8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report: July 15, 2022

(Date of earliest event reported)

Commission File Number	Exact Name of Registrant as specified in its charter	State or Other Jurisdiction of Incorporation or Organization	IRS Employer Identification Number
1-12609	PG&E CORPORATION	California	94-3234914
1-2348	PACIFIC GAS AND ELECTRIC COMPANY	California	94-0742640
333-263719-01	PG&E WILDFIRE RECOVERY FUNDING LLC	Delaware	88-1113018

		PG&E WILDFIRE RECOVERY FUNDING LLC
77 Beale Street P.O. Box 770000 San Francisco, California 94177	77 Beale Street P.O. Box 770000 San Francisco, California 94177	C/O Pacific Gas and Electric Company 77 Beale Street P.O. Box 770000 San Francisco, California 94177
(Address of principal executive offices) (Zip Code)	(Address of principal executive offices) (Zip Code)	(Address of principal executive offices) (Zip Code)
(415) 973-1000	(415) 973-7000	(415) 973-7000
(Registrant’s telephone number, including area code)	(Registrant’s telephone number, including area code)	(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	PCG	The New York Stock Exchange
Equity Units	PCGU	The New York Stock Exchange
First preferred stock, cumulative, par value $25 per share, 5% series A redeemable	PCG-PE	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5% redeemable	PCG-PD	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.80% redeemable	PCG-PG	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.50% redeemable	PCG-PH	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.36% series A redeemable	PCG-PI	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 6% nonredeemable	PCG-PA	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5.50% nonredeemable	PCG-PB	NYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5% nonredeemable	PCG-PC	NYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	PG&E Corporation     ☐
Emerging growth company	Pacific Gas and Electric Company     ☐
Emerging growth company	PG&E Wildfire Recovery Funding LLC     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

PG&E Corporation    ☐

Pacific Gas and Electric Company    ☐

PG&E Wildfire Recovery Funding LLC    ☐

Item 8.01. Other Events

Issuance of Recovery Bonds

On July 20, 2022, PG&E Wildfire Recovery Funding LLC (the “Issuing Entity”) issued $3,900,000,000 aggregate principal amount of Senior Secured Recovery Bonds, Series 2022-B (the “Recovery Bonds”), pursuant to an Indenture and Series Supplement, each dated as of July 20, 2022, which are annexed hereto as Exhibits 4.1 and 4.2, respectively. The Recovery Bonds were offered pursuant to the Prospectus dated July 13, 2022. In connection with this issuance of the Recovery Bonds, the Issuing Entity and Pacific Gas and Electric Company (the “Utility”) entered into the Recovery Property Servicing Agreement, the Recovery Property Purchase and Sale Agreement and the Administration Agreement, each dated as of July 20, 2022, which are annexed hereto as Exhibits 10.1, 10.2 and 10.3, respectively.

Redemption of First Mortgage Bonds

In connection with the issuance of the Recovery Bonds and the Utility’s use of a portion of the ultimate proceeds therefrom, on July 15, 2022, the Utility issued a notice of conditional redemption to redeem all $1,500,000,000 aggregate principal amount of outstanding 1.367% First Mortgage Bonds due 2023 (the “1.367% Bonds”) on or around July 25, 2022 (the “Redemption Date”). The 1.367% Bonds were issued pursuant to the Indenture of Mortgage, dated as of June 19, 2020, between the Utility and The Bank of New York Mellon Trust Company, N.A., as Trustee (as supplemented and amended, the “Mortgage Indenture”). The redemption of the 1.367% Bonds is conditioned upon the receipt of certain proceeds from the issuance of the Recovery Bonds. The 1.367% Bonds will be redeemed at the redemption prices set forth in the Mortgage Indenture plus accrued and unpaid interest thereon to the Redemption Date.

Prepayment of Term Loan Agreement

In connection with the issuance of the Recovery Bonds and the Utility’s use of a portion of the ultimate proceeds therefrom, on July 21, 2022, the Utility prepaid in full all of the loans outstanding pursuant to its $500,000,000 Term Loan Credit Agreement, dated April 4, 2022, by and among the Utility, the several lenders from time to time parties thereto, and MUFG Bank, Ltd., as administrative agent (the “Term Loan Credit Agreement”). As a result of such prepayment, the Term Loan Credit Agreement was terminated and is no longer outstanding.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
4.1	Indenture between PG&E Wildfire Recovery Funding LLC and The Bank of New York Mellon Trust Company, N.A., dated as of July 20, 2022
4.2	Series Supplement between PG&E Wildfire Recovery Funding LLC and The Bank of New York Mellon Trust Company, N.A. (including forms of the Recovery Bonds), dated as of July 20, 2022
5.1	Opinion of Hunton Andrews Kurth LLP with respect to legality
8.1	Opinion of Hunton Andrews Kurth LLP with respect to tax matters
10.1	Recovery Property Servicing Agreement between PG&E Wildfire Recovery Funding LLC and Pacific Gas and Electric Company, as Servicer, dated as of July 20, 2022
10.2	Recovery Property Purchase and Sale Agreement between PG&E Wildfire Recovery Funding LLC and Pacific Gas and Electric Company, as Seller, dated as of July 20, 2022
10.3	Administration Agreement between PG&E Wildfire Recovery Funding LLC and Pacific Gas and Electric Company, as Administrator, dated as of July 20, 2022
23.1	Consent of Hunton Andrews Kurth LLP (included as part of its opinions filed as Exhibit 5.1 and Exhibit 8.1)
99.1	Opinion of Hunton Andrews Kurth LLP with respect to U.S. and California constitutional matters
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

	PG&E CORPORATION
	By:	/s/ Christopher A. Foster
		Christopher A. Foster
Dated: July 21, 2022		Executive Vice President and Chief Financial Officer
	PACIFIC GAS AND ELECTRIC COMPANY
	By:	/s/ David S. Thomason
		David S. Thomason
Dated: July 21, 2022		Vice President, Chief Financial Officer and Controller
	PG&E WILDFIRE RECOVERY FUNDING LLC
	By:	/s/ Margaret K. Becker
		Margaret K. Becker
Dated: July 21, 2022		President

EX-4.1

Exhibit 4.1

PG&E WILDFIRE RECOVERY FUNDING LLC,

Issuer,

and

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

as Indenture Trustee and Securities Intermediary

INDENTURE

Dated as of July 20, 2022

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE		2
SECTION 1.01.	Definitions	2
SECTION 1.02.	Incorporation by Reference of Trust Indenture Act	2
SECTION 1.03.	Rules of Construction	2
ARTICLE II THE RECOVERY BONDS		3
SECTION 2.01.	Form	3
SECTION 2.02.	Denominations of Recovery Bonds	3
SECTION 2.03.	Execution, Authentication and Delivery	5
SECTION 2.04.	Temporary Recovery Bonds	5
SECTION 2.05.	Registration; Registration of Transfer and Exchange of Recovery Bonds	6
SECTION 2.06.	Mutilated, Destroyed, Lost or Stolen Recovery Bonds	7
SECTION 2.07.	Persons Deemed Owner	8
SECTION 2.08.	Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved	8
SECTION 2.09.	Cancellation	9
SECTION 2.10.	Outstanding Amount; Authentication and Delivery of Recovery Bonds	9
SECTION 2.11.	Book-Entry Recovery Bonds	13
SECTION 2.12.	Notices to Clearing Agency	14
SECTION 2.13.	Definitive Recovery Bonds	14
SECTION 2.14.	CUSIP Number	15
SECTION 2.15.	Letter of Representations	15
SECTION 2.16.	Tax Treatment	15
SECTION 2.17.	State Pledge	15
SECTION 2.18.	Security Interests	16
SECTION 2.19.	Payment by Issuer is Nonrecourse	18
ARTICLE III COVENANTS		19
SECTION 3.01.	Payment of Principal, Premium, if any, and Interest	19
SECTION 3.02.	Maintenance of Office or Agency	19
SECTION 3.03.	Money for Payments To Be Held in Trust	19
SECTION 3.04.	Existence	21
SECTION 3.05.	Protection of Recovery Bond Collateral	21
SECTION 3.06.	Opinions as to Recovery Bond Collateral	22
SECTION 3.07.	Performance of Obligations; Servicing; SEC Filings	22
SECTION 3.08.	Certain Negative Covenants	25
SECTION 3.09.	Annual Statement as to Compliance	26
SECTION 3.10.	Issuer May Consolidate, etc., Only on Certain Terms	26
SECTION 3.11.	Successor or Transferee	28

SECTION 3.12.	No Other Business	29
SECTION 3.13.	No Borrowing	29
SECTION 3.14.	Servicer’s Obligations	29
SECTION 3.15.	Guarantees, Loans, Advances and Other Liabilities	29
SECTION 3.16.	Capital Expenditures	29
SECTION 3.17.	Restricted Payments	29
SECTION 3.18.	Notice of Events of Default	30
SECTION 3.19.	Further Instruments and Acts	30
SECTION 3.20.	Notice of Events of Default	30
SECTION 3.21.	Sale Agreement, Servicing Agreement and Administration Agreement Covenants	30
SECTION 3.22.	Taxes	32
SECTION 3.23.	Additional Recovery Bonds or Additional Other Recovery Bonds	32
ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE		34
SECTION 4.01.	Satisfaction and Discharge of Indenture; Defeasance	34
SECTION 4.02.	Conditions to Defeasance	36
SECTION 4.03.	Application of Trust Money	37
SECTION 4.04.	Repayment of Moneys Held by Paying Agent	38
ARTICLE V REMEDIES		38
SECTION 5.01.	Events of Default	38
SECTION 5.02.	Acceleration of Maturity; Rescission and Annulment	39
SECTION 5.03.	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	40
SECTION 5.04.	Remedies; Priorities	42
SECTION 5.05.	Optional Preservation of the Recovery Bond Collateral	43
SECTION 5.06.	Limitation of Suits	44
SECTION 5.07.	Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest	45
SECTION 5.08.	Restoration of Rights and Remedies	45
SECTION 5.09.	Rights and Remedies Cumulative	45
SECTION 5.10.	Delay or Omission Not a Waiver	45
SECTION 5.11.	Control by Holders	45
SECTION 5.12.	Waiver of Past Defaults	46
SECTION 5.13.	Undertaking for Costs	46
SECTION 5.14.	Waiver of Stay or Extension Laws	47
SECTION 5.15.	Action on Recovery Bonds	47
SECTION 5.16.	Performance and Enforcement of Certain Obligations	47
ARTICLE VI THE INDENTURE TRUSTEE		48
SECTION 6.01.	Duties of Indenture Trustee	48
SECTION 6.02.	Rights of Indenture Trustee	50
SECTION 6.03.	Individual Rights of Indenture Trustee	52

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SECTION 6.04.	Indenture Trustee’s Disclaimer	52
SECTION 6.05.	Notice of Defaults	53
SECTION 6.06.	Reports by Indenture Trustee to Holders	53
SECTION 6.07.	Compensation and Indemnity	54
SECTION 6.08.	Replacement of Indenture Trustee and Securities Intermediary	55
SECTION 6.09.	Successor Indenture Trustee by Merger	56
SECTION 6.10.	Appointment of Co-Trustee or Separate Trustee	57
SECTION 6.11.	Eligibility; Disqualification	58
SECTION 6.12.	Preferential Collection of Claims Against Issuer	58
SECTION 6.13.	Representations and Warranties of Indenture Trustee	58
SECTION 6.14.	Annual Report by Independent Registered Public Accountants	58
SECTION 6.15.	Custody of Recovery Bond Collateral	59
SECTION 6.16	FATCA	59
ARTICLE VII HOLDERS’ LISTS AND REPORTS		60
SECTION 7.01.	Issuer To Furnish Indenture Trustee Names and Addresses of Holders	60
SECTION 7.02.	Preservation of Information; Communications to Holders	60
SECTION 7.03.	Reports by Issuer	60
SECTION 7.04.	Reports by Indenture Trustee	61
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES		61
SECTION 8.01.	Collection of Money	61
SECTION 8.02.	Collection Account	62
SECTION 8.03.	General Provisions Regarding the Collection Account	65
SECTION 8.04.	Release of Recovery Bond Collateral	66
SECTION 8.05.	Opinion of Counsel	67
SECTION 8.06.	Reports by Independent Registered Public Accountants	67
ARTICLE IX SUPPLEMENTAL INDENTURES		68
SECTION 9.01.	Supplemental Indentures Without Consent of Holders	68
SECTION 9.02.	Supplemental Indentures with Consent of Holders	70
SECTION 9.03.	Reserved	71
SECTION 9.04.	Execution of Supplemental Indentures	71
SECTION 9.05.	Effect of Supplemental Indenture	71
SECTION 9.06.	Conformity with Trust Indenture Act	72
SECTION 9.07.	Reference in Recovery Bonds to Supplemental Indentures	72
ARTICLE X MISCELLANEOUS		72
SECTION 10.01.	Compliance Certificates and Opinions, etc.	72
SECTION 10.02.	Form of Documents Delivered to Indenture Trustee	74
SECTION 10.03.	Acts of Holders	75
SECTION 10.04.	Notices, etc., to Indenture Trustee, Issuer and Rating Agencies	75
SECTION 10.05.	Notices to Holders; Waiver	76

iii

SECTION 10.06.	Rule 17g-5 Compliance	77
SECTION 10.07.	Conflict with Trust Indenture Act	77
SECTION 10.08.	Effect of Headings and Table of Contents	77
SECTION 10.09.	Successors and Assigns	78
SECTION 10.10.	Severability	78
SECTION 10.11.	Benefits of Indenture	78
SECTION 10.12.	Legal Holidays	78
SECTION 10.13.	GOVERNING LAW; WAIVER OF JURY TRIAL	78
SECTION 10.14.	Counterparts	78
SECTION 10.15.	Recording of Indenture	79
SECTION 10.16.	Issuer Obligation	79
SECTION 10.17.	Inspection	79
SECTION 10.18.	No Petition	80
SECTION 10.19.	Securities Intermediary	80

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EXHIBITS AND SCHEDULES

EXHIBIT A	Form of Recovery Bonds
EXHIBIT B	Form of Series Supplement
EXHIBIT C	Servicing Criteria to be Addressed by Indenture Trustee in Assessment of Compliance
APPENDIX
APPENDIX A	Definitions

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TRUST INDENTURE ACT CROSS REFERENCE TABLE

TIA Section		Indenture Section
310	(a)(1)	6.11
	(a)(2)	6.11
	(a)(3)	6.10(b)(i)
	(a)(4)	N.A.
	(a)(5)	6.11
	(b)	6.11
311	(a)	6.12
	(b)	6.12
312	(a)	7.01 and 7.02
	(b)	7.02(b)
	(c)	7.02(c)
313	(a)	7.04
	(b)(1)	7.04
	(b)(2)	7.04
	(c)	7.04
	(d)	N/A
314	(a)	3.09, 4.01, and 7.03(a)
	(b)	3.06 and 4.01
	(c)(1)	2.10, 4.01, 8.04(b) and 10.01(a)
	(c)(2)	2.10, 4.01, 8.04(b) and 10.01(a)
	(c)(3)	2.10, 4.01 and 10.01(a)
	(d)	8.04(b) and 10.01(a)
	(e)	10.01(a)
	(f)	10.01(a)
315	(a)	6.01(b)(i) and (ii)
	(b)	6.05

vi

TIA Section		Indenture Section
	(c)	6.01 (a)
	(d)	6.01(c)(i)-(iii)
	(e)	5.13
316	(a) (last sentence)	Appendix A – definition of “Outstanding”
	(a)(1)(A)	5.11
	(a)(1)(B)	5.12
	(a)(2)	N/A
	(b)	5.07
	(c)	Appendix A – definition of “Record Date”
317	(a)(1)	5.03(a)
	(a)(2)	5.03(c)(iv)
	(b)	3.03
318	(a)	10.07
	(b)	10.07
	(c)	10.07

**    “N/A” shall mean “not applicable.”

THIS CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF THIS INDENTURE.

vii

This INDENTURE dated as of July 20, 2022 (this “Indenture”), by and between PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Issuer”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, in its capacity as indenture trustee (the “Indenture Trustee”) for the benefit of the Secured Parties (as defined herein) and in its separate capacity as a securities intermediary and account bank (the “Securities Intermediary”).

RECITALS

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture and the creation and issuance of the Recovery Bonds issuable hereunder, which will be of substantially the tenor set forth herein and in the Series Supplement;

WHEREAS, the Recovery Bonds shall be non-recourse obligations and shall be secured by and payable solely out of the proceeds of the Recovery Property and the other Recovery Bond Collateral;

WHEREAS, if and to the extent that such proceeds of Recovery Property and the other Recovery Bond Collateral are insufficient to pay all amounts owing with respect to the Recovery Bonds, then, except as otherwise expressly provided hereunder, the Holders shall have no Claim in respect of such insufficiency against the Issuer or the Indenture Trustee, and the Holders, by their acceptance of the Recovery Bonds, waive any such Claim; and

WHEREAS, all things necessary to (a) make the Recovery Bonds, when executed by the Issuer and authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, valid obligations, and (b) make this Indenture a valid agreement of the Issuer, in each case, in accordance with their respective terms, have been done.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each party hereto hereby agrees as follows for the benefit of the other party hereto and each of the Holders:

GRANTING CLAUSE

IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Issuer, in consideration of the premises herein contained and of the purchase of the Recovery Bonds by the Holders and of other good and lawful consideration, the receipt and sufficiency of which are hereby acknowledged, and to secure, equally and ratably without prejudice, priority or distinction, except as specifically otherwise set forth in this Indenture, the payment of the Recovery Bonds, the payment of all other amounts due under or in connection with this Indenture (including, without limitation, all fees, expenses, counsel fees and other amounts due and owing to the Indenture Trustee) and the performance and observance of all of the covenants and conditions contained herein or in the Recovery Bonds, has hereby executed and delivered this Indenture and by these presents does hereby, and under the Series Supplement will grant a lien on and a security interest in and to, and otherwise convey, assign, transfer and pledge, in each case unto, the Indenture

1

Trustee, its successors and assigns, for the benefit of the Secured Parties, all of the Issuer’s right, title and interest in, to and under any and all of the property constituting Recovery Bond Collateral described in the Series Supplement (such property hereinafter referred to as the “Recovery Bond Collateral”). The Series Supplement will more particularly describe the obligations of the Issuer secured by the Recovery Bond Collateral.

AND IT IS HEREBY FURTHER COVENANTED, DECLARED AND AGREED between the parties hereto that all Recovery Bonds are to be issued, countersigned and delivered and that all of the Recovery Bond Collateral is to be held and applied, subject to the further covenants, conditions, releases, uses and trusts hereinafter set forth, and the Issuer, for itself and any successor, does hereby covenant and agree to and with the Indenture Trustee and its successors in said trust, for the benefit of the Secured Parties, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

Except as otherwise specified herein or as the context may otherwise require, the capitalized terms used herein shall have the respective meanings set forth in Appendix A attached hereto and made a part hereof for all purposes of this Indenture.

SECTION 1.02. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Recovery Bonds.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 1.03. Rules of Construction.

(a)    Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

2

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in the United States of America as in effect from time to time;

(iii) “or” is not exclusive;

(iv) “including” means including without limitation;

(v) words in the singular include the plural and words in the plural include the singular; and

(vi) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

ARTICLE II

THE RECOVERY BONDS

SECTION 2.01. Form.

(a)    The Recovery Bonds and the Indenture Trustee’s certificate of authentication shall be in substantially the forms set forth in Exhibit A attached hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or by the Series Supplement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be required to comply with the rules of any securities exchange or depository institution, or as may, consistently herewith, be determined by the officers executing the Recovery Bonds, as evidenced by their execution of the Recovery Bonds. Any portion of the text of any Recovery Bond may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Recovery Bond.

(b)    The Recovery Bonds shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing the Recovery Bonds, as evidenced by their execution of the Recovery Bonds.

(c)    Each Recovery Bond shall be dated the date of its authentication. The terms of the Recovery Bonds set forth in Exhibit A attached hereto are part of the terms of this Indenture.

SECTION 2.02. Denominations of Recovery Bonds.

(a)    The Recovery Bonds shall be issuable in the Minimum Denomination specified in the Series Supplement and, except as otherwise provided in the Series Supplement, in integral multiples of $1,000 in excess thereof.

3

(b)    The Recovery Bonds may, at the election of and as authorized by a Responsible Officer of the Issuer, be issued in one or more Tranches, and shall be designated generally as the “Recovery Bonds” of the Issuer, with such further particular designations added or incorporated in such title for the Recovery Bonds of any particular Tranche as a Responsible Officer of the Issuer may determine. Each Recovery Bond shall bear upon its face the designation so selected for the Tranche to which it belongs. All Recovery Bonds shall be identical in all respects except for the denominations thereof, unless the Recovery Bonds are comprised of one or more Tranches, in which case all Recovery Bonds of the same Tranche shall be identical in all respects except for the denominations thereof. All Recovery Bonds of a particular Tranche shall be in all respects equally and ratably entitled to the benefits hereof without preference, priority, or distinction on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Indenture.

(c)    The Recovery Bonds shall be created by the Series Supplement authorized by a Responsible Officer of the Issuer which shall establish the terms and provisions thereof. The several Tranches thereof may differ as between Tranches, in respect of any of the following matters:

(i) designation of the Tranches thereof;

(ii) the principal amount (and, if more than one Tranche is issued, the respective principal amounts of such Tranches);

(iii) the Recovery Bond Interest Rate;

(iv) the Payment Dates;

(v) the Scheduled Final Payment Date;

(vi) the Final Maturity Date;

(vii) the place or places for the payment of interest, principal and premium, if any;

(viii) the Minimum Denominations;

(ix) the Expected Amortization Schedule;

(x) provisions with respect to the definitions set forth in Appendix A hereto;

(xi) whether or not the Recovery Bonds are to be Book-Entry Recovery Bonds and the extent to which Section 2.11 should apply; and

(xii) any other provisions expressing or referring to the terms and conditions upon which the Recovery Bonds of any Tranche are to be issued under this Indenture that are not in conflict with the provisions of this Indenture and as to which the Rating Agency Condition is satisfied.

4

SECTION 2.03. Execution, Authentication and Delivery.

(a)    The Recovery Bonds shall be executed on behalf of the Issuer by any of its Responsible Officers. The signature of any such Responsible Officer on the Recovery Bonds may be manual, electronic or facsimile.

(b)    Recovery Bonds bearing the manual, electronic or facsimile signature of individuals who were at any time Responsible Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of the Recovery Bonds or did not hold such offices at the date of the Recovery Bonds.

(c)    At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Recovery Bonds executed by the Issuer to the Indenture Trustee pursuant to an Issuer Order for authentication; and the Indenture Trustee shall authenticate and deliver the Recovery Bonds as in this Indenture provided and not otherwise.

(d)    No Recovery Bond shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Recovery Bond a certificate of authentication substantially in the form provided for therein executed by the Indenture Trustee by the manual, electronic or facsimile signature of one of its authorized signatories, and such certificate upon any Recovery Bond shall be conclusive evidence, and the only evidence, that such Recovery Bond has been duly authenticated and delivered hereunder.

SECTION 2.04. Temporary Recovery Bonds.

(a)    Pending the preparation of Definitive Recovery Bonds pursuant to Section 2.13, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, Temporary Recovery Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Recovery Bonds in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing the Recovery Bonds may determine, as evidenced by their execution of the Recovery Bonds.

(b)    If Temporary Recovery Bonds are issued, the Issuer will cause Definitive Recovery Bonds to be prepared without unreasonable delay. After the preparation of Definitive Recovery Bonds, the Temporary Recovery Bonds shall be exchangeable for Definitive Recovery Bonds upon surrender of the Temporary Recovery Bonds at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more Temporary Recovery Bonds, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Recovery Bonds of authorized denominations. Until so exchanged, the Temporary Recovery Bonds shall in all respects be entitled to the same benefits under this Indenture as Definitive Recovery Bonds.

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SECTION 2.05. Registration; Registration of Transfer and Exchange of Recovery Bonds.

(a)    The Issuer shall cause to be kept a register (the “Recovery Bond Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Recovery Bonds and the registration of transfers of Recovery Bonds. The Indenture Trustee shall be “Recovery Bond Registrar” for the purpose of registering Recovery Bonds and transfers of Recovery Bonds as herein provided. Upon any resignation of any Recovery Bond Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Recovery Bond Registrar.

(b)    If a Person other than the Indenture Trustee is appointed by the Issuer as Recovery Bond Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Recovery Bond Registrar and of the location, and any change in the location, of the Recovery Bond Register, and the Indenture Trustee shall have the right to inspect the Recovery Bond Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely conclusively upon a certificate executed on behalf of the Recovery Bond Registrar by a Responsible Officer thereof as to the names and addresses of the Holders and the principal amounts and number of the Recovery Bonds (separately stated by Tranche).

(c)    Upon surrender for registration of transfer of any Recovery Bond at the office or agency of the Issuer to be maintained as provided in Section 3.02, provided that the requirements of Section 8-401 of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Holder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Recovery Bonds in any Minimum Denominations, of the same Tranche and aggregate principal amount.

(d)    At the option of the Holder, Recovery Bonds may be exchanged for other Recovery Bonds in any Minimum Denominations, of the same Tranche and aggregate principal amount, upon surrender of the Recovery Bonds to be exchanged at such office or agency as provided in Section 3.02. Whenever any Recovery Bonds are so surrendered for exchange, the Issuer shall, provided that the requirements of Section 8-401 of the UCC are met, execute and, upon any such execution, the Indenture Trustee shall authenticate and the Holder shall obtain from the Indenture Trustee, the Recovery Bonds which the Holder making the exchange is entitled to receive.

(e)    All Recovery Bonds issued upon any registration of transfer or exchange of other Recovery Bonds shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Recovery Bonds surrendered upon such registration of transfer or exchange.

(f)    Every Recovery Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require.

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(g)    No service charge shall be made to a Holder for any registration of transfer or exchange of Recovery Bonds, but the Issuer or the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge or any fees or expenses of the Indenture Trustee that may be imposed in connection with any registration of transfer or exchange of Recovery Bonds, other than exchanges pursuant to Sections 2.04 or 2.06 not involving any transfer.

(h)    The preceding provisions of this Section 2.05 notwithstanding, the Issuer shall not be required to make, and the Recovery Bond Registrar need not register transfers or exchanges of any Recovery Bond that has been submitted within fifteen (15) days preceding the due date for any payment with respect to such Recovery Bond until after such due date has occurred.

SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Recovery Bonds.

(a)    If (i) any mutilated Recovery Bond is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Recovery Bond and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Recovery Bond Registrar or the Indenture Trustee that such Recovery Bond has been acquired by a Protected Purchaser, the Issuer shall, provided that the requirements of Section 8-401 of the UCC are met, execute and, upon the Issuer’s written request, the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Recovery Bond, a replacement Recovery Bond of like Tranche, tenor and principal amount, bearing a number not contemporaneously outstanding; provided, however, that if any such destroyed, lost or stolen Recovery Bond, but not a mutilated Recovery Bond, shall have become or within seven (7) days shall be due and payable, instead of issuing a replacement Recovery Bond, the Issuer may pay such destroyed, lost or stolen Recovery Bond when so due or payable without surrender thereof. If, after the delivery of such replacement Recovery Bond or payment of a destroyed, lost or stolen Recovery Bond pursuant to the proviso to the preceding sentence, a Protected Purchaser of the original Recovery Bond in lieu of which such replacement Recovery Bond was issued presents for payment such original Recovery Bond, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Recovery Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Recovery Bond from such Person to whom such replacement Recovery Bond was delivered or any assignee of such Person, except a Protected Purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

(b)    Upon the issuance of any replacement Recovery Bond under this Section 2.06, the Issuer and/or the Indenture Trustee may require the payment by the Holder of such Recovery Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee and the Recovery Bond Registrar) connected therewith.

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(c)    Every replacement Recovery Bond issued pursuant to this Section 2.06 in replacement of any mutilated, destroyed, lost or stolen Recovery Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Recovery Bond shall be found at any time or enforced by any Person, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Recovery Bonds duly issued hereunder.

(d)    The provisions of this Section 2.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Recovery Bonds.

SECTION 2.07. Persons Deemed Owner.

Prior to due presentment for registration of transfer of any Recovery Bond, the Issuer, the Indenture Trustee, the Recovery Bond Registrar and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Recovery Bond is registered (as of the day of determination) as the owner of such Recovery Bond for the purpose of receiving payments of principal of and premium, if any, and interest on such Recovery Bond and for all other purposes whatsoever, whether or not such Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

SECTION 2.08. Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved.

(a)    The Recovery Bonds shall accrue interest as provided in the Series Supplement at the applicable Recovery Bond Interest Rate, and such interest shall be payable on each applicable Payment Date. Any installment of interest, principal or premium, if any, payable on any Recovery Bond which is punctually paid or duly provided for on the applicable Payment Date shall be paid to the Person in whose name such Recovery Bond (or one or more Predecessor Recovery Bonds) is registered on the Record Date for such Payment Date by wire transfer to an account maintained by such Holder in accordance with payment instructions delivered to the Indenture Trustee by such Holder, except that with respect to Book-Entry Recovery Bonds, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to such Recovery Bond on a Payment Date which shall be payable as provided below.

(b)    The principal of each Recovery Bond of each Tranche shall be paid, to the extent funds are available therefor in the Collection Account, in installments on each Payment Date as specified in the Series Supplement; provided that installments of principal not paid when scheduled to be paid in accordance with the Expected Amortization Schedule shall be paid upon receipt of money available for such purpose, in the order set forth in Section 8.02(e). Failure to pay principal in accordance with such Expected Amortization Schedule because moneys are not available pursuant to Section 8.02 to make such payments shall not constitute a Default or Event of Default under this Indenture; provided, however, that failure to pay the entire unpaid principal amount of

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the Recovery Bonds of a Tranche upon the Final Maturity Date for the Recovery Bonds shall constitute a Default or Event of Default under this Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02. All payments of principal and premium, if any, on the Recovery Bonds shall be made pro rata to the Holders entitled thereto unless otherwise provided in the Series Supplement. Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a Recovery Bond is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and premium, if any, and interest on such Recovery Bond will be paid. Such notice shall be mailed no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Recovery Bond and shall specify the place where such Recovery Bond may be presented and surrendered for payment of such installment.

(c)    If interest on the Recovery Bonds is not paid when due, such defaulted interest shall be paid (plus interest on such defaulted interest at the applicable Recovery Bond Interest Rate to the extent lawful) to the Persons who are Holders on a subsequent Special Record Date, which date shall be at least fifteen (15) Business Days prior to the Special Payment Date. The Issuer shall fix or cause to be fixed any such Special Record Date and Special Payment Date, and, at least ten (10) days before any such Special Record Date, the Issuer shall mail to each affected Holder a notice that states the Special Record Date, the Special Payment Date and the amount of defaulted interest (plus interest on such defaulted interest) to be paid.

SECTION 2.09. Cancellation.

All Recovery Bonds surrendered for payment, registration of transfer or exchange shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Recovery Bonds previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Recovery Bonds so delivered shall be promptly canceled by the Indenture Trustee. No Recovery Bonds shall be authenticated in lieu of or in exchange for any Recovery Bonds canceled as provided in this Section 2.09, except as expressly permitted by this Indenture. All canceled Recovery Bonds may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time.

SECTION 2.10. Outstanding Amount; Authentication and Delivery of Recovery Bonds.

(a)    The aggregate Outstanding Amount of Recovery Bonds that may be authenticated and delivered under this Indenture shall not exceed the aggregate of the amounts of Recovery Bonds that are authorized in the Financing Order but otherwise shall be unlimited.

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(b)    Recovery Bonds created and established by the Series Supplement may at any time be executed by the Issuer and delivered to the Indenture Trustee for authentication and thereupon the same shall be authenticated and delivered by the Indenture Trustee upon Issuer Request and upon delivery by the Issuer to the Indenture Trustee, and receipt by the Indenture Trustee, or the causing to occur by the Issuer, of the following; provided, however, that compliance with such conditions and delivery of such documents shall only be required in connection with the original issuance of the Recovery Bonds:

(i) Issuer Action. An Issuer Order authorizing and directing the authentication and delivery of the Recovery Bonds by the Indenture Trustee and specifying the principal amount of Recovery Bonds to be authenticated.

(ii) Authorizations. Copies of (X) the Financing Order which shall be in full force and effect and be Final, including the filing of PG&E’s written consent to all terms and conditions of the Financing Order with the CPUC in accordance with Section 850.1(d) of the Wildfire Financing Law, (Y) certified resolutions of the Managers or Member of the Issuer authorizing the execution and delivery of the Series Supplement and the execution, authentication and delivery of the Recovery Bonds and (Z) a duly executed Series Supplement.

(iii) Opinions. An opinion or opinions, portions of which may be delivered by one or more Independent counsel for the Issuer, portions of which may be delivered by one or more Independent counsel for the Servicer, and portions of which may be delivered by one or more Independent counsel for the Seller, dated the Closing Date, in each case subject to the customary exceptions, qualifications and assumptions contained therein, stating that (A) all conditions precedent provided for in this Indenture relating to (I) the authentication and delivery of the Issuer’s Recovery Bonds and (II) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture, have been complied with, and (B) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture is authorized or permitted by this Indenture.

(iv) Authorizing Certificate. An Officer’s Certificate, dated the Closing Date, of the Issuer certifying that (A) the Issuer has duly authorized the execution and delivery of this Indenture and the Series Supplement and the execution and delivery of the Recovery Bonds and (B) that the Series Supplement is in the form attached thereto, and it shall comply with the requirements of Section 2.02.

(v) The Recovery Bond Collateral. The Issuer shall have made or caused to be made all filings with the CPUC and the California Secretary of State pursuant to the Financing Order and the Wildfire Financing Law and all other filings necessary to perfect the Grant of the Recovery Bond Collateral to the Indenture Trustee and the Lien of this Indenture.

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(vi) Certificates of the Issuer and the Seller.

(A) An Officer’s Certificate from the Issuer, dated as of the Closing Date:

(I) to the effect that a. the Issuer is not in Default under this Indenture and that the issuance of the Recovery Bonds will not result in any Default or in any breach of any of the terms, conditions or provisions of or constitute a default under the Financing Order or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it or its property is bound or any order of any court or administrative agency entered in any Proceeding to which the Issuer is a party or by which it or its property may be bound or to which it or its property may be subject and b. that all conditions precedent provided in this Indenture relating to the execution, authentication and delivery of the Recovery Bonds have been complied with;

(II) to the effect that the Issuer has not assigned any interest or participation in the Recovery Bond Collateral except for the Grant contained in the Indenture and the Series Supplement; the Issuer has the power and right to Grant the Recovery Bond Collateral to the Indenture Trustee as security hereunder and thereunder; and the Issuer, subject to the terms of this Indenture, has Granted to the Indenture Trustee a first priority perfected security interest in all of its right, title and interest in and to such Recovery Bond Collateral free and clear of any Lien, mortgage, pledge, charge, security interest, adverse claim or other encumbrance arising as a result of actions of the Issuer or through the Issuer, except Permitted Liens;

(III) to the effect that the Issuer has appointed the firm of Independent registered public accountants as contemplated in Section 8.06;

(IV) to the effect that attached thereto are duly executed, true and complete copies of the Sale Agreement, the Servicing Agreement and the Administration Agreement, which are, to the knowledge of the Issuer, in full force and effect and, to the knowledge of the Issuer, that no party is in default of its obligations under such agreements;

(V) stating that all filings with the CPUC, the California Secretary of State and the Delaware Secretary of State pursuant to the Wildfire Financing Law, the UCC and the

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Financing Order and all UCC financing statements with respect to the Recovery Bond Collateral which are required to be filed by the terms of the Financing Order, the Wildfire Financing Law, the Sale Agreement, the Servicing Agreement and this Indenture have been filed as required; and

(VI) stating that (A) all conditions precedent provided for in this Indenture relating to (I) the authentication and delivery of the Issuer’s Recovery Bonds, and (II) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture, have been complied with, (B) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture is authorized or permitted by this Indenture, and (C) the Issuer has delivered the documents required under this Section 2.10 and has otherwise satisfied the requirements set out in this Section 2.10, including, but not limited to, complying with Section 2.10(a) hereof.

(B) An officer’s certificate from the Seller, dated as of the Closing Date, to the effect that, in the case of the Recovery Property identified in the Sale Agreement, immediately prior to the conveyance thereof to the Issuer pursuant to the Sale Agreement:

(I) the Seller was the original and the sole owner of such Recovery Property, free and clear of any Lien; the Seller had not assigned any interest or participation in such Recovery Property and the proceeds thereof other than to the Issuer pursuant to the Sale Agreement; the Seller has the power, authority and right to own, sell and assign such Recovery Property and the proceeds thereof to the Issuer; and the Seller, subject to the terms of the Sale Agreement, has validly sold and assigned to the Issuer all of its right, title and interest in and to such Recovery Property and the proceeds thereof, free and clear of any Lien (other than Permitted Liens) and such sale and assignment is absolute and irrevocable and has been perfected;

(II) the attached copy of the Financing Order creating such Recovery Property is true and complete and is in full force and effect; and

(III) an amount equal to the Required Capital Level has been deposited or caused to be deposited by the Seller with the Indenture Trustee for crediting to the Capital Subaccount.

(C) [Reserved].

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(D) Rating Agency Condition. The Indenture Trustee shall receive evidence reasonably satisfactory to it that the Recovery Bonds have received the ratings from the Rating Agencies required by the Underwriting Agreement as a condition to the issuance of the Recovery Bonds.

(E) Requirements of Series Supplement. Such other funds, accounts, documents, certificates, agreements, instruments or opinions as may be required by the terms of the Series Supplement.

(F) Required Capital Level. Evidence satisfactory to the Indenture Trustee that the Required Capital Level has been credited to the Capital Subaccount.

(G) Other Requirements. Such other documents, certificates, agreements, instruments or opinions as the Indenture Trustee may reasonably require.

SECTION 2.11. Book-Entry Recovery Bonds.

(a)    Unless the Series Supplement provides otherwise, all of the Recovery Bonds shall be issued in Book-Entry Form, and the Issuer shall execute and the Indenture Trustee shall, in accordance with this Section 2.11 and the Issuer Order, authenticate and deliver one or more Global Recovery Bonds, evidencing the Recovery Bonds which (i) shall be an aggregate original principal amount equal to the aggregate original principal amount of the Recovery Bonds to be issued pursuant to the Issuer Order, (ii) shall be registered in the name of the Clearing Agency therefor or its nominee, which shall initially be Cede & Co., as nominee for The Depository Trust Company, the initial Clearing Agency, (iii) shall be delivered by the Indenture Trustee pursuant to such Clearing Agency’s or such nominee’s instructions, and (iv) shall bear a legend substantially to the effect set forth in Exhibit A attached hereto.

(b)    Each Clearing Agency designated pursuant to this Section 2.11 must, at the time of its designation and at all times while it serves as Clearing Agency hereunder, be a “clearing agency” registered under the Exchange Act and any other applicable statute or regulation.

(c)    No Holder of Recovery Bonds issued in Book-Entry Form shall receive a Definitive Recovery Bond representing such Holder’s interest in any of the Recovery Bonds, except as provided in Section 2.13. Unless (and until) certificated, fully registered Recovery Bonds (the “Definitive Recovery Bonds”) have been issued to the Holders pursuant to Section 2.13 or pursuant to the Series Supplement relating thereto:

(i) the provisions of this Section 2.11 shall be in full force and effect;

(ii) the Issuer, the Servicer, the Paying Agent, the Recovery Bond Registrar and the Indenture Trustee may deal with the Clearing Agency for all purposes (including the making of distributions on the Recovery Bonds and the giving of instructions or directions hereunder) as the authorized representative of the Holders;

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(iii) to the extent that the provisions of this Section 2.11 conflict with any other provisions of this Indenture, the provisions of this Section 2.11 shall control;

(iv) the rights of Holders shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by law and agreements between such Holders and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Letter of Representations, unless and until Definitive Recovery Bonds are issued pursuant to Section 2.13, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal and interest on the Book-Entry Recovery Bonds to such Clearing Agency Participants; and

(v) whenever this Indenture requires or permits actions to be taken based upon instruction or directions of the Holders evidencing a specified percentage of the Outstanding Amount of Recovery Bonds, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from the Holders and/or the Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Recovery Bonds and has delivered such instructions to a Responsible Officer of the Indenture Trustee.

SECTION 2.12. Notices to Clearing Agency.

Unless and until Definitive Recovery Bonds shall have been issued to Holders pursuant to Section 2.13, whenever notice, payment, or other communications to the holders of Book-Entry Recovery Bonds is required under this Indenture, the Indenture Trustee, the Servicer and the Paying Agent, as applicable, shall make all such payments to, and give all such notices and communications specified herein, to the Clearing Agency.

SECTION 2.13. Definitive Recovery Bonds.

(a)    If (x)(i) the Issuer advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities under any Letter of Representations and (ii) the Issuer is unable to locate a qualified successor Clearing Agency, (y) the Issuer, at its option, advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (z) after the occurrence of an Event of Default hereunder, Holders holding Recovery Bonds aggregating not less than a majority of the aggregate Outstanding Amount of Recovery Bonds maintained as Book-Entry Recovery Bonds advise the Indenture Trustee, the Issuer and the Clearing Agency (through the Clearing Agency Participants) in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Holders, the Issuer shall notify the Clearing Agency, the Indenture Trustee and all such Holders in writing of the occurrence of any such event and of the availability of Definitive Recovery Bonds to the Holders requesting the same. Upon surrender to the Indenture Trustee of the Global Recovery Bonds by the Clearing Agency accompanied by registration instructions from such Clearing Agency for registration, the Issuer shall execute, and the Indenture

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Trustee shall authenticate and deliver, Definitive Recovery Bonds in accordance with the instructions of the Clearing Agency. None of the Issuer, the Recovery Bond Registrar, the Paying Agent or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. Upon the issuance of Definitive Recovery Bonds, the Indenture Trustee shall recognize the Holders of the Definitive Recovery Bonds as Holders hereunder.

(b)    Definitive Recovery Bonds will be transferable and exchangeable at the offices of the Recovery Bonds Registrar. With respect to any transfer of such listed Recovery Bonds, the new Definitive Recovery Bonds registered in the names specified by the transferee and the original transferor shall be available at the offices of such transfer agent.

SECTION 2.14. CUSIP Number.

The Issuer in issuing any Recovery Bonds may use a “CUSIP” number and, if so used, the Indenture Trustee shall use the CUSIP number provided to it by the Issuer in any notices to the Holders thereof as a convenience to such Holders; provided, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Recovery Bonds and that reliance may be placed only on the other identification numbers printed on the Recovery Bonds. The Issuer shall promptly notify the Indenture Trustee in writing of any change in the CUSIP number with respect to any Recovery Bond.

SECTION 2.15. Letter of Representations.

Notwithstanding anything to the contrary in this Indenture or the Series Supplement, the parties hereto shall comply with the terms of each Letter of Representations applicable to such party.

SECTION 2.16. Tax Treatment.

The Issuer and the Indenture Trustee, by entering into this Indenture, and the Holders and any Persons holding a beneficial interest in any Recovery Bond, by acquiring any Recovery Bond or interest therein, (a) express their intention that, solely for the purposes of federal taxes and, to the extent consistent with applicable State, local and other tax law, solely for the purposes of State, local and other taxes, the Recovery Bonds qualify under applicable tax law as indebtedness of the Member secured by the Recovery Bond Collateral and (b) solely for the purposes of federal taxes and, to the extent consistent with applicable State, local and other tax law, solely for purposes of State, local and other taxes, so long as any of the Recovery Bonds are outstanding, agree to treat the Recovery Bonds as indebtedness of the Member secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

SECTION 2.17. State Pledge.

(a)    Recovery Bonds are “recovery bonds” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on the Recovery Bonds are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the relevant Financing

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Order, including the right to impose, collect and receive certain charges (defined in the Wildfire Financing Law as “fixed recovery charges,” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E, or its successors or assigns, as more fully described in the Financing Order. Under the laws of the State of California in effect on the Closing Date, the State of California has agreed for the benefit of the Holders, pursuant to Section 850.1(e) of the Wildfire Financing Law, as follows:

“The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision [(g)] [of Section 850.1], the fixed recovery charges, any associated fixed recovery tax amounts, recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

“Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer hereby acknowledges that the purchase of any Recovery Bond by a Holder or the purchase of any beneficial interest in a Recovery Bond by any Person and the Indenture Trustee’s obligations to perform hereunder are made in reliance on such agreement and pledge by the State of California.

SECTION 2.18. Security Interests.

(a)    Representations and Warranties. The Issuer hereby makes the following representations and warranties:

(i) other than the security interests granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, granted, sold, conveyed or otherwise assigned any interests or security interests in the Recovery Bond Collateral and no security agreement, financing statement or equivalent security or Lien instrument listing the Issuer as debtor covering all or any part of the Recovery Bond Collateral is on file or of record in any jurisdiction, except such as may have been filed, recorded or made by the Issuer in favor of the Indenture Trustee on behalf of the Secured Parties in connection with this Indenture;

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(ii) this Indenture constitutes a valid and continuing lien on, and first priority perfected security interest in, the Recovery Bond Collateral in favor of the Indenture Trustee on behalf of the Secured Parties, which lien and security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing;

(iii) with respect to all Recovery Bond Collateral, this Indenture, together with the Series Supplement, creates a valid and continuing first priority perfected security interest (as defined in the UCC and as such term is used in the Wildfire Financing Law) in such Recovery Bond Collateral, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing;

(iv) the Issuer has good and marketable title to the Recovery Bond Collateral free and clear of any Lien, claim or encumbrance of any Person other than Permitted Liens;

(v) all of the Recovery Bond Collateral constitutes either Recovery Property or accounts, deposit accounts, investment property or general intangibles (as each such term is defined in the UCC) except that proceeds of the Recovery Bond Collateral may also take the form of instruments or money;

(vi) the Issuer has taken, or caused the Servicer to take, all action necessary to perfect the security interest in the Recovery Bond Collateral granted to the Indenture Trustee, for the benefit of the Secured Parties;

(vii) the Issuer has filed (or has caused the Servicer to file) all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Recovery Bond Collateral granted to the Indenture Trustee;

(viii) the Issuer has not authorized the filing of and is not aware, after due inquiry, of any financing statements against the Issuer that include a description of the Recovery Bond Collateral other than those filed in favor of the Indenture Trustee;

(ix) the Issuer is not aware of any judgment or tax Lien filings against the Issuer;

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(x) (I) the Collection Account (including all subaccounts thereof, other than the Cash Subaccount) constitutes a “securities account” within the meaning of the UCC and (II) the Cash Subaccount constitutes a “deposit account” within the meaning of the UCC;

(xi) the Issuer has taken all steps necessary to cause the Securities Intermediary of each such Securities Account to identify in its records the Indenture Trustee as the Person having a Security Entitlement against the Securities Intermediary in such Securities Account, no Collection Account is in the name of any Person other than the Indenture Trustee, and the Issuer has not consented to the Securities Intermediary of the Collection Account and the Indenture Trustee acting as “bank” with respect to the Cash Subaccount to comply with entitlement orders of any Person other than the Indenture Trustee; and

(xii) all of the Recovery Bond Collateral constituting investment property has been and will have been credited to the Collection Account or a subaccount thereof, and the Securities Intermediary for the Collection Account has agreed to treat all assets credited to the Collection Account (other than cash) as Financial Assets and all cash will be allocated to the applicable Cash Subaccount. Accordingly, the Indenture Trustee has a first priority perfected security interest in the Collection Account, all funds and Financial Assets on deposit therein, and all securities entitlements relating thereto.

(b)    Survival. The representations and warranties set forth in this Section 2.18 shall survive the execution and delivery of this Indenture and the issuance of any Recovery Bonds, shall be deemed re-made on each date on which any funds in the Collection Account are distributed to Issuer or otherwise released from the Lien of the Indenture and may not be waived by any party hereto except pursuant to a supplemental indenture executed in accordance with Article IX and as to which the Rating Agency Condition has been satisfied.

SECTION 2.19. Payment by Issuer is Nonrecourse.

Any amounts due hereunder from the Issuer with respect to the Recovery Bonds shall be paid solely from the Recovery Bond Collateral. In the event the Recovery Bond Collateral pledged to secure the Recovery Bonds has been exhausted and the Recovery Bonds have not been paid in full, then any and all amounts remaining due on the Recovery Bonds shall be extinguished and the Recovery Bonds cancelled. To the extent that under any applicable law the Holder of a Recovery Bond or any owner of a security entitlement to a Bond is deemed to have an interest in assets of the Issuer other than the Recovery Bond Collateral (“Other Issuer Assets”), such Holder or owner is deemed to have agreed that its interest in such Other Issuer Assets is fully subordinate to the claim against such Other Issuer Assets of the pledgees or grantees to which such Other Issuer Assets are pledged or granted and is further deemed to have agreed that this agreement shall constitute a subordination agreement for purpose of Section 510(a) of the United States Bankruptcy Code.

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ARTICLE III

COVENANTS

SECTION 3.01. Payment of Principal, Premium, if any, and Interest.

The principal of and premium, if any, and interest on the Recovery Bonds shall be duly and punctually paid by the Issuer, or the Servicer on behalf of the Issuer, in accordance with the terms of the Recovery Bonds and this Indenture; provided that except on a Final Maturity Date or upon the acceleration of the Recovery Bonds following the occurrence of an Event of Default, the Issuer shall only be obligated to pay the principal of the Recovery Bonds on each Payment Date therefor to the extent moneys are available for such payment pursuant to Section 8.02. Amounts properly withheld under the Code or other tax laws by any Person from a payment to any Holder of interest or principal or premium, if any, shall be considered as having been paid by the Issuer to such Holder for all purposes of this Indenture.

SECTION 3.02. Maintenance of Office or Agency.

The Issuer shall initially maintain in Chicago, an office or agency where Recovery Bonds may be surrendered for registration of transfer or exchange. The Issuer shall give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes and the Corporate Trust Office of the Indenture Trustee shall serve as the offices provided in the prior sentence. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders may be made at the office of the Indenture Trustee located at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders.

SECTION 3.03. Money for Payments To Be Held in Trust.

(a)    As provided in Section 8.02(a), all payments of amounts due and payable with respect to any Recovery Bonds that are to be made from amounts withdrawn from the Collection Account pursuant to Section 8.02(d) shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from such Collection Account for payments with respect to any Recovery Bonds shall be paid over to the Issuer except as provided in this Section 3.03 and Section 8.02.

(b)    Each Paying Agent shall meet the eligibility criteria set forth for any Indenture Trustee under Section 6.11. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will:

(i) hold all sums held by it for the payment of amounts due with respect to the Recovery Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

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(ii) give the Indenture Trustee and the Rating Agencies written notice of any Default by the Issuer of which it has actual knowledge (and if the Indenture Trustee is the Paying Agent, a Responsible Officer of the Paying Agent has actual knowledge) in the making of any payment required to be made with respect to the Recovery Bonds;

(iii) at any time during the continuance of any such Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv) immediately, with notice to the Rating Agencies, resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Recovery Bonds if at any time the Paying Agent determines that it has ceased to meet the standards required to be met by a Paying Agent at the time of such determination; and

(v) comply with all requirements of the Code and other tax laws with respect to the withholding from any payments made by it on any Recovery Bonds of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

(c)    The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

(d)    Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Recovery Bond and remaining unclaimed for two (2) years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on an Issuer Request; and, subject to Section 10.16, the Holder of such Recovery Bond shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer, cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee may also adopt and employ, at the written direction and expense of the Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

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SECTION 3.04. Existence.

The Issuer shall keep in full effect its existence, rights and franchises as a limited liability company under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the other Basic Documents, the Recovery Bonds, the Recovery Bond Collateral and each other instrument or agreement referenced herein or therein.

SECTION 3.05. Protection of Recovery Bond Collateral.

(a)    The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and all filings with the CPUC or the California Secretary of State pursuant to the Financing Order or the Wildfire Financing Law and all financing statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action necessary or advisable to:

(i) maintain or preserve the Lien and security interest (and the priority thereof) of this Indenture and the Series Supplement or carry out more effectively the purposes hereof;

(ii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iii) enforce any of the Recovery Bond Collateral;

(iv) preserve and defend title to the Recovery Bond Collateral and the rights of the Indenture Trustee and the Holders in such Recovery Bond Collateral against the Claims of all Persons and parties, including, without limitation, the challenge by any party to the validity or enforceability of the Financing Order, any Tariff, the Recovery Property or any proceeding relating thereto and institute any action or proceeding necessary to compel performance by the CPUC or the State of California of any of its obligations or duties under the Wildfire Financing Law, the State Pledge, or the Financing Order or Tariff; or

(v) pay any and all taxes levied or assessed upon all or any part of the Recovery Bond Collateral.

(b)    The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute or authorize, as the case may be, any filings with the CPUC or the California Secretary of State, financing statements, continuation statements or other instrument required pursuant to this Section 3.05, it being understood that the Indenture Trustee shall not be responsible for filing any such financing statement and shall have no obligation or any duty to prepare, authorize, execute or file such documents. The Indenture Trustee is specifically authorized upon written direction of the Issuer or Servicer to file financing statements covering the Recovery Bond Collateral,

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including, without limitation, financing statements that describe the Recovery Bond Collateral as “all assets” or “all personal property” of the Issuer; provided, however, that such authorization shall not be deemed to be an obligation.

SECTION 3.06. Opinions as to Recovery Bond Collateral.

(a)    Within ninety (90) days after the beginning of each calendar year beginning with the calendar year beginning January 1, 2022, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any filings with the CPUC, the Delaware Secretary of State or the California Secretary of State pursuant to the Wildfire Financing Law and the Financing Order and any financing statements and continuation statements as are necessary to maintain the Lien and the perfected security interest created by this Indenture and reciting the details of such action or stating that, in the opinion of such counsel, no such action is necessary to maintain such Lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any filings with the CPUC, the Delaware Secretary of State or the California Secretary of State, financing statements and continuation statements that will, in the opinion of such counsel, be required within the twelve-month period following the date of such opinion to maintain the Lien and the perfected security interest created by this Indenture and the Series Supplement.

(b)    Prior to the effectiveness of any amendment to the Sale Agreement or the Servicing Agreement, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer either (i) stating that, in the opinion of such counsel, all filings, including UCC financing statements and other filings with the CPUC, the Delaware Secretary of State and the California Secretary of State pursuant to the Wildfire Financing Law or the Financing Order, have been executed and filed that are necessary fully to maintain the Lien and security interest of the Issuer and the Indenture Trustee in the Recovery Property and the Recovery Bond Collateral, respectively, and the proceeds thereof, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) stating that, in the opinion of such counsel, no such action shall be necessary to maintain such Lien and security interest.

SECTION 3.07. Performance of Obligations; Servicing; SEC Filings.

(a)    The Issuer (i) shall diligently pursue any and all actions to enforce its rights under each instrument or agreement included in the Recovery Bond Collateral and (ii) shall not take any action and shall use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s covenants or obligations under any such instrument or agreement or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except, in each case, as expressly provided in this Indenture, the Series Supplement, the Sale Agreement, the Servicing Agreement or such other instrument or agreement.

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(b)    The Issuer may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee herein or in an Officer’s Certificate shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Servicer to assist the Issuer in performing its duties under this Indenture.

(c)    The Issuer shall punctually perform and observe all of its obligations and agreements contained in this Indenture, the Series Supplement, the other Basic Documents and in the instruments and agreements included in the Recovery Bond Collateral, including filing or causing to be filed all filings with the CPUC, the Delaware Secretary of State or the California Secretary of State pursuant to the Wildfire Financing Law or the Financing Order, all UCC financing statements and continuation statements required to be filed by it by the terms of this Indenture, the Series Supplement, the Sale Agreement and the Servicing Agreement in accordance with and within the time periods provided for herein and therein.

(d)    If the Issuer shall have knowledge of the occurrence of a Servicer Default under the Servicing Agreement, the Issuer shall promptly give written notice thereof to the Indenture Trustee and the Rating Agencies, and shall specify in such notice the response or action, if any, the Issuer has taken or is taking with respect to such Servicer Default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Servicing Agreement with respect to the Recovery Property, the Recovery Bond Collateral or the Fixed Recovery Charges, the Issuer shall take all reasonable steps available to it to remedy such failure.

(e)    As promptly as possible after the giving of notice of termination to the Servicer and the Rating Agencies of the Servicer’s rights and powers pursuant to Section 7.01 of the Servicing Agreement, the Indenture Trustee shall, at the written direction of the Holders evidencing not less than a majority of the Outstanding Amount of the Recovery Bonds) appoint a successor Servicer (the “Successor Servicer”), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Issuer and the Indenture Trustee. A Person shall qualify as a Successor Servicer only if such Person satisfies the requirements of the Servicing Agreement. If within thirty (30) days after the delivery of the notice referred to above, a new Servicer shall not have been appointed, the Indenture Trustee, at the Issuer’s expense, may petition the CPUC or a court of competent jurisdiction to appoint a Successor Servicer. In connection with any such appointment, PG&E may make such arrangements for the compensation of such Successor Servicer as it and such successor shall agree, subject to the limitations set forth in Section 8.02 and in the Servicing Agreement.

(f)    Upon any termination of the Servicer’s rights and powers pursuant to the Servicing Agreement, the Indenture Trustee shall promptly notify the Issuer, the Holders and the Rating Agencies. As soon as a Successor Servicer is appointed, the Indenture Trustee shall notify the Issuer, the Holders and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer.

(g)    The Issuer shall (or shall cause the Depositor to) post on its website (which for this purpose may be the website of any direct or indirect parent company of the Issuer) and, to the extent consistent with the Issuer’s and the Depositor’s obligations under applicable law, file with or furnish to the SEC in periodic reports and other reports as are required from time to time under

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Section 13 or Section 15(d) of the Exchange Act, the following information (other than any such information filed with the SEC and publicly available to investors unless the Issuer specifically requests such items to be posted) with respect to the Outstanding Recovery Bonds, in each case to the extent such information is reasonably available to the Issuer:

(i) the final Prospectus;

(ii) the statements of any remittances of Fixed Recovery Charges made to the Indenture Trustee (to be included in a Form 10-D or Form 10-K, or successor forms thereto);

(iii) a statement reporting the balances in the Collection Account and in each subaccount of the Collection Account as of the end of each quarter or the most recent date available (to be included in a Form 10-D or Form 10-K, or successor forms thereto);

(iv) a statement showing the balance of Outstanding Recovery Bonds that reflects the actual periodic payments made on the Recovery Bonds during the applicable period (to be included in the next Form 10-D or Form 10-K filed, or successor forms thereto);

(v) the Servicer’s Certificate as required to be submitted pursuant to the Servicing Agreement (to be filed with a Form 10-D, Form 10-K or Form 8-K, or successor forms thereto);

(vi) the Monthly Servicer’s Certificate as required to be submitted pursuant to the Servicing Agreement;

(vii) the Reconciliation Certificate as required to be submitted pursuant to the Servicing Agreement;

(viii) the text (or a link to the website where a reader can find the text) of each filing of a True-Up Adjustment and the results of each such filing;

(ix) any change in the long-term or short-term credit ratings of the Servicer assigned by the Rating Agencies;

(x) material legislative or regulatory developments directly relevant to the Outstanding Recovery Bonds (to be filed or furnished in a Form 8-K); and

(xi) any reports and other information that the Issuer is required to file with the SEC under the Securities Exchange Act of 1934.

(h)    Notwithstanding the foregoing, nothing herein shall preclude the Issuer from voluntarily suspending or terminating its filing obligations as Issuer with the SEC to the extent permitted by applicable law.

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(i)    The address of the Indenture Trustee’s website for investors is currently https://gctinvestorreporting.bnymellon.com. The Indenture Trustee shall promptly notify the Issuer, the Bondholders and the Rating Agencies of any change to the address of the website for investors.

(j)    The Issuer shall make all filings required under the Wildfire Financing Law relating to the transfer of the ownership or security interest in the Recovery Property other than those required to be made by the Seller or the Servicer pursuant to the Basic Documents.

SECTION 3.08. Certain Negative Covenants.

So long as any Recovery Bonds are Outstanding, the Issuer shall not:

(a)    except as expressly permitted by this Indenture and the other Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Recovery Bond Collateral, unless directed to do so by the Indenture Trustee in accordance with Article V;

(b)     claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the Recovery Bonds (other than amounts properly withheld from such payments under the Code or other tax laws) or assert any claim against any present or former Holder by reason of the payment of the taxes levied or assessed upon any part of the Recovery Bond Collateral;

(c)    terminate its existence or dissolve or liquidate in whole or in part, except in a transaction permitted by Section 3.10;

(d)    (i) permit the validity or effectiveness of this Indenture or the other Basic Documents to be impaired, or permit the Lien of this Indenture and the Series Supplement to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Recovery Bonds under this Indenture except as may be expressly permitted hereby, (ii) permit any Lien (other than the Lien of this Indenture or of the Series Supplement) to be created on or extend to or otherwise arise upon or burden the Recovery Bond Collateral or any part thereof or any interest therein or the proceeds thereof (other than tax liens arising by operation of law with respect to amounts not yet due), or (iii) permit the Lien of this Indenture or of the Series Supplement not to constitute a valid first priority perfected security interest in the Recovery Bond Collateral;

(e)    elect to be classified as an association taxable as a corporation for federal income tax purposes or otherwise take any action, file any tax return, or make any election inconsistent with the treatment of the Issuer, for purposes of federal taxes and, to the extent consistent with applicable State tax law, State income and franchise tax purposes, as a disregarded entity that is not separate from the sole owner of the Issuer;

(f)    change its name, identity or structure or the location of its chief executive office, unless at least ten (10) Business Days’ prior to the effective date of any such change the Issuer delivers to the Indenture Trustee (with copies to the Rating Agencies) such documents, instruments or agreements, executed by the Issuer, as are necessary to reflect such change and to continue the perfection of the security interest of this Indenture and the Series Supplement;

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(g)    take any action which is subject to a Rating Agency Condition without satisfying the Rating Agency Condition;

(h)    except to the extent permitted by applicable law, voluntarily suspend or terminate its filing obligations with the SEC as described in Section 3.07(g); or

(i)    issue any recovery bonds under the Wildfire Financing Law or any similar law (other than the Recovery Bonds).

SECTION 3.09. Annual Statement as to Compliance.

The Issuer will deliver to the Indenture Trustee and the Rating Agencies not later than March 31 of each year (commencing with March 31, 2023), an Officer’s Certificate stating, as to the Responsible Officer signing such Officer’s Certificate, that:

(a)    a review of the activities of the Issuer during the preceding twelve (12) months ended December 31 (or, in the case of the first such Officer’s Certificate, since the Closing Date) and of performance under this Indenture has been made; and

(b)    to the best of such Responsible Officer’s knowledge, based on such review, the Issuer has in all material respects complied with all conditions and covenants under this Indenture throughout such twelve-month period (or such shorter period in the case of the first such Officer’s Certificate), or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Responsible Officer and the nature and status thereof.

SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.

(a)    The Issuer shall not consolidate or merge with or into any other Person, unless:

(i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall a. be a Person organized and existing under the laws of the United States of America or any State, b. expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance satisfactory to the Indenture Trustee, the performance or observance of every agreement and covenant of this Indenture and the Series Supplement on the part of the Issuer to be performed or observed, all as provided herein and in the Series Supplement, and c. assume all obligations and succeed to all rights of the Issuer under the Sale Agreement, the Servicing Agreement and each other Basic Document to which the Issuer is a party;

(ii) immediately after giving effect to such merger or consolidation, no Default, Event of Default or Servicer Default shall have occurred and be continuing;

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(iii) the Rating Agency Condition shall have been satisfied with respect to such merger or consolidation;

(iv) the Issuer shall have delivered to PG&E, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to PG&E, and which may be based on a ruling from the Internal Revenue Service (unless the Internal Revenue Service has announced that it will not rule on the issues described in this paragraph)) to the effect that the consolidation or merger will not result in a material adverse federal or State income tax consequence to the Issuer, PG&E, the Indenture Trustee or the then existing Bondholders;

(v) any action as is necessary to maintain the Lien and the perfected security interest in the Recovery Bond Collateral created by this Indenture and the Series Supplement shall have been taken as evidenced by an Opinion of Counsel of external counsel of the Issuer delivered to the Indenture Trustee; and

(vi) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel of external counsel of the Issuer each stating that such consolidation or merger and such supplemental indenture comply with this Indenture and each Series Supplement and that all conditions precedent herein provided for in this Section 3.10(a) with respect to such transaction have been complied with (including any filing required by the Exchange Act).

(b)    Except as specifically provided herein, the Issuer shall not sell, convey, exchange, transfer or otherwise dispose of any of its properties or assets included in the Recovery Bond Collateral, to any Person, unless:

(i) the Person that acquires the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted: (i) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (ii) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance satisfactory to the Indenture Trustee, the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein and in the Series Supplement, (iii) expressly agrees by means of such supplemental indenture that all right, title and interest so sold, conveyed, exchanged, transferred or otherwise disposed of shall be subject and subordinate to the rights of Holders, (iv) unless otherwise provided in the supplemental indenture referred to in clause (i) above, expressly agrees to indemnify, defend and hold harmless the Issuer and the Indenture Trustee against and from any loss, liability or expense arising under or related to this Indenture, the Series Supplement and the Recovery Bonds (including

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the enforcement costs of such indemnity), (v) expressly agrees by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the SEC (and any other appropriate Person) required by the Exchange Act in connection with the Recovery Bonds and (vi) if such sale, conveyance, exchange, transfer or disposal relates to the Issuer’s rights and obligations under the Sale Agreement or the Servicing Agreement, assumes all obligations and succeeds to all rights of the Issuer under the Sale Agreement and the Servicing Agreement, as applicable;

(ii) immediately after giving effect to such transaction, no Default, Event of Default or Servicer Default shall have occurred and be continuing;

(iii) the Rating Agency Condition shall have been satisfied with respect to such transaction;

(iv) the Issuer shall have delivered to PG&E, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to PG&E, and which may be based on a ruling from the Internal Revenue Service) to the effect that the disposition will not result in a material adverse federal or State income tax consequence to the Issuer, PG&E, the Indenture Trustee or the then existing Bondholders;

(v) any action as is necessary to maintain the Lien and the perfected security interest in the Recovery Bond Collateral created by this Indenture and the Series Supplement shall have been taken as evidenced by an Opinion of Counsel of external counsel of the Issuer delivered to the Indenture Trustee; and

(vi) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel of external counsel of the Issuer each stating that such sale, conveyance, exchange, transfer or other disposition and such supplemental indenture comply with this Indenture and each Series Supplement and that all conditions precedent herein provided for in this Section 3.10(b) with respect to such transaction have been complied with (including any filing required by the Exchange Act).

SECTION 3.11. Successor or Transferee.

(a)    Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b)    Except as set forth in Section 6.07, upon a sale, conveyance, exchange, transfer or other disposition of all the assets and properties of the Issuer in accordance with Section 3.10(b), the Issuer will be released from every covenant and agreement of this Indenture and the other Basic

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Documents to be observed or performed on the part of the Issuer with respect to the Recovery Bonds and the Recovery Property immediately following the consummation of such acquisition upon the delivery of written notice to the Indenture Trustee from the Person acquiring such assets and properties stating that the Issuer is to be so released.

SECTION 3.12. No Other Business.

The Issuer shall not engage in any business other than financing, purchasing, owning and managing the Recovery Property and the other Recovery Bond Collateral and the issuance of the Recovery Bonds in the manner contemplated by the Financing Order and this Indenture and the Basic Documents and activities incidental thereto.

SECTION 3.13. No Borrowing.

The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Recovery Bonds and any other indebtedness expressly permitted by or arising under the Basic Documents.

SECTION 3.14. Servicer’s Obligations.

The Issuer shall enforce the Servicer’s compliance with and performance of all of the Servicer’s material obligations under the Servicing Agreement.

SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.

Except as otherwise contemplated by the Sale Agreement, the Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

SECTION 3.16. Capital Expenditures.

Other than the purchase of Recovery Property from the Seller on each Closing Date, the Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

SECTION 3.17. Restricted Payments.

Except as provided in Section 8.04(c), the Issuer shall not, directly or indirectly, (a) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to any owner of an interest in the Issuer or otherwise with respect to any ownership or equity interest or similar security in or of the Issuer, (b) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or similar security or (c) set aside or otherwise segregate any amounts for any such purpose; provided, however, that, if no Event of Default shall have occurred and be continuing or would be caused

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thereby, the Issuer may make, or cause to be made, any such distributions to any owner of an interest in the Issuer or otherwise with respect to any ownership or equity interest or similar security in or of the Issuer using funds distributed to the Issuer pursuant to Section 8.02(e)(xi) to the extent that such distributions would not cause the balance of the Capital Subaccount to decline below the Required Capital Level. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the other Basic Documents.

SECTION 3.18. Notice of Events of Default.

The Issuer agrees to give the Indenture Trustee, the CPUC and the Rating Agencies prompt written notice of each Default or Event of Default hereunder as provided in Section 5.01, and each default on the part of the Seller or the Servicer of its obligations under the Sale Agreement or the Servicing Agreement, respectively.

SECTION 3.19. Further Instruments and Acts.

Upon request of the Indenture Trustee (it being understood that this covenant shall not be construed as an affirmative duty of the Indenture Trustee), the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture and to maintain the first priority perfected security interest of the Indenture Trustee in the Recovery Bond Collateral.

SECTION 3.20. Notice of Events of Default.

The Issuer agrees to give the Indenture Trustee, the CPUC and the Rating Agencies prompt written notice of each Event of Default hereunder and each default on the part of the Seller or the Servicer of its obligations under the Sale Agreement or the Servicing Agreement with respect to the Recovery Property, respectively.

SECTION 3.21. Sale Agreement, Servicing Agreement and Administration Agreement Covenants.

(a)    The Issuer agrees to take all such lawful actions to enforce its rights under the Sale Agreement, the Servicing Agreement and the Administration Agreement and to compel or secure the performance and observance by the Seller, the Servicer and the Administrator of each of their respective obligations to the Issuer under or in connection with the Sale Agreement, the Servicing Agreement and the Administration Agreement in accordance with the terms thereof. So long as no Event of Default occurs and is continuing, but subject to Section 3.21(f), the Issuer may exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale Agreement, the Servicing Agreement and the Administration Agreement; provided that such action shall not adversely affect the interests of the Holders in any material respect.

(b)    If an Event of Default occurs and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of Holders of a majority of the Outstanding Amount of the Recovery Bonds of all Tranches affected thereby shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, the Administrator and the Servicer,

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as the case may be, under or in connection with the Sale Agreement, the Administration Agreement and the Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller, the Administrator or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale Agreement, the Administration Agreement and the Servicing Agreement, and any right of the Issuer to take such action shall be suspended.

(c)    Except as set forth in Section 3.22(e), with the prior written consent of the Indenture Trustee (subject to the delivery of the Opinion of Counsel set forth below), the Administration Agreement, the Sale Agreement and the Servicing Agreement may be amended in accordance with the provisions thereof, so long as the Rating Agency Condition is satisfied in connection therewith, at any time and from time to time, without the consent of the Holders of the Recovery Bonds; provided that all conditions precedent for such amendment have been satisfied and such amendment is authorized and permitted by the terms of such agreement, as evidenced by an Opinion of Counsel of external counsel of the Issuer. Notwithstanding the foregoing, the Sale Agreement, the Administration Agreement and the Servicing Agreement may be amended in accordance with the provisions thereof with ten (10) Business Days’ prior written notice given to the Rating Agencies, the prior written consent of the Indenture Trustee, but without the consent of the Holders, (I) to cure any ambiguity, to correct or supplement any provisions in the applicable agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in such agreement or of modifying in any manner the rights of the Holders; provided, however, that such action shall not adversely affect in any material respect the interests of any Holder or (II) to conform the provisions of the applicable agreement to the description of such agreement in the Prospectus. In the case of an amendment described in the preceding sentence, the Issuer shall furnish copies of such amendment to the Rating Agencies promptly after execution thereof.

(d)    Except as set forth in Section 3.21(d), if the Issuer, the Seller, the Administrator, the Servicer or any other party to the respective agreement proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, waiver, supplement, termination or surrender of, the terms of the Sale Agreement, the Administration Agreement, or the Servicing Agreement, or waive timely performance or observance by the Seller, the Administrator or the Servicer under the Sale Agreement, the Administration Agreement or the Servicing Agreement, in each case in such a way as would materially and adversely affect the interests of any Holder of Recovery Bonds, the Issuer shall first notify the Rating Agencies of the proposed amendment, modification, waiver, supplement, termination or surrender and shall promptly notify the Indenture Trustee in writing and the Indenture Trustee shall notify the Holders of the Recovery Bonds of the proposed amendment, modification, waiver, supplement, termination or surrender and whether the Rating Agency Condition has been satisfied with respect thereto. The Indenture Trustee shall consent to such proposed amendment, modification, waiver, supplement, termination or surrender only if the Rating Agency Condition is satisfied and only with the prior written consent of the Holders of a majority of the Outstanding Amount of Recovery Bonds of the Tranches materially and adversely affected. If any such amendment, modification, waiver, supplement, termination or surrender shall be so consented to by the Indenture Trustee or such Holders, the Issuer agrees to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as shall be necessary or appropriate in the circumstances.

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(e)    If the Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate or surrender, or to agree to any amendment, modification, supplement, termination, waiver or surrender of, the process for True-Up Adjustments, the Issuer shall notify the Indenture Trustee in writing and the Indenture Trustee shall notify the Holders of the Recovery Bonds of such proposal, and the Indenture Trustee shall consent thereto with the prior written consent of the Holders of a majority of the Outstanding Amount of Recovery Bonds of the Tranches affected thereby and only if the Rating Agency Condition has been satisfied with respect thereto.

(f)    Promptly following a default by the Seller under the Sale Agreement, by the Administrator under the Administration Agreement or the occurrence of a Servicer Default under the Servicing Agreement, and at the Issuer’s expense, the Issuer agrees to take all such lawful actions as the Indenture Trustee may request to compel or secure the performance and observance by each of the Seller, the Administrator or the Servicer of their obligations under and in accordance with the Sale Agreement, the Administration Agreement and the Servicing Agreement, as the case may be, in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with such agreements to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of any default by the Seller, the Administrator or the Servicer, respectively, thereunder and the institution of legal or administrative actions or Proceedings to compel or secure performance of their obligations under the Sale Agreement, the Administration Agreement or the Servicing Agreement, as applicable.

(g)    Before consenting to any amendment, modification, supplement, termination, waiver or surrender under Sections 3.21(d) or (e), the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that such action is authorized or permitted by this Indenture and all conditions precedent to such amendment have been satisfied.

SECTION 3.22. Taxes.

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

SECTION 3.23. Additional Recovery Bonds or Additional Other Recovery Bonds.

(a)    Following the issuance by the CPUC of any Subsequent Financing Order or pursuant to remaining authority under the Financing Order, the Issuer may, in its sole discretion but subject to the terms contained in this Section 3.23, acquire additional and separate recovery bond collateral and issue Additional Recovery Bonds or Additional Other Recovery Bonds under

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any such Subsequent Indenture that are backed by such separate additional recovery bond collateral. Any Additional Recovery Bonds and Additional Other Recovery Bonds may include terms and provisions unique to such Additional Recovery Bonds or such Additional Other Recovery Bonds.

(b)    In addition to all applicable requirements set forth in any Subsequent Indenture for any Additional Recovery Bonds or Additional Other Recovery Bonds, the following conditions must be satisfied in connection with any issuance of Additional Recovery Bonds or Additional Other Recovery Bonds:

(i) PG&E has existing authority under the Financing Order to issue Additional Recovery Bonds or PG&E requests and receives a Subsequent Financing Order from the CPUC to recover additional recovery costs through the issuance of Additional Other Recovery Bonds;

(ii) PG&E must serve as initial servicer and administrator for such series of the Additional Recovery Bonds or Additional Other Recovery Bonds and that the servicer and the administrator cannot be replaced without the requisite approval of the holders of all series of Recovery Bonds then-Outstanding;

(iii) satisfaction of the Rating Agency Condition;

(iv) each series of the Additional Recovery Bonds or Additional Other Recovery Bonds under a Subsequent Indenture shall have recourse only to the recovery property or additional other recovery property, as applicable, and funds on deposit in the trust account held by the Indenture Trustee with respect to such Additional Recovery Bonds or Additional Other Recovery Bonds, as the case shall be, shall be nonrecourse to the Recovery Property securing the Recovery Bonds and shall not constitute a claim against the Issuer if revenue from the fixed recovery charges and funds on deposit in the trust account with respect to such series of Additional Recovery Bonds or Additional Other Recovery Bonds is insufficient to pay such Additional Recovery Bonds or Additional Other Recovery Bonds, as the case shall be, in full;

(v) the Issuer has provided to the Indenture Trustee and the Rating Agencies then rating any series of the Issuer’s Outstanding Recovery Bonds an opinion of a nationally recognized law firm experienced in such matters to the effect that such issuance would not result in the Issuer’s substantive consolidation with PG&E and that there has been a true sale of the recovery property for such series, subject to the customary exceptions, qualifications and assumptions contained therein;

(vi) transaction documentation for the other series provides that the indenture trustee on behalf of holders of the recovery bonds of the other series will not file or join in filing of any bankruptcy petition against the Issuer;

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(vii) if holders of such other series are deemed to have any interest in any of the Recovery Bond Collateral dedicated to the Recovery Bonds, holders of such Additional Recovery Bonds or Additional Other Recovery Bonds must agree that their interest in the recovery bond collateral dedicated to the Additional Recovery Bonds or Additional Other Recovery Bonds is only a first priority perfected interest in the assets relating to the Additional Recovery Bonds or Additional Other Recovery Bonds, as the case may be, in accordance with the related intercreditor agreement;

(viii) each series of Additional Recovery Bonds or Additional Other Recovery will have its own bank accounts or trust accounts and funds for each series of recovery bonds shall be remitted in accordance with the related servicing agreement and related intercreditor agreement;

(ix) no series of Additional Recovery Bonds or Additional Other Recovery Bonds will be issued under this Indenture; and

(x) each series will bear its own indenture trustee fees, servicer fees and administration fees.

ARTICLE IV

SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance.

(a)    This Indenture shall cease to be of further effect with respect to the Recovery Bonds and the Indenture Trustee, on reasonable written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Recovery Bonds, when:

(i) either

(A) all Recovery Bonds theretofore authenticated and delivered (other than (I) Recovery Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (II) Recovery Bonds for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in the last paragraph of Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

(B) either (I) the Scheduled Final Payment Date has occurred with respect to all Recovery Bonds not theretofore delivered to the Indenture Trustee for cancellation or (II) the Recovery Bonds will be due and payable on their respective Scheduled Final Payment Dates within one year, and in any such case, the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust

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with the Indenture Trustee (1) cash and/or (2) U.S. Government Obligations which through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the Recovery Bonds not theretofore delivered to the Indenture Trustee for cancellation and all other sums payable hereunder by the Issuer with respect to the Recovery Bonds when scheduled to be paid and to discharge the entire indebtedness on the Recovery Bonds when due;

(ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; and

(iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel of external counsel of the Issuer and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of registered public accountants, each meeting the applicable requirements of Section 10.01(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to Recovery Bonds have been complied with.

(b)    Subject to Sections 4.01(e) and 4.02, the Issuer at any time may terminate (i) all its obligations under this Indenture with respect to the Recovery Bonds (“Legal Defeasance Option”) or (ii) its obligations under Sections 3.04, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18 and 3.19 and the operation of Section 5.01(a)(iii) (“Covenant Defeasance Option”) with respect to Recovery Bonds. The Issuer may exercise the Legal Defeasance Option with respect to Recovery Bonds notwithstanding its prior exercise of the Covenant Defeasance Option.

(c)    If the Issuer exercises the Legal Defeasance Option, the maturity of the Recovery Bonds may not be accelerated because of an Event of Default. If the Issuer exercises the Covenant Defeasance Option, the maturity of the Recovery Bonds may not be accelerated because of an Event of Default specified in Section 5.01(a)(iii).

(d)    Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option with respect to Recovery Bonds, the Indenture Trustee, on reasonable written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of the obligations that are terminated pursuant to such exercise.

(e)    Notwithstanding Sections 4.01(a) and 4.01(b) above, (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Recovery Bonds, (iii) rights of Holders to receive payments of principal, premium, if any, and interest, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.03) and (vi) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Indenture Trustee payable to all or any of them, shall survive until this Indenture or certain obligations hereunder have been satisfied and discharged pursuant to Section 4.01(a) or 4.01(b) have been paid in full. Thereafter the obligations in Sections 6.07 and 4.04 shall survive.

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SECTION 4.02. Conditions to Defeasance.

The Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance Option with respect to Recovery Bonds only if:

(a)    the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations which through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the Recovery Bonds not therefore delivered to the Indenture Trustee for cancellation and all other sums payable hereunder by the Issuer with respect to the Recovery Bonds when scheduled to be paid and to discharge the entire indebtedness on the Recovery Bonds when due;

(b)    the Issuer delivers to the Indenture Trustee a certificate from a nationally recognized firm of Independent registered public accountants expressing its opinion that the payments of principal and interest when due and without reinvestment of the deposited U.S. Government Obligations plus any deposited cash without investment will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay in respect of the Recovery Bonds (i) principal in accordance with the Expected Amortization Schedule therefor, (ii) interest when due and (iii) all other sums payable hereunder by the Issuer with respect to the Recovery Bonds;

(c)    in the case of the Legal Defeasance Option, ninety-five (95) days pass after the deposit is made and during the ninety-five (95)-day period no Default specified in Section 5.01(a)(v) or (vi) occurs which is continuing at the end of the period;

(d)    no Default has occurred and is continuing on the day of such deposit and after giving effect thereto;

(e)    in the case of an exercise of the Legal Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer stating that (i) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Recovery Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred;

(f)    in the case of an exercise of the Covenant Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer to the

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effect that the Holders of the Recovery Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

(g)    the Issuer delivers to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel of external counsel to the Issuer, each stating that all conditions precedent to the satisfaction and discharge of the Recovery Bonds to the extent contemplated by this Article IV have been complied with;

(h)    the Issuer delivers to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer to the effect that (i) in a case under the Bankruptcy Code in which PG&E (or any of its Affiliates, other than the Issuer) is the debtor, the court would hold that the deposited moneys or U.S. Government Obligations would not be in the bankruptcy estate of PG&E (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations); and (ii) in the event PG&E (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) were to be a debtor in a case under the Bankruptcy Code, the court would not disregard the separate legal existence of PG&E (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) and the Issuer so as to order substantive consolidation under the Bankruptcy Code of the Issuer’s assets and liabilities with the assets and liabilities of PG&E or such other Affiliate; and

(i)    the Rating Agency Condition shall have been satisfied with respect to the exercise of any Legal Defeasance Option or Covenant Defeasance Option.

Notwithstanding any other provision of this Section 4.02, no delivery of moneys or U.S. Government Obligations to the Indenture Trustee shall terminate any obligation of the Issuer to the Indenture Trustee under this Indenture or the Series Supplement or any obligation of the Issuer to apply such moneys or U.S. Government Obligations under Section 4.03 until principal of and premium, if any, and interest on the Recovery Bonds shall have been paid in accordance with the provisions of this Indenture and the Series Supplement.

SECTION 4.03. Application of Trust Money.

All moneys or U.S. Government Obligations deposited with the Indenture Trustee pursuant to Section 4.01 or 4.02 shall be held in trust and applied by it, in accordance with the provisions of the Recovery Bonds and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Recovery Bonds for the payment of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal, premium, if any, and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Servicing Agreement or required by law. Notwithstanding anything to the contrary in this Article IV, the Indenture Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request any moneys or U.S. Government Obligations held by it pursuant to Section 4.02 which, in the opinion of a nationally recognized firm of Independent registered public accountants expressed in a written certification thereof delivered to the Indenture Trustee (and not at the cost or expense of the Indenture Trustee), are in excess of the amount thereof which would be required to be deposited for the purpose for which such moneys or U.S. Government Obligations were deposited, provided that any such payment shall be subject to the satisfaction of the Rating Agency Condition.

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SECTION 4.04. Repayment of Moneys Held by Paying Agent.

In connection with the satisfaction and discharge of this Indenture or the Covenant Defeasance Option or Legal Defeasance Option with respect to the Recovery Bonds, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

ARTICLE V

REMEDIES

SECTION 5.01. Events of Default.

(a)    “Event of Default” wherever used herein, means any one or more of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i) default in the payment of any interest on any Recovery Bond when the same becomes due and payable (whether such failure to pay interest is caused by a shortfall in Fixed Recovery Charges received or otherwise), and such default shall continue for a period of five (5) Business Days; or

(ii) default in the payment of the then unpaid principal of any Recovery Bond of any Tranche on the Final Maturity Date for such Tranche; or

(iii) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than defaults specified in clauses (i) or (ii) above), and such default shall continue or not be cured, for a period of thirty (30) days after the earlier of (x) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Recovery Bonds, a written notice specifying such default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder or (y) the date that the Issuer has actual knowledge of the default; or

(iv) any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured, within thirty (30) days

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after the earlier of (x) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Recovery Bonds, a written notice specifying such incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder or (y) the date the Issuer has actual knowledge of the default, or

(v) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Recovery Bond Collateral in an involuntary case or proceeding under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Recovery Bond Collateral, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of ninety (90) consecutive days; or

(vi) the commencement by the Issuer of a voluntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case or proceeding under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Recovery Bond Collateral, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing; or

(vii) any act or failure to act by the State of California or any of its agencies (including the CPUC), officers or employees which violates or is not in accordance with the State Pledge.

(b)    The Issuer shall deliver to a Responsible Officer of the Indenture Trustee and to the Rating Agencies, within five (5) days after a Responsible Officer of the Issuer has knowledge of the occurrence thereof, written notice in the form of an Officer’s Certificate of any event (x) which is an Event of Default under clauses (i), (ii), (v), (vi) or (vii) or (y) which with the giving of notice, the lapse of time, or both, would become an Event of Default under clause (ii), (iii) or (iv), including, in each case, the status of such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.

(a)    If an Event of Default (other than an Event of Default under clause (vii) of Section 5.01) should occur and be continuing, then and in every such case the Indenture Trustee or the Holders representing not less than a majority of the Outstanding Amount of the Recovery Bonds may declare the Recovery Bonds to be immediately due and payable, by a notice in writing to the

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Issuer (and to the Indenture Trustee if given by Holders), and upon any such declaration the unpaid principal amount of the Recovery Bonds, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

(b)    At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders representing not less than a majority of the Outstanding Amount of the Recovery Bonds, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

(i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

(A) all payments of principal of and premium, if any, and interest on all Recovery Bonds due and owing at such time as if such Event of Default had not occurred and was not continuing and all other amounts that would then be due hereunder or upon the Recovery Bonds if the Event of Default giving rise to such acceleration had not occurred; and

(B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and

(ii) all Events of Default, other than the nonpayment of the principal of the Recovery Bonds that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

(c)    No such rescission shall affect any subsequent default or impair any right consequent thereto.

SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

(a)    If an Event of Default under Section 5.01(a)(i) or (ii) has occurred and is continuing, subject to Section 10.18, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and, subject to the limitations on recourse set forth herein, may enforce the same against the Issuer or other obligor upon the Recovery Bonds and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Recovery Bonds, wherever situated the moneys payable, or the Recovery Bond Collateral and the proceeds thereof, the whole amount then due and payable on the Recovery Bonds for principal, premium, if any, and interest, with interest upon the overdue principal and premium, if any, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the respective rate borne by the Recovery Bonds or the applicable Tranche and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

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(b)    If an Event of Default (other than Event of Default under clause (vii) of Section 5.01) occurs and is continuing, the Indenture Trustee shall, as more particularly provided in Section 5.04, proceed to protect and enforce its rights and the rights of the Holders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture and the Series Supplement or by law, including foreclosing or otherwise enforcing the Lien of the Recovery Bond Collateral securing the Recovery Bonds or applying to a court of competent jurisdiction for sequestration of revenues arising with respect to the Recovery Property.

(c)    If an Event of Default under Section 5.01(a)(v) or (vi) has occurred and is continuing, the Indenture Trustee, irrespective of whether the principal of any Recovery Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section 5.03, shall be entitled and empowered, by intervention in any Proceedings related to such Event of Default or otherwise:

(i) to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Recovery Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Holders allowed in such Proceedings;

(ii) unless prohibited by applicable law and regulations, to vote on behalf of the Holders in any election of a trustee in bankruptcy, a standby trustee or Person performing similar functions in any such Proceedings;

(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Holders and of the Indenture Trustee on their behalf; and

(iv) to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders allowed in any judicial proceeding relative to the Issuer, its creditors and its property,

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Holders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Holders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and

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their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.

(d)    Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Recovery Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Holder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

(e)    All rights of action and of asserting claims under this Indenture, or under any of the Recovery Bonds, may be enforced by the Indenture Trustee without the possession of any of the Recovery Bonds or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Recovery Bonds.

(f)    In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Recovery Bonds, and it shall not be necessary to make any Holder a party to any such Proceedings.

SECTION 5.04. Remedies; Priorities.

(a)    If an Event of Default (other than an Event of Default under clause (vii) of Section 5.01) shall have occurred and be continuing, the Indenture Trustee may do one or more of the following (subject to Section 5.05):

(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Recovery Bonds or under this Indenture with respect thereto, whether by declaration of acceleration or otherwise, and, subject to the limitations on recovery set forth herein, enforce any judgment obtained, and collect from the Issuer or any other obligor moneys adjudged due upon the Recovery Bonds;

(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Recovery Bond Collateral;

(iii) exercise any remedies of a secured party under the UCC, the Wildfire Financing Law or any other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Recovery Bonds;

(iv) at the written direction of the Holders of a majority of the Outstanding Amount of the Recovery Bonds, sell the Recovery Bond Collateral or any

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portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law, or elect that the Issuer maintain possession of all or a portion of the Recovery Bond Collateral pursuant to Section 5.05 and continue to apply the Recovery Bond Charge Collection as if there had been no declaration of acceleration; and

(v) exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, the Administrator, PG&E or the Servicer under or in connection with, and pursuant to the terms of, the Sale Agreement, the Administration Agreement or the Servicing Agreement;

provided, however, that the Indenture Trustee may not sell or otherwise liquidate any portion of the Recovery Bond Collateral following such an Event of Default, other than an Event of Default described in Section 5.01(a)(i), or (ii), unless (1) the Holders of 100 percent of the Outstanding Amount of the Recovery Bonds consent thereto, (2) the proceeds of such sale or liquidation distributable to the Holders are sufficient to discharge in full all amounts then due and unpaid upon the Recovery Bonds for principal, premium, if any, and interest after taking into account payment of all amounts due prior thereto pursuant to the priorities set forth in Section 8.02(e) or (3) the Indenture Trustee determines that the Recovery Bond Collateral will not continue to provide sufficient funds for all payments on the Recovery Bonds as they would have become due if the Recovery Bonds had not been declared due and payable, and the Indenture Trustee obtains the written consent of Holders of 66-2/3 percent of the Outstanding Amount of the Recovery Bonds. In determining such sufficiency or insufficiency with respect to clause (2) and (3), the Indenture Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Recovery Bond Collateral for such purpose.

(b)    If an Event of Default under clause (vii) of Section 5.01 shall have occurred and be continuing, the Indenture Trustee, for the benefit of the Secured Parties, shall be entitled and empowered to the extent permitted by applicable law, to institute or participate in Proceedings necessary to compel performance of or to enforce the State Pledge and to collect any monetary damages incurred by the Holders or the Indenture Trustee as a result of any such Event of Default, and may prosecute any such Proceeding to final judgment or decree. Such remedy shall be the only remedy that the Indenture Trustee may exercise if the only Event of Default that has occurred and is continuing is an Event of Default under Section 5.01(a)(vii).

(c)    If the Indenture Trustee collects any money pursuant to this Article V, it shall pay out such money in accordance with the priorities set forth in Section 8.02(e).

SECTION 5.05. Optional Preservation of the Recovery Bond Collateral.

If the Recovery Bonds have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of all or a portion of the Recovery Bond Collateral. It is the desire of the parties hereto and the Holders that there be at all times sufficient funds for the payment of principal of and premium, if any, and

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interest on the Recovery Bonds, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Recovery Bond Collateral. In determining whether to maintain possession of the Recovery Bond Collateral or sell or liquidate the same, the Indenture Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Recovery Bond Collateral for such purpose.

SECTION 5.06. Limitation of Suits.

(a)    No Holder of any Recovery Bond shall have any right to institute any Proceeding, judicial or otherwise, to avail itself of any remedies provided in the Wildfire Financing Law or to avail itself of the right to foreclose on the Recovery Bond Collateral or otherwise enforce the Lien and the security interest on the Recovery Bond Collateral with respect to this Indenture and the Series Supplement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i) such Holder previously has given written notice to the Indenture Trustee of a continuing Event of Default;

(ii) the Holders of not less than a majority of the Outstanding Amount of the Recovery Bonds have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii) such Holder or Holders have offered to the Indenture Trustee indemnity or security satisfactory to it against the costs, expenses, losses and liabilities which may be incurred in complying with such request;

(iv) the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and

(v) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty-day period by the Holders of a majority of the Outstanding Amount of the Recovery Bonds;

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

(b)    In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders, each representing less than a majority of the Outstanding Amount of the Recovery Bonds, the Indenture Trustee in its sole discretion may file a petition with a court of competent jurisdiction to resolve such conflict or determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

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SECTION 5.07. Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest.

Notwithstanding any other provisions in this Indenture, the Holder of any Recovery Bond shall have the right, which is absolute and unconditional, (a) to receive payment of (i) the interest, if any, on such Recovery Bond on the due dates thereof expressed in such Recovery Bond or in this Indenture or (ii) the unpaid principal, if any, of the Recovery Bonds on the Final Maturity Date therefor and (b) to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

SECTION 5.08. Restoration of Rights and Remedies.

If the Indenture Trustee or any Holder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Holder, then and in every such case the Issuer, the Indenture Trustee and the Holders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Holders shall continue as though no such Proceeding had been instituted.

SECTION 5.09. Rights and Remedies Cumulative.

No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.10. Delay or Omission Not a Waiver.

No delay or omission of the Indenture Trustee or any Holder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Holders, as the case may be.

SECTION 5.11. Control by Holders.

The Holders of not less than a majority of the Outstanding Amount of the Recovery Bonds of an affected Tranche shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Recovery Bonds of such Tranche or Tranches or exercising any trust or power conferred on the Indenture Trustee with respect to such Tranche or Tranches; provided that:

(a)    such direction shall not be in conflict with any rule of law or with this Indenture and shall not involve the Indenture Trustee in any personal liability or expense;

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(b)    subject to other conditions specified in Section 5.04, any direction to the Indenture Trustee to sell or liquidate any Recovery Bond Collateral shall be by the Holders representing the applicable percentage of the Outstanding Amount of the Recovery Bonds as provided in Section 5.04;

(c)    if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Recovery Bond Collateral pursuant to Section 5.05, then any direction to the Indenture Trustee by Holders representing less than 100 percent of the Outstanding Amount of the Recovery Bonds to sell or liquidate the Recovery Bond Collateral shall be of no force and effect; and

(d)    the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction;

provided, however, that, the Indenture Trustee’s duties shall be subject to Section 6.01, and the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Holders not consenting to such action. Furthermore and without limiting the foregoing, the Indenture Trustee shall not be required to take any action for which it reasonably believes that it will not be indemnified to its satisfaction against any costs, expenses, losses or liabilities.

SECTION 5.12. Waiver of Past Defaults.

(a)    Prior to the declaration of the acceleration of the maturity of the Recovery Bonds as provided in Section 5.02, the Holders representing not less than a majority of the Outstanding Amount of the Recovery Bonds of an affected Tranche, may waive any past Default or Event of Default and its consequences except a Default (A) in payment of principal of or premium, if any, or interest on any of the Recovery Bonds or (B) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Recovery Bond of all Tranches affected. In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

(b)    Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

SECTION 5.13. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Recovery Bond by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any

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party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Holder, or group of Holders, in each case holding in the aggregate more than ten (10) percent of the Outstanding Amount of the Recovery Bonds or (c) any suit instituted by any Holder for the enforcement of the payment of (i) interest on any Recovery Bond on or after the due dates expressed in such Recovery Bond and in this Indenture or (ii) the unpaid principal, if any, of any Recovery Bond on or after the Final Maturity Date therefor.

SECTION 5.14. Waiver of Stay or Extension Laws.

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 5.15. Action on Recovery Bonds.

The Indenture Trustee’s right to seek and recover judgment on the Recovery Bonds or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Holders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Recovery Bond Collateral or any other assets of the Issuer.

SECTION 5.16. Performance and Enforcement of Certain Obligations.

(a)    Promptly following a request from the Indenture Trustee to do so and at the Issuer’s expense, the Issuer agrees to take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Seller and the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale Agreement and the Servicing Agreement with respect to the Recovery Property, respectively, in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale Agreement and the Servicing Agreement, respectively, to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Seller or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Servicer of each of their obligations under the Sale Agreement and the Servicing Agreement with respect to the Recovery Property, respectively.

(b)    If an Event of Default has occurred, the Indenture Trustee may, and, at the direction (which direction shall be in writing) of the Holders of sixty-six and two-thirds percent (66-2/3%) of the Outstanding Amount of the Recovery Bonds shall, subject to Article VI, exercise all rights,

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remedies, powers, privileges and claims of the Issuer against the Seller or the Servicer under or in connection with the Sale Agreement and the Servicing Agreement with respect to the Recovery Property, respectively, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale Agreement or the Servicing Agreement, respectively, and any right of the Issuer to take such action shall be suspended.

ARTICLE VI

THE INDENTURE TRUSTEE

SECTION 6.01. Duties of Indenture Trustee.

(a)    If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b)    Except during the continuance of an Event of Default:

(i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming on their face to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c)    The Indenture Trustee may not be relieved from liability for its own negligent action, its own bad faith, its own negligent failure to act or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 6.01;

(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by an officer of the Indenture Trustee unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

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(iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder.

(d)    Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section 6.01.

(e)    The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

(f)    Money held in trust by the Indenture Trustee need not be segregated from other funds held by the Indenture Trustee except to the extent required by law or the terms of this Indenture.

(g)    No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayments of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

(h)    Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section 6.01 and to the provisions of the TIA.

(i)    In the event that the Indenture Trustee is also acting as Paying Agent or Recovery Bond Registrar hereunder, the protections of this Article VI shall also be afforded to the Indenture Trustee in its capacity as Paying Agent or Recovery Bond Registrar.

(j)    Except for the express duties of the Indenture Trustee with respect to the administrative functions set forth in the Basic Documents, the Indenture Trustee shall have no obligation to administer, service or collect Recovery Property or to maintain, monitor or otherwise supervise the administration, servicing or collection of the Recovery Property.

(k)    Under no circumstance shall the Indenture Trustee be liable for any indebtedness of the Issuer, the Servicer or the Seller evidenced by or arising under the Recovery Bonds or the Basic Documents. None of the provisions of this Indenture shall in any event require the Indenture Trustee to perform or be responsible for the performance of any of the Servicer’s obligations under the Basic Documents.

(l)    Commencing with March 15, 2023, on or before March 15 of each fiscal year ending December 31, the Indenture Trustee shall (i) deliver to the Issuer a report (in form and substance reasonably satisfactory to the Issuer and addressed to the Issuer and signed by an authorized officer of the Indenture Trustee) regarding the Indenture Trustee’s assessment of compliance, during the immediately preceding fiscal year ending December 31, with each of the applicable servicing criteria specified on Exhibit C attached hereto as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB and (ii) deliver to the Issuer a report of an Independent registered public accounting firm reasonably acceptable to the Issuer that attests to and reports on, in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, the assessment of compliance made by the Indenture Trustee and delivered pursuant to clause (i).

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(m)    The Indenture Trustee shall not be required to take any action it is directed to take under this Indenture if the Indenture Trustee determines in good faith that the action so directed is inconsistent with the Indenture, any other Basic Document or Applicable Law, or would involve the Indenture Trustee in personal liability.

SECTION 6.02. Rights of Indenture Trustee.

(a)    The Indenture Trustee may conclusively rely and shall be fully protected in relying on any document (including electronic documents and communications delivered in accordance with the terms of this Indenture) believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in such document.

(b)    Before the Indenture Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officer’s Certificate or an Opinion of Counsel, which counsel may be an employee of or counsel to the Issuer or the Seller and which shall be reasonably satisfactory to the Indenture Trustee, or, in the Indenture Trustee’s sole judgment, of external counsel of the Issuer (at no cost or expense to the Indenture Trustee) that such action is required or permitted hereunder. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

(c)    The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder. The Indenture Trustee shall give prompt written notice to the Rating Agencies of the appointment of any such agent, custodian or nominee to whom it delegates any of its express duties under this Indenture provided, that the Indenture Trustee shall not be obligated to give such notice (i) if the Issuer or the Holders have directed the Indenture Trustee to appoint such agent, custodian or nominee (in which event the Issuer shall give prompt notice to the Rating Agencies of any such direction) or (ii) of the appointment of any agents, custodians or nominees made at any time that an Event of Default of the Issuer has occurred and is continuing.

(d)    The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

(e)    The Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Recovery Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)    The Indenture Trustee shall be under no obligation to (i) take any action or exercise any of the rights or powers vested in it by this Indenture or any other Basic Document or (ii)

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institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto or to investigate any matter, at the request, order or direction of any of the Bondholders pursuant to the provisions of this Indenture and the Series Supplement or otherwise, unless it shall have received security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred..

(g)    In no event shall the Indenture Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, governmental action, strikes, work stoppages, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes, pandemics or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer systems and services; it being understood that the Indenture Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(h)    Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order. Whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate.

(i)    The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document.

(j)    In no event shall the Indenture Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(k)    The Indenture Trustee shall not be deemed to have notice of any Default or Event of Default unless it has actual knowledge or written notice of any event which is in fact such a default is received by a Responsible Officer of the Indenture Trustee at the Corporate Trust Office of the Indenture Trustee, and such notice references the Recovery Bonds and this Indenture.

(l)    The rights, privileges, protections, immunities and benefits given to the Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Indenture Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(m)    Beyond the exercise of reasonable care in the custody thereof, the Indenture Trustee will have no duty as to any Recovery Bond Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Indenture Trustee will be deemed to have exercised reasonable care in the custody of the Recovery Bond Collateral in its possession

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if the Recovery Bond Collateral is accorded treatment substantially equal to that which it accords its own property, and the Indenture Trustee will not be liable or responsible for any loss or diminution in the value of any of the Recovery Bond Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Indenture Trustee in good faith.

(n)    The Indenture Trustee will not be responsible for the existence, genuineness or value of any of the Recovery Bond Collateral or for the validity, sufficiency, perfection, priority or enforceability of the Liens in any of the Recovery Bond Collateral, except to the extent such action or omission constitutes negligence or willful misconduct on the part of the Indenture Trustee. The Indenture Trustee shall not be responsible for the validity of the title of any grantor to the collateral, for insuring the Recovery Bond Collateral or for the payment of taxes, charges, assessments or liens upon the Recovery Bond Collateral or otherwise as to the maintenance of the Recovery Bond Collateral.

(o)    In the event that the Indenture Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Indenture Trustee’s sole discretion may cause the Indenture Trustee, as applicable, to be considered an “owner or operator” under any environmental laws or otherwise cause the Indenture Trustee to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Indenture Trustee reserves the right, instead of taking such action, either to resign as Indenture Trustee or to arrange for the transfer of the title or control of the asset to a court appointed receiver. The Indenture Trustee will not be liable to any person for any environmental claims or any environmental liabilities or contribution actions under any federal, state or local law, rule or regulation by reason of the Indenture Trustee’s actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

SECTION 6.03. Individual Rights of Indenture Trustee.

The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Recovery Bonds and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee. Any Paying Agent, Recovery Bond Registrar, co-registrar or co-paying agent or agent appointed under Section 3.02 may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

SECTION 6.04. Indenture Trustee’s Disclaimer.

The Indenture Trustee shall not be responsible for and makes no representation (other than as set forth in Section 6.13) as to the validity or adequacy of this Indenture or the Recovery Bonds, it shall not be accountable for the Issuer’s use of the proceeds from the Recovery Bonds, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Recovery Bonds or in the Recovery Bonds other than the Indenture Trustee’s certificate of authentication. The Indenture Trustee shall not be responsible for the form, character, genuineness, sufficiency, value or validity of any of the Recovery Bond Collateral (or for the perfection or priority of the Liens thereon), or for or in respect of the Recovery

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Bonds (other than the certificate of authentication for the Recovery Bonds) or the Basic Documents and the Indenture Trustee shall in no event assume or incur any liability, duty or obligation to any Holder, other than as expressly provided in this Indenture. The Indenture Trustee shall not be liable for the default or misconduct of the Issuer, the Seller, or the Servicer under the Basic Documents or otherwise, and the Indenture Trustee shall have no obligation or liability to perform the obligations of such Persons.

SECTION 6.05. Notice of Defaults.

If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee or a Responsible Officer of the Indenture Trustee has been notified in writing of such Default, the Indenture Trustee shall deliver to each Rating Agency and each Bondholder notice of the Default within ten (10) Business Days after actual notice of such Default was received by a Responsible Officer of the Indenture Trustee (provided that the Indenture Trustee shall give the Rating Agencies prompt notice of any payment default in respect of the Recovery Bonds). Except in the case of a Default in payment of principal of and premium, if any, or interest on any Recovery Bond, the Indenture Trustee may withhold the notice if a Responsible Officer in good faith determines that withholding the notice is in the interests of Holders. Except for an Event of Default under Sections 5.01(a)(i) or (ii) that occur at a time when the Indenture Trustee is acting as the Paying Agent, and except as provided in the first sentence of this Section 6.05, in no event shall the Indenture Trustee be deemed to have knowledge of a Default.

SECTION 6.06. Reports by Indenture Trustee to Holders.

(a)    So long as Recovery Bonds are Outstanding and the Indenture Trustee is the Recovery Bond Registrar and Paying Agent, upon the written request of any Holder or the Issuer, within the prescribed period of time for tax reporting purposes after the end of each calendar year, it shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its federal income and any applicable local or State tax returns. If the Recovery Bond Registrar and Paying Agent is other than the Indenture Trustee, such Recovery Bond Registrar and Paying Agent, within the prescribed period of time for tax reporting purposes after the end of each calendar year, shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its federal income and any applicable local or State tax returns.

(b)    On or prior to each Payment Date or Special Payment Date therefor, the Indenture Trustee will deliver to each Holder of the Recovery Bonds on such Payment Date or Special Payment Date a statement as provided and prepared by the Servicer which will include (to the extent applicable) the following information (and any other information so specified in the Series Supplement) as to the Recovery Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:

(i) the amount of the payment to Holders allocable to principal, if any;

(ii) the amount of the payment to Holders allocable to interest;

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(iii) the aggregate Outstanding Amount of the Recovery Bonds, before and after giving effect to any payments allocated to principal reported under clause (i) above;

(iv) the difference, if any, between the amount specified in clause (iii) above and the Outstanding Amount specified in the related Expected Amortization Schedule;

(v) any other transfers and payments to be made on such Payment Date or Special Payment Date, including amounts paid to the Indenture Trustee and to the Servicer; and

(vi) the amounts on deposit in the Capital Subaccount and the Excess Funds Subaccount, after giving effect to the foregoing payments.

(c)    The Issuer shall send a copy of each of the Certificate of Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement and the Annual Accountant’s Report delivered to it pursuant to Section 3.04 of the Servicing Agreement to the Rating Agencies, the Indenture Trustee and to the Servicer for posting on the 17g-5 Website in accordance with Rule 17g-5 under the Exchange Act. A copy of such certificate and report may be obtained by any Holder by a request in writing to the Indenture Trustee.

SECTION 6.07. Compensation and Indemnity.

(a)    The Issuer shall pay to the Indenture Trustee from time to time reasonable compensation for its services. The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it in connection with the Recovery Bonds, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.

(b)    The Issuer shall indemnify the Indenture Trustee and its officers, directors, employees and agents against any and all cost, damage, loss, liability or expense (including attorneys’ fees and expenses) incurred by it in connection with the administration of this trust and the performance of its duties hereunder, including the cost and expense of enforcing this Indenture (including this Section) and defending itself against any claim or liability in connection with the exercise or performance of such duties. The Indenture Trustee shall notify the Issuer as soon as is reasonably practicable of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Indenture Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel.

(c)    Notwithstanding any other provision of this Indenture, the Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

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(d)    The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture, resignation or removal of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(a)(v) or (vi) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable federal or State bankruptcy, insolvency or similar law.

SECTION 6.08. Replacement of Indenture Trustee and Securities Intermediary.

(a)    The Indenture Trustee (or any other Eligible Institution in any capacity hereunder) may resign at any time upon thirty (30) days’ prior written notice to the Issuer subject to clause (c) below. The Holders of a majority of the Outstanding Amount of the Recovery Bonds may remove the Indenture Trustee (or any other Eligible Institution in any capacity hereunder) with thirty (30) days’ prior written notice by so notifying the Indenture Trustee (or such other Eligible Institution, as applicable) and may appoint a successor Indenture Trustee (or successor Eligible Institution in the applicable capacity). The Issuer shall remove the Indenture Trustee if:

(i) the Indenture Trustee fails to comply with Section 6.11;

(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Indenture Trustee or its property;

(iv) the Indenture Trustee otherwise becomes incapable of acting; or

(v) the Indenture Trustee fails to provide to the Issuer any information reasonably requested by the Issuer pertaining to the Indenture Trustee and necessary for the Issuer or the Depositor to comply with its reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the Issuer’s and the Indenture Trustee’s mutual satisfaction within a reasonable period of time.

Subject to clause (c) below, the Issuer shall remove any Person who maintains the Collection Account or any other account established under this Indenture and fails to constitute an Eligible Institution with thirty (30) days’ prior notice.

Any removal or resignation of the Indenture Trustee shall also constitute a removal or resignation of the Securities Intermediary.

(b)    If the Indenture Trustee gives notice of resignation or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee and Securities Intermediary. If any Person (other than the Indenture Trustee) acting in any capacity hereunder as an Eligible Institution is removed, fails to constitute an Eligible Institution or if a vacancy exists in any such capacity for any reason, the Issuer shall promptly appoint a successor to such capacity that constitutes an Eligible Institution.

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(c)    A successor Indenture Trustee (or any other successor Eligible Institution) shall deliver a written acceptance of its appointment as the Indenture Trustee and as the Securities Intermediary (or any such other capacity) to the retiring Indenture Trustee (or any such other capacity) and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee (or any such other Person) shall become effective, and the successor Indenture Trustee (or such other successor Eligible Institution) shall have all the rights, powers and duties of the Indenture Trustee and Securities Intermediary (or such other Eligible Institution), as applicable, under this Indenture. No resignation or removal of the Indenture Trustee (or any such other Person) pursuant to this Section 6.08 shall become effective until acceptance of the appointment by a successor Indenture Trustee having the qualifications set forth in Section 6.11 (or such other successor constituting an Eligible Institution). Notice of any such appointment shall be promptly given to each Rating Agency by the successor Indenture Trustee. The successor Indenture Trustee shall mail a notice of its succession (or the succession of any other Eligible Institution) to Holders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee. The retiring Eligible Institution shall promptly transfer all property held by it in its capacity hereunder to the successor Eligible Institution.

(d)    If a successor Indenture Trustee (or other successor Eligible Institution) does not take office within sixty (60) days after the retiring Indenture Trustee (or other retiring Eligible Institution) resigns or is removed, the retiring Indenture Trustee (or other retiring Eligible Institution), the Issuer or the Holders of a majority in Outstanding Amount of the Recovery Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee (or other successor Eligible Institution).

(e)    If the Indenture Trustee fails to comply with Section 6.11, any Holder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

(f)    Notwithstanding the replacement of the Indenture Trustee pursuant to this Section 6.08, the Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

SECTION 6.09. Successor Indenture Trustee by Merger.

(a)    If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Indenture Trustee; provided, however, that if such successor Indenture Trustee is not eligible under Section 6.11, then the successor Indenture Trustee shall be replaced in accordance with Section 6.08. Notice of any such event shall be promptly given to each Rating Agency by the successor Indenture Trustee.

(b)    In case at the time such successor or successors by merger, conversion, consolidation or transfer shall succeed to the trusts created by this Indenture any of the Recovery Bonds shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver the Recovery Bonds so authenticated; and in case at that time any of the Recovery Bonds shall not have been

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authenticated, any successor to the Indenture Trustee may authenticate the Recovery Bonds either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Recovery Bonds or in this Indenture provided that the certificate of the Indenture Trustee shall have.

SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.

(a)    Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the trust created by this Indenture or the Recovery Bond Collateral may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the trust created by this Indenture or the Recovery Bond Collateral, and to vest in such Person or Persons, in such capacity and for the benefit of the Secured Parties, such title to the Recovery Bond Collateral, or any part hereof, and, subject to the other provisions of this Section 6.10, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Holders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08. Notice of any such appointment shall be promptly given to each Rating Agency by the Indenture Trustee.

(b)    Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Recovery Bond Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c)    Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon its

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acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.

(d)    Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

SECTION 6.11. Eligibility; Disqualification.

The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a)(1) and § 310(a)(5) and Section 26(a)(1) of the Investment Company Act. The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of “Baa3” or better by Moody’s and “BBB-” or better by Standard & Poor’s. The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

SECTION 6.12. Preferential Collection of Claims Against Issuer.

The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

SECTION 6.13. Representations and Warranties of Indenture Trustee.

The Indenture Trustee hereby represents and warrants that:

(a)    the Indenture Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States; and

(b)    the Indenture Trustee has full power, authority and legal right to execute, deliver and perform this Indenture and the Basic Documents to which the Indenture Trustee is a party and has taken all necessary action to authorize the execution, delivery, and performance by it of this Indenture and such Basic Documents.

SECTION 6.14. Annual Report by Independent Registered Public Accountants.

In the event the firm of Independent registered public accountants requires the Indenture Trustee to agree or consent to the procedures performed by such firm pursuant to Section 3.04(a)

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of the Servicing Agreement, the Indenture Trustee shall deliver such letter of agreement or consent in conclusive reliance upon the direction of the Issuer in accordance with Section 3.04(a) of the Servicing Agreement. In the event such firm requires the Indenture Trustee to agree to the procedures performed by such firm, the Issuer shall direct the Indenture Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee will deliver such letter of agreement in conclusive reliance upon the direction of the Issuer, and the Indenture Trustee makes no independent inquiry or investigation to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures.

SECTION 6.15. Custody of Recovery Bond Collateral.

The Indenture Trustee shall hold such of the Recovery Bond Collateral (and any other collateral that may be granted to the Indenture Trustee) as consists of instruments, deposit accounts, negotiable documents, money, goods, letters of credit, and advices of credit in the State of New York. The Indenture Trustee shall hold such of the Recovery Bond Collateral as constitute investment property through the Securities Intermediary (which, as of the date hereof, is The Bank of New York Mellon Trust Company, N.A.). The initial Securities Intermediary, hereby agrees (and each future Securities Intermediary shall agree) with the Indenture Trustee that (A) such investment property (other than cash) shall at all times be credited to a Securities Account of the Indenture Trustee, (B) the Securities Intermediary shall treat the Indenture Trustee as entitled to exercise the rights that comprise each Financial Asset credited to such Securities Account, (C) all property (other than cash) credited to such Securities Account shall be treated as a Financial Asset, (D) the Securities Intermediary shall comply with entitlement orders originated by the Indenture Trustee without the further consent of any other person or entity, (E) the Securities Intermediary will not agree with any person other than the Indenture Trustee to comply with entitlement orders originated by such other person, (F) such Securities Accounts and the property credited thereto shall not be subject to any Lien or right of set-off in favor of the Securities Intermediary or anyone claiming through it (other than the Indenture Trustee), and (G) such agreement shall be governed by the internal laws of the State of New York. The Indenture Trustee shall hold any Recovery Bond Collateral consisting of money in a deposit account and shall act as a “bank” for purposes of perfecting the security interest in such deposit account. Terms used in the two preceding sentences that are defined in the UCC and not otherwise defined herein shall have the meaning set forth in the UCC. Except as permitted by this Section 6.15, or elsewhere in this Indenture, the Indenture Trustee shall not hold Recovery Bond Collateral through an agent or a nominee.

SECTION 6.16 FATCA.

The Issuer agrees (i) to provide the Indenture Trustee with such reasonable information as it has in its possession to enable the Indenture Trustee to determine whether any payments pursuant to the Indenture are subject to the withholding requirements described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof (“Applicable Law”), and (ii) that the Indenture Trustee shall be entitled to make any withholding or deduction from payments under the Indenture to the extent necessary to comply with Applicable Law, for which the Indenture Trustee shall not have any liability.

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ARTICLE VII

HOLDERS’ LISTS AND REPORTS

SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Holders.

The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five (5) days after the earlier of (i) each Record Date and (ii) six (6) months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Bondholders as of such Record Date, (b) at such other times as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Recovery Bond Registrar, no such list shall be required to be furnished.

SECTION 7.02. Preservation of Information; Communications to Holders.

(a)    The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Indenture Trustee in its capacity as Recovery Bond Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

(b)    Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or under the Recovery Bonds. In addition, upon the written request of any Holder or group of Holders of Outstanding Recovery Bonds evidencing not less than 10 percent of the Outstanding Amount of the Recovery Bonds, the Indenture Trustee shall afford the Holder or Holders making such request a copy of a current list of Holders for purposes of communicating with other Holders with respect to their rights hereunder.

(c)    The Issuer, the Indenture Trustee and the Recovery Bond Registrar shall have the protection of TIA § 312(c).

SECTION 7.03. Reports by Issuer.

(a)    The Issuer shall:

(i) so long as the Issuer or the Depositor is required to file such documents with the SEC, provide to the Indenture Trustee, within fifteen (15) days after the Issuer is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Issuer or the Depositor may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;

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(ii) provide to the Indenture Trustee and file with the SEC, in accordance with rules and regulations prescribed from time to time by the SEC such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit to all Holders described in TIA § 313(c)), such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as may be required by rules and regulations prescribed from time to time by the SEC.

(b)    Except as may be provided by Section 313(c) of the Trust Indenture Act, the Issuer may fulfill its obligation to provide the materials described in this Section 7.03(a) by providing such materials in electronic format.

(c)    The fiscal year of the Issuer shall end on December 31 of each year, unless the Issuer otherwise determines, in which case the Issuer will promptly notify the Indenture Trustee regarding any change in fiscal year.

(d)    Delivery of such reports, information and documents to the Indenture Trustee is for informational purposes only and the Indenture Trustee’s receipt of such shall not constitute actual or constructive notice or knowledge of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to rely exclusively on Officer’s Certificates).

SECTION 7.04. Reports by Indenture Trustee.

(a)    If required by TIA § 313(a), within sixty (60) days after March 30 of each year, commencing with March 30, 2022, the Indenture Trustee shall send to each Bondholder as required by TIA § 313(c) a brief report dated as of such date that complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b); provided, however, that the initial report so issued shall be delivered not more than twelve (12) months after the initial issuance thereof.

(b)    A copy of each report at the time of its sending to Holders shall be filed by the Servicer with the SEC and each stock exchange, if any, on which the Recovery Bonds are listed. The Issuer shall notify the Indenture Trustee in writing if and when the Recovery Bonds are listed on any stock exchange.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

SECTION 8.01. Collection of Money.

Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or

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assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture and the other Basic Documents. The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Recovery Bond Collateral, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, subject to Article VI, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

SECTION 8.02. Collection Account.

(a)    Prior to the Closing Date, the Issuer shall open or cause to be opened with the Securities Intermediary located at the Indenture Trustee’s office located at the Corporate Trust Office, or at another Eligible Institution, one or more segregated trust accounts in the Indenture Trustee’s name for the deposit of Estimated FRC Collections, FRC Collections and all other amounts received with respect to the Recovery Bond Collateral (the “Collection Account”). The Collection Account will consist of three subaccounts: a general subaccount (the “General Subaccount”), an excess funds subaccount (the “Excess Funds Subaccount”) and a capital subaccount (the “Capital Subaccount” and, together with the General Subaccount and the Excess Funds Subaccount, the “Subaccounts”). Each Subaccount shall have a separate subaccount (each, a “Cash Subaccount”) where cash allocated to the related Subaccount will be held. Only cash shall be allocated to a Cash Subaccount and no other Recovery Bond Collateral shall be allocated to a Cash Subaccount. References to any Subaccount shall be deemed to include the related Cash Subaccount. For administrative purposes, the Subaccounts may be established by the Indenture Trustee as separate accounts. Such separate accounts will be recognized individually as a Subaccount and collectively as the “Collection Account”. Prior to or concurrently with the issuance of Recovery Bonds, the Member shall deposit into the Capital Subaccount an amount equal to the Required Capital Level. All amounts in the Collection Account not allocated to any other subaccount shall be allocated to the General Subaccount. Any cash transferred to, or arising under, a Subaccount will be held in the related Cash Subaccount. Prior to the Initial Payment Date, all amounts in the Collection Account (other than funds deposited into the Capital Subaccount, up to the Required Capital Level and any Capital Subaccount Investment Earnings) shall be allocated to the General Subaccount. All references to the Collection Account shall be deemed to include reference to all subaccounts contained therein. Withdrawals from and deposits to each of the foregoing subaccounts of the Collection Account shall be made as set forth in Sections 8.02(d) and (e). The Collection Account shall at all times be maintained in an Eligible Account, under the sole dominion and exclusive control of the Indenture Trustee, through the Securities Intermediary, and only the Indenture Trustee shall have access to the Collection Account for the purpose of making deposits in and withdrawals from the Collection Account in accordance with this Indenture. Funds in the Collection Account shall not be commingled with any other moneys. All moneys deposited from time to time in the Collection Account, including amounts not required to pay costs of issuance of Recovery Bonds transferred by the Issuer to the Indenture Trustee, all deposits therein pursuant to this Indenture, and all investments made in Eligible Investments as directed in writing by the Issuer with such moneys, including all income or other gain from such investments other than Capital Subaccount Investment Earnings, shall be held by the Indenture Trustee in the

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Collection Account as part of the Recovery Bond Collateral as herein provided. The Securities Intermediary shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of redemption or the failure of the Issuer or the Servicer to provide timely written investment direction.

(b)    The Securities Intermediary hereby confirms that (i) the Collection Account (other than each Cash Subaccount) is, or at inception will be established as, a “securities account” as such term is defined in Section 8-501(a) of the UCC, (ii) it is a “securities intermediary” (as such term is defined in Section 8-102(a) (14) of the UCC) and is acting in such capacity with respect to such accounts, (iii) the Indenture Trustee for the benefit of the Secured Parties is the sole “entitlement holder” (as such term is defined in Section 8-102(a)(7) of the UCC) with respect to such accounts and no other Person shall have the right to give “entitlement orders” (as such term is defined in Section 8-102(a)(8)) with respect to such Collection Account and (iv) the Securities Intermediary agrees to comply with “entitlement orders” originated by the Indenture Trustee with respect to the Collection Account without further consent of the Issuer or any other Person. The Securities Intermediary hereby further agrees that each item of property (whether investment property, financial asset, security, instrument or cash) received by it will be credited to the Collection Account (and that all cash will be credited to the related Cash Subaccount). Such property, other than cash, shall be treated by it as a Financial Asset. The Indenture Trustee shall cause the Securities Intermediary to hold any Recovery Bond Collateral consisting of money in the applicable Cash Subaccount and the Securities Intermediary hereby confirms that each Cash Subaccount is a “deposit account” within the meaning of Section 9-102(a)(29) of the UCC. The Securities Intermediary further confirms that for purposes of perfecting the security interest in such deposit account, it shall (i) act as the “bank” within the meaning of Section 9-102(a)(8) of the UCC and (ii) comply with instructions originated by the Indenture Trustee directing disposition of the funds in the Cash Subaccount without further consent of the Issuer or any other Person. Notwithstanding anything to the contrary, for purposes of the UCC, New York State shall be deemed to be “securities intermediary jurisdiction” within the meaning of Section 8-110(e) of the UCC of the Securities Intermediary and “bank’s jurisdiction” within the meaning of Section 9-304(a) of the UCC of the Securities Intermediary acting as the “bank” and the Collection Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.

(c)    The Indenture Trustee shall have sole dominion and exclusive control over all moneys in the Collection Account through the Securities Intermediary and shall apply such amounts therein as provided in this Section 8.02. The Indenture Trustee shall also pay from the Collection Account any amounts requested in writing to be paid by or to the Servicer pursuant to Section 6.11(c) of the Servicing Agreement.

(d)    FRC Collections shall be deposited in the General Subaccount as provided in Section 6.11 of the Servicing Agreement. All deposits to and withdrawals from the Collection Account, all allocations to the subaccounts of the Collection Account and any amounts to be paid to the Servicer under Section 8.02(c) shall be made by the Indenture Trustee in accordance with the written instructions provided by the Servicer in the Monthly Servicer’s Certificate, the Servicer’s Certificate or upon other written notice provided by the Servicer pursuant to Section 6.11(a) of the Servicing Agreement, as applicable.

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(e)    On each Payment Date (or on any other date as directed by the Servicer with respect to Operating Expenses referred to in clause (iv) payable prior to the next Payment Date), the Indenture Trustee shall apply all amounts on deposit in the Collection Account, including all Investment Earnings thereon, to pay the following amounts, solely in accordance with the Servicer’s Certificate, in the following priority:

(i) all amounts owed by the Issuer to the Indenture Trustee (including legal fees and expenses and outstanding indemnity amounts) shall be paid to the Indenture Trustee (subject to Section 6.07) in an amount not to exceed annually the amount set forth in the Series Supplement (the “Indenture Trustee Cap”); provided, however, that the Indenture Trustee Cap shall be disregarded and inapplicable upon the acceleration of the Recovery Bonds following the occurrence of an Event of Default;

(ii) the Servicing Fee with respect to such Payment Date and all unpaid Servicing Fees for prior Payment Dates shall be paid to the Servicer;

(iii) the Administration Fee for such Payment Date shall be paid to the Administrator and an allocable share of the Independent Manager Fee for such Payment Date shall be paid to the Independent Managers;

(iv) all other ordinary periodic Operating Expenses for such Payment Date relating to the Recovery Bonds not described above shall be paid to the parties to which such Operating Expenses are owed;

(v) Periodic Interest for such Payment Date, including any overdue Periodic Interest (together with, to the extent lawful, interest on such overdue Periodic Interest at the applicable Recovery Bond Interest Rate), with respect to the Recovery Bonds shall be paid to the Holders of Recovery Bonds;

(vi) principal due and payable on the Recovery Bonds as a result of an Event of Default or on the Final Maturity Date of the Recovery Bonds shall be paid to the Holders of Recovery Bonds;

(vii) Periodic Principal for such Payment Date, including any overdue Periodic Principal, with respect to the Recovery Bonds shall be paid to the Holders of Recovery Bonds, pro rata;

(viii) any other unpaid fees, expenses and indemnity amounts owed to the Indenture Trustee;

(ix) any other unpaid Operating Expenses relating to the Recovery Bonds and any remaining amounts owed pursuant to the Basic Documents;

(x) the amount, if any, by which the Required Capital Level exceeds the amount in the Capital Subaccount as of such Payment Date shall be allocated to the Capital Subaccount;

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(xi) provided that no Event of Default has occurred and is continuing, release to PG&E an amount representing a return on capital of its Capital Contribution calculated at an annual rate per annum equal to the weighted average interest rate on the Recovery Bonds;

(xii) the balance, if any, shall be allocated to the Excess Funds Subaccount for distribution on subsequent Payment Dates; and

(xiii) after principal of and premium, if any, and interest on all the Recovery Bonds, and all of the other foregoing amounts, have been paid in full, including, without limitation, amounts due and payable to the Indenture Trustee under Section 6.07 or otherwise, the balance (including all amounts then held in the Capital Subaccount and the Excess Funds Subaccount), if any, shall be paid to PG&E, free from the Lien of this Indenture and the Series Supplement and credited to Consumers through normal ratemaking processes.

(f)    All payments to the Holders of the Recovery Bonds pursuant to clauses (v), (vi) and (vii) above shall be made to such Holders pro rata based on the respective amounts of interest and/or principal owed, unless, in the case of Recovery Bonds comprised of two or more Tranches, the Series Supplement provides otherwise. Payments in respect of principal of and premium, if any, and interest on any Tranche of Recovery Bonds will be made on a pro rata basis among all the Holders of such Tranche. In the case of an Event of Default, then, in accordance with Section 5.04(c), moneys will be applied pursuant to clauses (v) and (vi), in such order, on a pro rata basis, based upon the interest or the principal owed.

(g)    The amounts paid during any calendar year pursuant to clauses (i), (ii), (iii), (iv) and (viii) may not exceed the amounts approved in the Series Supplement.

(h)    If on any Payment Date funds on deposit in the General Subaccount are insufficient to make the payments contemplated by clauses (i) through (ix) of Section 8.02(e) above, the Indenture Trustee shall (I) first, draw from amounts on deposit in the Excess Funds Subaccount and (II) second, draw from amounts on deposit in the Capital Subaccount, in each case, up to the amount of such shortfall in order to make the payments contemplated by clauses (i) through (ix) of Section 8.02(e). In addition, if on any Payment Date funds on deposit in the General Subaccount are insufficient to make the allocations contemplated by clause (x) above, the Indenture Trustee shall draw from amounts on deposit in the Excess Funds Subaccount to make such allocations.

SECTION 8.03. General Provisions Regarding the Collection Account.

(a)    So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Collection Account shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order; provided, however, that (i) such Eligible Investments shall not mature or be redeemed later than the Business Day prior to the next Payment Date or Special Payment Date, if applicable, for the Recovery Bonds and (ii) such Eligible Investments shall not be sold, liquidated or otherwise disposed of at a loss prior to the maturity or the date of redemption thereof. All income or other gain from investments of moneys

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deposited in the Collection Account shall be deposited by the Indenture Trustee in such Collection Account, and any loss resulting from such investments shall be charged to such Collection Account. The Issuer will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in the Collection Account unless the security interest Granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer (at the Issuer’s cost and expense) to such effect. In no event shall the Indenture Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon. The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of redemption or the failure of the Issuer or the Servicer to provide timely written investment direction. The Indenture Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction pursuant to an Issuer Order, in which case such amounts shall remain uninvested.

(b)    Subject to Section 6.01(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in the Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

(c)    If (i) the Issuer shall have failed to give written investment directions for any funds on deposit in the Collection Account to the Indenture Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Recovery Bonds but the Recovery Bonds shall not have been declared due and payable pursuant to Section 5.02, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in such Collection Account in the money market fund (described under clause (d) of the definition of “Eligible Investments”) specified in the most recent written investment directions delivered by the Issuer to the Indenture Trustee with respect to such type of Eligible Investments; provided that if the Issuer has never delivered written investment directions to the Indenture Trustee or if the money market fund specified in the most recent written investment directions no longer exists, the Indenture Trustee shall not invest or reinvest such funds in any investments.

(d)    The parties hereto acknowledge that the Servicer may, pursuant to the Servicing Agreement, select Eligible Investments on behalf of the Issuer.

SECTION 8.04. Release of Recovery Bond Collateral.

(a)    So long as the Issuer is not in default hereunder and no Default hereunder would occur as a result of such action, the Issuer, through the Servicer, may collect, sell or otherwise dispose of written-off receivables, at any time and from time to time in the ordinary course of business, without any notice to, or release or consent by, the Indenture Trustee, but only as and to the extent permitted by the Basic Documents; provided, however, that any and all proceeds of such dispositions shall become Recovery Bond Collateral and be deposited to the General Subaccount

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immediately upon receipt thereof by the Issuer or any other Person, including the Servicer. Without limiting the foregoing, the Servicer, may, at any time and from time to time without any notice to, or release or consent by, the Indenture Trustee, sell or otherwise dispose of any Recovery Bond Collateral previously written-off as a defaulted or uncollectible account in accordance with the terms of the Servicing Agreement and the requirements of the proviso in the immediately preceding sentence.

(b)    The Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel of external counsel of the Issuer (at the Issuer’s cost and expense) and (if required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 10.01.

(c)    The Indenture Trustee shall, at such time as there are no Recovery Bonds Outstanding and all sums payable to the Indenture Trustee pursuant to Section 6.07 or otherwise have been paid, release any remaining portion of the Recovery Bond Collateral that secured the Recovery Bonds from the Lien of this Indenture, release to the Issuer or any other Person entitled thereto any funds or investments then on deposit in or credit to the Collection Account.

SECTION 8.05. Opinion of Counsel.

The Indenture Trustee shall receive at least seven (7) days’ notice when requested by the Issuer to take any action pursuant to Section 8.04, accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel of external counsel of the Issuer, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the perfection or priority of the remaining security for the Recovery Bonds or the rights of the Holders in contravention of the provisions of this Indenture and the Series Supplement; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Recovery Bond Collateral. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

SECTION 8.06. Reports by Independent Registered Public Accountants.

As of the Closing Date, the Issuer shall appoint a firm of Independent registered public accountants of recognized national reputation for purposes of preparing and delivering the reports or certificates of such accountants required by this Indenture and the Series Supplement. In the event such firm requires the Indenture Trustee to agree to the procedures performed by such firm,

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the Issuer shall direct the Indenture Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee will deliver such letter of agreement in conclusive reliance upon the direction of the Issuer, and the Indenture Trustee makes no independent inquiry or investigation to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures. Upon any resignation by, or termination by the Issuer of, such firm the Issuer shall provide written notice thereof to the Indenture Trustee and shall promptly appoint a successor thereto that shall also be a firm of Independent registered public accountants of recognized national reputation. If the Issuer shall fail to appoint a successor to a firm of Independent registered public accountants that has resigned or been terminated within fifteen (15) days after such resignation or termination, the Indenture Trustee shall promptly notify the Issuer of such failure in writing. If the Issuer shall not have appointed a successor within ten (10) days thereafter the Indenture Trustee shall promptly appoint a successor firm of Independent registered public accountants of recognized national reputation; provided that the Indenture Trustee shall have no liability with respect to such appointment. The fees of such Independent registered public accountants and its successor shall be payable by the Issuer as an Operating Expense.

ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. Supplemental Indentures Without Consent of Holders.

(a)    Without the consent of the Holders of any Recovery Bonds but with prior notice to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

(i) to correct or amplify the description of any property, including, without limitation, the Recovery Bond Collateral, at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture and the Series Supplement, or to subject to the Lien of this Indenture and the Series Supplement additional property;

(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Recovery Bonds;

(iii) to add to the covenants of the Issuer, for the benefit of the Secured Parties, or to surrender any right or power herein conferred upon the Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

(v) to cure any ambiguity or mistake, to correct or supplement any provision herein or in any supplemental indenture, including the Series Supplement, which may be inconsistent with any other provision herein or in any

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supplemental indenture, including the Series Supplement, or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided that (A) such action shall not, as evidenced by an Opinion of Counsel of external counsel of the Issuer, adversely affect in any material respect the interests of the Holders of the Recovery Bonds and (B) the Rating Agency Condition shall have been satisfied with respect thereto;

(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Recovery Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI;

(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar or successor federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA;

(viii) to evidence the final terms of the Recovery Bonds in the Series Supplement;

(ix) to qualify the Recovery Bonds for registration with a Clearing Agency;

(x) to satisfy any Rating Agency requirements;

(xi) to make any amendment to this Indenture or the Recovery Bonds relating to the transfer and legending of the Recovery Bonds to comply with applicable securities laws; or

(xii) to conform the text of this Indenture or the Recovery Bonds to any provision of the registration statement filed by the Issuer with the SEC with respect to the issuance of the Recovery Bonds to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture or the Recovery Bonds.

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)    The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Recovery Bonds, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Recovery Bonds under this Indenture; provided, however, that (i) such action shall not, as evidenced by an Opinion of Counsel of nationally recognized counsel of the Issuer experienced in structured finance transactions, adversely affect in any material respect the interests of the Holders and (ii) the Rating Agency Condition shall have been satisfied with respect thereto.

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SECTION 9.02. Supplemental Indentures with Consent of Holders.

(a)    The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies and with the consent of the Holders of not less than a majority of the Outstanding Amount of the Recovery Bonds of each Tranche to be adversely affected, by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Recovery Bonds under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Recovery Bond of each Tranche affected thereby:

(i) change the date of payment of any installment of principal of or premium, if any, or interest on any Recovery Bond of such Tranche, or reduce the principal amount thereof, the interest rate thereon or premium, if any, with respect thereto, change the provisions of this Indenture and the Series Supplement relating to the application of collections on, or the proceeds of the sale of, the Recovery Bond Collateral to payment of principal of or premium, if any, or interest on the Recovery Bonds, or change any place of payment where, or the coin or currency in which, any Recovery Bond or the interest thereon is payable;

(ii) reduce the percentage of the Outstanding Amount of the Recovery Bonds or of a Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

(iii) reduce the percentage of the Outstanding Amount of the Recovery Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Recovery Bond Collateral pursuant to Section 5.04;

(iv) modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that those provisions of this Indenture or the other Basic Documents referenced in this Section 9.02 cannot be modified or waived without the consent of the Holder of each Outstanding Recovery Bond affected thereby;

(v) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest, principal or premium, if any, due on any Recovery Bond on any Payment Date (including the calculation of any of the individual components of such calculation) or change the Expected Amortization Schedule or Final Maturity Date of any Tranche of Recovery Bonds;

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(vi) decrease the Required Capital Level;

(vii) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Recovery Bond Collateral or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Recovery Bond of the security provided by the Lien of this Indenture;

(viii) cause any material adverse federal income tax consequence to the Seller, the Issuer, the Managers, the Indenture Trustee or the then existing Holders; or

(ix) impair the right to institute suit for the enforcement of the provisions of this Indenture regarding payment or application of funds.

(b)    It shall not be necessary for any Act of Holders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

(c)    Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer shall mail to the Rating Agencies a copy of such supplemental indenture and to the Holders of the Recovery Bonds to which such supplemental indenture relates either a copy of such supplemental indenture or a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

SECTION 9.03. Reserved.

SECTION 9.04. Execution of Supplemental Indentures.

In executing any supplemental indenture permitted by this Article IX or the modifications thereby of the trust created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and all conditions precedent have been satisfied. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.05. Effect of Supplemental Indenture.

Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to each Tranche of Recovery Bonds affected thereby, and the respective rights, limitations

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of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.06. Conformity with Trust Indenture Act.

Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

SECTION 9.07. Reference in Recovery Bonds to Supplemental Indentures.

Recovery Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may bear a notation as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Recovery Bonds so modified as to conform, in the opinion of the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Recovery Bonds.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Compliance Certificates and Opinions, etc.

(a)    Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of registered public accountants meeting the applicable requirements of this Section 10.01, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

(b)    Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

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(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

(c)    (i)    Prior to the deposit of any Recovery Bond Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such deposit) to the Issuer of the Recovery Bond Collateral or other property or securities to be so deposited.

(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (c) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (c) above and this clause (ii), is ten percent or more of the Outstanding Amount of the Recovery Bonds, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than the lesser of (A) $25,000 or (B) one percent of the Outstanding Amount of the Recovery Bonds.

(iii) Whenever any property or securities are to be released from the Lien of this Indenture other than pursuant to Section 8.02(e), the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signatory thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities with respect thereto, or securities released from the Lien of this Indenture (other than pursuant to Section 8.02(e)) since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause

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(iv), equals 10 percent or more of the Outstanding Amount of the Recovery Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than the lesser of (A) $25,000 or (B) one percent of the then Outstanding Amount of the Recovery Bonds.

(v) Notwithstanding any other provision of this Section 10.01, the Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose of the Recovery Property and the other Recovery Bond Collateral as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Collection Account as and to the extent permitted or required by the Basic Documents.

SECTION 10.02. Form of Documents Delivered to Indenture Trustee.

(a)    In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

(b)    Any certificate or opinion of a Responsible Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters (including financial and capital markets), upon a certificate or opinion of, or representations by, an officer or officers of the Servicer or the Issuer and other documents necessary and advisable in the judgment of counsel delivering such Opinion of Counsel.

(c)    Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely conclusively upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

(d)    Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

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SECTION 10.03. Acts of Holders.

(a)    Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03.

(b)    The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

(c)    The ownership of Recovery Bonds shall be proved by the Recovery Bond Register.

(d)    Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Recovery Bonds shall bind the Holder of every Recovery Bond issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Recovery Bond.

SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.

(a)    Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with:

(i) the Indenture Trustee by any Holder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing by facsimile or other electronic communication, first-class mail or overnight delivery service to or with the Indenture Trustee at the Corporate Trust Office;

(ii) the Issuer by the Indenture Trustee or by any Holder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuer addressed to: PG&E Wildfire Recovery Funding LLC at c/o Pacific Gas and Electric Company, 77 Beale Street, P.O. Box 770000, San Francisco, California 94177, Attention: Brian M. Wong, Vice President, General Counsel and Corporate Secretary, Telephone: (415) 973-1000, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Holders to the Indenture Trustee; or

(iii) the CPUC by the Seller, the Issuer or the Indenture Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the CPUC addressed to: California Public Utilities Commission at 505 Van Ness Avenue, San Francisco, California 94102, Attention: General Counsel, Telephone: (415) 703-2782, Facsimile: (415) 703-1758.

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(b)    Notices required to be given to the Rating Agencies by the Issuer or the Indenture Trustee shall be in writing, facsimile, personally delivered or mailed by certified mail, return receipt requested to:

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

(ii) in the case of Standard & Poor’s, to S&P Global Ratings, a division of S&P Global Inc., Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@spglobal.com (all such notices to be delivered to Standard & Poor’s in writing by email); and

(iii) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

Any notice, report or other communication given hereunder may be in writing and addressed as follows or to the extent receipt is confirmed telephonically sent by Electronic Means to the address provided above.

The Indenture Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by the Issuer by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) subsequent to such transmission of written instructions, the Issuer shall provide the originally executed instructions or directions to the Indenture Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the Issuer providing such instructions or directions. If the Issuer elects to give the Indenture Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Indenture Trustee in its discretion elects to act upon such instructions, the Indenture Trustee’s understanding of such instructions shall be deemed controlling. The Indenture Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Indenture Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Issuer agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Indenture Trustee, including without limitation the risk of the Indenture Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

SECTION 10.05. Notices to Holders; Waiver.

(a)    Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Holder affected by such event, at such Holder’s address as it appears

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on the Recovery Bond Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

(b)    Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

(c)    In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event of Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

(d)    Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

SECTION 10.06. Rule 17g-5 Compliance.

The Indenture Trustee agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Indenture Trustee to any Rating Agency under this Indenture or any other Basic Document to which it is a party for the purpose of determining or confirming the credit rating of the Recovery Bonds or undertaking credit rating surveillance of the Recovery Bonds shall be provided, substantially concurrently, to the Servicer for posting on a password-protected website (the “17g-5 Website”). The Servicer shall be responsible for posting all of the information on the 17g-5 Website.

SECTION 10.07. Conflict with Trust Indenture Act.

(a)    If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control.

(b)    The provisions of TIA §§ 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

SECTION 10.08. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

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SECTION 10.09. Successors and Assigns.

All covenants and agreements in this Indenture and the Recovery Bonds by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors.

SECTION 10.10. Severability.

Any provision in this Indenture or in the Recovery Bonds that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remainder of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 10.11. Benefits of Indenture.

Nothing in this Indenture or in the Recovery Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Recovery Bond Collateral, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 10.12. Legal Holidays.

In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Recovery Bonds or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

SECTION 10.13. GOVERNING LAW; WAIVER OF JURY TRIAL.

THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. EACH OF THE ISSUER AND THE INDENTURE TRUSTEE AND EACH HOLDER (BY ITS ACCEPTANCE OF THE RECOVERY BONDS) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY.

SECTION 10.14. Counterparts.

This 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. The Issuer and Indenture Trustee agree that this Indenture may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider as specified in writing to the Indenture Trustee) appearing on this Indenture are the same as

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handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Indenture may be made by facsimile, email or other electronic transmission. The Issuer agrees to assume all risks arising out of the use of digital signatures and electronic methods of submitting such signatures to the Indenture Trustee, including without limitation the risk of the Indenture Trustee acting upon documents with unauthorized signatures and the risk of interception and misuse by third parties.

SECTION 10.15. Recording of Indenture.

If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel at the Issuer’s cost and expense (which shall be external counsel of the Issuer) to the effect that such recording is necessary either for the protection of the Holders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

SECTION 10.16. Issuer Obligation.

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

SECTION 10.17. Inspection.

The Issuer agrees that, on reasonable prior notice, it will permit, subject to the requirements of applicable law and the CPUC Regulations, any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder. Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known, or information obtained by the Indenture Trustee from sources other than the Issuer, provided such parties are rightfully in possession of such information and are not subject to a duty of confidentiality, (ii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) pursuant to any subpoena, civil

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investigative demand or similar demand or request of any court or regulatory authority exercising its proper jurisdiction, (C) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by this Indenture or the Basic Documents approved in advance by the Issuer or (D) to any affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same, provided, that such parties agree to be bound by the confidentiality provisions contained in this Section 10.17, or (iii) any other disclosure authorized by the Issuer.

SECTION 10.18. No Petition.

The Indenture Trustee, by entering into this Indenture, and each Holder, by accepting a Recovery Bond (or interest therein) issued hereunder, hereby covenant and agree that, subject to the CPUC’s right to order the sequestration and payment of revenues arising with respect to the Recovery Property notwithstanding any bankruptcy, reorganization or other insolvency proceedings with respect to the debtor, pledgor or transferor of the Recovery Property pursuant to Section 850.3(e) and (g) of the Wildfire Financing Law, they shall not, prior to the date which is one year and one day after the termination of this Indenture, acquiesce, petition or otherwise invoke or cause the Issuer or any Manager to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its respective property, or ordering the dissolution, winding up or liquidation of the affairs of the Issuer. Nothing in this paragraph shall preclude, or be deemed to estop, such Holder or the Indenture Trustee (a) from taking or omitting to take any action prior to such date in (i) any case or proceeding voluntarily filed or commenced by or on behalf of the Issuer under or pursuant to any such law or (ii) any involuntary case or proceeding pertaining to the Issuer which is filed or commenced by or on behalf of a Person other than such Holder and is not joined in by such Holder (or any Person to which such holder shall have assigned, transferred or otherwise conveyed any part of the obligations of the Issuer hereunder) under or pursuant to any such law, or (b) from commencing or prosecuting any legal action which is not an involuntary case or proceeding under or pursuant to any such law against the Issuer or any of its properties.

SECTION 10.19. Securities Intermediary.

The Securities Intermediary, in acting under this Indenture, is entitled to all rights, benefits, protections, immunities and indemnities accorded The Bank of New York Mellon Trust Company, N.A., a national banking association, in its capacity as Indenture Trustee under this Indenture.

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IN WITNESS WHEREOF, the Issuer, the Indenture Trustee and the Securities Intermediary have caused this Indenture to be duly executed by their respective officers thereunto duly authorized and duly attested, all as of the day and year first above written.

PG&E WILDFIRE RECOVERY FUNDING LLC, as Issuer
By:	/s/ Monica Klemann
	Name:	Monica Klemann
	Title:	Manager, Treasurer and Secretary
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Indenture Trustee and as Securities Intermediary
By:	/s/ David Hill
	Name:	David Hill
	Title:	Vice President

1

EXHIBIT A

FORM OF RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT

EXHIBIT A-1

HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No.	$
SEE REVERSE FOR CERTAIN DEFINITIONS
	CUSIP NO.

EXHIBIT A-2

THE PRINCIPAL OF THIS TRANCHE [ - ] RECOVERY BOND (“THIS TRANCHE [ - ] RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE [ - ] RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE [ - ] RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE [ - ] RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE [ - ] RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE [ - ].

INTEREST RATE        ORIGINAL PRINCIPAL
AMOUNT FINAL MATURITY
DATE

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to [                ], or registered assigns, the Original Principal Amount shown above [in semi-annual installments] on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined

EXHIBIT A-3

pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each                      and                      or if any such day is not a Business Day, the next succeeding Business Day, commencing on [    ] and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche [ - ] Recovery Bond (hereinafter referred to as this “Tranche [ - ] Recovery Bond”). Interest on this Tranche [ - ] Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche [ - ] Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche [ - ] Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche [ - ] Recovery Bond shall be applied first to interest due and payable on this Tranche [ - ] Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche [ - ] Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche [ - ] Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche [ - ] Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche [ - ] Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

EXHIBIT A-4

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date:	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

EXHIBIT A-5

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated:             ,         

This is one of the Tranche [ - ] Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

EXHIBIT A-6

REVERSE OF RECOVERY BOND* ¹

This Tranche [ - ] Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of [    ] Tranches, including this Tranche [ - ] Recovery Bond (herein called the “Tranche [ - ] Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche [ - ] Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche [ - ] Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche [ - ] Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche [ - ] Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount

* The form of the reverse of a Recovery Bond is substantially as follows, unless otherwise specified in the Series Supplement.

EXHIBIT A-7

of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche [ - ] Recovery Bonds shall be made pro rata to the Tranche [ - ] Holders entitled thereto based on the respective principal amounts of the Tranche [ - ] Recovery Bonds held by them.

Payments of interest on this Tranche [ - ] Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche [ - ] Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche [ - ] Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche [ - ] Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche [ - ] Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche [ - ] Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche [ - ] Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche [ - ] Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche [ - ] Recovery Bond and shall specify the place where this Tranche [ - ] Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

EXHIBIT A-8

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts, recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche [ - ] Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche [ - ] Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche    [ - ] Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche [ - ] Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

EXHIBIT A-9

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Prior to the due presentment for registration of transfer of this Tranche [ - ] Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche [ - ] Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche [ - ] Recovery Bond and for all other purposes whatsoever, whether or not this Tranche [ - ] Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche [ - ] Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche [ - ] Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche [ - ] Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche [ - ] Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche [ - ] Recovery Bond.

The term “Issuer” as used in this Tranche [ - ] Recovery Bond includes any successor to the Issuer under the Indenture.

EXHIBIT A-10

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche [ - ] Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

This Tranche [ - ] Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

No reference herein to the Indenture and no provision of this Tranche [ - ] Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche [ - ] Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche [ - ] Recovery Bond, by acquiring any Tranche [ - ] Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche [ - ] Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche [ - ] Recovery Bonds are outstanding, agree to treat the Tranche [ - ] Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche [ - ] Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	Custodian                                                               (Custodian)                                                                  (minor)
	Under Uniform Gifts to Minor Act (                                         )                                                                                       (State)

Additional abbreviations may also be used though not in the above list.

EXHIBIT A-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee                     

FOR VALUE RECEIVED, the undersigned² hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche [ - ] Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints                 , attorney, to transfer said Tranche [ - ] Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated:
	Signature Guaranteed:

² RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche [ - ] Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

EXHIBIT A-12

EXHIBIT B

FORM OF SERIES SUPPLEMENT

This SERIES SUPPLEMENT dated as of [            ], 2022 (this “Supplement”), by and between PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Issuer”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association (“BANK”), in its capacity as indenture trustee (the “Indenture Trustee”) for the benefit of the Secured Parties under the Indenture dated as of [            ], 2022 (the “Indenture”), by and between the Issuer and the BANK, in its capacity as Indenture Trustee and in its separate capacity as a securities intermediary.

PRELIMINARY STATEMENT

Section 9.01 of the Indenture provides, among other things, that the Issuer and the Indenture Trustee may at any time enter into an indenture supplemental to the Indenture for the purposes of authorizing the issuance by the Issuer of the Recovery Bonds and specifying the terms thereof. The Issuer has duly authorized the creation of the Recovery Bonds with an initial aggregate principal amount of $[        ] to be known as PG&E Wildfire Recovery Funding LLC Recovery Bonds (the “Recovery Bonds”), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Recovery Bonds.

All terms used in this Supplement that are defined in the Indenture, either directly or by reference therein, have the meanings assigned to them therein, except to the extent such terms are defined or modified in this Supplement or the context clearly requires otherwise. In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.

GRANTING CLAUSE

With respect to the Recovery Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Recovery Bonds, a Lien on and a security interest in and to all of the Issuer’s right, title and interest (whether now owned or hereafter acquired or arising) in, to and under all of the following property (such property, collectively, the “Recovery Bond Collateral”): (a) the Recovery Property created under and pursuant to the Financing Order, and transferred by the Seller to the Issuer pursuant to the Sale Agreement (including, to the fullest extent permitted by law, the right, title, and interest of the Issuer (i) in and to the Fixed Recovery Charges, including all rights to True-Up Adjustments to the Fixed Recovery Charges in accordance with the Wildfire Financing Law and the Financing Order and (ii) to be paid the amount that is determined in a Financing Order to be the amount that the Seller and Issuer is lawfully entitled to receive pursuant to the provisions of the Wildfire Financing Law and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of or arising from the Fixed Recovery Charges; (b) the Sale Agreement and all property and interests in property transferred under the Sale Agreement with respect to the Recovery Property and the Recovery Bonds, (c) the Servicing Agreement, the Administration Agreement and any subservicing, agency, intercreditor, administration or collection agreements executed in connection therewith, to the extent related to the foregoing Recovery Property and the Recovery

EXHIBIT B-1

Bonds, (d) the Collection Account, all subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time and all Financial Assets and securities entitlements carried therein or credited thereto, (e) all rights to compel the Servicer to file for and obtain adjustments to the Fixed Recovery Charges in accordance with Section 850.1(g) of the Wildfire Financing Law, the Financing Order or any Tariff filed in connection therewith, (f) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demands, causes and choses in action constitute Recovery Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (g) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, (h) all payments on or under, and all proceeds in respect of, any or all of the foregoing; it being understood that the following do not constitute Recovery Bond Collateral: amounts deposited with the Issuer on the Closing Date, required for payment of costs of issuance with respect to the Recovery Bonds (together with any interest earnings thereon), it being understood that such amounts described in this clause shall not be subject to Section 3.17 of the Indenture.

The foregoing Grant is made in trust to secure the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee equally and ratably without prejudice, priority or distinction, except as expressly provided in the Indenture, to secure compliance with the provisions of the Indenture with respect to the Recovery Bonds, all as provided in the Indenture and to secure the performance by the Issuer of all of its obligations under the Indenture (collectively, the “Secured Obligations”). The Indenture and this Series Supplement constitute a security agreement within the meaning of the Wildfire Financing Law and under the UCC to the extent that the provisions of the UCC are applicable hereto.

The Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the Recovery Bonds, acknowledges such Grant and accepts the trusts under this Supplement and the Indenture in accordance with the provisions of this Supplement and the Indenture.

SECTION 1. Designation. The Recovery Bonds shall be designated generally as the Senior Secured Recovery Bonds, Series [            ], and further denominated as Tranches [            ] through [            ].

SECTION 2. Initial Principal Amount; Recovery Bond Interest Rate; Scheduled Payment Date; Final Maturity Date. The Recovery Bonds of each Tranche shall have the initial principal amount, bear interest at the rates per annum and shall have the Scheduled Final Payment Dates and the Final Maturity Dates set forth below:

Tranche Initial Principal
Amount Recovery Bond
Interest Rate Scheduled Final
Payment Date Final Maturity
Date

EXHIBIT B-2

The Recovery Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 3. Authentication Date; Payment Dates; Expected Amortization Schedule for Principal; Periodic Interest; No Premium; Other Terms.

(a)     Authentication Date. The Recovery Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on [            ] (the “Closing Date”) shall have as their date of authentication [                ].

(b)     Payment Dates. The Payment Dates for the Recovery Bonds are [                    ] and [                    ] of each year or, if any such date is not a Business Day, the next succeeding Business Day, commencing on [            ] (the “Initial Payment Date”) and continuing until the earlier of repayment of the Tranche [            ] Recovery Bonds in full and the Final Maturity Date Tranche [            ] Recovery Bonds.

(c)     Expected Amortization Schedule for Principal. Unless an Event of Default shall have occurred and be continuing on each Payment Date, the Indenture Trustee shall distribute to the Holders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) of the Indenture as principal, in the following order and priority: [(1) to the holders of the Tranche A-1 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (2) to the holders of the Tranche A-2 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (3) to the holders of the Tranche A-3 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 3(c) on any Tranche on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of such Tranche of Recovery Bonds to the amount specified in the Expected Amortization Schedule set forth on Schedule A hereto for such Tranche and Payment Date.

(d)     Periodic Interest. Periodic Interest will be payable on each Tranche of the Recovery Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Recovery Bond Interest Rate and (ii) the Outstanding Amount of the related Tranche of Recovery Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the related Tranche of Recovery Bonds on such preceding Payment Date; provided, however, that with respect to the Initial Payment Date, or, if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Closing Date to, but excluding, the following Payment Date.

(e)     Book-Entry Recovery Bonds. The Recovery Bonds shall be Book-Entry Recovery Bonds and the applicable provisions of Section 2.11 of the Indenture shall apply to the Recovery Bonds.

(f)    Indenture Trustee Cap. The amount payable with respect to the Recovery Bonds pursuant to Section 8.02(e)(i) shall not exceed $200,000 annually; provided, however, that the Indenture Trustee Cap shall be disregarded and inapplicable upon the acceleration of the Recovery Bonds following the occurrence of an Event of Default.

EXHIBIT B-3

SECTION 4. Minimum Denominations. The Recovery Bonds shall be issuable in the Minimum Denomination and integral multiples of $1,000 in excess thereof.

SECTION 5. Certain Defined Terms. Article I of the Indenture provides that the meanings of certain defined terms used in the Indenture shall be as defined in Appendix A attached to the Indenture. Additionally, Article II of the Indenture provides certain terms will have the meanings specified in the related Supplement. With respect to the Recovery Bonds, the following definitions shall apply:

“Initial Payment Date” has the meaning specified in Section 3 of this Supplement.

“Minimum Denomination” shall mean $2,000.

“Recovery Bond Interest Rate” has the meaning specified in Section 2 of this Supplement.

“Payment Date” has the meaning specified in Section 3(b) of this Supplement.

“Periodic Interest” has the meaning specified in Section 3(d) of this Supplement.

“Closing Date” has the meaning specified in Section 3(a) of this Supplement.

SECTION 6. Delivery and Payment for the Recovery Bonds; Form of the Recovery Bonds. The Indenture Trustee shall deliver the Recovery Bonds to the Issuer when authenticated in accordance with Section 2.03 of the Indenture. The Recovery Bonds of each Tranche shall be in the form of Exhibits A-1 through A-3 hereto.

SECTION 7. Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture, as so supplemented by this Supplement, shall be read, taken, and construed as one and the same instrument. This Supplement amends, modifies and supplemented the Indenture only in so far as it relates to the Recovery Bonds.

SECTION 8. Counterparts. This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.

SECTION 9. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. EACH OF THE ISSUER AND THE INDENTURE TRUSTEE AND EACH HOLDER (BY ITS ACCEPTANCE OF THE RECOVERY BONDS) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY.

SECTION 10. Issuer Obligation. No recourse may be taken directly or indirectly, by the Holders with respect to the obligations of the Issuer on the Recovery Bonds, under the Indenture

EXHIBIT B-4

or under this Supplement or any certificate or other writing delivered in connection herewith or therewith, against (i) any owner of a beneficial interest in the Issuer (including PG&E) or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including PG&E) in its individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

[Signature Page Follows]

EXHIBIT B-5

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the first day of the month and year first above written.

ISSUER:
PG&E Wildfire Recovery Funding LLC
a Delaware limited liability company
By:
	Name:
	Title:
INDENTURE TRUSTEE:
The Bank of New York Mellon Trust Company, N.A., not in its individual capacity but solely as Indenture Trustee
By:
	Name:
	Title:

Signature Page to Series Supplement

EXHIBIT B-6

SCHEDULE A

EXPECTED AMORTIZATION SCHEDULE

OUTSTANDING PRINCIPAL BALANCE

DATE	TRANCHE	TRANCHE	TRANCHE
Closing Date	$	$	$
, 20
, 20
, 20
, 20

EXHIBIT B-7

EXHIBIT A-1

FORM OF TRANCHE [            ] RECOVERY BOND

[to be attached]

EXHIBIT B-8

EXHIBIT C

SERVICING CRITERIA TO BE ADDRESSED

BY INDENTURE TRUSTEE IN ASSESSMENT OF COMPLIANCE

Reg AB Reference	Servicing Criteria	Applicable Indenture Trustee Responsibility
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
1122(d)(1)(v)	Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X

EXHIBIT C-1

Reg AB Reference	Servicing Criteria	Applicable Indenture Trustee Responsibility
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	X
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations a. are mathematically accurate; b. are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; c. are reviewed and approved by someone other than the person who prepared the reconciliation; and d. contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports a. are prepared in accordance with timeframes and other terms set forth in the transaction agreements; b. provide information calculated in accordance with the terms specified in the transaction agreements; c. are filed with the Commission as required by its rules and regulations; and d. agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the servicer.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the servicer’s investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related documents.

EXHIBIT C-2

Reg AB Reference	Servicing Criteria	Applicable Indenture Trustee Responsibility
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.
1122(d)(4)(v)	The servicer’s records regarding the pool assets agree with the servicer’s records with respect to an obligor’s unpaid principal balance.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period any pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): a. such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; b. interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and c. such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.

EXHIBIT C-3

Reg AB Reference	Servicing Criteria	Applicable Indenture Trustee Responsibility
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

EXHIBIT C-4

APPENDIX A

DEFINITIONS

This is Appendix A to the Indenture.

A.     Defined Terms. As used in the Indenture, the Sale Agreement, the LLC Agreement, the Servicing Agreement, the Series Supplement or any other Basic Document as hereinafter defined, as the case may be (unless the context requires a different meaning), the following terms have the following meanings:

“17g-5 Website” has the meaning specified in Section 10.06 of the Indenture.

“Account Records” has the meaning specified in Section 1(a)(i) of the Administration Agreement.

“Act” has the meaning specified in Section 10.03(a) of the Indenture.

“Actual FRC Collections” means, if no Servicer Default has occurred and is continuing, the calculation of the collections of the Fixed Recovery Charges by the Servicer made in accordance with Section 6(e) of Annex I to the Servicing Agreement, and, if a Servicer Default has occurred and is continuing, a calculation of the collections of the Fixed Recovery Charges by the Servicer made in accordance with Section 6.11(c) of the Servicing Agreement.

“Additional Other Recovery Bonds” means any series of recovery bonds (as defined in the Wildfire Financing Law) and any other recovery bonds described in any similar securitization statute issued by the Issuer or any other issuing entity that is an affiliate of PG&E after the date hereof pursuant to any Subsequent Indenture and in accordance with the related Subsequent Financing Order to recover costs eligible to be financed under the Wildfire Financing Law or such other securitization statute and as determined reasonable by the CPUC.

“Additional Recovery Bonds” means any series of “recovery bonds” (as defined in the Wildfire Financing Law) issued by the Issuer or any other issuing entity that is an affiliate of PG&E after the date hereof pursuant to any Subsequent Indenture and in accordance with the Financing Order.

“Adjustment Date” means the effective date of any Advice Letter, including an Annual Adjustment Date.

“Administration Agreement” means the Administration Agreement, dated as of July 20, 2022, by and between PG&E and the Issuer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Administration Fee” has the meaning specified in Section 2 of the Administration Agreement.

“Administrator” means PG&E, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.

“Advice Letter” means any filing made to the CPUC by the Servicer on behalf of the Issuer with respect to the Fixed Recovery Charges or any True-Up Adjustment in the form of an advice letter, including the Issuance Advice Letter, any Routine Annual True-Up Mechanism Advice Letter, any Routine Semi-Annual True-Up Mechanism Advice Letter, any Routine Interim True-Up Mechanism Advice Letter, or any Non-Routine True-Up Mechanism Advice Letter.

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Annual Accountant’s Report” has the meaning specified in Section 3.04 of the Servicing Agreement.

“Annual Adjustment Date” means the date on which a Routine Annual True-Up Adjustment becomes effective in accordance with Section 4.01(b)(i) of the Servicing Agreement.

“Applicable ESP” means, with respect to each Consumer, the ESP, if any, providing “direct access” service to that Consumer.

“Applicable MDMA” has the meaning specified in Section 1 of Annex I attached to the Servicing Agreement.

“Application” means the Application of PG&E for a Financing Order to securitize regulatory assets and other Recovery Costs filed by PG&E with the CPUC dated January 6, 2021 pursuant to the Wildfire Financing Law, or any subsequent similar Application of PG&E.

“Bankruptcy” has the meaning specified in Section 9.01 of the LLC Agreement.

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time.

“Basic Documents” means the Indenture, the Administration Agreement, the Sale Agreement, the Certificate of Formation, the LLC Agreement, the Servicing Agreement, the Series Supplement, the Letter of Representations, the Underwriting Agreement and all other documents and certificates delivered in connection therewith.

“Billed FRCs” has the meaning specified in Annex I to the Servicing Agreement.

“Billing Commencement Date” means the date specified in the Issuance Advice Letter on which the Servicer will commence billing the Fixed Recovery Charges.

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“Bills” means each of the regular monthly bills, the summary bills, the opening bills and the closing bills issued to Consumers or ESPs by PG&E on its own behalf and in its capacity as Servicer.

“Book-Entry Form” means, with respect to any Recovery Bond, that such Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Recovery Bond was issued.

“Book-Entry Recovery Bonds” means any Recovery Bonds issued in Book-Entry Form; provided, however, that after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Recovery Bonds are to be issued to the Holder of such Recovery Bonds, such Recovery Bonds shall no longer be “Book-Entry Recovery Bonds”.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in San Francisco, California or New York, New York, are, or DTC or the Corporate Trust Office is, authorized or obligated by law, regulation or executive order to remain closed.

“CA UCC” means the Uniform Commercial Code as in effect on the date hereof in the State of California.

“Calculation Cut-Off Date” means a date, specified in an Advice Letter, on which the balance held to the credit of the Collection Account is ascertained.

“Capital Contribution” means the amount of cash contributed to the Issuer by PG&E as specified in the LLC Agreement.

“Capital Subaccount” has the meaning specified in Section 8.02(a) of the Indenture.

“CARE” means the California Alternative Rates for Energy program under the Public Utilities Code.

“Cash Flow Model” means the cash flow model approved in the Financing Order, as the same may be revised from time to time in connection with a Non-Routine True-Up Adjustment.

“Cash Subaccount” has the meaning specified in Section 8.02(a) of the Indenture.

“Certificate of Formation” means the Certificate of Formation filed with the Secretary of State of the State of Delaware on March 8, 2022 pursuant to which the Issuer was formed.

“Claim” means a “claim” as defined in Section 101(5) of the Bankruptcy Code.

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

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“Clearing Agency Participant” means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency.

“Closing Date” means, July 20, 2022, the date on which the Recovery Bonds are to be originally issued in accordance with Section 2.10 of the Indenture and the Series Supplement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collection Account” means the account established and maintained by the Indenture Trustee in accordance with Section 8.02(a) of the Indenture and any subaccounts contained therein.

“Collection Curve” means the collections curve that is expressed as a percentage measured at each of six consecutive 30-day intervals and represents the ratio of accumulative daily collections to the total amount billed to a sample customer population.

“Collection Period” means any period commencing on the first Servicer Business Day of any billing period and ending on the last Servicer Business Day of such billing period.

“Commission” has the meaning specified in Section 1(a)(ii) of the Administration Agreement.

“Company Minutes” has the meaning specified in Section 1(a)(iv) of the Administration Agreement.

“Corporate Trust Office” means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office (for all purposes other than registration of transfer of Recovery Bonds) as of the Closing Date is located at The Bank of New York Mellon Trust Company, N.A., Attn: ABS Structured Finance, 2 N. LaSalle Street, Suite 700, Chicago, IL 60602, and for registration of transfers of Recovery Bonds, the office as of the Closing Date is located at The Bank of New York Mellon Trust Company, N.A., Attn: ABS Structured Finance, 2 N. LaSalle Street, Suite 700, Chicago, IL 60602, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee by like notice.

“Covenant Defeasance Option” has the meaning specified in Section 4.01(b) of the Indenture.

“Consumers” means the existing and future consumers of electricity that has been transmitted or distributed by means of electric transmission or distribution facilities, whether those facilities are owned by the consumer, PG&E or any other party, to the extent those existing and future consumers of electricity are located in the service territory in which the Seller provided electric distribution service as of May 6, 2021, other than consumers of electricity exempted from the obligation to pay Fixed Recovery Charges under Section 850.1(l) of the Public Utilities Code.

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“CPUC” means the Public Utilities Commission of California, or any Governmental Authority succeeding to the duties of such agency.

“CPUC Regulations” means the regulations, including proposed or temporary regulations, promulgated under the Public Utilities Code.

“Daily Remittance” has the meaning specified in Section 6.11(a) of the Servicing Agreement.

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default as defined in Section 5.01 of the Indenture.

“Definitive Recovery Bonds” means Recovery Bonds issued in definitive form in accordance with Section 2.13 of the Indenture.

“Depositor” means PG&E, in its capacity as depositor of the Recovery Property.

“DTC” means The Depository Trust Company or any successor thereto.

“Electronic Means” means telephone, telecopy, telegraph, telex, internet, electronic mail, facsimile transmission or any other similar means of electronic communication. Any communication by telephone as an Electronic Means shall be promptly confirmed in writing or by one of the other means of electronic communication authorized herein.

“Eligible Account” means a segregated non-interest-bearing trust account with an Eligible Institution.

“Eligible Institution” means:

(a)    the corporate trust department of the Indenture Trustee, so long as any of the securities of the Indenture Trustee have (i) either a short-term credit rating from Moody’s of at least “P-1” or a long-term unsecured debt rating from Moody’s of at least “A2” and (ii) a credit rating from S&P of at least “A”; or

(b)    a depository institution organized under the laws of the United States of America or any state (or any domestic branch of a foreign bank) (i) that has either (A) a long-term issuer rating of “AA—” or higher by S&P and “A2” or higher by Moody’s, or (B) a short-term issuer rating of “A-1” or higher by S&P and “P-1” or higher by Moody’s, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (ii) whose deposits are insured by the FDIC.

If so qualified under clause (b) above, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.

“Eligible Investments” mean instruments or investment property which evidence:

(a)    direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;

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(b)     demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of or bankers’ acceptances issued by, any depository institution (including the Indenture Trustee, acting in its commercial capacity) incorporated or organized under the laws of the United States of America or any state thereof and subject to the supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least “A-1” and “P-1” or their equivalents by each of S&P and Moody’s, or such lower rating as will not result in the downgrading or withdrawal of the Recovery Bonds;

(c)    commercial paper (including commercial paper of the Indenture Trustee, acting in its commercial capacity, and other than commercial paper issued by PG&E or any of its affiliates) having, at the time of investment or contractual commitment to invest, a rating of at least “A-1” and “P-1” or their equivalents by each of S&P and Moody’s or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Recovery Bonds;

(d)    investments in money market funds which have a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its affiliates is investment manager or advisor) from Moody’s and S&P;

(e)    repurchase obligations with respect to any security that is a direct obligations of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with Eligible Institutions;

(f)    repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker-dealer acting as principal and that meets certain ratings criteria; and

(g)    (i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a “broker/dealer”), the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s and “A-1+” by S&P at the time of entering into such repurchase obligation; or (ii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least “P-1” by Moody’s and “A-1+” by S&P at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company.

Notwithstanding the foregoing: (1) no securities or investments which mature in 30 days or more will be Eligible Investments unless the issuer thereof has either a short-term unsecured debt rating of at least “P-1” from Moody’s or a long-term unsecured debt rating of at least “A1” from Moody’s; (2) no securities or investments described in bullet points (b) through (d) above which have maturities of more than 30 days but less than or equal to 3 months will be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least “A1” from Moody’s and a short-term unsecured debt rating of at least “P-1” from Moody’s; (3) no securities or investments described in bullet points (b) through (d) above which have maturities of more than

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3 months will be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least “A1” from Moody’s and a short-term unsecured debt rating of at least “P-1” from Moody’s; (4) no securities or investments described in bullet points (b) through (d) above which have a maturity of 60 days or less will be Eligible Investments unless such securities have a rating from S&P of at least “A-1”; and (5) no securities or investments described in bullet points (b) through (d) above which have a maturity of more than 60 days will be Eligible Investments unless such securities have a rating from S&P of at least “AA-”, “A-1+” or “AAAm”.

“ESP” means an alternative energy service provider who has entered into an ESP Service Agreement with the Seller.

“ESP Service Agreement” means an agreement between an ESP and the Seller for the provision of “direct access” service to Consumers in accordance with CPUC Decision 97-10-087 and subsequent decisions.

“Estimated FRC Collections” means the payments in respect of Fixed Recovery Charges which are deemed to have been received by the Servicer, directly or indirectly (including through a ESP), from or on behalf of Consumers, calculated in accordance with Section 6(e) of Annex I of the Servicing Agreement.

“Event of Default” has the meaning specified in Section 5.01 of the Indenture.

“Excess Funds Subaccount” has the meaning specified in Section 8.02(a) of the Indenture.

“Excess Remittance” means the amount, if any, calculated for a particular Reconciliation Period, by which all Estimated FRC Collections remitted to the Collection Account during such Reconciliation Period exceed Actual FRC Collections received by the Servicer during such Reconciliation Period.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exempted Consumers” means Consumers who participate in the CARE program and/or the FERA program.

“Expected Amortization Schedule” means, with respect to any Tranche, the expected amortization schedule related thereto set forth in the Series Supplement.

“FDIC” means the Federal Deposit Insurance Corporation or any successor thereto.

“Federal Book-Entry Regulations” means 31 C.F.R. Part 357 et seq. (Department of Treasury).

“Federal Book-Entry Securities” means securities issued in book-entry form by the United States Treasury.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal

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funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three (3) federal funds brokers of recognized standing selected by it.

“FERA” means the Family Electric Rate Assistance program under the Public Utilities Code.

“Final” means, with respect to the Financing Order, that the Financing Order has become final, is not being appealed and that the time for filing an appeal therefrom has expired.

“Final Maturity Date” means, with respect to each Tranche of Recovery Bonds, the Final Maturity Date therefor, as specified in the Series Supplement.

“Financial Asset” means “financial asset” as set forth in Section 8-102(a)(9) of the CA UCC.

“Financing Order” means the order of the CPUC, D. 21-05-015, issued on May 11, 2021, which became effective on February 28, 2022.

“First Payment Period” means the period commencing on an Adjustment Date (or for the period immediately after the issuance of the Recovery Bonds, the Closing Date) through and including the next Payment Date.

“Fixed Recovery Charge” means any fixed recovery charge as defined in Section 850(b)(7) of the Wildfire Financing Law which is authorized by the Financing Order.

“Fixed Recovery Charge Payments” means the payments made by Consumers based on the Fixed Recovery Charges.

“FRC Collections” means Fixed Recovery Charges revenues received by the Servicer to be remitted to the Collection Account.

“FRTAs” means fixed recovery tax amounts authorized by the Financing Order.

“Full Consolidated ESP Billing” has the meaning specified in Section 1 of Annex I attached to the Servicing Agreement.

“General Subaccount” has the meaning specified in Section 8.02(a) of the Indenture.

“Global Recovery Bond” means a Recovery Bond to be issued to the Holders thereof in Book-Entry Form, which Global Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement.

“Governmental Authority” means any nation or government, any federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative function of government.

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“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement. A Grant of the Recovery Bond Collateral or of any other agreement or instrument included therein shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Recovery Bond Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

“Holder” or “Bondholder” means the Person in whose name a Recovery Bond is registered on the Recovery Bond Register.

“Indemnified Losses” has the meaning specified in Section 5.03 of the Servicing Agreement.

“Indemnified Person” has the meaning specified in Section 6.02 of the Servicing Agreement.

“Indenture” means the Indenture, dated as of July 20, 2022, by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., a national banking association, as Indenture Trustee and as Securities Intermediary as originally executed and, as from time to time supplemented or amended by the Series Supplement or indentures supplemental thereto entered into pursuant to the applicable provisions of the Indenture, as so supplemented or amended, or both, and shall include the forms and terms of the Recovery Bonds established thereunder.

“Indenture Trustee” means The Bank of New York Mellon Trust Company, N.A., a national banking association, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee under the Indenture.

“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, any other obligor on the Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director (other than as an independent director or manager) or Person performing similar functions.

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent appraiser or

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other expert appointed by an Issuer Order and consented to by the Indenture Trustee, and such opinion or certificate shall state that the signer has read the definition of “Independent” in the Indenture and that the signer is Independent within the meaning thereof.

“Independent Manager” has the meaning specified in Section 4.01(a) of the LLC Agreement.

“Independent Manager Fee” has the meaning specified in Section 4.01(a) of the LLC Agreement.

“Initial Payment Date” has the meaning specified in Section 3 of the Series Supplement.

“Insolvency Event” means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

“Internal Revenue Service” means the Internal Revenue Service of the United States of America.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Investment Earnings” means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.

“Issuance Advice Letter” means the Issuance Advice Letter filed with the CPUC pursuant to the Wildfire Financing Law and the Financing Order with respect to the Recovery Bonds.

“Issuer” means PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company, named as such in the Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Recovery Bonds.

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“Issuer Documents” has the meaning specified in Section 1(a)(iv) of the Administration Agreement.

“Issuer Order” and “Issuer Request” mean a written order or request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.

“Legal Defeasance Option” has the meaning specified in Section 4.01(b) of the Indenture.

“Letter of Representations” means any applicable agreement between the Issuer and the applicable Clearing Agency, with respect to such Clearing Agency’s rights and obligations (in its capacity as a Clearing Agency) with respect to any Book-Entry Recovery Bonds, as the same may be amended, supplemented, restated or otherwise modified from time to time.

“Lien” means, with respect to any asset, any security interest, lien, mortgage, leasehold mortgage, charge, pledge, hypothecation, claim, equity or encumbrance of any kind.

“LLC Act” means the Delaware Limited Liability Company Act, as amended.

“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of PG&E Wildfire Recovery Funding LLC, effective as of May 3, 2022, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Manager” means each manager of the Issuer under the LLC Agreement.

“Member” has the meaning specified in the first paragraph of the LLC Agreement.

“Minimum Denomination” means, with respect to any Recovery Bond, the minimum denomination therefor specified in the Series Supplement, which minimum denomination shall be not less than $2,000, except for one Recovery Bond of each tranche which may be of smaller denomination, and, except as otherwise provided in the Series Supplement, integral multiples of $1,000 in excess thereof.

“Monthly Servicer’s Certificate” means a certificate, substantially in the form of Exhibit A to the Servicing Agreement, completed and executed by a Responsible Officer of the Servicer pursuant to Section 4.01(c)(iv) of the Servicing Agreement.

“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto. References to Moody’s are effective so long as Moody’s is a Rating Agency.

“Non-Routine True-Up Adjustment” means each adjustment to the Fixed Recovery Charges made pursuant to the terms of a Non-Routine True-Up Mechanism Advice Letter in accordance with Section 4.01(b)(iv) of the Servicing Agreement.

“Non-Routine True-Up Effective Date” has the meaning specified in Section 4.01(b)(iv) of the Servicing Agreement.

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“Non-Routine True-Up Mechanism Advice Letter” means the Advice Letter substantially in the form of Exhibit E to the Servicing Agreement filed in connection with a Non-Routine True-Up Adjustment.

“Notice of Default” has the meaning specified in Section 5.01 of the Indenture.

“Notice Parties” means those Persons who are required to receive notice of filings made with the CPUC pursuant to A. 21-01-004.

“Officer’s Certificate” means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Responsible Officer of the party delivering such certificate.

“Operating Expenses” means all unreimbursed fees, costs and expenses of the Issuer, including all amounts owed by the Issuer to the Indenture Trustee, any Manager, the Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency fees, costs and expenses of the Issuer and PG&E, the return on equity due PG&E for its Capital Contribution and any franchise taxes owed on investment income in the Collection Account.

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in the Basic Documents, be employees of or counsel to the party providing such opinion of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion of counsel, and shall be in form and substance reasonably acceptable to such party. Any Opinion of Counsel may be based, insofar as it relates to factual matters (including financial and capital markets), upon a certificate or opinion or, or representations by, an officer or officer of the Servicer or the Issuer and other documents necessary and advisable in the judgment of counsel delivering such opinion.

“Outstanding” means, as of the date of determination, all Recovery Bonds theretofore authenticated and delivered under this Indenture except:

(a)     Recovery Bonds theretofore canceled by the Recovery Bond Registrar or delivered to the Recovery Bond Registrar for cancellation;

(b)     Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Recovery Bonds; and

(c)     Recovery Bonds in exchange for or in lieu of other Recovery Bonds which have been issued pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Recovery Bonds are held by a Protected Purchaser;

provided that in determining whether the Holders of the requisite Outstanding Amount of the Recovery Bonds or any Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Recovery Bonds owned by the Issuer, any other obligor upon the Recovery Bonds, the Member, the Seller, the Servicer or any

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Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Recovery Bonds that the Indenture Trustee actually knows to be so owned shall be so disregarded. Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.

“Outstanding Amount” means the aggregate principal amount of all Recovery Bonds or, if the context requires, all Recovery Bonds of a Tranche, Outstanding at the date of determination.

“Partial Consolidated ESP Billing” has the meaning specified in Section 1 of Annex I attached to the Servicing Agreement.

“Paying Agent” means with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Recovery Bonds pursuant to the Indenture.

“Payment Date” means, with respect to any Tranche of Recovery Bonds, the dates specified in the Series Supplement; provided that if any such date is not a Business Day, the Payment Date shall be the Business Day immediately succeeding such date.

“Payment Period” means, as of any date of calculation, a period commencing on a Payment Date through and including the next succeeding Payment Date.

“Periodic Billing Requirement” means, for any Payment Period, the aggregate amount of Fixed Recovery Charges calculated by the Servicer, using write-offs and Average Days Sales Outstanding data as necessary to be billed during such period in order to collect the Periodic Payment Requirement on a timely basis.

“Periodic Interest” means, with respect to any Payment Date, the periodic interest for such Payment Date as specified in the Series Supplement.

“Periodic Payment Requirement” means, for any Payment Period, the total dollar amount required to pay all scheduled (or legally due) payments of Periodic Principal and Periodic Interest on the Recovery Bonds and all Operating Expenses.

“Periodic Principal” means, with respect to any Payment Date, the excess, if any, of the Outstanding Amount of Recovery Bonds over the outstanding Unrecovered Balance specified for such Payment Date on the Expected Amortization Schedule.

“Permitted Lien” means the Lien created by the Indenture.

“Person” means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

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“PG&E” means Pacific Gas and Electric Company, a California corporation, and any of its successors or permitted assigns.

“Predecessor Recovery Bond” means, with respect to any particular Recovery Bond, every previous Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Recovery Bond, and, for the purpose of this definition, any Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Recovery Bond.

“Premises” has the meaning specified in Section 1(g) of the Administration Agreement.

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

“Prospectus” means the prospectus dated July 13, 2022 relating to the Recovery Bonds.

“Protected Purchaser” has the meaning specified in Section 8-303 of the UCC.

“Public Utilities Code” means the California Public Utilities Code, as amended from time to time.

“Quarterly Adjustment Date” means, the date on which a Routine Annual True-Up Adjustment becomes effective in accordance with Section 4.01(b)(i) of the Servicing Agreement.

“Rating Agency” means, with respect to any Tranche of Recovery Bonds, any of Moody’s or Standard & Poor’s which provides a rating with respect to such Tranche of Recovery Bonds. If no such organization or successor is any longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Servicer.

“Rating Agency Condition” means, with respect to any action, not less than ten (10) Business Days’ prior written notification to each Rating Agency of such action, and written confirmation from each of Standard & Poor’s and Moody’s to the Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any Tranche of Recovery Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to the Issuer that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any Tranche of Recovery Bonds; provided, that if within such ten (10) Business Day period, any Rating Agency (other than Standard & Poor’s) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five (5) Business Days following such second (2nd) request, the applicable Rating Agency

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Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency’s right to review or consent).

“Reconciliation Certificate” means, with respect to any Payment Date, a certificate in the form of the Reconciliation Certificate attached as Exhibit G to the Servicing Agreement and delivered to the Indenture Trustee in accordance with Sections 4.01(c)(iv) and 6.11(c) of the Servicing Agreement for such Payment Date.

“Reconciliation Period” means, with respect to any date of calculation, a period commencing on the second preceding Payment Date through and including the next preceding Payment Date.

“Record Date” means, with respect to a Payment Date, in the case of Definitive Recovery Bonds, the close of business on the last day of the calendar month preceding the calendar month in which such Payment Date occurs, and in the case of Book-Entry Recovery Bonds, one Business Day prior to the applicable Payment Date.

“Recovery Bonds” means the Recovery Bonds authorized by the Financing Order and issued under the Indenture.

“Recovery Bond Collateral” has the meaning specified in the preamble of the Indenture.

“Recovery Bond Interest Rate” means, with respect to any Tranche of Recovery Bonds, the rate at which interest accrues on the Recovery Bonds of such Tranche, as specified in the Series Supplement.

“Recovery Bond Register” means the register maintained pursuant to Section 2.05 of the Indenture, providing for the registration of the Recovery Bonds and transfers and exchanges thereof.

“Recovery Bond Registrar” means the registrar at any time of the Recovery Bond Register, appointed pursuant to Section 2.05 of the Indenture.

“Recovery Costs” means all Recovery Costs as defined in Section 850(b)(10) of the Wildfire Financing Law.

“Recovery Property” means all recovery property as defined in Section 850(b)(11) of the Wildfire Financing Law created pursuant to the Financing Order and sold or otherwise conveyed to the Issuer under the Sale Agreement, including the right to impose, collect and receive the Fixed Recovery Charges authorized in the Financing Order. As used in the Basic Documents, the term “Recovery Property” when used with respect to PG&E includes the contract rights of PG&E that exist prior to the time that such rights are first transferred in connection with the issuance of the Recovery Bonds, at which time they become recovery property in accordance with Section 850.1(g) of the Wildfire Financing Law.

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“Recovery Property Records” has the meaning specified in Section 5.01 of the Servicing Agreement.

“Registered Holder” means the Person in whose name a Recovery Bond is registered on the Recovery Bond Register.

“Registration Statement” means the registration statement, Form SF-1 Registration Nos. 333-265457 and 333-265457-01, filed with the SEC for registration under the Securities Act relating to the offering and sale of the Recovery Bonds, and including all amendments thereto.

“Regulation AB” means the rules of the SEC promulgated under Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§ 229.1100-229.1125, as such may be amended from time to time.

“Reimbursable Expenses” has the meaning specified in Section 2 of the Administration Agreement.

“Released Parties” has the meaning specified in Section 6.02(e) of the Servicing Agreement.

“Remittance Shortfall” means the amount, if any, calculated for a particular Reconciliation Period, by which Actual FRC Collections received by the Servicer during such Reconciliation Period exceed all Estimated FRC Collections remitted to the Collection Account during such Reconciliation Period.

“Required Capital Level” means an amount equal to 0.50% of the initial principal amount of the Recovery Bonds, or such other amount as may be permitted or required under the Financing Order and applicable Internal Revenue Service rulings, deposited into the Capital Subaccount by the Member prior to or upon the issuance of the Recovery Bonds.

“Requirement of Law” means any foreign, federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.

“Responsible Officer” means with respect to (a) the Issuer, any Manager or any duly authorized officer; (b) the Indenture Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, Assistant Vice President, Secretary or Assistant Treasurer, Trust Officer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers, respectively), and that has direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred to because of such officer’s knowledge and familiarity with the particular subject; (c) any corporation (other than the Indenture Trustee), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, the Assistant Treasurer or any other duly authorized officer of such Person who has been authorized to act in the circumstances; (d) any partnership, any general partner thereof; and (e) any other Person (other than an individual or the Indenture Trustee), any duly authorized officer or member of such Person, as the context may require, who is authorized to act in matters relating to such Person.

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“Retirement of the Recovery Bonds” means any day on which the final distribution is made to the Indenture Trustee in respect of the last Outstanding Recovery Bonds.

“Routine Annual True-Up Adjustment” means each adjustment to the Fixed Recovery Charges made pursuant to the terms of an Annual True-Up Mechanism Advice Letter in accordance with Section 4.01(b)(i) of the Servicing Agreement.

“Routine Annual True-Up Mechanism Advice Letter” means the Advice Letter substantially in the form of Exhibit D to the Servicing Agreement filed in connection with a Routine Annual True-Up Adjustment.

“Routine Semi-Annual True-Up Adjustment” means each adjustment to the Fixed Recovery Charges made pursuant to the terms of a Routine Semi-Annual True-Up Mechanism Advice Letter in accordance with Section 4.01(b)(ii) of the Servicing Agreement.

“Routine Semi-Annual True-Up Mechanism Advice Letter” means the Advice Letter substantially in the form of Exhibit D to the Servicing Agreement filed in connection with a Routine Semi-Annual True-Up Adjustment.

“Routine Interim True-Up Adjustment” means each adjustment to the Fixed Recovery Charges made pursuant to the terms of an Interim True-Up Mechanism Advice Letter in accordance with Section 4.01(b)(iii) of the Servicing Agreement.

“Routine Interim True-Up Mechanism Advice Letter” means the Advice Letter substantially in the form of Exhibit D to the Servicing Agreement filed in connection with a Routine Interim True-Up Adjustment.

“Sale Agreement” means the Recovery Property Purchase and Sale Agreement, dated as of July 20, 2022, by and between PG&E and the Issuer, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Scheduled Final Payment Date” means with respect to each Tranche of Recovery Bonds, the date when all interest and principal is scheduled to be paid with respect to that Tranche in accordance with the Expected Amortization Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date with respect to any Tranche shall be the last Scheduled Payment Date set forth in the Expected Amortization Schedule relating to such Tranche. The “last Scheduled Final Payment Date” means the Scheduled Final Payment Date of the last maturing Tranche of Recovery Bonds.

“Scheduled Payment Date” has the meaning specified in the Series Supplement with respect to each Tranche of Recovery Bonds.

“SEC” means the U.S. Securities and Exchange Commission.

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“Second Payment Period” means the period commencing on the day following the First Payment Period through and including the next Payment Date on the Recovery Bonds.

“Secretary of State” means the Secretary of State of the State of Delaware or the Secretary of State of the State of California, as the case may be, or any Governmental Authority succeeding to the duties of such offices.

“Secured Obligations” has the meaning specified in the Series Supplement, a form of which is attached as Exhibit B to the Indenture.

“Secured Parties” means the Indenture Trustee, the Bondholders and any credit enhancer described in the Series Supplement.

“Securities Account” means the Collection Account (to the extent it constitutes a securities account as defined in the CA UCC and Federal Book-Entry Regulations).

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Intermediary” means The Bank of New York Mellon Trust Company, N.A., a national banking association, solely in the capacity of a “securities intermediary” as defined in the CA UCC and Federal Book-Entry Regulations or any successor securities intermediary under the Indenture.

“Security Entitlement” means “security entitlement” (as defined in Section 8-102(a)(17) of the CA UCC) with respect to Financial Assets now or hereafter credited to the Securities Account and, with respect to Federal Book-Entry Regulations, with respect to Federal Book-Entry Securities now or hereafter credited to the Securities Account, as applicable.

“Seller” has the meaning specified in the preamble to the Sale Agreement.

“Series” means any series of “recovery bonds” (as defined in the Wildfire Financing Law) issued by the Issuer under this Indenture or any Subsequent Indenture, including the Recovery Bonds and any Additional Recovery Bonds or Additional Other Recovery Bonds.

“Series Supplement” means the indenture supplemental to the Indenture in the form attached as Exhibit B to the Indenture that authorizes the issuance of the Recovery Bonds.

“Servicer” means PG&E, as Servicer under the Servicing Agreement, or any successor Servicer to the extent permitted under the Servicing Agreement.

“Servicer Business Day” means any day other than a Saturday, Sunday or holiday on which the Servicer maintains normal office hours and conducts business.

“Servicer Default” has the meaning specified in Section 7.01 of the Servicing Agreement.

“Servicer Policies and Practices” has the meaning specified in Section 1 of Annex I attached to the Servicing Agreement.

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“Servicer’s Certificate” means a certificate, substantially in the form of Exhibit B to the Servicing Agreement, completed and executed by a Responsible Officer of the Servicer pursuant to Section 4.01(c)(ii) of the Servicing Agreement.

“Servicer’s Regulation AB Certificate” means the certificate referred to in Section 3.03 of the Servicing Agreement and substantially in the form of Exhibit B attached to the Servicing Agreement.

“Servicing Agreement” means the Recovery Property Servicing Agreement, dated as of July 20, 2022, by and between the Issuer and PG&E, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Servicing Fee” means the fee payable to the Servicer on each Payment Date for services rendered during the period from, but not including, the preceding Payment Date (or from the Closing Date in the case of the first Payment Date) to and including the current Payment Date, determined pursuant to Section 6.06 of the Servicing Agreement.

“Special Member” has the meaning specified in Section 1.02(b) of the LLC Agreement.

“Special Payment” means with respect to any Tranche of Recovery Bonds, any payment of principal of or interest on (including any interest accruing upon default), or any other amount in respect of, the Recovery Bonds of such Tranche that is not actually paid within five (5) days of the Payment Date applicable thereto.

“Special Payment Date” means the date on which a Special Payment is to be made by the Indenture Trustee to the Holders.

“Special Purpose Provisions” has the meaning specified in Section 11.02 of the LLC Agreement.

“Special Record Date” means with respect to any Special Payment Date, the close of business on the fifteenth (15^th) day (whether or not a Business Day) preceding such Special Payment Date.

“Standard & Poor’s” or “S&P” means S&P Global Ratings, a division of S&P Global Inc., or any successor thereto. References to S&P are effective so long as S&P is a Rating Agency.

“State” means any one of the fifty states of the United States of America, or the District of Columbia.

“State Pledge” means the pledge of the State of California as set forth in Section 850.1(e) of the Wildfire Financing Law.

“Subsequent Financing Order” means a financing order of the CPUC under the Wildfire Financing Law issued to PG&E subsequent to the Financing Order.

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“Subaccounts” has the meaning specified in Section 8.02(a) of the Indenture.

“Subsequent Indenture” means any indenture by and between the Issuer and an indenture trustee subsequent to this Indenture, pursuant to which any Series of Additional Recovery Bonds or Additional Other Recovery Bonds is issued by the Issuer.

“Successor Servicer” has the meaning specified in Section 3.07(e) of the Indenture.

“Tariff” means the Tariff filed with the CPUC pursuant to the Wildfire Financing Law to evidence the Fixed Recovery Charges pursuant to the Financing Order.

“Tax Return” has the meaning specified in Section 1(a)(iii) of the Administration Agreement.

“Temporary Recovery Bonds” means Recovery Bonds executed, and upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive Recovery Bonds pursuant to Section 2.04 of the Indenture.

“Termination Notice” has the meaning specified in Section 7.01 of the Servicing Agreement.

“Tranche” means any one of the tranches of Recovery Bonds.

“Treasury Regulations” means the regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

“True-Up Adjustment” means any Routine Annual True-Up Adjustment, Routine Semi-Annual True-Up Adjustment, Routine Interim True-Up Adjustment, or Non-Routine True-Up Adjustment, as the case may be.

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force on the Closing Date, unless otherwise specifically provided.

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

“Underwriters” means the underwriters who purchase Recovery Bonds of any Tranche from the Issuer and sell such Recovery Bonds in a public offering.

“Underwriting Agreement” means the Underwriting Agreement, dated as of July 13, 2022, by and among the Issuer, PG&E and the representatives of the several Underwriters named therein, as the same may be amended, supplemented or modified from time to time, with respect to the issuance of the Recovery Bonds.

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“Unrecovered Balance” means, as of any Payment Date, the sum of the outstanding principal amount of the Recovery Bonds less the amount in the Excess Funds Subaccount available to make principal payments on the Recovery Bonds.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the option of the issuer thereof.

“Weighted Average Days Sales Outstanding” means the weighted average number of days PG&E’s monthly bills to Consumers remain outstanding during the calendar year immediately preceding the calculation thereof, or for such other period specified in an Advice Letter or Reconciliation Certificate, pursuant to the Servicing Agreement.

“Wildfire Financing Law” means Division 1, Part 1, Chapter 4, Article 5.8 of the California Public Utilities Code, §§ 850 – 850.8, in each case as amended from time to time.

B.     Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles. To the extent that the definitions of accounting terms in any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control. As used in the Basic Documents, the term “including” means “including without limitation,” and other forms of the verb “to include” have correlative meanings. All references to any Person shall include such Person’s permitted successors.

C.     Computation of Time Periods. Unless otherwise stated in any of the Basic Documents, as the case may be, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

D.     Reference; Captions. The words “hereof”, “herein” and “hereunder” and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document; and references to “Section”, “subsection”, “Schedule” and “Exhibit” in any Basic Document are references to Sections, subsections, Schedules and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document. The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.

E.     The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter forms of such terms.

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EX-4.2

Exhibit 4.2

SERIES SUPPLEMENT

This SERIES SUPPLEMENT dated as of July 20, 2022 (this “Supplement”), by and between PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Issuer”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association (“BANK”), in its capacity as indenture trustee (the “Indenture Trustee”) for the benefit of the Secured Parties under the Indenture dated as of July 20, 2022 (the “Indenture”), by and between the Issuer and the BANK, in its capacity as Indenture Trustee and in its separate capacity as a securities intermediary.

PRELIMINARY STATEMENT

Section 9.01 of the Indenture provides, among other things, that the Issuer and the Indenture Trustee may at any time enter into an indenture supplemental to the Indenture for the purposes of authorizing the issuance by the Issuer of the Recovery Bonds and specifying the terms thereof. The Issuer has duly authorized the creation of the Recovery Bonds with an initial aggregate principal amount of $3,900,000,000 to be known as PG&E Wildfire Recovery Funding LLC Recovery Bonds (the “Recovery Bonds”), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Recovery Bonds.

All terms used in this Supplement that are defined in the Indenture, either directly or by reference therein, have the meanings assigned to them therein, except to the extent such terms are defined or modified in this Supplement or the context clearly requires otherwise. In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.

GRANTING CLAUSE

With respect to the Recovery Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Recovery Bonds, a Lien on and a security interest in and to all of the Issuer’s right, title and interest (whether now owned or hereafter acquired or arising) in, to and under all of the following property (such property, collectively, the “Recovery Bond Collateral”): (a) the Recovery Property created under and pursuant to the Financing Order, and transferred by the Seller to the Issuer pursuant to the Sale Agreement (including, to the fullest extent permitted by law, the right, title, and interest of the Issuer (i) in and to the Fixed Recovery Charges, including all rights to True-Up Adjustments to the Fixed Recovery Charges in accordance with the Wildfire Financing Law and the Financing Order and (ii) to be paid the amount that is determined in a Financing Order to be the amount that the Seller and Issuer is lawfully entitled to receive pursuant to the provisions of the Wildfire Financing Law and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of or arising from the Fixed Recovery Charges; (b) the Sale Agreement and all property and interests in property transferred under the Sale Agreement with respect to the Recovery Property and the Recovery Bonds, (c) the Servicing Agreement, the Administration Agreement and any subservicing, agency, intercreditor, administration or collection agreements executed in connection therewith, to the extent related to the foregoing Recovery Property and the Recovery Bonds, (d) the Collection Account, all subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or

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credited thereto from time to time and all Financial Assets and securities entitlements carried therein or credited thereto, (e) all rights to compel the Servicer to file for and obtain adjustments to the Fixed Recovery Charges in accordance with Section 850.1(g) of the Wildfire Financing Law, the Financing Order or any Tariff filed in connection therewith, (f) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demands, causes and choses in action constitute Recovery Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (g) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, (h) all payments on or under, and all proceeds in respect of, any or all of the foregoing; it being understood that the following do not constitute Recovery Bond Collateral: amounts deposited with the Issuer on the Closing Date, required for payment of costs of issuance with respect to the Recovery Bonds (together with any interest earnings thereon), it being understood that such amounts described in this clause shall not be subject to Section 3.17 of the Indenture.

The foregoing Grant is made in trust to secure the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee equally and ratably without prejudice, priority or distinction, except as expressly provided in the Indenture, to secure compliance with the provisions of the Indenture with respect to the Recovery Bonds, all as provided in the Indenture and to secure the performance by the Issuer of all of its obligations under the Indenture (collectively, the “Secured Obligations”). The Indenture and this Series Supplement constitute a security agreement within the meaning of the Wildfire Financing Law and under the UCC to the extent that the provisions of the UCC are applicable hereto.

The Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the Recovery Bonds, acknowledges such Grant and accepts the trusts under this Supplement and the Indenture in accordance with the provisions of this Supplement and the Indenture.

SECTION 1. Designation. The Recovery Bonds shall be designated generally as the Senior Secured Recovery Bonds, Series 2022-B, and further denominated as Tranches A-1 through A-5.

SECTION 2. Initial Principal Amount; Recovery Bond Interest Rate; Scheduled Payment Date; Final Maturity Date. The Recovery Bonds of each Tranche shall have the initial principal amount, bear interest at the rates per annum and shall have the Scheduled Final Payment Dates and the Final Maturity Dates set forth below:

Tranche	Initial Principal Amount		Recovery Bond Interest Rate			Scheduled Final Payment Date		Final Maturity Date
A-1	$	613,080,000		4.022	%		06/01/2031		06/01/2033
A-2	$	600,000,000		4.722	%		06/01/2037		06/01/2039
A-3	$	500,040,000		5.081	%		06/01/2041		06/01/2043
A-4	$	1,149,960,000		5.212	%		12/01/2047		12/01/2049
A-5	$	1,036,920,000		5.099	%		06/01/2052		06/01/2054

2

The Recovery Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 3. Authentication Date; Payment Dates; Expected Amortization Schedule for Principal; Periodic Interest; No Premium; Other Terms.

(a) Authentication Date. The Recovery Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on July 20, 2022 (the “Closing Date”) shall have as their date of authentication July 20, 2022.

(b) Payment Dates. The Payment Dates for the Recovery Bonds are June 1 and December 1 of each year or, if any such date is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 (the “Initial Payment Date”) and continuing until the earlier of repayment of the Tranche A-5 Recovery Bonds in full and the Final Maturity Date Tranche A-5 Recovery Bonds.

(c) Expected Amortization Schedule for Principal. Unless an Event of Default shall have occurred and be continuing on each Payment Date, the Indenture Trustee shall distribute to the Holders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) of the Indenture as principal, in the following order and priority: (1) to the holders of the Tranche A-1 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (2) to the holders of the Tranche A-2 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (3) to the holders of the Tranche A-3 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (4) to the holders of the Tranche A-4 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; (5) to the holders of the Tranche A-5 Recovery Bonds, until the Outstanding Amount of such Tranche of Recovery Bonds thereof has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 3(c) on any Tranche on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of such Tranche of Recovery Bonds to the amount specified in the Expected Amortization Schedule set forth on Schedule A hereto for such Tranche and Payment Date.

(d) Periodic Interest. Periodic Interest will be payable on each Tranche of the Recovery Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Recovery Bond Interest Rate and (ii) the Outstanding Amount of the related Tranche of Recovery Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the related Tranche of Recovery Bonds on such preceding Payment Date; provided, however, that with respect to the Initial Payment Date, or, if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Closing Date to, but excluding, the following Payment Date.

(e) Book-Entry Recovery Bonds. The Recovery Bonds shall be Book-Entry Recovery Bonds and the applicable provisions of Section 2.11 of the Indenture shall apply to the Recovery Bonds.

3

(f) Indenture Trustee Cap. The amount payable with respect to the Recovery Bonds pursuant to Section 8.02(e)(i) shall not exceed $200,000 annually; provided, however, that the Indenture Trustee Cap shall be disregarded and inapplicable upon the acceleration of the Recovery Bonds following the occurrence of an Event of Default.

SECTION 4. Minimum Denominations. The Recovery Bonds shall be issuable in the Minimum Denomination and integral multiples of $1,000 in excess thereof.

SECTION 5. Certain Defined Terms. Article I of the Indenture provides that the meanings of certain defined terms used in the Indenture shall be as defined in Appendix A attached to the Indenture. Additionally, Article II of the Indenture provides certain terms will have the meanings specified in the related Supplement. With respect to the Recovery Bonds, the following definitions shall apply:

“Initial Payment Date” has the meaning specified in Section 3 of this Supplement.

“Minimum Denomination” shall mean $2,000.

“Recovery Bond Interest Rate” has the meaning specified in Section 2 of this Supplement.

“Payment Date” has the meaning specified in Section 3(b) of this Supplement.

“Periodic Interest” has the meaning specified in Section 3(d) of this Supplement.

“Closing Date” has the meaning specified in Section 3(a) of this Supplement.

SECTION 6. Delivery and Payment for the Recovery Bonds; Form of the Recovery Bonds. The Indenture Trustee shall deliver the Recovery Bonds to the Issuer when authenticated in accordance with Section 2.03 of the Indenture. The Recovery Bonds of each Tranche shall be in the form of Exhibits A-1 through A-5 hereto.

SECTION 7. Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture, as so supplemented by this Supplement, shall be read, taken, and construed as one and the same instrument. This Supplement amends, modifies and supplemented the Indenture only in so far as it relates to the Recovery Bonds.

SECTION 8. Counterparts. This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.

SECTION 9. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. EACH OF THE ISSUER AND THE INDENTURE TRUSTEE AND EACH HOLDER (BY ITS ACCEPTANCE OF THE RECOVERY BONDS) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY.

4

SECTION 10. Issuer Obligation. No recourse may be taken directly or indirectly, by the Holders with respect to the obligations of the Issuer on the Recovery Bonds, under the Indenture or under this Supplement or any certificate or other writing delivered in connection herewith or therewith, against (i) any owner of a beneficial interest in the Issuer (including PG&E) or (ii) any shareholder, partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including PG&E) in its individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

[Signature Page Follows]

5

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the first day of the month and year first above written.

ISSUER:
PG&E Wildfire Recovery Funding LLC
a Delaware limited liability company
By:	/s/ Monica Klemann
	Name: Monica Klemann
	Title:   Manager, Treasurer and Secretary
INDENTURE TRUSTEE:
The Bank of New York Mellon Trust
Company, N.A., not in its individual capacity
but solely as Indenture Trustee
By:	/s/ David Hill
	Name: David Hill
	Title:   Vice President

Signature Page to Series Supplement

6

SCHEDULE A

EXPECTED AMORTIZATION SCHEDULE

OUTSTANDING PRINCIPAL BALANCE

Semi-Annual Payment Date	Tranche A-1 Principal		Tranche A-2 Principal		Tranche A-3 Principal		Tranche A-4 Principal		Tranche A-5 Principal
Closing Date	$	613,080,000	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2023	$	576,590,692	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2023	$	545,225,081	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2024	$	513,188,246	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2024	$	480,465,823	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2025	$	447,043,139	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2025	$	412,905,211	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2026	$	378,036,730	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2026	$	342,422,064	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2027	$	306,045,244	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2027	$	268,889,961	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2028	$	230,939,554	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2028	$	192,177,008	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2029	$	152,584,944	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2029	$	112,145,610	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2030	$	70,840,874	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2030	$	28,652,217	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2031	$	0	$	585,560,723	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2031	$	0	$	541,501,586	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2032	$	0	$	496,360,798	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2032	$	0	$	450,111,804	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2033	$	0	$	402,727,397	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2033	$	0	$	354,179,702	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2034	$	0	$	304,440,162	$	500,040,000	$	1,149,960,000	$	1,036,920,000

7

12/01/2034	$	0	$	253,479,516	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2035	$	0	$	201,267,786	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2035	$	0	$	147,774,259	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2036	$	0	$	92,967,465	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2036	$	0	$	36,815,164	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2037	$	0	$	0	$	479,324,324	$	1,149,960,000	$	1,036,920,000
12/01/2037	$	0	$	0	$	420,343,814	$	1,149,960,000	$	1,036,920,000
06/01/2038	$	0	$	0	$	359,809,168	$	1,149,960,000	$	1,036,920,000
12/01/2038	$	0	$	0	$	297,679,433	$	1,149,960,000	$	1,036,920,000
06/01/2039	$	0	$	0	$	233,912,581	$	1,149,960,000	$	1,036,920,000
12/01/2039	$	0	$	0	$	168,465,471	$	1,149,960,000	$	1,036,920,000
06/01/2040	$	0	$	0	$	101,293,830	$	1,149,960,000	$	1,036,920,000
12/01/2040	$	0	$	0	$	32,352,217	$	1,149,960,000	$	1,036,920,000
06/01/2041	$	0	$	0	$	0	$	1,111,553,992	$	1,036,920,000
12/01/2041	$	0	$	0	$	0	$	1,038,898,642	$	1,036,920,000
06/01/2042	$	0	$	0	$	0	$	964,267,067	$	1,036,920,000
12/01/2042	$	0	$	0	$	0	$	887,605,514	$	1,036,920,000
06/01/2043	$	0	$	0	$	0	$	808,858,766	$	1,036,920,000
12/01/2043	$	0	$	0	$	0	$	727,970,106	$	1,036,920,000
06/01/2044	$	0	$	0	$	0	$	644,881,275	$	1,036,920,000
12/01/2044	$	0	$	0	$	0	$	559,532,428	$	1,036,920,000
06/01/2045	$	0	$	0	$	0	$	471,862,092	$	1,036,920,000
12/01/2045	$	0	$	0	$	0	$	381,807,123	$	1,036,920,000
06/01/2046	$	0	$	0	$	0	$	289,302,659	$	1,036,920,000
12/01/2046	$	0	$	0	$	0	$	194,282,073	$	1,036,920,000
06/01/2047	$	0	$	0	$	0	$	96,676,928	$	1,036,920,000
12/01/2047	$	0	$	0	$	0	$	0	$	1,033,336,922
06/01/2048	$	0	$	0	$	0	$	0	$	930,350,740

8

12/01/2048	$	0	$	0	$	0	$	0	$	824,589,081
06/01/2049	$	0	$	0	$	0	$	0	$	715,977,144
12/01/2049	$	0	$	0	$	0	$	0	$	604,438,116
06/01/2050	$	0	$	0	$	0	$	0	$	489,893,112
12/01/2050	$	0	$	0	$	0	$	0	$	372,261,119
06/01/2051	$	0	$	0	$	0	$	0	$	251,458,944
12/01/2051	$	0	$	0	$	0	$	0	$	127,401,151
06/01/2052	$	0	$	0	$	0	$	0	$	0

9

EXHIBIT A-1

FORM OF TRANCHE A-1 RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

Exhibit A-1-1

THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No. R-A-1-[     ] $ [      ] 

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP NO. 693342 AF4

Exhibit A-1-2

THE PRINCIPAL OF THIS TRANCHE A-1 RECOVERY BOND (“THIS TRANCHE A-1 RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-1 RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE A-1 RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE A-1 RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-1 RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE A-1.

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT			FINAL MATURITY DATE
4.022%	$	[	]		06/01/33

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date

Exhibit A-1-3

determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each June 1 and December 1 or if any such day is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-1 Recovery Bond (hereinafter referred to as this “Tranche A-1 Recovery Bond”). Interest on this Tranche A-1 Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-1 Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche A-1 Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche A-1 Recovery Bond shall be applied first to interest due and payable on this Tranche A-1 Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche A-1 Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche A-1 Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche A-1 Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche A-1 Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

Exhibit A-1-4

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date: July 20, 2022	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

Exhibit A-1-5

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: July 20, 2022

This is one of the Tranche A-1 Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

Exhibit A-1-6

REVERSE OF RECOVERY BOND

This Tranche A-1 Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of five Tranches, including this Tranche A-1 Recovery Bond (herein called the “Tranche A-1 Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche A-1 Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche A-1 Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche A-1 Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche A-1 Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche A-1 Recovery Bonds shall be made pro rata to the Tranche A-1 Holders entitled thereto based on the respective principal amounts of the Tranche A-1 Recovery Bonds held by them.

Exhibit A-1-7

Payments of interest on this Tranche A-1 Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche A-1 Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche A-1 Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche A-1 Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche A-1 Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche A-1 Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche A-1 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche A-1 Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche A-1 Recovery Bond and shall specify the place where this Tranche A-1 Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts,

Exhibit A-1-8

recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-1 Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche A-1 Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche A-1 Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-1 Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Exhibit A-1-9

Prior to the due presentment for registration of transfer of this Tranche A-1 Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche A-1 Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche A-1 Recovery Bond and for all other purposes whatsoever, whether or not this Tranche A-1 Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche A-1 Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche A-1 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche A-1 Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche A-1 Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche A-1 Recovery Bond.

The term “Issuer” as used in this Tranche A-1 Recovery Bond includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche A-1 Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

This Tranche A-1 Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Exhibit A-1-10

No reference herein to the Indenture and no provision of this Tranche A-1 Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche A-1 Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche A-1 Recovery Bond, by acquiring any Tranche A-1 Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche A-1 Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche A-1 Recovery Bonds are outstanding, agree to treat the Tranche A-1 Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche A-1 Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________           (Custodian)                                           (minor)
	Under Uniform Gifts to Minor Act (____________________)                                                                                     (State)

Additional abbreviations may also be used though not in the above list.

Exhibit A-1-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee ____________

FOR VALUE RECEIVED, the undersigned¹ hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche A-1 Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______                , attorney, to transfer said Tranche A-1 Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated: ________________
	Signature Guaranteed:

¹ RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche A-1 Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

Exhibit A-1-12

EXHIBIT A-2

FORM OF TRANCHE A-2 RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

Exhibit A-2-1

THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No. R-A-2-[     ] $ [      ] 

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP NO. 693342 AG2

Exhibit A-2-2

THE PRINCIPAL OF THIS TRANCHE A-2 RECOVERY BOND (“THIS TRANCHE A-2 RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-2 RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE A-2 RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE A-2 RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-2 RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE A-2.

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT			FINAL MATURITY DATE
4.722%	$	[	]		06/01/39

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date

Exhibit A-2-3

determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each June 1 and December 1 or if any such day is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-2 Recovery Bond (hereinafter referred to as this “Tranche A-2 Recovery Bond”). Interest on this Tranche A-2 Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-2 Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche A-2 Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche A-2 Recovery Bond shall be applied first to interest due and payable on this Tranche A-2 Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche A-2 Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche A-2 Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche A-2 Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche A-2 Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

Exhibit A-2-4

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date: July 20, 2022	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

Exhibit A-2-5

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: July 20, 2022

This is one of the Tranche A-2 Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

Exhibit A-2-6

REVERSE OF RECOVERY BOND

This Tranche A-2 Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of five Tranches, including this Tranche A-2 Recovery Bond (herein called the “Tranche A-2 Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche A-2 Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche A-2 Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche A-2 Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche A-2 Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche A-2 Recovery Bonds shall be made pro rata to the Tranche A-2 Holders entitled thereto based on the respective principal amounts of the Tranche A-2 Recovery Bonds held by them.

Exhibit A-2-7

Payments of interest on this Tranche A-2 Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche A-2 Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche A-2 Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche A-2 Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche A-2 Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche A-2 Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche A-2 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche A-2 Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche A-2 Recovery Bond and shall specify the place where this Tranche A-2 Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts,

Exhibit A-2-8

recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-2 Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche A-2 Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche A-2 Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-2 Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Exhibit A-2-9

Prior to the due presentment for registration of transfer of this Tranche A-2 Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche A-2 Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche A-2 Recovery Bond and for all other purposes whatsoever, whether or not this Tranche A-2 Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche A-2 Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche A-2 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche A-2 Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche A-2 Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche A-2 Recovery Bond.

The term “Issuer” as used in this Tranche A-2 Recovery Bond includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche A-2 Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

This Tranche A-2 Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Exhibit A-2-10

No reference herein to the Indenture and no provision of this Tranche A-2 Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche A-2 Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche A-2 Recovery Bond, by acquiring any Tranche A-2 Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche A-2 Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche A-2 Recovery Bonds are outstanding, agree to treat the Tranche A-2 Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche A-2 Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT	___________________ Custodian ______________________
	(Custodian)	(minor)
	Under Uniform Gifts to Minor Act (____________________)
		(State)

Additional abbreviations may also be used though not in the above list.

Exhibit A-2-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee ____________

FOR VALUE RECEIVED, the undersigned¹ hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche A-2 Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______                , attorney, to transfer said Tranche A-2 Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated: ________________
	Signature Guaranteed:

¹ RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche A-2 Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

Exhibit A-2-12

EXHIBIT A-3

FORM OF TRANCHE A-3 RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

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THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No. R-A-3-[    ] $ [    ] 

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP NO. 693342 AH0

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THE PRINCIPAL OF THIS TRANCHE A-3 RECOVERY BOND (“THIS TRANCHE A-3 RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-3 RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE A-3 RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE A-3 RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-3 RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE A-3.

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT			FINAL MATURITY DATE
5.081%	$	[	]		06/01/43

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date

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determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each June 1 and December 1 or if any such day is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-3 Recovery Bond (hereinafter referred to as this “Tranche A-3 Recovery Bond”). Interest on this Tranche A-3 Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-3 Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche A-3 Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche A-3 Recovery Bond shall be applied first to interest due and payable on this Tranche A-3 Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche A-3 Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche A-3 Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche A-3 Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche A-3 Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date: July 20, 2022	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

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INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: July 20, 2022

This is one of the Tranche A-3 Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

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REVERSE OF RECOVERY BOND

This Tranche A-3 Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of five Tranches, including this Tranche A-3 Recovery Bond (herein called the “Tranche A-3 Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche A-3 Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche A-3 Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche A-3 Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche A-3 Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche A-3 Recovery Bonds shall be made pro rata to the Tranche A-3 Holders entitled thereto based on the respective principal amounts of the Tranche A-3 Recovery Bonds held by them.

Exhibit A-3-7

Payments of interest on this Tranche A-3 Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche A-3 Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche A-3 Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche A-3 Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche A-3 Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche A-3 Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche A-3 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche A-3 Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche A-3 Recovery Bond and shall specify the place where this Tranche A-3 Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts,

Exhibit A-3-8

recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-3 Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche A-3 Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche A-3 Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-3 Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Exhibit A-3-9

Prior to the due presentment for registration of transfer of this Tranche A-3 Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche A-3 Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche A-3 Recovery Bond and for all other purposes whatsoever, whether or not this Tranche A-3 Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche A-3 Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche A-3 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche A-3 Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche A-3 Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche A-3 Recovery Bond.

The term “Issuer” as used in this Tranche A-3 Recovery Bond includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche A-3 Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

This Tranche A-3 Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Exhibit A-3-10

No reference herein to the Indenture and no provision of this Tranche A-3 Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche A-3 Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche A-3 Recovery Bond, by acquiring any Tranche A-3 Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche A-3 Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche A-3 Recovery Bonds are outstanding, agree to treat the Tranche A-3 Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche A-3 Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________           (Custodian)                                           (minor)
	Under Uniform Gifts to Minor Act (____________________)                                                                                     (State)

Additional abbreviations may also be used though not in the above list.

Exhibit A-3-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee ____________

FOR VALUE RECEIVED, the undersigned³ hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche A-3 Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______                , attorney, to transfer said Tranche A-3 Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated: ________________ Signature Guaranteed:

³ RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche A-3 Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

Exhibit A-3-12

EXHIBIT A-4

FORM OF TRANCHE A-4 RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

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THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No. R-A-4-[     ] $ [      ] 

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP NO. 693342 AJ6

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THE PRINCIPAL OF THIS TRANCHE A-4 RECOVERY BOND (“THIS TRANCHE A-4 RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-4 RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE A-4 RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE A-4 RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-4 RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE A-4.

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT			FINAL MATURITY DATE
5.212%	$	[	]		12/1/49

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date

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determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each June 1 and December 1 or if any such day is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-4 Recovery Bond (hereinafter referred to as this “Tranche A-4 Recovery Bond”). Interest on this Tranche A-4 Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-4 Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche A-4 Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche A-4 Recovery Bond shall be applied first to interest due and payable on this Tranche A-4 Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche A-4 Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche A-4 Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche A-4 Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche A-4 Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date: July 20, 2022	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

5

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: July 20, 2022

This is one of the Tranche A-4 Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

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REVERSE OF RECOVERY BOND

This Tranche A-4 Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of five Tranches, including this Tranche A-4 Recovery Bond (herein called the “Tranche A-4 Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche A-4 Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche A-4 Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche A-4 Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche A-4 Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche A-4 Recovery Bonds shall be made pro rata to the Tranche A-4 Holders entitled thereto based on the respective principal amounts of the Tranche A-4 Recovery Bonds held by them.

Exhibit A-4-7

Payments of interest on this Tranche A-4 Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche A-4 Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche A-4 Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche A-4 Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche A-4 Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche A-4 Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche A-4 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche A-4 Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche A-4 Recovery Bond and shall specify the place where this Tranche A-4 Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts,

Exhibit A-4-8

recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-4 Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche A-4 Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche A-4 Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-4 Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Exhibit A-4-9

Prior to the due presentment for registration of transfer of this Tranche A-4 Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche A-4 Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche A-4 Recovery Bond and for all other purposes whatsoever, whether or not this Tranche A-4 Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche A-4 Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche A-4 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche A-4 Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche A-4 Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche A-4 Recovery Bond.

The term “Issuer” as used in this Tranche A-4 Recovery Bond includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche A-4 Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

This Tranche A-4 Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Exhibit A-4-10

No reference herein to the Indenture and no provision of this Tranche A-4 Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche A-4 Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche A-4 Recovery Bond, by acquiring any Tranche A-4 Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche A-4 Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche A-4 Recovery Bonds are outstanding, agree to treat the Tranche A-4 Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche A-4 Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________           (Custodian)                                           (minor)
	Under Uniform Gifts to Minor Act (____________________)                                                                                     (State)

Additional abbreviations may also be used though not in the above list.

Exhibit A-4-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee ____________

FOR VALUE RECEIVED, the undersigned¹ hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche A-4 Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______                , attorney, to transfer said Tranche A-4 Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated: ________________ Signature Guaranteed:

¹ RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche A-4 Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

Exhibit A-4-12

EXHIBIT A-5

FORM OF TRANCHE A-5 RECOVERY BOND

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE 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 SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 PRINCIPAL OF THIS BOND WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

THE HOLDER OF THIS BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. IN THE EVENT THAT THE RECOVERY BOND COLLATERAL PLEDGED TO SECURE THIS BOND HAS BEEN EXHAUSTED AND THIS BOND HAS NOT BEEN PAID IN FULL, THEN ANY AND ALL AMOUNTS REMAINING DUE ON THIS BOND SHALL BE EXTINGUISHED AND THIS BOND SHALL BE CANCELLED. TO THE EXTENT THAT UNDER ANY APPLICABLE LAW THE HOLDER OF THIS BOND OR THE OWNER OF A SECURITY ENTITLEMENT HERETO IS DEEMED TO HAVE AN INTEREST IN OTHER ISSUER ASSETS, THE HOLDER HEREOF AND THE OWNER OF A SECURITY ENTITLEMENT HERETO ARE EACH DEEMED TO HAVE AGREED THAT THEIR INTEREST IN SUCH OTHER ISSUER ASSETS IS FULLY SUBORDINATE TO THE CLAIM AGAINST SUCH OTHER ISSUER ASSETS OF THE PLEDGEES OR GRANTEES TO WHICH SUCH OTHER ISSUER ASSETS ARE PLEDGED OR GRANTED AND ARE FURTHER DEEMED TO HAVE AGREED THAT THIS AGREEMENT SHALL CONSTITUTE A SUBORDINATION AGREEMENT FOR PURPOSE OF SECTION 510(a) OF THE UNITED STATES BANKRUPTCY CODE.

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THE HOLDER OF THIS BOND, BY ACCEPTING THIS BOND, HEREBY COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO, BY ACCEPTING SUCH SECURITY ENTITLEMENT, IS DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT NOTWITHSTANDING ANY PRIOR TERMINATION OF THE INDENTURE, BUT SUBJECT TO THE CPUC’S RIGHT TO ORDER THE SEQUESTRATION AND PAYMENT OF REVENUES ARISING WITH RESPECT TO THE RECOVERY PROPERTY NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE DEBTOR, PLEDGOR OR TRANSFEROR OF THE RECOVERY PROPERTY PURSUANT TO SECTION 850.3(e) AND (g) OF THE CALIFORNIA PUBLIC UTILITIES CODE, THEY SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW OR APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF THE PROPERTY OF THE ISSUER OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER. THE HOLDER OF THIS BOND HEREBY FURTHER COVENANTS AND AGREES, AND EACH OWNER OF A SECURITY ENTITLEMENT HERETO IS HEREBY DEEMED TO COVENANT AND AGREE, WITH THE ISSUER, THE INDENTURE TRUSTEE AND EACH OTHER THAT THEY SHALL NOT COOPERATE WITH OR ENCOURAGE OTHERS TO FILE A BANKRUPTCY PETITION AGAINST THE ISSUER DURING THE SAME PERIOD. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN THE HOLDER OF THIS BOND OR OWNER OF A SECURITY ENTITLEMENT HERETO AND IS NOT JOINED IN BY THE HOLDER OF THIS BOND (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) OR OWNER OF A SECURITY ENTITLEMENT HERETO UNDER OR PURSUANT TO ANY SUCH LAW, OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS BOND.

REGISTERED No. R-A-5-[     ] $ [      ] 

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP NO. 693342 AK3

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THE PRINCIPAL OF THIS TRANCHE A-5 RECOVERY BOND (“THIS TRANCHE A-5 RECOVERY BOND”) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE A-5 RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE RECOVERY BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE A-5 RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.11(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS TRANCHE A-5 RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE (1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE A-5 RECOVERY BONDS, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER a. FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN i. ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR ii. ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR b. FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

PG&E Wildfire Recovery Funding LLC SENIOR SECURED RECOVERY BONDS, TRANCHE A-5.

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT			FINAL MATURITY DATE
5.099%	$	[	]		6/1/54

PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified on the reverse hereof or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date

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determined as provided on the reverse hereof and ending on or before the Final Maturity Date shown above and to pay interest, at the Interest Rate shown above, on each June 1 and December 1 or if any such day is not a Business Day, the next succeeding Business Day, commencing on June 1, 2023 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each a “Payment Date”), on the principal amount of this Tranche A-5 Recovery Bond (hereinafter referred to as this “Tranche A-5 Recovery Bond”). Interest on this Tranche A-5 Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Such principal of and interest on this Tranche A-5 Recovery Bond shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Tranche A-5 Recovery Bond are payable 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. All payments made by the Issuer with respect to this Tranche A-5 Recovery Bond shall be applied first to interest due and payable on this Tranche A-5 Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Tranche A-5 Recovery Bond, all in the manner set forth in the Indenture.

Reference is made to the further provisions of this Tranche A-5 Recovery Bond set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Tranche A-5 Recovery Bond.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual or electronic signature, this Tranche A-5 Recovery Bond shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, electronically or in facsimile, by its Responsible Officer.

Date: July 20, 2022	PG&E Wildfire Recovery Funding LLC
	By:
		Name:
		Title:

5

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: July 20, 2022

This is one of the Tranche A-5 Recovery Bonds, designated above and referred to in the within-mentioned Indenture.

The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee
By:
	Name:
	Title:

6

REVERSE OF RECOVERY BOND

This Tranche A-5 Recovery Bond is one of a duly authorized issue of Recovery Bonds of the Issuer (herein called the “Recovery Bonds”), issued and which Recovery Bonds are issuable in one or more Tranches, and the Recovery Bonds consists of five Tranches, including this Tranche A-5 Recovery Bond (herein called the “Tranche A-5 Recovery Bonds”), all issued and to be issued under that certain Indenture dated as of July 20, 2022, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between the Issuer and The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (the “Indenture Trustee”, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the “Securities Intermediary”, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Recovery Bonds. For purposes herein, “Series Supplement” means that certain Series Supplement dated as of July 20, 2022, between the Issuer and the Indenture Trustee. All terms used in this Tranche A-5 Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.

The Tranche A-5 Recovery Bonds, the other Tranches of Recovery Bonds (all of such Tranches being referred to herein as “Recovery Bonds”) are and will be equally and ratably secured by the Recovery Bond Collateral pledged as security therefor as provided in the Indenture.

The principal of this Tranche A-5 Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Amortization Schedule which is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Bondholders representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Tranche A-5 Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Recovery Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Recovery Bonds representing not less than a majority of the Outstanding Amount of the Recovery Bonds have declared the Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Tranche A-5 Recovery Bonds shall be made pro rata to the Tranche A-5 Holders entitled thereto based on the respective principal amounts of the Tranche A-5 Recovery Bonds held by them.

Exhibit A-5-7

Payments of interest on this Tranche A-5 Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by wire transfer to an account maintained by the Person whose name appears as the Registered Holder of this Tranche A-5 Recovery Bond (or one or more Predecessor Recovery Bonds) on the Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that if this Tranche A-5 Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Recovery Bond evidencing this Tranche A-5 Recovery Bond unless and until such Global Recovery Bond is exchanged for Definitive Recovery Bonds (in which event payments shall be made as provided above), and except for the final installment of principal and premium, if any, payable with respect to this Tranche A-5 Recovery Bond on a Payment Date which shall be payable as provided below. Any reduction in the principal amount of this Tranche A-5 Recovery Bond (or any one or more Predecessor Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche A-5 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Tranche A-5 Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice sent no later than five (5) days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Tranche A-5 Recovery Bond and shall specify the place where this Tranche A-5 Recovery Bond may be presented and surrendered for payment of such installment.

The Issuer shall pay interest on overdue installments of interest at the Recovery Bond Interest Rate to the extent lawful.

This Recovery Bond is a “recovery bond” as such term is defined in the Wildfire Financing Law. Principal and interest due and payable on this Recovery Bond are payable from and secured primarily by Recovery Property created and established by the Financing Order obtained from the Public Utilities Commission of California pursuant to the Wildfire Financing Law. Recovery Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, collect and recover certain charges (defined in the Wildfire Financing Law as “fixed recovery charges” to be included in regular electric utility bills of existing and future electric service Consumers within the service territory of PG&E or its successors or assigns, as more fully described in the Financing Order.

The Wildfire Financing Law provides that: “The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (g) of Section 850.1, the fixed recovery charges, any associated fixed recovery tax amounts,

Exhibit A-5-8

recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.”

The Wildfire Financing Law further provides that: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond. The issuance of recovery bonds under this article [of the Wildfire Financing Law] shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.”

The Issuer and PG&E hereby acknowledge that the purchase of this Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche A-5 Recovery Bond may be registered on the Recovery Bond Register upon surrender of this Tranche A-5 Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by (A) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP); (II) The New York Stock Exchange Medallion Program (MSP); (III) The Stock Exchange Medallion Program (SEMP); or (IV) in such other guarantee program acceptable to the Indenture Trustee, and (B) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche A-5 Recovery Bonds of Minimum Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Tranche A-5 Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Sections 2.04 or 2.06 of the Indenture not involving any transfer.

Each Recovery Bond holder, by acceptance of a Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (I) any owner of a membership interest in the Issuer (including PG&E) or (II) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including PG&E) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Recovery Bond specifically confirms the nonrecourse nature of these obligations, and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Recovery Bonds.

Exhibit A-5-9

Prior to the due presentment for registration of transfer of this Tranche A-5 Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Tranche A-5 Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Tranche A-5 Recovery Bond and for all other purposes whatsoever, whether or not this Tranche A-5 Recovery Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Bondholders representing not less than a majority of the Outstanding Amount of all Recovery Bonds at the time outstanding of each Tranche to be affected. The Indenture also contains provisions permitting the Bondholders representing specified percentages of the Outstanding Amount of the Recovery Bonds, on behalf of the Holders of all the Recovery Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Tranche A-5 Recovery Bond (or any one of more Predecessor Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche A-5 Recovery Bond and of any Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Tranche A-5 Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Recovery Bonds issued thereunder.

The Indenture contains provisions for defeasance at any time of (A) the entire indebtedness of the Issuer on this Tranche A-5 Recovery Bond and (B) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth herein, which provisions apply to this Tranche A-5 Recovery Bond.

The term “Issuer” as used in this Tranche A-5 Recovery Bond includes any successor to the Issuer under the Indenture.

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Bondholders under the Indenture.

The Tranche A-5 Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.

Exhibit A-5-10

This Tranche A-5 Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of CALIFORNIA, without reference to its conflict of law provisions, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

No reference herein to the Indenture and no provision of this Tranche A-5 Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Tranche A-5 Recovery Bond at the times, place, and rate, and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche A-5 Recovery Bond, by acquiring any Tranche A-5 Recovery Bond or interest therein, (I) express their intention that, solely for the purpose of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Tranche A-5 Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral and (II) solely for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Tranche A-5 Recovery Bonds are outstanding, agree to treat the Tranche A-5 Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Tranche A-5 Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________
	(Custodian)                                             (minor)
	Under Uniform Gifts to Minor Act (____________________)                                                                                   (State)

Additional abbreviations may also be used though not in the above list.

Exhibit A-5-11

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee ____________

FOR VALUE RECEIVED, the undersigned⁵ hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche A-5 Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______                , attorney, to transfer said Tranche A-5 Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated: ________________
	Signature Guaranteed:

⁵ RECOVERY BOND: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Tranche A-5 Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution which is a member of one of the following recognized Signature Guaranty Programs: (I) The Securities Transfer Agent Medallion Program (STAMP), (II) The New York Stock Exchange Medallion Program (MSP), (III) the Stock Exchange Medallion Program (SEMP) or (IV) such other guarantee program acceptable to the Indenture Trustee.

Exhibit A-5-12

EX-5.1

Exhibit 5.1

July 20, 2022

Pacific Gas and Electric Company

PG&E Wildfire Recovery Funding LLC

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Re: Pacific Gas and Electric Company

PG&E Wildfire Recovery Funding LLC

Registration Statement on Form SF-1

Dear Ladies and Gentlemen:

We have acted as counsel to Pacific Gas and Electric Company, a California corporation (“PG&E”), and PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Company”), in connection with the issuance and sale by the Company of $3,900,000,000 aggregate principal amount of the Company’s Senior Secured Recovery Bonds, Series 2022-B (the “Bonds”), pursuant to (i) the Registration Statement on Form SF-1 (Registration Nos. 333-265457 and 333-265457-01) filed by PG&E and the Company on June 7, 2022 with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), as amended by Amendment No. 1 thereto filed by PG&E and the Company on July 6, 2022 with the Commission under the Securities Act (collectively, the “Initial Registration Statement”) and (ii) the Registration Statement on Form SF-1MEF (Registration Nos. 333-266115 and 333-266115-01) filed by PG&E and the Company on July 13, 2022 with the Commission under the Securities Act solely to register additional securities (the “Additional Registration Statement” and, together with the Initial Registration Statement, the “Registration Statement”).

The Bonds were issued under the Indenture, dated as of July 20, 2022 (the “Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, National Association, as trustee (the “Trustee”), as supplemented by the Series Supplement, dated as of July 20, 2022 establishing the forms, terms and other provisions of the Bonds (the “Series Supplement” and, together with the Base Indenture, the “Indenture”). The Bonds were sold pursuant to the terms of the Underwriting Agreement, dated July 13, 2022 (the “Underwriting Agreement”), among the Company, PG&E, Citigroup Global Markets Inc., Barclays Capital Inc. and Goldman Sachs & Co. LLC, as representatives of the several underwriters named therein.

This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

ATLANTA   AUSTIN   BANGKOK   BEIJING   BOSTON   BRUSSELS   CHARLOTTE   DALLAS   DUBAI   HOUSTON   LONDON

LOS ANGELES   MIAMI   NEW YORK   NORFOLK   RICHMOND   SAN FRANCISCO   THE WOODLANDS   TOKYO   TYSONS   WASHINGTON, DC

www.HuntonAK.com

Pacific Gas and Electric Company

PG&E Wildfire Recovery Funding LLC

July 20, 2022

Page 2

We are familiar with the proceedings taken by the Company in connection with the authorization, issuance and sale of the Bonds. In rendering the opinion expressed below, we have examined and relied upon copies of the Registration Statement and the exhibits filed therewith, and the Indenture. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and statements of government officials and other instruments, and have examined such questions of law and have satisfied ourselves as to such matters of fact, as we have considered relevant and necessary as a basis for the opinion contained herein. We have assumed (i) the genuineness of all signatures, (ii) the legal capacity of natural persons; (iii) the authenticity of all documents submitted to us as originals and (iv) the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. In delivering the opinion expressed below, we have relied without independent verification, as to factual matters, on certifications and other written or oral statements of governmental and other public officials and of officers and representatives of the Company and PG&E. We have also assumed that the Indenture is the valid and legally binding obligation of the Trustee.

Based on the foregoing, and subject to the qualifications and limitations hereinafter set forth, we are of the opinion that the Bonds, when duly authenticated by the Trustee and issued and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, will constitute the valid and binding obligations of the Company.

Our opinion is subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or affecting creditors’ rights generally and to general equitable principles (regardless of whether considered in a proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.

We express no opinion herein as to the law of any jurisdiction other than the law of the State of California.

Pacific Gas and Electric Company

PG&E Wildfire Recovery Funding LLC

July 20, 2022

Page 3

We hereby consent to (i) the filing of this opinion letter as an exhibit to the Registration Statement and to all references to us included in or made a part of the Registration Statement and (ii) the posting of a copy of this opinion letter to an internet website required under Rule 17g-5 under the Securities Exchange Act of 1934, as amended and maintained by PG&E for the purpose of complying with such rule. In giving the foregoing consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. This opinion letter is limited to the matters stated herein, and no opinion may be implied or inferred beyond the matters expressly stated in this opinion letter. This opinion letter is given as of the date hereof, and we assume no obligation to advise you after the date hereof of facts or circumstances that come to our attention or changes in the law, including judicial or administrative interpretations thereof, that occur which could affect the opinion contained herein.

Very truly yours,

/s/ Hunton Andrews Kurth LLP

EX-8.1

Exhibit 8.1

	HUNTON ANDREWS KURTH LLP RIVERFRONT PLAZA, EAST TOWER 951 EAST BYRD STREET RICHMOND, VIRGINIA 23219 TEL    804 • 788 • 8200
	File No: 026915.0000027

July 20, 2022

Pacific Gas and Electric Company

PG&E Wildfire Recovery Funding LLC

c/o Pacific Gas and Electric Company

77 Beale Street

San Francisco, CA 94177

Pacific Gas and Electric Company

RECOVERY BONDS

Ladies and Gentlemen:

We have acted as United States federal income tax counsel to Pacific Gas and Electric Company, a California corporation (“PG&E”), and PG&E’s wholly owned subsidiary, PG&E Wildfire Recovery Funding LLC (the “Issuer”), in connection with the Registration Statement on Form SF-1 (File Nos. 333-265457 and 333-265457-01) filed on June 7, 2022, as amended by Amendment No. 1 filed on July 6, 2022, with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (collectively, the “Initial Registration Statement”) and the Registration Statement on Form SF-1MEF (File Nos. 333-266115 and 333-266115-01) filed on July 13, 2022 with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (collectively with the Initial Registration Statement, the “Registration Statement”), including the prospectus therein (the “Prospectus”) included as part of the Registration Statement, relating to the registration thereunder of the Issuer’s five tranches of Senior Secured Recovery Bonds, Series 2022-B (the “Bonds”). The Bonds will be issued in an aggregate principal amount of $3,900,000,000, pursuant to an Indenture among the Issuer, as issuer, and The Bank of New York Mellon Trust Company, N.A. (“BNY”), as indenture trustee, account bank and securities intermediary, together with a Series Supplement between the Issuer and BNY establishing the form and terms of such Bonds (collectively the “Indenture”). Capitalized terms used and not defined herein have the respective meanings ascribed to them in the Prospectus. You have requested our opinion regarding certain U.S. federal income tax matters.

We have reviewed the Registration Statement, including the Prospectus, as part of the Registration Statement (collectively, the “Offering Documents”), relating to the Bonds, and the basic documents (as defined in the Prospectus, and together with the Offering Documents, the “Transaction Documents”).

ATLANTA   AUSTIN   BANGKOK   BEIJING   BOSTON   BRUSSELS   CHARLOTTE   DALLAS   DUBAI   HOUSTON   LONDON   LOS ANGELES

MIAMI   NEW YORK   NORFOLK   RICHMOND   SAN FRANCISCO   THE WOODLANDS   TOKYO   TYSONS   WASHINGTON, DC

www.huntonak.com

Pacific Gas and Electric Company

July 20, 2022

Page 2

We are familiar with the proceedings taken by PG&E and the Issuer in connection with the authorization, issuance and sale of the Bonds. As to any facts material to the opinions expressed herein, we have relied, without independent verification, upon certificates and statements and representations and warranties of officers and other representatives and agents of PG&E, the Issuer, BNY and other parties and signatories to the Transaction Documents and their related exhibits and of public officials.

In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, with your permission we have assumed, and are relying thereon without independent investigation, (i) the authenticity of all Transaction Documents submitted to us as originals or as copies thereof, and the conformity to the originals of all Transaction Documents submitted to us as copies, (ii) the genuineness of signatures, (iii) the legal capacity of natural persons signing the basic documents, (iv) the necessary entity formation and continuing existence in the jurisdiction of formation, and the necessary licensing and qualification in all jurisdictions, of the parties to all basic documents, (v) the necessary entity authorization, execution, delivery and enforceability (as limited by bankruptcy and other insolvency laws) of the basic documents, and the necessary entity power and authority with respect thereto, (vi) that each of the parties and signatories to the basic documents have complied and will comply (without waiver) with all of the provisions and representations and certifications of such basic documents, (vii) that the Issuer and the other parties and signatories to the basic documents have conducted and will conduct their activities only as provided in the Transaction Documents, (viii) that there has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with any Transaction Document and (ix) that there is not any other agreement that modifies or supplements the agreements expressed in any Transaction Document to which this opinion letter relates and that renders any of the opinions expressed below inconsistent with such Transaction Document as so modified or supplemented. Finally, we have assumed that the Wildfire Financing Law (as defined in the Prospectus) is valid and that the financing order (as defined in the Prospectus) issued by the California Public Utilities Commission (“CPUC”) on May 11, 2021, is valid, complies with California law, is in full force and effect, and is final and non-appealable.

In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, we have made no inquiry, have conducted no investigation and assume no responsibility with respect to (a) the accuracy of and compliance by the parties thereto with the representations, financial calculations, warranties, covenants, certifications and assumptions as to factual matters contained in any Transaction Document or otherwise provided to us or (b) the conformity of the underlying assets and related documents to the requirements of any agreement to which this opinion letter relates.

Pacific Gas and Electric Company

July 20, 2022

Page 3

Based upon the foregoing and based upon, in particular, Revenue Procedure 2005-62, 2005-2 C.B. 507 (the “Revenue Procedure”), and subject to the qualifications, representations, warranties, covenants, certifications, financial calculations and assumptions stated herein and in the Transaction Documents, we are of the opinion that if (i) all of the parties and signatories to the Transaction Documents comply (without waiver) with all of the provisions of the Indenture and the other Transaction Documents prepared and executed in connection with such transaction and (ii) the Bonds are issued as described in the Transaction Documents and not as part of another transaction or series of transactions that would require the Issuer, PG&E, any investor or any other participant to treat such transaction or transactions as subject to the disclosure, registration or list maintenance requirements of section 6011, 6111 or 6112 of the Internal Revenue Code, as amended (the “Code”), then, in each case below, solely for United States federal income tax purposes:

1.    the issuance of the Bonds will be a “qualifying securitization” within the meaning of the Revenue Procedure;

2.    the Bonds will be characterized as obligations of PG&E for United States federal income tax purposes as expressly set forth in section 6.02 of the Revenue Procedure;

3.    the Issuer will not be subject to federal income tax as an entity separate from PG&E (the Issuer’s sole member); and

4.    PG&E will not be treated as recognizing gross income upon the issuance of the Bonds.

You should be aware that the above opinions represent our conclusions as to the application of existing law to the transaction described above. There can be no assurance, however, that contrary positions will not be taken by the Internal Revenue Service or that existing law, regulations, administrative rules and practice will not change. Any such change might be retroactive and might affect the opinions set forth above. We also caution you that our opinions depend upon the facts, qualifications, representations, warranties, covenants, certifications, financial calculations, assumptions and Transaction Documents to which this letter refers, which are subject to change, reinterpretation and misunderstanding. Our conclusion could differ if these items on which we have relied are, become or are found to be, different. No opinion has been sought, and none has been given, concerning the tax consequences of the transaction described herein or of the acquisition, ownership, or disposition of the Bonds under the laws of any state, locality or foreign jurisdiction.

These opinions are rendered as of the date hereof, speak only as of the date hereof and are based on the current provisions of the Code and the Treasury Regulations issued or proposed thereunder, revenue rulings, revenue procedures and other published releases of the Internal Revenue Service and current case law, any of which can change at any time. We undertake no

Pacific Gas and Electric Company

July 20, 2022

Page 4

obligation to update this opinion letter after the date hereof or advise you of changes in the event there is any change in legal authorities, facts, qualifications, representations, warranties, covenants, certifications, financial calculations, assumptions or Transaction Documents on which this opinion letter is based (including the taking of any action by any party or signatory to the basic documents or any amendments to any basic document pursuant to any opinion of counsel or a waiver), or any inaccuracy in any of these items upon which we have relied in rendering this opinion letter, unless we are specifically engaged to do so.

In rendering this opinion letter, other than as expressly stated above, we do not express any opinion concerning any law other than the federal income tax laws of the United States, including without limitation the Code, Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, all of which are subject to change. We do not express any opinion herein with respect to any matter not specifically addressed in the opinions expressed above, including without limitation, (i) any statute, regulation or provision of law of any state, county, municipality or other political subdivision or any agency or instrumentality thereof, (ii) the securities laws of any jurisdiction or (iii) the tax laws of any jurisdiction (other than the federal income tax laws of the United States and only as specifically described in the opinions above). Additional issues may exist that could affect the United States federal tax treatment of the transaction that is the subject of this opinion letter, and this opinion letter does not consider or provide a conclusion with respect to any such additional issues.

We are furnishing this opinion letter to you and this opinion letter is not to be relied on, circulated, quoted or otherwise referred to for any other purpose. We hereby consent, however, to (a) the posting of a copy of this opinion letter to an internet website required under Rule 17g-5 under the Securities Exchange Act of 1934, as amended, and maintained by PG&E solely for the purpose of complying with such rule and (b) the filing of this opinion letter as Exhibit 8.1 to the Registration Statement and the incorporation thereof in the Registration Statement and the use of our name under the captions “Material U.S. Federal Income Tax Consequences” and “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the Commission.

Very truly yours,

/s/ Hunton Andrews Kurth LLP

EX-10.1

Exhibit 10.1

RECOVERY PROPERTY SERVICING AGREEMENT

by and between

PG&E WILDFIRE RECOVERY FUNDING LLC,

Issuer

and

PACIFIC GAS AND ELECTRIC COMPANY,

Servicer

Dated as of July 20, 2022

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
SECTION 1.01.	Definitions		1
ARTICLE II APPOINTMENT AND AUTHORIZATION			2
SECTION 2.01.	Appointment of Servicer; Acceptance of Appointment		2
SECTION 2.02.	Authorization		2
SECTION 2.03.	Dominion and Control Over the Recovery Property		2
ARTICLE III ROLE OF SERVICER			3
SECTION 3.01.	Duties of Servicer		3
SECTION 3.02.	Servicing and Maintenance Standards		5
SECTION 3.03.	Annual Reports on Compliance with Regulation AB		6
SECTION 3.04.	Annual Report by Independent Registered Public Accountants		6
ARTICLE IV SERVICES RELATED TO TRUE-UP ADJUSTMENTS			7
SECTION 4.01.	True-Up Adjustments		7
SECTION 4.02.	Limitation of Liability		12
ARTICLE V THE RECOVERY PROPERTY			13
SECTION 5.01.	Custody of Recovery Property Records		13
SECTION 5.02.	Duties of Servicer as Custodian		13
SECTION 5.03.	Custodian’s Indemnification		14
SECTION 5.04.	Effective Period and Termination		15
ARTICLE VI THE SERVICER			15
SECTION 6.01.	Representations and Warranties of Servicer		15
SECTION 6.02.	Indemnities of Servicer; Release of Claims		17
SECTION 6.03.	Merger or Consolidation of, or Assumption of the Obligations of, Servicer		18
SECTION 6.04.	Limitation on Liability of Servicer and Others		19
SECTION 6.05.	PG&E Not to Resign as Servicer		20
SECTION 6.06.	Servicing Compensation		20
SECTION 6.07.	Compliance with Applicable Law		21
SECTION 6.08.	Access to Certain Records and Information Regarding Recovery Property		21
SECTION 6.09.	Appointments		21
SECTION 6.10.	No Servicer Advances		22
SECTION 6.11.	Remittances		22

i

ARTICLE VII DEFAULT		23
SECTION 7.01.	Servicer Default	23
SECTION 7.02.	Appointment of Successor	24
SECTION 7.03.	Waiver of Past Defaults	25
SECTION 7.04.	Notice of Servicer Default	25
ARTICLE VIII MISCELLANEOUS PROVISIONS		25
SECTION 8.01.	Amendment	25
SECTION 8.02.	Maintenance of Accounts and Records	26
SECTION 8.03.	Notices	27
SECTION 8.04.	Assignment	28
SECTION 8.05.	Limitations on Rights of Others	28
SECTION 8.06.	Severability	28
SECTION 8.07.	Separate Counterparts	28
SECTION 8.08.	Headings	28
SECTION 8.09.	Governing Law	28
SECTION 8.10.	Assignment to Indenture Trustee	29
SECTION 8.11.	Nonpetition Covenants	29
SECTION 8.12.	Limitation of Liability	29
SECTION 8.13.	Rule 17g-5 Compliance	29

ANNEXES, SCHEDULES AND EXHIBITS

ANNEX I	Servicing Procedures
SCHEDULE 4.01	Expected Amortization Schedule
EXHIBIT A	Monthly Servicer’s Certificate
EXHIBIT B	Semi-Annual Servicer’s Certificate
EXHIBIT C	Servicer’s Regulation AB Certificate
EXHIBIT D	Form of Routine Annual/ Semi-Annual/Interim True-up Mechanism Advice Letter
EXHIBIT E	Form of Non-Routine True-Up Mechanism Advice Letter
EXHIBIT F	Reconciliation Certificate

ii

This RECOVERY PROPERTY SERVICING AGREEMENT, dated as of July 20, 2022 (this “Agreement”) by and between PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company, as issuer (the “Issuer”), and PACIFIC GAS AND ELECTRIC COMPANY (“PG&E”), a California corporation, as servicer (the “Servicer”).

RECITALS

WHEREAS, pursuant to the Wildfire Financing Law and the Financing Order, PG&E, in its capacity as seller (the “Seller”), and the Issuer are concurrently entering into the Sale Agreement pursuant to which the Seller is selling and the Issuer is purchasing certain Recovery Property created pursuant to the Wildfire Financing Law and the Financing Order described therein;

WHEREAS, in connection with its ownership of the Recovery Property and in order to collect the associated Fixed Recovery Charges, the Issuer desires to engage the Servicer to carry out the functions described herein and the Servicer desires to be so engaged;

WHEREAS, the Issuer desires to engage the Servicer to act on its behalf in obtaining Routine Annual True-Up Adjustments, Routine Semi-Annual True-Up Adjustments, Routine Interim True-Up Adjustments and Non-Routine True-Up Adjustments from the CPUC and the Servicer desires to be so engaged;

WHEREAS, the FRC Collections initially will be commingled with other funds collected by the Servicer;

AGREEMENT

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

ARTICLE I

DEFINITIONS

SECTION 1.01.    Definitions.

(a)    Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in that certain Indenture (including Appendix A thereto) dated as of the date hereof between the Issuer and The Bank of New York Mellon Trust Company, N.A., a national banking association, in its capacity as the Indenture Trustee (the “Indenture Trustee”) and in its separate capacity as a securities intermediary (the “Securities Intermediary”), as the same may be amended, restated, supplemented or otherwise modified from time to time.

(b)    All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c)    The words “hereof,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule, Exhibit, Annex and Attachment references contained in this Agreement are references to Sections, Schedules, Exhibits, Annexes and Attachments in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.”

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

(e)    Non-capitalized terms used herein which are defined in the Public Utilities Code shall, as the context requires, have the meanings assigned to such terms in the Public Utilities Code, but without giving effect to amendments to the Public Utilities Code after the date hereof which have a material adverse effect on the Issuer or the Holders.

ARTICLE II

APPOINTMENT AND AUTHORIZATION

SECTION 2.01.    Appointment of Servicer; Acceptance of Appointment.

Subject to Section 6.05 and Article VII, the Issuer hereby appoints the Servicer, and the Servicer, as an independent contractor, hereby accepts such appointment, to perform the Servicer’s obligations pursuant to this Agreement on behalf of and for the benefit of the Issuer or any assignee thereof in accordance with the terms of this Agreement and applicable law. This appointment and the Servicer’s acceptance thereof may not be revoked except in accordance with the express terms of this Agreement.

SECTION 2.02.    Authorization.

With respect to all or any portion of the Recovery Property, the Servicer shall be, and hereby is, authorized and empowered by the Issuer to (a) execute and deliver, on behalf of itself and/or the Issuer, as the case may be, any and all instruments, documents or notices, and (b) on behalf of itself and/or the Issuer, as the case may be, make any filing and participate in proceedings of any kind with any Governmental Authority, including with the CPUC. The Issuer shall execute and deliver to the Servicer such documents as have been prepared by the Servicer for execution by the Issuer and shall furnish the Servicer with such other documents as may be in the Issuer’s possession, in each case as the Servicer may determine to be necessary or appropriate to enable it to carry out its servicing and administrative duties hereunder. Upon the Servicer’s written request, the Issuer shall furnish the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its duties hereunder.

SECTION 2.03.    Dominion and Control Over the Recovery Property.

Notwithstanding any other provision herein, the Issuer shall have dominion and control over the Recovery Property, and the Servicer, in accordance with the terms hereof, is acting solely as the servicing agent and custodian for the Issuer with respect to the Recovery Property and the Recovery Property Records. The Servicer shall not take any action that is not authorized by this Agreement, that would contravene the Public Utilities Code, the CPUC Regulations or the

2

Financing Order, that is not consistent with its customary procedures and practices, or that shall impair the rights of the Issuer in the Recovery Property, in each case unless such action is required by applicable law or court or regulatory order.

ARTICLE III

ROLE OF SERVICER

SECTION 3.01.    Duties of Servicer.

The Servicer, as agent for the Issuer, shall have the following duties:

(a)    Duties of Servicer Generally. The Servicer’s duties in general shall include management, servicing and administration of the Recovery Property; obtaining meter reads, calculating electric usage, billing, collections and posting of all payments in respect of the Recovery Property; responding to inquiries by Consumers, the CPUC, or any federal, local or other state governmental authorities with respect to the Recovery Property; delivering Bills to Consumers and ESPs, processing and depositing collections and making periodic remittances pursuant to the Financing Order and each Tariff; furnishing periodic reports to the Issuer, the Indenture Trustee and the Rating Agencies; and taking action in connection with True-Up Adjustments as set forth herein. Certain of the duties set forth above may be performed by ESPs pursuant to ESP Service Agreements if such ESPs satisfy the creditworthiness requirements as set forth in PG&E’s Electric Rule 22.P., “Credit Requirements.” Anything to the contrary notwithstanding, the duties of the Servicer set forth in this Servicing Agreement shall be qualified in their entirety by any CPUC Regulations, the Financing Order and the U.S. federal securities laws and the rules and regulations promulgated thereunder, including Regulation AB, as in effect at the time such duties are to be performed. Without limiting the generality of this Section 3.01(a), in furtherance of the foregoing, the Servicer hereby agrees that it shall also have, and shall comply with, the duties and responsibilities relating to data acquisition, usage and bill calculation, billing, customer service functions, collections, payment processing and remittance set forth in Annex I hereto, as it may be amended from time to time. For the avoidance of doubt, the term “usage” when used herein includes references to both kilowatt hour consumption and kilowatt demand.

(b)    Reporting Functions.

(i)    Monthly Servicer’s Certificate. On or before the twenty-fifth calendar day of each month (or if such day is not a Servicer Business Day, on the immediately preceding Servicer Business Day), the Servicer shall prepare and deliver to the Issuer, the Indenture Trustee and the Rating Agencies a written report substantially in the form of Exhibit A hereto (a “Monthly Servicer’s Certificate”) setting forth certain information relating to Fixed Recovery Charge Payments received by the Servicer during the Collection Period immediately preceding such date; provided, however, that for any month in which the Servicer is required to deliver a Servicer’s Certificate pursuant to Section 4.01(c)(ii), the Servicer shall prepare and deliver the Monthly Servicer’s Certificate no later than the date of delivery of such Servicer’s Certificate.

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(ii)    Notification of Laws and Regulations. The Servicer shall immediately notify the Issuer, the Indenture Trustee and the Rating Agencies in writing if it becomes aware of any Requirements of Law or CPUC Regulations hereafter promulgated that have a material adverse effect on the Servicer’s ability to perform its duties under this Agreement.

(iii)    Other Information. Upon the reasonable request of the Issuer, the Indenture Trustee or any Rating Agency, the Servicer shall provide to the Issuer, the Indenture Trustee or such Rating Agency, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the Recovery Property to the extent it is reasonably available to the Servicer, as may be reasonably necessary and permitted by law to enable the Issuer, the Indenture Trustee or the Rating Agencies to monitor the performance by the Servicer hereunder; provided, however, that any such request by the Indenture Trustee shall not create any obligation for the Indenture Trustee to monitor the performance of the Servicer. In addition, so long as any of the Recovery Bonds are outstanding, the Servicer shall provide the Issuer and the Indenture Trustee, within a reasonable time after written request therefor, any information available to the Servicer or reasonably obtainable by it that is necessary to calculate the Fixed Recovery Charges.

(iv)    Preparation of Reports. The Servicer shall prepare and deliver such additional reports as required under this Agreement, including a copy of each Servicer’s Certificate described in Section 4.01(c)(ii), the annual Servicer’s Regulation AB Certificate described in Section 3.03, and the Annual Accountant’s Report described in Section 3.04. In addition, the Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured, delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the SEC (and/or any other Governmental Authority) by the Issuer or the Depositor under the federal securities or other applicable laws or in accordance with the Basic Documents, including, but without limiting the generality of foregoing, filing with the SEC, if applicable and required by applicable law, a copy or copies of (i) the Monthly Servicer’s Certificates described in Section 3.01(b)(i) (under Form 10-D or any other applicable form), (ii) the Servicer’s Certificates described in Section 4.01(c)(ii) (under Form 10-D or any other applicable form), (iii) the annual statements of compliance, attestation reports and other certificates described in Section 3.03, and (iv) the Annual Accountant’s Report (and any attestation required under Regulation AB) described in Section 3.04. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Depositor’s annual report on Form 10-K (and any other applicable SEC or other reports, attestations, certifications and other documents), to the extent that the Servicer’s signature is required by, and consistent with, the federal securities laws and/or any other applicable law.

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(c)    Opinions of Counsel. The Servicer shall deliver to the Issuer and the Indenture Trustee:

(i)    promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel from external counsel of the Issuer either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the CPUC and the California Secretary of State and all filings pursuant to the UCC, that are necessary under the UCC and the Wildfire Financing Law to perfect or maintain, as applicable, the Liens of the Indenture Trustee in the Recovery Property have been authorized, executed and filed, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Liens; and

(ii)    within ninety (90) days after the beginning of each calendar year beginning with the first calendar year beginning more than three (3) months after the date hereof, an Opinion of Counsel from external counsel of the Issuer, dated as of a date during such ninety (90)-day period, either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the CPUC and the California Secretary of State and all filings pursuant to the UCC, have been executed and filed that are necessary under the UCC and the Wildfire Financing Law to maintain the Liens of the Indenture Trustee in the Recovery Property, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Liens.

Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to perfect or maintain, as applicable, such interest or Lien.

SECTION 3.02.    Servicing and Maintenance Standards.

On behalf of the Issuer, the Servicer shall (a) manage, service, administer, bill, collect and calculate Fixed Recovery Charges in accordance with the Wildfire Financing Law and post collections in respect of the Recovery Property with reasonable care and in material compliance with applicable Requirements of Law, including all applicable CPUC Regulations and guidelines, using the same degree of care and diligence that the Servicer exercises with respect to similar assets for its own account and, if applicable, for others; (b) follow customary standards, policies and procedures for the industry in California in performing its duties as Servicer; (c) use all reasonable efforts, consistent with its customary servicing procedures, to enforce, and maintain rights in respect of, the Recovery Property and to bill and collect the Fixed Recovery Charges; (d) comply with all Requirements of Law, including all applicable CPUC Regulations and guidelines, applicable to and binding on it relating to the Recovery Property; (e) file all CPUC notices described in the Wildfire Financing Law and file and maintain the effectiveness of UCC financing statements with respect to the property transferred under the Sale Agreement, and (f) take such other action on behalf of the Issuer to ensure that the Lien of the Indenture Trustee on the Recovery Bond Collateral remains perfected and of first priority. The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of all or any portion of the Recovery Property, which, in the Servicer’s judgment, may include the taking of legal action, at the Issuer’s expense but subject to the priority of payments set forth in Section 8.02(e) of the Indenture.

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SECTION 3.03.    Annual Reports on Compliance with Regulation AB.

(a)    The Servicer shall deliver to the Issuer, the Indenture Trustee and the Rating Agencies, on or before the earlier of (A) March 31 of each year or (B) with respect to each calendar year during which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, a certificate from a Responsible Officer of the Servicer (each such certificate, a “Servicer’s Regulation AB Certificate”) (i) containing, and certifying as to, the statements of compliance required by Item 1123 (or any successor or similar items or rule) of Regulation AB, as then in effect and (ii) containing, and certifying as to, the statements and assessment of compliance required by Item 1122(a) (or any successor or similar items or rule) of Regulation AB, as then in effect. The Servicer’s Regulation AB Certificates shall be in the form of Exhibit C attached hereto, with such changes as may be required to conform to the applicable securities law.

(b)    The Servicer shall use commercially reasonable efforts to obtain from each other party participating in the servicing function any additional certifications as to the statements and assessment required under Item 1122 or Item 1123 of Regulation AB to the extent required in connection with the filing of the annual report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a breach of the Servicer’s duties hereunder. The parties acknowledge that the Indenture Trustee’s certifications shall be limited to the Item 1122 certifications described in Exhibit C attached to the Indenture.

(c)    The initial Servicer, in its capacity as Depositor, shall post on its website and file with or furnish to the SEC, in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, the information described in Section 3.07(g) of the Indenture to the extent such information is reasonably available to the Depositor. Except to the extent permitted by applicable law, the initial Servicer, in its capacity as Depositor, shall not voluntarily suspend or terminate its filing obligations as Depositor with the SEC as described in this Section 3.03(c). The covenants of the initial Servicer, in its capacity as Depositor, pursuant to this Section 3.03(c) shall survive the resignation, removal or termination of the initial Servicer as Servicer hereunder.

SECTION 3.04.    Annual Report by Independent Registered Public Accountants.

(a)    The Servicer shall cause a firm of Independent registered public accountants (which may provide other services to the Servicer or the Seller) to prepare annually, and the Servicer shall deliver annually to the Issuer, the Indenture Trustee and the Rating Agencies on or before the earlier of (A) March 31 of each year, beginning March 31, 2023, or (B) with respect to each calendar year during which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the annual report on Form 10-K is required to be filed in accordance with the Exchange Act and

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the rules and regulations thereunder, a report (the “Annual Accountant’s Report”) regarding the Servicer’s assessment of compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB during the immediately preceding twelve (12) months ended December 31 (or, in the case of the first Annual Accountant’s Report to be delivered on or before March 31, 2023, the period of time from the date of this Agreement until December 31, 2022), in accordance with paragraph (b) of Rule 13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be signed by an authorized officer of the Servicer and shall at a minimum address each of the servicing criteria specified in Exhibit C. In the event that the accounting firm providing such report requires the Indenture Trustee to agree or consent to the procedures performed by such firm, the Issuer shall direct the Indenture Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee will deliver such letter of agreement or consent in conclusive reliance upon the direction of the Issuer subject to the Indenture Trustee’s rights, privileges, protections and immunities under the Indenture, and the Indenture Trustee will not make any independent inquiry or investigation as to, and shall have no obligation or liability in respect of the sufficiency, validity or correctness of such procedures.

(b)    The Annual Accountant’s Report shall also indicate that the accounting firm providing such report is independent of the Servicer in accordance with the Rules of the Public Company Accounting Oversight Board, and shall include any attestation report required under Item 1122(b) of Regulation AB (or any successor or similar items or rule), as then in effect.

ARTICLE IV

SERVICES RELATED TO TRUE-UP ADJUSTMENTS

SECTION 4.01.    True-Up Adjustments.

From time to time, until the Retirement of the Recovery Bonds, the Servicer shall identify the need for True-Up Adjustments and shall take all reasonable action to obtain and implement such True-Up Adjustments, all in accordance with the following:

(a)    Expected Amortization Schedule. The Expected Amortization Schedule for the Recovery Bonds is attached hereto as Schedule 4.01(a). If the Expected Amortization Schedule is revised, the Servicer shall send a copy of such revised Expected Amortization Schedule to the Issuer, the Indenture Trustee and the Rating Agencies promptly thereafter.

(b)    True-Up Adjustments.

(i)    Routine Annual True-Up Adjustments and Advice Letter Submissions. At least fifty (50) days before the last day of February (and beginning twelve months prior to the Scheduled Final Payment Date, on each Quarterly Adjustment Date), the Servicer shall: (A) for each of the First Payment Period and Second Payment Period, update the data and assumptions underlying the calculation of the Fixed Recovery Charges, including the electric sales forecast for all Consumers (excluding Exempted Consumers) for the forthcoming year, Periodic Principal, interest and estimated fees and all other Ongoing Financing Costs; (B) determine the Periodic Payment Requirements and Periodic Billing Requirement for the First Payment Period and Second Payment Period based on such updated

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data and assumptions and adjusting for (i) FRC Collections and excess funds held to the credit of the General Subaccount and Excess Funds Subaccount on the Calculation Cut-Off Date and (ii) FRC Collections to be collected at the then current Fixed Recovery Charge rates after the Calculation Cut-Off Date; (C) determine the Fixed Recovery Charges on a per kWh/basis through the next succeeding Annual Adjustment Date based on such Periodic Billing Requirements and the terms of the Financing Order, including the Cash Flow Model; (D) make all required notice and other submissions with the CPUC to reflect the revised Fixed Recovery Charges, including a Routine Annual True-Up Mechanism Advice Letter in the form attached hereto as Exhibit D; and (E) take all reasonable actions and make all reasonable efforts to effect such Routine Annual True-Up Adjustment and to enforce the provisions of the Wildfire Financing Law and the Financing Order. The Servicer shall implement the revised Fixed Recovery Charges, if any, resulting from such Routine Annual True-Up Adjustment as of the Annual Adjustment Date.

(ii)    Routine Semi-Annual True-Up Adjustments and Advice Letter Submissions. If the Servicer forecasts that FRC Collections will be insufficient to meet the Periodic Payment Requirement during the Second Payment Period, at least fifty (50) days before August 31 the Servicer shall: (A) for the Second Payment Period and the next succeeding Payment Period, update the data and assumptions underlying the calculation of the Fixed Recovery Charges, including the electric sales forecast for all Consumers (excluding Exempted Consumers) for the forthcoming year, Periodic Principal, interest and estimated fees and all other Ongoing Financing Costs; (B) determine the Periodic Payment Requirements and Periodic Billing Requirement for the Second Payment Period and the next succeeding Payment Period based on such updated data and assumptions and adjusting for (i) FRC Collections and excess funds held to the credit of the General Subaccount and Excess Funds Subaccount on the Calculation Cut-Off Date and (ii) FRC Collections to be collected at the then-current Fixed Recovery Charge rates after the Calculation Cut-Off Date; and (C) based upon such updated data and requirements, project whether existing and projected FRC Collections together with available fund balances in the Excess Funds Subaccount, will be sufficient (x) to make on a timely basis all scheduled payments of Periodic Principal and interest in respect of each Recovery Bond during such Payment Period, (y) to pay other Ongoing Financing Costs on a timely basis and (z) to maintain the Capital Subaccount at the Required Capital Level. If the Servicer determines that Fixed Recovery Charges will not be sufficient for such purposes, the Servicer shall, no later than fifty (50) days prior August 31, the day prior to the proposed effective date of the revised Fixed Recovery Charges (which shall be the date that is six months after the Annual Adjustment Date): (1) determine the Fixed Recovery Charges on a per kWh/basis through the Annual Adjustment Date based on such Periodic Billing Requirement and the terms of the Financing Order, including the Cash Flow Model; (2) make all required notice and other submissions with the CPUC to reflect the revised Fixed Recovery Charges, including a Routine Semi-Annual True-Up Mechanism Advice Letter in the form attached hereto as Exhibit D; and (3) take all reasonable actions and make all reasonable efforts to effect such Routine Semi-Annual True-Up Adjustment and to enforce the provisions of the Wildfire Financing Law and the Financing Order.

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(iii)    Routine Interim True-Up Adjustments and Advice Letter Submissions. If at any time the Servicer forecasts that FRC Collections will be insufficient to meet the Periodic Payment Requirement during the First Payment Period or Second Payment Period, the Servicer may: (A) for each of the First Payment Period and Second Payment Period, update the data and assumptions underlying the calculation of the Fixed Recovery Charges, including the electric sales forecast for all Consumers (excluding Exempted Consumers) for the forthcoming year, Periodic Principal, interest and estimated fees and all other Ongoing Financing Costs; (B) determine the Periodic Payment Requirements and Periodic Billing Requirement for the First Payment Period and Second Payment Period based on such updated data and assumptions and adjusting for (i) FRC Collections and excess funds held to the credit of the General Subaccount and Excess Funds Subaccount on the Calculation Cut-Off Date and (ii) FRC Collections to be collected at the then-current Fixed Recovery Charge rates after the Calculation Cut-Off Date; and (C) based upon such updated data and requirements, project whether existing and projected FRC Collections together with available fund balances in the Excess Funds Subaccount, will be sufficient (x) to make on a timely basis all scheduled payments of Periodic Principal and interest in respect of each Recovery Bond during such Payment Period, (y) to pay other Ongoing Financing Costs on a timely basis and (z) to maintain the Capital Subaccount at the Required Capital Level. If the Servicer determines that Fixed Recovery Charges will not be sufficient for such purposes, the Servicer shall, no later than fifty (50) days prior to the proposed effective date of the revised Fixed Recovery Charges (provided that such effective date shall be on the first calendar day of a month): (1) determine the Fixed Recovery Charges on a per kWh/basis through the Annual Adjustment Date based on such Periodic Billing Requirement and the terms of the Financing Order, including the Cash Flow Model; (2) make all required notice and other submissions with the CPUC to reflect the revised Fixed Recovery Charges, including a Routine Interim True-Up Mechanism Advice Letter in the form attached hereto as Exhibit D; and (3) take all reasonable actions and make all reasonable efforts to effect such Routine Interim True-Up Adjustment and to enforce the provisions of the Wildfire Financing Law and the Financing Order.

(iv)    Non-Routine Adjustments and Advice Letter Submissions. The Servicer may submit a Non-Routine True-Up Adjustment to propose revisions to the logic, structure and components of the Cash Flow Model in the Financing Order. In connection with any Non-Routine True-Up Adjustment, the Servicer will: (A) present a new Cash Flow Model; (B) for each of the First Payment Period and Second Payment Period, update the data and assumptions underlying the calculation of the Fixed Recovery Charges, including the electric sales forecast for all Consumers (excluding Exempted Consumers) for the forthcoming year, Periodic Principal, interest and estimated fees and all other Ongoing Financing Costs; (C) recalculate the Fixed Recovery Charges based on the revisions to Cash Flow Model proposed by the Servicer; (D) file a Non-Routine True-Up Mechanism Advice

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Letter in the form attached hereto as Exhibit E necessary to begin the billing of such revised Fixed Recovery Charges, which Advice Letter will provide that neither the proposed revision in such Advice Letter, nor any modification ordered by the CPUC, will become effective unless the Rating Agency Condition is satisfied; and (E) take all reasonable actions and make all reasonable efforts to effect such Non-Routine True-Up Adjustment and to enforce the provisions of the Wildfire Financing Law and the Financing Order. Any such Non-Routine True-Up Mechanism Advice Letter must be submitted at least ninety (90) days before the effective date (the “Non-Routine True-Up Effective Date”) contained in the related Non-Routine True-Up Mechanism Advice Letter, provided such effective date may be delayed as required to ensure that the Rating Agency Condition is satisfied. The Servicer shall implement the revised Fixed Recovery Charges, if any, resulting from such Non-Routine True-Up Adjustment on the Non-Routine True-Up Effective Date, provided the CPUC will have the opportunity to consider a resolution that adopts, modifies or rejects the proposed revisions to the Cash Flow Model and the public will have an opportunity to review and protest a Non-Routine True-Up Mechanism Advice Letter in accordance with CPUC procedures, to the extent permitted by Section 850.1(e) of the Wildfire Financing Law, and provided further than, in the absence of a CPUC resolution that adopts, modifies or rejects the revisions proposed in the Non-Routine True-Up Mechanism Advice Letter shall go into effect on the Non-Routine True-Up Effective Date if such Non-Routine True-Up Effective Date is at least ninety (90) days after the date of submission of the related Non-Routine True-Up Mechanism Advice Letter.

(c) Reports.

(i)    Notification of Advice Letter Submissions and True-Up Adjustments. Whenever the Servicer submits an Advice Letter with the CPUC and Notice Parties, the Servicer shall send a copy of such submission or notice (together with a copy of all notices and documents which, in the Servicer’s reasonable judgment, are material to the adjustments effected by such Advice Letter or notice) to the Issuer, the Indenture Trustee and the Rating Agencies concurrently therewith. If, for any reason any revised Fixed Recovery Charges are not implemented and effective on the applicable date set forth herein, the Servicer shall notify the Issuer, the Indenture Trustee and each Rating Agency by the end of the second Servicer Business Day after such applicable date.

(ii)    Servicer’s Certificate. Not later than five (5) Servicer Business Days prior to each Payment Date or Special Payment Date, the Servicer shall deliver a written report substantially in the form of Exhibit B attached hereto (the “Servicer’s Certificate”) to the Issuer, the Indenture Trustee and the Rating Agencies which shall include all of the following information (to the extent applicable and including any other information so specified in the Series Supplement) as to the Recovery Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:

(a) the amount of the payment to Holder allocable to principal, if any;

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(b) the amount of the payment to Holders allocable to interest;

(c) the aggregate Outstanding Amount of the Recovery Bonds, before and after giving effect to any payments allocated to principal reported under clause (A) above;

(d) the difference, if any, between the amount specified in clause (C) above and the Outstanding Amount specified in the Expected Amortization Schedule;

(e) any other transfers and payments to be made on such Payment Date or Special Payment Date, including amounts paid to the Indenture Trustee and to the Servicer; and

(f) the amounts on deposit in the Capital Subaccount and the Excess Funds Subaccount, after giving effect to the foregoing payments.

(iii)    Reports to Consumers.

(a) After each revised Fixed Recovery Charge has gone into effect pursuant to a True-Up Adjustment, the Servicer shall, to the extent and in the manner and time frame required by the Financing Order and applicable CPUC Regulations, if any, cause to be prepared and delivered to Consumers any required notices announcing such revised Fixed Recovery Charges.

(b) The Servicer shall comply with the requirements of the Financing Order with respect to the identification of Fixed Recovery Charges on Bills. As provided in the Financing Order, the back of the bill shall display the Fixed Recovery Charge as the “Recovery Bond Charge” and the Customer Credit as the “Recovery Bond Credit” and shall state as follows: “Recovery Bond Charge: Your bill for electric service includes a charge that has been approved by the CPUC to repay bonds issued for certain costs related to catastrophic wildfires. The Recovery Bond Charge (RBC) rate is currently $0.564 per kWh. PG&E has also contributed certain amounts to a trust fund which is used provide a customer credit equal to $0.564 per kWh (Recovery Bond Credit). The right to recover the RBC has been transferred to one or more Special Purpose Entities that issued the bonds and does not belong to PG&E. PG&E is collecting that portion of the RBC on behalf of the Special Purpose Entities.” The fixed recovery charges for each series of recovery bonds, including the Issuer’s Senior Secured Recovery Bonds, Series 2022-A, Additional Recovery Bonds and Additional Other Recovery Bonds, may not be separately identified on consumer electricity bills, although consumer electricity bills will state that a portion of the electricity bill consists of the rights to the fixed recovery charges that have been sold to the financing entity created to issue the Issuer’s Senior Secured Recovery Bonds, Series 2022-A, such Additional Recovery Bonds or Additional Other Recovery Bonds.

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(c) Except to the extent that applicable CPUC Regulations make the Applicable ESP responsible for such costs, or the Applicable ESP has otherwise agreed to pay such costs, the Servicer shall pay from its own funds all costs of preparation and delivery incurred in connection with clauses (a) and (b) above, including printing and postage costs as the same may increase or decrease from time to time.

(iv)    Reconciliation Certificates. The Servicer shall provide to the Indenture Trustee within sixty (60) days of each Payment Date, a Reconciliation Certificate in the form of Exhibit F hereto, in accordance with Section 6.11(c) of this Agreement.

(v)    ESP Reports. The Servicer shall provide to the Rating Agencies, upon request, any publicly available reports filed by the Servicer with the CPUC (or otherwise made publicly available by the Servicer) relating to ESPs and any other non-confidential and non-proprietary information relating to ESPs reasonably requested by the Rating Agencies to the extent such information is reasonably available to the Servicer.

SECTION 4.02.    Limitation of Liability.

(a) The Issuer and the Servicer expressly agree and acknowledge that:

(i)    In connection with any True-Up Adjustment, the Servicer is acting solely in its capacity as the servicing agent hereunder.

(ii)    Neither the Servicer nor the Issuer nor the Indenture Trustee is responsible in any manner for, and shall have no liability whatsoever as a result of, any action, decision, ruling or other determination made or not made, or any delay (other than any delay resulting from the Servicer’s failure to make any filings required by Section 4.01 in a timely and correct manner or any breach by the Servicer of its duties under this Agreement), by the CPUC in any way related to the Recovery Property or in connection with any True-Up Adjustment, the subject of any filings under Section 4.01, any proposed True-Up Adjustment, or the approval of any revised Fixed Recovery Charges and the scheduled adjustments thereto.

(iii)    Except to the extent the Servicer is liable under Section 6.02, the Servicer shall have no liability whatsoever relating to the calculation of any revised Fixed Recovery Charges and the scheduled adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculation regarding expected energy usage volume, the Collections Curve, so long as the Servicer has acted in good faith and has not acted in a grossly negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any Person, including the Bondholders, not receiving any payment, amount or return anticipated or expected or in respect of any Recovery Bond generally, except only to the extent that the same is caused by the Servicer’s gross negligence, willful misconduct or bad faith.

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(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the Servicer of liability for any misrepresentation by the Servicer under Section 6.01 or for any breach by the Servicer of its other obligations under this Agreement.

ARTICLE V

THE RECOVERY PROPERTY

SECTION 5.01.    Custody of Recovery Property Records.

To assure uniform quality in servicing the Recovery Property and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuer as custodian of any and all documents and records that the Servicer shall keep on file, in accordance with its customary procedures, relating to the Recovery Property, including copies of the Financing Order, Issuance Advice Letter and Advice Letters, relating thereto and all documents filed with the CPUC in connection with any True-Up Adjustment and computational records relating thereto (collectively, the “Recovery Property Records”), which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuer with respect to all Recovery Property.

SECTION 5.02.    Duties of Servicer as Custodian.

(a)    Safekeeping. The Servicer shall hold the Recovery Property Records on behalf of the Issuer and maintain such accurate and complete accounts, records and computer systems pertaining to the Recovery Property Records as shall enable the Issuer and the Indenture Trustee, as applicable, to comply with this Agreement, the Sale Agreement and the Indenture. In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of care and diligence that the Servicer exercises with respect to comparable assets that the Servicer services for itself or, if applicable, for others. The Servicer shall promptly report to the Issuer, the Indenture Trustee and the Rating Agencies any failure on its part to hold the Recovery Property Records and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Issuer or the Indenture Trustee of the Recovery Property Records. The Servicer’s duties to hold the Recovery Property Records set forth in this Section 5.02, to the extent the Recovery Property Records have not been previously transferred to a successor Servicer pursuant to Article VII, shall terminate one year and one day after the earlier of the date on which (i) the Servicer is succeeded by a successor Servicer in accordance with Article VII and (ii) no Recovery Bonds are Outstanding.

(b)    Maintenance of and Access to Records. The Servicer shall maintain the Recovery Property Records at 77 Beale Street, San Francisco, California 94177 or at such other office as shall be specified to the Issuer and the Indenture Trustee by written notice at least thirty (30) days prior to any change in location. The Servicer shall make available for inspection, audit and copying to the Issuer and the Indenture Trustee or their respective duly authorized representatives, attorneys or auditors the Recovery Property Records at such times during normal business hours as the Issuer or the Indenture Trustee shall reasonably request and which do not unreasonably interfere with the Servicer’s normal operations. Nothing in this Section 5.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any CPUC

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Regulation) prohibiting disclosure of information regarding the Consumers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 5.02(b).

(c)    Release of Documents. Upon instruction from the Indenture Trustee in accordance with the Indenture, the Servicer shall release any Recovery Property Records to the Indenture Trustee, the Indenture Trustee’s agent or the Indenture Trustee’s designee, as the case may be, at such place or places as the Indenture Trustee may designate, as soon as practicable. Nothing in this Section 5.02(c) shall affect the obligation of the Servicer to observe any applicable law (including any CPUC Regulation) prohibiting disclosure of information regarding the Consumers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 5.02(c).

(d)    Defending Recovery Property Against Claims. The Servicer agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary (i) to block or overturn any attempts to cause a repeal, modification or supplement to the Wildfire Financing Law or the Financing Order or the rights of holders of Recovery Property by legislative enactment, voter initiative, constitutional amendment or other means that would be materially adverse to Bondholders and (ii) to compel performance by the CPUC or the State of California of any of their obligations or duties under the Wildfire Financing Law, the Financing Order or any Advice Letter. The costs of any such action shall be payable from FRC Collections as an Operating Expense in accordance with the priorities set forth in Section 8.02(d) of the Indenture. The Servicer shall have no obligations under this paragraph if it is not being reimbursed on a current basis for its costs and expenses in taking such actions, and shall not be required to advance its own funds to satisfy its obligations hereunder).

(e)    Seeking to Prevent Expansions of Exemptions. The Servicer agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to attempt to prevent the granting by the State of California or the CPUC, after the Closing Date, of any material exemptions from the obligation to pay Fixed Recovery Charges that are not expressly provided for in the Wildfire Financing Law and that violate the State Pledge or any other obligations of the State of California or the CPUC under the Wildfire Financing Law or the Financing Order, including any failure of the CPUC to require any municipal entity which acquires any portion of the service territory of PG&E to impose, collect and remit the Fixed Recovery Charges. The Servicer shall have no obligations under this paragraph if it is not being reimbursed on a current basis for its costs and expenses in taking such actions, and shall not be required to advance its own funds to satisfy its obligations hereunder.

SECTION 5.03.    Custodian’s Indemnification.

The Servicer as custodian shall indemnify the Issuer, any Independent Manager and the Indenture Trustee (for itself and for the benefit of the Holders) and each of their respective officers, directors, employees and agents for, and defend and hold harmless each such Person from and against, any and all liabilities, obligations, losses, damages, payments and claims, and reasonable costs or expenses, of any kind whatsoever (collectively, “Indemnified Losses”) that may be

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imposed on, incurred by or asserted against each such Person as the result of any grossly negligent act or omission in any way relating to the maintenance and custody by the Servicer, as custodian, of the Recovery Property Records; provided, however, that the Servicer shall not be liable for any portion of any such amount resulting from the willful misconduct, bad faith or negligence of the Issuer, any Independent Manager or the Indenture Trustee, as the case may be.

Indemnification under this Section 5.03 shall survive resignation or removal of the Indenture Trustee or any Independent Manager and shall include reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorney’s fees and expenses and reasonable fees, out-of-pocket expenses and costs incurred in connection with any action, claim or suit brought to enforce the Indenture Trustee’s right to indemnification).

SECTION 5.04.    Effective Period and Termination.

The Servicer’s appointment as custodian shall become effective as of the Closing Date and shall continue in full force and effect until terminated pursuant to this Section 5.04. If the Servicer shall resign as Servicer in accordance with Section 6.05 of this Agreement or if all of the rights and obligations of the Servicer shall have been terminated under Section 7.01, the appointment of the Servicer as custodian shall be terminated effective as of the date on which the termination or resignation of the Servicer is effective. Additionally, if not sooner terminated as provided above, the Servicer’s obligations as custodian shall terminate one year and one day after the date on which no Recovery Bonds are Outstanding.

ARTICLE VI

THE SERVICER

SECTION 6.01.    Representations and Warranties of Servicer.

The Servicer makes the following representations and warranties, as of the Closing Date, and as of such other dates as expressly provided in this Section 6.01, on which the Issuer and the Indenture Trustee are deemed to have relied in entering into this Agreement relating to the servicing of the Recovery Property. The representations and warranties shall survive the execution and delivery of this Agreement, the sale of any Recovery Property and the pledge thereof to the Indenture Trustee pursuant to the Indenture.

(a)    Organization and Good Standing. The Servicer is duly organized and validly existing and is in good standing under the laws of the State of California, with the requisite corporate or other power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted by it and to service the Recovery Property and hold the Recovery Property Records, and to execute, deliver and carry out the terms of this Agreement, and had at all relevant times, and has, the requisite power, authority and legal right to service the Recovery Property and to hold the Recovery Property Records as custodian.

(b)    Due Qualification. The Servicer is duly qualified to do business and is in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Recovery Property as required by this Agreement) shall require such qualifications, licenses or

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approvals (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the Servicer’s business, operations, assets, revenues or properties or to its servicing of the Recovery Property).

(c)    Power and Authority. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Servicer under its organizational or governing documents and laws.

(d)    Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors’ rights generally from time to time in effect and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law.

(e)    No Violation. The consummation by the Servicer of the transactions contemplated by this Agreement and the fulfillment by the Servicer of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a material default under, the articles of incorporation or bylaws of the Servicer, or any indenture, material agreement or other instrument to which the Servicer is a party or by which it or any of its property is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument other than the Basic Documents or any lien created pursuant to the Wildfire Financing Law; nor violate any existing law or any order, rule or regulation applicable to the Servicer of any court or of any Governmental Authority having jurisdiction over the Servicer or its properties.

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

(g)    Approvals. No approval, authorization, consent, order or other action of, or filing with, any court, Federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the execution and delivery by the Servicer of this Agreement, the performance by the Servicer of the transactions contemplated hereby or the fulfillment by the Servicer of the terms hereof, except those that have been obtained or made and those that the Servicer is required to make in the future pursuant to Article IV hereof.

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(h)    Reports and Certificates. Each report and certificate delivered in connection with the Issuance Advice Letter or delivered in connection with any Advice Letter made to the CPUC by the Issuer with respect to the Fixed Recovery Charges or True-Up Adjustments will constitute a representation and warranty by the Servicer that each such report or certificate, as the case may be, is true and correct in all material respects; provided, however, that to the extent any such report or certificate is based in part upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the Servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance (and facts known to the Servicer on the date such report or certificate is delivered).

SECTION 6.02.    Indemnities of Servicer; Release of Claims.

(a)    The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement.

(b)    The Servicer shall indemnify the Issuer, the Indenture Trustee (for itself and for the benefit of the Holders) and the Independent Manager and each of their respective trustees, officers, directors, employees and agents (each, an “Indemnified Person”), for, and defend and hold harmless each such Person from and against, any and all Indemnified Losses imposed on, incurred by or asserted against any such Person as a result of (i) the Servicer’s willful misconduct, bad faith or gross negligence in the performance of, or reckless disregard of, its obligations and duties or observance of its covenants under this Agreement or (ii) the Servicer’s material breach of any of its representations or warranties that results in a Servicer Default under this Agreement, except to the extent of Indemnified Losses either resulting from the willful misconduct, bad faith or gross negligence of such Person seeking indemnification hereunder or resulting from a material breach of a representation or warranty made by such Person seeking indemnification hereunder in any of the Basic Documents that gives rise to the Servicer’s breach.

(c)    For purposes of Section 6.02(b), in the event of the termination of the rights and obligations of PG&E (or any successor thereto pursuant to Section 6.03) as Servicer pursuant to Section 7.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer pursuant to Section 7.02.

(d)    Indemnification under this Section 6.02 shall survive any repeal of, modification of, or supplement to, or judicial invalidation of, the Wildfire Financing Law or the Financing Order and shall survive the resignation or removal of the Indenture Trustee or any Independent Manager or the termination of this Agreement and shall include reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorney’s fees and expenses and the reasonable fees, out-of-pocket expenses and costs incurred in connection with any action, claim or suit brought to enforce the Indenture Trustee’s right to indemnification).

(e)    Except to the extent expressly provided in this Agreement or the other Basic Documents (including the Servicer’s claims with respect to the Servicing Fee, reimbursement for any Excess Remittance, reimbursement for costs incurred pursuant to Section 5.02(d) and the payment of the purchase price of Recovery Property), the Servicer hereby releases and discharges

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the Issuer, any Independent Manager and the Indenture Trustee, and each of their respective officers, directors and agents (collectively, the “Released Parties”) from any and all actions, claims and demands whatsoever, whenever arising, which the Servicer, in its capacity as Servicer or otherwise, shall or may have against any such Person relating to the Recovery Property or the Servicer’s activities with respect thereto other than any actions, claims and demands arising out of the willful misconduct, bad faith or gross negligence of the Released Parties.

(f)    Promptly after receipt by an Indemnified Person of notice (or, in the case of the Indenture Trustee, receipt of notice by a Responsible Officer only) of the commencement of any action, proceeding or investigation, such Indemnified Person shall, if a claim in respect thereof is to be made against the Servicer under this Section 6.02, notify the Servicer in writing of the commencement thereof. Failure by an Indemnified Person to so notify the Servicer shall relieve the Servicer from the obligation to indemnify and hold harmless such Indemnified Person under this Section 6.02 only to the extent that the Servicer suffers actual prejudice as a result of such failure. With respect to any action, proceeding or investigation brought by a third party for which indemnification may be sought under this Section 6.02, the Servicer shall be entitled to conduct and control, at its expense and with counsel of its choosing that is reasonably satisfactory to such Indemnified Person, the defense of any such action, proceeding or investigation (in which case the Servicer shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the Indemnified Person except as set forth below); provided that the Indemnified Person shall have the right to participate in such action, proceeding or investigation through counsel chosen by it and at its own expense. Notwithstanding the Servicer’s election to assume the defense of any action, proceeding or investigation, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Servicer shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the defendants in any such action include both the Indemnified Person and the Servicer and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the Servicer, (ii) the Servicer shall not have employed counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the institution of such action, (iii) the Servicer shall authorize the Indemnified Person to employ separate counsel at the expense of the Servicer or (iv) in the case of the Indenture Trustee, such action exposes the Indenture Trustee to a material risk of criminal liability or forfeiture or a Servicer Default has occurred and is continuing. Notwithstanding the foregoing, the Servicer shall not be obligated to pay for the fees, costs and expenses of more than one separate counsel for the Indemnified Persons other than one local counsel, if appropriate. The Servicer will not, without the prior written consent of the Indemnified Person, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought under this Section 6.02 (whether or not the Indemnified Person is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Person from all liability arising out of such claim, action, suit or proceeding.

SECTION 6.03.    Merger or Consolidation of, or Assumption of the Obligations of, Servicer.

Any Person (a) into which the Servicer may be merged or consolidated and that succeeds to all or substantially all of the electric distribution business of the Servicer, (b) that results from

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the division of the Servicer into two or more entities and succeeds to all or substantially all of the electric distribution business of the Servicer, (c) that may result from any merger or consolidation to which the Servicer shall be a party and succeeds to all or substantially all of the electric distribution business of the Servicer, or (d) that may otherwise succeed to all or substantially all of the electric distribution business of the Servicer, shall be the successor to the Servicer under this Agreement; provided, however, that (i) such successor must execute an agreement of assumption to perform every obligation of the Servicer hereunder, (ii) immediately after giving effect to such transaction, no Servicer Default and no event that, after notice or lapse of time, or both, would become a Servicer Default shall have occurred and be continuing, (iii) the Servicer shall have delivered to the Issuer, the Indenture Trustee and the Rating Agencies an Officers’ Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption complies with this Section 6.03 and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with and (iv) prior written notice shall have been delivered to the Rating Agencies. Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (i) and (ii) above shall be conditions to the consummation of the transactions referred to in clauses (a), (b), (c) and (d) above. If all the conditions to any such assumption are met, then the prior Servicer will automatically be released from all of its obligations under this Agreement, other than those that specifically survive a termination of this Agreement.

SECTION 6.04.    Limitation on Liability of Servicer and Others.

Neither the Servicer nor any of the directors or officers or employees or agents of the Servicer shall be liable to the Issuer, the Indenture Trustee, the Bondholders or any other Person, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for good faith errors in judgment; provided, however, that this provision shall not protect the Servicer or any such person against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising under this Agreement.

Except as provided in this Agreement, the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be related to or incidental to its duties to service the Recovery Property in accordance with this Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Servicer may, in respect of any Proceeding, undertake any action that it is not specifically identified in this Agreement as a duty of the Servicer but that the Servicer reasonably determines is necessary or desirable in order to protect the rights and duties of the Issuer or the Indenture Trustee under this Agreement and the interests of the Holders and Consumers under this Agreement. The Servicer’s costs and expenses incurred in connection with any such proceeding shall be payable from FRC Collections as an Operating Expense (and shall not be deemed to constitute a portion of the Servicing Fee) in accordance with the Indenture. The Servicer shall have no obligations under this paragraph if it is not being reimbursed on a current basis for its costs and expenses in taking such actions, and shall not be required to advance its own funds to satisfy its obligations hereunder.

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SECTION 6.05.    PG&E Not to Resign as Servicer.

Subject to the provisions of Section 6.03, PG&E shall not resign from the obligations and duties hereby imposed on it as Servicer under this Agreement except upon either (a) a determination by PG&E that the performance of its duties under this Agreement shall no longer be permissible under applicable law or (b) satisfaction of the following: (i) the Rating Agency Condition shall have been satisfied and (ii) the CPUC shall have approved such resignation. Notice of any such determination permitting the resignation of PG&E pursuant to clause (a) shall be communicated to the Issuer, the Indenture Trustee and the Rating Agencies at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Issuer and the Indenture Trustee, with a copy to the CPUC, concurrently with or promptly after such notice. No such resignation shall become effective until a successor Servicer shall have assumed the responsibilities and obligations of PG&E in accordance with Section 7.02. No such resignation shall become effective until a successor Servicer shall have assumed the responsibilities and obligations of PG&E in accordance with Section 7.02.

SECTION 6.06.    Servicing Compensation.

(a)    In consideration for its services hereunder, until the Retirement of the Recovery Bonds, the Servicer shall receive an annual fee (the “Servicing Fee”) in an amount equal to (i) 0.05% of the initial principal amount of the Recovery Bonds for so long as PG&E or an Affiliate of PG&E is the Servicer or (ii) if PG&E or any of its Affiliates is not the Servicer, an amount agreed upon by the Successor Servicer and the Indenture Trustee, provided that such fee must be approved by the CPUC, plus, in either case, reasonable out-of-pocket expenses to cover the Servicer’s incremental costs and expenses in servicing the Recovery Bond. The Servicing Fee owing shall be calculated based on the initial principal amount of the Recovery Bonds and shall be paid semi-annually with half of the Servicing Fee being paid on each Payment Date (provided that the first payment may be adjusted for a longer or shorter first Payment Period). The Servicer also shall be entitled to retain as additional compensation (i) any interest earnings on Fixed Recovery Charge Payments received by the Servicer and invested by the Servicer during each Collection Period prior to remittance to the Collection Account and (ii) all late payment charges, if any, collected from Consumers or ESPs; provided, however, that if the Servicer has failed to remit the Daily Remittance to the General Subaccount of any Collection Account on the Servicer Business Day that such payment is to be made pursuant to Section 6.11 on more than three (3) occasions during the period that the Recovery Bonds are outstanding, then thereafter the Servicer will be required to pay to the Indenture Trustee interest on each Daily Remittance accrued at the Federal Funds Rate from the Servicer Business Day on which such Daily Remittance was required to be made to the date that such Daily Remittance is actually made.

(b)    The Servicing Fee set forth in Section 6.06(a) shall be paid to the Servicer by the Indenture Trustee, on each Payment Date in accordance with the priorities set forth in Section 8.02(e) of the Indenture, by wire transfer of immediately available funds from the Collection Account to an account designated by the Servicer. Any portion of the Servicing Fee not paid on any such date should be added to the Servicing Fee payable on the subsequent Payment Date. In no event shall the Indenture Trustee be liable for the payment of any Servicing Fee or

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other amounts specified in this Section 6.06; provided that this Section 6.06 does not relieve the Indenture Trustee of any duties it has to allocate funds for payment for such fees under Section 8.02 of the Indenture.

(c)    The foregoing Servicing Fees constitute a fair and reasonable price for the obligations to be performed by the Servicer. Such Servicing Fee shall be determined without regard to the income of the Issuer, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Issuer and shall be considered an Operating Expense of the Issuer subject to the limitations on such expenses set forth in the Financing Order.

SECTION 6.07.    Compliance with Applicable Law.

The Servicer covenants and agrees, in servicing the Recovery Property, to comply in all material respects with all laws applicable to, and binding upon, the Servicer and relating to the Recovery Property the noncompliance with which would have a material adverse effect on the value of the Recovery Property; provided, however, that the foregoing is not intended to, and shall not, impose any liability on the Servicer for noncompliance with any Requirement of Law that the Servicer is contesting in good faith in accordance with its customary standards and procedures.

SECTION 6.08.    Access to Certain Records and Information Regarding Recovery Property.

The Servicer shall provide to the Indenture Trustee access to the Recovery Property Records as is reasonably required for the Indenture Trustee to perform its duties and obligations under the Indenture and the other Basic Documents, and shall provide access to such records to the Holders as required by applicable law. Access shall be afforded without charge, but only upon reasonable request and during normal business hours at the respective offices of the Servicer. Nothing in this Section 6.08 shall affect the obligation of the Servicer to observe any applicable law (including any CPUC Regulation) prohibiting disclosure of information regarding the Consumers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 6.08.

SECTION 6.09.    Appointments.

The Servicer may at any time appoint any Person to perform all or any portion of its obligations as Servicer hereunder; provided, however, that, unless such Person is an Affiliate of PG&E, the Rating Agency Condition shall have been satisfied in connection therewith; provided further that the Servicer shall remain obligated and be liable under this Agreement for the servicing and administering of the Recovery Property in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Person and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Recovery Property. The fees and expenses of any such Person shall be as agreed between the Servicer and such Person from time to time and none of the Issuer, the Indenture Trustee, the Holders or any other Person shall have any responsibility therefor or right or claim thereto. Any such appointment shall not constitute a Servicer resignation under Section 6.05.

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SECTION 6.10.    No Servicer Advances.

The Servicer shall not make any advances of interest on or principal of the Recovery Bonds.

SECTION 6.11.    Remittances.

(a)    On each Servicer Business Day, after the Billing Commencement Date, the Servicer shall remit to the General Subaccount of the Collection Account the total Estimated FRC Collections estimated to have been received by the Servicer from or on behalf of Consumers on such Servicer Business Day in respect of all previously billed Fixed Recovery Charges (the “Daily Remittance”), which Daily Remittance shall be calculated according to the procedures set forth in Annex I and shall be remitted as soon as reasonably practicable but in no event later than the second Servicer Business Day after such payments are estimated to have been received. Prior to each remittance to the General Subaccount of the Collection Account pursuant to this Section 6.11, the Servicer shall provide written notice to the Indenture Trustee of each such remittance (including the exact dollar amount to be remitted). The Servicer shall also, promptly upon receipt, remit to the Collection Account any other proceeds of the Recovery Bond Collateral which it may receive from time to time.

(b)    The Servicer agrees and acknowledges that it holds all Fixed Recovery Charge Payments collected by it and any other proceeds for the Recovery Bond Collateral received by it for the benefit of the Indenture Trustee and the Holders and that all such amounts will be remitted by the Servicer in accordance with this Section 6.11 without any surcharge, fee, offset, charge or other deduction except (i) as set forth in clause (c) below and (ii) for late fees permitted by Section 6.06. The Servicer further agrees not to make any claim to reduce its obligation to remit all Fixed Recovery Charge Payments collected by it in accordance with this Agreement except (i) as set forth in clause (c) below and (ii) for late fees permitted by Section 6.06.

(c)    Not less than semi-annually (except in the case of the first reconciliation after the first Payment Date, which may be longer than six months), the Servicer will compare Actual FRC Collections to the Estimated FRC Collections that have been remitted to the Indenture Trustee. Such reconciliation will be conducted within sixty (60) days of each Payment Date and reflected in a Reconciliation Certificate delivered to the Indenture Trustee in the form attached hereto as Exhibit F. The Servicer shall calculate the amount of any Remittance Shortfall or Excess Remittance for the immediately preceding Reconciliation Period, and (A) if a Remittance Shortfall exists, the Servicer shall make a supplemental remittance, to the General Subaccount of the Collection Account within ten (10) days, or (B) if an Excess Remittance exists, the Servicer will reduce the Daily Remittance(s) over the next month following the date of the Reconciliation Certificate to the Indenture Trustee. If there is a Remittance Shortfall, the amount which the Servicer remits to the General Subaccount of the Collection Account on the relevant date set forth above shall be increased by the amount of such Remittance Shortfall, such increase coming from the Servicer’s own funds.

(d)    The Servicer acknowledges and agrees that the Issuer is the owner of and has the legal right to all Fixed Recovery Charges received by the Servicer, and that the daily and reconciliation calculations and remittances permitted by this Servicing Agreement, which are based upon estimates of the Fixed Recovery Charges received by the Servicer, is made for convenience and cost effectiveness given the current billing system of the Servicer. The Servicer agrees that in the event any Servicer Default hereunder or if otherwise required or permitted, as

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provided in Section 6(e)(ii) of Annex I, the Servicer, upon demand of the Indenture Trustee, will promptly, but not later than 60 days follow such request, provide to the Indenture Trustee a reconciliation of actual Fixed Recovery Charges received by the Servicer and the Fixed Recovery Charges remitted by the Servicer.

(e)    Unless otherwise directed to do so by the Issuer, the Servicer shall be responsible for selecting Eligible Investments in which the funds in each Collection Account shall be invested pursuant to Section 8.03 of the Indenture.

ARTICLE VII

DEFAULT

SECTION 7.01.    Servicer Default.

If any one or more of the following events (each, a “Servicer Default”) shall occur and be continuing:

(a)    any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer; or

(b)    any failure on the part of the Servicer or, so long as the Servicer is PG&E or an Affiliate thereof, any failure on the part of PG&E, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or PG&E, as the case may be, set forth in this Agreement (other than as provided in clause (a) of this Section 7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of sixty (60) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer or PG&E, as the case may be, by the Issuer (with a copy to the Indenture Trustee) or to the Servicer or PG&E, as the case may be, by the Indenture Trustee or (B) such failure is discovered by an officer of the Servicer; or

(c)    any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five (5) Business Days; or

(d)    any representation or warranty made by the Servicer in this Agreement or any Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of sixty (60) days after the date on which (A) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee or (B) such failure is discovered by an officer of the Servicer; or

(e)    an Insolvency Event occurs with respect to the Servicer or PG&E;

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then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee, or the Holders of Recovery Bonds evidencing not less than a majority of the Outstanding Amount of the Recovery Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Bondholders) (a “Termination Notice”) may terminate all the rights and obligations of the Servicer, subject to compliance with Section 7.02. In addition, upon a Servicer Default described in Section 7.01(a), each of the following shall be entitled to apply to the CPUC for sequestration and payment of revenues arising with respect to the Recovery Property: (i) the holders of any Recovery Bonds and any Indenture Trustee or representative thereof as beneficiaries of any statutory or other Lien permitted by the Wildfire Financing Law; (ii) the Issuer or its assignees; or (iii) pledgees or transferees, including transferees under Section 850.4 of the Wildfire Financing Law, of the Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Agreement, whether with respect to the Recovery Bonds, the Recovery Property, the Fixed Recovery Charges or otherwise, shall, without further action, pass to and be vested in such successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Recovery Property or the Fixed Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Recovery Property Records to the successor Servicer. In case a successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorney’s fees and expenses) incurred in connection with transferring the Recovery Property Records to the successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of PG&E as Servicer shall not terminate PG&E’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

SECTION 7.02.    Appointment of Successor.

(a)    Upon the Servicer’s receipt of a Termination Notice pursuant to Section 7.01 or the Servicer’s resignation or removal in accordance with the terms of this Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, and shall be entitled to receive the requisite portion of the Servicing Fee, until a successor Servicer shall have assumed in writing the obligations of the Servicer hereunder as described below. In the event of the Servicer’s termination, removal or resignation hereunder, the Issuer shall appoint a successor Servicer with the Indenture Trustee’s prior written consent thereto (which consent shall not be unreasonably withheld) and the written approval of the CPUC, and the successor Servicer shall accept its appointment by a written assumption in form acceptable to the Issuer and the Indenture Trustee. If within 30 days after the delivery of the Termination Notice, the Issuer shall

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not have obtained such a new Servicer, the Indenture Trustee may petition the CPUC or a court of competent jurisdiction to appoint a successor Servicer under this Agreement. A Person shall qualify as a successor Servicer only if (i) such Person is permitted under CPUC Regulations to perform the duties of the Servicer, (ii) the Rating Agency Condition shall have been satisfied and (iii) such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Agreement. In no event shall the Indenture Trustee be liable for its or the Issuer’s appointment of a successor Servicer. The Indenture Trustee’s expenses incurred under this Section 7.02(a) shall be at the sole expense of the Issuer and payable from the Collection Account as provided in Section 8.02 of the Indenture.

(b)    Upon appointment, the successor Servicer shall be the successor in all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer and shall be entitled to the Servicing Fee and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement.

SECTION 7.03.    Waiver of Past Defaults.

The Holders of Recovery Bonds evidencing not less than a majority of the Outstanding Amount of the Recovery Bonds may, on behalf of all Bondholders, direct the Indenture Trustee to waive in writing any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required remittances to the Indenture Trustee for deposit to the Collection Account in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto.

SECTION 7.04.    Notice of Servicer Default.

The Servicer shall deliver to the Issuer, the Indenture Trustee, the CPUC and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five (5) Business Days thereafter, written notice of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 7.01.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01.    Amendment.

(a)    This Agreement may be amended in writing by the Servicer and the Issuer with five Business Days’ prior written notice given to the Rating Agencies and the prior written consent of the Indenture Trustee, but without the consent of any of the Bondholders, (i) to cure any ambiguity, to correct or supplement any provisions in this Agreement, (ii) to add additional Recovery Property under this Agreement or (iii) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Bondholders; provided, however, that any such amendment pursuant to clause (iii) shall not, as evidenced by an Officer’s Certificate delivered to the Issuer and the Indenture Trustee, adversely affect in any material respect the interests of any Bondholder. For purposes of this paragraph (a),

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any amendment that increases the Servicing Fee payable to a successor Servicer shall not be treated as adversely affecting the interests of any Bondholder so long as the Servicing Fee is within the range approved in the Financing Order.

(b)    This Agreement may also be amended in writing from time to time by the Servicer and the Issuer with prior written notice given to the Rating Agencies and the prior written consent of the Indenture Trustee and the prior written consent of the Holders of Recovery Bonds evidencing not less than a majority of the Outstanding Amount of the Recovery Bonds affected by any such amendment, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Bondholders; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, FRC Collections or (ii) reduce the aforesaid percentage of the Outstanding Amount of Recovery Bonds, the Holders of which are required to consent to any such amendment, without the consent of the Holders of all the outstanding Recovery Bonds.

Promptly after the execution of any such amendment and the requisite consents, the Issuer shall furnish written notification of the substance of such amendment to the Indenture Trustee and each of the Rating Agencies.

It shall not be necessary for the consent of Recovery Bondholders pursuant to this Section 8.01(b) to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.

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

(d)    Notwithstanding Sections 8.01(a) or 8.01(b), or anything to the contrary in this Agreement, the Servicer and the Issuer may amend Annex I to this Agreement in writing with prior written notice given to the Indenture Trustee, the CPUC and the Rating Agencies, but without the consent of the Indenture Trustee, the CPUC, any Rating Agency or any Bondholder, solely to address changes to the Servicer’s method of calculating Fixed Recovery Charge Payments received as a result of changes to the Servicer’s current computerized customer information system or to address the manner of presenting Fixed Recovery Charges on the Bills of Consumers; provided that any such amendment shall not have or cause a material adverse effect on the Bondholders.

SECTION 8.02.    Maintenance of Accounts and Records.

(a)    The Servicer shall maintain accounts and records as to the Recovery Property accurately and in accordance with its standard accounting procedures and in sufficient detail to permit reconciliation between Fixed Recovery Charge Payments received by the Servicer and FRC Collections from time to time deposited in the Collection Account.

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(b)    The Servicer shall permit the Indenture Trustee and its agents at any time during normal business hours, upon reasonable notice to the Servicer and to the extent it does not unreasonably interfere with the Servicer’s normal operations, to inspect, audit and make copies of and abstracts from the Servicer’s records regarding the Recovery Property and the Fixed Recovery Charges. Nothing in this Section 8.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any CPUC Regulation) prohibiting disclosure of information regarding the Consumers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 8.02(b).

SECTION 8.03.    Notices.

Unless otherwise specifically provided herein, all notices, directions, consents and waivers required under the terms and provisions of, this Agreement shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:

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

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

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

(d)    in the case of the CPUC, to California Public Utilities Commission at 505 Van Ness Avenue, San Francisco, California 94102, Attention: General Counsel, Telephone: (415) 703-2782, Facsimile: (415) 703-1758;

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

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

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(g)    as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 8.04.    Assignment.

Notwithstanding anything to the contrary contained herein, except as provided in Section 6.03 and as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by the Servicer.

SECTION 8.05.    Limitations on Rights of Others.

The provisions of this Agreement are solely for the benefit of the Servicer and the Issuer and, to the extent provided herein or in the Basic Documents, Consumers, the Indenture Trustee and the Holders, and the other Persons expressly referred to herein, and such Persons shall have the right to enforce the relevant provisions of this Agreement. Nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Recovery Property or Recovery Bond Collateral or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

SECTION 8.06.    Severability.

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remainder of such provision (if any) or the remaining provisions hereof (unless such a construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 8.07.    Separate Counterparts.

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 8.08.    Headings.

The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

SECTION 8.09.    Governing Law.

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of California, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

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SECTION 8.10.    Assignment to Indenture Trustee.

(a) The Servicer hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee for the benefit of the Secured Parties pursuant to the Indenture of any or all of the Issuer’s rights hereunder and (b) in no event shall the Indenture Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates delivered pursuant hereto, as to all of which any recourse shall be had solely to the assets of the Issuer subject to the availability of funds therefor under Section 8.02 of the Indenture.

SECTION 8.11.    Nonpetition Covenants.

Notwithstanding any prior termination of this Agreement or the Indenture, but subject to the CPUC’s right to order the sequestration and payment of revenues arising with respect to the Recovery Property notwithstanding any bankruptcy, reorganization or other insolvency proceedings with respect to the debtor, pledgor or transferor of the Recovery Property pursuant to Section 850.2(e) and (g) of the Wildfire Financing Law, the Servicer shall not, prior to the date that is one year and one day after the termination of the Indenture, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer or ordering the winding up or liquidation of the affairs of the Issuer.

SECTION 8.12.    Limitation of Liability.

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

SECTION 8.13.    Rule 17g-5 Compliance.

The Servicer agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Servicer to any Rating Agency under this Agreement or any other Basic Document to which it is a party for the purpose of determining the initial credit rating of the Recovery Bonds or undertaking credit rating surveillance of the Recovery Bonds with any Rating Agency, or satisfy the Rating Agency Condition, shall be substantially concurrently posted by the Servicer on the 17g-5 Website.

[SIGNATURE PAGE FOLLOWS]

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

ISSUER:
PG&E WILDFIRE RECOVERY FUNDING LLC, a Delaware limited liability company
By:	/s/ Monica Klemann
	Name:	Monica Klemann
	Title:	Manager, Treasurer and Secretary
SERVICER:
PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
By:	/s/ Margaret K. Becker
	Name:	Margaret K. Becker
	Title:	Vice President and Treasurer

ACKNOWLEDGED AND ACCEPTED:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Indenture Trustee
By:	/s/ David Hill
	Name: David Hill
	Title:   Vice President

Signature Page to

Recovery Property Servicing Agreement

ANNEX I

SERVICING PROCEDURES

The Servicer agrees to comply with the following servicing procedures:

SECTION 1. DEFINITIONS.

(a)    Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Recovery Property Servicing Agreement (the “Agreement”) to which this Annex I is attached.

(b)    Whenever used in this Annex I, the following words and phrases shall have the following meanings:

“Applicable MDMA” means with respect to each Consumer, the meter data management agent providing meter reading services for that Consumer’s account.

“Billed FRCs” means the amounts of Fixed Recovery Charges billed by the Servicer, whether billed directly to Consumers by the Servicer.

“Collections Curve” means the collections curve that is expressed as a percentage measured at each of six consecutive 30-day intervals and represents the ratio of accumulative daily collections to the total amount billed to a sample customer population.

“Full Consolidated ESP Billing” means the billing procedures pursuant to which, subject to the Servicer’s approval and consent, an ESP will be responsible for reading the meter, calculating and collecting all utility charges to Consumers served by such ESP and by the Servicer, including the Fixed Recovery Charges, and will become obligated to the Servicer for such Billed FRC Revenues, all in accordance with the Servicer Policies and Practices. In Full Consolidated ESP Billing, an ESP is responsible for the accuracy of calculating and collecting the Fixed Recovery Charges. Unless the context indicates otherwise, the term Full Consolidated ESP Billing includes Partial Consolidated ESP Billing.

“Partial Consolidated ESP Billing” means the billing procedures pursuant to which the Servicer will be responsible for calculating the utility charges to Consumers served by the Servicer, including the Fixed Recovery Charges, and sending such calculations to an ESP, which will then be responsible for billing and collecting all utility charges to Consumers served by such ESP and by the Servicer, including the Fixed Recovery Charges. In Partial Consolidated ESP Billing, an ESP is not responsible for the accuracy of the calculating and collecting Fixed Recovery Charges.

“Servicer Policies and Practices” means, with respect to the Servicer’s duties under this Annex I, the policies and practices of the Servicer applicable to such duties that the Servicer follows with respect to comparable assets that it services for itself and, if applicable, others.

EXHIBIT A

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SECTION 2. DATA ACQUISITION.

(a)    Installation and Maintenance of Meters. Except to the extent that an ESP is responsible for such services pursuant to an ESP Agreement, the Servicer shall use its best efforts to cause to be installed, replaced and maintained meters in such places and in such condition as will enable the Servicer to obtain usage measurements for each Consumer at least once every billing period. If Consumers are billed by entities other than the Servicer or an ESP, the Servicer shall request these other entities to bill those Consumers for the Fixed Recovery Charge and to remit the Fixed Recovery Charge Revenues to the Servicer on behalf of those Consumers. The Servicer shall have no other responsibility to bill or collect Fixed Recovery Charges from or in respect of Consumers billed by entities other than ESPs.

(b)    Meter Reading. At least once each billing period, the Servicer shall obtain usage measurements from the Applicable MDMA for each Consumer; provided, however, that the Servicer may estimate any Consumer’s usage determined in accordance with applicable CPUC Regulations and Servicer Policies and Practices; and, provided, further, that the Servicer may obtain usage measurements from the Applicable ESP for Consumers receiving services from such ESP if the respective ESP Service Agreement so provides.

(c)    Cost of Metering. The Issuer shall not be obligated to pay any costs associated with the routine metering duties set forth in this Section 2, including the costs of installing, replacing and maintaining meters, nor shall the Issuer be entitled to any credit against the Servicing Fee for any cost savings realized by the Servicer as a result of new metering and/or billing technologies.

SECTION 3. USAGE AND BILL CALCULATION.

The Servicer (a) shall obtain a calculation of each Consumer’s usage (which may be based on data obtained from such Consumer’s meter read or on usage estimates determined in accordance with the Servicer Policies and Practices and applicable CPUC Regulations) at least once each billing period and shall determine therefrom each Consumer’s individual Fixed Recovery Charge to be included on such Consumer’s Bill; provided, however, that in the case of Consumers served by an ESP under Full Consolidated ESP Billing, the Applicable ESP, rather than the Servicer, shall determine such Consumers’ total Fixed Recovery Charges to be included on such Consumers’ Bills based on specific Fixed Recovery Charges (cents per kilowatt hour rates) provided by the Servicer, and the Servicer shall deliver to the Applicable ESPs such specific cents per kilowatt hour rates as are necessary for the Applicable ESPs to calculate such Consumers’ respective Fixed Recovery Charges as such charges may change from time to time pursuant to the True-Up Adjustments.

SECTION 4. BILLING.

The Servicer shall implement the Fixed Recovery Charges as of the Billing Commencement Date and shall thereafter bill each Consumer or the Applicable ESP, for the respective Consumer’s outstanding current and past due Fixed Recovery Charges accruing

Annex I-2

through the date on which the Fixed Recovery Charges may no longer be billed under the Tariff, all in accordance with the following:

(a)    Frequency of Bills; Billing Practices. In accordance with the Servicer’s then-existing Servicer Policies and Practices for its own charges, as such Servicer Policies and Practices may be modified from time to time, the Servicer shall generate and issue a Bill to each Consumer, or, in the case of a Consumer subject to Partial Consolidated ESP Billing, to the Applicable ESP, for such Consumers’ Fixed Recovery Charges once every applicable billing period, at the same time, with the same frequency and on the same Bill as that containing the Servicer’s own charges to such Consumers or ESPs, as the case may be. In the event that the Servicer makes any material modification to its Servicer Policies and Practices for its own charges, it shall notify the Issuer, the Indenture Trustee, the CPUC and the Rating Agencies as soon as practicable, and in no event later than 60 Business Days after such modification goes into effect; provided, however, that the Servicer may not make any modification that will materially adversely affect the Bondholders.

(b)    Format.

(i)    The Servicer shall conform to such requirements regarding the format, structure and text of Bills delivered to Consumers and ESPs as this Agreement, the Financing Order, the Wildfire Financing Law and applicable CPUC Regulations shall from time to time prescribe. To the extent that Bill format, structure and text are not prescribed by this Agreement, the Financing Order, the Wildfire Financing Law or by applicable CPUC Regulations, the Servicer shall determine the format, structure and text of all Bills in accordance with its reasonable business judgment, its Servicer Policies and Practices with respect to its own charges and prevailing industry standards.

(c)    Delivery. The Servicer shall deliver all Bills issued by it (i) by United States mail in such class or classes as are consistent with the Servicer Policies and Practices followed by the Servicer with respect to its own charges to its Consumers or (ii) by any other means, whether electronic or otherwise, that the Servicer may from time to time use to present its own charges to its Consumers. In the case of Consumers that are subject to Partial Consolidated ESP Billing, the Servicer shall deliver all Bills or charges to the Applicable ESPs by such means as are mutually agreed upon by the Servicer and the Applicable ESP and are consistent with CPUC Regulations. The Servicer or an ESP, as applicable, shall pay from its own funds all costs of issuance and delivery of all Bills, including but not limited to printing and postage costs as the same may increase or decrease from time to time.

SECTION 5. CUSTOMER SERVICE FUNCTIONS.

The Servicer shall handle all Consumer inquiries and other Consumer service matters according to the same procedures it uses to service Consumers with respect to its own charges.

SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE.

(a)    Collection Efforts, Policies, Procedures.

(i)    The Servicer shall use reasonable efforts to collect all Billed FRC Revenues from Consumers and ESPs as and when the same become due and shall follow such collection procedures as it follows with respect to comparable assets that it services for itself or others, including with respect to the following:

(A) The Servicer shall prepare and deliver overdue notices to Consumers and ESPs in accordance with applicable CPUC Regulations and Servicer Policies and Practices.

Annex I-3

(B) The Servicer shall apply late payment charges, which may be payable to the extent authorized, to outstanding Consumer and ESP balances in accordance with applicable CPUC Regulations and as required by the Financing Order. All late payment charges, to the extent available, and interest collected shall be payable to and retained by the Servicer as a component of its compensation under the Agreement, and the Issuer shall have no right to share in the same.

(C) The Servicer shall deliver oral and written past-due and shut-off notices in accordance with applicable CPUC Regulations and Servicer Policies and Practices.

(D) The Servicer shall adhere to and carry out disconnection policies and termination of Full Consolidated ESP Billing in accordance with Section 779.2 of the Public Utilities Code, CPUC Decision 97-10-087, as it may be amended or modified from time to time, and applicable CPUC Regulations and Servicer Policies and Practices.

(E) The Servicer may employ the assistance of collection agents in accordance with applicable CPUC Regulations and Servicer Policies and Practices.

(F) In circumstances where the Servicer is allowed to bill Consumers directly, the Servicer shall deliver verbal and written final notices of delinquency and possible disconnection in accordance with applicable CPUC Regulations and Servicer Policies and Practices.

(G) The Servicer shall adhere to and carry out disconnection policies and termination of ESP billing in accordance with the Public Utilities Code, the Financing Order, applicable CPUC Regulations and the Servicer Policies and Practices.

(H) The Servicer may employ the assistance of collection agents to collect any past-due Fixed Recovery Charges in accordance with applicable CPUC Regulations and Servicer Policies and Practices and the Tariff.

(I) The Servicer shall apply Consumer and ESP deposits to the payment of delinquent accounts in accordance with the Financing Order, applicable CPUC Regulations and Servicer Policies and Practices and according to the priorities set forth in Section 6(b) of this Annex I.

(ii)    The Servicer may in its own discretion waive any late payment charge or any other fee or charge relating to delinquent payments, if any, and may waive, vary or modify any terms of payment of any amounts payable by a Consumer, in each case if such waiver or action: (A) would be in accordance with the Servicer’s customary practices or those of any

Annex I-4

successor Servicer with respect to comparable assets that it services for itself and for others; (B) would not materially adversely affect the rights of the Holders as evidenced by an Officer’s Certificate of the Issuer; and (C) would comply with applicable law; provided, however, that notwithstanding anything in the Agreement or this Annex I to the contrary, the Servicer is authorized to write off any Billed FRCs, in accordance with its Servicer Policies and Practices.

(iii)    The Servicer shall accept payment from Consumers in respect of Billed FRCs in such forms and methods and at such times and places as it accepts for payment of its own charges. The Servicer shall accept payment from ESPs in respect of Billed FRCs in such forms and methods and at such times and places as the Servicer and each ESP shall mutually agree in accordance with applicable CPUC Regulations.

(b)    Payment Processing; Allocation; Priority of Payments.

(i)    The Servicer shall post all payments received to Consumer or ESP accounts as promptly as practicable, and, in any event, substantially all payments shall be posted no later than three (3) Business Days after receipt.

(ii)    Subject to clause (iii) below, the Servicer shall apply payments received to each Consumer’s or each Applicable ESP’s account in proportion to the charges contained on the outstanding Bill to such Consumer or Applicable ESP.

(iii)    Any amounts collected by the Servicer that represent partial payments of the total Bill to a Consumer or ESP shall be allocated as follows: (A) first to amounts owed to the Issuer, PG&E and any other affiliate of PG&E which is owed “fixed recovery charges” as defined in Section 850(b)(7) of the Wildfire Financing Law and other fees and charges, (excluding any late fees), regardless of age, pro rata in proportion to the ratio of billed amounts for the Fixed Recovery Charges to the total billed amount; then (B) all late charges shall be allocated to the Servicer; provided that penalty payments owed on late payments of Fixed Recovery Charges shall be allocated to the Issuer in accordance with the terms of the Tariff.

(iv)    The Servicer shall hold all over-payments for the benefit of the Issuer and PG&E and shall apply such funds to future Bill charges in accordance with clauses (ii) and (iii) as such charges become due.

(c)    Accounts; Records.

The Servicer shall maintain accounts and records as to the Recovery Property accurately and in accordance with its standard accounting procedures and in sufficient detail (i) to permit reconciliation between payments or recoveries with respect to the Recovery Property and the amounts from time to time remitted to the Collection Account in respect of the Recovery Property and (ii) to permit the FRC Collections held by the Servicer to be accounted for separately from the funds with which they may be commingled, so that the dollar amounts of FRC Collections commingled with the Servicer’s funds may be properly identified and traced.

Annex I-5

(d)    Investment of Fixed Recovery Charge Payments Received.

Prior to each Daily Remittance, the Servicer may invest Fixed Recovery Charge Payments received at its own risk and (except as required by applicable CPUC Regulations) for its own benefit. So long as the Servicer complies with its obligations under Section 6(c), neither such investments nor such funds shall be required to be segregated from the other investment and funds of the Servicer.

(e)    Calculation of Daily Remittance.

(i)    For purposes of calculating the Daily Remittance, the Servicer shall, on each Servicer Business Day, estimate FRC Collections using the then-current Collections Curve, which resulting estimate shall constitute the amount of Estimated FRC Collections for such Servicer Business Day. Pursuant to Section 6.11(c) of the Agreement, not less than semi-annually (except in the case of the First Payment Period, which may be longer than six months), but in no event more than sixty (60) days after each Payment Date, the Servicer shall calculate the amount of Actual FRC Collections for the immediately preceding Reconciliation Period as compared to the Estimated FRC Collections forwarded to the Collection Account in respect of such Reconciliation Period. For purposes of such calculation, the Servicer may calculate Actual FRC Collections using an updated Collections Curve prepared by the Servicer for the most recent six-month period. Such calculation will be provided to the Indenture Trustee in a Reconciliation Certificate in substantially the form appended to the Agreement as Exhibit F.

(ii)    Reserved.

(iii)    All calculations of collections, each update of the Collections Curve and any changes in procedures used to calculate the Estimated FRC Collections pursuant to this Section 6(e) shall be made in good faith, and in the case of any change in procedures pursuant to clause (ii) above, in a manner reasonably intended to provide estimates and calculations that are at least as accurate as those that would be provided on the Billing Commencement Date utilizing the initial procedures.

(f)    Remittances.

(i)    The Issuer shall cause to be established the Collection Account in the name of the Indenture Trustee in accordance with the Indenture.

(ii)    The Servicer shall make remittances to the Collection Account in accordance with Section 6.11 of the Agreement.

(iii)    In the event of any change of account or change of institution affecting any Collection Account, the Issuer shall provide written notice thereof to the Servicer and the Rating Agencies not later than five (5) Business Days from the effective date of such change.

Annex I-6

SCHEDULE 4.01(a)

EXPECTED AMORTIZATION SCHEDULE

See Attached

Schedule 4.01(a)-1

EXPECTED OUTSTANDING PRINCIPAL BALANCE PER TRANCHE

Semi-Annual Payment Date	Tranche A-1 Principal		Tranche A-2 Principal		Tranche A-3 Principal		Tranche A-4 Principal		Tranche A-5 Principal
Closing Date	$	613,080,000	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2023	$	576,590,692	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2023	$	545,225,081	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2024	$	513,188,246	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2024	$	480,465,823	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2025	$	447,043,139	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2025	$	412,905,211	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2026	$	378,036,730	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2026	$	342,422,064	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2027	$	306,045,244	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2027	$	268,889,961	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2028	$	230,939,554	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2028	$	192,177,008	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2029	$	152,584,944	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2029	$	112,145,610	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2030	$	70,840,874	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2030	$	28,652,217	$	600,000,000	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2031	$	0	$	585,560,723	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2031	$	0	$	541,501,586	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2032	$	0	$	496,360,798	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2032	$	0	$	450,111,804	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2033	$	0	$	402,727,397	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2033	$	0	$	354,179,702	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2034	$	0	$	304,440,162	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2034	$	0	$	253,479,516	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2035	$	0	$	201,267,786	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2035	$	0	$	147,774,259	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2036	$	0	$	92,967,465	$	500,040,000	$	1,149,960,000	$	1,036,920,000
12/01/2036	$	0	$	36,815,164	$	500,040,000	$	1,149,960,000	$	1,036,920,000
06/01/2037	$	0	$	0	$	479,324,324	$	1,149,960,000	$	1,036,920,000
12/01/2037	$	0	$	0	$	420,343,814	$	1,149,960,000	$	1,036,920,000
06/01/2038	$	0	$	0	$	359,809,168	$	1,149,960,000	$	1,036,920,000
12/01/2038	$	0	$	0	$	297,679,433	$	1,149,960,000	$	1,036,920,000
06/01/2039	$	0	$	0	$	233,912,581	$	1,149,960,000	$	1,036,920,000
12/01/2039	$	0	$	0	$	168,465,471	$	1,149,960,000	$	1,036,920,000
06/01/2040	$	0	$	0	$	101,293,830	$	1,149,960,000	$	1,036,920,000
12/01/2040	$	0	$	0	$	32,352,217	$	1,149,960,000	$	1,036,920,000
06/01/2041	$	0	$	0	$	0	$	1,111,553,992	$	1,036,920,000
12/01/2041	$	0	$	0	$	0	$	1,038,898,642	$	1,036,920,000
06/01/2042	$	0	$	0	$	0	$	964,267,067	$	1,036,920,000
12/01/2042	$	0	$	0	$	0	$	887,605,514	$	1,036,920,000
06/01/2043	$	0	$	0	$	0	$	808,858,766	$	1,036,920,000
12/01/2043	$	0	$	0	$	0	$	727,970,106	$	1,036,920,000
06/01/2044	$	0	$	0	$	0	$	644,881,275	$	1,036,920,000
12/01/2044	$	0	$	0	$	0	$	559,532,428	$	1,036,920,000
06/01/2045	$	0	$	0	$	0	$	471,862,092	$	1,036,920,000
12/01/2045	$	0	$	0	$	0	$	381,807,123	$	1,036,920,000

Semi-Annual Payment Date	Tranche A-1 Principal		Tranche A-2 Principal		Tranche A-3 Principal		Tranche A-4 Principal		Tranche A-5 Principal
06/01/2046	$	0	$	0	$	0	$	289,302,659	$	1,036,920,000
12/01/2046	$	0	$	0	$	0	$	194,282,073	$	1,036,920,000
06/01/2047	$	0	$	0	$	0	$	96,676,928	$	1,036,920,000
12/01/2047	$	0	$	0	$	0	$	0	$	1,033,336,922
06/01/2048	$	0	$	0	$	0	$	0	$	930,350,740
12/01/2048	$	0	$	0	$	0	$	0	$	824,589,081
06/01/2049	$	0	$	0	$	0	$	0	$	715,977,144
12/01/2049	$	0	$	0	$	0	$	0	$	604,438,116
06/01/2050	$	0	$	0	$	0	$	0	$	489,893,112
12/01/2050	$	0	$	0	$	0	$	0	$	372,261,119
06/01/2051	$	0	$	0	$	0	$	0	$	251,458,944
12/01/2051	$	0	$	0	$	0	$	0	$	127,401,151
06/01/2052	$	0	$	0	$	0	$	0	$	0

EXHIBIT A

MONTHLY SERVICER’S CERTIFICATE

See Attached.

MONTHLY SERVICER’S CERTIFICATE

Dated as of [            ], 20[    ]

Reference is hereby made to the Recovery Property Servicing Agreement, dated as of July 20, 2022 (the “Servicing Agreement”) between Pacific Gas and Electric Company, a California corporation, as Servicer (the “Servicer”), and PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company, as Issuer (the “Issuer”). Capitalized terms used but not defined herein shall have the respective meanings specified in the Servicing Agreement.

Pursuant to Section 3.01(b) of the Servicing Agreement, the Servicer does hereby certify as follows:

Collection Period:

Remittance Dates:

	a. FRCs in Effect	b. FRCs Billed1	c. Estimated FRC Collections Deemed Received2	d. Estimated FRC Collections Remitted3
Total

[Signature Page Follows]

¹  Fixed Recovery Charges billed during Collection Period.

²  Estimated Fixed Recovery Charges deemed collected during Collection Period (i.e., Fixed Recovery Charges collected based upon a Collections Curve.

³  Estimated Fixed Recovery Charges remitted during Collection Period (i.e., Estimated Fixed Recovery Chagres remitted within two Servicer Business Days of deemed collection date).

Exhibit A-2

IN WITNESS HEREOF, the undersigned has duly executed and delivered this Monthly Servicer’s Certificate as of the date first above written.

SERVICER:
PACIFIC GAS AND ELECTRIC COMPANY,
a California corporation
By:
	Name:
	Title:	Treasurer

Signature Page to Monthly Servicer’s Certificate

EXHIBIT B

FORM OF SEMI-ANNUAL SERVICER’S CERTIFICATE

See Attached.

EXHIBIT B-1

SEMI-ANNUAL SERVICER’S CERTIFICATE

Dated as of [            ], 20[    ]

Pursuant to Section 4.01(c)(ii) of the Recovery Property Servicing Agreement, dated as of July 20, 2022 (the “Servicing Agreement”), between, PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, as Servicer (the “Servicer”), and PG&E Wildfire Recovery Funding LLC, as Issuer (the “Issuer”), the Servicer does hereby certify, for the             , 20     Payment Date (the “Current Payment Date”), as follows:

Capitalized terms used herein have their respective meanings as set forth in the Indenture. References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement or the Indenture, as the context indicates.

Collection Periods:                                          to                     

Payment Date:                                                                          

1.	Collections Allocable and Aggregate Amounts Available for the Current Payment Date:
	Fixed Recovery Charge Remittances
	a.	Estimated Monthly Fixed Recovery Charges Remitted for      Collection Period1		$
	b.	Estimated Monthly Fixed Recovery Charges Remitted for      Collection Period		$
	c.	Estimated Monthly Fixed Recovery Charges Remitted for      Collection Period		$
	d.	Estimated Monthly Fixed Recovery Charges Remitted for      Collection Period		$
	e.	Estimated Monthly Fixed Recovery Charges Remitted for      Collection Period		$
	f.	Estimated Fixed Recovery Charges Remitted for      Collection Period2		$
i.	Total Estimated Fixed Recovery Charge Remittances			$
ii.	Investment Earnings on Collection Account
		iii.	Investment Earnings on Capital Subaccount	$
		iv.	Investment Earnings on Excess Funds Subaccount	$
		v.	Investment Earnings on General Subaccount	$
vi.		General Subaccount Balance (sum of i through y above)		$
xii.		Excess Funds Subaccount Balance as of Prior Payment Date		$
xiii.		Capital Subaccount Balance as of Prior Payment Date		$
ix.		Collection Account Balance (sum of vi through vii above)		$
2.	Outstanding Amounts as of Prior Payment Date:
i.	Tranche A-1 Outstanding Amount			$
ii.	Tranche A-2 Outstanding Amount			$
iii.	Tranche A-3 Outstanding Amount			$

¹  Includes amounts calculated for the Reconciliation Period for the prior Collection Period, which was settled in [month-date]. Based upon Estimated Fixed Recovery Charges remitted during Collection Period (i.e., Estimated Fixed Recovery Charges remitted within two Servicer Business Days of deemed collection date).

²  Does not include reconciliation amounts calculated for the Reconciliation Period for such Collection Period, which will be settled in the month following such Collection Period

EXHIBIT B-2

iv.	Tranche A-4 Outstanding Amount	$
v.	Tranche A-5 Outstanding Amount	$
vi.	Aggregate Outstanding Amount of all Tranches of Recovery Bonds	$
3.	Required Funding/Payments as of Current Payment Date:	$
Principal		Principal Due
i.	Tranche A-1	$
ii.	Tranche A-2	$
iii.	Tranche A-3	$
iv.	Tranche A-4	$
v.	Tranche A-5	$
vi.	For all Tranches of Recovery Bonds:	$

Interest Tranche	Interest Rate	Days in Interest Period3	Principal Balance	Interest Due
v. Tranche A-1				$
vi. Tranche A-2				$
vii. Tranche A-3				$
vii. Tranche A-4				$
vii. Tranche A-5				$
viii.	For all Tranches of Recovery Bonds:			$

		Required Level	Funding Required
ix. Capital Subaccount
4.	Allocation of Remittances as of Current Payment Date Pursuant to 8.02(e) of Indenture
i.	Indenture Trustee Fees and Expenses; Indemnity Amounts4		$
ii.	Servicing Fee		$
iii.	Administration Fee		$
iv.	Other Ongoing Financing Costs Expenses		$
v.	Semi-Annual Interest (including any past-due for prior periods)		$
vi.	Return on PG&E Capital Contribution and any remittance of unpaid upfront financing costs

³  On 30/360 day basis for initial payment date; otherwise use one-half of annual rate.

⁴  Subject to $200,000 cap per annum

EXHIBIT B-3

	Tranche	Aggregate	Per $1000 of Original Principal Amount
1.	Tranche A-1 Interest Payment	$	$
2.	Tranche A-2 Interest Payment	$	$
3.	Tranche A-3 Interest Payment	$	$
4.	Tranche A-4 Interest Payment	$	$
5.	Tranche A-5 Interest Payment	$	$

vii.	Principal Due and Payable as a Result of an Event of Default or on Final Maturity Date			$
	Tranche	Aggregate	Per $1000 of Original Principal Amount
1.	Tranche A-1 Principal Payment	$	$
2.	Tranche A-2 Principal Payment	$	$
3.	Tranche A-3 Principal Payment	$	$
4.	Tranche A-4 Principal Payment	$	$
5.	Tranche A-5 Principal Payment	$	$
viii.	Semi-Annual Principal			$
ix.	Deposit to Excess Funds Subaccount			$
x.	Released to Issuer upon Retirement of all Notes			$
xi.	Aggregate Remittances as of Current Payment Date			$
6.	Subaccount Withdrawals as of Current Payment (if applicable, pursuant to Section 8.02(e) of Indenture:
i.	Excess Funds Subaccount			$
ii.	Capital Subaccount			$
iii.	Total Withdrawals			$
7.	Outstanding Amount and Collection Account Balance as of Current Payment Date (after giving effect to payments to be made on such Payment Date):
i.	Tranche A-1			$
ii.	Tranche A-2			$
iii.	Tranche A-3			$
iv.	Tranche A-4			$
v.	Tranche A-5			$
vi.	Aggregate Outstanding Amount of all Tranches of Recovery Bonds:			$

EXHIBIT B-4

vii.	Excess Funds Subaccount Balance			$
viii.	Capital Subaccount Balance			$
ix.	Aggregate Collection Account Balance			$
8.	Shortfalls in Interest and Principal Payments as of Current Payment Date
	i.	Semi-annual Interest
			Tranche A-1 Interest Payment	$
			Tranche A-2 Interest Payment	$
			Tranche A-3 Interest Payment	$
			Tranche A-4 Interest Payment	$
			Tranche A-5 Interest Payment	$
	ii.	Semi-Annual Principal
			Tranche A-1 Principal Payment	$
			Tranche A-2 Principal Payment	$
			Tranche A-3 Principal Payment	$
			Tranche A-4 Principal Payment	$
			Tranche A-5 Principal Payment	$
8.	Shortfalls in Required Subaccount Levels as of Current Payment Date
	iii.	Capital Subaccount

EXHIBIT B-5

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Semi-Annual Servicer’s Certificate as of the date first above written.

SERVICER:
PACIFIC GAS AND ELECTRIC COMPANY,
a California corporation
By:
	Name:
	Title:

EXHIBIT B-6

EXHIBIT C

SERVICER’S REGULATION AB CERTIFICATE

The undersigned hereby certifies that he/she is the duly elected and acting [                    ] of PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, as servicer (the “Servicer”), under the Recovery Property Servicing Agreement dated as of July 20, 2022 (the “Servicing Agreement”) between the Servicer and PG&E Wildfire Recovery Funding LLC, as issuer (the “Issuer”), and further that:

1.     The undersigned (a) is responsible under Item 1122(a) of Regulation AB for assessing the Servicer’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”) and (b) a review of the Servicer’s activities during the Assessment Period (defined below) and its performance under the Servicing Agreement has been made under the supervision of the undersigned in accordance with Item 1123 of Regulation AB.

2.     With respect to each of the Servicing Criteria, the undersigned has made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year covered by the Depositor’s annual report on Form 10-K Report (such fiscal year, the “Assessment Period”):

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	Not applicable; no servicing activities were outsourced.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.	Not applicable; documents do not provide for a back-up servicer.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function	Not applicable; CPUC rules impose credit standards on

EXHIBIT C-1

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	retail electric providers who handle customer collections and govern performance requirements of utilities.
1122(d)(1)(v)	Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information.	Applicable
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	Applicable
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	Not applicable; no advances by the Servicer are permitted under the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	Applicable, but no current assessment is required since transaction accounts are maintained by and in the name of the Indenture Trustee.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	Applicable, but no current assessment required; all “custodial accounts” are maintained by the Indenture Trustee.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	Not applicable; all transfers made by wire transfer.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts.	Applicable; assessment below.

EXHIBIT C-2

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	These reconciliations (A) are mathematically accurate; (B) are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) are reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	Applicable; assessment below.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	Not applicable; investor records maintained by Indenture Trustee.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	Applicable; assessment below.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	Applicable; assessment below.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.	Applicable; assessment below.

EXHIBIT C-3

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	Not applicable; no removals or substitutions of recovery property are contemplated or allowed under the transaction documents.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.	Applicable; assessment below.
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	Not applicable; because underlying obligation (fixed recovery charge) is not an interest bearing instrument.
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool asset (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	Applicable; assessment below
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	Applicable; limited assessment below. Servicer actions governed by CPUC regulations.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to availability of “true-up” mechanism.

EXHIBIT C-4

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	Not applicable; fixed recovery charges are not interest bearing instruments.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool asset, or such other number of days specified in the transaction agreements.	Applicable; Servicer maintains ESP deposit accounts in accordance with CPUC rules and regulations.
1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	Not applicable; Servicer does not make payments on behalf of obligors.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction documents.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectable accounts are recognized and recorded in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	Not applicable; no external enhancement is required under the transaction documents.

EXHIBIT C-5

3.     To the best of the undersigned’s knowledge, based on such review, the Servicer is in compliance in all material respects with the applicable Servicing Criteria set forth above as of and for the period ending the end of the fiscal year covered by the Depositor’s annual report on Form 10-K[, except with respect to the matters identified in the list of Servicer Defaults contained in Annex A attached hereto (if any) and as otherwise set forth below.]⁵

4.     A registered public accounting firm has issued an attestation report on the undersigned’s assessment of compliance with the applicable Servicing Criteria set forth above as of and for the period ending the end of the fiscal year covered by the Depositor’s annual report on Form 10-K.

[Signature Page Follows]

⁵  If the Servicer is not in compliance in all material respects with the Servicing Criteria, include description of any material instance of noncompliance.

EXHIBIT C-6

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer’s Regulation AB Certificate as of the date first above written.

SERVICER: PACIFIC GAS AND ELECTRIC COMPANY a California corporation
By:
	Name:
	Title:

EXHIBIT C-7

ANNEX A

LIST OF SERVICER DEFAULTS

The following Servicer Defaults, or events which with the giving of notice, the lapse of time, or both, would become Servicer Defaults known to the undersigned occurred during the year ended [                    ]:

Nature of Default Status

ANNEX A-1

EXHIBIT D

FORM OF ROUTINE TRUE-UP MECHANISM ADVICE LETTER

[date]

Application                     -E

(Pacific Gas and Electric Company ID U 39-E)

Public Utilities Commission of the State of California

Subject:  Routine [Annual (and at least quarterly beginning 12 months prior to the last scheduled final payment date of the last maturing tranche of a series of Recovery Bonds)] / [Semi-Annual] / [Interim] True-Up Mechanism Advice Letter for Fixed Recovery Charges True-up Mechanism

Pursuant to California Public Utilities Commission (CPUC) Decision (D.) 21-05-015 (Decision), Pacific Gas and Electric Company (PG&E), as servicer of the Recovery Bonds (Recovery Bonds) and on behalf of the Special Purpose Entity, hereby applies for adjustment to the Fixed Recovery Charge for series                     , Tranche(s)                      of the Recovery Bonds.

Purpose:

This advice letter establishes revised Fixed Recovery Charges and Fixed Recovery Tax Amounts (FRTAs) for rate schedules for Consumers, as set forth in D.21-005-015.

Background:

In D.21-005-015, the CPUC granted PG&E authority to issue Recovery Bonds to pay Catastrophic Wildfire Amounts and associated financing costs, and consequently to reduce PG&E’s electric rates.

Recovery Bonds are securities that are backed by the cash flows generated by a specific asset that will be sold by PG&E to a Special Purpose Entity that issued the Recovery Bonds secured by this asset. The asset sold is Recovery Property, a current property right that was created by Article 5.8 as the right, title and interest in and to all (i) Fixed Recovery Charges established pursuant to the Financing Order, including all rights to obtain adjustments, and (ii) revenues, collections, claims, payments, moneys, or proceeds of or arising from the Fixed Recovery Charges that will cover debt service and all related Recovery Bond costs.

In D.21-005-015, the CPUC authorized PG&E to submit Routine True-up Mechanism Advice Letters at least annually, and more frequently as permitted in the Financing Order, (i) at least 50 days before the last day of February for annual submissions, (ii) at least 50 days before August 31 for semi-annual submissions and (iii) at least 50 days before the end of the month for interim submissions.

EXHIBIT D-1

These advice letters are intended to ensure that the actual revenues collected under the Fixed Recovery Charges will be sufficient to make all scheduled payments of Bond principal, interest, and other financing costs on a timely basis during the current or next succeeding payment period or to replenish any draws upon the capital subaccount. Routine True-up Mechanism Advice Letters are those where PG&E uses the method found reasonable by the CPUC in D.21-005-015 to revise existing Fixed Recovery Charges and FRTAs.

Using the method approved by the CPUC in D.21-005-015, this Advice Letter modifies the variables used in the Fixed Recovery Charge calculations and provides the resulting modified Fixed Recovery Charges.

Table 1 shows the revised assumptions for each of the variables used in calculating the Fixed Recovery Charges for Consumers. Exhibit 1 shows the revised payment schedule.

TABLE 1

Input Values For Revised Fixed Recovery Charges

kWh sales for the applicable period

Percent of Consumers’ revenue written off (Res/Non-Res)

Percent of revenue requirement allocated to Consumers

Percent of Consumers’ billed amounts expected to be uncollected

Percent of billed amounts collected in current month

Percent of billed amounts collected in second month after billing

Percent of billed amounts collected in third month after billing

Percent of billed amounts collected in fourth month after billing

Percent of billed amounts collected in fifth month after billing

Percent of billed amounts collected in sixth month after billing

Percent of billed amounts remaining less uncollectibles

Ongoing Financing Costs for the applicable period

Expected Fixed Recovery Charges outstanding balance as of    /    /     Over- or undercollection of principal from previous Fixed Recovery Charge collections to be reflected in the new Fixed Recovery Charges

Table 2 shows the revised Fixed Recovery Charges calculated for Consumers. The Fixed Recovery Charge and FRTA, if any, calculations are shown in Exhibit 2.

TABLE 2

Consumer Fixed Recovery Charge6	¢	/ kWh
Consumers Fixed Recovery Tax Amount	¢	/ kWh

Exhibit 3 includes proposed changes to Part IX of PG&E’s Preliminary Statement to show Fixed Recovery Charges and FRTAs, if any, to be effective March 1, [September 1, if semi-annual Routine True-Up Mechanism Advice Letter] [or month, if interim Routine True-Up Mechanism Advice Letter], [year].

⁶  For residential rates, PG&E proposed to retain the total rate relationships by tier determined by D. 15-07-001 with the addition of the Fixed Recovery Charges and Customer Credit.

EXHIBIT D-2

Effective Date:

[If Annual Routine True-Up Mechanism Advice Letter]

In accordance with D.21-005-015, Routine True-Up Mechanism Advice Letters for required annual Fixed Recovery Charge adjustments shall be submitted at least 50 days before last day of February. These Tier 1 advice letters are to receive a CPUC Energy Division negative or affirmative response within 20 days of submission. In the absence of a CPUC Energy Division negative response, PG&E’s timely revision to the Fixed Recovery Charges shall automatically go into effect the March 1st immediately following the submission. Therefore, these Fixed Recovery Charges and any FRTAs shall be effective March 1, [year] through February 28, [year], unless they are changed by an interim adjustment prior to February 28, [year].⁷

[If Semi-Annual Routine True-Up Mechanism Advice Letter]

In accordance with D.21-005-015, semi-annual Routine True-Up Mechanism Advice Letters for interim Fixed Recovery Charge adjustments shall be submitted at least 50 days before the end of [August]. These Tier 1 advice letters are to receive a CPUC Energy Division negative or affirmative response within 20 days of submission. In the absence of a CPUC Energy Division negative response, PG&E’s timely revision to the Fixed Recovery Charges shall automatically go into effect the September 1st immediately following the submission. Therefore these Fixed Recovery Charges shall be effective September 1, [year] through February 28, [year], unless they are changed by an interim adjustment prior to February 28, [year].⁸

[If Interim Routine True-Up Mechanism Advice Letter]

In accordance with D.21-005-015, interim Routine True-Up Mechanism Advice Letters for interim Fixed Recovery Charge adjustments shall be submitted at least 50 days before the proposed effective date (which, for efficacy of reporting, will be the first day of a month). These Tier 1 advice letters are to receive a CPUC Energy Division negative or affirmative response within 20 days of submission. In the absence of a CPUC Energy Division negative response, PG&E’s timely revision to the Fixed Recovery Charges shall automatically go into effect on the proposed effective date. Therefore, these Fixed Recovery Charges shall be effective [month] 1, [year] through February 28, [year], unless they are changed by an interim adjustment prior to February 28, [year].⁹

⁷  February 29 to be used in a Leap Year.

⁸  February 29 to be used in a Leap Year.

⁹  February 29 to be used in a Leap Year.

EXHIBIT D-3

Description of Exhibits

Exhibit 1 to this Advice Letter presents the revised principal amortization schedule for the Recovery Bonds.

Exhibit 2 presents the revised Fixed Recovery Charge calculations.

Exhibit 3 provides proposed changes to Part IX of PG&E’s Preliminary Statement.

Notice

In accordance with General Order 96-B Section 4.4, a copy of this Advice Letter is being sent electronically and via U.S. mail to parties shown on the attached list. Address changes should be directed to PG&E at email address PGETariffs@pge.com. Advice Letter submissions can also be accessed electronically at: https://www.pge.com/tariffs/advice-letters.page.

Vice President – Regulatory Relations

Attachments

cc: Service List for A.21-01-004.

EXHIBIT D-4

Exhibit 1

Revised Expected Principal Amount Amortization

Series                     , Tranche                     

EXHIBIT D-5

Exhibit 2

Revised Amounts Receivable And Expected Principal Amount Amortization

The total amount payable to the owner of the Recovery Property, or its assignee(s), pursuant to this letter is a $ principal amount, plus interest on such principal amount, plus other Financing Costs, to be obtained from Fixed Recovery Charge calculated in accordance with D.21-05-015.

The Fixed Recovery Charges shall be adjusted from time to time, at least annually, via the Fixed Recovery Charge True-Up Mechanism in accordance with D.21-05-015.

The following amounts are scheduled to be paid by the Bond Trustee from Fixed Recovery Charges it has received. These payment amounts include principal plus interest and other financing costs.

Payment Date	Receipt Amount	Payment Amount	Outstanding Principal
[date 1]	[$receipt 1]	[$payment 1]	[$outstanding principal 1]
●	●	●	●
●	●	●	●
●	●	●	●
[date n]	[$receipt n]	[$payment n]	[$outstanding principal n]
			[$0]

EXHIBIT D-6

Exhibit 3

Proposed Changes to Part IX of PG&E’s Preliminary Statement

EXHIBIT D-7

EXHIBIT E

FORM OF NON-ROUTINE TRUE-UP MECHANISM ADVICE LETTER

[date]

Application                     -E

(Pacific Gas and Electric Company ID U 39-E)

Public Utilities Commission of the State of California

Subject:  Non-Routine True-Up Mechanism Advice Letter

Pursuant to California Public Utilities Commission (CPUC) Decision (D.) 21-05-015 (Decision), Pacific Gas and Electric Company (PG&E), as servicer of the Recovery Bonds (Recovery Bonds) and on behalf of the Special Purpose Entity, hereby applies for adjustment to the Fixed Recovery Charge for series , Tranche(s) of the Recovery Bonds.

Purpose

This Advice Letter establishes revised Fixed Recovery Charges for rate schedules for Consumers, as set forth in D.21-05-015.

Background

In D.21-05-015, the CPUC granted PG&E authority to issue Recovery Bonds to pay Catastrophic Wildfire Amounts and associated financing costs, and consequently to reduce PG&E’s electric rates.

Recovery Bonds are securities that are backed by the cash flows generated by a specific asset that will be sold by PG&E to a Special Purpose Entity that issued the Recovery Bonds secured by this asset. The asset sold is Recovery Property, a current property right that was created by Article 5.8 as the right, title and interest in and to all (i) Fixed Recovery Charges established pursuant to the Financing Order, including all rights to obtain adjustments, and (ii) revenues, collections, claims, payments, moneys, or proceeds of or arising from the Fixed Recovery Charges that will cover debt service and all related Recovery Bond costs.

In D.21-05-015, the CPUC authorized PG&E to submit Non-Routine True-up Mechanism Advice Letters as permitted in the Financing Order, to propose revisions to the logic, structure and components of the cash flow model adopted by the Financing Order. These submissions are intended to ensure that the actual revenues collected under the Fixed Recovery Charges will be sufficient to make all scheduled payments of Bond principal, interest, and other financing costs on a timely basis during the current or next succeeding payment period or to replenish any draws upon the capital subaccount.

EXHIBIT E-1

Using the cash flow model attached to this Non-Routine True-Up Mechanism Advice Letter as Exhibit 1, this Advice Letter modifies the variables used in the Fixed Recovery Charge calculations and provides the resulting modified Fixed Recovery Charges.

Table 1 shows the revised assumptions for each of the variables used in calculating the Fixed Recovery Charges for Consumers. Exhibit 2 shows the revised payment schedule.

TABLE 1

Input Values For Revised Fixed Recovery Charges

kWh sales for the applicable period

Percent of Consumers’ revenue written off (Res/Non-Res)

Percent of revenue requirement allocated to Consumers

Percent of Consumers’ billed amounts expected to be uncollected

Percent of billed amounts collected in current month

Percent of billed amounts collected in second month after billing

Percent of billed amounts collected in third month after billing

Percent of billed amounts collected in fourth month after billing

Percent of billed amounts collected in fifth month after billing

Percent of billed amounts collected in sixth month after billing

Percent of billed amounts remaining less uncollectibles

Ongoing Financing Costs for the applicable period

Expected Fixed Recovery Charges outstanding balance as of    /    /     Over- or undercollection of principal from previous Fixed Recovery Charge collections to be reflected in the new Fixed Recovery Charges

Table 2 shows the revised Fixed Recovery Charges calculated for Consumers. The Fixed Recovery Charge calculations are shown in Exhibit 3.

TABLE 2

Consumer Fixed Recovery Charge¹⁰ ¢  / kWh

Exhibit 4 includes proposed changes to Part IX of PG&E’s Preliminary Statement to show Fixed Recovery Charges to be effective on [Date].

Effective Date

In accordance with D.21-05-015, Non-Routine True-Up Mechanism Advice Letters for Fixed Recovery Charge adjustments shall be submitted at least 90 days before the date when the proposed changes would become effective. If the CPUC provides a resolution adopting the proposed changes in the Non-Routine True-Up Mechanism Advice Letter, PG&E, or a successor servicer, may implement Fixed Recovery Charge adjustments proposed in this Non-Routine True-Up Mechanism Advice Letter on [Date].

¹⁰  For residential rates, PG&E proposed to retain the total rate relationships by tier determined by D.15-07-001 with the addition of the Fixed Recovery Charges and Customer Credit.

EXHIBIT E-2

Absent a CPUC resolution that adopts, modifies, or rejects the proposed revisions to the cash flow model, PG&E or a successor servicer may implement the adjustments on the effective date identified in the Non-Routine True-Up Mechanism Advice Letter if that date is at least 90 days after the date of submission.

Description of Exhibits

Exhibit 1 to this Advice Letter presents the new cash flow model for the Fixed Recovery Charges.

Exhibit 2 to this Advice Letter presents the revised principal amortization schedule for the Recovery Bonds.

Exhibit 3 presents the revised Fixed Recovery Charge calculations.

Exhibit 4 provides proposed changes to Part IX of PG&E’s Preliminary Statement.

Notice

In accordance with General Order 96-B Section 4.4, a copy of this Advice Letter is being sent electronically and via U.S. mail to parties shown on the attached list. Address changes should be directed to PG&E at email address PGETariffs@pge.com. Advice Letter submissions can also be accessed electronically at: https://www.pge.com/tariffs/advice-letters.page.

Vice President – Regulatory Relations

Attachments

cc:     Service List for A.21-01-004.

EXHIBIT E-3

Exhibit 1

New Cash Flow Model Description for the Fixed Recovery Charges

EXHIBIT E-4

Exhibit 2

Revised Expected Principal Amount Amortization

Series                     , Tranches                     

EXHIBIT E-5

Exhibit 3

Revised Amounts Receivable And Expected Principal Amount Amortization

The total amount payable to the owner of the Recovery Property, or its assignee(s), pursuant to this letter is a $[        ] principal amount, plus interest on such principal amount, plus other Financing Costs, to be obtained from a Fixed Recovery Charge calculated in accordance with D.21-05-015.

The Fixed Recovery Charges shall be adjusted from time to time, at least annually, via the Fixed Recovery Charge True-Up Mechanism in accordance with D.21-05-015.

The following amounts are scheduled to be paid by the Bond Trustee from Fixed Recovery Charges it has received. These payment amounts include principal plus interest and other financing costs.

Payment Date	Receipt Amount	Payment Amount	Outstanding Principal
[date 1]	[$receipt 1]	[$payment 1]	[$outstanding principal 1]
●	●	●	●
●	●	●	●
●	●	●	●
[date n]	[$receipt n]	[$payment n]	[$outstanding principal n]
			[$0]

EXHIBIT E-6

Exhibit 4

Proposed changes to Part IX of PG&E’s Preliminary Statement

EXHIBIT E-7

EXHIBIT F

RECONCILIATION CERTIFICATE

Dated as of [            ], 20[    ]

Reference is hereby made to the Recovery Property Servicing Agreement, dated as of July 20, 2022 (the “Servicing Agreement”) between Pacific Gas and Electric Company, a California corporation, as Servicer (the “Servicer”), and PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company, as Issuer (the “Issuer”). Capitalized terms used but not defined herein shall have the respective meanings specified in the Servicing Agreement.

Pursuant to Section 4.01(c)(iv) of the Servicing Agreement the Servicer does hereby certify as follows:

Reconciliation Period: [Applicable Period]

	a. Estimated FRC Collections Received Total ($)	b. Actual Fixed Recovery Charge Payments Received ($)	c. (Remittance Shortfall) or Excess Remittance for this Reconciliation Period ($)11
Total

d. Daily remittances previously made by the Servicer to the Collection Account in respect of this Reconciliation Period (a):

e. If (a>b), (c) equals net amount due to the Servicer from the Collection Amount:

f. If (b>a), (c) equals net amount due from the Servicer to the Collection Amount:

Inputs for Reconciliation Period

a. Average Days Sales Outstanding

b. Write-offs:

[Signature Page Follows]

¹¹  A Remittance Shortfall will be expressed as a negative number. Excess Remittance will be expressed as a positive number.

Exhibit F

IN WITNESS HEREOF, the undersigned has duly executed and delivered this Reconciliation Certificate as of the date first above written.

SERVICER:
PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
By:
	Name:
	Title:	Treasurer

EXHIBIT F

EX-10.2

Exhibit 10.2

RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT

by and between

PG&E WILDFIRE RECOVERY FUNDING LLC,

as Issuer

and

PACIFIC GAS AND ELECTRIC COMPANY,

as Seller

Dated as of July 20, 2022

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			1
SECTION 1.01.	Definitions.		1
SECTION 1.02.	Other Definitional Provisions.		2
ARTICLE II CONVEYANCE OF RECOVERY PROPERTY			2
SECTION 2.01.	Conveyance of Recovery Property.		2
SECTION 2.02.	Conditions to Sale of Recovery Property.		3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER			4
SECTION 3.01.	Organization and Good Standing.		4
SECTION 3.02.	Due Qualification.		5
SECTION 3.03.	Power and Authority.		5
SECTION 3.04.	Binding Obligation.		5
SECTION 3.05.	No Violation.		5
SECTION 3.06.	No Proceedings.		6
SECTION 3.07.	Consents and Approvals.		6
SECTION 3.08.	The Recovery Property.		6
SECTION 3.09.	Change in Law.		9
SECTION 3.10.	Limitations on Representations and Warranties.		9
ARTICLE IV COVENANTS OF THE SELLER			10
SECTION 4.01.	Existence.		10
SECTION 4.02.	No Liens.		10
SECTION 4.03.	Delivery of Collections; Sale of Certain Assets.		10
SECTION 4.04.	Notice of Liens.		11
SECTION 4.05.	Compliance with Law.		11
SECTION 4.06.	Covenants Related to Recovery Bonds and Recovery Property.		11
SECTION 4.07.	Protection of Title.		12
SECTION 4.08.	Nonpetition Covenants.		13
SECTION 4.09.	Taxes.		13
SECTION 4.10.	Notice of Breach to Rating Agencies, Etc.		13
SECTION 4.11.	Use of Proceeds.		13
SECTION 4.12.	Further Assurances.		14
ARTICLE V THE SELLER			14
SECTION 5.01.	Liability of Seller; Indemnities.		14
SECTION 5.02.	Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller.		15
SECTION 5.03.	Limitation on Liability of Seller and Others.		15
ARTICLE VI MISCELLANEOUS PROVISIONS			15
SECTION 6.01.	Amendment.		15

i

SECTION 6.02.	Notices.	16
SECTION 6.03.	Assignment.	17
SECTION 6.04.	Limitations on Rights of Third Parties.	17
SECTION 6.05.	Severability.	17
SECTION 6.06.	Separate Counterparts.	17
SECTION 6.07.	Headings.	17
SECTION 6.08.	Governing Law.	18
SECTION 6.09.	Assignment to Indenture Trustee.	18
SECTION 6.10.	Limitation of Liability.	18
SECTION 6.11.	Waivers.	18

ii

This RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT, dated as of July 20, 2022 (this “Agreement”), is between PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Issuer”), and PACIFIC GAS AND ELECTRIC COMPANY, a California corporation (together with its successors in interest to the extent permitted hereunder, the “Seller” or “PG&E”).

RECITALS

WHEREAS, the Issuer desires to purchase the Recovery Property created pursuant to the Wildfire Financing Law and the Financing Order and as further described in the Issuance Advice Letter;

WHEREAS, the Seller is willing to sell its rights and interests in and to the Recovery Property to the Issuer whereupon such rights and interests will become the Recovery Property;

WHEREAS, the Issuer, in order to finance the purchase of the Recovery Property, will enter into that certain Indenture, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) between the Issuer and The Bank of New York Mellon Trust Company, N.A., a national banking association, in its capacity as Indenture Trustee (the “Indenture Trustee”) and in its separate capacity as a securities intermediary (the “Securities Intermediary”), and issue the Recovery Bonds thereunder and under the Series Supplement (as defined in the Indenture); and

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

AGREEMENT

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

ARTICLE I

DEFINITIONS

SECTION 1.01.    Definitions.

(a)    Unless otherwise defined herein, capitalized terms used herein shall have the meanings specified in the Indenture (including Appendix A attached thereto).

(b)    Whenever used in this Agreement, the following words and phrases shall have the following meanings:

“Financing Order” means the order of the CPUC, D.21-05-015, issued on May 6, 2021, which became final and non-appealable on February 28, 2022.

“Fixed Recovery Charges” means the Fixed Recovery Charges authorized to be imposed and collected pursuant to the Financing Order and the Issuance Advice Letter.

“Issuance Advice Letter” means the Issuance Advice Letter filed with the CPUC pursuant to the Wildfire Financing Law and the Financing Order with respect to the Recovery Bonds.

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

“Tariff” means the rate tariff filed with the CPUC as the Issuance Advice Letter delivered pursuant to the Financing Order to evidence the Fixed Recovery Charges, as amended.

SECTION 1.02.    Other Definitional Provisions.

(a)    All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(b)    The words “hereof,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”.

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

ARTICLE II

CONVEYANCE OF RECOVERY PROPERTY

SECTION 2.01.    Conveyance of Recovery Property.

(a)    In consideration of the Issuer’s payment to the Seller of $3,880,516,537, subject to the conditions specified in Section 2.02, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse except as otherwise set forth herein, all right, title and interest of the Seller in and to the Recovery Property (such sale, transfer, assignment, set over and conveyance of the Recovery Property includes, to the fullest extent permitted by the

2

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

(b)    Subject to Section 2.02, the Issuer does hereby purchase the Recovery Property from the Seller for the consideration set forth in Section 2.01(a).

SECTION 2.02.    Conditions to Sale of Recovery Property.

The obligation of the Issuer to purchase Recovery Property on the Closing Date shall be subject to the satisfaction of each of the following conditions:

(i)    on or prior to the Closing Date, the Seller must duly execute and deliver this Agreement to the Issuer;

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

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

(iv)    as of the Closing Date, the Seller is not insolvent and will not have been made insolvent by such sale and the Seller is not aware of any pending insolvency with respect to itself;

(v)    as of the Closing Date, the representations and warranties of the Seller set forth in this Agreement shall be true and correct with the same force and effect as if made on the Closing Date (except to the extent that they relate to an earlier date); on and as of the Closing Date no breach of any covenant or agreement of the Seller contained in this Agreement has occurred and is continuing; and no Servicer Default shall have occurred and be continuing;

(vi)    as of the Closing Date, (A) the Issuer shall have sufficient funds available to pay the purchase price for the Recovery Property to be conveyed on such date and (B) all conditions to the issuance of the Recovery Bonds intended to provide such funds set forth in the Indenture shall have been satisfied or waived;

(vii)    on or prior to the Closing Date, the Seller shall have taken all action required to transfer to the Issuer ownership of the Recovery Property to be conveyed on such date, free and clear of all Liens other than Liens created by the Issuer pursuant to the Basic Documents and to

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perfect such transfer, including, without limitation, filing any statements or filings under the Wildfire Financing Law or the UCC; and the Issuer or the Servicer, on behalf of the Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a first priority perfected security interest in the Recovery Bond Collateral and maintain such security interest as of such date;

(viii)    the Seller shall have received and delivered to the Issuer and the Indenture Trustee an opinion or opinions of outside tax counsel (as selected by the Seller, and in form and substance reasonably satisfactory to the Issuer and the Underwriters) to the effect that (A) the Issuer will not be subject to United States federal income tax as an entity separate from its sole owner and that the Recovery Bonds will be treated as debt of the Issuer’s sole owner for United States federal income tax purposes, and (B) the issuance of the Recovery Bonds will not result in gross income to the Seller. The opinion of outside tax counsel described above may, if the Seller so chooses, be conditioned on the receipt by the Seller of one or more letter rulings from the Internal Revenue Service (unless the Internal Revenue Service has announced that it will not rule on the issues described in this paragraph) and in rendering such opinion outside tax counsel shall be entitled to rely on the rulings contained in such ruling letters and to rely on the representations made, and information supplied, to the Internal Revenue Service in connection with such letter rulings;

(ix)    on and as of the Closing Date, each of the LLC Agreement, the Servicing Agreement, this Agreement, the Indenture, the Financing Order, the Tariff and the Wildfire Financing Law shall be in full force and effect; and

(x)    the Seller shall have delivered to the Indenture Trustee and the Issuer an Officers’ Certificate confirming the satisfaction of each condition precedent specified in this Section 2.02.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

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

SECTION 3.01.    Organization and Good Standing.

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

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(b)    After giving effect to the sale of the Recovery Property under this Agreement, the Seller: (i) is solvent and expects to remain solvent, (ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes, (iii) is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small capital, (iv) reasonably believes that it will be able to pay its debts as they become due and (v) is able to pay its debts as they mature and does not intend to incur, nor does it believe that it will incur, indebtedness that it will not be able to repay at its maturity.

SECTION 3.02.    Due Qualification.

The Seller is duly qualified to do business and is in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Seller’s business, operations, assets, revenues or properties).

SECTION 3.03.    Power and Authority.

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

SECTION 3.04.    Binding Obligation.

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

SECTION 3.05.    No Violation.

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

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SECTION 3.06.    No Proceedings.

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

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

SECTION 3.07.    Consents and Approvals.

(a)    The Seller filed its written consent to the terms and conditions to the Financing Order on May 14, 2021, as required by Section 850.1(d) of the Wildfire Financing Law.

(b)    No governmental approvals, authorizations, consents, orders or other actions or filings, other than filings under the Wildfire Financing Law, are required for the Seller to execute, deliver and perform its obligations under this Agreement except those which have been obtained or made or are required to be made by the Seller in the future pursuant to this Agreement.

SECTION 3.08.    The Recovery Property.

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

(b)    Title. It is the intention of the parties hereto that (other than for federal income tax purposes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes) the transfers and assignments herein contemplated each constitute a sale and absolute transfer of the Recovery Property from the Seller to the Issuer and that no interest in, or right or title to, the Recovery Property shall be part of the Seller’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No portion of the Recovery Property has been sold, transferred, assigned or pledged or otherwise conveyed by the Seller to any Person other than the Issuer, and no security agreement, financing statement or equivalent security or lien instrument listing the Seller as debtor covering all or any part of the Recovery Property is on file or of record in any jurisdiction, except such as may have been filed, recorded

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or made in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents. The Seller has not authorized the filing of and is not aware (after due inquiry) of any financing statement against it that includes a description of collateral including the Recovery Property other than any financing statement filed, recorded or made in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents. The Seller is not aware (after due inquiry) of any judgment or tax lien filings against either the Seller or the Issuer. At the Closing Date, immediately prior to the sale of the Recovery Property hereunder, the Seller is the original and the sole owner of the Recovery Property free and clear of all Liens and rights of any other Person, and no offsets, defenses or counterclaims exist or have been asserted with respect thereto.

(c)    Transfer Filings. On the Closing Date, immediately upon the sale under this Agreement, the Recovery Property transferred on the Closing Date shall be validly transferred and sold to the Issuer, the Issuer shall own all such Recovery Property, free and clear of all Liens, except for the Lien arising under Section 850.3(g) of the Wildfire Financing Law, the Financing Order and the Issuance Advice Letter, and all filings (including filings with the Secretary of State of California under the Wildfire Financing Law) necessary in any jurisdiction to give the Issuer a perfected ownership interest in the Recovery Property shall have been made.

(d)    Financing Order, Issuance Advice Letter and Tariff; Other Approvals. Under the laws of the State of California (including the Wildfire Financing Law) and the United States in effect on the Closing Date: (i) the Financing Order and the Issuance Advice Letter pursuant to which the rights and the interests of the Seller have been created, including the right to impose, collect and receive the Fixed Recovery Charges and the interest in and to the Recovery Property is in full force and effect, and the Seller has validly and irrevocably consented to the terms of the Financing Order, (ii) as of the Closing Date, subject to the limitations set forth in Section 850.1(g) of the Wildfire Financing Law, the Recovery Bonds are entitled to the protection provided in the first sentence of Section 850.1(e) and the first sentence of Section 850.2(f) of the Wildfire Financing Law, (iii) as of the Closing Date, the Tariff has been filed with the CPUC in accordance with the Financing Order, (iv) the process by which the Financing Order was approved and the Financing Order, the Issuance Advice Letter and the Tariff comply with all applicable laws and regulations and the Seller has provided the certification to the CPUC required by the Issuance Advice Letter, (v) the Issuance Advice Letter and the Tariff have been filed in accordance with the Financing Order, (vi) no other approval, authorization, consent, order or other action of, or filing with any governmental authority is required on the part of the Seller in connection with the creation of the Recovery Property, except those that have been obtained or made, and (vii) under the “contract clause” of the U.S. Constitution and the “contract clause” of the California Constitution, Holders of the Recovery Bonds could, absent a demonstration by the State of California that such action is necessary to further a significant and legitimate public purpose, successfully challenge the constitutionality of any legislative action that limits, alters, impairs or reduces the value of the recovery property or the fixed recovery charges so as to impair (a) the terms of the indenture or the bonds or (b) the rights and remedies of the bondholders determined by such court to limit, alter, impair or reduce the value of the recovery property or the fixed recovery charges prior to the time that the bonds are fully paid and discharged.

(e)    State Action. Under the Wildfire Financing Law, the State of California has pledged that it will not take or permit any action that would impair the value of the Recovery Property transferred on such date, or, except as permitted by Section 850.1(g) of the Wildfire

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Financing Law, reduce, alter or impair the Fixed Recovery Charges relating to the Recovery Property until the principal, interest and premium and any other charges incurred and contracts to be performed in connection with the Recovery Bonds relating to the Recovery Property have been paid and performed in full. Under the laws of the State of California and the United States, any law enacted by the State of California, whether by legislation or voter initiative, that repeals or amends the Wildfire Financing Law or take any other action in contravention of the State pledge would constitute a “taking,” for which just compensation must be paid, if, for a public use, either the law (a) constituted a permanent appropriation of a substantial property interest of the bondholders in the recovery property or denied all economically productive use of the Recovery Property; (b) destroyed the recovery property other than in response to emergency conditions; or (c) substantially reduced, altered or impaired the value of the recovery property so as to unduly interfere with the reasonable expectations of the bondholders arising from their investments in the Recovery Bonds. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Recovery Bonds.

(f)    Assumptions. On the Closing Date, based upon the information available to the Seller on such date, the assumptions used in calculating the Fixed Recovery Charges are reasonable and are made in good faith. Notwithstanding the foregoing, the Seller makes no representation or warranty, express or implied, that amounts actually collected arising from those Fixed Recovery Charges will in fact be sufficient to meet the payment obligations on the related Recovery Bonds or that the assumptions used in calculating such Fixed Recovery Charges will in fact be realized.

(g)    Creation of Recovery Property. Upon the filing of the Issuance Advice Letter with respect to the Recovery Property pursuant to the Financing Order: (i) the related rights and interests of the Seller under the Financing Order, including the right to impose, collect and receive the Fixed Recovery Charges established pursuant to the Financing Order, will become Recovery Property, (ii) the Recovery Property will constitute a current property right, (iii) the Recovery Property will include the right, title and interest of the Seller to the Tariff imposing the Fixed Recovery Charges, and the right to obtain periodic true-up adjustments of the Fixed Recovery Charges, (iv) the owner of the Recovery Property will be legally entitled to bill Fixed Recovery Charges and collect payments in respect of the Fixed Recovery Charges in the aggregate amount sufficient to pay or fund, in accordance with the Indenture, the principal of the Recovery Bonds, all interest thereon, and all other Ongoing Financing Costs, and (v) the Recovery Property will not be subject to any Lien, except for the lien arising under Section 850.3(g) of the Wildfire Financing Law, the Financing Order and the Issuance Advice Letter.

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

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(i)    Under existing law as of the Closing Date, Holders will not be responsible for, nor will payments to Holders be reduced by, any sales tax, gross receipts tax, general corporation tax, single business tax, personal property tax, privilege tax, franchise or license tax, or other tax imposed on the Seller or the Issuer as a result of the sale and assignment of the Recovery Property by the Seller to the Issuer, the acquisition of the Recovery Property by the Issuer or the issuance and sale by the Issuer of the Recovery Bonds, other than withholding of taxes applicable to Recovery Bond payments and any taxes imposed as a result of a failure of the Issuer or the Seller to properly withhold or remit taxes imposed with respect to payments on any Recovery Bond.

(j)    Prospectus. As of the date hereof, the information describing the Seller under the caption “The Depositor, Seller, Initial Servicer and Sponsor” in the prospectus dated July 13, 2022 relating to the Bonds is true and correct in all material respects.

(k)    No Court Order. There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Wildfire Financing Law, the Financing Order, the Recovery Property or the Fixed Recovery Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.

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

SECTION 3.09.    Change in Law.

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

SECTION 3.10.    Limitations on Representations and Warranties.

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

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ARTICLE IV

COVENANTS OF THE SELLER

SECTION 4.01.    Existence.

Subject to Section 5.02, so long as any of the Recovery Bonds are Outstanding, the Seller (a) will keep in full force and effect its existence and remain in good standing under the laws of the jurisdiction of its organization, (b) will obtain and preserve its qualification to do business, in each case to the extent that in each such jurisdiction such existence or qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the other Basic Documents to which the Seller is a party and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby or to the extent necessary for the Seller to perform its obligations hereunder or thereunder and (c) will continue to operate its distribution system to provide service to its customers.

SECTION 4.02.    No Liens.

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

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

(a)    In the event that the Seller receives any FRC Collections or other payments in respect of the Fixed Recovery Charges or the proceeds thereof other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the Issuer, all payments received by it in respect thereof as soon as practicable after receipt thereof. Prior to such remittance to the Servicer by the Seller, the Seller agrees that such amounts are held by it in trust for the Issuer and the Indenture Trustee.

(b)    The Seller shall not continue as or become a party to any trade receivables purchase and sale agreement or similar arrangement under which it sells all or any portion of its accounts receivables owing from Consumers unless the Indenture Trustee, the Seller and the other parties to such additional arrangement shall have entered into a joinder to the Intercreditor Agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude Recovery Property (including Fixed Recovery Charges) from any receivables or other assets pledged or sold under such arrangement.

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

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SECTION 4.04.    Notice of Liens.

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

SECTION 4.05.    Compliance with Law.

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

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

(a)    So long as any of the Recovery Bonds are Outstanding, the Seller shall treat the Recovery Property as the Issuer’s property for all purposes other than financial reporting, state or federal regulatory or tax purposes, and treat the Recovery Bonds as debt for all purposes and specifically as debt of the Issuer, other than for financial reporting, state or federal regulatory or tax purposes.

(b)    Solely for the purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, so long as any of the Recovery Bonds are Outstanding, the Seller agrees to treat the Recovery Bonds as indebtedness of the Seller (as the sole owner of the Issuer) secured by the Recovery Bond Collateral unless otherwise required by appropriate taxing authorities.

(c)    So long as any of the Recovery Bonds are Outstanding, the Seller shall disclose in its financial statements that the Issuer and not the Seller is the owner of the Recovery Property and that the assets of the Issuer are not available to pay creditors of the Seller or its Affiliates (other than the Issuer).

(d)    So long as any of the Recovery Bonds are Outstanding, the Seller shall not own or purchase any Recovery Bonds.

(e)    So long as the Recovery Bonds are Outstanding, the Seller shall disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles.

(f)    The Seller agrees that upon the sale by the Seller of the Recovery Property to the Issuer pursuant to this Agreement, (i) to the fullest extent permitted by law, the Issuer shall have all of the rights originally held by the Seller with respect to such Recovery Property, including the right to exercise any and all rights and remedies to collect any amounts payable by any Consumer in respect of such Recovery Property, notwithstanding any objection or direction to the contrary by the Seller and (ii) any payment by any Consumer to the Issuer shall discharge such Consumer’s obligations in respect of such Recovery Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.

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

(h)    The Seller agrees not to withdraw the filing of the Issuance Advice Letter with the CPUC.

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

(j)    Promptly after obtaining knowledge of any breach in any material respect of its representations and warranties in this Agreement, the Seller shall notify the Issuer, the CPUC and the Rating Agencies of the breach.

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

(l)    Upon the request of the Issuer, the Seller shall execute and deliver such further instruments and do such further acts as may be necessary to carry out the provisions and purposes of this Agreement.

(m)    The Seller shall not permit the issuance of any Additional Recovery Bonds or Additional Other Recovery Bonds by any issuing entity, unless the Rating Agency Condition with respect to the Recovery Bonds is satisfied.

SECTION 4.07.    Protection of Title.

The Seller shall execute and file the filings required by law to perfect and continue the perfection of the interests of the Issuer in the Recovery Property and the Indenture Trustee’s Lien on the Recovery Property, including all filings required under the Wildfire Financing Law and the UCC relating to the transfer of the ownership of the rights and interests related to the Recovery Bonds under the Financing Order by the Seller to the Issuer and the pledge of the Recovery Property to the Indenture Trustee. The Seller also agrees to take those legal or administrative actions that may be reasonably necessary (i) to protect the Issuer and Secured Parties from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would

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result in a breach of any representation or warranty of the Seller set forth in Article III, and the costs of any such actions or proceedings will be paid by the Seller and (ii) to block or overturn any attempts to cause a repeal of, modification of or supplement to the Wildfire Financing Law, the Financing Order, the Issuance Advice Letter or the rights of Holders by legislative enactment or constitutional amendment that would be materially adverse to the Issuer or the Secured Parties or which would otherwise cause an impairment of the rights of the Issuer or the Secured Parties. The costs of any such actions or proceedings will be payable by the Seller.

SECTION 4.08.    Nonpetition Covenants.

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

SECTION 4.09.    Taxes.

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

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

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

SECTION 4.11.    Use of Proceeds.

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

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SECTION 4.12.    Further Assurances.

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

ARTICLE V

THE SELLER

SECTION 5.01.    Liability of Seller; Indemnities.

(a)    The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement.

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

(c)    Notwithstanding Section 5.01(b) above, the Seller shall not be liable for any loss, damages, liability, obligation, claim, action, suit or payment resulting solely from a downgrade in the ratings on the Recovery Bonds or for any consequential damages, including any loss of market value of the Recovery Bonds resulting from any default or any downgrade of the ratings of the Recovery Bonds.

(d)    The indemnities described in this Section will survive the termination of this Agreement and include reasonable fees and expenses of investigation and litigation, including reasonable attorneys’ fees and expenses. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement.

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SECTION 5.02.    Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller.

Any Person (a) into which the Seller may be merged, converted or consolidated and that succeeds to all or substantially all of the electric distribution business of the Seller, (b) that results from the division of the Seller into two or more Persons and succeeds to all or substantially all of the electric distribution business of the Seller, (c) that results from any merger or consolidation to which the Seller shall be a party and that succeeds to all or substantially all of the electric distribution business of the Seller, (d) that succeeds to the properties and assets of the Seller substantially as a whole, or succeeds to all or substantially all of the electric distribution business of the Seller, or (e) that otherwise succeeds to all or substantially all of the electric distribution business of the Seller, shall be the successor to the Seller under this Agreement without further act on the part of any of the parties to this Agreement; provided, further, that (i) immediately after giving effect to any transaction referred to above, no representation or warranty made by the Seller pursuant to Article III shall have been breached and, to the extent the Seller is the Servicer, no Servicer Default under the Servicing Agreement, and no event, that after notice or lapse of time, or both, would become a Servicer Default under the Servicing Agreement will have occurred and be continuing, (ii) the successor to the Seller must execute an agreement of assumption to perform every obligation of the Seller under this Agreement, (iii) the Rating Agencies shall have received prior written notice of such transaction, and (iv) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with.

SECTION 5.03.    Limitation on Liability of Seller and Others.

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

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 6.01.    Amendment.

This Agreement may be amended in writing by the Seller and the Issuer with ten (10) Business Days’ prior written notice to the Rating Agencies, but without the consent of any of the Holders (i) to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Holders; provided, however, that such action shall not, as evidenced by an Officer’s Certificate delivered to the Issuer and the Indenture Trustee, adversely affect in any material respect the interests of any Holder or (ii) to conform the provisions hereof to the description of this Agreement in the Prospectus. Promptly after execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies.

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In addition, this Agreement may be amended in writing by the Seller and the Issuer with (i) the prior written consent of the Indenture Trustee, (ii) the satisfaction of the Rating Agency Condition, and (iii) if any amendment would adversely affect in any material respect the interest of any Holder of the Bonds, the consent of a majority of the Holders of each affected Tranche of Bonds. In determining whether a majority of Holders have consented, Bonds owned by the Issuer, Seller or any Affiliate of the Issuer or Seller shall be disregarded, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such consent, the Indenture Trustee shall only be required to disregard any Bonds it actually knows to be so owned. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies.

It shall not be necessary for the consent of Holders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.

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

SECTION 6.02.    Notices.

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

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

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

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

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

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

(f)    as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 6.03.    Assignment.

Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Agreement may not be assigned by the Seller.

SECTION 6.04.    Limitations on Rights of Third Parties.

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

SECTION 6.05.    Severability.

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remainder of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 6.06.    Separate Counterparts.

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 6.07.    Headings.

The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

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SECTION 6.08.    Governing Law.

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

SECTION 6.09.    Assignment to Indenture Trustee.

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

SECTION 6.10.    Limitation of Liability.

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

SECTION 6.11.    Waivers.

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

[Signature Page Follows]

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

PG&E WILDFIRE RECOVERY FUNDING LLC,
a Delaware limited liability Company
By:	/s/ Monica Klemann
	Name: Monica Klemann
	Title: Manager, Treasurer and Secretary

PACIFIC GAS AND ELECTRIC COMPANY,
a California Corporation
By:	/s/ Margaret K. Becker
	Name: Margaret K. Becker
	Title: Vice President and Treasurer

ACKNOWLEDGED AND ACCEPTED:

THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.,

as Indenture Trustee

By:	/s/ David Hill
	Name: David Hill
	Title:   Vice President

Signature Page to

Recovery Property Purchase and Sale Agreement

EX-10.3

Exhibit 10.3

ADMINISTRATION AGREEMENT

This ADMINISTRATION AGREEMENT, dated as of July 20, 2022 (this “Administration Agreement”), by and between PACIFIC GAS AND ELECTRIC COMPANY, a California corporation (“PG&E”), as administrator (in such capacity, the “Administrator”), and PG&E WILDFIRE RECOVERY FUNDING LLC, a Delaware limited liability company (the “Issuer”). Capitalized terms used but not otherwise defined herein shall have the meanings specified in Appendix A attached to the Indenture (as defined below).

RECITALS

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

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Recovery Bonds, including (i) the Indenture, (ii) the Recovery Property Servicing Agreement, dated as of July 20, 2022 (the “Servicing Agreement”), by and between the Issuer and PG&E, as Servicer, (iii) the Recovery Property Purchase and Sale Agreement, dated as of July 20, 2022 (the “Sale Agreement”), by and between the Issuer and PG&E, as Seller and (iv) the other Basic Documents to which the Issuer is a party, relating to the Recovery Bonds (the Indenture, the Servicing Agreement, the Sale Agreement and the other Basic Documents to which the Issuer is a party, as such agreements may be amended and supplemented from time to time, collectively, the “Related Agreements”);

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

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

WHEREAS, the Administrator has the capacity to provide the services and the facilities required thereby and is willing to perform such services and provide such facilities for the Issuer on the terms set forth herein.

AGREEMENT

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

SECTION 1.    Duties of the Administrator – Management Services. The Administrator hereby agrees to provide the following corporate management services to the Issuer and to cause third parties to provide professional services required for or contemplated by such services in accordance with the provisions of this Administration Agreement:

(a)    furnish the Issuer with ordinary clerical, bookkeeping and other corporate administrative services necessary and appropriate for the Issuer, including, without limitation, the following services:

(i)    maintain at the Premises (as defined below) general accounting records of the Issuer (the “Account Records”), subject to year-end audit, in accordance with generally accepted accounting principles, separate and apart from its own accounting records, prepare or cause to be prepared such quarterly and annual financial statements as may be necessary or appropriate and arrange for year-end audits of the Issuer’s financial statements by the Issuer’s independent accountants;

(ii)    prepare and, after execution by the Issuer, file with the Securities and Exchange Commission (the “Commission”) and any applicable state agencies documents required to be filed by the Issuer with the Commission and any applicable state agencies, including, without limitation, periodic reports required to be filed under the Securities Exchange Act of 1934, as amended;

(iii)    prepare for execution by the Issuer and cause to be filed such income, franchise or other tax returns of the Issuer as shall be required to be filed by applicable law (the “Tax Returns”) and cause to be paid on behalf of the Issuer from the Issuer’s funds any taxes required to be paid by the Issuer under applicable law;

(iv)    prepare or cause to be prepared for execution by the Issuer’s Managers minutes of the meetings of the Issuer’s Managers and such other documents deemed appropriate by the Issuer to maintain the separate limited liability company existence and good standing of the Issuer (the “Company Minutes”) or otherwise required under the Related Agreements (together with the Account Records, the Tax Returns, the Company Minutes, the LLC Agreement, and the Certificate of Formation, the “Issuer Documents”); and any other documents deliverable by the Issuer thereunder or in connection therewith; and

(v)    hold, maintain and preserve at the Premises (or such other place as shall be required by any of the Related Agreements) executed copies (to the extent applicable) of the Issuer Documents and other documents executed by the Issuer thereunder or in connection therewith;

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

(c)    take such actions on the behalf of the Issuer as are necessary for the issuance and delivery of the Recovery Bonds;

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

(e)    to the full extent allowable under applicable law, enforce each of the rights of the Issuer under the Related Agreements, at the direction of the Indenture Trustee (acting at the direction of Holders of a majority of the Outstanding Amount of the Recovery Bonds);

(f)    provide for the defense, at the direction of the Issuer’s Managers, of any action, suit or proceeding brought against the Issuer or affecting the Issuer or any of its assets;

(g)    provide office space (the “Premises”) for the Issuer and such reasonable ancillary services as are necessary to carry out the obligations of the Administrator hereunder, including telecopying, duplicating and word processing services;

(h)    undertake such other administrative services as may be appropriate, necessary or requested by the Issuer; and

(i)    provide such other services as are incidental to the foregoing or as the Issuer and the Administrator may agree.

In providing the services under this Section 1 and as otherwise provided under this Administration Agreement, the Administrator will not knowingly take any actions on behalf of the Issuer which (i) the Issuer is prohibited from taking under the Related Agreements, or (ii) would cause the Issuer to be in violation of any federal, state or local law or the LLC Agreement.

In performing its duties hereunder, the Administrator shall use the same degree of care and diligence that the Administrator exercises with respect to performing such duties for its own account and, if applicable, for others.

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

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with the performance of its obligations under this Administration Agreement in accordance with Section 3 (but, for the avoidance of doubt, excluding any such costs and expenses incurred by PG&E in its capacity as Servicer), to the extent that such costs and expenses are supported by invoices or other customary documentation and are reasonably allocated to the Issuer (“Reimbursable Expenses”).

SECTION 3.    Third Party Services. Any services required for or contemplated by the performance of the above-referenced services by the Administrator to be provided by unaffiliated third parties (including independent auditors’ fees and counsel fees) may, if provided for or otherwise contemplated by the Financing Order and if the Issuer deems it necessary or desirable, be arranged by the Issuer or by the Administrator at the direction (which may be general or specific) of the Issuer. Costs and expenses associated with the contracting for such third-party professional services may be paid directly by the Issuer or paid by the Administrator and reimbursed by the Issuer in accordance with Section 2, or otherwise as the Administrator and the Issuer may mutually arrange.

SECTION 4.    Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Recovery Bond Collateral as the Issuer shall reasonably request.

SECTION 5.    Independence of the Administrator. For all purposes of this Administration Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority, and shall not hold itself out as having the authority, to act for or represent the Issuer in any way and shall not otherwise be deemed an agent of the Issuer.

SECTION 6.    No Joint Venture. Nothing contained in this Administration Agreement (a) shall constitute the Administrator and the Issuer as partners or co-members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (b) shall be construed to impose any liability as such on either of them or (c) shall be deemed to confer on either of them any express, implied or apparent authority to incur any obligation or liability on behalf of the other.

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

SECTION 8.    Term of Agreement; Resignation and Removal of Administrator.

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

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

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(c)    The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect to the proposed appointment.

SECTION 9.    Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Administration Agreement pursuant to Section 8(b), the resignation of the Administrator or the removal of the Administrator pursuant to Section 8, the Administrator shall be entitled to be paid a pro-rated portion of the annual fee described in Section 2 hereof through the date of termination and all Reimbursable Expenses incurred by it through the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver to the Issuer all property and documents of or relating to the Recovery Bond Collateral then in the custody of the Administrator. In the event of the resignation of the Administrator or the removal of the Administrator pursuant to Section 8, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.

SECTION 10.    Administrator’s Liability. The Administrator shall render the services called for hereunder in good faith, taking into consideration the best interests of the Company. In no event shall the Administrator ever be liable to the Company under this Agreement or in connection with services provided hereunder for any punitive, incidental, consequential, or indirect damages in tort, contract, or otherwise.

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

(a) if to the Issuer, to:

PG&E Wildfire Recovery Funding LLC

c/o Pacific Gas and Electric Company

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Attention: Brian M. Wong

Telephone: (415) 973-1000

(b) if to the Administrator, to:

Pacific Gas and Electric Company

77 Beale Street, P.O. Box 770000

San Francisco, California 94177

Attention: Brian M. Wong

Telephone: (415) 973-1000

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

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

SECTION 12.    Amendments. (a) This Administration Agreement may be amended from time to time by a written amendment duly executed and delivered by each of the Issuer and the Administrator with ten Business Days’ prior written notice given to the Rating Agencies, (i) to cure any ambiguity, to correct or supplement any provisions in this Administration Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Administration Agreement or of modifying in any manner the rights of the Holders; provided, however, that the Issuer and the Indenture Trustee shall receive an Officer’s Certificate stating that the execution of such amendment shall not adversely affect in any material respect the interests of any Holder and that all conditions precedent have been satisfied or (ii) to conform the provisions hereof to the description of this Administration Agreement in the Prospectus.

(b)     In addition, this Administration Agreement may be amended from time to time by a written amendment duly executed and delivered by each of the Issuer and the Administrator with the prior written consent of the Indenture Trustee, the satisfaction of the Rating Agency Condition; provided that any such amendment may not adversely affect the interest of any Holder in any material respect without the consent of the Holders of a majority of the outstanding principal amount of the Recovery Bonds. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies.

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

SECTION 14.    Governing Law. This Administration Agreement shall be governed by, and construed and interpreted in accordance with the laws of the State of California, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

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SECTION 15.    Headings. The Section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Administration Agreement.

SECTION 16.    Counterparts. This Administration Agreement may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same Administration Agreement. The words “execution,” “signed,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.

SECTION 17.    Severability. Any provision of this Administration Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 18.    Nonpetition Covenant. Notwithstanding any prior termination of this Administration Agreement, the Administrator covenants that it shall not, prior to the date which is one year and one day after payment in full of the Recovery Bonds, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer.

SECTION 19.    Assignment to Indenture Trustee. The Administrator hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee for the benefit of the Secured Parties pursuant to the Indenture of any or all of the Issuer’s rights hereunder and the assignment of any or all of the Issuer’s rights hereunder to the Indenture Trustee for the benefit of the Secured Parties. For the avoidance of doubt, the Indenture Trustee is a third-party beneficiary of this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.

[Signature Page Follows]

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

PACIFIC GAS AND ELECTRIC COMPANY, a California corporation
By:	/s/ Margaret K. Becker
	Name: Margaret K. Becker
	Title: Vice President and Treasurer
PG&E WILDFIRE RECOVERY FUNDING LLC, a Delaware limited liability company
By:	/s/ Monica Klemann
	Name: Monica Klemann
	Title: Manager, Treasurer and Secretary

Signature Page to

Administration Agreement

EX-99.1

Exhibit 99.1

July 20, 2022

To the Persons Listed on the Attached Schedule I

Re: Federal and California Constitutional Issues related to PG&E Recovery Bonds

Ladies and Gentlemen:

We have served as counsel to Pacific Gas and Electric Company, a California corporation (“PG&E”), in connection with the issuance and sale on the date hereof by PG&E Wildfire Recovery Funding LLC, a Delaware limited liability company (the “Issuer”), of $3,900,000,000 aggregate principal amount of the Issuer’s Senior Secured Recovery Bonds, Series 2022-B (the “Bonds”), which are more fully described in the Registration Statement on Form SF-1 (File Nos. 333-265457 and 333-265457-01) filed on June 7, 2022, as amended by Amendment No. 1 filed on July 6, 2022, with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (collectively, the “Initial Registration Statement”) and the Registration Statement on Form SF-1MEF (File Nos. 333-266115 and 333-266115-01) filed on July 13, 2022 with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (collectively with the Initial Registration Statement, the “Registration Statement”), and the preliminary prospectus (the “Prospectus”) included as part of the Registration Statement. The Bonds are being sold pursuant to the provisions of the Underwriting Agreement dated July 13, 2022 (the “Underwriting Agreement”) between PG&E, the Issuer, and underwriters named in Schedule I to the Underwriting Agreement. The Bonds are being issued under the provisions of the Indenture dated as of the date hereof (the “Indenture”) between the Issuer and The Bank of New York Mellon Trust Company, National Association, a national banking association, as indenture trustee (the “Indenture Trustee”) and account bank and securities intermediary. According to the Indenture, the Indenture Trustee holds the recovery property described below (the “Recovery Property”) as collateral security for the payment of the Bonds.

On July 12, 2019, Governor Gavin Newsom signed into law Assembly Bill No. 1054, which amended Division 1, Part 1, Chapter 4, Article 5.8 (commencing with Section 850) of the California Public Utilities Code. The California legislature later amended Article 5.8 with Assembly Bill No. 1513 (Article 5.8, as amended, is referred to herein as the “Wildfire Financing Law”). The Wildfire Financing Law authorizes “electrical corporations”¹ to file an application for “recovery of costs and expenses related to catastrophic wildfires,” including fire risk mitigation capital expenditures identified in subdivision (e) of Section 8386.3 that the California Public Utilities Commission (“CPUC”) has found are “just and reasonable” for recovery.² In such event, the Wildfire Financing Law provides that the CPUC may issue an irrevocable “financing order” to provide for the recovery of “recovery costs” through the issuance of “recovery bonds” secured by a pledge of “recovery property.”³

¹  As defined in Section 218 of the Public Utilities Code.

²  Pub. Util. Code § 850(a)(2).

³  Id. § 850(b)(6)–(11).

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To the Persons Listed on the Attached Schedule I

July 20, 2022

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The term “recovery property” is defined in the Wildfire Financing Law as follows:

(A) “Recovery property” means the property right created pursuant to this article, including, without limitation, the right, title, and interest of the electrical corporation or its transferee:

(i) In and to the fixed recovery charges established pursuant to a financing order, including all rights to obtain adjustments to the fixed recovery charges in accordance with Section 850.1 and the financing order.

(ii) To be paid the amount that is determined in a financing order to be the amount that the electrical corporation or its transferee is lawfully entitled to receive pursuant to the provisions of this article and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of or arising from the fixed recovery charges that are the subject of a financing order.

(B) “Recovery property” shall not include a right to be paid fixed recovery tax amounts.

(C) “Recovery property” shall constitute a current property right, notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of the electrical corporation, the electrical corporation performing certain services.⁴

Moreover, Section 10 of the Wildfire Financing Law—which amended Section 850.1 of the Public Utilities Code and is referred to herein as the “State Pledge”—reads, in relevant part:

The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (i), the fixed recovery charges, any associated fixed recovery tax amounts, recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery

⁴  Id. § 850(b)(11). The “fixed recovery charges established pursuant to a financing order” under § (b)(11)(A)(i) are referred to herein as the “Charges.”

To the Persons Listed on the Attached Schedule I

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bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds.⁵

On January 6, 2021, PG&E filed an application for a financing order with the CPUC. Consistent with the Wildfire Financing Law, the Recovery Property was created in favor of PG&E pursuant to a financing order issued by the CPUC as Decision 21-05-015 on May 11, 2021 (the “Financing Order”). The Financing Order became final and non-appealable on February 28, 2022. On the date hereof and simultaneous with the issuance of the Bonds, the Recovery Property was sold and assigned to the Issuer in accordance with the provisions of the Recovery Property Purchase and Sale Agreement dated as of July 20, 2022 between PG&E and the Issuer in consideration for the payment by the Issuer to PG&E of the proceeds of the sale of the Bonds, net of various issuance costs.

QUESTIONS PRESENTED

You have requested our reasoned opinion with respect to the following questions presented under the Federal and California Constitutions:

(A)(i) Whether the holders of the Bonds (the “Bondholders”), by virtue of the State Pledge, could successfully challenge under Article I, Section 10 of the United States Constitution (the “Federal Contract Clause”), the constitutionality of any legislative action of the State of California (the “State”), whether by legislation or voter initiative (either statutory or constitutional), that becomes law (“Legislative Action”) that limits, alters, or reduces the value of the Recovery Property or the Charges so as to impair (a) the terms of the Indenture or the Bonds or (b) the rights and remedies of the Bondholders (or the Indenture Trustee acting on their behalf) before the Bonds are fully paid and discharged;⁶

(ii) Whether the Bondholders could successfully challenge under Article I, Section 9 of the California Constitution (the “California Contract Clause”) the constitutionality of any Legislative Action that results in an Impairment; and

⁵  Id. § 850.1(e).

⁶  Any impairment described in clause (a) or (b) is referred to herein as an “Impairment.”

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(iii) Whether preliminary injunctive relief would be available under federal law to delay implementation of Legislative Action that results in an Impairment pending final adjudication of a claim challenging such Legislative Action in federal court and, assuming a favorable final adjudication of such claim, whether permanent injunctive relief would be available to enjoin the implementation of the challenged Legislative Action.

(B)(i) Whether, under the Takings Clause of the Fifth Amendment to the United States Constitution (the “Federal Takings Clause”), the State could repeal or amend the Wildfire Financing Law or take any other action in contravention of the State Pledge without paying just compensation to the Bondholders, as determined by a court of competent jurisdiction, if taking such an action in contravention of the State Pledge (a) constituted a permanent appropriation of a substantial property interest of the Bondholders in the Recovery Property or denied all economically productive use of the Recovery Property; (b) destroyed the Recovery Property other than in response to emergency conditions; or (c) substantially reduced, altered, or impaired the value of the Recovery Property so as to unduly interfere with the reasonable expectations of the Bondholders arising from their investments in the Bonds (a “Taking”); and

(ii) Whether, under Article I, Section 19 of the California Constitution (the “California Takings Clause”) and as determined by a court of competent jurisdiction, the State could repeal or amend the Wildfire Financing Law or take any other action in contravention of the State Pledge, assuming such action constituted a Taking, without paying just compensation to the Bondholders.

OPINIONS

Based on our review of the facts and the relevant judicial authorities, and subject to the qualifications, limitations, and assumptions set forth in this letter (including the assumption that any Impairment would be “substantial”), it is our opinion that a reviewing court of competent jurisdiction, in a properly prepared and presented case:

(1) would conclude, with respect to the questions presented above in (A)(i) and (ii), that the State Pledge constitutes a contractual relationship between the Bondholders and the State and that, absent a demonstration by the State that an Impairment is necessary to further a significant and legitimate public purpose, and upon a finding by the court that an evident and more moderate course would serve the State’s purposes equally well, the Bondholders (or the Indenture Trustee acting on their behalf) could successfully challenge under the Federal Contract Clause or the California Contract Clause the constitutionality of any Legislative Action determined by such court to cause an Impairment before the Bonds are fully paid and discharged;

(2) would conclude, with respect to the question presented above in (A)(iii), that sound and substantial arguments support the granting of preliminary injunctive relief and that permanent injunctive relief is available under federal law to prevent implementation of Legislative Action hereafter taken and determined by such court to cause an Impairment in violation of the Federal Contract Clause; and

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(3) would conclude, with respect to the questions presented above in (B)(i) and (ii), that under the Federal Takings Clause and the California Takings Clause, the State is required to pay just compensation to the Bondholders if the State’s repeal or amendment of the Wildfire Financing Law or taking of any other action in contravention of the State Pledge constituted a Taking, provided that the court might take a more expansive view of emergency conditions, leading to correspondingly narrower restrictions on State action under the California Takings Clause.

We note that this letter is limited to the laws of the United States of America and the State of California. Our opinions are based on our evaluation of the facts and circumstances described herein and the existing precedent and arguments relevant to the factual circumstances likely to exist at the time of a challenge to Legislative Action (or other State action) based on the Federal or California Contract Clause or Takings Clause. Such precedent and such circumstances could change materially from those discussed below. Accordingly, the opinions herein are intended to express our belief as to the result that should be obtainable through the proper application of existing judicial decisions in a properly prepared and presented case. None of the foregoing opinions is intended to be a guaranty as to what a particular court would hold; rather, each such opinion is an expression as to the decision a court ought to reach if the issue were properly prepared and presented and the court followed what we believe to be the applicable legal principles under existing precedent.

In addition, we are not aware of any reported controlling precedent that is directly on point with respect to the questions presented above. Thus, our analysis is a reasoned application of judicial decisions involving similar or analogous circumstances. Moreover, the application of equitable principles (including the issuance of injunctive relief) is subject to the discretion of the court asked to apply them. We cannot predict the facts and circumstances that will be present in the future and may be relevant to the exercise of such discretion. As a result, there can be no assurance that a court will follow our reasoning or reach the conclusions that we believe are supported by current precedent. The recipients of this letter should assess these considerations in analyzing the risks associated with the subject transaction.

DISCUSSION

I. THE FEDERAL CONTRACT CLAUSE

The Federal Contract Clause provides that “[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts.”⁷ According to the United States Supreme Court, this language serves

⁷  U.S. Const. art. I, § 10.

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“to encourage trade and credit by promoting confidence in the stability of contractual obligations.”⁸ Accordingly, “the [Federal] Contract Clause limits the power of the States to modify their own contracts as well as to regulate those between private parties.”⁹ While on its face the Federal Contract Clause appears to proscribe any law impairing the obligation of contracts, the Supreme Court has made clear that the Clause’s proscription “is not an absolute one and is not to be read with literal exactness like a mathematical formula.”¹⁰

Instead, the Supreme Court applies a three-part test to determine whether a legislative action violates the Federal Contract Clause:

(1) whether the legislative action operates as a substantial impairment of a contractual relationship;

(2) assuming such an impairment, whether the legislative action is justified by a significant and legitimate public purpose; and

(3) whether the adjustment of the rights and responsibilities of the contracting parties is reasonable and appropriate given the public purpose behind the legislative action.¹¹

In addition, in cases involving a contract with a state, there is an additional step known as the “reserved powers doctrine.” That doctrine requires a reviewing court to ask whether a state has “surrender[ed] an essential attribute of its sovereignty,” which the state is not permitted to do.¹²

The following subparts address: (1) whether a contract exists between the State and the Bondholders; (2) if so, whether that contract violates the “reserved powers” doctrine; and (3) the State’s burden in justifying an Impairment. The determination of whether a Legislative Action constitutes a substantial impairment of a particular contract is a fact-specific analysis, and nothing in this letter expresses an opinion as to how a court of competent jurisdiction would resolve that issue with respect to the Financing Order, the Recovery Property, or the Bonds. Therefore, we assume for purposes of this letter that any Impairment resulting from a challenged Legislative Action would be substantial under the Federal Contract Clause.

⁸  U.S. Trust Co. v. New Jersey, 431 U.S. 1, 15 (1977).

⁹  Id. at 17.

¹⁰  Id. at 21 (internal quotation marks omitted); see also Energy Reserves Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400, 410 (1983) (“Although the language of the Federal Contract Clause is facially absolute, its prohibition must be accommodated to the inherent police power of the State ‘to safeguard the vital interests of its people.’”) (quoting Home Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 434 (1934)).

¹¹  Energy Reserves, 459 U.S. at 411–13; see also RUI One Corp. v. City of Berkeley, 371 F.3d 1137, 1147 (9th Cir. 2004) (citations omitted).

¹²  U.S. Trust, 431 U.S. at 23.

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A. The Existence of a Contractual Relationship

The law is clear that a contractual relationship may, in certain circumstances, arise from a legislative enactment. Courts have recognized, however, a general presumption that “absent some clear indication that [a] legislature intends to bind itself contractually, . . . ‘a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise.’”¹³ That presumption arises from the principle that a legislature’s primary function “is not to make contracts, but to make laws that establish the policy of the state.”¹⁴

The general presumption against a contractual relationship may be overcome where the language of the statute at issue indicates an intent to create contractual rights. To determine whether a contract has been created by a statute, courts have explained, “it is of first importance to examine the language of the statute.”¹⁵ On this score, the United States Supreme Court has held that a statute creates a contractual relationship between a state and private parties if the statute contains adequate language of contractual undertaking.¹⁶ According to the Court, a statutory contract is created “when the language and circumstances evince a legislative intent to create private rights of a contractual nature enforceable against the State.”¹⁷

Several Supreme Court decisions support the conclusion that the State Pledge creates a contractual relationship between the State and the Bondholders. For example, in U.S. Trust, the Supreme Court affirmed the trial court’s uncontested finding that a statutory covenant between two states that benefitted the holders of certain bonds gave rise to a contractual obligation between the states and those bondholders.¹⁸ The covenant at issue limited the ability of the Port Authority of New York and New Jersey to subsidize rail-passenger transportation with revenues and reserves

¹³  Nat’l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465–66 (1985) (quoting Dodge v. Bd. of Education, 302 U.S. 74, 79 (1937)).

¹⁴  Id. at 466 (citing Ind. ex. Rel. Anderson v. Brand, 303 U.S. 95, 104–05 (1938)).

¹⁵  Dodge, 302 U.S. at 78.

¹⁶  See Brand, 303 U.S. at 104–05 (noting that “the cardinal inquiry is as to the terms of the statute supposed to create such a contract”); U.S. Trust, 431 U.S. at 17–18, 18 n.14.

¹⁷  U.S. Trust, 431 U.S. at 18 n.14; see also Barcellos & Wolfsen, Inc. v. Westlands Water Dist., 899 F.2d 814, 821 (9th Cir. 1990) (same).

¹⁸  Id. at 17–18.

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pledged as security for various bonds. In finding the presence of a contract between the states and the bondholders, the Court emphasized that “[t]he intent to make a contract is clear from the statutory language: ‘The 2 States covenant and agree with each other and with the holders of any affected bonds.’”¹⁹

Similarly, in Brand, the Supreme Court held that the Indiana Teachers’ Tenure Act formed a contract between the state and specified teachers because the statutory language showed a clear contractual intent. Specifically, the Court based its decision on the legislature’s repeated and intentional use of the word “contract” throughout the statute to describe the legal relationship between the state and the impacted teachers.²⁰ “The title of the act,” too, was “couched in terms of contract,” and “[t]he tenor of the act indicate[d] that the word ‘contract’ was not used inadvertently or in other than its usual legal meaning.”²¹

Like the language of the covenants considered in U.S. Trust and Brand, the language of the State Pledge manifests the California legislature’s intent to bind the State. In particular, the State Pledge provides, in pertinent part, that “[t]he State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter. . . .”²² Similar to the terms “covenant” and “agree” quoted in U.S. Trust, and the word “contract” in Brand, the terms “pledge” and “agree” evince a desire to create private rights of a contractual nature enforceable against the State. And “[t]he tenor” of the State Pledge, as in Brand, indicates that those words were “not used inadvertently or in other than [their] usual legal meaning.” Also consistent with the language at issue in U.S. Trust, the State Pledge names the beneficiaries of the State’s pledge and agreement. Finally, it bears mention that the State authorized an issuer of recovery bonds to include the State Pledge in contracts with the holders of recovery bonds (such as the Bondholders). On this record, there is ample evidence to overcome the general presumption against statutory contracts and to conclude that the State Pledge creates a contractual relationship between the State and the Bondholders under the Federal Contract Clause. Perhaps equally important, we are unaware of any circumstances surrounding the enactment of the Wildfire Financing Law suggesting that the California legislature did not intend to bind contractually the State through the State Pledge.

¹⁹  Id. at 18 (quoting 1962 N.J. LAWS, c. 8, § 6; 1962 N.Y. LAWS, c. 209, § 6).

²⁰  Brand, 303 U.S. at 105. That said, the mere use of the word “contract,” without more, will not necessarily establish the requisite contractual intent. See Nat’l R.R., 470 U.S. at 470. Indeed, in National Railroad, the Court found that the use of the word “contract” in the Rail Passenger Service Act defined only the relationship between the newly created nongovernmental corporation Amtrak and the railroads, not a contractual relationship between the United States and the railroads. The Court made clear that “[l]egislation outlining the terms on which private parties may execute contracts does not on its own constitute a statutory contract.” Id. at 467.

²¹  Brand, 303 U.S. at 105.

²²  Pub. Util. Code § 850.1(e).

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B. The Reserved Powers Doctrine

As noted, the reserved powers doctrine limits the State’s ability to contract away an essential attribute of its sovereignty.²³ According to this doctrine, if a contract purports to capitulate a state’s “reserved powers,” such a contract is void as a matter of law. Although the scope of the reserved powers doctrine has not been precisely defined by courts, Supreme Court case law has established that a state cannot enter into contracts that forbid the exercise of the state’s police powers or the state’s power of eminent domain.²⁴ On the other hand, the Court has made clear that a state’s “power to enter into effective financial contracts cannot be questioned,” and promises that are “purely financial” do not necessarily compromise a state’s reserved powers.²⁵

In our view, the State Pledge does not purport to surrender any reserved powers of the State. Although the State’s commitment not to “limit [or] alter . . . the fixed recovery charges, . . . recovery property, financing orders, or any rights under a financing order” is arguably broader than the commitment in U.S. Trust that revenues and reserves securing bonds would not be depleted beyond a certain level,²⁶ the State Pledge does not purport to contract away or forbid the future exercise of the State’s power of eminent domain or police power to protect public health and safety. Through “financing order[s]” (like the Financing Order), the State will authorize electric utilities to issue “recovery bonds” (such as the Bonds) and pledges not to impair the value of the “recovery property” (i.e., the Recovery Property) securing such instruments. In other words, the State Pledge constitutes an agreement made by the State not to impair the financial security for recovery bonds to foster the capital markets’ acceptance of such bonds, which are expressly authorized and will be issued to facilitate the recovery of the costs of catastrophic wildfires. As such, we believe that the State Pledge is akin to the “financial contract” involved in U.S. Trust, and therefore would not be viewed as an impermissible surrender of an essential attribute of state sovereignty.

²³  U.S. Trust, 431 U.S. at 23.

²⁴  Id. at 23–24, 24 nn.20–21 (citing Stone v. Mississippi, 101 U.S. 814, 817 (1880); W. River Bridge Co. v. Dix, 47 U.S. 507, 525–26 (1848)).

²⁵  Id. at 24; see also Cont’l Ill. Nat’l Bank & Trust Co. v. Washington, 696 F.2d 692, 699 (9th Cir. 1983) (“Thus, insofar as the purely financial aspects of the agreement are concerned, reservations are not to be lightly inferred.”).

²⁶  U.S. Trust, 431 U.S. at 25.

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C. The State’s Burden to Justify an Impairment

To survive scrutiny under the Federal Contract Clause, a substantial impairment by a state of a statutory contract can be justified only with “a significant and legitimate public purpose . . . such as the remedying of a broad and general social or economic problem.”²⁷ In addition, the state must show that its action causing a substantial impairment is “reasonable and necessary to serve” such a public purpose. Admittedly, this analysis is case- and fact-specific, but the contours of the analysis are illustrated by several decisions of the United States Supreme Court.

For instance, in Home Building & Loan Association v. Blaisdell—“the leading case in the modern area of [Federal] Contract Clause interpretation”²⁸—the Court assessed a challenge to a Minnesota law that, in response to economic conditions caused by the Great Depression: (1) authorized county courts to extend the period of redemption from foreclosure sales on mortgages “for such additional time as the court may deem just and equitable,” subject to certain limitations; and (2) regulated actions for deficiency judgments.²⁹ In upholding the Minnesota law, the Court relied on the following factors: (1) an economic emergency threatened the loss of homes and land that provided state residents with necessary shelter and means of subsistence; (2) the law was not enacted for the benefit of specific individuals but for the protection of a broad interest of society; (3) the relief provided by the law was appropriately tailored to the emergency and could only be granted in reasonable conditions; (4) the conditions on which the law extended the period of redemption were not unreasonable; and (5) the law was temporary in operation and limited to the emergency on which it was based.

During the same term, the Supreme Court qualified its decision in Blaisdell, emphasizing the importance of the last factor analyzed—i.e., “the temporary and conditional relief which the legislation granted.”³⁰ In W.B. Worthen Co. v. Thomas, the Court addressed a challenge to an Arkansas law providing that money paid to any Arkansas resident as the insured or beneficiary designated under an insurance policy would be exempt from liability or seizure under judicial process.³¹ The Court struck down the Arkansas law under the Federal Contract Clause, and in so doing noted that the Arkansas law was not a temporary emergency measure like the Minnesota law at issue in Blaisdell. Two other contemporaneous opinions issued by the Supreme Court vacated laws passed in response to the economic emergency created by the Great Depression, thereby reinforcing the notion that, to be justified, an impairment must be the result of a reasonable, necessary, and tailored response to a broad and significant public concern.³²

²⁷  Energy Reserves, 459 U.S. at 411–12 (citation omitted). We are aware of no authority supporting the proposition that the will of the people, in and of itself, constitutes a broad and significant public purpose sufficient for a substantial impairment by a state of a statutory contract to survive a challenge under the Federal Contract Clause.

²⁸  U.S. Trust, 431 U.S. at 25.

²⁹  290 U.S. 398, 415–18 (1934).

³⁰  W.B. Worthen Co. v. Thomas, 292 U.S. 426, 434 (1934).

³¹  Id. at 429–30.

³²  See Treigle v. Acme Homestead Ass’n, 297 U.S. 189 (1936); W.B. Worthen Co. v. Kavanaugh, 295 U.S. 56 (1935).

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Relatedly, the deference that courts give to a legislature’s determination of the need for an impairment has turned on whether the contract at issue is a private one or whether the state is a contracting party. In fact, any deference, the Supreme Court has instructed, to legislative judgment as to the necessity and reasonableness of a particular action, “is not appropriate” when the state is a party to the contract at issue.³³ In that circumstance, a “stricter standard” should apply, for as the Court in Energy Reserves pointed out, “[i]n almost every case, the Court has held a governmental unit to its contractual obligations when it enters financial or other markets.”³⁴ The Ninth Circuit, too, has held that “[c]ourts defer to a lesser degree when the State is a party to the contract because the State’s self-interest is at stake.”³⁵

The leading case involving the impairment of contracts to which the state is a party is U.S. Trust. There, two states agreed not to deplete the revenues and reserves securing certain bonds below a specified level. The states thereafter repealed that promise, justifying the repeal with the purported need to finance new mass transit projects in order to promote and encourage additional use of public transportation in light of energy shortages and environmental concerns.³⁶ The Court ruled that the states’ action was invalid under the Federal Contract Clause because repeal of the covenant was “neither necessary to achievement of the plan nor reasonable in light of the circumstances.”³⁷ The Court further stated that a modification less drastic than total repeal would have permitted the states to achieve their plan to improve commuter rail service, and, in fact, the states could have achieved that goal without modifying the covenant at all. For example, the states could have “discourage[d] automobile use through taxes on gasoline or parking, [ ] and use[d] the revenues to subsidize mass transit projects.”³⁸

³³  U.S. Trust, 431 U.S. at 25–26.

³⁴  459 U.S. at 412–13 n.14.

³⁵  RUI One, 371 F.3d at 1147 (internal quotation marks omitted); Apartment Ass’n of Los Angeles Cnty v. City of Los Angeles, 10 F.4th 905, 913 (9th Cir. 2021) (“A heightened level of judicial scrutiny is appropriate when the government is a contracting party. . . . But when the government is not party to the contract being impaired, courts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure.”) (internal citations and quotation marks omitted) (upholding eviction moratorium during COVID-19 pandemic on a finding that its provisions constituted “an appropriate and reasonable way to advance a significant and legitimate public purpose”).

³⁶  431 U.S. at 28–29.

³⁷  Id. at 29.

³⁸  Id. at 30 n.29.

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Moreover, the Court contrasted the legislation under consideration with the statute challenged in City of El Paso v. Simmons, which limited to five years the reinstatement rights of defaulting purchasers of land from the state.³⁹ For many years prior to the enactment of that statute, defaulting purchasers were allowed to reinstate their claims upon written request and payment of delinquent interest unless the rights of third parties had intervened. In U.S. Trust, the Court opined that this older statute “had effects that were unforeseen and unintended by the legislature when originally adopted” in that “speculators were placed in a position to obtain windfall benefits.”⁴⁰ Thus, according to the Court, the state’s adoption of a statute of limitations was reasonable to restrict parties to gains expected from the contract when the original statute was adopted. By comparison, the need for mass transportation in New York and New Jersey was not a new development and the likelihood that publicly owned commuter railroads would produce substantial deficits was well known when the states adopted the covenant.⁴¹

The U.S. Trust Court also distinguished its prior holding in Faitoute Iron & Steel Co. v. City of Asbury Park,⁴² which was, at that point, the “only time in th[e 20th] century that alteration of a municipal bond contract ha[d] been sustained.”⁴³ Faitoute involved a state municipal reorganization act under which bankrupt local governments could be placed in receivership by a state agency. The holders of certain municipal revenue bonds received new securities bearing lower interest rates and later maturities. As recounted in U.S. Trust, the Faitoute Court rejected the bondholders’ Federal Contract Clause claims on the ground that the “old bonds represented only theoretical rights; as a practical matter the city could not raise its taxes enough to pay off its creditors under the old contract terms,” and thus the plan “enabled the city to meet its financial obligations more effectively.”⁴⁴ U.S. Trust explained that the obligation in Faitoute was “discharged, not impaired” by the plan.⁴⁵

³⁹  379 U.S. U.S. 497 (1965).

⁴⁰  U.S. Trust, 431 U.S. at 31.

⁴¹  Id. at 31–32.

⁴²  316 U.S. 502 (1942).

⁴³  U.S. Trust, 431 U.S. at 27.

⁴⁴  Id. at 28.

⁴⁵  Id.

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The case law demonstrates that the State bears a substantial burden in attempting to justify a significant impairment of a contract to which it is a party. As the Supreme Court put it, “[i]n almost every case, the Court has held a governmental unit to its contractual obligations when it enters financial or other markets.”⁴⁶ That is because a state action that impairs contracts to which it is a party must further a significant, legitimate, and broad public purpose. And that public purpose must be served by a reasonable, necessary, and carefully tailored measure, since “a State is not free to impose a drastic impairment when an evident and more moderate course would serve its purposes equally well.”⁴⁷

Subject to the qualifications, limitations, and assumptions set forth in this letter, it is our opinion that a reviewing court of competent jurisdiction, in a properly prepared and presented case, would conclude that the State Pledge constitutes a contractual relationship between the Bondholders and the State under the Federal Contract Clause. We are also of the view that, absent a demonstration by the State that an Impairment is necessary to further a significant and legitimate public purpose, and upon a finding by the court that an evident and more moderate course would serve the State’s purposes equally well, the Bondholders (or the Indenture Trustee acting on their behalf) could successfully challenge under the Federal Contract Clause the constitutionality of any Legislative Action determined by such court to limit, alter, impair, or reduce the value of the Recovery Property or the Charges so as to cause an Impairment before the Bonds are fully paid and discharged.

II. THE CALIFORNIA CONTRACT CLAUSE

The California Contract Clause mirrors the Federal Contract Clause in its proscription of laws “impairing the obligation of contracts.”⁴⁸ It is therefore unsurprising that “[t]he California Supreme Court uses the federal Contract Clause analysis for determining whether a statute violates the parallel provision of the California Constitution.”⁴⁹ This is no less true in cases involving a California statute that purports to repudiate the State’s own contractual obligations.⁵⁰

⁴⁶  Energy Reserves, 459 U.S. at 412 n.14 (citing U.S. Trust, 431 U.S. at 25–28); see also, e.g., Kavanaugh, 295 U.S. 56; Murray v. Charleston, 96 U.S. 432 (1878).

⁴⁷  U.S. Trust, 431 U.S. at 31.

⁴⁸  Cal. Const., Art. I, § 9.

⁴⁹  Calfarm Ins. Co. v. Deukmejian, 48 Cal. 3d 805, 827–28 (1989); see also 20th Century Ins. Co. v. Superior Court, 90 Cal. App. 4th 1247, 1269 n.24 (2001) (“It is appropriate to rely on federal precedent in analyzing violations of both the California and United States contract clauses. This was the approach utilized in Calfarm Ins. Co. v. Deukmejian.”); Campanelli v. Allstate Life Ins. Co., 322 F.3d 1086, 1097 (9th Cir. 2003) (similar).

⁵⁰  See, e.g., California Teachers Ass’n v. Cory, 155 Cal. App. 3d 494, 511–12 (1984) (relying on the “leading case” of U.S. Trust in the “special context . . . [of] the alteration of the state’s own obligation of payment”); Sonoma Cnty. Org. of Pub. Emps. v. Cnty. of Sonoma, 23 Cal. 3d 296 (1979) (relying on U.S. Trust and other federal cases in determining that section 16280 of the California Government Code, which invalidated agreements granting cost-of-living increases by local public agencies, was an invalid impairment of contract in violation of both the state and federal constitutions); Hermosa Beach Stop Oil Coalition v. City of Hermosa Beach, 86 Cal. App. 4th 534 (2001) (similar).

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That said, the California Court of Appeal in Hermosa Beach Stop Oil Coalition v. City of Hermosa Beach⁵¹ interpreted U.S. Trust in a different manner than have many federal courts. Specifically, although U.S. Trust purports to address the reserved powers doctrine in the context of evaluating the validity of a contract with a public utility, the court in Hermosa Beach viewed U.S. Trust as standing for the proposition that, assuming a contract with a public entity is valid, a different standard of review applies to laws impairing that contract if the law is in furtherance of the state’s police powers. In the court’s words: “If the legislation has been enacted pursuant to the state’s reserved police powers, rather than its taxing and spending powers, traditional standards of deference to the legislature’s judgment in economic and social matters must be observed.”⁵² The impact of that holding, of course, is to dampen the heightened scrutiny applied to laws impairing contracts with the State when the law at issue is an exercise of the State’s reserved police powers.

Notwithstanding Hermosa Beach, California courts have often been more protective of contract rights than their federal counterparts. For one thing, state courts have held that the California Contract Clause applies not only to legislative action but also to judicial action.⁵³ For another, California courts held that, unlike the federal decisions noting that a statute must evince an explicit intent to confer contract rights, under California law “a legislative intent to grant contractual rights can be implied from a statute if it contains an unambiguous element of exchange

⁵¹  86 Cal. App. 4th 534 (2001).

⁵²  Id. at 561.

⁵³  See Bradley v. Superior Court, 48 Cal. 2d 509, 519 (1957) (“Neither the court nor the Legislature may impair the obligation of a valid contract.”); White v. Davis, 30 Cal. 4th 528, 548 (2003) (same).

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of consideration by a private party for consideration offered by the state.”⁵⁴ The Third District Court of Appeal has also instructed that “failure to perform pursuant to the terms of the contract . . . can only be viewed as an impairment of the contract.”⁵⁵ Thus, there appears to be no legal distinction between a “breach” of the State Pledge and an “impairment” of the State Pledge for purposes of California Contract Clause analysis. Finally, the Third District even went as far as explaining that U.S. Trust imposed a “strict scrutiny” standard (as opposed to merely “heightened” scrutiny) when the State seeks to justify an impairment of its own contractual funding obligations,⁵⁶ although the court Hermosa Beach later rejected such a reading of U.S. Trust and applied a “careful examination” standard for such impairments.⁵⁷

In addition, California courts have cited favorably the Supreme Court’s analysis in Energy Reserves. To give but one example, the court in 20th Century Insurance held that legislation reviving expired insurance claims arising out of a particular earthquake did not violate the California Contract Clause. The court premised that holding on the fact that the insurance industry, like the industry at issue in Energy Reserves, was an actively regulated industry:

In determining whether legislation amounts to a substantial impairment, one factor to be considered is “whether the industry the complaining party has entered has been regulated in the past.” Whether the state actively regulates the industry at issue frames the parties’ reasonable expectations and minimizes any potential statutory impairment. In California, the insurance business “is a highly regulated industry, and one in which further regulation can reasonably be anticipated.” The Calfarm court noted that by at least 1988, “insurers were well aware of the possibility that initiatives or ordinary legislation might be enacted that would affect existing policies.”⁵⁸

As is true with federal courts, California courts have invalidated impairments of public and private bonds. In Islais Co. v. Matheson, the California Supreme Court struck down legislation that retroactively changed the interest and penalty rates for reclamation district bonds.⁵⁹ At the

⁵⁴  California Teachers, 155 Cal. App. 3d at 505; see also Ret. Emps. Ass’n of Orange Cnty., Inc. v. Cnty. of Orange, 266 P.3d 287, 296 (Cal. 2011) (“Although the intent to make a contract must be clear, our case law does not inexorably require that the intent be express.”).

⁵⁵  Id. at 510.

⁵⁶  Id. at 511–512; see also Bd. of Admin. of the Pub. Emps.’ Ret. Sys. v. Wilson, 52 Cal. App. 4th 1109, 1155 (1997).

⁵⁷  86 Cal. App. 4th at 569.

⁵⁸  90 Cal. App. 4th at 1269.

⁵⁹  3 Cal. 2d 657, 662 (1935).

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time the bonds were issued, the California Political Code set the relevant interest rate at twelve percent and the penalty rate at twenty percent. In 1931, after the bonds were issued, the State amended the California Political Code, reducing the interest rate to seven percent and the penalty rate to ten percent. The court held that the “obligations of the contract are determined by the law in effect at the time the contract was made,” and that the contract rate for the bonds at issue should therefore be the statutory rate prior to the 1931 amendment.⁶⁰ The court also found that the amendment was not justified as a “police power measure[ ],” that the penalties and interest reduced by the amendment were “an integral part of the fund constituted by law as security for the payment of [the] outstanding bonds,” and that the amendment thus could not be applied retroactively.⁶¹

Similarly, in Schuhart v. Pinguelo, the California Court of Appeal invalidated a state contractual impairment on the ground that the State failed to offer adequate justification.⁶² The case involved bonds issued by the Pleasanton Township County Water District under the Improvement Act of 1911 to construct public improvements for the benefit of certain parcels of real property. In accordance with the Improvement Act, assessments were levied against each parcel of real property benefitting from the improvements, and the assessment became a lien against the parcel. A separate bond representing each unpaid assessment could be issued to finance the improvements. At the time the bonds were issued, the statutory penalty rate was one percent. But the Legislature subsequently amended the statute by changing the rate to two percent. The Court of Appeal found that, because the law in effect at the time the bonds were issued provided for a one percent penalty rate and the face of the bonds stated the same, the change from one percent to two percent was “a substantial change in the obligation assumed” by the obligor.⁶³ The court ultimately held that the Legislature, in increasing the penalty rate, did not exercise police powers to protect a broad societal interest and therefore the impairment was not justified under the California Contract Clause.⁶⁴

In short, the great weight of authority instructs that courts in the State have interpreted the California Contract Clause consistent with the analysis applied by federal courts interpreting the Federal Contract Clause. For that reason, our assessment regarding the Federal Contract Clause generally applies to the California Contract Clause as well. In particular, the relevant case law demonstrates that the State bears a substantial burden when attempting to justify an impairment of

⁶⁰  Id.

⁶¹  Id. at 666.

⁶²  230 Cal. App. 3d 1599 (1991).

⁶³  Id. at 1605.

⁶⁴  Id. at 1606.

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a contract to which it is a party.⁶⁵ And a state action that impairs such contracts must further a significant, legitimate, and broad public purpose, not the interests of a narrow group, and that public purpose must be served by a reasonable, necessary, and carefully tailored measure.

Subject to the qualifications, limitations, and assumptions set forth in this letter, it is our opinion that a reviewing court of competent jurisdiction, in a properly prepared and presented case, would conclude that the State Pledge constitutes a contractual relationship between the Bondholders and the State under the California Contract Clause. We are also of the view that, absent a demonstration by the State that an Impairment is necessary to further a significant and legitimate public purpose, and upon a finding by the court that an evident and more moderate course would serve the State’s purposes equally well, the Bondholders (or the Indenture Trustee acting on their behalf) could successfully challenge under the California Contract Clause the constitutionality of any Legislative Action determined by such court to limit, alter, impair, or reduce the value of the Recovery Property or the Charges so as to cause an Impairment prior to the time that the Bonds are fully paid and discharged.

III. INJUNCTIVE RELIEF

In a challenge to Legislative Action under the Federal or California Contract Clause, we expect that a plaintiff would seek, among other potential remedies, an injunction preventing state officials from enforcing the provisions of such Legislative Action.⁶⁶ A preliminary injunction would serve to delay the implementation of the Legislative Action pending the final resolution of the Contract Clause challenge, whereas a permanent injunction would prevent any future implementation of the Legislative Action once the court has resolved the merits of the litigation.

A. The Availability of Preliminary Injunctive Relief in Federal Court

A federal court balances the following equitable factors in deciding whether to grant preliminary injunctive relief: (1) whether the party seeking an injunction is likely to succeed on the merits; (2) whether the party is likely to suffer irreparable harm in the absence of injunctive relief; (3) whether the balance of equities tips in favor of the party seeking the injunction; and (4)

⁶⁵  It is also true, however, that in California the detrimental impact on contract beneficiaries must be more than theoretical to constitute an unconstitutional impairment. The challenger must present evidence demonstrating a detrimental impact. See, e.g., Cal. Redevelopment Ass’n v. Matosantos, 212 Cal. App. 4th 1457, 1494 (2013).

⁶⁶  Notably, if a plaintiff also sought money damages in federal court, the state defendant(s) could claim immunity. The Eleventh Amendment generally bars federal courts from granting money damages against the State, see Ariz. Students’ Ass’n v. Ariz. Bd. of Regents, 824 F.3d 858, 865 (9th Cir. 2016), unless the State waived that immunity, see Walden v. Nevada, 945 F.3d 1088, 1092 (9th Cir. 2019).

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whether an injunction is in the public interest.⁶⁷ The decision to grant or deny a preliminary injunction is committed to the sound discretion of a federal district court, and the court’s exercise of that discretion is reviewed on appeal under the deferential “abuse of discretion” standard.⁶⁸

Success on the Merits. For purposes this opinion, and consistent with the assumptions above, we assume that a reviewing court would find a strong likelihood of success on the merits, i.e., that the Legislative Action is likely an Impairment. Thus, we examine only the three remaining elements of the standard for a preliminary injunction.

Irreparable Harm. In evaluating the irreparable harm prong on a request for a preliminary injunction, courts in the Ninth Circuit evaluate whether (1) there is a sufficient causal connection between the alleged injury and the conduct sought to be enjoined;⁶⁹ (2) irreparable injury is likely in the absence of an injunction;⁷⁰ (3) the threat of harm to the plaintiff is immediate;⁷¹ and (4) litigation can offer monetary compensation instead, i.e., an availability of an alternative remedy.⁷²

Causation. To obtain a preliminary injunction, Bondholders would have to prove that enforcement of the Legislative Action caused harm to them, such as loss of expected payments or loss of bond value. Because an Impairment, by definition, is Legislative Action that operates to the detriment of Bondholders, we believe that Bondholders would be able to show causation.

⁶⁷  See, e.g., Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009). There is, in the Ninth Circuit, an alternative formulation of the test indicating that the greater the relative hardship to the party seeking the preliminary injunction, the less probability of success must be shown. See Stormans, 586 F.3d at 1127. In particular, under this “sliding scale” approach the trial court can “balance” the requirements for a preliminary injunction so that a stronger showing of irreparable harm to plaintiff may offset a lesser showing of likelihood of success on the merits. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). But even under the “sliding scale” test, the mere possibility of irreparable injury to plaintiffs does not permit injunctive relief, since such relief still requires some proof of a likelihood of irreparable injury. See Stormans, 586 F.3d at 1127.

⁶⁸  Associated Press v. Otter, 682 F.3d 821, 824 (9th Cir. 2012) (internal quotation marks omitted).

⁶⁹  See Perfect 10, Inc. v. Google, Inc., 653 F.3d 976, 982 (9th Cir. 2011); Garcia v. Google, Inc., 786 F.3d 733, 745 (9th Cir. 2015).

⁷⁰  See Winter, 555 U.S. at 22.

⁷¹  See Caribbean Marine Servs. Co. v. Baldrige, 844 F.2d 668, 674 (9th Cir. 1988).

⁷²  See Sampson v. Murray, 415 U.S. 61, 90 (1974); Idaho v. Coeur d’Alene Tribe, 794 F.3d 1039, 1046 (9th Cir. 2015) (purely economic harms generally not irreparable, as money lost may be recovered later in litigation).

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Likelihood of Injury. Bondholders would also have to prove that their harm is likely in the absence of an injunction. Again, however, the presence of likely harm is what makes the Legislative Action an Impairment in the first place. Thus, we assume here that Bondholders could prove likely harm without an injunction. As noted below, with respect to alternative remedies, where a constitutional violation is established, the irreparable injury element is satisfied. See infra n.74 and accompanying text.

Immediacy. If scheduled payments are disrupted or bond values are depressed by Legislative Action before a trial on the merits, then the Bondholders can prove immediate harm. If, however, a trial on the merits could take place before such harm occurs, then the harm may not be immediate enough to support a preliminary injunction.⁷³

Alternative Remedies. Unless the State waives immunity, the Eleventh Amendment bars federal courts from granting money damages against the State. Thus, absent such a waiver, money damages would be unavailable to redress the harm to the Bondholders from the Legislative Action. Moreover, where a “constitutional violation is established,” for instance a violation of the Federal Contract Clause, “usually no further showing of irreparable injury is necessary” to obtain a preliminary injunction.⁷⁴

Balance of Equities. In deciding whether to grant a preliminary injunction, courts typically identify the harm that a preliminary injunction might cause the defendant, and weigh that harm against the plaintiff’s threatened injury.⁷⁵ Here, a court will likely consider the balance of harm in the “public interest” step of the analysis because the balance of equities and the public interest often merge when the government is the party opposing the request for a preliminary injunction.⁷⁶

Public Interest. In assessing the last element of a preliminary injunction request, courts “pay particular regard for the public consequences in employing the extraordinary remedy of injunction.”⁷⁷ In fact, “[a]ny time a State is enjoined by a court from effectuating statutes enacted

⁷³  See, e.g., Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir. 1984).

⁷⁴  11A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, FEDERAL PRACTICE AND PROCEDURE § 2944, at 94 (2d ed. 1995) (citing cases).

⁷⁵  See Winter, 555 U.S. at 24; Earth Island Inst. v. Carlton, 626 F.3d 462, 475 (9th Cir. 2010).

⁷⁶  See Nken v. Holder, 556 U.S. 418, 435 (2009); Drakes Bay Oyster Co. v. Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014).

⁷⁷  Winter, 555 U.S. at 24; see also Salazar v. Buono, 559 U.S. 700, 714 (2010); Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 996–97 (9th Cir. 2011).

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by representatives of its people, it suffers a form of irreparable injury.”⁷⁸ But the law is also clear that there is no “blanket presumption in favor of the government in all preliminary injunction cases.”⁷⁹ And importantly, the government has no interest in enforcing unconstitutional laws,⁸⁰ and courts have instructed that financial concerns are not a paramount public interest.⁸¹ Thus, if a court determines that the Bondholders have established a substantial likelihood that a Legislative Action is unconstitutional under the Contract Clause—and, for the reasons explained above, we believe they can—then the “public interest” factor will counsel in favor of an injunction.

Based on the foregoing, the Bondholders likely could satisfy the standards for preliminary injunctive relief to prevent an unconstitutional Impairment, although much will depend on the particulars of the Legislative Action.

B. The Availability of Permanent Injunctive Relief in Federal Court

The requirements for a permanent injunction are much the same as those for a preliminary injunction. As noted above, the only meaningful difference is that, to obtain a permanent injunction, the Bondholders must show actual success on the merits, i.e., prevailing at trial.⁸² Because we expect that the Bondholders could obtain a preliminary injunction (subject to the caveats described above), we also expect that they could obtain a permanent injunction after succeeding at trial.

IV. THE FEDERAL TAKINGS CLAUSE

The Federal Takings Clause provides that private property shall not “be taken for public use, without just compensation.” The Federal Takings Clause is applicable to state action via the

⁷⁸  Maryland v. King, 567 U.S. 1301, 1303 (2012) (internal quotation marks omitted).

⁷⁹  Rodriguez v. Robbins, 715 F.3d 1127, 1145–46 (9th Cir. 2013).

⁸⁰  See KH Outdoor, LLC v. City of Trussville, 458 F.3d 1261, 1272 (11th Cir. 2006); N. Y. Progress & Prot. PAC v. Walsh, 733 F.3d 483, 488 (2nd Cir. 2013).

⁸¹  See, e.g., Indep. Living Ctr. of S. Cal., Inc. v. Maxwell-Jolly, 572 F.3d 644, 659 (9th Cir. 2009) (“State budgetary considerations do not . . . in social welfare cases, constitute a critical public interest that would be injured by the grant of preliminary relief.”), vacated and remanded on other grounds sub nom Douglas v. Indep. Living Ctr. of S. Cal., Inc, 565 U.S. 606 (2012); Pashby v. Delia, 709 F.3d 307, 331 (4th Cir. 2013) (“[T]he public interest in this case lies with safeguarding public health rather than with assuaging North Carolina’s budgetary woes.”) (finding that public interest weighed in favor of preliminary injunction enjoining state from implementing new Medicaid eligibility policy).

⁸²  See Perfect 10, 653 F.3d at 979–80.

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Fourteenth Amendment,⁸³ and the Clause covers both tangible and intangible property.⁸⁴ Rights under contracts can be property for purposes of the Federal Takings Clause,⁸⁵ but legislation that “disregards or destroys” contract rights does not always constitute a taking.⁸⁶ Where intangible property is at issue, state law will determine whether a property right exists. And if a court determines that an intangible asset is property, the court will then consider whether the owner of that property interest had a “reasonable investment-backed expectation” that the property right would be protected.⁸⁷

The United States Supreme Court has suggested that the Federal Takings Clause may be implicated by a diverse range of government actions, including when the government (1) permanently appropriates or denies all economically productive use of property;⁸⁸ (2) destroys property other than in response to emergency conditions;⁸⁹ and (3) reduces, alters, or impairs the value of property so as to unduly interfere with reasonable investment-backed expectations.⁹⁰ To decide whether a particular interference is “undue,” courts have considered the nature of the governmental action and weighed the public purpose served by the action against the degree to which it interferes with legitimate property interests and/or investment-backed expectations.⁹¹

The Supreme Court has identified two categories of regulatory action that constitute per se

⁸³  See Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 160 (1980).

⁸⁴  See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003 (1984).

⁸⁵  See Lynch v. United States, 292 U.S. 571, 577 (1934).

⁸⁶  See Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224 (1986).

⁸⁷  PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 83 (1980); see also 2 Ronald D. Rotunda & John E. Nowak, TREATISE ON CONSTITUTIONAL LAW: SUBSTANCE AND PROCEDURE § 15.12(a)(iii), at 971 (5th ed. 2012).

⁸⁸  See, e.g., Connolly, 475 U.S. at 225; Palazzolo v. Rhode Island, 533 U.S. 606, 617 (2001); Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1027–28 (1992); United States v. Sec. Indus. Bank, 459 U.S. 70, 77 (1982).

⁸⁹  The emergency exception to the just compensation requirement of the Federal Takings Clause often arises in cases involving the government’s activities during military hostilities. See, e.g., Nat’l Bd. of Young Men’s Christian Ass’ns v. United States, 395 U.S. 85 (1969); United States v. Cent. Eureka Mining Co., 357 U.S. 155 (1958). Of note, though, the exception is not limited to wartime activities. See Miller v. Schoene, 276 U.S. 272 (1928).

⁹⁰  See Connolly, 475 U.S. at 224–25; Cent. Eureka Mining, 357 U.S. 155.

⁹¹  See, e.g., Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 485 (1987)

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takings: (1) regulations that require a property owner to suffer a permanent physical invasion of property, and (2) regulations that deprive the owner of all economically beneficial use of the property.⁹² Beyond these two narrow categories, challenges to regulations that interfere with protected property interests are governed by the three-part test set forth in Penn Central Transportation Co. v. City of New York.⁹³ Under that test, a regulation constitutes a taking if it denies a property owner “economically viable use” of that property, which is, in turn, determined by three factors: (1) the character of the governmental action; (2) the economic impact of the regulation on the claimant; and (3) the extent to which the regulation has interfered with distinct investment-backed expectations.⁹⁴

The first Penn Central factor requires the Court to examine “the purpose and importance of the public interest underlying a regulatory imposition” with an “inquiry into the degree of harm created by the claimant’s prohibited activity, its social value and location, and the ease with which any harm stemming from it could be prevented.”⁹⁵

The second Penn Central factor incorporates the principle enunciated by Justice Holmes many years ago: “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.”⁹⁶ Thus, “not every destruction or injury to property by governmental action has been held to be a ‘taking’ in the constitutional sense.”⁹⁷ Diminution in property value alone, for example, does not constitute a taking unless accompanied by serious economic harm.

The third and final Penn Central factor is “a way of limiting takings recovery to owners who could demonstrate that they bought their property in reliance on a state of affairs that did not include the challenged regulatory regime.”⁹⁸ The burden under this factor of showing interference with reasonable, investment-backed expectations is a heavy one.⁹⁹ Indeed, a reasonable,

⁹²  Lingle v. Chevron USA, Inc., 544 U.S. 528, 538 (2005).

⁹³  438 U.S. 104 (1978).

⁹⁴  Id. at 124.

⁹⁵  Maritrans Inc. v. United States, 342 F.3d 1344, 1356 (Fed. Cir. 2003) (internal citation and quotation marks omitted).

⁹⁶  Penn. Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

⁹⁷  Armstrong v. United States, 364 U.S. 40, 48 (1960).

⁹⁸  Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1176 (Fed. Cir. 1994).

⁹⁹  DeBenedictis, 480 U.S. at 493.

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investment-backed expectation “must be more than a ‘unilateral expectation or an abstract need,’”¹⁰⁰ and “legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations.”¹⁰¹ To sustain a claim under the Federal Takings Clause, the challenging party must show that it had a “reasonable expectation” at the time the contract was entered that the party “would proceed without possible hindrance” arising from changes in government policy.¹⁰²

We are not aware of any federal case law that addresses the applicability of the Federal Takings Clause in the context of a purported exercise by a state of its police power to abrogate or impair contracts otherwise binding on the state. The outcome, thus, of any claim that interference by the State with the value of the Recovery Property without compensation is unconstitutional would likely depend on factors such as the State interest furthered by that interference and the extent of financial loss to the Bondholders caused by that interference. Also relevant to a court’s inquiry would be the extent to which the Bondholders had a reasonable expectation that changes in government policy and regulation would not interfere with their investment. With respect to the last factor, we note that the Wildfire Financing Law expressly provides for the creation of Recovery Property in connection with the issuance of the Bonds, and further provides that the Financing Order, once final, is irrevocable. Moreover, through the State Pledge, the State has “pledge[d] and agree[d] with the . . . holders of [the] recovery bonds” not to impair the value of such Recovery Property.¹⁰³ Given the foregoing, we believe that Bondholders very likely have reasonable investment-backed expectations in their investments in the Bonds.

Based on our analysis of relevant judicial authority, it is our opinion, as set forth above and subject to the qualifications, limitations, and assumptions in this letter, that under the Federal Takings Clause, a reviewing court of competent jurisdiction would hold that the State is required to pay just compensation to the Bondholders if the State’s repeal or amendment of the Wildfire Financing Law or any other action by the State in contravention of the State Pledge constituted a Taking. As noted earlier, in determining whether there is an undue interference, a court would consider the nature of the governmental action and weigh the public purpose served by that action against the degree to which the action interferes with the legitimate property interests and distinct investment-backed expectations of the Bondholders. There can be no assurance, however, that any such award of just compensation would be sufficient to pay the full amount of principal of and interest on the Bonds.¹⁰⁴

¹⁰⁰  Monsanto, 467 U.S. at 1005–06 (quoting Webb’s Fabulous Pharmacies, 449 U.S. at 161).

¹⁰¹  Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16 (1976).

¹⁰²  Chang v. United States, 859 F.2d 893, 897 (Fed. Cir. 1988).

¹⁰³  Pub. Util. Code § 850.1(e).

¹⁰⁴  The State Pledge provides that “nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds” Id. (emphasis added). In Federal Takings Clause jurisprudence, “adequate provision” refers to the existence of a procedure to seek “just compensation.” It does not create an additional or different standard for measuring the adequacy of the compensation. And, where a state has made an “adequate provision” for a party to seek such “just compensation,” a party will be unable to enjoin the government’s action. Knick v. Twp. of Scott, 139 S. Ct. 2162, 2176-77 (2019). But, under present law, to the extent that there is a Taking and the State’s procedures for seeking just compensation are inadequate, Bondholders (or the Indenture Trustee on their behalf) or the Issuer could seek to enjoin enforcement of the State action by suing individual state officers under Ex Parte Young, 209 U.S. 123, 155–56 (1908) and 42 U.S.C. § 1983.

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V. THE CALIFORNIA TAKINGS CLAUSE

The California Takings Clause provides that “Private Property may be taken or damaged for public use only when compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.”¹⁰⁵ Because the provision includes the word “damaged” in its prohibition, the California Takings Clause “protects a somewhat broader range of property values” than the Federal Takings Clause.¹⁰⁶ “But aside from that difference, not pertinent here, [California courts] appear to have construed the clauses congruently.”¹⁰⁷ Courts have thus followed the United States Supreme Court’s holdings, including Ruckelshaus, Connolly, and Eastern Enters. v. Apfel, in assessing claims under the California Takings Clause.¹⁰⁸

Notably, in Action Apartment Association v. Santa Monica Rent Control Board,¹⁰⁹ the Court of Appeal held that apartment owners adequately pled a cause of action for a taking where the Rent Control Board required them to pay a higher rate of interest on security deposits than the rate of interest paid by banks. The court began by explaining that “[t]raditional takings principles did not develop with this scenario in mind.”¹¹⁰ “Even so, we find that current takings jurisprudence

¹⁰⁵  Cal. Const., Art. I, § 19.

¹⁰⁶  San Remo Hotel L.P. v. City and Cnty. of San Francisco, 27 Cal. 4th 643, 664 (2002).

¹⁰⁷  Id.

¹⁰⁸  See, e.g., DVD Copy Control Ass’n, Inc. v. Bunner, 31 Cal. 4th 864, 878 (2003) (citing Ruckelshaus); Golden Cheese Co. v. Voss, 230 Cal. App. 3d 727 (1991) (following Connolly); Myers v. Philip Morros Cos., Inc., 28 Cal. 4th 828, 846 (2002) (following Eastern Enters. v. Apfel, 524 U.S. 498 (1998)).

¹⁰⁹  94 Cal. App. 4th 587 (2001).

¹¹⁰  Id. at 601.

To the Persons Listed on the Attached Schedule I

July 20, 2022

Page 25

provides an adequate framework for analyzing the issue before us.”¹¹¹ The court found that the case did not fit either of the categorical takings scenarios, and hence analyzed the issue as a regulatory taking.

Applying federal precedent, the court then reviewed the three Penn Central factors. The court first found that the rent control law would require landlords to pay $2.3 million over three years, which amounted to each individual landlord, on average, paying $718 or $82.50 per rental unit.¹¹² Although not a large amount, the court noted that a “small taking is still a taking.”¹¹³ With respect to the second factor, the court found that payment of three percent interest was contrary to the landlords’ reasonable investment-backed expectations: “Landlords might have expected that, some day, they would have to pay security deposit interest to their tenants . . . , but they surely did not expect the payments would exceed the interest paid by banks.”¹¹⁴ Finally, the court found that the character of the action did not support its validity:

[t]he provision[] of the ordinance requiring that interest on security deposits be paid [by landlords at a specified rate, regardless of market conditions, is] remote . . . from any concern with the health or safety of [Santa Monica residents], the quality of housing in [Santa Monica], or the welfare of [Santa Monica] as a whole. [The ordinance’s] only apparent rationale is to transfer wealth from landlords . . . to tenants—making [it] an unedifying example of class legislation . . . .¹¹⁵

Relatedly, in Customer Co. v. City of Sacramento,¹¹⁶ the California Supreme Court addressed a takings claim brought by the owner of a convenience store to recover for damage caused by efforts of police to apprehend a suspect who had taken refuge in the store. The court held that the owner was not entitled to just compensation, a conclusion bolstered by consideration of cases applying the “so-called emergency exception” to the just compensation requirement.¹¹⁷ As relevant here, the court also noted that:

¹¹¹  Id.

¹¹²  Id. at 606.

¹¹³  Id.

¹¹⁴  Id.

¹¹⁵  Id. The California Supreme Court has interchangeably referred to an “emergency exception,” the “doctrine of noncompensable loss,” and the “police power exception” to the California Takings Clause.

¹¹⁶  10 Cal. 4th 368 (1995).

¹¹⁷  Id. at 383.

To the Persons Listed on the Attached Schedule I

July 20, 2022

Page 26

Injury to property can and often does result from the demolition of buildings to prevent the spread of conflagration, from the abandonment of an existing highway, from the enforced necessity of improving property in particular ways to conform to police regulations and requirements. . . . And equally well settled and understood is the law that in the exercise of this same power property may in some, and indeed in many, instances be utterly destroyed. The destruction of buildings, of diseased animals, of rotten fruit, of infected trees, are cases that at once come to mind as applicable to both personalty and realty.¹¹⁸

In such cases, the court stated, where the State acts within the “the legitimate purview and scope of the police power,” it causes “damage without injury.”¹¹⁹ In addition to the federal authorities discussed above, the court referenced a prior state decision addressing what the court referred to as the “doctrine of noncompensable loss”: “This doctrine of noncompensable loss comes into play in connection with more direct ‘taking’ or ‘damaging’ of property only under ‘emergency’ conditions; i.e., when damage to private property is inflicted by government ‘under the pressure of public necessity and to avert impending peril.’”¹²⁰ The court concluded that the damage caused by the police was such a noncompensable loss.

Finally, the California Supreme Court in Holtz v. Superior Court¹²¹ addressed a takings claim in connection with a city’s excavation work that damaged the lateral support of the plaintiff’s land. The court discussed the doctrine of noncompensable loss, which it also referred to as the “police power” exception:

[T]he “police power” doctrine “generally . . . operates in the field of regulation,” rendering “damages” occasioned by the adoption of administrative or legislative provisions noncompensable [internal citations omitted]; this doctrine of noncompensable loss comes into play in connection with more direct “taking” or “damaging” of property only under “emergency” conditions; i.e., when damage to private property is inflicted by government “under the pressure of public necessity and to avert impending peril.” Recognizing that a broad interpretation of this doctrine of noncompensable loss would completely vitiate the constitutional requirement of just compensation, the courts have narrowly circumscribed the types of emergency that will exempt the public entity from liability.¹²²

¹¹⁸  Id. (quotation omitted).

¹¹⁹  Id.

¹²⁰  Id. at 384 (quoting Holtz v. Superior Court, 3 Cal. 3d 296, 305 (1970)).

¹²¹  Holtz, 3 Cal. 3d 296.

¹²²  Id. at 305 (citations omitted).

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In so holding, the court offered as examples of noncompensable losses “the demolition of all or parts of buildings to prevent the spread of conflagration, or the destruction of diseased animals, or rotten fruit, or infected trees where life or health is jeopardized.”¹²³ Because the city excavation work at issue bore little resemblance to those examples, the court found the police power doctrine inapplicable as a matter of law.

Under the federal and state authorities discussed above, we reach the same opinion under the California Takings Clause that we expressed regarding the Federal Takings Clause, except to the extent that the emergency exception might apply comparatively more broadly under California law. There are, to be sure, few examples of the application of the “emergency” exception. But it is possible that a future State emergency could justify the destruction of the Recovery Property without compensation.

*    *    *    *    *    *     *

¹²³  Id. at 305 n.10.

To the Persons Listed on the Attached Schedule I

July 20, 2022

Page 28

This opinion letter may not be relied on in any manner or for any purpose by any person other than the addressees listed on Schedule I hereto. Nor may you rely on this opinion letter for any purpose other than the transactions described herein. This opinion letter may not be quoted, published, communicated, or otherwise made available in whole or in part to any person (including, without limitation, any person who acquires a Bond or any interest therein from an Underwriter), other than the addressees listed on Schedule I hereto, without our specific prior written consent, except that each of the Underwriters may furnish copies of this letter (1) to any of its accountants or attorneys, (2) to comply with any subpoena, order, regulation, ruling, or request of any judicial, administrative, governmental, supervisory, or legislative body or committee or any self-regulatory body (including any securities or commodities exchange or the Financial Industry Regulatory Authority, Inc.), (3) to any other person for the purpose of substantiating an Underwriter’s due diligence defense, and (4) as otherwise required by law. Provided, however, that none of the foregoing persons is entitled to rely hereon unless an addressee hereof. While a copy of this opinion letter may be posted by or at the direction of PG&E or the Issuer to an internet website required under Rule 17g-5 promulgated under the Securities Exchange Act of 1934, as amended, and maintained in connection with the ratings on the Bonds solely for the purpose of compliance with such rule or undertakings pursuant thereto made by PG&E or the Issuer, such permission to post a copy of this letter to such website shall not be construed to entitle any person, including any credit rating agency, who is not an addressee hereof to rely on this opinion letter.

We hereby consent to the filing of this letter as an exhibit to the Registration Statement, and to all references to our firm included in or made a part of the Registration Statement. In giving the foregoing consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the related rules and regulations of the CPUC.

This opinion letter is being issued as of the date hereof, and we assume no obligation to update or supplement this opinion letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the matters discussed herein, including any changes in applicable law which may hereafter occur.

Very truly yours,

/s/ Hunton Andrews Kurth LLP

Schedule I

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

Goldman Sachs & Co. LLC

200 West Street

New York, New York 10282

As Representatives of the several Underwriters

Pacific Gas and Electric Company

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

PG&E Wildfire Recovery Funding LLC

c/o Pacific Gas and Electric Company

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

The Bank of New York Mellon Trust Company, N.A.

2 N. LaSalle Street, Suite 700

Chicago, Illinois 60602

Attention: ABS Corporate Trust Administration

Moody’s Investors Service, Inc.

7 World Trade Center at

250 Greenwich Street, 24th Floor

New York, New York 10007

Attention: ABS/RMBS Monitoring Department

S&P Global Ratings, a division of S&P Global Inc.

55 Water Street, 40th Floor

New York, New York 10041

Attention: Structured Credit Surveillance

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