Exhibit A 

Redline of Second Amended Plan 

 

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UNITED STATES DISTRICT COURT

DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO, et

al.,

Debtors.1

PROMESA

Title III

No. 17-BK-3283-LTS

(Jointly Administered)

In re:

THE FINANCIAL OVERSIGHT AND

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

PUERTO RICO ELECTRIC POWER AUTHORITY,

Debtor.

PROMESA

Title III

No. 17-BK-4780-LTS

(Jointly Administered)

FIRSTSECOND AMENDED TITLE III PLAN OF ADJUSTMENT OF

THE PUERTO RICO ELECTRIC POWER AUTHORITY

PROSKAUER ROSE LLP

Eleven Times Square

New York, New York 10036

Telephone: (212) 969-3000

Facsimile: (212) 969-2900

O’NEILL & BORGES LLC

250 Muñoz Rivera

Ave., Suite 800

San Juan, PR 00918-1813

Telephone: (787) 764-8181

Facsimile: (787) 753-8944

Attorneys for the Financial Oversight and Management Board as Representative for PREPA

Dated: February 9,26, 2023

1 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case number and the last four (4) 

digits of each Debtor’s federal tax identification number, as applicable, are the (i) Commonwealth of Puerto Rico (the 

“Commonwealth”) (Bankruptcy Case No. 17-BK-3283-LTS) (Last Four Digits of Federal Tax ID: 3481); (ii) Puerto 

Rico Sales Tax Financing Corporation (“COFINA”) (Bankruptcy Case No. 17-BK-3284-LTS) (Last Four Digits of 

Federal Tax ID: 8474); (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case No. 

17-BK-3567-LTS) (Last Four Digits of Federal Tax ID: 3808); (iv) Employees Retirement System of the 

Government of the Commonwealth of Puerto Rico (“ERS”) (Bankruptcy Case No. 17-BK-3566-LTS) (Last Four 

Digits of Federal Tax ID: 9686); (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17- 

BK-4780-LTS) (Last Four Digits of Federal Tax ID: 3747); and (vi) Puerto Rico Public Buildings Authority (“PBA”) 

(Bankruptcy Case No. 19-BK-5523-LTS) (Last Four Digits of Federal Tax ID: 3801) (Title III case numbers are 

listed as Bankruptcy Case numbers due to software limitations).

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TABLE OF CONTENTS

Page

INTRODUCTION 1

ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION

OF TIME, GOVERNING LAW, AND OTHER REFERENCES 1

A. Defined Terms 1

B. Rules of Interpretation 2726

C. Computation of Time 2826

D. Governing Law 2826

E. Reference to Monetary Figures 2827

F. Controlling Document 2827

G. Consent Rights 2827

ARTICLE II ADMINISTRATIVE AND PROFESSIONAL CLAIMS 2927

A. Administrative Expense Claims 2928

B. Disallowance of Claims Filed After the Administrative Claim Bar Date 2928

C. Professional Compensation and Reimbursement Claims 2928

D. Supporting Creditors’ Fees 3029

ARTICLE III CLASSIFICATION OF CLAIMS 3130

A. Classification of Claims 3130

B. Special Provision Governing Unimpaired Claims 3231

C. Elimination of Vacant Classes 3231

D. Voting Classes; Presumed Acceptance by Non-Voting Classes 3231

E. Subordinated Claims 3231

F. Confirmation Pursuant to PROMESA Section 314 3331

G. Confirmation Pursuant to Bankruptcy Code Section 1129(b) 3332

ARTICLE IV PROVISIONS FOR TREATMENT OF SETTLING BONDHOLDER

OR SETTLING MONOLINE CLAIMS (CLASS 1) 3332

A. Treatment of Class 1 Claims 3332

ARTICLE V PROVISIONS FOR TREATMENT OF NON-SETTLING

BONDHOLDER OR NON-SETTLING MONOLINE CLAIMS (CLASS 2) 3433

A. Treatment of Class 2 Claims 3433

ARTICLE VI PROVISIONS FOR TREATMENT OF PENSION CLAIM (CLASS 3) 3533

A. Treatment of Class 3 Claims 3533

ARTICLE VII PROVISIONS FOR TREATMENT OF FUEL LINE LOAN CLAIMS

(CLASS 4) 3634

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A. Treatment of Class 4 Claims 3634

ARTICLE VIII PROVISIONS FOR TREATMENT OF NATIONAL INSURED

BOND CLAIMS (CLASS 5) 3635

A. Treatment of Class 5 Claims 3635

ARTICLE IX PROVISIONS FOR TREATMENT OF NATIONAL

REIMBURSEMENT CLAIM (CLASS 6) 3635

A. Treatment of Class 6 Claims (If the Settlement of the National 

Reimbursement Claim is Approved) 36 35

B. Treatment of Class 6 Claims (If the Settlement of the National 

Reimbursement Claim is Not Approved) 37

ARTICLE X PROVISIONS FOR TREATMENT OF GENERAL UNSECURED

CLAIMS (CLASS 7) 3735

A. Treatment of Class 7 Claims 3735

B. Election to be Treated as a Convenience Claim 3736

ARTICLE XI PROVISIONS FOR TREATMENT OF VITOL CLAIM (CLASS 8) 3836

A. Treatment of Class 8 Claims 3836

ARTICLE XII PROVISIONS FOR TREATMENT OF ASSURED INSURED

INTEREST RATE SWAPS CLAIMS (CLASS 9) 3836

A. Treatment of Class 9 Claims 3836

ARTICLE XIII PROVISIONS FOR TREATMENT OF ORDINARY COURSE

CUSTOMER CLAIMS (CLASS 10) 3837

A. Treatment of Class 10 Claims 3837

ARTICLE XIV PROVISIONS FOR TREATMENT OF EMINENT

DOMAIN/INVERSE CONDEMNATION CLAIMS (CLASS 11) 3937

A. Treatment of Class 11 Claims 3937

ARTICLE XV PROVISIONS FOR TREATMENT OF FEDERAL CLAIMS (CLASS

12) 3938

A. Treatment of Class 12 Claims 3938

ARTICLE XVI PROVISIONS FOR TREATMENT OF CONVENIENCE CLAIMS

(CLASS 13) 4038

A. Treatment of Class 13 Claims 4038

ARTICLE XVII PROVISIONS FOR TREATMENT OF SECTION 510(b)

SUBORDINATED CLAIMS (CLASS 14) 4038

A. Treatment of Class 14 Claims 4038

ARTICLE XVIII PROVISIONS FOR IMPLEMENTATION OF THE PLAN 4038

A. Allowance of Claims 4038

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B. Releases, Injunction, and Exculpation 4139

C. Dismissal of Fuel Line Lender Priority Action 4139

D. Effectuating Documents; Further Transactions 4139

E. Enrollment of Active PREPA ERS Participants in Act 106 Plan 4139

F. Legacy Charge 4140

G. PREPA Operational Restructuring 4240

H. Purchase and Sale of the Administrative Expense Bonds 4241

I. Settlement of the National Claims 4241

ARTICLE XIX PROVISIONS REGARDING THE ISSUANCE AND

DISTRIBUTION OF THE NEW BONDS 4342

A. Issuance and Distribution 4342

B. General Terms 4342

C. Excess New Bonds 4544

D. Payment Provisions 4544

E. Security 4644

F. Call Provisions 4645

G. Accounts and Payment Waterfall 4745

H. Key Covenants for New Bonds 4746

I. Application of Moneys in Debt Service Fund 4847

J. Interest Rate Covenant 4947

K. No Rights of Acceleration 4948

L. Limited Default 4948

M. Limited Remedies 4948

N. Additional Bonds and Refunding Bonds 5049

O. Force Majeure 5049

P. Direct Right of Action 5150

Q. New Master Indenture 5150

R. Governing Law 5150

S. Tax Exemption of the New Bonds 5150

T. CVIs Not Tax Exempt 5251

ARTICLE XX PROVISIONS REGARDING NATIONAL INSURED BONDS AND

TREATMENT OF NATIONAL INSURED BOND CLAIMS 5251

A. National Commutation Treatment of National Insured Bond Claims 5352

B. National Non-Commutation Treatment of National Insured Bond Claims 5352

C. Acceleration of National Insured Bonds 5453

D. Assignment of Redemption Rights 5553

E. Entitlement to Vote 5554

F. Improper Election 5554

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ARTICLE XXI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED

LEASES 5554

A. Rejection or Assumption of Executory Contracts and Unexpired Leases 5554

B. Approval of Rejection or Assumption of Executory Contracts and

Unexpired Leases 5655

C. Inclusiveness 5755

D. Cure of Defaults and Objections to Cure and Assumption 5756

E. Contracts and Leases Entered Into After the Petition Date 5857

F. Insurance Policies 5857

G. Rejection Damage Claims 5857

H. Indemnification and Reimbursement Obligations 5857

I. Nonoccurrence of Effective Date 5957

J. Reservation of Rights 5958

ARTICLE XXII GUC TRUST 5958

A. Execution of GUC Trust Deed of Trust 5958

B. Purpose of the GUC Trust 5958

C. GUC Trust Assets 5958

D. Administration of the GUC Trust 6058

E. The GUC Trustee 6059

F. Role of the GUC Trustee 6059

G. GUC Trustee’s Tax Power for Reorganized PREPA 6059

H. Transferability of GUC Trust Interests 6059

I. Cash 6059

J. Distribution of GUC Trust Assets 6159

K. Funding, Costs, and Expenses of the GUC Trust 6160

L. Compensation of the GUC Trustee 6160

M. Retention of Professionals/Employees by the GUC Trustee 6160

N. Federal Income Tax Treatment of the GUC Trust 6160

O. Dissolution of GUC Trust 6362

P. Indemnification of GUC Trustee and Members of GUC Trust Board 6362

ARTICLE XXIII AVOIDANCE ACTIONS TRUST 6463

A. Execution of Avoidance Actions Trust Agreement 6463

B. Purpose of the Avoidance Actions Trust 6463

C. Avoidance Actions Trust Assets 6463

D. Administration of the Avoidance Actions Trust 6463

E. The Avoidance Actions Trustee 6563

F. Role of the Avoidance Actions Trustee 6564

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G. Avoidance Actions Trustee’s Tax Power for Reorganized PREPA 6564

H. Transferability of Avoidance Actions Trust Interests 6564

I. Cash 6664

J. Distribution of Avoidance Actions Trust Assets 6665

K. Funding, Costs, and Expenses of the Avoidance Actions Trust 6665

L. Compensation of the Avoidance Actions Trustee 6665

M. Retention of Professionals/Employees by the Avoidance Actions Trustee 6665

N. Federal Income Tax Treatment of the Avoidance Actions Trust 6765

O. Dissolution of Avoidance Action Trust 6968

P. Indemnification of Avoidance Actions Trustee and Members of Avoidance

Actions Trust Bond 6968

ARTICLE XXIV PROVISIONS GOVERNING DISTRIBUTIONS 7068

A. Appointment of Distribution Agent 7068

B. Distributions on Account of Claims Allowed as of the Effective Date 7069

C. Rights and Powers of Distribution Agent 7069

D. Special Rules for Distributions to Holders of Disputed Claims 7169

E. Delivery of Distributions 7170

F. Claims Paid or Payable by Third Parties 7573

G. Withholding and Reporting Requirements 7574

H. Time Bar to Cash Payments 7675

I. Distributions After Effective Date 7675

J. Setoffs 7675

K. Allocation Between Principal and Accrued Interest 7675

L. Holder of Claim 7775

M. Exculpation 7776

ARTICLE XXV PROCEDURES FOR RESOLVING DISPUTED CLAIMS 7776

A. Objections to Claims and Prosecution of Disputed Claims 7776

B. Estimation of Claims 7877

C. Claims Administration Responsibilities 7877

D. Adjustment to Claims Without Objection 7977

E. Extension of Claims Objection Bar Date 7977

F. Authority to Amend Creditor List 7978

G. No Interest 7978

H. Disallowance of Claims 7978

ARTICLE XXVI GOVERNANCE AND PROVISIONS REGARDING PREPA

PAYGO TRUST AND PENSION SYSTEM 8078

A. Formation and Responsibilities of the PREPA PayGo Trust 8078

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B. Funding of the PREPA PayGo Trust 8078

C. Management of PREPA PayGo Trust 8079

D. Non-Impairment Covenant 8179

E. Maintenance of Pension 8180

ARTICLE XXVII EFFECT OF CONFIRMATION OF THE PLAN 8180

A. Discharge and Release of Claims and Causes of Action 8180

B. Releases by the Debtor and Reorganized Debtor 8381

C. Releases by Holders of Claims 8382

D. Exculpation 8482

E. Injunction 8483

F. Non-Severability of Releases, Injunctions, and Exculpations 8583

G. Reimbursement or Contribution 8584

H. Release of Liens 8584

ARTICLE XXVIII MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE

PLAN 8584

A. Modification of Plan 8584

B. Revocation or Withdrawal 8684

C. Amendment of Plan Documents 8685

D. No Admission of Liability 8685

ARTICLE XXIX CORPORATE GOVERNANCE AND MANAGEMENT OF

REORGANIZED DEBTOR 8685

A. Corporate Action 8685

B. Reorganized Debtor’s By-Laws 8786

C. Officers of Reorganized Debtor 8786

ARTICLE XXX IDENTIFICATION OF CLAIMS IMPAIRED BY THE PLAN AND

NOT IMPAIRED BY THE PLAN 8786

A. Impaired Classes 8786

B. Unimpaired Classes 8786

ARTICLE XXXI CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN 8786

A. Conditions Precedent to Confirmation Date 8786

B. Waiver of Conditions Precedent to Confirmation 9089

ARTICLE XXXII CONDITIONS PRECEDENT TO THE EFFECTIVE DATE 9189

A. Conditions Precedent to the Effective Date 9189

B. Waiver of Conditions Precedent 9190

C. Effect of Non-Occurrence of Conditions to Effective Date 9290

ARTICLE XXXIII PROVISIONS REGARDING COMMITTEE 9291

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A. Dissolution of Committee 9291

ARTICLE XXXIV PROVISIONS REGARDING OVERSIGHT BOARD AND

COMPLIANCE WITH PROMESA 9291

A. Effect of Confirmation 9291

B. Ongoing Role of the Oversight Board 9291

C. Preemption of Laws 9391

ARTICLE XXXV RETENTION OF JURISDICTION 9392

ARTICLE XXXVI MISCELLANEOUS PROVISIONS 9594

A. Title to Assets 9594

B. No Waiver 9694

C. Supplemental Injunction 9695

D. Immediate Binding Effect 9795

E. Additional Documents 9796

F. Reservation of Rights 9796

G. Successors and Assigns 9796

H. Post-Effective Date Fees and Expenses 9896

I. Securities Act Exemption 9897

J. Governing Law 9897

K. Closing Case 9897

L. Section Headings 9897

M. Document Retention 9997

N. Service of Documents 9997

O. Term of Injunctions or Stays 10098

P. Entire Agreement 10099

Q. Plan Supplement Exhibits 10099

R. Non-Severability 10099

S. Votes Solicited in Good Faith 101100

T. Waiver or Estoppel 101100

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INTRODUCTION

The Oversight Board, as the Title III representative of PREPA pursuant to PROMESA

section 315(b), proposes this plan of adjustment pursuant to and in accordance with PROMESA

Title III.

A discussion of PREPA’s history, operations, and events leading to the commencement of

PREPA’s Title III Case, as well as a summary and analysis of the Plan, risk factors, and other

related matters, is included in the Disclosure Statement. Other agreements and documents,

which have been or will be filed with the Title III Court, are referenced in the Plan or the

Disclosure Statement and are available for review.

ARTICLE I

DEFINED TERMS, RULES OF INTERPRETATION,

COMPUTATION OF TIME, GOVERNING LAW, AND OTHER REFERENCES

A. Defined Terms

Capitalized terms used in the Plan shall have the meanings set forth in this Article I.A.

Any term used in capitalized form that is not otherwise defined but that is used in PROMESA

(and to the extent made applicable by PROMESA, the Bankruptcy Code, and the Bankruptcy

Rules) shall have the meaning assigned to such term in PROMESA, the Bankruptcy Code, or the

Bankruptcy Rules, as applicable and as modified by PROMESA.

1. “2022 Fiscal Plan Projections” means the 30-Year Load Forecast with the

Individual Effects of Three Drivers Causing Load Reduction set forth at Exhibit 55 of the 2022

Fiscal Plan for PREPA certified by the Oversight Board on June 28, 2022.

2. “AAFAF” means the

Autoridad de

Asesoría Financiera y

Agencia Fiscal, a public corporation and instrumentality of the Commonwealth, whose name in

English is the Puerto Rico Fiscal

Agency and Financial

Advisory

Authority.

3. “ACR Order” means that certain Order (A) Authorizing Administrative

Reconciliation of Claims, (B) Approving Additional Form of Notice, and (C) Granting Related

Relief, dated March 12, 2020 [Case. No. 17-BK-3283-LTS, ECF No. 12274].

4. “Active PREPA ERS Participant” means a Participant who, as reflected in the

records of PREPA ERS, is not receiving a pension or annuity as of the Effective Date.

5. “Additional Bonds” means, if applicable, any bonds, notes, or other forms of

indebtedness incurred by Reorganized PREPA other than the New Bonds and Refunding Bonds,

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which may be payable from Revenues, excluding during the applicable periods an amount up to

Legacy Charge Revenues and Remaining Legacy Charge Revenues, as applicable.

6. “Administrative Claim Bar Date” means, unless otherwise ordered by the Title III

Court, the date established by the Title III Court and set forth in the Confirmation Order as the

last day to file proofs of Administrative Expense Claims pursuant to section 503(b) of the

Bankruptcy Code, which date shall be no more than ninety (90) days after the Effective Date.

7. “Administrative Expense Bonds” means the Series B-2 Bonds to be issued by

Reorganized PREPA pursuant to the Plan on the Effective Date and sold to the Commonwealth

for payment of Allowed Administrative Expense Claims, which shall be in an aggregate original

principal amount to be determined by the Oversight Board in its sole discretion, up to the

Administrative Expense Bonds Amount.

8. “Administrative Expense Bonds Amount” means approximately $400,000,000, or

such lower principal or original principal amount as determined by the Oversight Board at or

prior to the Confirmation Hearing, in each case, which principal amount shall be subject to

consultation rights of AAFAF.

9. “Administrative Expense Claim” means a Claim against the Debtor or its Assets

constituting a cost or expense of administration of the Title III Case asserted or authorized to be

asserted, on or prior to the Administrative Claim Bar Date, in accordance with Bankruptcy Code

sections 503(b) and 507(a)(2) arising during the period up to and including the Effective Date.

10. “ADR Order” means that certain Order (A) Authorizing Alternative Dispute

Resolution Procedures, (B) Approving Additional Forms of Notice, (C) Approving Proposed

Mailing, and (D) Granting Related Relief, dated April 1, 2020 [Case No. 17-BK-3283-LTS, ECF

No. 12576].

11. “ADR Procedures” means the alternative dispute resolution procedures authorized

pursuant to the ADR Order.

12. “Affiliate” has the meaning set forth in Bankruptcy Code section 101(2) and

PROMESA section 301(c)(1).

13. “Allowed” means, with respect to any Claim, such Claim or portion thereof (a)

proof of which was filed on or before the applicable Bar Date or (b) if no Proof of Claim has

been timely filed, which has been or hereafter is listed by the Debtor in the Creditor List and is

not listed thereon as “disputed”, “contingent”, or “unliquidated,” or (c) allowed pursuant to (i)

Bankruptcy Code section 502(h), applicable to the Title III Case pursuant to PROMESA section

301, (ii) the terms of the Plan, or (iii) a Final Order; provided, however, that, with respect to any

Claim described in clause (a) or (b) above, such Claim shall be considered Allowed only if, and

to the extent that, no objection to the allowance thereof, or action to equitably subordinate or

otherwise limit recovery with respect thereto, has been interposed within the applicable period of

limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final Order, or as

to which an objection has been interposed and such Claim has been allowed in whole or in part

by a Final Order. For purposes of determining the amount of an “Allowed Claim” with respect to

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distributions within a Class, there shall be deducted therefrom an amount equal to the amount of

any, original issue discount not accrued as of the date immediately prior to the Petition Date and

any claim that the Debtor may hold against the holder thereof, to the extent such Claim may be

set off pursuant to applicable bankruptcy and non-bankruptcy law. Notwithstanding anything to

the contrary herein, (x) Claims allowed solely for the purpose of voting to accept or reject the

Plan pursuant to an order of the Title III Court shall not be considered Allowed hereunder unless

otherwise specified herein or by order of the Title III Court, (y) for any purpose under the Plan,

except with respect to amounts that are determined by a Final Order to be “just compensation”

attributable in connection with the allowance of an Eminent Domain/Inverse Condemnation

Claim and treatment thereof pursuant to the terms and provisions of Article XIV hereof,

“Allowed” shall not include interest, penalties, or late charges arising from or relating to the

period from and after the Petition Date, and (z) “Allowed” shall not include any Claim subject to

disallowance in accordance with Bankruptcy Code section 502(d).

14. “Amended Lien & Recourse Challenge” means the litigation styled The Financial

Oversight and Management Board for Puerto Rico v. U.S. Bank National Association, Adv.

Proc. No. 19-00391-LTS, currently pending in the Title III Court.

15. “Amended Lien & Recourse Challenge Final Resolution” means either the entry of

(a) a Final Order in the Amended Lien & Recourse Challenge or (b) a binding settlement

agreement entered into among the parties to the Amended Lien & Recourse Challenge and

approved by a Final Order.

16. “Amendment Test” shall have the meaning given to it in Article XVIII.F of the

Plan.

17. “Assets” means, with respect to the Debtor, (a) all “property” of the Debtor,

including, without limitation, such property as may be reflected on the Debtor’s books and

records and the Confirmation Order as of the Effective Date and (b) all Causes of Action, and

any subsequent proceeds thereof, that have been or may be commenced by the Debtor or an

authorized representative for the benefit of the Debtor and its Creditors, unless modified or

released pursuant to the Plan or a Final Order.

18. “Assured” means, collectively, Assured Guaranty Corp. and Assured Guaranty

Municipal Corp.

19. “Assured Insured Interest Rate Swaps” means (a) that certain ISDA Master

Agreement, including its related Schedule and the Credit Support Annex to the Schedule, each

dated as of April 18, 2007, by and between PREPA and JPMorgan Chase Bank, N.A., and a

transaction entered into pursuant to such documents and reflected in that certain Swap

Transaction confirmation dated April 27, 2007 with JPMorgan Ref. No. 2000005090781, insured

by Assured pursuant to that certain Financial Guaranty Insurance Policy, #218491A-SWP, issued

on May 3, 2007, and secured by PREPA’s “Subordinate Obligations Fund” established and

governed by the Trust Agreement; and (b) that certain ISDA Master Agreement, including its

related Schedule and the Credit Support Annex to the Schedule, each dated as of April 18, 2007,

by and between PREPA and UBS AG, and a transaction entered into pursuant to such documents

and reflected in that certain Swap Transaction confirmation dated as of April 18, 2007 with UBS

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Ref: 37638915 and insured by Assured pursuant to that certain Financial Guaranty Insurance

Policy, No. 208491B-SWP, dated as of May 3, 2007, and secured by PREPA’s “Subordinate

Obligations Fund” established and governed by the Trust Agreement.

20. “Assured Insured Interest Rate Swaps Claims” means a Claim on account of the

Assured Insured Interest Rate Swaps.

21. “Assured Insured Interest Rate Swaps Claim Recovery” means, as applicable, (a)

the Settling Monoline Treatment, if the Holder of the Assured Insured Interest Rate Swaps

Claims, by the Settlement Offer Deadline, shall have become party to the Monoline Settlement

Agreement, or (b) the Non-Settling Monoline Treatment, if the Holder of the Assured Insured

Interest Rate Swaps Claims shall not, by the Settlement Offer Deadline, have become party to the

Monoline Settlement Agreement. the treatment provided to Holders of Allowed Claims in Class

2.

22. “Avoidance Actions” means avoidance, recovery, and subordination actions

identified on Schedule A hereto, as such Schedule A may be amended or modified up to and

including the Effective Date, against any Entity that have been brought by or on behalf of the

Debtor against an Entity under sections 510, 544, 545, 547, 548, 549, 550, 551, 552, or 553 of

the Bankruptcy Code, applicable to the Title III Case pursuant to section 301 of PROMESA, or

applicable non-bankruptcy law incorporated by Bankruptcy Code section 544.

23. “Avoidance Action Proceeds” means the net Cash consideration received by

PREPA in connection with the Avoidance Actions.

24. “Avoidance Actions Trust” means the trust to be created on or prior to the Effective

Date into which on the Effective Date shall be transferred the authority to litigate or compromise

and settle the Avoidance Actions.

25. “Avoidance Actions Trust Agreement” means the agreement to be executed and

delivered on or prior to the Effective Date providing for, among other things, the ongoing

litigation of the Avoidance Actions.

26. “Avoidance Actions Trust Assets” means, collectively, the (a) Avoidance Actions

and (b) any Cash held by the Avoidance Action Trustee from time to time.

27. “Avoidance Actions Trust Beneficiaries” means, collectively, the Holders of

Claims in the Unsecured Claims Pool.

28. “Avoidance Actions Trust Board” means the three (3) member board appointed as

of the Effective Date to govern the Avoidance Actions Trust, selected by the Oversight Board.

29. “Avoidance Actions Trust Interests” means the beneficial interests in the

Avoidance Actions Trust allocated in accordance with the terms and provisions of the Plan to the

General Unsecured Claim Recovery for the benefit of Holders of Claims in the Unsecured

Claims Pool.

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30. “Avoidance Actions Trustee” means the trustee appointed by the Avoidance

Actions Trust Board, by a simple majority vote of such board, contemporaneously with the

Effective Date in accordance with the terms and provisions of the Avoidance Actions Trust

Agreement, including, without limitation, any successor thereto.

31. “Ballot Date” means the deadline(s) established by the Title III Court and set forth

in the Disclosure Statement Order for the submission of ballots pursuant to the terms and

provisions of the Plan.

32. “Bankruptcy Code” means title 1 of the United States Code, 1 U.S.C. §§ 101–1532,

to the extent applicable to the Title III Case pursuant to PROMESA section 301(a).

33. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure as

promulgated by the United States Supreme Court under section 2075 of title 28 of the United

States Code, 28 U.S.C. § 2075, as made applicable to the Title III Case pursuant to PROMESA

section 310.

34. “Bar Date” means the respective dates established by the Title III Court by which

proofs of Claim must have been filed with respect to such Claims against the Debtor, pursuant to

(a) the Bar Date Orders, (b) a Final Order of the Title III Court, or (c) the Plan.

35. “Bar Date Orders” means the orders of the Title III Court establishing the dates by

which proofs of Claim against the Debtor or its Assets must have been filed, including, but not

limited to the (a) Order (A) Establishing Deadlines and Procedures for Filing Proofs of Claim

and (B) Approving Form and Manner of Notice Thereof [Case No. 17-BK-3283-LTS, ECF No.

2521], and (b) Order (A) Extending Deadlines for Filing Proofs of Claim and (B) Approving

Form and Manner of Notice Thereof [Case No. 17-3283-BK-LTS, ECF No. 3160].

36. “Bond Collateral” means the assets of PREPA, if any, subject to a valid, perfected,

and enforceable prepetition security interest in favor of the Bond Trustee on account of the

PREPA Revenue Bonds as determined pursuant to the Amended Lien & Recourse Challenge

Final Resolution.

37. “Bond Trustee” means U.S. Bank National Association, in its capacity as successor

trustee under the Trust Agreement.

38. “Business Day” means a day other than a Saturday, Sunday, or any other day on

which commercial banking institutions in New York, New York and San Juan, Puerto Rico are

required to close by law or executive order; provided, that for the purposes of the definition of

Treasury Rate, Business Day shall also exclude, to the extent not already excluded, (i) a day on

which commercial banks are required or authorized by law to be closed in the state, or (ii) a day

on which The New York Stock Exchange is closed for the entire day or the federal reserve banks

are closed.

39. “Cash” means the lawful currency of the United States, including, but not limited

to, bank deposits, checks representing good funds, and legal equivalents thereof.

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40. “Causes of Action” means all claims, actions, causes of action, rights to payment,

choses in action, suits, Debts, dues, sums of money, accounts, reckonings, bonds, bills,

specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses,

damages, judgments, remedies, rights of set-off, third-party claims, subrogation claims,

contribution claims, reimbursement claims, indemnity claims, counterclaims, and cross claims

(including, but not limited to, all claims for breach of fiduciary duty, negligence, malpractice,

breach of contract, aiding and abetting, fraud, inducement, avoidance, recovery, subordination,

and all Avoidance Actions) that are pending or may be asserted against any Person or Entity

whether arising on or before the Effective Date, based in law or equity, including, but not limited

to, under the Bankruptcy Code, whether known, unknown, reduced to judgment, not reduced to

judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,

secured, or unsecured and whether asserted or assertable directly or derivatively, in law, equity,

or otherwise and whether asserted or unasserted as of the Effective Date.

41. “CBA Rejection Damages Claim” means a Claim, if any, arising against PREPA

from the rejection, pursuant to section 365(d) of the Bankruptcy Code, or pursuant to a

settlement, of any Collective Bargaining Agreement, excluding any Claim against PREPA and/or

PREPA ERS arising from PREPA’s rejection of any Collective Bargaining Agreement with

respect to retirement obligations, including Pension Claims, which are treated pursuant to Article

III of the Plan.

42. “Claim” means any claim, as such term is defined in Bankruptcy Code section

101(5), against PREPA.

43. “Claims Objection Bar Date” means one hundred eighty (180) days following the

Effective Date or such later date as may be approved by the Title III Court.

44. “Claims Register” means the official register of Claims maintained by the

Solicitation Agents.

45. “Class” means a category of Holders of Claims under Bankruptcy Code section

1122(a).

46. “Collective Bargaining Agreements” means, collectively, the UEPI CBA and the

UTIER CBA.

47. “Commonwealth” means the Commonwealth of Puerto Rico.

48. “Commonwealth Confirmation Order” means The Order and Judgment

Confirming Modified Eight Amended Title III Joint Plan of Adjustment of the Commonwealth of

Puerto Rico, the Employees Retirement System of the Government of the Commonwealth of

Puerto Rico, and the Puerto Rico Public Buildings Authority, dated January 18, 2022 [Case No.

17-BK-3283-LTS, ECF No. 19813].

48. 49. “Commonwealth Constitution” means the Constitution of the Commonwealth

of Puerto Rico.

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49. 50. “Confirmation” means entry of the Confirmation Order on the docket of the

Title III Case.

50. 51. “Confirmation Date” means the date on which the Title III Court enters the

Confirmation Order on the docket of the Title III Case within the meaning of Bankruptcy Rules

5003 and 9021.

51. 52. “Confirmation Hearing” means the hearing(s) before the Title III Court under

Bankruptcy Code section 1128 at which PREPA seeks entry of the Confirmation Order.

52. 53. “Confirmation Order” means the order of the Title III Court confirming the

Plan under PROMESA section 314, as the same may be subsequently amended, supplemented,

or otherwise modified.

53. 54. “Convenience Cap” means one million dollars ($1,000,000), the aggregate

amount of consideration to be made available to Holders of Allowed Convenience Claims.

54. 55. “Convenience Claim” means an Allowed General Unsecured Claim (a) that is

equal to or less than ten thousand dollars ($10,000) or (b) the Holder of which, at such Holder’s

option, has elected to reduce the amount of such Allowed General Unsecured Claim to ten

thousand dollars ($10,000) in accordance with terms and provisions set forth in Article XVI

hereof; provided, however, that, notwithstanding the foregoing, a holder of multiple General

Unsecured Claims that are in the aggregate greater than twenty thousand dollars ($20,000) may

elect to reduce all such Claims to an aggregate amount of twenty thousand dollars ($20,000) and

elect to have all such Claims receive treatment as Convenience Claims; and, provided, further,

that the aggregate amount of consideration to be made available to Convenience Claims shall be

the Convenience Cap, and, provided, further, that, in the event that such Convenience Cap is

exceeded, Holders of Allowed Convenience Claims shall receive a Pro Rata Share of the

Convenience Cap.

55. 56. “Creditor” means any Entity holding an Allowed Claim against the Debtor or

the Debtor’s Assets or, pursuant to Bankruptcy Code section 102(2), against any other property of

the Debtor, including, without limitation, a Claim against the Debtor of a kind specified in

Bankruptcy Code section 502(g), 502(h), or 502(i), in each case, solely in such Entity’s capacity

as such.

56. 57. “Creditor List” means the creditor list (together with all summaries, notes, and

schedules) attached as Exhibit A to the Notice of Filing of Creditor List for the Puerto Rico

Electric Power Authority [Case No. 17-BK-4780-LTS, ECF No. 520], pursuant to Bankruptcy

Code sections 924 and 925, as such list, summaries, notes, or schedules have been or may be

amended, restated, supplemented, or otherwise modified by PREPA.

57. 58. “Creditors’ Committee” means the Official Committee of Unsecured Creditors

appointed by the U.S. Trustee in the Title III Case.

58. 59. “Cure Claim” means a Claim (unless waived or modified by the applicable

counterparty) based upon PREPA’s defaults under an Executory Contract or an Unexpired Lease

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assumed by PREPA under Bankruptcy Code section 365, other than a default not required to be

cured pursuant to Bankruptcy Code section 365(b)(2).

59. 60. “CVI” means, collectively, the securities to be issued on the Effective Date by

Reorganized PREPA as described in Article XIX hereof and issued in accordance with the terms

and conditions of the Plan, the Confirmation Order, and the New Master Indenture.

60. 61. “CVI Maturity Date” means the date that is thirty-five (35) years after the

Effective Date.

61. 62. “CVI Notional Amount” means the sum of the GUC CVI, the Settling CVI, and

the Non-Settling CVI.

62. 63. “CVI Redemption Price” means the calculation of the present value of the

outstanding CVI as of the applicable call date, which shall be the sum of the present values of

equal annual installments of the outstanding CVI balance as of Fiscal Year end from the

applicable call date to the final maturity of the CVI, discounted to the date of redemption of the

CVI on an annual basis (assuming a 360-day year consisting of twelve 30-day months) at the

Treasury Rate plus two-percent (2.00%).

63. 64. “Debt” shall have the meaning given to it in section 101(12) of the Bankruptcy

Code.

64. 65. “Debt Service Fund” means the fund held by the New Master Trustee into

which Reorganized PREPA shall deposit Net Revenues in accordance with the Payment

Waterfall.

65. 66. “Debtor” means PREPA.

66. 67. “Deficiency Claim” means an Allowed PREPA Revenue Bond Claim or an

Allowed Assured Insured Interest Rate Swaps Claim held by a Non-Settling Bondholder or

Non-Settling Monoline that is not a Secured Claim and constitutes an unsecured Claim against

PREPA pursuant to section 506(a)(1) of the Bankruptcy Code, as determined by the Amended

Lien & Recourse Challenge Final Resolution.

67. 68. “Definitive Documents” means, collectively, the definitive documents and

agreements contemplated by the Plan, including, without limitation, (a) the Disclosure Statement

(including any amendments, modifications, and supplements thereto) and any documentation or

agreements related thereto, which shall be reasonably satisfactory to the Required Fuel Line

Lenders, (b) the Plan (including any amendments, modifications, and supplements thereto) and

any documentation or agreements related thereto, which shall be not inconsistent with the Fuel

Line Lender PSA and reasonably satisfactory to the Required Fuel Line Lenders, (c) the

Confirmation Order, which shall be not inconsistent with the Fuel Line Lender PSA and

reasonably satisfactory to the Required Fuel Line Lenders, (d) the New Master Indenture and

documents or agreements related thereto, which shall be not inconsistent with the Fuel Line

Lender PSA and reasonably acceptable to the Required Fuel Line Lenders, (e) the form of bonds

for the New Bonds, which shall be not inconsistent with the Fuel Line Lender PSA and

reasonably acceptable to the Required Fuel Line Lenders, (f) the form of the CVI, (g) the PREPA

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PayGo Deed of Trust and documents or agreements related thereto, (h) the GUC Trust Deed of

Trust and documents or agreements related thereto, (i) the Avoidance Actions Trust Agreement

and documents or agreements related thereto, and (j) each other document that will comprise the

Plan Supplement, in all cases except as otherwise set forth herein, the form and substance of

which shall be acceptable to the Oversight Board in its sole and absolute discretion, and, with

respect to the documents identified in subsections (a)–(e) and any other document referenced in

the term “PREPA Definitive Documents” as defined in the National PSA, shall have terms and

conditions consistent with the National PSA in all respects and otherwise be in form and

substance reasonably satisfactory to National.

68. 69. “Determination” shall have the meaning given to it in Article XIX.S of the

Plan.

69. 70. “Disallowed” means, with respect to any Claim, a Claim or any portion thereof

that is not Allowed and (a) has been disallowed by a Final Order, (b) is designated as zero,

contingent, disputed, or undisputed in the Creditor List and as to which no Proof of Claim or

request for payment of an Administrative Expense Claim has been timely filed or deemed timely

filed with the Title III Court, (c) has been withdrawn by agreement of the Debtor and the Holder

thereof, or (d) has been withdrawn by the Holder thereof.

70. 71. “Disclosure Statement” means the disclosure statement for the Plan, including

all exhibits and schedules thereto, and approved by the Title III Court pursuant to Bankruptcy

Code section 1125.

71. 72. “Disclosure Statement Order” means the order of the Title III Court approving

the Disclosure Statement, which Disclosure Statement Order shall be in form and substance

reasonably acceptable to the Required Fuel Line Lenders and National.

72. 73. “Disputed” means, with respect to any Claim, a Claim that is not yet Allowed,

including (a) any Proof of Claim that, on its face, is contingent or unliquidated, (b) any Proof of

Claim or request for payment of an Administrative Expense Claim filed after the Effective Date,

applicable bar date, or the deadline for filing Proofs of Claim based on PREPA’s rejection of

Executory Contracts or Unexpired Leases, as applicable, and (c) any Claim that is subject to an

objection or a motion to estimate, in each case that has not been withdrawn, resolved, or ruled on

by a Final Order of the Title III Court.

73. 74. “Distribution Agent” means, as applicable, PREPA, Reorganized PREPA, the

GUC Trustee, or such Entity or Entities designated by the Oversight Board, each of which is to

make or to facilitate distributions in accordance with the provisions of the Plan.

74. 75. “Distribution Date” means, except as otherwise set forth herein, the date or

dates determined by the Oversight Board or the GUC Trustee, as applicable, on or after the

Effective Date, upon which the Distribution Agent shall make distributions to Holders of

Allowed Claims entitled to receive distributions under the Plan.

75. 76. “Distribution Record Date” means the Ballot Date or such other date

established by a separate Final Order of the Title III Court, including the Confirmation Order;

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provided, however, that the “Distribution Record Date” shall not apply to any publicly held

securities that will receive a distribution pursuant to the Plan through DTC.

76. 77. “DTC” means The Depository Trust Company.

77. 78. “Effective Date” means the date that is the first Business Day after the

Confirmation Date on which all conditions precedent to the occurrence of the Effective Date set

forth in Article XXXII.A of the Plan have been satisfied or waived in accordance with Article

XXXII.B of the Plan.

78. 79. “Election of Settlement Class Signature Page” means the signature page

attached to the Uninsured Bond Settlement Agreement or Monoline Settlement Agreement,

pursuant to which a Holder of PREPA Revenue Bond Claims may elect to be a Settling

Bondholder by returning such completed signature page to the Oversight Board by the Settlement

Offer Deadline and otherwise in accordance with the terms of the Uninsured Bond Settlement

Agreement or Monoline Settlement Agreement, as applicable.

79. 80. “Eminent Domain/Inverse Condemnation Claim” means a Claim arising from

or related to (a) an Eminent Domain Proceeding and a Final Order entered therein for an amount in

excess of the amount deposited by the condemnor in accordance with the terms and provisions of

32

L.

P

.R.A. § 2907, including, without limitation, interest accrued with respect thereto or (b) an asserted

inverse condemnation of property caused by an asserted taking of property for public use by the

Debtor without due process of law and without having received just compensation, including,

without limitation, through the imposition of development restrictions or use limitations.

80. 81. “Eminent Domain Proceeding” means a condemnation action or proceeding

commenced by PREPA in the Court of First Instance in accordance with the terms and provisions of

32

L.

P

.R.A. § 2905 to obtain title to real property located on Puerto Rico.

81. 82. “Entity” has the meaning set forth in Bankruptcy Code section 101(15).

82. 83. “Excess New Bonds” means the Net Remaining New Bonds, if any, available

for distribution, after making the distributions of Net Remaining New Bonds provided for by the

Plan to (a) the GUC Trust, (b) Holders of Allowed PREPA Revenue Bond Claims or Holders of

Assured Insured Interest Rate Swaps Claims that are a Settling Bondholder or a Settling

Monoline, and (c) Holders of Allowed Fuel Line Loan Claims.

83. 84. “Exchange Offer” shall have the meaning given to it in Article XIX.S of the

Plan.

84. 85. “Exculpated Party” means, collectively, and in each case in its capacity as

such: (a) PREPA; (b) the Oversight Board; (c) AAFAF; (d) the Creditors’ Committee; (e) the

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Vitol Parties, except with respect to any claims related to the Vitol-SCC AP; (f) the Fuel Line

Lender PSA Creditors; (g); National; (h) LUMA Energy; and (i) with respect to each of the

foregoing, such Entity’s current and former Related Persons.

85. 86. “Executory Contract” means a contract or lease to which PREPA is a party that

is subject to assumption, rejection, or assumption and assignment in accordance with Bankruptcy

Code section 365, except as provided in PROMESA section 311.

86. 87. “Federal Claims” means, collectively, any and all Claims of the United States

of America, its agencies, departments or agents, including, without limitation, the United States

Department of Housing and Urban Development, the United States Department of Homeland

Security, the United States Environmental Protection Agency, and the United States Department

of Labor.

87. 88. “Final Order” means, as applicable, an order or judgment of a court of

competent jurisdiction that has been entered on the docket maintained by the clerk of such court

and has not been reversed, vacated, or stayed and as to which (a) the time to appeal, petition for

certiorari, or move for a new trial, re-argument, or rehearing has expired and as to which no

appeal, petition for certiorari, remand proceeding, or other proceedings for a new trial,

re-argument, or rehearing shall then be pending, or (b) if an appeal, writ of certiorari, new trial,

re-argument, or rehearing thereof has been sought, (i) such order or judgment shall have been

affirmed or remanded in part or in full, with no further proceedings on remand, by the highest

court to which such order was appealed, certiorari shall have been denied, or a new trial,

re-argument, or rehearing shall have been denied or resulted in no modification of such order,

and (ii) the time to take any further appeal, petition for certiorari, or move for a new trial,

re-argument, or rehearing shall have expired; provided, however, that the possibility that a

motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the

Bankruptcy Rules or the Local Bankruptcy Rules, may be filed relating to such order shall not

prevent such order from being a Final Order, except as provided in the Federal Rules of

Appellate Procedure, the Bankruptcy Rules, or the Local Bankruptcy Rules.

88. 89. “Findings of Fact and Conclusions of Law” means the findings of fact and

conclusions of law of the Title III Court entered in the Title III Case in connection with

confirmation of the Plan in accordance with section 314 of PROMESA and section 1129 of the

Bankruptcy Code, made applicable in the Title III Case in accordance with section 301 of

PROMESA.

89. 90. “Fiscal Plan” means a “Fiscal Plan” as defined in PROMESA section 5(10).

90. 91. “Fiscal Year” means a fiscal year of PREPA, commencing on July 1st and

concluding on June 30th the following calendar year.

91. 92. “Fuel Line Citibank Facility” means the Trade Finance Facility Agreement,

dated July 20, 2012, by and between PREPA and Citibank, N.A., as amended, amended and

restated, supplemented, or otherwise modified from time to time.

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92. 93. “Fuel Line Facilities” means, collectively, the credit facilities extended to

PREPA pursuant to the Fuel Line Scotia Facility and the Fuel Line Citibank Facility.

93. 94. “Fuel Line Lender Priority Action” means the litigation styled Cortland

Capital Market Services LLC, et al., v. The Financial Oversight and Management Board for

Puerto Rico, et al., Case No. 19-00396-LTS, currently pending in the Title III Court, in which the

lenders of the Fuel Line Loans asserted, among other things, that the Fuel Line Loans constitute

“Current Expenses” under the Trust Agreement and have priority over PREPA’s bondholders.

94. 95. “Fuel Line Lender PSA” means that certain Plan Support and Settlement

Agreement, dated as of December 1, 2022, by and among the Oversight Board and the Fuel Line

Lender PSA Creditors, as it may be amended, modified, or supplemented in accordance with the

terms thereof.

95. 96. “Fuel Line Lender PSA Creditors” means, collectively, the parties to the Fuel

Line Lender PSA, other than the Oversight Board, as they may change from time to time in

accordance with the Fuel Line Lender PSA.

96. 97. “Fuel Line Lender PSA Creditors Consummation Fees” means consummation

costs of fifteen million dollars ($15,000,000) to be paid to the Fuel Line Lender PSA Creditors.

97. 98. “Fuel Line Lender PSA Creditors Fees” means, collectively, the Fuel Line

Lender PSA Creditors Consummation Fees and the Fuel Line Lender PSA Creditors

Professionals’ Reimbursement Fees.

98. 99. “Fuel Line Lender PSA Creditors Professionals’ Reimbursement Fees” means

reimbursement of up to eleven million dollars ($11,000,000) in documented professional fees

incurred by the Fuel Line Lender PSA Creditors.

99. 100. “Fuel Line Loan Claim” means a Claim on account of Fuel Line Loans or

otherwise arising from or related to the Fuel Line Facilities (including interest accrued through

the Petition Date).

100. 101. “Fuel Line Loans” means the loans or advances made under the Fuel Line

Facilities.

101. 102. “Fuel Line Scotia Facility” means the Credit Agreement, dated May 4, 2012,

by and among PREPA, Scotiabank de Puerto Rico, and certain lenders, as amended, amended

and restated, supplemented, or otherwise modified from time to time.

102. 103. “General Unsecured Claim” means any unsecured Claim against PREPA

other than an Administrative Expense Claim, a Federal Claim, a Professional Claim, an Eminent

Domain/Inverse Condemnation Claim (except as otherwise provided in Article XIV of the Plan),

a Pension Claim, a Fuel Line Loan Claim, a PREPA Revenue Bond Claim (including a

Deficiency Claim), a National Insured Bond Claim, a National Reimbursement Claim, a Vitol

Claim, an Assured Insured Interest Rate Swaps Claim, a Secured Claim, an Ordinary Course

Customer Claim, a Section 510(b) Subordinated Claim, or such other Claim determined by the

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Title III Court not to be an General Unsecured Claim. For the avoidance of doubt, each CBA

Rejection Damages Claim shall be a “General Unsecured Claim.”

103. 104. “General Unsecured Claim Recovery” means the aggregate recovery by

Holders of Claims in the Unsecured Claims Pool, payable from the GUC Trust Assets, comprised

of (a) the Avoidance Action Proceeds, (b) the GUC New Bonds, if any, and (c) the GUC CVI.

104. 105. “Government Parties” means collectively, (a) the Oversight Board, (b)

PREPA, and (c) AAFAF.

105. 106. “Governmental Unit” has the meaning set forth in Bankruptcy Code section

101(27).

106. 107. “Gross Remaining New Bonds” means the Series B Bonds, if any, available

for distribution after the Mandatory New Bonds Distribution and the GUC New Bonds Initial

Distribution.

107. 108. “GUC CVI” means CVI in the notional face amount equal to the Unsecured

Claims Pool minus the sum of the (a) the amount of the Avoidance Action Proceeds as of the

Effective Date and (b) face of amount of the GUC New Bonds.

108. 109. “GUC Initial New Bonds Recovery Percentage” means fifty percent (50.0%).

109. 110. “GUC New Bonds” means, collectively, the GUC New Bonds Initial

Distribution and the GUC New Bonds Secondary Distribution.

110. 111. “GUC New Bonds Initial Distribution” means the aggregate principal amount

of Series B Bonds to be initially distributed to the GUC Trust for the benefit of Holders of

Claims in the Unsecured Claims Pool, equal to the lesser of (a) the Unsecured Claims Pool

Estimate times the GUC Initial New Bonds Recovery Percentage and (b) all GUC Remaining

New Bonds.

111. 112. “GUC New Bonds Secondary Distribution” means the aggregate principal

amount of Net Remaining New Bonds distributed to the GUC Trust for the benefit of Holders of

Claims in the Unsecured Claims Pool, after the GUC New Bonds Initial Distribution, equal to the

Unsecured Claims Pool Estimate minus the GUC New Bonds Initial Distribution divided by the

Remaining Series B Bonds Claims Pool, which resulting fraction shall be multiplied by the Net

Remaining New Bonds; provided, however, the sum of the GUC New Bonds Initial Distribution

plus the GUC New Bonds Secondary Distribution shall not exceed one hundred percent

(100.0%) of the Unsecured Claims Pool Estimate.

112. 113. “GUC Remaining New Bonds” means the Series B Bonds, if any, available

for distribution after the Mandatory New Bonds Distribution.

113. 114. “GUC Trust” means an Entity to be established on or prior to the Effective

Date for the benefit of Holders of Claims in the Unsecured Claims Pool, which Entity shall be a

liquidating trust managed in accordance with the GUC Trust Deed of Trust.

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114. 115. “GUC Trust Assets” means, collectively, (a) the Avoidance Action Proceeds,

(b) the GUC New Bonds, if any, and (c) the GUC CVI.

115. 116. “GUC Trust Beneficiaries” means, collectively, the Holders of Claims in the

Unsecured Claims Pool.

116. 117. “GUC Trust Board” means the three (3) member board appointed as of the

Effective Date to govern the GUC Trust, selected by the Oversight Board.

117. 118. “GUC Trust Deed of Trust” means the deed of trust to be executed and

delivered on or prior to the Effective Date providing for, among other things, the distribution of

the General Unsecured Claims Recovery to the Holders of Claims in the Unsecured Claims Pool.

118. 119. “GUC Trust Interests” means the beneficial interests in the GUC Trust

allocated in accordance with the terms and provisions of the Plan for the benefit of Holders of

Claims in the Unsecured Claims Pool.

119. 120. “GUC Trustee” means the trustee appointed by the GUC Trust Board, by a

simple majority vote of such board, contemporaneously with the Effective Date in accordance

with the terms and provisions of the GUC Trust Deed of Trust, including, without limitation, any

successor thereto.

120. 121. “Holder” means an Entity holding a Claim, except as provided in PROMESA

section 301(c)(3).

121. 122. “Impaired” means a Claim that is not Unimpaired.

122. 123. “Insurance Policies” means, collectively, all of the Debtor’s insurance

policies, excluding any insurance policies issued by Monoline Insurers with respect to Insured

PREPA Revenue Bonds.

123. 124. “Insured PREPA Revenue Bonds” means the PREPA Revenue Bonds insured

pursuant to insurance policies issued by the Monoline Insurers.

124. 125. “Interest Rate Covenant” shall have the meaning given to it in Article XIX.J

of the Plan.

125. 126. “IRC” means the United States Internal Revenue Code of 1986, as amended

from time to time.

126. 127. “IRS” means the Internal Revenue Service, an agency of the United States

Department of Treasury.

127. 128. “Invited Bonds” shall have the meaning given to it in Article XIX.S of the

Plan.

128. 129. “Law 458 Action” means the litigation styled PREPA v. Vitol Inc. et al., Adv.

Proc. No. 19-00453 in [Case No. 17-BK-3283-LTS].

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129. 130. “Legacy Charge” means the hybrid fixed monthly flat fee and volumetric

charge by Reorganized PREPA to be included in Reorganized PREPA’s rates, fees, and charges

to its customers, as more fully described on Schedule B hereto, as such Schedule B may be

amended or modified up to and including the Effective Date, to pay principal and interest on the

New Bonds and any Refunding Bonds, in structure and amounts that do not delay or extend the

Series A Bonds’ or the Series B Bonds’ expected repayment date and expected weighted average

life as set forth in the Fuel Line Lender PSA or the National PSA, as applicable, and otherwise

that are reasonably acceptable to the Required Fuel Line Lenders.

130. 131. “Legacy Charge Revenues” means, during the applicable period, the portion,

expressed in dollars, of all Revenues attributable to the Legacy Charge, as calculated by a

Servicer and certified by an officer thereof to the New Master Trustee.

131. 132. “Lien” has the meaning set forth in Bankruptcy Code section 101(37).

132. 133. “Local Bankruptcy Rules” means the Local Bankruptcy Rules of the United

States Bankruptcy Court for the District of Puerto Rico and, to the extent applicable to the Title

III Case, the Local District Court Rules for the District of Puerto Rico, each as amended from

time to time.

133. 134. “LUMA Energy” means, collectively, LUMA Energy, LLC, a joint venture

between Quanta Services and Canadian Utilities Limited, an ATCO Ltd. Company, and LUMA

Energy ServCo, LLC, its subsidiary.

134. 135. “Mandatory New Bonds Distribution” means the New Bonds to be issued

pursuant to this Plan and distributed in accordance with the following provisions of the Plan:

Article II.D; Article IV.A(ii); Article V.A(ii); Article VII.A(i); Article VIII.A; Article IX.A;

Article XII.A; and Article XVIII.H.

135. 136. “Monoline Insurers” means Assured, National, and Syncora.

137. “Monoline Settlement Agreement” means a settlement agreement pursuant to

which a Monoline Insurer (other than National) may, by the Settlement Offer Deadline, accept

the proposed classification and settlement for such Monoline Insurer’s Claims as set forth in the

Monoline Settlement Agreement, and have, among other things, (a) such Monoline Insurer’s

Claims treated as a Settling Monoline in accordance with Article V of the Plan (and, as

applicable, such Monoline Insurer’s Assured Insured Interest Rate Swaps Claims treated pursuant

to Article XII of the Plan), and (b) such Monoline Insurer release and discharge any and all

Claims, Causes of Action, and/or counterclaims in or related to the Amended Lien & Recourse

Challenge or any proceeding related thereto.

136. 138. “National” means National Public Finance Guarantee Corporation.

137. 139. “National Acceleration Price” means, with respect to any National Insured

Bond, a price equal to the outstanding principal amount of a National Insured Bond plus the

accrued and unpaid interest thereon (or, in the case of any capital appreciation bonds, the

compounded amount thereof) as of the date of payment.

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138. 140. “National Bondholder Election Form” means the “Form of Election Notice

for Holders of Claims in Class 5”, a copy of which is attached to the Disclosure Statement Order.

139. 141. “National Certificates” means, with respect to each National Trust that is

formed for the benefit of the beneficial holders of National Insured Bonds, the certificate(s) or

receipt(s) to be issued by such National Trust to beneficial holders of such National Insured

Bonds that are deposited into the National Trust.

140. 142. “National Claims” means, collectively, the National Insured Bond Claims and

the National Reimbursement Claim.

141. 143. “National Commutation Consideration” means a combination of some or all

of the following, to be selected by National at National’s sole discretion at or prior to the Plan

Supplement Deadline: (i) some or all of a Holder’s Pro Rata Share of the National Plan

Consideration; (ii) a percentage, to be determined at National’s sole discretion, of the amounts

distributable to National in accordance with the terms and provisions of Article II.D.2 hereof; and

(iii) Cash in an amount to be determined by National in its sole discretion.

142. 144. “National Commutation Treatment” means the treatment set forth in Article

XX.A of this Plan.

143. 145. “National Escrow Account” means escrow accounts that may be formed, on

or prior to the Effective Date, by PREPA, for the benefit of the beneficial holders of National

Insured Bonds whose National Escrow Consideration is deposited therein, the terms of which

shall be set forth in the Plan Supplement.

144. 146. “National Escrow Consideration” means any or all of the New Bonds

distributable on account of Allowed National Insured Bond Claims and any other consideration

that may be selected by National, in National’s sole and absolute discretion, at or prior to the Plan

Supplement Deadline.

145. 147. “National Insurance Policies” means the existing insurance policies,

including secondary market insurance policies, initially issued by (a) MBIA Insurance

Corporation and subsequently novated to National or (b) FGIC and subsequently novated to

National, relating to the National Insured Bonds, together with any and all agreements and other

documents related thereto.

146. 148. “National Insured Bonds” means, collectively, the PREPA Revenue Bonds

that are insured by National or any of its affiliates and listed on Exhibit C to the National PSA;

provided, however, for the avoidance of doubt, “National Insured Bonds” shall not include any

PREPA Revenue Bonds that National (a) satisfied all amounts due and owningowing thereunder

and (b) sold, assigned, and transferred its interests and rights into certain third-party buyers.

147. 149. “National Insured Bond Claims” means, collectively, the Claims against

PREPA arising from the National Insured Bonds; provided, for the avoidance of doubt, the

National Insured Bond Claims shall not include the National Reimbursement Claim.

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148. 150. “National Non-Commutation Treatment” means the treatment set forth in

Article XX.B of this Plan.

149. 151. “National Plan Consideration” means the consideration distributable on

account of Allowed National Insured Bond Claims.

150. 152. “National PSA” means that certain Plan Support and Settlement Agreement,

dated as of January 31, 2023, by and among PREPA, the Oversight Board, and National,

including any exhibits or schedules thereto, as it may be amended, modified, or supplemented in

accordance with the terms thereof.

151. 153. “National Reimbursement Claim” means the Claim of National arising from

the payments made by National after the Petition Date, and as they may continue to be

madeaccrue up to, but not including, the Effective Date to holders of the National Insured Bonds

on account of interest accrued on such bonds. For the avoidance of doubt, the National

Reimbursement Claim does not include any claims arising under PREPA Revenue Bonds that

National sold, assigned, and transferred its interests and right in to certain third-party buyers.

152. 154. “National Settlement” means the settlement of all Claims, interests, and

controversies among PREPA, the Oversight Board, and National, the terms of which are set out

in the National PSA.

153. 155. “National Trust” means the trust(s) which may be formed, on or prior to the

Effective Date, by PREPA, the sole cost and expense of which, including, but not limited to, the

formation and maintenance of the trust(s) (including trustee fees and expenses), shall be satisfied

from the assets of the National Trust, and for the benefit of beneficial holders of such National

Insured Bonds, the terms of which shall be set forth in the Plan Supplement.

154. 156. “National Trust Consideration” means some or all of the New Bonds

distributable on account of Allowed National Insured Bond Claims and any other consideration

that may be selected by National, in National’s sole and absolute discretion, at or prior to the Plan

Supplement Deadline.

155. 157. “Net Remaining New Bonds” means the Series B Bonds, if any, available for

distribution after the Mandatory New Bonds Distribution, the GUC New Bonds Initial

Distribution, and the PREPA PayGo New Bonds Distribution.

156. 158. “Net Revenues” means Revenues minus Operating Expenses.

157. 159. “New Bonds” means, collectively, the Series A Bonds and Series B Bonds to

be issued by Reorganized PREPA pursuant to the Plan on the Effective Date, having an

aggregate original principal amount of approximately $5.68 billion.

158. 160. “New Master Indenture” means the master trust indenture to be executed and

delivered on or prior to the Effective Date pursuant to which Reorganized PREPA shall issue the

New Bonds and the CVI, and includes all of the terms and provisions in connection therewith,

which shall not be inconsistent with the Fuel Line Lender PSA and the National PSA and shall

be reasonably acceptable to the Required Fuel Line Lenders and National, as the same may be

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amended, supplemented, or modified from time to time in accordance with its terms and

conditions, a form of which will be attached to the Plan Supplement.

159. 161. “New Master Trustee” means the trustee or replacement trustee, as the case

may be, appointed in accordance with the terms and conditions of the New Master Indenture;

provided, that the initial New Master Trustee shall be reasonably acceptable to the Required Fuel

Line Lenders and National.

160. 162. “Non-Settling Bondholder” means a Holder of PREPA Revenue Bond Claims

that is not a Monoline Insurer that did not timely submit to the Solicitation Agent by the

Settlement Offer Deadline the Election of Settlement Class Signature Page issued to such Holder.

161. 163. “Non-Settling CVI” means, (a) if the Non-Settling CVI Conditions are met,

CVI in the notional face amount equal to the sum of the Remaining Disallowed Non-Settling

Claims of all Holders of PREPA Revenue Bonds Claims that are a Non-Settling Bondholder or a

Non-Settling Monoline as calculated in Article V.A(iv) of the Plan, or (b) if the Non-Settling

CVI Conditions are not met, CVI in the notional face amount of zero dollars ($0.00).

162. 164. “Non-Settling CVI Conditions” means if (a) Class 2 votes to accept the Plan

and (b) a Final Order is entered in the Amended Lien & Recourse Challenge determining that the

PREPA Revenue Bonds are recourse solely to the Sinking Fund.

163. 165. “Non-Settling Monoline” means (a) a Holder of PREPA Revenue Bond

Claims that is a Monoline Insurer other than National or (b) a Holder of Assured Insured Interest

Rate Swaps Claims, in each case that did not timely submit to the Solicitation Agent by the

Settlement Offer Deadline an Election of Settlement Class Signature Page issued to such

HolderAssured and Syncora.

166. “Non-Settling Monoline Treatment” means the treatment provided to Holders of

Allowed Claims in Class 2.

164. 167. “Operating Expenses” means all of Reorganized PREPA’s reasonable and

necessary current expenses of managing, operating, maintaining, repairing, and replacing

Reorganized PREPA’s electric utility system and providing customer service to users of such

system and shall include, without limiting the generality of the foregoing, all administrative

expenses, wages, salaries, benefits, insurance premiums and deductibles, expenses of preliminary

surveys not chargeable to capital expenditures, engineering expenses relating to operation and

maintenance, legal and other professional service expenses (including, without limitation, claims,

judgments, losses, and damages), purchases of equipment, goods, and services, equipment

rentals, project management costs, physical and data security expenses, permitting fees and

expenses, banking and cash management expenses, any payment to pension, pension trust, or

retirement funds (including, for the avoidance of doubt, payments made to the PREPA PayGo

Trust), all expenses related to third party operation and maintenance contracts, and all other

expenses required to be paid by Reorganized PREPA under the provisions of the definitive

documentation governing the New Bonds, under its contractual obligations (including any and all

fees and pass-through expense payable under the transmission and distribution contract, as well

as under any other contracts relating to a “PREPA Transaction” as defined in Act 120-2018), or

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by law, or permitted by standard practices for public utility systems, plus maintenance of a

reasonable minimum balance of unrestricted cash consistent with PREPA’s current practices as

further provided in the New Master Indenture.

165. 168. “Operationally Restructured” means the reorganization of PREPA, in

accordance with the Commonwealth’s and PREPA’s certified Fiscal Plan, into separate and

distinct legal entities, in a form and structure substantially similar to that set forth immediately

below, with clearly divided assets, functions, and financial statements, or as otherwise agreed to

by Reorganized PREPA, AAFAF, the Oversight Board, and LUMA Energy.

166. 169. “Ordinary Course Customer Claim” means a Claim, other than a Disputed

Claim, held by a customer of PREPA related to ordinary course customer matters, including a

Claim related to overpayment of customer bills or customer deposits held by PREPA.

167. 170. “Oversight Board” means the Financial Oversight and Management Board for

Puerto Rico established pursuant to PROMESA section 101, as the Debtor’s Title III

representative in its Title III Case pursuant to PROMESA section 315(b).

168. 171. “Participant” means a current, former, active, inactive, retired, or disabled

employee who holds an accrued claim against PREPA ERS for one or more retirement benefits

on account of being or having been a participant in PREPA ERS, together with its beneficiaries,

if any.

169. 172. “Payment Waterfall” shall have the meaning given to it in Article XIX.G of

the Plan.

170. 173. “Pension Claim” means the Claim of PREPA ERS on account of

contributions owed (including amounts payable in the future) by PREPA to PREPA ERS to pay

retiree pension benefits in accordance with the PREPA ERS Regulations, collective bargaining

agreements, resolutions, and applicable law, including any Claim for rejection damages with

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respect to PREPA’s rejection of any pre-petition obligations to pay retiree pension benefits

pursuant to any Executory Contract.

171. 174. “Person” has the meaning set forth in Bankruptcy Code section 101(41).

172. 175. “Petition Date” means July 2, 2017, the date on which the Title III Case was

commenced.

173. 176. “Plan” means this plan of adjustment, including the Plan Supplement and all

exhibits, supplements, appendices, and schedules.

174. 177. “Plan Supplement” means any compilation of documents and forms of

documents, agreements, schedules, and exhibits to the Plan, including, among other documents,

the New Master Indenture, the GUC Trust Deed of Trust, the Avoidance Actions Trust

Agreement, the PREPA PayGo Deed of Trust, and the Schedule of Assumed Contracts and

Leases which shall be filed with the Title III Court no later than the Plan Supplement Deadline,

and additional documents filed with the Title III Court prior to the Effective Date as amendments

to the Plan Supplement, each of which shall be consistent in all respects with, and shall otherwise

contain, the terms and conditions set forth on the exhibits and schedules attached hereto, where

applicable, and which shall not be inconsistent with the Fuel Line Lender PSA and the National

PSA and shall be reasonably acceptable to the Required Fuel Line Lenders and National. The

Plan Supplement shall be deemed incorporated into and part of the Plan as if set forth herein in

full.

175. 178. “Plan Supplement Deadline” means seven (7) days before the Ballot Date or

such later date as may be approved by the Title III Court on notice to parties in interest.

176. 179. “PREB” means the Puerto Rico Energy Bureau or its successor or designee.

177. 180. “PREPA” means the Puerto Rico Electric Power Authority, a public

corporation of the Commonwealth of Puerto Rico established pursuant to Act No. 83 of 1941, as

amended.

178. 181. “PREPA ERS” means the Puerto Rico Electric Power

Authority Employee Retirement System, or by its Spanish name Sistema de Retiro de los

Empleados de la

Autoridad de Energía Eléctrica (the “SREAEE” by its Spanish acronym), the entity responsible for

the administration and payment of PREPA’s pension obligations, pursuant to the PREPA ERS

Regulations.

179. 182. “PREPA ERS Priority Action” means the litigation styled Sistema de Retiro

de Los Empleados de la Autoridad de Energia Electrica v. The Financial Oversight and

Management Board for Puerto Rico, et al., Case No. 19-00405-LTS, currently pending in the

Title III Court.

180. 183. “PREPA ERS Regulations” means the regulations adopted by PREPA

pursuant to PREPA’s Resolution No. 200, adopted June 25, 1945, that provide for the

governance, funding, and operation of PREPA ERS, as amended from time to time.

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181. 184. “PREPA PayGo Deed of Trust” means the deed of trust to be executed and

delivered on or prior to the Effective Date, substantially in the form included in the Plan

Supplement, providing for, among other things, the creation of the PREPA PayGo Trust and

terms for the deposit of funds by PREPA and withdrawal of monies to reimburse PREPA ERS

for payment of benefits to Participants as adjusted by this Plan.

182. 185. “PREPA PayGo New Bonds Distribution” means the aggregate principal

amount of Series B Bonds to be initially distributed to the PREPA PayGo Trust for the benefit of

PREPA ERS, equal to the product of (a) twenty percent (20.0%) times (b) the Gross Remaining

New Bonds.

183. 186. “PREPA PayGo Trust” means the reserve trust to be created in accordance

with the terms and conditions hereof, which reserve trust shall be utilized to reimburse PREPA

ERS on an annual basis for payment of retirement benefits to Participants as adjusted by this

Plan.

184. 187. “PREPA Revenue Bond Claim” means, other than the National Claims, a

Claim against PREPA on account of any PREPA Revenue Bonds, including Insured PREPA

Revenue Bonds, Uninsured PREPA Revenue Bonds, and insurance policies issued by the

Monoline Insurers.

185. 188. “PREPA Revenue Bonds” means bonds issued by PREPA pursuant to the

Trust Agreement.

186. 189. “Pro Rata Share” means with respect to Allowed Claims (i) within the same

Class, the proportion that an Allowed Claim bears to the sum of all Allowed Claims within such

Class, and (ii) among multiple Classes, the proportion that Allowed Claims in any such Class

bears to the sum of the Allowed Claims in all such Classes.

187. 190. “Professional” means an Entity: (a) whose compensation for services

rendered prior to or on the Effective Date is subject to PROMESA sections 316 and 317, and (i)

employed in the Title III Case by the Debtor (in the Debtor’s sole discretion), (ii) employed in the

Title III Case by the Oversight Board (in the Oversight Board’s sole discretion) or AAFAF (in

AAFAF’s sole discretion), or (iii) employed in the Title III Case pursuant to a Final Order in

accordance with Bankruptcy Code section 1103; or (b) for which compensation and

reimbursement has been Allowed by the Bankruptcy Court pursuant to Bankruptcy Code section

503(b)(4).

188. 191. “Professional Claim” means a Claim by a Professional seeking an award by

the Title III Court of compensation for services rendered or reimbursement of expenses incurred

through and including the Confirmation Date under PROMESA sections 316 and 317.

189. 192. “PROMESA” means the Puerto Rico Oversight, Management, and Economic

Stability Act, Pub. L. No. 14-187, 130 Stat. 549 (2016), 48 U.S.C. § 2101, et. seq., as the same

may be amended or modified.

190. 193. “Proof of Claim” means a proof of Claim filed against PREPA in the Title III

Case.

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191. 194. “Qualified Operator” shall have the meaning given to it in the New Master

Indenture.

192. 195. “Refunding Bonds” means, if applicable, any bonds or replacement financing

incurred by Reorganized PREPA to refinance the (a) New Bonds or (b)(i) Refunding Bonds

incurred by Reorganized PREPA to refinance the Refunding Bonds described in the immediately

preceding clause (a) or (ii) any such further refinancings of Refunding Bonds, as applicable,

which Refunding Bonds shall be secured by Net Revenues up to the amount of the Legacy

Charge Revenues, and right to receive such Net Revenues in each case up to the amount of the

Legacy Charge Revenues pledged to secure the New Bonds, and otherwise be issued in

accordance with the New Master Indenture; provided, that if any Series A Bonds are still

outstanding when Refunding Bonds are issued, such Refunding Bonds shall (a) be subordinate in

principal payment priority to the Series A Bonds, and (b) not in any way affect the terms of the

Series A Bonds as set forth herein; provided, further, however, that any Refunding Bonds that

refund Series A Bonds are not subject to the immediately preceding proviso.

193. 196. “Related Persons” means, with respect to any Entity (including for the

avoidance of doubt, the Commonwealth, the Government Parties, and the Creditors’ Committee),

its predecessors, successors, and assigns (whether by operation of law or otherwise), and their

respective current and former employees, managers, elected or appointed officials, directors,

officers, board members, principals, members, equity holders (whether such interests are held

directly or indirectly), partners, financial advisors, attorneys, accountants, investment bankers,

consultants, agents, and professionals (including, without limitation, any and all Professionals

retained by the Debtor, the Oversight Board, AAFAF, and the Creditors’ Committee), or other

representatives, nominees, or investment managers, each acting in such capacity, and any Entity

claiming by or through any of them (including their respective officers, directors, managers,

shareholders, partners, employees, members, and professionals), each in its respective capacity as

such; provided, however, that “Related Persons” is not intended, nor shall it be construed, to

include the Commonwealth.

194. 197. “Released Claims” means, collectively, (a) Claims and Causes of Action that

arise in, are related to, or have been or could have been asserted against PREPA or its Assets in

the Title III Case, including all Claims held by Participants, (b) Claims and Causes of Action that

have been or could have been asserted by PREPA, the Oversight Board, and/or AAFAF (with

respect to releases given by PREPA) and by Creditors (with respect to releases given by the

Releasing Parties), (c) all Claims asserted by PREPA ERS in connection with the PREPA ERS

Priority Action, and (d) Claims that otherwise arise from or relate to the Title III Case, the Plan,

the Restructuring Transactions, and the compromises and settlements set forth herein; provided,

however, that “Released Claims” is not intended to include, nor shall it have the effect of

including, Claims or Causes of Action unrelated to the Debtor; provided, further, that “Released

Claims” is not intended to release, nor shall it have the effect of releasing, any party from the

performance of its obligations in accordance with the Confirmation Order or the Plan, including,

without limitation, performance of obligations arising from or related to the New Bonds.

195. 198. “Released Party” means collectively, and in each case in its capacity as such:

(a) PREPA; (b) the Oversight Board; (c) AAFAF; (d) the Vitol Parties, solely with respect to the

Law 458 Action; (e) each Settling Bondholder that votes to accept the Plan; (f) each Settling

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Monoline that votes to accept the Plan; (g) the Fuel Line Lender PSA Creditors; (hg) National;

and (ih) with respect to each of the foregoing, each of their respective current and former Related

Persons.

196. 199. “Releasing Parties” means, collectively: (a) all Holders of Claims against the

Debtor or their Assets who were entitled to vote on the Plan and voted to accept the Plan; (b)

such Holders’ current and former Affiliates; and (c) with respect to the foregoing clauses (a) and

(b), each such Entity’s current and former Related Persons.

197. 200. “Remaining Claim” means, with respect to any Allowed Claim, the amount of

such Allowed Claim minus the total Cash and face amount of New Bonds, if any, such Holder

has received on account of such Allowed Claim, at the time the Remaining Claim is calculated.

198. 201. “Remaining Disallowed Non-Settling Claim” shall have the meaning given to

it in Article V.A(iv) of the Plan.

199. 202. “Remaining Legacy Charge” means the fixed fee component of the Legacy

Charge in place as of the Effective Date, from and after the Series B Bond Defeasance Date,

through the CVI Maturity Date.

200. 203. “Remaining Legacy Charge Revenues” means, during the applicable period,

the portion, expressed in dollars, of all Revenues attributable to the Remaining Legacy Charge,

as calculated by Reorganized PREPA and certified by an officer thereof to the New Master

Trustee.

201. 204. “Remaining Net Revenues” means the Net Revenues from and after the Series

B Bond Defeasance Date through the CVI Maturity Date.

202. 205. “Remaining Series B Bonds Claims Pool” means, at the time immediately

following the Mandatory New Bonds Distribution, the GUC New Bonds Initial Distribution, and

the PREPA PayGo New Bonds Distribution, the sum of (a) the Remaining Claims of the Settling

Bondholders and Settling Monolines, (b) the Remaining Claims of the Fuel Line Lenders, which

shall be $112,141,934.97, and (c) the Unsecured Claims Pool Estimate minus the GUC New

Bonds Initial Distribution.

203. 206. “Reorganized Debtor” or “Reorganized PREPA” means PREPA, from and

after the Effective Date.

204. 207. “Reorganized Debtor By-Laws” means the by-laws of Reorganized PREPA,

to the extent applicable, from and after the Effective Date.

205. 208. “Required Fuel Line Lenders” means the Fuel Line Lenders that beneficially

own or control, in the aggregate, at least a majority in principal amount of the Fuel Line Loans

beneficially owned or controlled, in the aggregate, by the Fuel Line Lenders at such time.

206. 209. “Restructuring Transactions” means the Debtor’s restructuring, including,

without limitation, the transactions described in this Plan.

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207. 210. “Retiree” means a person who, as reflected in the records of PREPA ERS as

of the Effective Date, receives a pension or annuity from PREPA ERS.

208. 211. “Revenues”means all moneys received by Reorganized PREPA, including the

income derived by Reorganized PREPA from the sale of electricity generated or distributed,

including, but not limited to, the Legacy Charge, any proceeds of use and occupancy insurance or

any part thereof, and income from investments made by Reorganized PREPA, and including, for

the avoidance of doubt, monies collected by LUMA Energy on Reorganized PREPA’s behalf;

provided, however, that all funds from any federal or Commonwealth government grants,

governmental appropriations, or government loans shall be deemed to not be Revenues for

purposes of this definition and the New Master Indenture.

209. 212. “Schedule of Assumed Contracts and Leases” means the schedule of

Executory Contracts and Unexpired Leases to be assumed by PREPA pursuant to the Plan, filed

as part of the Plan Supplement, as may be amended by PREPA from time to time prior to the

Confirmation Date.

210. 213. “Section 103 Bond Counsel” means with respect to PREPA or Reorganized

PREPA, as the case may be, counsel providing services with respect to section 103 of the IRC.

211. 214. “Section 510(b) Subordinated Claim” means any Claim, to the extent

determined pursuant to a Final Order, against the Debtor or its Assets arising from or relating to

(a) rescission of a purchase or sale of an existing security of the Debtor or an Affiliate of the

Debtor, (b) purchase, sale, or retention of such a security, or (c) reimbursement, indemnification,

or contribution allowed under section 502 of the Bankruptcy Code on account of such Claim.

212. 215. “Secured Claim” means a Claim: (a) secured by a valid Lien on any of the

Debtor’s assets to the extent of the value of such collateral, as determined in accordance with

Bankruptcy Code section 506(a); or (b) subject to a valid right of setoff pursuant to Bankruptcy

Code section 553.

213. 216. “Securities Act” means the Securities Act of 1933, 15 U.S.C. §§ 77a–77aa, as

amended, or any similar federal, state, or local law.

214. 217. “Series A Bond Defeasance Date” means the date on which the principal and

interest owed on the Series A Bonds (and any Refunding Bonds issued pursuant to the New

Master Indenture in order to refund any Series A Bonds) are irrevocably paid in full in Cash, or

are otherwise deemed not to be outstanding in accordance with the terms of the New Master

Indenture.

215. 218. “Series A Bonds” means the series of New Bonds known as the Series A

Bonds to be distributed to the Holders of Allowed Fuel Line Loan Claims, with the principal

terms as described in Article XIX, and otherwise issued in accordance with the terms and

conditions of the Plan, the Confirmation Order, and the New Master Indenture.

216. 219. “Series B Bond Defeasance Date” means the date on which the principal and

interest owed on the Series B Bonds (and any Refunding Bonds issued pursuant to the New

Master Indenture in exchange for any Series B Bonds) are irrevocably paid in full in Cash, or are

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otherwise deemed not to be outstanding in accordance with the terms of the New Master

Indenture.

217. 220. “Series B Bonds” means the series of New Bonds known as the Series B

Bonds, consisting of the Series B-1 Bonds and Series B-2 Bonds, to be distributed pursuant to the

Plan, which may be issued in the form of current interest bonds, capital appreciation bonds,

convertible bonds, or convertible capital appreciation bonds, with the principal terms as

described in Article XIX, and otherwise issued in accordance with the terms and conditions of

the Plan, the Confirmation Order, and the New Master Indenture.

218. 221. “Series B-1 Bonds” means the series of New Bonds known as the Series B-1

Bonds to be distributed pursuant to the Plan as current interest bonds, with the principal terms as

described in Article XIX, and otherwise issued in accordance with the terms and conditions of

the Plan, the Confirmation Order, and the New Master Indenture.

219. 222. “Series B-2 Bonds” means the series of New Bonds known as the Series B-2

Bonds to be distributed pursuant to the Plan as convertible capital appreciation bonds, with the

principal terms as described in Article XIX, and otherwise issued in accordance with the terms

and conditions of the Plan, the Confirmation Order, and the New Master Indenture.

220. 223. “Servicer” means the Entity that is a Qualified Operator that operates

PREPA’s or Reorganized PREPA’s transmission and distribution system and collects Revenues

from time to time.

221. 224. “Settlement Offer Deadline” means February 24, 2023, at 5:00 p.m. (Eastern

Standard Time), or such other date and time as determined by the Oversight Board in its sole

discretion.

222. 225. “Settling Bondholder” means a Holder of Uninsured PREPA Revenue Bonds

that is not a Monoline Insurer that timely submitted to the Solicitation Agent by the Settlement

Offer Deadline the Election of Settlement Class Signature Page issued to such Holder pursuant to

the Uninsured Bond Settlement Agreement.

223. 226. “Settling CVI” means CVI in the notional face amount equal to the sum of the

Remaining Claims of all Holders of PREPA Revenue Bonds Claims that are a Settling

Bondholder or a Settling Monoline as calculated in Article IV.A(iv) of the Plan.

227. “Settling Monoline” means a Monoline Insurer (other than National) that, by the

Settlement Offer Deadline, became party to a Monoline Settlement Agreement.

228. “Settling Monoline Treatment” means the treatment provided to Holders of

Allowed Claims in Class 1.

224. 229. “Sinking Fund” means the deposit account(s) held by the Bond Trustee which

are subject to a perfected security interest in favor of the Bond Trustee, for the benefit of the

holders of the PREPA Revenue Bonds.

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225. 230. “Solicitation Agent” means Kroll Restructuring Administration LLC, the

notice, claims, and solicitation agent retained by PREPA in the Title III Case by order of the Title

III Court.

226. 231. “Syncora” means Syncora Guarantee Inc.

232. “Takings Clause SCOTUS Victory” means a final, non-appealable ruling in favor

of the Oversight Board’s appeal of the Commonwealth Confirmation Order and the Findings of

Fact and Conclusions of Law entered with respect thereto relating to the non-dischargeability of

Eminent Domain/Inverse Condemnation Claims against the Commonwealth.

227. 233. “Title III” means Title III of PROMESA.

228. 234. “Title III Case” means the Title III case under PROMESA pending for

PREPA in the Title III Court, captioned as In re Financial Oversight & Management Board for

Puerto Rico as representative of Puerto Rico Electric Power Authority [Case No.

17-BK-4780-LTS (D.P.R.)].

229. 235. “Title III Court” means the United States District Court for the District of

Puerto Rico or such other court having jurisdiction over the Title III Case.

230. 236. “Treasury Rate” means, with respect to any redemption date for the CVI, the

yield to maturity of United States Treasury securities (excluding inflation indexed securities)

with a constant maturity (as compiled and published in the Federal Reserve Statistical Release

H.15 (519) that has become publicly available not less than two (2) Business Days nor more than

forty-five (45) calendar days prior to the redemption date (or, if such statistical release is no

longer published, any publicly available source of similar market data)), most nearly equal to the

period from the redemption date to the weighted average maturity date of equal annual

installments of the outstanding CVI to be redeemed, as determined by an independent accounting

firm, investment banking firm, or financial advisor retained by PREPA or the Commonwealth at

PREPA’s or the Commonwealth’s expense; provided, however, that if the period from the

redemption date to such maturity date is less than one (1) year, the weekly average yield on

actually traded United States Treasury securities adjusted to a constant maturity of one (1) year

will be used.

231. 237. “Trust Agreement” means that certain Trust Agreement dated as of January 1,

1974, as amended, by and between PREPA and U.S. Bank National Association, as successor

trustee.

232. 238. “UEPI CBA” means that certain collective bargaining agreement between the

Puerto Rico Electric Power Authority and the Union of Independent Professional Employees.

233. 239. “Unclaimed Distribution” means any distribution under the Plan on account

of an Allowed Claim to a Holder that has not: (a) accepted a particular distribution or, in the case

of distributions made by check, negotiated such check; (b) given notice to PREPA of an intent to

accept a particular distribution; (c) responded to PREPA’s requests for information necessary to

facilitate a particular distribution; or (d) taken any other action necessary to facilitate such

distribution.

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234. 240. “Unexpired Lease” means a lease of nonresidential real property to which

PREPA is a party that is subject to assumption or rejection under Bankruptcy Code section 365,

except as provided in PROMESA section 311.

235. 241. “Unimpaired” is used to describe a Class of Claims that is unimpaired within

the meaning of Bankruptcy Code section 1124.

236. 242. “Uninsured Bond Settlement Agreement” means that certain settlement offer

memorandum and settlement agreement, made to all Holders of Uninsured PREPA Revenue

Bond Claims, describing the terms of the settlement offer being made to such Holders pursuant

thereto, including the proposed treatment of PREPA Revenue Bond Claims pursuant to Article

IV of the Plan, and distributing the Election of Settlement Class Signature Page, pursuant to

which a Holder of Uninsured PREPA Revenue Bonds may accept the proposed classification and

settlement for such Claim.

237. 243. “Uninsured PREPA Revenue Bond” means a PREPA Revenue Bond that is

not insured by a Monoline Insurer.

238. 244. “Unsecured Claims Pool” means the sum of all Allowed Claims of Holders

of:

(a) the General Unsecured Claims;

(b) the Vitol Claim;

(c) the Deficiency Claims, if any; (d) if there is a Takings Clause SCOTUS

Victory, Remaining Claims with respect to the Eminent Domain/Inverse

Condemnation Claims after the Holder of such Allowed Claim has caused

the Clerk of the Court of First Instance to distribute to such Holder the

amount of monies on deposit with the Court of First Instance with respect

to the condemned property; and

(d) (e) the Federal Claims, if any, which may be Impaired in accordance with

Article XV of the Plan.

245. “Unsecured Claims Pool Estimate” means the estimated amount of the Unsecured

Claims Pool, which shall be the sum of:

(a) eight hundred million dollars ($800,000,000);

(b) the Vitol Claim; 

(c) if, as of the Effective Date, there has been, or still may be, a Takings

Clause SCOTUS Victory, $2,437,556; and 

(d) the Deficiency Claims, if any.

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239. 246. “UTIER CBA” means that certain collective bargaining agreement between

the Puerto Rico Electric Power Authority and the Workers Union of the Electric Power and

Irrigation Industry.

240. 247. “Vitol” means Vitol Inc.

241. 248. “Vitol Claim” means the Claim against PREPA on account of the Vitol

Settlement Agreement.

242. 249. “Vitol Parties” mean, collectively, Vitol and Vitol S.A.

243. 250. “Vitol-SCC AP” means the action styled Special Claims Comm. v.

Inspectorate America Corp., Adv. Proc. No. 19-00388 in [Case No. 17-BK-4780-LTS].

244. 251. “Vitol Settlement Agreement” means that certain Settlement Agreement and

Release dated August 26, 2022, by and between the Oversight Board, Vitol, and Vitol S.A.

B. Rules of Interpretation

For purposes of the Plan: (a) in the appropriate context, each term, whether stated in the

singular or the plural, shall include both the singular and the plural, and pronouns stated in the

masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter

gender; (b) unless otherwise specified, any reference herein to a contract, lease, instrument,

release, indenture, or other agreement or document being in a particular form or on particular

terms and conditions means that such document shall be substantially in such form or

substantially on such terms and conditions; (c) unless otherwise specified, any reference herein to

an existing document, schedule, or exhibit, shall mean such document, schedule, or exhibit, as it

may have been or may be amended, modified, or supplemented; (d) unless otherwise specified,

all references herein to “Articles” and “Sections” are references to Articles and Sections,

respectively, hereof or hereto; (e) the words “herein,” “hereof,” and “hereto” refer to the Plan in its

entirety rather than to any particular portion of the Plan; (f) captions and headings to Articles and

Sections are inserted for convenience of reference only and are not intended to contradict the

text; (g) unless otherwise specified herein, the rules of construction set forth in Bankruptcy Code

section 102 shall apply; (h) references to docket numbers of documents filed in the Title III Case

are references to the docket numbers under the Title III Court’s CM/ECF system; (i) the words

“include” and “including,” and variations thereof, shall not be deemed to be terms of limitation,

and shall be deemed to be followed by the words “without limitation;” (j) any immaterial

effectuating provisions may be interpreted by PREPA in such a manner that is consistent with the

overall purpose and intent of the Plan, all without further notice to or action, order, or approval of

the Title III Court or any other Entity; and (k) unless the context otherwise requires, any

capitalized term used and not defined herein or elsewhere in the Plan that is defined in

PROMESA or the Bankruptcy Code shall, if defined in PROMESA, have the meaning assigned

to that term in PROMESA or, if not defined in PROMESA, but defined in the Bankruptcy Code,

shall have the meaning ascribed thereto in the Bankruptcy Code.

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C. Computation of Time

Unless otherwise specifically stated herein, the provisions of Bankruptcy Rule 9006(a)

shall apply in computing any period of time prescribed or allowed herein. If the date on which a

transaction may occur pursuant to the Plan shall occur on a day that is not a Business Day, then

such transaction shall instead occur on the next succeeding Business Day.

D. Governing Law

Except to the extent that other federal law is applicable, or to the extent that an exhibit

hereto or any document to be entered into in connection herewith provides otherwise, the rights,

duties, and obligations arising under this Plan shall be governed by, and construed and enforced

in accordance with, PROMESA (including the provisions of the Bankruptcy Code made

applicable under PROMESA section 301) and, to the extent not inconsistent therewith, the laws

of the Commonwealth of Puerto Rico, without giving effect to principles of conflicts of laws.

E. Reference to Monetary Figures

All references in the Plan to monetary figures refer to currency of the United States of

America, unless otherwise expressly provided.

F. Controlling Document

In the event of an inconsistency between the Plan and the Disclosure Statement, the terms

of the Plan shall control in all respects. In the event of an inconsistency between the Plan and the

Plan Supplement, the Plan shall control. In the event of any inconsistency between the Plan and

the Confirmation Order, the Confirmation Order shall control and be deemed a modification of

the Plan; provided, however, that under no circumstances shall the Confirmation Order materially

modify the economic terms set forth herein absent consent of the Oversight Board.

G. Consent Rights

Notwithstanding anything herein to the contrary, any and all consent rights of the parties

to the Fuel Line Lender PSA set forth in the Fuel Line Lender PSA with respect to the form and

substance of (i) this Plan, (ii) all exhibits to the Plan, (iii) the Plan Supplement, and (iv) the

Definitive Documents, including any amendments, restatements, supplements, or other

modifications to such agreements and documents, and any consents, waivers, or other deviations

under or from any such documents, shall be incorporated herein by this reference (including to

the applicable definitions in Article I.A hereof) and be fully enforceable as if stated in full herein.

Notwithstanding anything herein to the contrary, any and all consent rights of the parties

to the National PSA set forth in the National PSA, including with respect to the form and

substance of (i) this Plan, (ii) all exhibits to the Plan, (iii) the Plan Supplement, and (iv) the

Definitive Documents, including any amendments, restatements, supplements, or other

modifications to such agreements and documents, and any consents, waivers, or other deviations

under or from any such documents, shall be incorporated herein by this reference (including to

the applicable definitions in Article I.A hereof) and be fully enforceable as if stated in full herein.

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ARTICLE II

ADMINISTRATIVE AND PROFESSIONAL CLAIMS

In accordance with Bankruptcy Code section 1123(a)(1), made applicable to this Title III

Case pursuant to PROMESA section 301(a), Administrative Expense Claims and Professional

Claims have not been classified as voting Classes.

A. Administrative Expense Claims

On the later to occur of (i) the Effective Date and (ii) the date on which an Administrative

Expense Claim shall become an Allowed Claim, the Reorganized Debtor shall (a) pay to each

Holder of an Allowed Administrative Expense Claim, in Cash, the full amount of such

Administrative Expense Claim or (b) satisfy and discharge such Allowed Administrative

Expense Claim in accordance with such other terms no more favorable to the claimant than as

may be agreed upon by and between the Holder thereof and the Reorganized Debtor; provided,

however, that Allowed Administrative Expense Claims representing indebtedness incurred in the

ordinary course prior to the Effective Date by the Debtor shall be paid in full and performed by

the Reorganized Debtor in accordance with the terms and subject to the conditions of any

agreement governing, investment evidencing, or other document relating to, such transactions;

and, provided, further, that, if any such ordinary course expense is not billed, or a written request

for payment is not made, within one hundred twenty (120) days after the Effective Date, such

ordinary course expense shall be barred and the Holder thereof shall not be entitled to, or receive,

a distribution pursuant to the Plan.

B. Disallowance of Claims Filed After the Administrative Claim Bar Date

After the Administrative Claim Bar Date, any Administrative Expense Claim, proof of

which has not been filed, shall be deemed forever barred, and the Debtor and the Reorganized

Debtor shall have no obligation with respect thereto; provided, however, that no proof of

Administrative Expense Claim shall be required to be filed if such Administrative Expense

Claim (a) shall have been incurred (i) in accordance with an order of the Title III Court or (ii)

with the written consent of the applicable Government Parties expressly granting such

Administrative Expense Claim, (b) is a Professional Claim, (c) is an Administrative Expense

Claim of the IRS for the payment of taxes incurred by the Debtor during the period from and

after the Petition Date, or (d) is the subject of a pending motion seeking allowance of an

administrative expense.

C. Professional Compensation and Reimbursement Claims

All Entities awarded compensation, including, without limitation, to the fullest extent

provided in respective letters of engagement or similar instruments or agreements, or

reimbursement of expenses by the Title III Court shall be paid in full, in Cash, in the amounts

allowed by the Title III Court (i) as soon as reasonably practicable following the later to occur of

(a) the Effective Date and (b) the date upon which the Title III Court order allowing such Claims

is deemed to be a Final Order or (ii) upon such other terms no more favorable to the claimant

than as may be mutually agreed upon between such claimant and the Government Parties;

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provided, however, that, except as provided herein, each Professional must file its application for

final allowance of compensation for professional services rendered and reimbursement of

expenses on or prior to the date that is one hundred twenty (120) days following the Effective

Date. The Reorganized Debtor shall pay compensation for professional services extended and

reimbursement of expenses incurred after the Effective Date in the ordinary course and without

the need for Title III Court approval.

From and after the Confirmation Date, any requirement that Professionals comply with

PROMESA sections 316 and 317 in seeking compensation for services rendered after such date

shall terminate, and PREPA may employ and shall pay any Professional without any further

notice to or action, order, or approval of the Title III Court.

D. Supporting Creditors’ Fees

1. Fuel Line Lenders

On the Effective Date, each Fuel Line Lender PSA Creditor shall receive, in the form of

either additional Series A Bonds or Cash, in the Oversight Board’s sole discretion, and not on

account of their Allowed Claim, such Fuel Line Lenders PSA Creditors’ (i) Pro Rata Share of the

Fuel Line Lender PSA Creditors Consummation Fees in consideration for their assistance in

formulating the Plan and (ii) Pro Rata Share of the Fuel Line Lender PSA Creditors

Professionals’ Reimbursement Fees to compensate for the reasonable fees and expenses incurred

in connection with the Title III Case and negotiating and executing the Fuel Line Lender PSA;

provided, that ten percent (10%) of the Fuel Line Lender PSA Creditors Professionals’

Reimbursement Fees shall be allocated to the Fuel Line Lenders PSA Creditor of record as of the

Agreement Effective Date (as defined in the Fuel Line Lender PSA) under the Fuel Line Citibank

Facility and ninety percent (90%) of the Fuel Line Lender PSA Creditors Professionals’

Reimbursement Fees shall be allocated to the Fuel Line Lender PSA Creditors (party to the Fuel

Line Lender PSA as of the Agreement Effective Date) under the Fuel Line Scotia Facility (and

pro rata among such Fuel Line Lender PSA Creditors). The Fuel Line Lender PSA Creditor Fees

compensate the Fuel Line Lender PSA Creditors for value received and constitute an essential

component of the compromises and settlements embodied herein and are not severable from the

other terms and provisions set forth herein.

On the Effective Date, each Fuel Line Lender PSA Creditor shall also receive Series A

Bonds or Cash, in the sole discretion of the Oversight Board, in the face amount of interest at a

rate of six percent (6.0%) per annum deemed to have accrued on account of each Holder’s Pro

Rata Share of Series A Bonds to be distributed pursuant to the immediately preceding clause (i),

during a period equal to the shorter of (a) December 1, 2022 to the Effective Date, and (b) one

(1) year.

2. National

On the Effective Date, National shall receive, in the form of an Allowed Administrative

Expense Claim and not on account of its Allowed Claims, Series B Bonds or Cash, as elected in

the Oversight Board’s sole discretion (which election shall be deemed to be Series B Bonds,

unless the Oversight Board elects otherwise at or prior to the commencement of the Confirmation

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Hearing), in the aggregate face amount equal to the sum of (i) three percent (3.0%) times the

Allowed National Insured Bond Claims to compensate for the reasonable fees and expenses

incurred by National in connection with the Title III Case and negotiating and executing the

National PSA and prosecution of approval of the Disclosure Statement and Plan and (ii) two and

eighty-six one hundredths percent (2.86%) times the Allowed National Insured Bond Claims in

consideration for the structuring of payments to be made to holders of claims arising from or

relating to National Insured Bonds in accordance with the National PSA. The fees and costs in

this Article II.D.2 compensate National for value received and constitute an essential component

of the compromises and settlements embodied herein and are not severable from the other terms

and provisions set forth herein.

ARTICLE III

CLASSIFICATION OF CLAIMS

A. Classification of Claims 

Except for the Claims addressed in Article II of the Plan, all Claims are classified in the

Classes set forth below in accordance with Bankruptcy Code section 1122. A Claim is classified

in a particular Class only to the extent the Claim qualifies within the description of that Class and

is classified in other Classes to the extent any portion of the Claim qualifies within the

description of such other Classes. A Claim also is classified in a particular Class for the purpose

of receiving distributions under the Plan only to the extent such is an Allowed Claim in that

Class and has not been paid, released, or otherwise satisfied prior to the Effective Date.

Claims are classified as follows:

Class Claim Status Voting Rights

1

Settling Bondholder and Settling 

Monoline Claims Impaired Entitled to Vote

2

Non-Settling Bondholder and

Non-Settling Monoline Claims Impaired Entitled to Vote

3 Pension Claim Impaired Entitled to Vote

4 Fuel Line Loan Claims Impaired Entitled to Vote

5 National Insured Bond Claims Impaired Entitled to Vote

6 National Reimbursement Claim Impaired Entitled to Vote

7 General Unsecured Claims Impaired Entitled to Vote

8 Vitol Claims Impaired Entitled to Vote

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Class Claim Status Voting Rights

9

Assured Insured Interest Rate Swaps

Claims Impaired Entitled to Vote

10 Ordinary Course Customer Claims Unimpaired Not Entitled to Vote

(Deemed to Accept)

11 Eminent Domain/Inverse

Condemnation Claims Impaired Entitled to Vote

12 Federal Claims Impaired Entitled to Vote

13 Convenience Claims Unimpaired Not Entitled to Vote

(Deemed to Accept)

14 Section 510(b) Subordinated Claims Impaired Not Entitled to Vote

(Deemed to Reject)

B. Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall affect PREPA’s

rights regarding any Unimpaired Claim, including all rights regarding legal and equitable

defenses to, or setoffs or recoupments against, any such Unimpaired Claim.

C. Elimination of Vacant Classes

Any Class of Claims that does not have a Holder of an Allowed Claim or a Claim

temporarily Allowed by the Title III Court as of the date of the Confirmation Hearing shall be

deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for

purposes of determining acceptance or rejection of the Plan by such Class pursuant to

Bankruptcy Code section 1129(a)(8).

D. Voting Classes; Presumed Acceptance by Non-Voting Classes

An Impaired Class of Holders of Claims shall have accepted the Plan if the Plan is

accepted by at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of

the Allowed Claims of such Class that have voted to accept or reject the Plan. If a Class contains

Claims eligible to vote and no Holders of Claims eligible to vote in such Class vote to accept or

reject the Plan, that Class shall be deemed to accept the Plan; provided, however, such Class will

not be used as an Impaired accepting Class pursuant to Bankruptcy Code section 1129(a)(10).

E. Subordinated Claims

The allowance, classification, and treatment of all Allowed Claims and the respective

distributions and treatments under the Plan take into account and conform to the relative priority

and rights of the Claims in each Class in connection with any contractual, legal, and equitable

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subordination rights relating thereto, whether arising under general principles of equitable

subordination, Bankruptcy Code section 510(b), or otherwise. Pursuant to Bankruptcy Code

section 510, the Oversight Board reserves the right to re-classify any Allowed Claim in

accordance with any contractual, legal, or equitable subordination relating thereto.

F. Confirmation Pursuant to PROMESA Section 314

The Oversight Board shall seek Confirmation of the Plan pursuant to PROMESA section

314 with respect to any rejecting Class of Claims. The Oversight Board reserves the right to

modify the Plan in accordance with Article XVIII of the Plan to the extent, if any, that

Confirmation pursuant to PROMESA section 314 requires modification, including by modifying

the treatment applicable to a Class of Claims to render such Class of Claims Unimpaired to the

extent permitted by PROMESA, the Bankruptcy Code, and the Bankruptcy Rules.

G. Confirmation Pursuant to Bankruptcy Code Section 1129(b)

In the event that any Impaired Class of Claims shall fail to accept, or be deemed to reject,

the Plan in accordance with Bankruptcy Code section 1129(a), the Debtor reserves the right to (i)

request that the Bankruptcy Court confirm the Plan in accordance with Bankruptcy Code section

1129(b) or (ii) amend the Plan (and any such amendment shall comply with the Fuel Line Lender

PSA and the National PSA).

ARTICLE IV

PROVISIONS FOR TREATMENT OF

SETTLING BONDHOLDER OR SETTLING MONOLINE CLAIMS (CLASS 1)

A. Treatment of Class 1 Claims

On the Effective Date, the PREPA Revenue Bond Claims of each Settling Bondholder or

Settling Monoline shall be deemed Allowed pursuant to the terms of the Uninsured Bond

Settlement Agreement or Monoline Settlement Agreement, as applicable, and shall receive, in

full consideration, satisfaction, release, settlement, and exchange of such Holder’s Allowed

PREPA Revenue Bond Claim, up to the full amount of such Holder’s Allowed PREPA Revenue

Bond Claim, unless such Holder agrees to a less favorable treatment, in the following order:

(i) such Holder’s Pro Rata Share of the funds deposited in the Sinking Fund, subject to the

terms of the Trust Agreement;

(ii) Series B Bonds in the face amount equal to the product of (A) fifty percent (50.00%)

times (B) the amount of such Holder’s Allowed PREPA Revenue Bond Claim minus (C)

the amount distributed to such Holder pursuant to the immediately preceding clause (i);

(iii) with respect to such Holder’s Remaining Claim after the collective distributions are made

pursuant to the immediately preceding clauses (i) and (ii): (A) forty percent (40.0%) of

such Holder’s Pro Rata Share of the Net Remaining New Bonds, if any, available for

distribution to the Remaining Series B Bond Claims Pool; and (B) up to an additional

sixty percent (60.0%) of such Holder’s Pro Rata Share of the Net Remaining New Bonds,

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if any, available for distribution to the Remaining Series B Bond Claims Pool, if and only

if both (I) the face amount of the GUC New Bonds equalequals one hundred percent

(100.0%) of the Unsecured Claims Pool Estimate and (II) the Remaining Claims of the

Fuel Line Lenders described in Article VII.A(ii) of the Plan receive Net Remaining New

Bonds in the face amount equal to one hundred percent (100.0%) of such Remaining

Claims; and

(iv) with respect to such Holder’s Remaining Claim, if any, after the collective distributions

are made pursuant to the immediately preceding clauses (i), (ii), and (iii), such Holder’s

Pro Rata Share of CVI along with all other Creditors of PREPA entitled to receive CVI

pursuant to the Plan.

ARTICLE V

PROVISIONS FOR TREATMENT OF

NON-SETTLING BONDHOLDER OR NON-SETTLING

MONOLINE CLAIMS (CLASS 2)

A. Treatment of Class 2 Claims 

On the Effective Date, each Non-Settling Bondholder or Non-Settling Monoline that is a

Holder of an Allowed PREPA Revenue Bond Claim shall receive, in full consideration,

satisfaction, release, and exchange of such Holder’s Allowed PREPA Revenue Bond Claim, up to

the full amount of such Holder’s Allowed Claim, unless such Holder agrees to a less favorable

treatment, in the following order:

(i) such Holder’s Pro Rata Share of the amounts in the Sinking Fund, subject to the terms of

the Trust Agreement;

(ii) if the Court determines the Bond Trustee has an Allowed Secured Claim in connection

with the Amended Lien & Recourse Challenge, the lesser of (A) such Holder’s Pro Rata

Share of Series B Bonds in the face amount equal to the value of the Bond Collateral (as

determined in connection with the Confirmation Hearing or any other appropriate

proceeding), if any, minus the amount distributed to such Holder pursuant to the

immediately preceding clause (i), and (B) such Holder’s Pro Rata Share of the Series B

Bonds available after the distributions of Series B Bonds are made pursuant to Article

IV.A(ii);

(iii) with respect to such Holder’s Deficiency Claim that is a Remaining Claim, if any, after

the collective distributions are made pursuant to the immediately preceding clauses (i)

and (ii), such Holder’s Pro Rata Share of the General Unsecured Claim Recovery; and

(iv) if the Non-Settling CVI Conditions are met, each Holder shall receive, based on the

amount of principal and interest accrued and unpaid through the Petition Date with

respect to such Holder’s PREPA Revenue Bonds minus the Cash distributions made to

such Holder pursuant to the preceding clause (i) (the “Remaining Disallowed

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Non-Settling Claim”), such Holder’s Pro Rata Share of CVI along with all other Creditors

of PREPA entitled to receive CVI pursuant to the Plan.

ARTICLE VI

PROVISIONS FOR TREATMENT OF

PENSION CLAIM (CLASS 3)

A. Treatment of Class 3 Claims

From and after the Effective Date, in full consideration, satisfaction, release, and

exchange of the Pension Claim held by PREPA ERS, Reorganized PREPA shall pay to the

PREPA PayGo Trust, for the benefit of PREPA ERS, the amounts described in Article XXVI.B,

sufficient to satisfy of Participants’ claims against PREPA ERS to the extent described in this

Article VI.

1. Reimbursement of Benefit Payments by PREPA ERS to PREPA ERS

Participants

a) The PREPA PayGo Trust shall reimburse the PREPA ERS for retirement

benefits paid and reasonable administrative costs (as determined by PREB to be subject to

payment as part of the rate to be charged by PREPA to its customers) incurred in the prior Fiscal

Year ending June 30; provided, that benefit payments for which PREPA ERS is entitled to

reimbursement hereunder shall be limited to (i) benefits payable to any Participant who is a

Retiree as of the Effective Date, without any further cost of living adjustments from and after the

Effective Date, and (ii) benefits payable to Participants who are Active PREPA ERS Participants

as of the Effective Date, (A) with benefit accruals frozen as of the Effective Date in the manner

set forth in Schedule C hereto, and (B) not subject to any cost of living adjustments from and

after the Effective Date.

b) The contractual obligations of PREPA to PREPA ERS as of the Petition

Date, including, without limitation, the obligation to pay employer contributions sufficient to

fund benefits as set forth in the PREPA ERS Regulations, shall be rescinded or deemed rejected

pursuant to section 365(a) of the Bankruptcy Code, and, other than the obligations set forth in

this Article VI and Article XXVI.B, no further obligation of PREPA or Reorganized PREPA to

PREPA ERS shall arise in connection with such rejection.

2. Preemption

All provisions of the Commonwealth Constitution, Commonwealth statutes,

executive orders, rules, regulations, and policies that create, require, or enforce employee pension

and other pension-related benefits that are modified and/or preserved in whole or in part herein,

to the extent inconsistent with the treatment of Allowed Pension Claim hereunder, including any

provisions that would prohibit the enrollment of Active PREPA ERS Participants and

subsequently hired employees of PREPA in the defined contribution plan for Commonwealth

employees under Act 106-2017 as set forth in Article XVIII, are preempted as inconsistent with

PROMESA.

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ARTICLE VII

PROVISIONS FOR TREATMENT OF

FUEL LINE LOAN CLAIMS (CLASS 4)

A. Treatment of Class 4 Claims

On the Effective Date, each Holder of an Allowed Fuel Line Loan Claim shall receive,

unless such Holder agrees to a less favorable treatment, in full consideration, satisfaction,

settlement, release, and exchange of such Holder’s Allowed Fuel Line Loan Claim, up to the full

amount of such Holder’s Allowed Claim, in the following order:

(i) Series A Bonds in the face amount equal to eighty-four percent (84.0%) of the amount of

such Holder’s Allowed Fuel Line Loan Claim; and

(ii) with respect to such Holder’s Remaining Claim after the collective distributions are made

pursuant to the preceding clause (i), such Holder’s Pro Rata Share of the Net Remaining

New Bonds, if any, available for distribution to the Remaining Series B Bond Claims

Pool.

ARTICLE VIII

PROVISIONS FOR TREATMENT OF

NATIONAL INSURED BOND CLAIMS (CLASS 5)

A. Treatment of Class 5 Claims

Subject to the terms and provisions of Article XX hereof, on the Effective Date, the

National Insured Bond Claims shall be Allowed as set forth in Article XVIII.A herein, and shall

receive, in full consideration, satisfaction, release, settlement, and exchange of the Allowed

National Insured Bond Claims, unless National agrees to a less favorable treatment, Series B

Bonds in the face amount equal to seventy-one and sixty-five one hundredths percent (71.65%)

of the amount of the Allowed National Insured Bond Claims.

ARTICLE IX

PROVISIONS FOR TREATMENT OF

NATIONAL REIMBURSEMENT CLAIM (CLASS 6)

A. Treatment of Class 6 Claims (If the Settlement of the National Reimbursement

Claim is Approved)

Subject to the approval of the settlement of the National Reimbursement Claim as set

forth in Article XVIII.I of the Plan, on the Effective Date, National shall receive, in full

consideration, satisfaction, release, settlement, and exchange of the Allowed National

Reimbursement Claim, unless National agrees to a less favorable treatment, Series B Bonds in

the face amount equal to twenty percent (20.0%) of the amount of the National Reimbursement

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Claim. For the avoidance of doubt, if the National Reimbursement Claim is Allowed, it shall not

be subject to Article XXVII.G.

B. Treatment of Class 6 Claims (If the Settlement of the National Reimbursement

Claim is Not Approved)

If the Title III Court does not approve the settlement or determines the treatment of the

National Reimbursement Claim does not comply with PROMESA for reasons including, without

limitation, the Allowability and/or treatment of the National Reimbursement Claim, or the Title

III Court finds the treatment of the National Reimbursement Claim constitutes unfair

discrimination, the settlement and the treatment of National’s Claims shall, without further

action, convert to a settlement of National’s Claims that eliminates the obligation to issue Series

B Bonds on account of the National Reimbursement Claim and all payments for debt service

arising from, relating to, or on account of the National Reimbursement Claim; provided, that, in

such circumstance, National shall have the option to forego all consideration under the National

PSA, including the fees and expenses set forth in Article II.D.2, and, in exchange, receive the

same treatment as another settling Class of Holders of PREPA Revenue Bonds Claims, so long

as the settlement with such Class whose recovery National would receive was reached prior to

the earlier to occur of (i) any substantive ruling on the claims and counterclaims asserted in the

Amended Lien & Recourse Challenge that Holders of PREPA Revenue Bonds are secured by

Revenues outside of the Sinking Fund, and (ii) an indication or a determination, either oral or

written, at a hearing or otherwise, by the Title III Court that the Holders of PREPA Revenue

Bonds are secured by Revenues outside of the Sinking Fund.

ARTICLE X

PROVISIONS FOR TREATMENT OF

GENERAL UNSECURED CLAIMS (CLASS 7)

A. Treatment of Class 7 Claims

On the Effective Date, each Holder of an Allowed General Unsecured Claim shall receive

in full consideration, satisfaction, release, and exchange of such Holder’s Allowed General

Unsecured Claim, such Holder’s Pro Rata Share of the General Unsecured Claim Recovery, up to

the full amount of such Holder’s Allowed Claim, unless such Holder agrees to a less favorable

treatment.

B. Election to be Treated as a Convenience Claim

Notwithstanding the provisions of Article X.A of the Plan, any Holder of (i) an Allowed

General Unsecured Claim, other than a General Unsecured Claim that is a component of a larger

General Unsecured Claim, portions of which may be held by such or any other Holder of an

Allowed Claim, whose Allowed General Unsecured Claim is more than ten thousand dollars

($10,000), and who elects to reduce the amount of such Allowed General Unsecured Claim to ten

thousand dollars ($10,000) and (ii) multiple Allowed General Unsecured Claims that are greater

than twenty thousand dollars ($20,000) in the aggregate, and who elects to reduce the aggregate

amount of such Allowed General Unsecured Claims to twenty thousand dollars ($20.000) shall,

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at such Holder’s option, be entitled to receive, based on such Allowed General Unsecured Claim

as so reduced, distributions pursuant to Article XVI hereof. Such election must be made on the

Ballot and be received by the Oversight Board on or prior to the Ballot Date. Any election made

after the Ballot Date shall not be binding upon PREPA unless the Ballot Date is expressly

waived, in writing, by the Oversight Board; provided, however, that, under no circumstances may

such waiver by the Oversight Board occur on or after the Effective Date.

ARTICLE XI

PROVISIONS FOR TREATMENT OF

VITOL CLAIM (CLASS 8)

A. Treatment of Class 8 Claims

On the Effective Date, the Holder of the Allowed Vitol Claim shall receive in full

consideration, satisfaction, release, settlement, and exchange of such Holder’s Allowed Vitol

Claim, fifty percent (50.0%) of the Holder’s Pro Rata Share of the General Unsecured Claim

Recovery, up to the amount equal to fifty percent (50.0%) of such Holder’s Allowed Claim,

unless such Holder agrees to a less favorable treatment.

ARTICLE XII

PROVISIONS FOR TREATMENT OF

ASSURED INSURED INTEREST RATE SWAPS CLAIMS (CLASS 9)

A. Treatment of Class 9 Claims

On the Effective Date, each Holder of an Allowed Assured Insured Interest Rate Swaps

Claim shall receive in full consideration, satisfaction, release, and exchange of such Holder’s

Allowed Assured Insured Interest Rate Swaps Claim, such Holder’s Pro Rata Share of the

Assured Insured Interest Rate Swaps Claim Recovery, up to the full amount of such Holder’s

Allowed Claim, unless such Holder agrees to a less favorable treatment.

ARTICLE XIII

PROVISIONS FOR TREATMENT OF

ORDINARY COURSE CUSTOMER CLAIMS (CLASS 10)

A. Treatment of Class 10 Claims

On the Effective Date, each Holder of an Allowed Ordinary Course Customer Claim shall

receive in full consideration, satisfaction, release, and exchange of such Holder’s Allowed

Ordinary Course Customer Claim, satisfaction of such Holder’s Claim in the ordinary course of

business, including that PREPA and Reorganized PREPA, as applicable, may retain any

customer deposits in the ordinary course of business.

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ARTICLE XIV

PROVISIONS FOR TREATMENT OF

EMINENT DOMAIN/INVERSE CONDEMNATION CLAIMS (CLASS 11)

A. Treatment of Class 11 Claims

From and after the Effective Date, (a) to the extent not modified prior thereto, the

automatic stay extant pursuant to section 362 of the Bankruptcy Code and the discharge

injunction pursuant to Article XXVII hereof shall be deemed modified in order to permit the

Holder of an Eminent Domain/Inverse Condemnation Claim to (i) liquidate such Eminent

Domain/Inverse Condemnation Claim in such Holder’s Eminent Domain Proceeding and (ii)

cause the Clerk of the Court of First Instance to distribute to such Holder the amount of monies

on deposit with the Court of First Instance with respect to the condemned property, and (b)

subject to the entry of the Confirmation Order and the Commonwealth Confirmation Order

providing such Claims must be paid in full to the extent they are Allowed Claims for just

compensation, upon each such order becoming a Final Order, and upon the occurrence of

another. Upon the occurrence of a Final Order determining the validity and amount of just

compensation attributable to an Eminent Domain/Inverse Condemnation Claim, the Holder of an

Allowed Eminent Domain/Inverse Condemnation Claim shall be entitled to receive, in full

consideration, satisfaction, release, and exchange of such Holder’s unpaid balance of its Allowed

Eminent Domain/Inverse Condemnation Claim, in Cash, one hundred percent (100.0%)such

Holder’s Pro Rata Share of the General Unsecured Claim Recovery. If the Court declines in the

Confirmation Order to confirm the Plan due to such treatment, the treatment shall automatically

convert, without further action from the Debtor, such that such Holders will receive 100% of

suchthe unpaid balance, of their Eminent Domain /Inverse Condemnation Claims unless such

Holder agrees to a less favorable treatment; provided, however, that, in the event of a Takings

Clause SCOTUS Victory, the Holder of such unpaid balance of an Allowed Eminent

Domain/Inverse Condemnation Claim shall receive, in full consideration, satisfaction, release,

and exchange therefor, such Holder’s Pro Rata Share of the General Unsecured Claim Recovery,

up to the full amount of such Holder’s, unless (a) the Debtor appeals the Title III Court’s denial of

the Plan’s treatment of such Claims as General Unsecured Claims, (b) such appeal is ultimately

successful, and (c) a Final Order is entered holding that Allowed Eminent Domain/Inverse

Condemnation ClaimClaims may be Impaired.

ARTICLE XV

PROVISIONS FOR TREATMENT OF

FEDERAL CLAIMS (CLASS 12)

A. Treatment of Class 12 Claims

On the Effective Date, each Holder of an Allowed Federal Claim shall receive in full

consideration, satisfaction, release, and exchange of such Holder’s Allowed Federal Claim, the

greater of (i) such Holder’s Pro Rata Share of the General Unsecured Claim Recovery, up to the

full amount of such Holder’s Allowed Claim, and (ii) the treatment of such Allowed Federal

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Claims as required by section 304(h) of PROMESA, unless such Holder agrees to a less

favorable treatment.

ARTICLE XVI

PROVISIONS FOR TREATMENT OF

CONVENIENCE CLAIMS (CLASS 13)

A. Treatment of Class 13 Claims

On the later of the Effective Date and the date such Allowed Convenience Claim

becomes an Allowed Claim, or as soon thereafter as possible, the GUC Trustee shall pay to each

Holder of an Allowed Convenience Claim, in Cash, from Reorganized PREPA, the full amount

of such Allowed Convenience Claim, in full satisfaction, settlement, release, and discharge of,

and in exchange for such Allowed Convenience Claim, unless such Holder agrees to a less

favorable treatment.

ARTICLE XVII

PROVISIONS FOR TREATMENT OF

SECTION 510(b) SUBORDINATED CLAIMS (CLASS 14)

A. Treatment of Class 14 Claims

Section 510(b) Subordinated Claims shall not receive a distribution pursuant to the Plan

and each Holder of an Allowed Section 510(b) Subordinated Claim shall be deemed to have

rejected the Plan with respect to such Section 510(b) Subordinated Claims.

ARTICLE XVIII

PROVISIONS FOR IMPLEMENTATION OF THE PLAN

A. Allowance of Claims

For purposes of confirmation and consummation of the Plan and distributions to be made

hereunder, unless otherwise Allowed pursuant to an order of the Title III Court, on the Effective

Date: (a) the Fuel Line Loan Claims shall be deemed Allowed in the aggregate amount of

$700,887,093.58, and not subject to challenge, objection, or revocation; (b) the Vitol Claims

shall be deemed Allowed in the aggregate amount of $41,457,382.88; (c) the National Insured

Bond Claims shall be Allowed in the aggregate amount equal to $836,145,928.13; (d) subject to

the approval of the settlement between the Oversight Board and National with respect to the

National Reimbursement Claim, the National Reimbursement Claim shall be Allowed in the

aggregate amount equal to the payments made by National after the Petition Date and, as they

may continue to be madeaccrue up to, but not including, the Effective Date to holders of the

National Insured Bonds on account of interest accrued on such bonds; (e) each PREPA Revenue

Bond Claim held by a Settling Bondholder or a Settling Monoline shall be deemed Allowed in

the aggregate amount equal to the principal amount of the PREPA Revenue Bonds held or

insured by such Holder as of the Settlement Offer Deadline plus interest accrued and unpaid on

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such PREPA Revenue Bonds through the Petition Date, which shall be in the aggregate amount

of $69,410,202.80; and (f) each Assured Insured Interest Rate Swaps Claim shall be Allowed in

an amount to be agreed upon between the Oversight Board and the Holder of such Claim;

provided, that, if no agreement can be reached on the amount of the Assured Insured Interest

Rate Swaps Claim to be Allowed, the Oversight Board and Holder of the Claim shall submit

such dispute to the Title III Court (or other Person or Entity upon mutual agreement of the

Oversight Board and Holder) to determine the amount of such Claim to be Allowed, which

amount shall be determined in accordance with applicable law.

B. Releases, Injunction, and Exculpation

The releases, injunctions, and exculpations provided in Article XXVII herein are integral

to obtaining the value provided hereunder and constitute an essential component of the

compromises reached and are not severable from the other provisions of this Plan.

C. Dismissal of Fuel Line Lender Priority Action

No later than ten (10) days after the Effective Date, the Fuel Line Lender PSA Creditors

shall file all appropriate notices, pleadings, and motions necessary to dismiss, with prejudice, the

Fuel Line Lender Priority Action.

D. Effectuating Documents; Further Transactions

On and after the Effective Date, PREPA, and the officers and members of the boards of

directors and managers thereof, are authorized to and shall issue, execute, deliver, file, or record

such contracts, securities, instruments, releases, and other agreements or documents and take

such actions necessary or appropriate to effectuate, implement, and further evidence the terms

and conditions of the Plan, and any other securities issued pursuant to the Plan in the name of

and on behalf of PREPA, notwithstanding any requirements of Commonwealth law, regulations,

or executive orders, and without the need for any approvals, authorizations, or consents except

for those expressly required under the Plan or otherwise required by PROMESA.

E. Enrollment of Active PREPA ERS Participants in Act 106 Plan

As of the Effective Date, new defined contribution accounts in the retirement plan

established for Commonwealth employees under Act 106-2017 will be established for all Active

PREPA ERS Participants (or at the sole discretion of the Oversight Board, other defined

contribution accounts that will be established by Reorganized PREPA on or as soon as

practicable after the Effective Date), with minimum employee contributions of eight and one-half

percent (8.5%) of their payroll in accordance with the contribution requirements of Act

106-2017. After the Effective Date, newly hired employees of Reorganized PREPA will also

participate in the same defined contribution program. To the extent any provisions of Act

106-2017, Act 120-2018, or Act 17-2019 are inconsistent with such enrollment, such provisions

are hereby preempted. AAFAF shall have consultation rights with respect to the enrollment of

Active PREPA ERS Participants in the retirement plan established for Commonwealth

employees under Act 106-2017 pursuant to this Article XVIII.E

F. Legacy Charge

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On or prior to the Effective Date, the Legacy Charge shall be implemented by the

Reorganized Debtor or any qualified operator of the transmission and distribution system

(including LUMA Energy), and approved by PREB, as detailed in Schedule B hereto and

required by the New Master Indenture; provided, however, that, Reorganized PREPA and/or

PREB, with the approval of the Oversight Board while in existence, can modify the fixed fee and

volumetric charge that comprise the Legacy Charge in an economically neutral manner as set

forth in the New Master Indenture, in structure and amounts that do not delay or extend the

respective expected repayment date and expected weighted average life of the Series A Bonds

and the Series B Bonds, and otherwise that are reasonably acceptable to the Required Fuel Line

Lenders, and which shall not decrease the projected Revenues attributable to the Legacy Charge

as of the date of the amendment to the Legacy Charge (the “Amendment Test”). The Oversight

Board as representative of the Debtor and/or Reorganized Debtor is authorized to take all actions

necessary to enter into, implement, and enforce the Legacy Charge, and amendments thereto in

accordance with this Article XVIII.F.

As required by the Plan, consistent with the PREPA Fiscal Plan, mandated by 1 U.S.C. §

142(b) and the Confirmation

Orde

r

, PREB shall approve and implement the Legacy Charge as required by §§ 6.3(p) and (q) of

Act 17-2019 and the New Master Indenture (subject to its right, in accordance with the

Amendment

T

est, to modify the fixed fee and volumetric charge that comprise the Legacy Charge in a neutral

economic manner), until the New Bonds, Refunding Bonds (if any), and CVI are defeased in full or

have expired in accordance with their terms and shall refrain from taking any actions that will

frustrate, diminish, or otherwise impair the value of the Legacy Charge or PREPA’s ability to collect

the Legacy Charge.

G. PREPA Operational Restructuring

Prior to, on, or as soon as practicable following the Effective Date, the Debtor and the

Reorganized Debtor, as applicable, shall be Operationally Restructured, including that PREPA

shall, as required by the Fiscal Plan and applicable law:

(a) take all necessary actions to (i) complete the competitive procurement

process for substantially all of PREPA’s generation assets and (ii)

complete ongoing efforts to transfer operation and maintenance of existing

PREPA generation assets to professional and independent private

operators; and

(b) maintain operation and maintenance contracts with private operators for

the transmission and distribution system; provided, that such contracts will

not adversely impact the tax exemption on any outstanding Reorganized

PREPA tax-exempt New Bonds, Refunding Bonds, or Additional Bonds.

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H. Purchase and Sale of the Administrative Expense Bonds

On the Effective Date, in order to provide for payment of the Allowed Administrative

Expense Claims, the Commonwealth shall purchase, and Reorganized PREPA shall sell, assign,

transfer, and convey to the Commonwealth the Administrative Expense Bonds for Cash in an

aggregate purchase price equal to the sum of the Administrative Expense Bonds Amount.

I. Settlement of the National Claims

Pursuant to sections 105(a) and 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule

9019, the provisions of the National Settlement shall constitute a good-faith compromise and

settlement among PREPA, the Oversight Board, and National of all Claims, Causes of Action,

interests, and controversies among such parties, including all potential Claims, Causes of Action,

interests, and controversies between PREPA, the Oversight Board, and National, and are in

consideration of the value provided to PREPA by National pursuant to the National Settlement.

The Plan shall be deemed a motion to approve the National Settlement as a good-faith

compromise and settlement of all of the Claims, interests, Causes of Action and controversies

described in the foregoing sentence pursuant to section 1123(b)(3) of the Bankruptcy Code and

Bankruptcy Rule 9019, and entry of the Confirmation Order shall constitute the Title III Court’s

approval of the National Settlement, as well as a finding by the Title III Court that the National

Settlement is in the best interests of PREPA, the Oversight Board, and Holders of Claims and is

fair, equitable, and reasonable.

Pursuant to sections 105(a) and 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule

9019, the treatment of the National Reimbursement Claim as set forth in this Plan is expressly

conditioned upon the approval and effectiveness of the compromise and settlement between the

Oversight Board, on behalf of PREPA, and National, with respect the National Reimbursement

Claim, pursuant to which the National Reimbursement Claim is Allowed as set forth in Article

XVIII.A of the Plan and shall receive the treatment described in Article IX.A of the Plan. In the

event thatIf the Title III Court disallows the National Reimbursement Claim or does not approve

the settlement of the Reimbursement Claims on the terms set forth in the Planwith National or

determines the treatment of the National Reimbursement Claim does not comply with

PROMESA for reasons including, without limitation, the Allowability and/or treatment of the

National Reimbursement Claim, or the Title III Court finds the treatment of the National

Reimbursement Claim constitutes unfair discrimination, the settlement and the treatment of

National’s Claims shall, without further action, convert to a settlement of National’s Claims that

eliminates the obligation to issue Series B Bonds on account of the National Reimbursement

Claim and all payments for debt service arising from, relating to, or on account of the National

Reimbursement Claim.; provided, that, in such circumstance, National shall have the option to

forego all consideration under the National PSA, including the fees and expenses set forth in

Article II.D.2, and, in exchange, receive the same treatment as another settling Class of Holders

of PREPA Revenue Bonds Claims, so long as the settlement with such Class whose recovery

National would receive was reached prior to the earlier to occur of (i) any substantive ruling on

the claims and counterclaims asserted in the Amended Lien & Recourse Challenge that Holders

of PREPA Revenue Bonds are secured by Revenues outside of the Sinking Fund, and (ii) an

indication or a determination, either oral or written, at a hearing or otherwise, by the Title III

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Court that the Holders of PREPA Revenue Bonds are secured by Revenues outside of the

Sinking Fund.

ARTICLE XIX

PROVISIONS REGARDING THE ISSUANCE AND DISTRIBUTION OF THE NEW

BONDS

A. Issuance and Distribution 

1. New Bonds

The New Bonds shall be issued pursuant to the terms and provisions of the New Master

Indenture and shall be distributed as set forth in the Plan. The definitive documentation

governing the New Bonds generally shall provide for the terms set forth herein, subject to the

results of any election permitted by the Plan and other adjustments permitted or required by the

Plan.

2. CVI

The CVI will be issued pursuant to the terms and provisions of the New Master Indenture

and shall be distributed as set forth in this Plan. The definitive documentation governing the CVI

generally shall provide for the terms set forth in the Plan.

B. General Terms

1. New Bonds

On the Effective Date, Reorganized PREPA shall issue two series of New Bonds: Series

A Bonds and Series B Bonds, which Series B Bonds shall consist of two subseries. The

maturities, interest rates, and amortization schedules for the New Bonds, assuming the maximum

original principal amount of New Bonds authorized to be issued pursuant to the Plan

(approximately $5.68 billion) is issued, are attached hereto as Schedule E.

a) Series A Bonds

Series A Bonds shall be issued in a principal amount sufficient to comply with the terms

of the Fuel Line Lender PSA and Article VII hereof, which shall be approximately $650,000,000.

They shall have a final stated maturity of fifteen (15) years from the Effective Date, which final

stated maturity date may be modified based on agreed upon covenants in the New Master

Indenture and relating to the Legacy Charge, which final stated maturity date shall be acceptable

to the Required Fuel Line Lenders, with an expected repayment of five (5) years from the

Effective Date and an expected weighted average life of 2.89 years from the Effective Date, in

each case based upon 2022 Fiscal Plan Projections. The Series A Bonds shall be issued on the

Effective Date but shall accrue interest from the deemed issuance date of December 1, 2022 for

purposes of the calculation of accrued interest; provided, however, the period for accrual of

interest prior to the Effective Date shall not exceed one (1) year and that the interest accrued

prior to the Effective Date shall be payable upon the Effective Date in the form of Series A

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Bonds or Cash, at the Oversight Board’s sole discretion. From and after the stated maturity date,

the Series A Bonds shall no longer accrue interest, although principal and accrued but unpaid

interest outstanding shall continue to be paid. Series A Bonds shall bear interest at a rate of six

percent (6.00%) per annum payable semi-annually in Cash.

b) Series B Bonds

The Series B Bonds shall be issued in a principal amount equal to the aggregate principal

amount of New Bonds minus the aggregate principal amount of Series A Bonds. Series B Bonds

shall have a final stated maturity of fifty (50) years from the Effective Date, with an expected

repayment of thirty-five (35) years from the Effective Date based upon 2022 Fiscal Plan

Projections, which is subject to change based on load projections in subsequent PREPA Fiscal

Plans, as described further in the Disclosure Statement filed contemporaneously herewith. The

Series B Bonds shall be dated as of the Effective Date. The Series B Bonds shall bear interest at

rates that range from six percent (6.00%) per annum to six and seventy-five one-hundredths

percent (6.75%) per annum. From and after the stated maturity date, the Series B Bonds shall no

longer accrue interest, although principal outstanding shall continue to be paid.

Series B Bonds shall be issued in two subseries: Series B-1 Bonds; and Series B-2

Bonds. The Series B-1 Bonds will be current interest bonds and shall bear interest at a rate of six

percent (6.00%) per annum payable semi-annually, with an expected repayment of thirty-four

(34) years from the Effective Date and an expected weighted average life of 21.81 years from the

Effective Date, in each case based upon 2022 Fiscal Plan Projections.

The Series B-1 Bonds have priority as to payments of principal over the Series B-2

Bonds. The Series B-1 Bonds shall be issued in the principal amount of approximately $4.63

billion.

The Series B-2 Bonds will be convertible capital appreciation bonds and shall bear

interest at a rate of six and seventy-five one-hundredths percent (6.75%) per annum, accreting

annually until July 1, 2028, at which point the Series B-2 Bonds shall convert to current interest

bonds with interest payable semi-annually, with an expected repayment of thirty-five (35) years

from the Effective Date, and expected weighted average life of 34.51 years from the Effective

Date, in each case based upon 2022 Fiscal Plan Projections. The Series B-2 Bonds shall be

issued in an amount equal to the Administrative Expense Bonds Amount with a maturity value of

approximately $557,000,000 (with an assumed Effective Date of July 1, 2023 and an original

principal value of approximately $400,000,000).

2. CVI

On the Effective Date, Reorganized PREPA shall issue the CVI in the amount of the CVI

Notional Amount with a zero percent (0.00%) coupon and a final maturity date of the CVI

Maturity Date. Payments shall be made on the CVI only after the Series B Bond Defeasance

Date has occurred, so long as the Series B Bond Defeasance Date occurs prior to the CVI

Maturity Date. If the Series B Bond Defeasance Date occurs prior to the CVI Maturity Date, the

CVI shall be payable from that portion of Net Revenues constituting the Remaining Legacy

Charge Revenues deposited to the credit of the Debt Service Fund in accordance with the

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Payment Waterfall until the earlier of (a) the date on which the CVI Notional Amount has been

paid in full and (b) the CVI Maturity Date.

On the CVI Maturity Date, any amount of principal outstanding on account of the CVI

shall no longer be due and payable.

The CVI shall not carry any default rate of interest. The CVI will be issued in

denominations to be specified in the New Master Indenture.

C. Excess New Bonds

On the Effective Date, Reorganized PREPA shall, in its sole discretion, issue some, all, or

none of the Excess New Bonds to the PREPA PayGo Trust. Any amount of Excess New Bonds

that are available for distribution to the PREPA PayGo Trust, but that Reorganized PREPA

determines to not issue to the PREPA PayGo Trust, shall be deemed to have not been issued, and

the amount of New Bonds issued pursuant to the Plan shall be reduced on dollar-for-dollars basis

by the aggregate principal amount of such unissued Excess New Bonds.

D. Payment Provisions

Interest on the New Bonds shall be paid on the next January 1 or July 1 date following the

Effective Date and each January 1 and July 1 thereafter until the earlier of the New Bonds (a) the

respective stated maturity dates of the New Bonds or (b) their payment or satisfaction in full in

accordance with their respective terms.

All unpaid principal on the New Bonds not paid when due, whether at or prior to final

scheduled maturity date, shall remain outstanding and due and payable until paid in full. Interest

shall not accrue on any outstanding obligations under the New Bonds after the New Bonds’

respective stated maturity dates; only unpaid principal and unpaid interest accrued through the

stated maturity shall be payable following the respective final stated maturity dates. Interest on

the New Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day

months. The New Bonds shall not carry any default rate of interest.

E. Security

1. New Bonds

The New Bonds shall be secured by Reorganized PREPA’s Net Revenues up to an

amount equal to the Legacy Charge Revenues and the right to receive such Net Revenues up to

an amount equal to the Legacy Charge Revenues, as more particularly described in the New

Master Indenture. For the avoidance of doubt, (i) the New Bonds shall not have a priority of

payment senior to that of the Additional Bonds, provided, however, that the Revenues securing

any Additional Bonds exclude during the applicable periods an amount up to the Legacy Charge

Revenues and Remaining Legacy Charge Revenues, as applicable, and (ii) the Lien securing the

New Bonds is not limited to the Net Revenues deposited in the Debt Service Fund.

2. CVI

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The CVI shall be secured by Reorganized PREPA’s Remaining Net Revenues up to an

amount equal to the Remaining Legacy Charge Revenues and the right to receive such

Remaining Net Revenues up to an amount equal to the Remaining Legacy Charge Revenues, as

more particularly described in the New Master Indenture.

3. Additional Bonds

Reorganized PREPA may issue Additional Bonds payable from Revenues and the right to

receive such Revenues. For the avoidance of doubt, the New Bonds shall not have a priority of

payment senior to that of the Additional Bonds; provided, however, that the Revenues securing

any Additional Bonds exclude during the applicable periods an amount up to the exclude during

the applicable periods up to an amount Legacy Charge Revenues and Remaining Legacy Charge

Revenues, as applicable. The Additional Bonds shall be subject to an additional bonds test,

which shall be reasonably acceptable to the Oversight Board and, the Required Fuel Line

Lenders, and National, and documented in the New Master Indenture.

F. Call Provisions 

1. New Bonds

The New Bonds are subject to redemption prior to maturity, at the election or direction of

Reorganized PREPA, in whole or in part (and, if in part, in an authorized denomination provided

for under the New Master Indenture), on any date that is on or after ten (10) years following the

Effective Date, upon thirty (30) days’ prior written notice, at a redemption price equal to the

principal amount thereof, plus accrued interest to the redemption date.

If less than all the New Bonds of a particular series are called for redemption prior to

maturity, Reorganized PREPA will select the maturity or maturities of such series of the New

Bonds to be redeemed, and DTC, on behalf of the New Master Trustee, will select the New

Bonds within the same maturity of such series to be redeemed by means of a random lottery.

2. CVI

The CVI is subject to redemption prior to maturity, at the election or direction of

Reorganized PREPA, in whole or in part (and, if in part, in an authorized denomination provided

for under the New Master Indenture), on any date that is on or after ten (10) years following the

Effective Date, upon thirty (30) days’ prior written notice. The redemption price shall be equal to

the CVI Redemption Price.

G. Accounts and Payment Waterfall

All Revenues shall be deposited in the “General Fund” held by Reorganized PREPA. On

the first Business Day of each month, Reorganized PREPA shall apply or transfer, as applicable,

Revenues in the amounts and in the order of priority set forth in the New Master Indenture (the

“Payment Waterfall”); provided, that the Payment Waterfall set forth in the New Master Indenture

shall provide that Revenues will be (i) first, applied by Reorganized PREPA to the payment of

Operating Expenses, (ii) second, transferred by Reorganized PREPA to the New Master Trustee

for the payment of the New Master Trustee’s fees and expenses not to exceed one hundred

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thousand dollars ($100,000) per year, and (iii) third, transferred to the New Master Trustee for

deposit to the credit of the Debt Service Fund in an amount sufficient to pay debt service on all

outstanding New Bonds, up to the amount of the Legacy Charge Revenues and, from and after

the Series B Bond Defeasance Date and until the CVI Maturity Date, up to the amount of the

Remaining Legacy Charge Revenues. Any amounts remaining after such transfers and deposits

will be used by Reorganized PREPA as set forth in the New Master Indenture.

For the avoidance of doubt, (i) the New Bonds shall not have a priority of payment senior

to that of the Additional Bonds; provided, however, that the Revenues securing any Additional

Bonds exclude during the applicable periods an amount up to the Legacy Charge Revenues and

Remaining Legacy Charge Revenues, as applicable, and (ii) the Payment Waterfall in the New

Master Indenture will reflect the application and transfer of Revenues pledged to the payment of

debt service on Additional Bonds.

H. Key Covenants for New Bonds

The Definitive Documents, including the New Master Indenture and the Confirmation

Order, shall contain customary terms, conditions, and covenants, including, without limitation,

covenants by Reorganized PREPA that it shall, among other things:

1. make reasonable best efforts to (a) continue to levy and collect rates, fees, and

charges, including, but not limited to, the Legacy Charge and the Remaining Legacy Charge and

(b) deposit Net Revenues collected from such rates, fees, and charges into the Debt Service Fund

in accordance with the Payment Waterfall;

2. take no action that would (a) limit or alter the rights vested in PREPA or

Reorganized PREPA in accordance with the Plan and the Confirmation Order to fulfill the terms

of any agreements with the holders of the New Bonds or the CVI or (b) limit or impair the rights

and remedies of the holders of the New Bonds or the CVI;

3. take all reasonable actions to cause the Series A Bonds and Series B Bonds to be

tax-exempt to the extent permitted by law (including seeking any appropriate no-action,

clearance determination, or favorable ruling from the IRS);

4. do and perform all acts and things permitted by law and reasonably necessary or

desirable to ensure that interest paid to holders of any federally tax-exempt New Bonds shall be

and remain excludable from gross income for federal income tax purposes;

5. not create any Lien, pledge, or charge on the Net Revenues up to the amount of

the Legacy Charge Revenues, or right to receive the same, except in connection with issuance of

Additional Bonds as permitted under the New Master Indenture; and

6. not issue any Series A Bonds to any parties other than to be issued pursuant to this

Plan and the Fuel Line Lender PSA.

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I. Application of Moneys in Debt Service Fund

From and after the Effective Date, until the New Bonds, Refunding Bonds, and/or CVI

have been paid, satisfied in full in accordance with their terms, or otherwise no longer deemed to

be outstanding under the New Master Indenture, Reorganized PREPA shall deposit, in

accordance with the Payment Waterfall, Net Revenues up to the amount of the Legacy Charge

Revenues with respect to the New Bonds and up to the amount of the Remaining Legacy Charge

Revenues with respect to the CVI to the credit of the Debt Service Fund.

The monies deposited into the Debt Service Fund shall be applied, to the extent available,

as follows:

1. New Bonds

- First, to the payment of stated interest due and payable on the New Bonds;

- Second, to the payment of principal on the Series A Bonds and any Refunding

Bonds issued to refund the Series A Bonds until irrevocably paid in full in Cash or

otherwise deemed not to be outstanding in accordance with the terms of the New

Master Indenture; and

- Third, to the payment of principal on the Series B Bonds and any Refunding

Bonds (other than the Refunding Bonds described in Second above) until

irrevocably paid in full in Cash or otherwise deemed not to be outstanding in

accordance with the terms of the New Master Indenture.

2. CVI

- Then, to the payment of the CVI Notional Amount.

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J. Interest Rate Covenant 

Until the earlier of repayment of the Series A Bonds and the Series B Bonds or the final

maturity of the Series A Bonds and the Series B Bonds, if, in any given year, the Net Revenues

up to the amount of the Legacy Charge Revenues deposited in the Debt Service Fund are

insufficient to pay the interest due and owing on the New Bonds in that Fiscal Year, Reorganized

PREPA shall (and absent Reorganized PREPA’s action, the New Master Trustee shall) (a)

exercise its powers to the fullest extent of the law to implement an increase in the Legacy Charge

sufficient to repay such interest due and payable on the New Bonds in the succeeding Fiscal Year

and/or (b) initiate a rate case before PREB or any other proceeding to compel PREB to

implement an increase in the Legacy Charge sufficient to pay such interest due and payable on

the New Bonds in the succeeding Fiscal Year (the “Interest Rate Covenant”). The New Master

Trustee shall have the right to compel specific performance of the Interest Rate Covenant.

K. No Rights of Acceleration

The New Bonds and the CVI shall not be subject to acceleration other than an

acceleration of the New Bonds in connection with an insolvency proceeding (including under

Title III of PROMESA).

L. Limited Default

1. New Bonds

There shall be no event of default on the New Bonds (prior to the stated final maturity

date of the Series A Bonds, solely with respect to the Series A Bonds, and generally with respect

to the Series B Bonds) for failure to pay scheduled debt service, so long as Reorganized PREPA

(a) charges and employs its reasonable best efforts to (i) levy the Legacy Charge, (ii) collect the

Revenues generated by the Legacy Charge, and (iii) deposit the full amount of Net Revenues up

to the amount of the Legacy Charge Revenues into the Debt Service Fund after providing for

distributions made in accordance with the Payment Waterfall, and (b) complies with the Interest

Rate Covenant.

2. CVI

There shall be no event of default on the CVI so long as Reorganized PREPA takes

reasonable actions to collect Revenues generated by the Remaining Legacy Charge and deposits

the full amount of Net Revenues up to the amount of the Remaining Legacy Charge Revenues

into the Debt Service Fund.

M. Limited Remedies

Upon the occurrence of an event of default on the New Bonds or the CVI, the New

Master Trustee’s sole remedies shall be to: (a) seek enforcement of Reorganized PREPA’s

obligation to take reasonable measures to levy rates, fees, and charges, including, but not limited

to, the Legacy Charge and the Remaining Legacy Charge and collect Revenues generated by the

Legacy Charge and Remaining Legacy Charge and deposit Net Revenues up to the amount of the

Legacy Charge Revenues with respect to the New Bonds and up to the amount of the Remaining

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Legacy Charge Revenues with respect to the CVI into the Debt Service Fund in accordance with

the Payment Waterfall; and/or (b) prior to the Series A Bond Defeasance Date or the earlier of

the Series B Bond Defeasance Date or Series B Bonds final maturity, as applicable, at the request

of twenty-five percent (25.0%) or more of the Series A Bonds or the Series B Bonds, as

applicable, enforce the Interest Rate Covenant. All provisions of the Commonwealth

Constitution, Commonwealth statutes, executive orders, rules, regulations, and policies that

provide the “Right to Receivership Upon Default,” codified at 22

L.

P

.R.A. § 207, are preempted as inconsistent with PROMESA. For the avoidance of doubt, the Lien

securing the New Bonds is not limited to the Net Revenues deposited in the Debt Service Fund.

N. Additional Bonds and Refunding Bonds 

Reorganized PREPA may issue Refunding Bonds to refund, refinance, or defease

outstanding New Bonds authorized under the New Master Indenture. Such Refunding Bonds

shall be secured by Net Revenues up to the amount of the Legacy Charge Revenues as more

specifically set forth in the New Master Indenture.

Reorganized PREPA may issue Additional Bonds for any lawful purpose in accordance

with the additional bonds test and the other terms of the New Master Indenture. Such Additional

Bonds may be secured by Revenues as more specifically set forth in the New Master Indenture;

provided, that the Revenues securing any such Additional Bonds exclude during the applicable

periods an amount up to Legacy Charge Revenues and Remaining Legacy Charge Revenues, as

applicable, while the New Bonds, any Refunding Bonds, or the CVI remain outstanding. For the

avoidance of doubt, the New Bonds shall not have a priority of payment senior to that of the

Additional Bonds; provided, however, that the Revenues securing any Additional Bonds exclude

during the applicable periods an amount up to the Legacy Charge Revenues and Remaining

Legacy Charge Revenues, as applicable.

O. Force Majeure

1. New Bonds

In the event of a federally-declared disaster as a result of a storm or other catastrophic

event that disrupts Reorganized PREPA’s operations such that Reorganized PREPA cannot

collect Revenues necessary to cover Operating Expenses and deposit Net Revenues up to the

amount of the Legacy Charge Revenues with respect to the New Bonds in accordance with the

Payment Waterfall for a given Fiscal Year, Reorganized PREPA may elect, in its sole discretion,

to defer up to two (2) consecutive semi-annual debt service payments.

For the avoidance of doubt, if Reorganized PREPA exercises such election, interest on

the New Bonds will continue to accrue until paid. All deferred principal and interest on Series A

Bonds impacted by such election shall be paid on or before the earlier of Series A Bonds final

stated maturity date or the first scheduled payment date five (5) years after the end of the debt

service deferral period. All deferred principal and interest on Series B Bonds impacted by such

election shall be paid on or before the first scheduled payment date five (5) years after the end of

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the debt service deferral period. For the avoidance of doubt, the interest on the New Bonds that

is deferred as a result of the force majeure election shall keep accruing even after the stated

maturity of the Series B Bonds.

2. CVI

In the event of a federally-declared disaster as a result of a storm or other catastrophic

event that disrupts Reorganized PREPA’s operations such that Reorganized PREPA cannot

collect Revenues necessary to cover Operating Expenses and deposit Remaining Net Revenues

up to the amount of the Remaining Legacy Charge Revenues with respect to the CVI into the

Debt Service Fund in accordance with the Payment Waterfall for a given Fiscal Year,

Reorganized PREPA shall be under no obligation to make CVI payments for any shortfalls in

Remaining Legacy Charge Revenues.

P. Direct Right of Action

Pursuant to the New Master Indenture, and subject to such additional rights as provided

therein, the New Master Trustee shall have a direct right of action to enforce the terms of the

New Master Indenture, including, without limitation, with respect to funding deposits in the Debt

Service Fund and seeking specific performance remedies for any breach of covenants in the New

Master Indenture.

Q. New Master Indenture

Provisions requiring the Legacy Charge to be added to bills issued by Reorganized

PREPA to its customers to pay principal and interest on the New Bonds, make payments on the

CVI, and governing, among other things, amendments of or supplements to the New Bonds, the

CVI, or the New Master Indenture, events of default, remedies, priority of payments after default

under the New Master Indenture, and defeasance under the New Master Indenture will be set

forth in the New Master Indenture. The New Master Indenture will be executed and delivered on

or prior to the Effective Date.

R. Governing Law

The New Master Indenture, and the New Bonds and CVI issued thereunder, as applicable,

will be governed by the laws of the State of New York and, for certain limited matters, the laws

of the Commonwealth, without giving effect to principles of conflicts of law.

S. Tax Exemption of the New Bonds

In the event that the Government Parties obtain a ruling from the IRS (the

“Determination”) that certain features of the New Bonds will not prevent the issuance of all of the

New Bonds on the Effective Date as tax-exempt obligations, any Holders of Claims or Entities

receiving New Bonds pursuant to the Plan shall receive the benefit of such Determination in the

form of tax-exempt New Bonds issued pursuant to the Plan with coupons for all maturities equal

to the coupons on the tax-exempt New Bonds as set forth herein; provided, however, that such

New Bonds shall be accompanied by the favorable opinion of Section 103 Bond Counsel that the

interest, other than pre-issuance accrued interest, on such New Bonds is, in such counsel’s

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opinion, excluded from gross income for purposes of U.S. federal income tax, Commonwealth

income tax, and U.S. state and local income tax; provided, further, however, that, in the event

that the Determination is obtained subsequent to the Effective Date, then the holders of the

taxable New Bonds affected by such Determination (the “Invited Bonds”) shall be invited to

exchange such bonds for converted bonds (the “Exchange Offer”) and, subject to the application

of all reasonable expenses incurred by the Government Parties in connection with such Exchange

Offer, the interest rate on the converted bonds shall be the same as the interest on Invited Bonds

of the same type, interest rate, series and maturity; and, provided, further, that, such converted

bonds shall be accompanied by the favorable opinion of Section 103 Bond Counsel that the

interest, other than pre-issuance accrued interest, on such converted bonds, and on the Invited

Bonds exchanged for such converted bonds from the original date of delivery of such Invited

Bonds so exchanged, is, in such counsel’s opinion, excluded from gross income for purposes of

U.S. federal income tax, Commonwealth income tax, and U.S. state and local income tax; and,

provided, further, that, in the event that neither of the foregoing Determinations are obtained, the

covenants to seek such Determinations shall terminate upon the earliest to occur of (1) within

forty-five (45) days of the entry of the Confirmation Order, (2) notification by the IRS to the

Commonwealth that IRS is unable to issue a favorable private letter ruling, closing agreement, or

other type of IRS Determination with respect to the matters addressed by this subsection, and (3)

the amendment of the New Master Indenture following receipt of a favorable Determination and

consummation of an Exchange Offer.

T. CVIs Not Tax Exempt

Any income received on account of the CVIs shall not be excluded from gross income for

purposes of U.S. federal income tax, Commonwealth income tax, and U.S. state and local

income tax.

ARTICLE XX

PROVISIONS REGARDING NATIONAL INSURED BONDS AND TREATMENT OF

NATIONAL INSURED BOND CLAIMS

In the event that Classes 5 and 6 vote to accept the Plan in accordance with section 1126

of the Bankruptcy Code, and all National Insurance Policies and related agreements related to

National Insured Bonds are in full force and effect, or have otherwise been fully performed by

National, with no outstanding payment defaults by National with respect to such National Insured

Bonds up to and including the Effective Date, then, notwithstanding any other provision of the

Plan, on the Effective Date, Holders of Allowed National Insured Bond Claims shall receive the

following treatments, which treatments shall be selected by National, in its sole and absolute

discretion, at or prior to the Plan Supplement Deadline and be set forth on the National

Bondholder Election Form; provided, however, that, for the avoidance of doubt, National Insured

Bonds owned or held by National (by subrogation or otherwise) shall not be subject to the

treatment elections set forth in this Article XX and, subject to the rights of the Bond Trustee,

National shall receive the National Plan Consideration on account of such bonds; and, provided,

further, that, subject to providing Holders of Allowed National Insured Bond Claims with the

treatment or elections set forth in this Article XX and satisfying all such treatment or elections,

National shall have all right, title, and interest in the National Plan Consideration and shall

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manage the National Plan Consideration in its sole and absolute discretion subject to and in

accordance with all applicable laws and regulations; and, provided, further, that any calculations

and/or payments to be made to a Holder based on, or in relation to, such Holder’s Allowed

National Insured Bond Claim pursuant to the options set forth in this Article XX will take into

account any payments of principal and/or accrued interest already made to such Holder by

National pursuant to the terms of the relevant National Insurance Policies, and such Holder shall

not be compensated for any amounts already paid to such Holder pursuant to the terms of the

relevant National Insurance Policies.

A. National Commutation Treatment of National Insured Bond Claims 

Each Holder of an Allowed National Insured Bond Claim shall have the option to elect on

the National Bondholder Election Form to receive, on the Effective Date, the National

Commutation Consideration, distributable by or at the direction of National, and, if elected, (i)

the Holder thereof shall have no other or further rights under or with respect to the applicable

National Insurance Policy or any National Trust or National Escrow Account, (ii) the Holder

thereof shall not receive any payments from National under the National Insurance Policies on

account of accrued and unpaid interest on and after, or, in the case of any capital appreciation

bonds, the accreted value on and after, the Effective Date, and to the extent any accrued or

accreted interest is paid to such Holder by National after such date, such amount shall be credited

against the consideration such Holder, their successors, transferees, or assigns are otherwise

entitled to receive as National Commutation Consideration, and (iii) National shall receive the

National Plan Consideration distributable on account of the applicable Allowed National Insured

Bond Claim. The National Insured Bonds of a Holder that timely and validly elects to receive

the National Commutation Treatment or makes an improper election as described in Article

XX.F hereof, shall be deemed cancelled on the Effective Date, and National’s obligations under

the applicable National Insurance Policies shall be fully and finally satisfied, released, and

discharged.

B. National Non-Commutation Treatment of National Insured Bond Claims 

In the event that a Holder of an National Insured Bond Claim timely and validly elects on

the National Bondholder Election Form to receive the National Non-Commutation Treatment in

accordance with the provisions of Article XX.B and Article XX.F hereof, (i) National shall

receive the National Plan Consideration distributable on account of the applicable Allowed

National Insured Bond Claim, and (ii) such Holder shall receive one or more of the following

treatments, at National’s election, which election shall be exercised by National in its sole

discretion at or prior to the Plan Supplement Deadline, and as detailed in the applicable National

Bondholder Election Form:.

1. Custodial Trusts 

Such Holder of an National Insured Bond Claim shall (A) deposit, or be deemed to have

deposited, among other things, such Holder’s Pro Rata Share of the National Trust Consideration,

the National Insured Bonds allocable to such electing Holder, and the related National Insurance

Policies into the applicable National Trust, (B) be deemed to have received its Pro Rata Share of

the National Trust Consideration and National Certificates in consideration therefor, and (C)

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have no recourse to National or the National Insurance Policies other than as provided for under

the terms of the National Trust.

2. Escrow

Such Holder of a National Insured Bond Claim shall deposit, or be deemed to have

deposited, among other things, such holder’s Pro Rata Share of the National Escrow

Consideration in the National Escrow Account and such deposited National Escrow

Consideration shall be held as security for National’s obligations to the Holders of the National

Insured Bonds whose National Escrow Consideration was deposited in the National Escrow

Account under the National Insurance Policies.

3. Payment of Accelerated Amounts 

National shall receive the National Plan Consideration that would be otherwise allocable

to such Holder of an Allowed National Insured Bond Claim and National shall fully and

completely discharge its obligation to such Holder of an Allowed National Insured Bond Claim

by paying on the Effective Date, in Cash, the amount thereof at the National Acceleration Price

as of the date of payment.

4. Alternative Treatment 

The Oversight Board and National reserve the right to formulate an alternative election or

implementation option with respect to the National Insured Bonds that is mutually acceptable to

the Oversight Board and National, each in their respective sole discretion; provided, however,

that any such alternative election or implementation option must be proposed, in writing, prior to

the commencement of the Disclosure Statement hearingPlan Supplement Deadline.

Notwithstanding the foregoing, and for the avoidance of doubt, National may make different

elections, with respect to different CUSIPs and different holders of National Insured Bonds.

C. Acceleration of National Insured Bonds

Notwithstanding any other provision of the Plan, to the extent that there are no

outstanding payment defaults by National with respect to National Insured Bonds up to and

including the Effective Date, the payment of the principal of the National Insured Bonds shall be

accelerated as of the Effective Date, and such National Insured Bonds shall be due and payable

from and after the Effective Date at the National Acceleration Price of one hundred percent

(100%) of the principal amount thereof plus interest accrued thereon (or, in the case of any

capital appreciation bonds, the compounded amount thereof) to the date of payment. National

shall have the right to pay the National Acceleration Price with respect to the National Insured

Bonds at any time, and the Holder of the National Insured Bonds and the trustee or fiscal agent

(as applicable) shall be required to accept the same in satisfaction of National’s obligations under

the applicable National Insurance Policy with respect to such bonds, and, upon such payment,

National’s obligations under the applicable National Insurance Policy shall be fully satisfied and

extinguished, notwithstanding any provision of the applicable National Insurance Policy or other

documents related to the National Insured Bonds. For the avoidance of doubt, notwithstanding

such acceleration, there shall be no acceleration of any payment required to be made under any

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National Insurance Policy unless National elects, in its sole and absolute discretion, to make such

payment(s) on an accelerated basis.

D. Assignment of Redemption Rights

Notwithstanding any other provision of the Plan, to the extent permitted pursuant to

applicable definitive documents and not inconsistent with the rights provided in accordance with

the applicable National Insurance Policy, on the Effective Date, PREPA shall be deemed to have

assigned to National any and all rights to redeem and call the National Insured Bonds and any

related rights such that such rights may be exercised directly and exclusively by National as if it

were PREPA for such purpose. Any amounts due in connection with any such redemption shall

be equal to the lesser of the applicable redemption price and the National Acceleration Price.

E. Entitlement to Vote

Subject to the terms and provisions of the Disclosure Statement Order, (a) the solicitation

of acceptances and rejections to the Plan by Holders of National Insured Bond Claims shall be

made by the Oversight Board to National in accordance with the provisions of Section 301(c)(3)

of PROMESA, applicable law and governing documents, and (b) the election to choose between

the National Commutation Treatment as set forth in Article XX.A hereof and the National

Non-Commutation Treatment as set forth in Article XX.B hereof shall be made by the beneficial

Holders of the applicable National Insured Bonds on the applicable National Bondholder

Election Form; provided, however, that the form of the National Non-Commutation Treatment

shall be selected by National in accordance with Article XX.B hereof.

F. Improper Election

If a Holder of an Allowed National Insured Bond Claim (1) fails to timely and validly

elect the National Non-Commutation Treatment pursuant to Article XX.B hereof, or (2) submits

an election for less than all of its National Insured Bond Claims in a particular class (in which

case, such election shall be void and of no force or effect), such Holder shall be deemed to have

elected to receive the National Commutation Treatment set forth in Article XX.A hereof with

respect to such National Insured Bond Claims, to commute the applicable National Insurance

Policies, to release and discharge National’s obligations under such National Insurance Policies,

and to receive distributions in accordance with Article XX.A hereof. In addition, the National

Insured Bonds of a Holder of an Allowed National Insured Bond Claim that does not validly

elect to receive the National Non-Commutation Treatment pursuant to clauses (1) or (2) above

shall be deemed cancelled on the Effective Date, and National’s obligations under the applicable

National Insurance Policies shall be fully and finally satisfied, released, and discharged.

ARTICLE XXI

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Rejection or Assumption of Executory Contracts and Unexpired Leases

Pursuant to Bankruptcy Code section 365(b)(2) and subject to the provisions of Article

XXI.F and Article XXI.H hereof, all Executory Contracts and Unexpired Leases that exist

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between the Debtor and any Entity, and which have not expired by their own terms on or prior to

the Confirmation Date, shall be deemed rejected by the Debtor as of the Effective Date, except

for any Executory Contract or Unexpired Lease (a) that has been assumed, assumed and assigned,

or rejected pursuant to an order of the Title III Court entered prior to the Effective Date, (b) that

is specifically designated as a contract or lease to be assumed or assumed and assigned on the

Schedule of Assumed Contracts and Leases to the Plan Supplement, (c) that has been registered

with the Office of the Comptroller of Puerto Rico or has been approved by the Oversight Board

or authorized by the Title III Court, (d) with the United States, or any of its agencies,

departments, or agents pursuant to any federal program, (e) by or between any Commonwealth

agencies, departments, municipalities, public corporations, or instrumentalities, unless

specifically designated a contract to be rejected in the Plan Supplement, or (f) that contains any

easement, license, or permit in favor of PREPA or Reorganized PREPA or necessary to PREPA’s

or Reorganized PREPA’s operations or assets; provided, however, that the Debtor reserves the

right, on or prior to the Effective Date, to amend such schedules to delete any Executory Contract

and Unexpired Lease therefrom or add any Executory Contract and Unexpired Lease thereto, in

which event such Executory Contract(s) and Unexpired Lease(s) shall be deemed to be, as the

case may be, either rejected, assumed, or assumed and assigned as of the Effective Date. The

Debtor shall serve (y) notice of any Executory Contract and Unexpired Lease to be assumed or

assumed and assigned through the operation of this Article XXI.A by including a schedule of

such contracts and leases in the Plan Supplement and (z) notice of any Executory Contract and

Unexpired Lease to be rejected through the operation of this Article XXI.A, by serving a separate

notice to the relevant counterparties to such agreements. To the extent there are any amendments

to such schedules, the Debtor shall provide notice of any such amendments to the parties to the

Executory Contract and Unexpired Lease affected thereby. The listing of a document on the

schedules to the Plan Supplement or in any separate notice shall not constitute an admission by

the Debtor that such document is an Executory Contract and Unexpired Lease or that the Debtor

has any liability thereunder.

Except as otherwise provided herein or agreed to by the Debtor and the applicable

counterparty, each assumed Executory Contract or Unexpired Lease shall include all

modifications, amendments, supplements, restatements, or other agreements related thereto, and

all rights related thereto, if any, including all easements, licenses, permits, rights, privileges,

immunities, options, rights of first refusal, and any other interests. Modifications, amendments,

supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that

have been executed by PREPA during the Title III Case shall not be deemed to alter the

prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or

amount of any Claims that may arise in connection therewith.

Except as otherwise provided herein or agreed to by the Debtor and the applicable

counterparty, each assumed Executory Contract or Unexpired Lease shall include all

modifications, amendments, supplements, restatements, or other agreements related thereto, and

all rights related thereto, if any, including all easements, licenses, permits, rights, privileges,

immunities, options, rights of first refusal, and any other interests. Modifications, amendments,

supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that

have been executed by PREPA during the Title III Case shall not be deemed to alter the

prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or

amount of any Claims that may arise in connection therewith.

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B. Approval of Rejection or Assumption of Executory Contracts and Unexpired Leases

Entry of the Confirmation Order by the Title III Court shall constitute approval, pursuant

to Bankruptcy Code sections 365(a) and 1123(b)(2), of the rejection, assumption, or assumption

and assignment, as the case may be, of an Executory Contract and an Unexpired Lease pursuant

to Article XXI.A of the Plan.

C. Inclusiveness

Unless otherwise specified on the schedules to the Plan Supplement, each Executory

Contract and Unexpired Lease listed or to be listed therein shall include any and all

modifications, amendments, supplements, restatements, or other agreements made directly or

indirectly by any agreement, instrument, or other document that in any manner affects such

Executory Contract and Unexpired Lease, without regard to whether such agreement, instrument,

or other document is listed on such schedule.

D. Cure of Defaults and Objections to Cure and Assumption

Except to the extent that different treatment has been agreed to by the non-Debtor party or

parties to any Executory Contract and Unexpired Lease to be assumed or assumed and assigned

pursuant to Article XXI.A of the Plan, the Debtor shall, pursuant to the provisions of Bankruptcy

Code section 1123(a)(5)(G) and 1123(b)(2) and consistent with the requirements of Bankruptcy

Code section 365, within at least twenty (20) days prior to the Confirmation Hearing, file with

the Title III Court and serve by first class mail on each non-Debtor party to such Executory

Contracts and Unexpired Leases to be assumed pursuant to Article XXI.A of the Plan, a notice,

which shall list the cure amount as to each Executory Contract or Unexpired Lease to be assumed

or assumed and assigned. The parties to such Executory Contracts and Unexpired Leases will

have twenty (20) days from the date of service of such notice to file and serve any objection to

the cure amounts listed by the Debtor. If there are any objections filed, the Title III Court shall

hold a hearing on a date to be set by the Title III Court. Any counterparty to an Executory

Contract or Unexpired Lease that fails to timely object to the proposed assumption or

assumption and assignment of any Executory Contract or Unexpired Lease will be deemed

to have consented to such assumption or assumption and assignment. Notwithstanding the

terms and provisions of Article XXI.A of the Plan, the Debtor shall retain its rights to reject any

of its Executory Contracts and Unexpired Leases that are subject to a dispute concerning amounts

necessary to cure any defaults through the Effective Date.

Any Cure Claim shall be deemed fully satisfied, released, and discharged upon payment

by PREPA of the Cure Claim; provided, however, that nothing herein shall prevent PREPA from

paying any Cure Claim despite the failure of the relevant counterparty to file such request for

payment of such Cure Claim. PREPA also may settle any Cure Claim without any further notice

to or action, order, or approval of the Title III Court. If there is any dispute regarding any Cure

Claim, the ability of PREPA or any assignee to provide “adequate assurance of future

performance” within the meaning of Bankruptcy Code section 365, or any other matter pertaining

to assumption, then payment of such Cure Claim shall occur as soon as reasonably practicable

after entry of a Final Order resolving such dispute, approving such assumption (and, if

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applicable, assignment), or as may be agreed upon by PREPA and the counterparty to the

Executory Contract or Unexpired Lease.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or

otherwise shall result in the full release and satisfaction of any Cure Claims, Claims, or defaults,

whether monetary or nonmonetary, including defaults of provisions restricting the change in

control or ownership interest composition or other bankruptcy-related defaults, arising under any

assumed Executory Contract or Unexpired Lease at any time prior to the effective date of

assumption. Any and all Proofs of Claim (but, for the avoidance of doubt, not including

Cure Claims) based upon Executory Contracts or Unexpired Leases that have been

assumed in the Title III Case, including pursuant to the Confirmation Order, shall be

deemed Disallowed and expunged as of the Effective Date without the need for any

objection thereto or any further notice to or action, order, or approval of the Title III

Court.

E. Contracts and Leases Entered Into After the Petition Date

Contracts, leases, and other agreements entered into after the Petition Date by PREPA

and any Executory Contracts and Unexpired Leases assumed by PREPA may be performed by

PREPA in the ordinary course of its operations.

F. Insurance Policies

Subject to the terms and provisions of Article XXI.H hereof, each of the Debtor’s

Insurance Policies and any agreements, documents, or instruments relating thereto, are treated as

Executory Contracts under the Plan and shall be assumed as of the Effective Date; provided,

however, that such treatment shall not, and shall not be construed to, discharge or relieve any

Monoline Insurer with respect to its respective obligations to Holders of Claims under policies of

insurance and applicable law and governing documents with respect thereto, as applicable, under

this Plan.

G. Rejection Damage Claims

If the rejection of an Executory Contract and Unexpired Lease by the Debtor hereunder

results in damages to the other party or parties to such contract or lease, any Claim for such

damages, if not heretofore evidenced by a filed Proof of Claim, shall be forever barred and shall

not be enforceable against the Debtor, or its properties or agents, successors, or assigns,

including, without limitation, the Reorganized Debtor, unless a Proof of Claim is filed with the

Title III Court and served upon attorneys for the Oversight Board and Reorganized Debtor, as the

case may be, on or before thirty (30) days after the later to occur of (i) the Confirmation Date,

and (ii) the date of entry of an order by the Title III Court authorizing rejection of a particular

Executory Contract and Unexpired Lease.

H. Indemnification and Reimbursement Obligations

For purposes of the Plan, (i) to the extent executory in nature, the obligations of the

Debtor, including, without limitation, directors and officers Insurance Policies, to indemnify and

reimburse its directors or officers that were directors or officers, respectively, on or prior to the

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Petition Date, as the case may be, shall be deemed assumed as of the Effective Date, and (ii)

indemnification obligations of the Debtor arising from conduct of officers and directors during

the period from and after the Petition Date, as the case may be, shall be Administrative Expense

Claims; provided, however, that, under no circumstances shall the Debtor or the Reorganized

Debtor, as the case may be, be responsible for any indemnification obligation, cost, or expense

associated with the gross negligence, intentional fraud, or willful misconduct of their respective

officers or directors.

I. Nonoccurrence of Effective Date

If the Effective Date does not occur, the Title III Court shall retain jurisdiction with

respect to any request to extend the deadline for assuming or rejecting Executory Contracts and

Unexpired Leases pursuant to Bankruptcy Code section 365(d)(4), unless such deadline(s) have

expired.

J. Reservation of Rights

Nothing contained in the Plan or the Plan Supplement shall constitute an admission by

the Debtor, Reorganized Debtor, or any other party that any such contract or lease is in fact an

Executory Contract and Unexpired Lease or that the Debtor has any liability thereunder. If there

is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of

assumption, the Debtor or Reorganized Debtor shall have forty-five (45) days following entry of

a Final Order resolving such dispute to alter their treatment of such contract or lease.

ARTICLE XXII

GUC TRUST

A. Execution of GUC Trust Deed of Trust

On or before the Effective Date, PREPA and the GUC Trustee shall execute the GUC

Trust Deed of Trust, and shall take all other necessary steps to establish the GUC Trust and the

GUC Trust Interests therein, which shall be for the benefit of the GUC Trust Beneficiaries,

whether their Claims are Allowed before, on, or after the Effective Date. The GUC Trust Deed

of Trust may provide powers, duties, and authorities in addition to those explicitly stated herein,

but only to the extent that such powers, duties, and authorities do not affect the status of the GUC

Trust as a “liquidating trust” for United States federal income tax purposes.

B. Purpose of the GUC Trust

The GUC Trust shall be established for the sole purpose of receiving and distributing the

GUC Trust Assets in accordance with Treasury Regulation section 301.7701-4(d), with no

objective to continue or engage in the conduct of a trade or business except to the extent

reasonably necessary to, and consistent with, the liquidating purpose of the GUC Trust.

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C. GUC Trust Assets

The GUC Trust shall consist of the GUC Trust Assets. On the Effective Date, PREPA

shall transfer all the GUC Trust Assets to the GUC Trust. The GUC Trust Assets may be

transferred subject to certain liabilities, as provided in the Plan or the GUC Trust Deed of Trust.

Such transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use,

or other similar Tax, pursuant to section 1146(a) of the Bankruptcy Code. Upon delivery of the

GUC Trust Assets to the GUC Trust, PREPA and its predecessors, successors and assigns, and

each other Entity released pursuant to Article XXVII hereof shall be discharged and released

from all liability with respect to the delivery of such distributions.

D. Administration of the GUC Trust

The GUC Trust shall be administered by the GUC Trustee according to the GUC Trust

Deed of Trust and the Plan. In the event of any inconsistency between the Plan and the GUC

Trust Deed of Trust, the GUC Trust Deed of Trust shall govern.

E. The GUC Trustee

If the GUC Trustee dies, becomes incapacitated, is terminated, or resigns for any reason,

the GUC Trust Board shall designate a successor; provided, however, that under no circumstance

shall the GUC Trustee be a director or officer with respect to any Affiliate of the GUC Trust.

F. Role of the GUC Trustee

In furtherance of and consistent with the purpose of the GUC Trust and the Plan, and

subject to the terms of the Confirmation Order, the Plan, and the GUC Trust Deed of Trust, and

the oversight of the GUC Trust Board, the GUC Trustee shall, among other things, have the

following rights, powers, and duties: (i) to hold the GUC Trust Assets for the benefit of the GUC

Trust Beneficiaries, whether their Claims are Allowed on or after the Effective Date; (ii) to

prepare and file (or cause to be prepared and filed), from and after the Effective Date, all tax and

regulatory forms, returns, reports, and other documents required, or that the GUC Trustee

otherwise deems appropriate with respect to the GUC Trust; (iii) to hold, manage, and timely

distribute Cash obtained through the exercise of its power and authority to the GUC Trust

Beneficiaries; and (iv) to not unduly prolong the duration of the GUC Trust. In all

circumstances, the GUC Trustee shall act in the best interests of all GUC Trust Beneficiaries and

in furtherance of the purpose of the GUC Trust. The GUC Trustee shall be obligated to provide

prompt written responses to the Oversight Board’s questions, from time to time, about the GUC

Trust’s progress in administering its Assets and distributions and its finances.

G. GUC Trustee’s Tax Power for Reorganized PREPA

From and after the Effective Date, the GUC Trustee shall prepare and file (or cause to be

prepared and filed), on behalf of Reorganized PREPA, all tax returns or other tax information

statements required to be filed with respect to the GUC Trust or that the GUC Trustee otherwise

deems appropriate.

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H. Transferability of GUC Trust Interests

The GUC Trust Interests shall not be transferable or assignable except by will, intestate

succession, or operation of law.

I. Cash

The GUC Trustee may invest Cash (including any earnings thereon or proceeds

therefrom) as permitted by section 345 of the Bankruptcy Code; provided, however, that such

investments are investments permitted to be made by a liquidating trust within the meaning of

Treasury Regulation section 301.7701-4(d), as reflected therein, or under applicable IRS

guidelines, rulings, or other controlling authorities.

J. Distribution of GUC Trust Assets

The GUC Trustee shall make distributions to Holders of Claims in the Unsecured Claims

Pool in accordance with Article XXIV of the Plan.

K. Funding, Costs, and Expenses of the GUC Trust

On or prior to the Effective Date, PREPA shall fund the GUC Trust on a one-time basis

in an amount of one million dollars ($1,000,000). The reasonable costs and expenses of the

GUC Trust, including the fees and expenses of the GUC Trust and its retained professionals,

shall be paid out of the GUC Trust Assets, including the fifty percent (50.0%) of the Holder of

the Allowed Vitol Claim’s Pro Rata Share of the General Unsecured Claim Recovery not

distributed to the Holder of the Allowed Vitol Claim pursuant to Article XI of the Plan, which

shall be retained by the GUC Trust. The GUC Trustee shall be authorized to use proceeds of

GUC Trust Assets to fund the GUC Trust, if necessary.

L. Compensation of the GUC Trustee

The individual(s) serving as or comprising the GUC Trustee shall be entitled to

reasonable compensation in an amount consistent with that of similar functionaries in similar

roles, the payment of which shall not be subject to the approval of the Title III Court.

M. Retention of Professionals/Employees by the GUC Trustee

Subject to the approval and consent of the GUC Trust Board, the GUC Trust may retain

and compensate attorneys, other professionals, and employees to assist the GUC Trust Board on

such terms as the GUC Trustee deems appropriate without Title III Court approval.

N. Federal Income Tax Treatment of the GUC Trust

1. GUC Trust Assets Treated as Owned by Creditors. For all United States federal

income tax purposes, all parties (including, without limitation, the Debtor, the GUC Trustee, and

the GUC Trust Beneficiaries) shall treat the transfer of the GUC Trust Assets to the GUC Trust

as (1) a transfer of the GUC Trust Assets (subject to any obligations relating to those Assets)

directly to the GUC Trust Beneficiaries, followed by (2) the transfer by such beneficiaries to the

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GUC Trust of the GUC Trust Assets in exchange for GUC Trust Interests. Accordingly, the

GUC Trust Beneficiaries shall be treated for United States federal income tax purposes as the

deemed grantors and owners of their respective share of the GUC Trust Assets. The foregoing

treatment shall also apply, to the extent permitted by applicable law, for state and local income

tax purposes.

2. Tax Reporting.

a) The GUC Trustee shall prepare and file (or cause to be prepared

and filed) tax returns for the GUC Trust treating the GUC Trust as a grantor trust pursuant to

Treasury Regulation section 1.671-4(a) and in accordance with this Article XXII.N. The GUC

Trustee also will annually send to each Holder of a GUC Trust Interest a separate statement

regarding the receipts and expenditures of the GUC Trust as relevant for U.S. federal income tax

purposes and will instruct all such Holders to use such information in preparing their U.S. federal

income tax returns or to forward the appropriate information to such Holder’s underlying

beneficial holders with instructions to utilize such information in preparing their U.S. federal

income tax returns. The GUC Trustee shall also file (or cause to be filed) any other statement,

return, or disclosure relating to the GUC Trust that is required by any Governmental Unit.

b) The GUC Trustee shall then in good faith value all other GUC

Trust Assets, and shall make all such values available from time to time, to the extent relevant,

and such values shall be used consistently by all parties to the GUC Trust (including, without

limitation, the Debtor, the GUC Trustee, and GUC Trust Beneficiaries) for all United States

federal income tax purposes.

c) Allocations of GUC Trust taxable income among the GUC Trust

Beneficiaries shall be determined by reference to the manner in which an amount of Cash

representing such taxable income would be distributed (were such Cash permitted to be

distributed at such time) if, immediately prior to such deemed distribution, the GUC Trust had

distributed all its assets to the holders of the GUC Trust Interests, adjusted for prior taxable

income and loss and taking into account all prior and concurrent distributions from the GUC

Trust. Similarly, taxable loss of the GUC Trust shall be allocated by reference to the manner in

which an economic loss would be borne immediately after a hypothetical liquidating distribution

of the remaining GUC Trust Assets. The tax book value of the GUC Trust Assets for purpose of

this paragraph shall equal their fair market value on the Effective Date, adjusted in accordance

with tax accounting principles prescribed by the IRC, the applicable Treasury Regulations, and

other applicable administrative and judicial authorities and pronouncements.

d) Subject to definitive guidance from the IRS or a court of competent

jurisdiction to the contrary (including the receipt by the GUC Trustee of a private letter ruling if

the GUC Trustee so requests one, or the receipt of an adverse determination by the IRS upon

audit if not contested by the GUC Trustee), the GUC Trustee shall (A) timely elect to treat any

reserve for the GUC Trust Assets as a “disputed ownership fund” governed by Treasury

Regulation section 1.468B-9, and (B) to the extent permitted by applicable law, report

consistently with the foregoing for state and local income tax purposes. All parties (including the

GUC Trustee and the GUC Trust Beneficiaries) shall report for United States federal, state, and

local income tax purposes consistently with the foregoing.

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e) The GUC Trustee shall be responsible for payment, out of the

GUC Trust Assets, of any taxes imposed on the trust or its Assets. In the event, and to the extent,

any Cash retained on account of Disputed Claims insufficient to pay the portion of any such taxes

attributable to the taxable income arising from the assets allocable to, or retained on account of,

Disputed Claims, such taxes may be (i) reimbursed from any subsequent Cash amounts retained

on account of Disputed Claims, or (ii) to the extent such Disputed Claims have subsequently

been resolved, deducted from any amounts otherwise distributable by the GUC Trustee as a

result of the resolution of such Disputed Claims.

3. Tax Withholdings by GUC Trustee. The GUC Trustee may withhold and pay to

the appropriate tax authority all amounts required to be withheld pursuant to the IRC or any

provision of any foreign, state, or local tax law with respect to any payment or distribution to the

holders of GUC Trust Interests. All such amounts withheld and paid to the appropriate tax

authority (or placed in escrow pending resolution of the need to withhold) shall be treated as

amounts distributed to such holders of GUC Trust Interests for all purposes of the GUC Trust

Deed of Trust, and it being understood that any such amount withheld shall reduce the amount

actually realized by the applicable holder upon distribution. The GUC Trustee shall be

authorized to collect such tax information from the holders of GUC Trust Interests (including,

without limitation, social security numbers or other tax identification numbers) as in its sole

discretion the GUC Trustee deems necessary to effectuate the Plan, the Confirmation Order, and

the GUC Trust Deed of Trust. In order to receive distributions under the Plan, all holders of

GUC Trust Interests shall be required to identify themselves to the GUC Trustee and provide tax

information and the specifics of their holdings, to the extent the GUC Trustee deems appropriate

in the manner and in accordance with the procedures from time to time established by the GUC

Trustee for these purposes. This identification requirement generally applies to all holders of

GUC Trust Interests, including those who hold their securities in street name. The GUC Trustee

may refuse to make a distribution to any holder of a GUC Trust Interest that fails to furnish such

information in a timely fashion, and until such information is delivered, and may treat such

holder’s GUC Trust Interests as disputed; provided, however, that, if such information is not

furnished to the GUC Trustee within six (6) months of the original request to furnish such

information, no further distributions shall be made to the holder of such GUC Trust Interest; and,

provided, further, that, upon the delivery of such information by a holder of a GUC Trust

Interest, the GUC Trustee shall make such distribution to which the holder of the GUC Trust

Interest is entitled, without additional interest occasioned by such holder’s delay in providing tax

information; and, provided, further, that, if the GUC Trustee fails to withhold in respect of

amounts received or distributable with respect to any such holder and the GUC Trustee is later

held liable for the amount of such withholding, such holder shall reimburse the GUC Trustee for

such liability (to the extent such amounts were actually distributed to such holder).

O. Dissolution of GUC Trust

The GUC Trustee and the GUC Trust shall be discharged or dissolved, as the case may

be, upon the earlier to occur of (i) all of the GUC Trust Assets have been distributed pursuant to

the Plan and the GUC Trust Deed of Trust, and (ii) all distributions required to be made by the

GUC Trustee under the Plan and the GUC Trust Deed of Trust have been made. Upon the

dissolution of the GUC Trust, all remaining GUC Trust Assets, if any, shall revertbe distributed

to the PREPA PayGo Trust.

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P. Indemnification of GUC Trustee and Members of GUC Trust Board

The GUC Trustee or the individual(s) comprising the GUC Trustee, as the case may be,

the GUC Trust Board, the members of the GUC Trust Board and their respective employees,

agents, and professionals, shall not be liable to the GUC Trust Beneficiaries for actions taken or

omitted in their capacity as, or on behalf of, the GUC Trustee or the GUC Trust Board, as

applicable, except those acts arising out of their own willful misconduct or gross negligence, and

each shall be entitled to indemnification and reimbursement by the GUC Trust for fees and

expenses in defending any and all actions or inactions in their capacity as, or on behalf of, the

GUC Trustee or the GUC Trust Board, as applicable, except for any actions or inactions

involving willful misconduct or gross negligence. Any indemnification claim of the GUC

Trustee, the GUC Trust Board, the members of the GUC Trust Board, and the other parties

entitled to indemnification under this subsection shall be satisfied solely from the GUC Trust

Assets and shall be entitled to a priority distribution therefrom, ahead of the GUC Trust Interests

and any other claim to or interest in such assets. The GUC Trustee, the GUC Trust Board, and

the members of the GUC Trust Board shall be entitled to rely, in good faith, on the advice of

their retained professionals.

ARTICLE XXIII

AVOIDANCE ACTIONS TRUST

A. Execution of Avoidance Actions Trust Agreement

On or before the Effective Date, PREPA and the Avoidance Actions Trustee shall execute

the Avoidance Actions Trust Agreement, and shall take all other necessary steps to establish the

Avoidance Actions Trust and the Avoidance Actions Trust Interests therein, which shall be for

the benefit of the Avoidance Actions Trust Beneficiaries, whether their Claims are Allowed

before, on, or after the Effective Date. The Avoidance Actions Trust Agreement may provide

powers, duties, and authorities in addition to those explicitly stated herein, but only to the extent

that such powers, duties, and authorities do not affect the status of the Avoidance Actions Trust

as a “liquidating trust” for United States federal income tax purposes.

B. Purpose of the Avoidance Actions Trust

The Avoidance Actions Trust shall be established for the sole purpose of prosecuting the

Avoidance Actions and distributing its assets, in accordance with Treasury Regulation section

301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business

except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the

Avoidance Actions Trust.

C. Avoidance Actions Trust Assets

The Avoidance Actions Trust shall consist of the Avoidance Actions Trust Assets. On

the Effective Date, PREPA shall transfer all of the Avoidance Actions Trust Assets to the

Avoidance Actions Trust. The Avoidance Actions Trust Assets may be transferred subject to

certain liabilities, as provided in the Plan or the Avoidance Actions Trust Agreement. Such

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transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use or

other similar Tax, pursuant to section 1146(a) of the Bankruptcy Code. Upon delivery of the

Avoidance Actions Trust Assets to the Avoidance Actions Trust, PREPA and its predecessors,

successors and assigns, and each other Entity released pursuant to Article XXVII hereof shall be

discharged and released from all liability with respect to the delivery of such distributions.

D. Administration of the Avoidance Actions Trust

The Avoidance Actions Trust shall be administered by the Avoidance Actions Trustee

according to the Avoidance Actions Trust Agreement and the Plan. In the event of any

inconsistency between the Plan and the Avoidance Actions Trust Agreement, the Avoidance

Actions Trust Agreement shall govern.

E. The Avoidance Actions Trustee

If the Avoidance Actions Trustee dies, becomes incapacitated, is terminated, or resigns

for any reason, the Avoidance Actions Trust Board shall designate a successor; provided,

however, that under no circumstance shall the Avoidance Actions Trustee be a director or officer

with respect to any Affiliate of the Avoidance Actions Trust.

F. Role of the Avoidance Actions Trustee

In furtherance of and consistent with the purpose of the Avoidance Actions Trust and the

Plan, and subject to the terms of the Confirmation Order, the Plan and the Avoidance Actions

Trust Agreement, and the oversight of the Avoidance Actions Trust Board, the Avoidance

Actions Trustee shall, among other things, have the following rights, powers, and duties: (i) to

hold, manage, convert to Cash, and timely distribute the Avoidance Actions Trust Assets to the

GUC Trust, including prosecuting and resolving the Claims belonging to the Avoidance Actions

Trust; (ii) to hold the Avoidance Actions Trust Assets for the benefit of the Avoidance Actions

Trust Beneficiaries, whether their Claims are Allowed on or after the Effective Date; (iii) in the

Avoidance Actions Trustee’s reasonable business judgment, to investigate, prosecute, settle

and/or abandon rights, Causes of Action, or litigation of the Avoidance Actions Trust; (iv) to

prepare and file (or cause to be prepared and filed), from and after the Effective Date, all tax and

regulatory forms, returns, reports, and other documents required, or that the Avoidance actions

Trustee otherwise deems appropriate with respect to the Avoidance Actions Trust; (v) in the

Avoidance Actions Trustee’s reasonable business judgment, to control, prosecute, and/or settle

on behalf of the Avoidance Actions Trust, objections to Claims on account of which the

Avoidance Actions Trustee will be responsible; (vi) to hold, manage, and timely distribute Cash

or non-Cash Avoidance Actions Trust Assets obtained through the exercise of its power and

authority to the GUC Trustee; and (vii) to not unduly prolong the duration of the Avoidance

Actions Trust. In all circumstances, the Avoidance Actions Trustee shall act in the best interests

of all Avoidance Actions Trust Beneficiaries and in furtherance of the purpose of the Avoidance

Actions Trust. The Avoidance Action Trustee shall be obligated to provide prompt written

responses to the Oversight Board’s questions, from time to time, about the Avoidance Action

Trust’s progress in administering its assets and distributions and its finances.

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G. Avoidance Actions Trustee’s Tax Power for Reorganized PREPA

From and after the Effective Date, the Avoidance Actions Trustee shall prepare and file

(or cause to be prepared and filed), on behalf of Reorganized PREPA, all tax returns or other tax

information statements required to be filed with respect to the Avoidance Actions Trust or that

the Avoidance Actions Trustee otherwise deems appropriate.

H. Transferability of Avoidance Actions Trust Interests

The Avoidance Actions Trust Interests shall not be transferable or assignable except by

will, intestate succession, or operation of law

I. Cash

The Avoidance Actions Trustee may invest Cash (including any earnings thereon or

proceeds therefrom) as permitted by section 345 of the Bankruptcy Code; provided, however, that

such investments are investments permitted to be made by a liquidating trust within the meaning

of Treasury Regulation section 301.7701-4(d), as reflected therein, or under applicable IRS

guidelines, rulings, or other controlling authorities.

J. Distribution of Avoidance Actions Trust Assets

The Avoidance Actions Trustee shall distribute to the GUC Trust, on a monthly basis, all

unrestricted Cash on hand (including any Cash received from PREPA on the Effective Date),

except (i) Cash reserved pursuant to the Avoidance Actions Trust Agreement to fund the

activities of the Avoidance Actions Trust, (ii) such amounts as are allocable to or retained to pay

reasonable incurred or anticipated expenses (including, but not limited to, any taxes imposed on

or payable by the Avoidance Actions Trust in respect of the Avoidance Actions Trust Assets);

provided, however, that the Avoidance Actions Trustee shall not be required to make a

distribution pursuant to this Article XXIII.J if the aggregate, net amount of unrestricted Cash

available for distribution (taking into account the above listed exclusions) is such that it would

make the distribution impracticable as reasonably determined by the Avoidance Actions Trustee,

with the consent of the Avoidance Actions Trust Board, in accordance with applicable law, and

so long as such aggregate amount is less than one million dollars ($1,000,000).

K. Funding, Costs, and Expenses of the Avoidance Actions Trust

On the Effective Date, the Avoidance Actions Trust shall be funded on a one-time basis

in an amount of one million dollars ($1,000,000). The reasonable costs and expenses of the

Avoidance Actions Trust, including the fees and expenses of the Avoidance Actions Trustee and

its retained professionals, shall be paid out of the Avoidance Actions Trust Assets. Fees and

expenses incurred in connection with the prosecution and settlement of any Avoidance Actions

shall be considered costs and expenses of the Avoidance Actions Trust. The Avoidance Action

Trustee shall be authorized to use proceeds of trust assets to fund the Avoidance Action Trust, if

necessary.

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L. Compensation of the Avoidance Actions Trustee

The individual(s) serving as or comprising the Avoidance Actions Trustee shall be

entitled to reasonable compensation in an amount consistent with that of similar functionaries in

similar roles, the payment of which shall not be subject to the approval of the Title III Court.

M. Retention of Professionals/Employees by the Avoidance Actions Trustee

Subject to the approval and consent of the Avoidance Actions Trust Board, the

Avoidance Actions Trust may retain and compensate attorneys, other professionals, and

employees to assist the Avoidance Actions Trust Board on such terms as the Avoidance Actions

Trustee deems appropriate without Title III Court approval.

N. Federal Income Tax Treatment of the Avoidance Actions Trust

1. Avoidance Actions Trust Assets Treated as Owned by Creditors. For all

United States federal income tax purposes, all parties (including, without limitation, the Debtor,

the Avoidance Actions Trustee, and the Avoidance Actions Trust Beneficiaries) shall treat the

transfer of the Avoidance Actions Trust Assets to the Avoidance Actions Trust as (1) a transfer

of the Avoidance Actions Trust Assets (subject to any obligations relating to those Assets)

directly to the Avoidance Actions Trust Beneficiaries, followed by (2) the transfer by such

beneficiaries to the Avoidance Actions Trust of the Avoidance Actions Trust Assets in exchange

for Avoidance Actions Trust Interests. Accordingly, the Avoidance Actions Trust Beneficiaries

shall be treated for United States federal income tax purposes as the deemed grantors and owners

of their respective share of the Avoidance Actions Trust Assets. The foregoing treatment shall

also apply, to the extent permitted by applicable law, for state and local income tax purposes.

2. Tax Reporting.

a) The Avoidance Actions Trustee shall prepare and file (or cause to

be prepared and filed) tax returns for the Avoidance Actions Trust treating the Avoidance

Actions Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a) and in

accordance with this Article XXIII.N. The Avoidance Actions Trustee also will annually send to

each holder of an Avoidance Actions Trust Interest a separate statement regarding the receipts

and expenditures of the Avoidance Actions Trust as relevant for U.S. federal income tax

purposes and will instruct all such holders to use such information in preparing their U.S. federal

income tax returns or to forward the appropriate information to such Holder’s underlying

beneficial holders with instructions to utilize such information in preparing their U.S. federal

income tax returns. The Avoidance Actions Trustee shall also file (or cause to be filed) any other

statement, return, or disclosure relating to the Avoidance Actions Trust that is required by any

Governmental Unit.

b) The Avoidance Actions Trustee will then in good faith value all

other Avoidance Actions Trust Assets, and shall make all such values available from time to

time, to the extent relevant, and such values shall be used consistently by all parties to the

Avoidance Actions Trust (including, without limitation, the Debtor, the Avoidance Actions

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Trustee, and Avoidance Actions Trust Beneficiaries) for all United States federal income tax

purposes.

c) Allocations of Avoidance Actions Trust taxable income among the

Avoidance Actions Trust Beneficiaries shall be determined by reference to the manner in which

an amount of Cash representing such taxable income would be distributed (were such Cash

permitted to be distributed at such time) if, immediately prior to such deemed distribution, the

Avoidance Actions Trust had distributed all its assets to the holders of the Avoidance Actions

Trust Interests, adjusted for prior taxable income and loss and taking into account all prior and

concurrent distributions from the Avoidance Actions Trust. Similarly, taxable loss of the

Avoidance Actions Trust shall be allocated by reference to the manner in which an economic loss

would be borne immediately after a hypothetical liquidating distribution of the remaining

Avoidance Actions Trust Assets. The tax book value of the Avoidance Actions Trust Assets for

purpose of this paragraph shall equal their fair market value on the Effective Date, adjusted in

accordance with tax accounting principles prescribed by the IRC, the applicable Treasury

Regulations, and other applicable administrative and judicial authorities and pronouncements.

d) Subject to definitive guidance from the IRS or a court of competent

jurisdiction to the contrary (including the receipt by the Avoidance Actions Trustee of a private

letter ruling if the Avoidance Actions Trustee so requests one, or the receipt of an adverse

determination by the IRS upon audit if not contested by the Avoidance Actions Trustee), the

Avoidance Actions Trustee shall (A) timely elect to treat any reserve for the Avoidance Actions

Trust Assets as a “disputed ownership fund” governed by Treasury Regulation section 1.468B-9,

and (B) to the extent permitted by applicable law, report consistently with the foregoing for state

and local income tax purposes. All parties (including the Avoidance Actions Trustee and the

Avoidance Actions Trust Beneficiaries) shall report for United States federal, state, and local

income tax purposes consistently with the foregoing.

e) The Avoidance Actions Trustee shall be responsible for payment,

out of the Avoidance Actions Trust Assets, of any taxes imposed on the trust or its assets. In the

event, and to the extent, any Cash retained on account of Disputed Claims insufficient to pay the

portion of any such taxes attributable to the taxable income arising from the assets allocable to,

or retained on account of, Disputed Claims, such taxes may be (i) reimbursed from any

subsequent Cash amounts retained on account of Disputed Claims, or (ii) to the extent such

Disputed Claims have subsequently been resolved, deducted from any amounts otherwise

distributable by the Avoidance Actions Trustee as a result of the resolution of such Disputed

Claims.

3. Tax Withholdings by Avoidance Actions Trustee. The Avoidance Actions

Trustee may withhold and pay to the appropriate tax authority all amounts required to be

withheld pursuant to the IRC or any provision of any foreign, state, or local tax law with respect

to any payment or distribution to the holders of Avoidance Actions Trust Interests. All such

amounts withheld and paid to the appropriate tax authority (or placed in escrow pending

resolution of the need to withhold) shall be treated as amounts distributed to such holders of

Avoidance Actions Trust Interests for all purposes of the Avoidance Actions Trust Agreement,

and it being understood that any such amount withheld shall reduce the amount actually realized

by the applicable holder upon distribution. The Avoidance Actions Trustee shall be authorized

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to collect such tax information from the holders of Avoidance Actions Trust Interests (including,

without limitation, social security numbers or other tax identification numbers) as in its sole

discretion the Avoidance Actions Trustee deems necessary to effectuate the Plan, the

Confirmation Order, and the Avoidance Actions Trust Agreement. In order to receive

distributions under the Plan, all holders of Avoidance Actions Trust Interests shall be required to

identify themselves to the Avoidance Actions Trustee and provide tax information and the

specifics of their holdings, to the extent the Avoidance Actions Trustee deems appropriate in the

manner and in accordance with the procedures from time to time established by the Avoidance

Actions Trustee for these purposes. This identification requirement generally applies to all

holders of Avoidance Actions Trust Interests, including those who hold their securities in street

name. The Avoidance Actions Trustee may refuse to make a distribution to any holder of a

Avoidance Actions Trust Interest that fails to furnish such information in a timely fashion, and

until such information is delivered, and may treat such holder’s Avoidance Actions Trust

Interests as disputed; provided, however, that, if such information is not furnished to the

Avoidance Actions Trustee within six (6) months of the original request to furnish such

information, no further distributions shall be made to the holder of such Avoidance Actions Trust

Interest; and, provided, further, that, upon the delivery of such information by a holder of a

Avoidance Actions Trust Interest, the Avoidance Actions Trustee shall make such distribution to

which the holder of the Avoidance Actions Trust Interest is entitled, without additional interest

occasioned by such holder’s delay in providing tax information; and, provided, further, that, if the

Avoidance Actions Trustee fails to withhold in respect of amounts received or distributable with

respect to any such holder and the Avoidance Actions Trustee is later held liable for the amount

of such withholding, such holder shall reimburse the Avoidance Actions Trustee for such liability

(to the extent such amounts were actually distributed to such holder).

O. Dissolution of Avoidance Action Trust

The Avoidance Actions Trustee and the Avoidance Actions Trust shall be discharged or

dissolved, as the case may be, upon the earlier to occur of (i) all of the Avoidance Actions Trust

Assets have been distributed pursuant to the Plan and the Avoidance Actions Trust Agreement,

(ii) the Avoidance Actions Trustee determines, with the consent of the Avoidance Actions Trust

Board, that the administration of any remaining Avoidance Actions Trust Assets is not likely to

yield sufficient additional Avoidance Actions Trust proceeds to justify further pursuit, including

because the expense of administering the Avoidance Actions Trust so as to make a final

distribution to its beneficiaries is likely to exceed the value of the Assets remaining in the

Avoidance Actions Trust, and (iii) all distributions required to be made by the Avoidance

Actions Trustee under the Plan and the Avoidance Actions Trust Agreement have been made.

Upon the dissolution of the Avoidance Actions Trust, all remaining Avoidance Action Trust

Assets, if any, shall be transferred to the GUC Trust.

P. Indemnification of Avoidance Actions Trustee and Members of Avoidance Actions

Trust Bond

The Avoidance Actions Trustee or the individual(s) comprising the Avoidance Actions

Trustee, as the case may be, the Avoidance Actions Trust Board, the members of the Avoidance

Actions Trust Board and their respective employees, agents, and professionals, shall not be liable

to the Avoidance Actions Trust Beneficiaries for actions taken or omitted in their capacity as, or

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on behalf of, the Avoidance Actions Trustee or the Avoidance Actions Trust Board, as

applicable, except those acts arising out of their own willful misconduct or gross negligence, and

each shall be entitled to indemnification and reimbursement by the Avoidance Actions Trust for

fees and expenses in defending any and all actions or inactions in their capacity as, or on behalf

of, the Avoidance Actions Trustee or the Avoidance Actions Trust Board, as applicable, except

for any actions or inactions involving willful misconduct or gross negligence. Any

indemnification claim of the Avoidance Actions Trustee, the Avoidance Actions Trust Board, the

members of the Avoidance Actions Trust Board, and the other parties entitled to indemnification

under this subsection shall be satisfied solely from the Avoidance Actions Trust Assets and shall

be entitled to a priority distribution therefrom, ahead of the Avoidance Actions Trust Interests

and any other claim to or interest in such assets. The Avoidance Actions Trustee, the Avoidance

Actions Trust Board, and the members of the Avoidance Actions Trust Board shall be entitled to

rely, in good faith, on the advice of their retained professionals.

ARTICLE XXIV

PROVISIONS GOVERNING DISTRIBUTIONS

A. Appointment of Distribution Agent

PREPA, Reorganized PREPA, the GUC Trustee, and/or the Solicitation Agent shall act

as Distribution Agent or may employ or contract with other Entities, to act as the Distribution

Agent or to assist in or make the distributions required by the Plan. Any Distribution Agent

appointed by PREPA or the GUC Trustee shall serve without bond. Other than as specifically set

forth in the Plan, the Distribution Agent shall make all distributions required to be made under

the Plan. Except as otherwise provided herein, all distributions under the Plan shall be made by

the Distribution Agent.

B. Distributions on Account of Claims Allowed as of the Effective Date

Except as otherwise provided herein, a Final Order, or as otherwise agreed to by PREPA

and the Holder of the applicable Claim, on the first Distribution Date, the Distribution Agent

shall make initial distributions under the Plan on account of Claims Allowed on the Effective

Date or as soon as practicable thereafter, subject to PREPA’s and Reorganized PREPA’s right to

object to Claims; provided, however, that Allowed Administrative Expense Claims with respect

to liabilities incurred by PREPA in the ordinary course of its operations during the Title III Case

or assumed by PREPA prior to the Effective Date shall be paid or performed in the ordinary

course of its operations in accordance with the terms and conditions of any controlling

agreements, course of dealing, course of operations, or industry practice; provided, further, that

the Distribution Agent may make distributions of Fuel Line Lender PSA Creditor Fees to a party

entitled thereto in a manner mutually agreed upon between such party and the Distribution Agent

and to the extent the Fuel Line Lender PSA Creditor Fees shall be payable in Cash, such Fuel

Line Lender PSA Creditor Fees shall be paid no later than ten (10) Business Days following the

Effective Date; provided, further, that the Oversight Board will use reasonable efforts to

distribute New Bonds through The Depository Trust Company. Except as otherwise provided in

the Plan, Holders of Claims shall not be entitled to interest, dividends, or accruals on the

distributions provided for in the Plan, regardless of whether such distributions are delivered on or

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at any time after the Effective Date. Notwithstanding anything to the contrary in the Plan, no

Holder of an Allowed Claim shall, on account of such Allowed Claim, receive a distribution in

excess of the Allowed amount of such Claim.

C. Rights and Powers of Distribution Agent

1. Powers of the Distribution Agent

Except as may be provided otherwise hereunder, the Distribution Agent shall be

empowered to (a) take all steps and execute all instruments and documents necessary to

effectuate the Plan, (b) make distributions contemplated by the Plan, (c) comply with the Plan

and the obligations thereunder, and (d) exercise such other powers as may be vested in the

Distribution Agent pursuant to order of the Title III Court, pursuant to the Plan, or as deemed by

the Distribution Agent to be necessary and proper to implement the provisions of the Plan.

2. Fees and Expenses Incurred On and After the Effective Date

Except as otherwise ordered by the Title III Court, the amount of any reasonable fees and

expenses incurred by the Distribution Agent on and after the Effective Date and any reasonable

compensation and expense reimbursement claims, including, without limitation, reasonable fees

and expenses of counsel, incurred by the Distribution Agent, shall be paid in Cash without

further order of the Title III Court.

D. Special Rules for Distributions to Holders of Disputed Claims

Notwithstanding any provision otherwise in the Plan and except as otherwise agreed by

the relevant parties: (a) no partial payments and no partial distributions shall be made with

respect to a Disputed Claim until all such disputes in connection with such Disputed Claim have

been resolved by settlement or Final Order; and (b) any Entity that holds both an Allowed Claim

and a Disputed Claim shall not receive any distribution on the Allowed Claim unless and until all

objections to the Disputed Claim have been resolved by settlement or Final Order or the Claims

have been Allowed or expunged. Any dividends or other distributions arising from property

distributed to Holders of Allowed Claims in a Class and paid to such Holders under the Plan

shall also be paid, in the applicable amounts, to any Holder of a Disputed Claim in such Class

that becomes an Allowed Claim after the date or dates that such dividends or other distributions

were earlier paid to Holders of Allowed Claims in such Class.

At such time as a Disputed Claim becomes, in whole or in part, an Allowed Claim,

Reorganized Debtor shall distribute to the Holder thereof the distributions, if any, to which such

Holder is then entitled under the Plan, together with any earnings that have accrued thereon (net

of any expenses, including any taxes, relating thereto), but only to the extent that such earnings

are attributable to the amount of the Allowed Claim. Such distribution, if any, shall be made as

soon as practicable after the date that the order or judgement of the Title III Court allowing such

Disputed Claim becomes a Final Order.

E. Delivery of Distributions

1. Timeliness of Distributions

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Any distribution to be made pursuant to the Plan shall be deemed to be timely made if

made within ten (10) Business Days after the date specified in the Plan. Whenever any

distribution to be made under this Plan shall be due on a day other than a Business Day, such

distribution shall instead be made, without interest, on the immediately succeeding Business Day,

but shall be deemed to have been made on the date due.

2. Record Date for Distributions

Subject to the provisions of Bankruptcy Rule 9010, and except as provided in the

Confirmation Order or herein, distributions and deliveries to Holders of Allowed Claims shall be

made through DTC or at the address of each such Holder as set forth on the Schedules filed with

the Court, unless superseded by the address set forth on Proofs of Claim filed by such Holders, or

at the last known address of such Holder if no Proof of Claim is filed or if the Debtor has been

notified in writing of a change of address; provided, however, that initial distributions by the

Distribution Agent for the benefit of Holders of Allowed PREPA Revenue Bond Claims shall be

made to the Bond Trustee, as applicable, for such obligation in accordance with the respective

governing documents for such obligations. Neither PREPA nor any Distribution Agent,

including the GUC Trustee, will have any obligation to recognize the transfer of, or the sale of

any participation in, any Claim that occurs after the close of business on the Distribution Record

Date, and will be entitled for all purposes herein to recognize and distribute only to those Holders

of Allowed Claims (including Holders of Claims that become Allowed after the Distribution

Record Date) that are Holders of such Claims, or participants therein, as of the close of business

on the Distribution Record Date; provided, however, that the New Bonds will be transferable and

transfers will be recognized if made in accordance with the terms and conditions of the New

Master Indenture. PREPA and any Distribution Agent shall instead be entitled to recognize and

deal for all purposes under the Plan with only those record Holders stated on the official Claims

Register as of the close of business on the Distribution Record Date.

3. Distribution Process

The Distribution Agent shall make all distributions required under the Plan, except that

distributions to Holders of Allowed Claims governed by a separate agreement and administered

by a Servicer shall be deposited with the appropriate Servicer, at which time such distributions

shall be deemed complete, and the Servicer shall deliver such distributions in accordance with

the Plan and the terms of the governing agreement. Except as otherwise provided herein, and

notwithstanding any authority to the contrary, distributions to Holders of Allowed Claims,

including Claims that become Allowed after the Effective Date, shall be made to Holders of

record as of the Effective Date by the Distribution Agent or a Servicer, as appropriate: (1) to the

address of such Holder as set forth in the books and records of the Debtor (or if the Debtor has

been notified in writing, on or before the date that is ten (10) days before the Effective Date, of a

change of address, to the changed address); (2) in accordance with Federal Rule of Civil

Procedure 4, as modified and made applicable by Bankruptcy Rule 7004, if no address exists in

the Debtor’s books and records, no Proof of Claim has been filed and the Distribution Agent has

not received a written notice of a change of address on or before the date that is ten (10) days

before the Effective Date; or (3) on any counsel that has appeared in the Title III Case on the

Holder’s behalf. The Debtor and the Distribution Agent, as applicable, shall not incur any

liability whatsoever on account of any distributions under the Plan.

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4. Foreign Currency Exchange Rate

Except as otherwise provided in a Final Order, as of the Effective Date, any Claim

asserted in currency other than U.S. dollars shall be automatically deemed converted to the

equivalent U.S. dollar value using the exchange rate for the applicable currency as published in

The Wall Street Journal, National Edition, on the Effective Date.

5. De Minimis, Fractional, Undeliverable, and Unclaimed Distributions

(a) De Minimis and Fractional Distributions. No distribution of (i) New

Bonds shall be made by the Distribution Agent on account of an Allowed

Claim if the amount to be distributed to the specific Holder of an Allowed

Claim on the applicable Distribution Date has an economic value of less

than $1,000.00 and (ii) Cash shall be made by the Distribution Agent on

account of an Allowed Claim if the amount to be distributed to the specific

Holder of an Allowed Claim on the applicable Distribution Date has an

economic value of less than $100.00. No fractional New Bonds shall be

distributed. Where a fractional portion of a New Bond otherwise would be

called for under the Plan, the actual issuance shall reflect a rounding down

to the nearest whole New Bond.

(b) Undeliverable Distributions. If any distribution to any Holder is returned

to the Distribution Agent as undeliverable, no further distribution shall be

made to such Holder unless and until the Distribution Agent is notified, in

writing, of such Holder’s then-current address. Subject to the terms and

provision of Article XXIV.E.5(c) of the Plan, undeliverable distributions

shall remain in the possession of the Distribution Agent until such time as

a distribution becomes deliverable. All Entities ultimately receiving

previously undeliverable Cash shall not be entitled to any interest or other

accruals thereon of any kind. Nothing contained in the Plan shall require

the Distribution Agent to attempt to locate any Holder of an Allowed

Claim.

(c) Reversion of Unclaimed Distributions. If (i) a check is sent, by the

Distribution Agent to a Holder in respect of distributions and such check is

not negotiated within one hundred twenty (120) days following the date on

which such check was issued, or (ii) any other form of distribution to a

Holder is otherwise undeliverable or that has become an Unclaimed

Distribution, the Distribution Agent (or its duly authorized agent) shall, on

or prior to the date that is one hundred eighty (180) days from (i) the

Effective Date, with respect to all Allowed Claims as of the Effective

Date, and (ii) the date that a distribution is made with respect to any

Disputed Claim that becomes an Allowed Claim subsequent to the

Effective Date, file a list with the Title III Court setting forth the names of

those Entities for which distributions have been made hereunder that have

not been negotiated or have been returned as undeliverable as of the date

thereof. Any Holder of an Allowed Claim on such list that does not

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identify itself and assert its rights pursuant to the Plan to receive a

distribution within six (6) months from the date so listed shall have its

entitlement to such undeliverable distribution discharged and shall be

forever barred from asserting any entitlement pursuant to the Plan, against

the Reorganized Debtor or the GUC Trustee, or their respective

professionals, agents, or property, and any (1) Cash in the possession of

the Distribution Agent or the trustee with respect to existing securities, as

the case may be, shall be released to the Reorganized Debtor for use to

discharge operating expenses of the Reorganized Debtor and (2) the New

Bonds in the possession of the Distribution Agent with respect to existing

securities, shall be released to the Reorganized Debtor for cancellation or

deposit into the treasury of the Reorganized Debtor, as determined by

Reorganized Debtor in its sole and absolute discretion.

6. Surrender of Cancelled Instruments 

As a condition to participation under this Plan, the Holder of a note, debenture, or other

evidence of indebtedness of PREPA that desires to receive the property to be distributed on

account of an Allowed Claim based on such note, debenture, or other evidence of indebtedness

shall surrender such note, debenture, or other evidence of indebtedness to PREPA or its designee

(unless such Holder’s Claim will not be Impaired by the Plan, in which case such surrender shall

not be required), and shall execute and deliver such other documents as are necessary to

effectuate the Plan; provided, however, that, if a claimant is a Holder of a note, debenture, or

other evidence of indebtedness for which no physical certificate was issued to the Holder but

which instead is held in book-entry form pursuant to a global security hold by DTC or other

securities depository or custodian thereof, there shall be no requirement of surrender. In

PREPA’s sole discretion, if no surrender of a note, debenture, or other evidence of indebtedness

occurs and the Holder of a Claim does not provide an affidavit and indemnification agreement, in

form and substance reasonably satisfactory to PREPA, that such note, debenture, or other

evidence of indebtedness was lost, then no distribution may be made to such Holder in respect of

the Claim based on such note, debenture, or other evidence of indebtedness.

7. Cancellation of Notes, Instruments, Certificates, and Other Documents

Except (a) as provided in any contract, instrument, or other agreement or document

entered into or delivered in connection with the Plan, (b) for purposes of evidencing a right to

distribution under the Plan, or (c) as specifically provided otherwise in the Plan (including any

rejection of Executory Contracts or Unexpired Leases pursuant to Article XXI.A hereof), on the

Effective Date, the PREPA Revenue Bonds and Fuel Line Facilities and all instruments and

documents related thereto will be deemed automatically cancelled, terminated, and of no further

force or effect against the Debtor without any further act or action under any applicable

agreement, law, regulation, order or rule, with the Debtor and the applicable trustee, paying

agent, or fiscal agent, as the case may be, having no continuing obligations or duties and

responsibilities thereunder and the obligations of the parties to the Debtor, as applicable, under

the PREPA Revenue Bonds and Fuel Line Facilities and all instruments and documents related

thereto shall be discharged; provided, however, that, notwithstanding anything contained herein

to the contrary, the PREPA Revenue Bonds and Fuel Line Facilities and such other instruments

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and documents shall continue in effect solely (i) to allow the Distribution Agent to make any

distributions as set forth in the Plan and to perform such other necessary administrative or other

functions with respect thereto, (ii) to allow Holders of Allowed PREPA Revenue Bond Claims,

Allowed National Claims, and Allowed Fuel Line Loan Claims to receive distributions in

accordance with the terms and provisions of the Plan, (iii) for any trustee, agent, contract

administrator, or similar entity under all instruments and documents related thereto, to perform

necessary functions, including making distributions, in accordance with the Plan and to have the

benefit of all the rights and protections and other provisions of such instruments and documents,

as applicable, and all other related agreements, (iv) to set forth the terms and conditions

applicable to parties to such documents and instruments other than the Debtor, or (v) as may be

necessary to preserve any claims under the respective Insurance Policies and related documents

issued by a Monoline Insurer. Notwithstanding the foregoing, and except as otherwise expressly

provided in the Plan, such bonds or bond documents that remain outstanding shall not form the

basis for the assertion of any Claim against the Debtor or Reorganized Debtor, as the case may

be.

F. Claims Paid or Payable by Third Parties

1. Claims Paid by Third Parties

A Claim shall be reduced in full, and such Claim shall be Disallowed without an

objection to such Claim having to be filed and without any further notice to or action, order, or

approval of the Title III Court, to the extent that the Holder of such Claim receives payment in

full on account of such Claim from a party that is not the Distribution Agent. To the extent a

Holder of a Claim receives a distribution on account of such Claim and also receives payment

from a party that is not the Distribution Agent on account of such Claim from the Distribution

Agent, such Holder shall repay, return, or deliver any distribution held by or transferred to the

Holder to the applicable Distribution Agent to the extent the Holder’s total recovery on account

of such Claim from the third party and under the Plan exceeds the amount of such Claim as of

the date of any such distribution under the Plan.

2. Claims Payable by Insurance Carriers

No distributions under the Plan shall be made on account of an Allowed Claim that is

payable pursuant to one of PREPA’s Insurance Policies until the Holder of such Allowed Claim

has exhausted all remedies with respect to such insurance policy. To the extent that one or more

of PREPA’s insurers agrees to satisfy in full a Claim, then immediately upon such insurers’

agreement, such Claim may be expunged to the extent of any agreed upon satisfaction on the

Claims Register by the Solicitation Agent without a Claims objection having to be filed and

without any further notice to or action, order, or approval of the Title III Court.

3. Applicability of Insurance Policies

Except as otherwise provided herein, distributions to Holders of Allowed Claims shall be

in accordance with the provisions of an applicable insurance policy. Except as otherwise

expressly provided herein, nothing contained in the Plan shall constitute or be deemed a waiver

of any Cause of Action that PREPA or any Entity may hold against any other Entity, including

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insurers under any policies of insurance, nor shall anything contained herein constitute or be

deemed a waiver by such insurers of any defenses, including coverage defenses, held by such

insurers.

G. Withholding and Reporting Requirements

Any party issuing any instrument or making any distribution under the Plan shall comply

with all applicable withholding and reporting requirements imposed by any United States federal,

state or local tax law or tax authority, and all distributions under the Plan shall be subject to any

such withholding or reporting requirements. Notwithstanding the above, each holder of an

Allowed Claim that is to receive a distribution under the Plan shall have the sole and exclusive

responsibility for the satisfaction and payment of any taxes imposed on such Holder by any

Governmental Unit, including income, withholding and other tax obligations, on account of such

distribution. Any party issuing any instrument or making any distribution under the Plan has the

right, but not the obligation, to not make a distribution until such Holder has made arrangements

satisfactory to such issuing or distributing party for payment of any such withholding tax

obligations and, if any party issuing any instrument or making any distribution under the Plan

fails to withhold with respect to any such Holder’s distribution, and is later held liable for the

amount of such withholding, the Holder shall reimburse such party. The Distribution Agent may

require, as a condition to the receipt of a distribution, that the Holder complete the appropriate

Form W-8 or Form W-9, as applicable to each Holder. If the Holder fails to comply with such a

request within one year, such distribution shall be deemed an Unclaimed Distribution. PREPA

reserves the right to allocate all distributions made under the Plan in compliance with all

applicable wage garnishments, alimony, child support, and other spousal awards, Liens, and

encumbrances.

H. Time Bar to Cash Payments

Checks issued by the Distribution Agent on account of Allowed Claims shall be null and

void if not negotiated within one hundred twenty (120) days from and after the date of issuance

thereof. Requests for reissuance of any check shall be made directly to the Distribution Agent by

the holder of the Allowed Claim with respect to which such check originally was issued. Any

claim in respect of such a voided check shall be made on or before the later of (i) the first (1st)

anniversary of the Effective Date or (ii) ninety (90) days after the date of issuance of such check,

if such check represents a final distribution hereunder on account of such Claim. After such date,

all Claims in respect of voided checks shall be discharged and forever barred and the Distribution

Agent shall retain all monies related thereto for the sole purpose of redistribution to Holders of

Allowed Claims in accordance with the terms and provisions hereof.

I. Distributions After Effective Date

Distributions made after the Effective Date to Holders of Claims that are not Allowed

Claims as of the Effective Date, but which later become Allowed Claims, shall be deemed to

have been made in accordance with the terms and provisions of Article XXIV.E of the Plan.

J. Setoffs

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Except as otherwise provided in the Plan or in the Confirmation Order, the Distribution

Agent may, pursuant to applicable bankruptcy or non-bankruptcy law, set off against any

Allowed Claim and the distributions to be made pursuant to the Plan on account thereof (before

any distribution is made on account of such Claim by the Distribution Agent), the claims, rights,

and Causes of Action of any nature that the Debtor or Reorganized Debtor may hold against the

Holder of such Allowed Claim; provided, however, that neither the failure to effect such a setoff

nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtor or

Reorganized Debtor of any such claims, rights, and Causes of Action that the Debtor or the

Reorganized Debtor may possess against such Holder; and, provided, further, that nothing

contained herein is intended to limit the ability of any Creditor to effectuate rights of setoff or

recoupment preserved or permitted by the provisions of Bankruptcy Code sections 553, 555, 559,

or 560 or pursuant to the common law right of recoupment; and, provided, further, that nothing

in this Article XXIV.J shall affect the releases and injunctions provided in Article XXVII of the

Plan.

K. Allocation Between Principal and Accrued Interest

To the extent that any Allowed Claim entitled to a distribution under the Plan consists of

indebtedness and other amounts (such as accrued but unpaid interest thereon), such distribution

shall be allocated first, to interest accrued and unpaid as of the date immediately preceding the

Petition Date, second, to the principal amount of the Claim (as determined for federal income tax

purposes) and third, to the extent the consideration exceeds the principal amount of the Claim, to

such other amounts; provided, however, that the Debtor’s or Reorganized Debtor’s treatment of

any distributions for its tax purposes will not be binding on any Creditor as to the treatment of

such distributions for any regulatory, tax, or other purposes.

L. Holder of Claim

For all purposes of the Plan, including, without limitation, for purposes of distributions

pursuant to the terms and provisions of this Article XXIV, the Holder of a Claim shall mean any

Entity who, directly or indirectly, has investment power with respect to any Claim, which

includes the power to dispose or to direct the disposition of such Claim; provided, however, that,

solely with respect to Insured PREPA Revenue Bonds and Bankruptcy Code section 1126, the

Holder of any Insured PREPA Revenue Bond Claims shall be determined in accordance with

PROMESA section 301(c)(3) and any law or governing documents applicable to such Insured

PREPA Revenue Bond Claims.

M. Exculpation

From and after the Effective Date, the Distribution Agent shall be exculpated by all

Entities, including, without limitation, Holders of Claims and other parties in interest, from any

and all claims, Causes of Action, and other assertions of liability arising out of the discharge of

the powers and duties conferred upon such Distribution Agent by the Plan or any order of the

Title III Court entered pursuant to or in furtherance of the Plan, or applicable law, except for

actions or omissions to act arising out of the gross negligence or willful misconduct of such

Distribution Agent. No Holder of a Claim or other party in interest shall have or pursue any

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claim or cause of action against the Distribution Agent for making payments in accordance with

the Plan or for implementing the provisions of the Plan.

ARTICLE XXV

PROCEDURES FOR RESOLVING DISPUTED CLAIMS

A. Objections to Claims and Prosecution of Disputed Claims

Except with respect to Allowed Claims, and subject to the terms and conditions of the

ADR Procedures and the ADR Order, the Reorganized Debtor, by and through the Oversight

Board, shall object to, and shall assume any pending objection filed by the Debtor to, the

allowance of Claims filed with the Title III Court with respect to which it disputes liability,

priority or amount, including, without limitation, objections to Claims that have been assigned

and the assertion of the doctrine of equitable subordination with respect thereto. All objections,

affirmative defenses, and counterclaims shall be litigated to Final Order; provided, however, that

the Reorganized Debtor, by and through the Oversight Board, shall have the authority to file,

settle, compromise, or withdraw any objections to Claims, without approval of the Title III Court.

Unless otherwise ordered by the Title III Court, to the extent not already objected to by the

Debtor, the Reorganized Debtor shall file and serve all objections to Claims as soon as

practicable, but, in each instance, not later than the Claims Objection Bar Date. Notwithstanding

anything contained in the Plan to the contrary, on the Effective Date, any (i) PREPA Revenue

Bond Claim or Fuel Line Loan Claim filed by any Entity for amounts due under existing

securities and (ii) Proofs of Claim included on a schedule to the Plan Supplement, if any, shall be

deemed satisfied and expunged and the Oversight Board shall instruct the Solicitation Agent, its

court-appointed representative, to remove such Claims from the Claims Register maintained for

the benefit of the Title III Court.

Except as otherwise provided herein, no Claim shall become an Allowed Claim unless

and until such Claim is deemed Allowed under the Plan or PROMESA, or the Title III Court has

entered a Final Order allowing such Claim. For the avoidance of doubt, there is no requirement

to file a Proof of Claim (or move the Title III Court for allowance) to be an Allowed Claim under

the Plan. Except as otherwise provided herein, all Proofs of Claim filed after the Effective

Date shall be Disallowed and forever barred, estopped, and enjoined from assertion, and

shall not be enforceable against PREPA or Reorganized PREPA, without the need for any

objection by PREPA or Reorganized PREPA or any further notice to or action, order, or

approval of the Title III Court.

B. Estimation of Claims

Except with respect to Allowed Claims, on and after the Effective Date, and unless

otherwise limited by an order of the Title III Court, including, without limitation, the ACR Order

and the ADR Order, the Reorganized Debtor, by and through the Oversight Board, may at any

time request the Title III Court to estimate for final distribution purposes any contingent,

unliquidated or Disputed Claim pursuant to Bankruptcy Code section 502(c) regardless of

whether the Debtor previously objected to or sought to estimate such Claim, and the Title III

Court will retain jurisdiction to consider any request to estimate any Claim at any time during

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litigation concerning any objection to any Claim, including, without limitation, during the

pendency of any appeal relating to any such objection. Unless otherwise provided in an order of

the Title III Court, in the event that the Title III Court estimates any contingent, unliquidated, or

Disputed Claim, the estimated amount shall constitute either the allowed amount of such Claim

or a maximum limitation on such Claim, as determined by the Title III Court; provided, however,

that, if the estimate constitutes the maximum limitation on such Claim, the Reorganized Debtor,

by and through the Oversight Board, may elect to pursue supplemental proceedings to object to

any ultimate allowance of such Claim; and, provided, further, that the foregoing is not intended

to limit the rights granted by Bankruptcy Code section 502(j). All of the aforementioned Claims

objection, estimation, and resolution procedures are cumulative and not necessarily exclusive of

one another.

C. Claims Administration Responsibilities

Except as otherwise specifically provided in the Plan, after the Effective Date, PREPA

shall have the sole authority: (1) to file, withdraw, or litigate to judgment, objections to Claims;

(2) to settle or compromise any Disputed Claim without any further notice to or action, order, or

approval by the Title III Court; and (3) to administer and adjust the Claims Register to reflect any

such settlements or compromises without any further notice to or action, order, or approval by

the Title III Court. For the avoidance of doubt, except as otherwise provided herein, from and

after the Effective Date, PREPA shall have and retain any and all rights and defenses PREPA had

immediately prior to the Effective Date with respect to any Disputed Claim.

D. Adjustment to Claims Without Objection

Any duplicate Claim or any Claim that has been paid, satisfied, amended, or superseded

may be adjusted or expunged on the Claims Register by PREPA without PREPA having to file

an application, motion, complaint, objection, or any other legal proceeding seeking to object to

such Claim and without any further notice to or action, order, or approval of the Title III Court.

E. Extension of Claims Objection Bar Date

Upon motion by Reorganized PREPA to the Title III Court, Reorganized PREPA may

request, and the Title III Court may grant, an extension to the Claims Objection Bar Date

generally or with respect to specific Claims. Any extension granted by the Title III Court shall

not be considered to be a modification of the Plan under PROMESA section 313.

F. Authority to Amend Creditor List

PREPA will have the authority to amend the Creditor List with respect to any Claim and

to make distributions based on such amended Creditor List without approval of the Title III

Court. If any such amendment to the Creditor List reduces the amount of a Claim or changes the

nature or priority of a Claim, PREPA will provide the Holder of such Claim with notice of such

amendment and such Holder will have twenty (20) days to file an objection to such amendment

with the Title III Court. If no such objection is filed, the Distribution Agent may proceed with

distributions based on such amended Creditor List without approval of the Title III Court.

G. No Interest

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Unless otherwise specifically provided for herein or by order of the Title III Court,

postpetition interest shall not accrue or be paid on Claims, and no Holder of a Claim shall be

entitled to interest accruing on or after the Petition Date on any Claim or right. Additionally, and

without limiting the foregoing, interest shall not accrue or be paid on any Disputed Claim with

respect to the period from the Effective Date to the date a final distribution is made on account of

such Disputed Claim, if and when such Disputed Claim becomes an Allowed Claim.

H. Disallowance of Claims 

All Claims of any Entity from which property is sought by PREPA under Bankruptcy

Code sections 550 or 553 or that PREPA alleges is a transferee of a transfer that is avoidable

under Bankruptcy Code sections 544, 545, 547, 548, or 549 shall be Disallowed if: (a) the

Entity, on the one hand, and PREPA, on the other hand, agree or the Title III Court has

determined by Final Order that such Entity or transferee is liable to turn over any property or

monies under any of the aforementioned Bankruptcy Code sections; and (b) such Entity or

transferee has failed to turn over such property by the date set forth in such agreement or Final

Order.

ARTICLE XXVI

GOVERNANCE AND PROVISIONS REGARDING PREPA PAYGO TRUST AND

PENSION SYSTEM

A. Formation and Responsibilities of the PREPA PayGo Trust 

On or prior to the Effective Date, PREPA shall take all necessary steps to establish the

PREPA PayGo Trust, including, without limitation, by execution and delivery of the PREPA

PayGo Deed of Trust.

B. Funding of the PREPA PayGo Trust

1. Initial Funding

On the Effective Date, PREPA shall contribute, or cause to be contributed to the PREPA

PayGo Trust, one million dollars ($1,000,000) to fund the initial administrative fees, costs, and

expenses of the PREPA PayGo Trust.

2. Ongoing Funding of the PREPA PayGo Trust

Reorganized PREPA shall make debt service payments with respect to the PREPA PayGo

New Bonds Distribution and Excess New Bonds, if any, held by the PREPA PayGo Trust in

accordance with the New Master Indenture. In addition, from and after the Fiscal Year in which

the Effective Date occurs, Reorganized PREPA shall make, or cause to be made, annual (but in

no event later than September 30th following the conclusion of each Fiscal Year) contributions to

the PREPA PayGo Trust such that:

(a) the combined payments on account of the PREPA PayGo New Bonds

Distribution and Excess New Bonds and Cash payments under this Article

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XXVI.B.2 shall be sufficient for the PREPA PayGo Trust to reimburse

PREPA ERS for retirement benefits paid and administrative expenses

incurred in the prior Fiscal Year ending June 30 as set forth in Article

VI.A.1, and

(b) the contribution in the immediately foregoing clause (a) shall be increased

or limited such that, after such contribution, the PREPA PayGo Trust

assets shall equal two (2) times the expected retirement benefits to be paid

and administrative expenses to be incurred during the current Fiscal Year,

with any resulting increase to the amount paid pursuant to the immediately

foregoing clause (a) not to exceed fifty million dollars ($50,000,000) in a

given Fiscal Year.

C. Management of PREPA PayGo Trust

The PREPA PayGo Trust will be managed by an independent entity whose members shall

meet the independence, professionalism, experience, and qualification standards set forth in the

PREPA PayGo Deed of Trust.

D. Non-Impairment Covenant

PREPA covenants herein, and will covenant in the PREPA PayGo Deed of Trust, for the

benefit of all Participants that, with respect to payments and other obligations owed to PREPA

ERS pursuant to the Plan, all such obligations shall remain in place and not otherwise be altered,

modified, or amended until all such obligations have been satisfied in full in accordance with the

provisions of the Plan and the Definitive Documents, enforceable by any and each of the

Oversight Board, the PREPA PayGo Trust, and PREPA ERS and, with respect to any such

provision, the PREPA PayGo Deed of Trust shall not be amended or modified by Reorganized

PREPA except (i) with the express prior written consent of the Oversight Board (if in existence),

and PREPA ERS, or (ii) pursuant to a new or re-opened Title III case for Reorganized PREPA

and a confirmed new or modified, and effective, plan of adjustment.

E. Maintenance of Pension

Before the tenth (10th) anniversary of the Effective Date, both the Government of the

Commonwealth of Puerto Rico and Reorganized PREPA, including, without limitation, by any

Entity or Person acting for or on behalf thereof, shall not (a) implement existing legislation, enact

new legislation, or enter into new collective bargaining agreements or other contracts to create or

increase any defined benefit pension payment or obligation to current or future retirees from or

related to any defined benefit plans over the benefits provided by the Plan, regardless of funding

source, or (b) undo (in whole or part) the Plan’s eliminations of defined benefit plan accruals and

cost of living adjustments for PREPA ERS Participants.

ARTICLE XXVII

EFFECT OF CONFIRMATION OF THE PLAN

A. Discharge and Release of Claims and Causes of Action

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1. Complete Satisfaction, Discharge, and Release

Except as expressly provided in the Plan or the Confirmation Order, all distributions and

rights afforded under the Plan shall be, and shall be deemed to be, in exchange for, and in

complete satisfaction, settlement, discharge, and release of, all Claims or Causes of Action

against PREPA and Reorganized PREPA that arose, in whole or in part, prior to the Effective

Date, relating to the Title III Case, the Debtor or Reorganized Debtor or any of their respective

Assets, property, or interests of any nature whatsoever, including any interest accrued on such

Claims from and after the Petition Date, and regardless of whether any property will have been

distributed or retained pursuant to the Plan on account of such Claims or Causes of Action.

Upon the Effective Date, the Debtor and Reorganized Debtor shall be deemed discharged and

released from any and all Claims, Causes of Action, and any other Debts that arose, in whole or

in part, prior to the Effective Date (including prior to the Petition Date), and all Debts of the kind

specified in Bankruptcy Code sections 502(g), 502(h), or 502(i), whether or not (a) a Proof of

Claim based upon such Debt is filed or deemed filed under Bankruptcy Code section 501, (b) a

Claim based upon such Debt is allowed under Bankruptcy Code section 502 (or is otherwise

resolved), or (c) the Holder of a Claim based upon such Debt voted to accept the Plan; provided,

for the avoidance of doubt, this Article XXVII.A.1 does not extend to or include any claims,

rights, or defenses (whether ordinary or affirmative) of the Vitol Parties related to the Vitol-SCC

AP preserved pursuant to the Vitol Settlement Agreement, and the Vitol Parties are not releasing

and instead is expressly preserving, all of its claims, rights, or defenses related to the Vitol-SCC

AP as provided in the Vitol Settlement Agreement.

2. Preclusion from Assertion of Claims Against the Debtor

All Entities shall be precluded from asserting any and all Claims or other obligations,

suits, judgments, damages, Debts, rights, remedies, Causes of Action, or liabilities, of any nature

whatsoever, including any interest accrued on such Claims from and after the Petition Date,

against the Debtor and Reorganized Debtor and each of their respective Assets, property and

rights, relating to the Title III Case, regardless of whether any property will have been distributed

or retained pursuant to the Plan on account of such Claims or other obligations, suits, judgments,

damages, Debts, rights, remedies, Causes of Action, or liabilities. In accordance with the

foregoing, except as expressly provided in the Plan or the Confirmation Order, the Confirmation

Order shall constitute a judicial determination, as of the Effective Date, of the discharge and

release of all such Claims, Causes of Action, or Debt of or against the Debtor and the

Reorganized Debtor pursuant to Bankruptcy Code sections 524 and 944, applicable to the Title

III Case pursuant to PROMESA section 301, and such discharge shall void and extinguish any

judgment obtained against the Debtor or Reorganized Debtor and their respective Assets, and

property at any time, to the extent such judgment is related to a discharged Claim, Debt, or

liability. As of the Effective Date, and in consideration for the value provided under the Plan,

each Holder of a Claim in any Class under this Plan shall be and hereby is deemed to release and

forever waive and discharge as against the Debtor and Reorganized Debtor, and their respective

Assets and property and all such Claims; provided, for the avoidance of doubt, this Article

XXVII.A.2 does not extend to or include any claims, rights, or defenses (whether ordinary or

affirmative) of the Vitol Parties related to the Vitol-SCC AP preserved pursuant to the Vitol

Settlement Agreement, and the Vitol Parties are is not releasing and instead is expressly

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preserving, all of its claims, rights, or defenses related to the Vitol-SCC AP as provided in the

Vitol Settlement Agreement.

3. Injunction Related to Discharge of Claims

Except as otherwise expressly provided in this Article XXVII of the Plan, the

Confirmation Order or such other Final Order of the Title III Court that may be applicable, all

Entities who have held, hold, or may hold Claims or any other Debt or liability that is discharged

or released pursuant to Article XXVII hereof or who have held, hold, or may hold Claims or any

other Debt or liability that is discharged or released pursuant to Article XXVII hereof are

permanently enjoined, from and after the Effective Date, from (a) commencing or continuing,

directly or indirectly, in any manner, any action or other proceeding (including, without

limitation, any judicial, arbitral, administrative, or other proceeding) of any kind on any such

Claim or other Debt or liability that is discharged or released pursuant to the Plan against any of

the Released Parties or any of their respective Assets or property, (b) the enforcement,

attachment, collection, or recovery by any manner or means of any judgment, award, decree, or

order against any of the Released Parties or any of their respective assets or property on account

of any Claim or other Debt or liability that is discharged or released pursuant to the Plan, (c)

creating, perfecting, or enforcing any encumbrance of any kind against any of the Released

Parties or any of their respective assets or property on account of any Claim or other Debt or

liability that is discharged or released pursuant to the Plan, and (d) except to the extent provided,

permitted, or preserved by Bankruptcy Code sections 553, 555, 556, 559, or 560 or pursuant to

the common law right of recoupment, asserting any right of setoff, subrogation, or recoupment of

any kind against any obligation due from any of the Released Parties or any of their respective

assets or property, with respect to any such Claim or other Debt or liability that is discharged or

released pursuant to the Plan. Such injunction shall extend to all successors and assigns of the

Released Parties and their respective assets and property.

B. Releases by the Debtor and Reorganized Debtor

Except as otherwise expressly provided in the Plan or the Confirmation Order, on

the Effective Date, and for good and valuable consideration, each of the Debtor and

Reorganized Debtor, the Distribution Agent and each of the Debtor’s and Reorganized

Debtor’s Related Persons shall be deemed to have and hereby does irrevocably and

unconditionally, fully, finally, and forever waive, release, acquit, and discharge the

Released Parties from any and all Claims or Causes of Action that the Debtor, Reorganized

Debtor, and the Distribution Agent, or any of them, or anyone claiming through them, on

their behalf or for their benefit, have or may have or claim to have, now or in the future,

against any Released Party that are Released Claims or otherwise are based upon, relate to,

or arise out of or in connection with, in whole or in part, any act, omission, transaction,

event, or other circumstance relating to the Title III Case, the Fuel Line Lender PSA, the

National PSA, or the Debtor taking place or existing on or prior to the Effective Date,

and/or any Claim, act, fact, transaction, occurrence, statement, or omission in connection

with or alleged or that could have been alleged, including, without limitation, any such

Claim, demand, right, liability, or cause of action for indemnification, contribution, or any

other basis in law or equity for damages, costs, or fees.

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C. Releases by Holders of Claims

Notwithstanding anything contained in this Plan to the contrary, as of the Effective

Date, for good and valuable consideration, each Holder of a Claim is deemed to have

released and discharged the Debtor and the Reorganized Debtor from any and all Causes

of Action, whether known or unknown, including any derivative claims, asserted on behalf

of the Debtor, that such Entity would have been legally entitled to assert (whether

individually or collectively), based on or relating to, or in any manner arising from, in

whole or in part, the Debtor (including management, ownership, or operation thereof), the

Debtor’s in- or out-of-court restructuring efforts, intercompany transactions, the Title III

Case, the formulation, preparation, dissemination, negotiation, or filing of the Disclosure

Statement, the Plan, the Uninsured Bond Settlement Agreement, the Monoline Settlement

Agreement, the Vitol Settlement Agreement, the Restructuring Transactions, the Fuel Line

Lender PSA, the National PSA, or any contract, instrument, release, or other Definitive

Documents, agreement, or document created or entered into in connection with the

Disclosure Statement, or the Plan, the filing of the Title III Case, the pursuit of

Confirmation, the pursuit of consummation, the administration and implementation of the

Plan, including the issuance or distribution of securities pursuant to the Plan, or the

distribution of property under the Plan or any other related agreement, or upon any other

related act or omission, transaction, agreement, event, or other occurrence taking place on

or before the Effective Date. Notwithstanding anything to the contrary in the foregoing,

the releases set forth above do not release any post-Effective Date obligations of any party

or Entity under the Plan, the Restructuring Transactions, or any document, instrument, or

agreement (including those set forth in the Plan Supplement) executed to implement the

Plan.

D. Exculpation

Except as otherwise specifically provided in the Plan, no Exculpated Party shall

have or incur, and each Exculpated Party is released and exculpated from any Cause of

Action for any claim related to any act or omission in connection with, relating to, or

arising out of, the Title III Case, the formulation, preparation, dissemination, negotiation,

or filing of the Fuel Line Lender PSA, the National PSA, Disclosure Statement, the Plan,

the Uninsured Bond Settlement Agreement, the Monoline Settlement Agreement, the Vitol

Settlement Agreement, or any Restructuring Transaction, contract, instrument, release or

other Definitive Document, agreement, or document created or entered into in connection

with the Disclosure Statement or the Plan, the filing of the Title III Case, the pursuit of

Confirmation, the pursuit of consummation, the administration and implementation of the

Plan, including the issuance of securities pursuant to the Plan, or the distribution of

property under the Plan or any other related agreement, except for claims related to any

act or omission that is determined in a Final Order to have constituted actual fraud or

gross negligence, but in all respects such Entities shall be entitled to reasonably rely upon

the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.

The Exculpated Parties have, and upon completion of the Plan shall be deemed to have,

participated in good faith and in compliance with the applicable laws with regard to the

solicitation of votes and distribution of consideration pursuant to the Plan and, therefore,

are not, and on account of such distributions shall not be, liable at any time for the

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violation of any applicable law, rule, or regulation governing the solicitation of acceptances

or rejections of the Plan or such distributions made pursuant to the Plan. For the

avoidance of doubt, notwithstanding anything contained herein to the contrary, the Plan

shall not, and shall not be construed to, release or exculpate, any payment obligation under

the applicable National Insurance Policy, to any beneficial holder of National Insured

Bonds, in accordance with its terms solely to the extent of any failure of such holder to

receive the treatment provided to Holders of Claims in Class 5 (or any claims that National

may have against a beneficial holder of National Insured Bonds with respect to National’s

applicable obligations under the National Insurance Policies).

E. Injunction

As of the Effective Date, all Entities that hold, have held, or may hold a Released

Claim that is released pursuant to this Article XXVII of the Plan, are, and shall be,

permanently, forever and completely stayed, restrained, prohibited, barred, and enjoined

from taking any of the following actions, whether directly or indirectly, derivatively, or

otherwise, on account of or based on the subject matter of such discharged Released

Claims: (i) commencing, conducting, or continuing in any manner, directly or indirectly,

any suit, action, or other proceeding (including, without limitation, any judicial, arbitral,

administrative, or other proceeding) in any forum; (ii) enforcing, attaching (including,

without limitation any prejudgment attachment), collecting, or in any way seeking to

recover any judgment, award, decree, or other order; (iii) creating, perfecting, or in any

way enforcing in any matter, directly or indirectly, any Lien; (iv) setting off, seeking

reimbursement or contributions from, or subrogation against, or otherwise recouping in

any manner, directly or indirectly, any amount against any liability or obligation owed to

any Entity released under Article XXVII hereof; and (v) commencing or continuing in any

manner, in any place of any judicial, arbitration, or administrative proceeding in any

forum, that does not comply with or its inconsistent with the provisions of the Plan or the

Confirmation Order.

F. Non-Severability of Releases, Injunctions, and Exculpations

Notwithstanding anything else contained in the Plan, the releases, injunctions, and

exculpation provided in this Article XXVII are integral to obtaining the value provided hereunder

and constitute an essential component of the compromises reached and are not severable from the

other provisions of this Plan.

G. Reimbursement or Contribution

If the Bankruptcy Court disallows a Claim for reimbursement or contribution of an Entity

pursuant to Bankruptcy Code section 502(e)(1)(B), then to the extent that such Claim is

contingent as of the time of allowance or disallowance, such Claim shall be forever Disallowed

and expunged notwithstanding Bankruptcy Code section 502(j), unless prior to the Confirmation

Date: (1) such Claim has been adjudicated as non-contingent; or (2) the relevant Holder of a

Claim has filed a non-contingent Proof of Claim on account of such Claim and a Final Order has

been entered prior to the Confirmation Date determining such Claim as no longer contingent.

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H. Release of Liens

Except (a) with respect to the Liens securing the New Bonds and CVI, or (b) as otherwise

provided herein or in any contract, instrument, release, or other agreement or document created

pursuant to the Plan, on the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other

security interests against any property of the Debtor shall be fully released and discharged, and

the Holders of such mortgages, deeds of trust, Liens, pledges, or other security interests shall

execute such documents as may be reasonably requested by the Debtor, as applicable, to reflect

or effectuate such releases, and all of the right, title, and interest of any holder of such mortgages,

deeds of trust, Liens, pledges, or other security interests shall revert to the Debtor and its

successors and assigns.

ARTICLE XXVIII

MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

A. Modification of Plan

Subject to sections 104(j) and 313 of PROMESA and sections 942 and 1127(d) of the

Bankruptcy Code, applicable to the Title III Cases pursuant to PROMESA section 301 of

PROMESA, PREPA may alter, amend, or modify the Plan or the Exhibits at any time prior to or

after the Confirmation Date but prior to the Effective Date; provided, that such alteration,

amendment, or modification does not materially and adversely impact LUMA Energy, shall not

be inconsistent with the Fuel Line Lender PSA or the National PSA, and shall be reasonably

acceptable to the Required Fuel Line Lenders and National. Subject to Article I.G hereof, a

Holder of a Claim that has accepted the Plan shall be deemed to have accepted the Plan as

altered, amended, or modified so long as the proposed alteration, amendment, or modification

does not materially and adversely change the treatment of the Claim of such Holder.

B. Revocation or Withdrawal

The Plan may be revoked or withdrawn prior to the Confirmation Date by the Oversight

Board. If the Plan is revoked or withdrawn prior to the Confirmation Date, or if the Plan does

not become effective for any reason whatsoever, then the Plan shall be deemed null and void. In

such event, nothing contained herein shall be deemed to constitute a waiver or release of any

claim by the Debtor or any other Entity, or to prejudice in any manner the rights of the Debtor or

any other Entity in any further proceeding involving the Debtor.

C. Amendment of Plan Documents

From and after the Effective Date, the authority to amend, modify, or supplement the Plan

Supplement, the exhibits and schedules to the Plan Supplement and the exhibits and schedules to

the Plan, and any document attached to any of the foregoing, shall be as provided in such Plan

Supplement, exhibits and schedules to the Plan Supplement, or exhibits and schedules to the Plan

and their respective attachments, as the case may be.

D. No Admission of Liability

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The submission of this Plan is not intended to be, nor shall it be construed as, an

admission or evidence in any pending or subsequent suit, action, proceeding, or dispute of any

liability, wrongdoing, or obligation whatsoever (including as to the merits of any claim or

defense) by any Entity with respect to any of the matters addressed in this Plan.

None of this Plan (including, without limitation, the exhibits and schedules hereto), or

any settlement entered, act performed, or document executed in connection with this Plan: (i) is

or may be deemed to be or may be used as an admission or evidence of the validity of any claim

or of any wrongdoing or liability of any Entity; (ii) is or may be deemed to be or may be used as

an admission or evidence of any liability, fault, or omission of any Entity in any civil, criminal,

or administrative proceeding in any court, administrative agency, or other tribunal; (iii) is or may

be deemed to be or used as an admission or evidence against Reorganized Debtor, the Debtor, or

any other Entity with respect to the validity of any Claim. None of this Plan or any settlement

entered, act performed, or document executed in connection with this Plan shall be admissible in

any proceeding for any purposes, except to carry out the terms of this Plan, and except that, once

confirmed, any Entity may file this Plan in any action for any purpose, including, but not limited

to, in order to support a defense or counterclaim based on the principles of res judicata, collateral

estoppel, release, good faith settlement, judgment bar, or reduction or any other theory of claim

preclusion or issue preclusion or similar defense of counterclaim.

ARTICLE XXIX

CORPORATE GOVERNANCE AND MANAGEMENT OF REORGANIZED DEBTOR

A. Corporate Action

On the Effective Date, all matters provided for under the Plan that would otherwise

require approval of the directors of the Debtor or Reorganized Debtor, including, without

limitation, to the extent applicable, the authorization to issue or cause to be issued the New

Bonds, the authorization to enter into the Definitive Documents, the adoption of Reorganized

Debtor By-Laws, and the election or appointment, as the case may be, of directors and officers of

Reorganized Debtor pursuant to the Plan, as applicable, shall be authorized and approved in all

respects, in each case, in accordance with the New Master Indenture and the new corporate

governance documents, as applicable, and without further action by any Entity under any other

applicable law, regulation, order, or rule. Other matters provided under the Plan involving the

corporate structure of the Reorganized Debtor, or corporate action by the Reorganized Debtor,

shall be deemed to have occurred, be authorized, and shall be in effect in accordance with the

New Master Indenture and the new corporate governance documents, as applicable, and without

requiring further action by any Entity under any other applicable law, regulation, order, or rule.

Without limiting the foregoing, from and after the Confirmation Date, the Debtor and

Reorganized Debtor shall take any and all actions deemed appropriate in order to consummate

the transactions contemplated herein in accordance with the New Master Indenture, and the new

corporate governance documents, as applicable.

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B. Reorganized Debtor’s By-Laws

To the extent applicable, the by-laws of the Reorganized Debtor shall be amended as of

the Effective Date to be consistent with the Plan, as applicable.

C. Officers of Reorganized Debtor

The Reorganized Debtor’s officers and governing directors will remain the same as of the

Effective Date, unless disclosed otherwise in the Plan Supplement.

ARTICLE XXX

IDENTIFICATION OF CLAIMS IMPAIRED BY THE PLAN AND NOT IMPAIRED BY

THE PLAN

A. Impaired Classes

The Claims in Classes 1–9,9 and 11–12 are Impaired and receiving distributions pursuant

to the Plan, and are therefore entitled to vote to accept or reject the Plan. The Claims in Class 14

are Impaired and not receiving a distribution pursuant to the Plan and, therefore, Class 14 is

deemed to have rejected the Plan.

B. Unimpaired Classes

The Claims in Classes 10 and 13 are Unimpaired pursuant to the Plan, are deemed to

have accepted the Plan, and are not entitled to vote to accept or reject the Plan.

ARTICLE XXXI

CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN

A. Conditions Precedent to Confirmation Date

It shall be a condition precedent to Confirmation of the Plan that the following conditions

shall have been satisfied or waived pursuant to Article XXXI.B of the Plan:

(a) Fiscal Plan Certification: The Oversight Board shall have certified a

Fiscal Plan consistent with the Plan and shall have certified the submission

of the Plan, and any modifications to the Plan through the Confirmation

Date, in accordance with PROMESA sections 104(j) and 313.

(b) Required Orders: The Title III Court shall have entered an order or

orders (including, without limitation, the Disclosure Statement Order and

the Confirmation Order in accordance with PROMESA section 314 and

Bankruptcy Code section 1129, made applicable to the Title III Cases

pursuant to PROMESA section 301) providing for the following:

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(i) Approving the Disclosure Statement as containing “adequate

information” pursuant to Bankruptcy Code section 1125;

(ii) Authorizing the solicitation of votes and elections with respect to

the Plan;

(iii) Determining that all votes and elections or deemed elections are

binding and have been properly tabulated;

(iv) Confirming and giving effect to the terms and provisions of the

Plan, including the releases set forth in Article XXVII of the Plan;

(v) Subject to Article XVIII with respect to the settlement of the

National Claims, determining that the compromises and

settlements set forth in the Plan are appropriate, reasonable, and

approved and authorizing the transactions contemplated therein;

(vi) Determining that all applicable tests, standards, and burdens in

connection with the Plan have been duly satisfied and met by the

Oversight Board, the Debtor, and the Plan;

(vii) Determining the validity, priority, extent, and enforceability of the

Lien asserted by the Bond Trustee;

(viii) Determining the amount, if any, of the Deficiency Claim;

(ix) Determining that PREB is required to approve the Legacy Charge

as a rate, fee, and/or charge necessary to guarantee that

Reorganized PREPA meets its obligations to holders of New

Bonds;

(x) Approving the documents in the Plan Supplement, and determining

that such documents are valid and binding on parties with respect

thereto; and

(xi) Authorizing the Reorganized Debtor to execute, enter into, and

deliver the documents in the Plan Supplement, and to execute,

implement, and take all actions otherwise necessary or appropriate

to give effect to the transactions contemplated by the Plan, and the

documents in the Plan Supplement;

(xii) Authorizing the Debtor to take all actions necessary to enter into,

implement, and consummate the contracts, instruments, securities,

releases, leases, indentures, and other agreements or documents

created in connection with the Plan, including setting,

implementing, and enforcing the Legacy Charge;

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(xiii) Decreeing that the provisions of the Confirmation Order and the

Plan are nonseverable and mutually dependent;

(xiv) Authorizing the Debtor and Reorganized Debtor to: (1) make all

distributions and issuances as required under the Plan; and (2)

enter into any agreements and transaction as set forth in the Plan

Supplement;

(xv) Authorizing the implementation of the Plan in accordance with its

terms;

(xvi) Determining the New Bonds, and the covenants by Reorganized

PREPA, for the benefit of the holders of the New Bonds, as

provided in the New Master Indenture or the Confirmation Order,

as applicable, constitute valid, binding, legal, and enforceable

obligations of Reorganized PREPA, under Puerto Rico, New York,

and federal law;

(xvii) Determining the CVI, and the covenants by Reorganized PREPA,

for the benefit of the holders of the CVI, as provided in the New

Master Indenture or the Confirmation Order, as applicable,

constitute valid, binding, legal, and enforceable obligations of

Reorganized PREPA, under Puerto Rico and federal law;

(xviii) Determining that the Lien on and security interest in the Net

Revenues up to the amount of the Legacy Charge Revenues, and

the right to receive Net Revenues up to the amount of the Legacy

Charge Revenues, and all other provisions to pay the New Bonds,

are valid, binding, legal, and enforceable;

(xix) Determining that the Lien on and security interest in the Remaining

Net Revenues up to the amount of the Remaining Legacy Charge

Revenues, and the right to receive the Remaining Net Revenues up

to the amount of the Legacy Charge Revenues, and all other

provisions to pay the CVI, are valid, binding, legal, and

enforceable;

(xx) Determining that the Lien on and security interest in the Net

Revenues up to the amount of the Legacy Charge Revenues shall

be deemed automatically perfected on the Effective Date, subject

only to Liens and security interests permitted under the New

Master Indenture, and shall not be subject to recharacterization or

equitable subordination for any purposes whatsoever and shall not

constitute preferential transfers or fraudulent conveyances under

PROMESA or any applicable non-bankruptcy law, to the fullest

extent permitted by law;

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(xxi) Providing that no party, Person, or Entity shall enact, adopt, or

implement any law, rule, regulation, or policy that impedes,

financially or otherwise, consummation and implementation of the

transactions contemplated by the Plan; and

(xxii) Determining the Plan is consistent with the Debtor’s Fiscal Plan

and satisfies PROMESA section 314(b)(7).

(c) Form of Orders: The Confirmation Order and the Plan are each in form

and substance acceptable to the Oversight Board and reasonably

acceptable to the Required Fuel Line Lenders.

(d) PREB Approval: PREB shall have provided any required approval of the

rates, fees, and charges, including the Legacy Charge, necessary to

guarantee that Reorganized PREPA meets its obligations to holders of

New Bonds.

(e) Confirmation Order: The Confirmation Order includes (i)

determinations that all of the settlements and compromises contained in

the Plan satisfy applicable standard Bankruptcy Code sections 365,

1123(b)(3), and 1129 and Bankruptcy Rule 9019, to the extent applicable,

(ii) the releases, exculpations, and injunctions set forth in Article XXVII of

the Plan, and (iii) the applicable provisions set forth in this Article XXXI;

provided, that approval of the National Settlement with respect to the

National Reimbursement Claim shall not be a condition to Confirmation

of this Plan.

B. Waiver of Conditions Precedent to Confirmation

To the extent practicable and legally permissible, each of the conditions precedent Article

XXXI.A hereof may be waived, in whole or in part, by the Oversight Board, with the consent of

the Required Fuel Line Lenders with respect to conditions that directly impact their rights under

the Plan or the Fuel Line Lender PSA (with such consent not to be unreasonably withheld). Any

such waiver of a condition precedent may be effected at any time by filing a notice thereof with

the Title III Court executed by the Oversight Board.

ARTICLE XXXII

CONDITIONS PRECEDENT TO THE EFFECTIVE DATE

A. Conditions Precedent to the Effective Date

It shall be a condition precedent to the Effective Date that the following conditions shall

have been satisfied or waived pursuant to Article XXXII.B of the Plan:

1. Fiscal Plan Certification: The Oversight Board shall have determined that the

Plan is consistent with the Debtor’s Fiscal Plan and shall have certified the

submission of the Plan, and any modifications to the Plan through the

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Confirmation Date, in accordance with PROMESA sections 104(j) and 313. The

Fiscal Plan certified as of the Effective Date shall provide for payment of

principal and interest with respect to the New Bonds as set forth herein.

2. Confirmation: All conditions precedent to Confirmation, including entry of the

Confirmation Order, shall have been satisfied or waived pursuant to Article

XXXI.B of the Plan.

3. Final Order; No Injunction: The Confirmation Order shall be a Final Order, and

shall not be stayed in any respect.

4. Authorizations: All authorizations, consents, regulatory approvals, rulings, or

documents, if any, that are necessary to implement and effectuate the Plan,

including that PREB approves rates, fees, and charges necessary to guarantee that

Reorganized PREPA meets its obligations to holders of New Bonds and the

PREPA PayGo Trust, including the Legacy Charge, have been obtained or enacted

or entered and not revoked or reversed.

5. Execution of Documents; Other Actions: All actions and all contracts,

instruments, settlements, releases and other agreements or documents, including

Definitive Documents, necessary to implement the terms and provisions of the

Plan, including the Definitive Documents, are effected or executed and delivered,

as applicable, are in full force and effect, and are in form and substance

satisfactory to the Oversight Board.

6. Plan Supplement: The final version of the Plan Supplement and all of the

schedules, documents, and exhibits contained therein shall have been filed in a

manner consistent in all material respects with the Plan, Fuel Line Lender PSA,

and National PSA and shall be in form and substance acceptable to PREPA.

B. Waiver of Conditions Precedent

The Oversight Board may waive any of the conditions to the Effective Date set forth in

Article XXXII.A of the Plan at any time without any notice to any other parties in interest and

without any further notice to or action, order, or approval of the Title III Court, and without any

formal action other than proceeding to confirm and consummate the Plan, with the consent of the

Required Fuel Line Lenders with respect to conditions that directly impact their rights under the

Plan or the Fuel Line Lender PSA (with such consent not to be unreasonably withheld); provided,

that the Oversight Board must provide at least five (5) business days’ notice to LUMA Energy

prior to waiving any condition precedent to the Effective Date.

C. Effect of Non-Occurrence of Conditions to Effective Date

If prior to the Effective Date, the Confirmation Order is vacated pursuant to a Final

Order, then except as provided in any order of the Title III Court vacating the Confirmation

Order, the Plan will be null and void in all respects, and nothing contained in the Plan or

Disclosure Statement shall: (a) constitute a waiver or release of any Claims or Causes of Action;

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(b) prejudice in any manner the rights of the Debtor or any other Entity; or (c) constitute an

admission, acknowledgment, offer, or undertaking of any sort by the Debtor or any other Entity.

ARTICLE XXXIII

PROVISIONS REGARDING COMMITTEE

A. Dissolution of Committee

On the Effective Date, the Creditors’ Committee shall be (a) dissolved and be deemed to

have satisfied all of its respective duties and obligations, and (b) released and discharged from

any action or activity taken, or required to be taken, in connection with the Title III Case. To the

extent that, as of the date immediately prior to the Effective Date, the Creditors’ Committee was

a party to a contested matter or adversary proceeding in connection with the Title III Case or any

objection to claim, from and after the Effective Date and to the extent not already a party thereto,

the Reorganized Debtor shall be deemed to have assumed such role and responsibility in

connection with such contested matter or adversary proceeding and, upon such assumption, the

Creditors’ Committee shall be relieved of any role, responsibility, or obligation with respect

thereto.

ARTICLE XXXIV

PROVISIONS REGARDING OVERSIGHT BOARD AND COMPLIANCE WITH

PROMESA

A. Effect of Confirmation

Nothing in this Plan or the Confirmation Order shall discharge, substitute, alter, or

otherwise modify the powers and responsibilities of the Oversight Board pursuant to PROMESA

or the obligations of the Reorganized Debtor under PROMESA. From and after the Effective

Date, the Reorganized Debtor shall continue to have all of its obligations pursuant to

PROMESA, including, without limitation, the terms and conditions of Titles I and II thereof.

B. Ongoing Role of the Oversight Board

Nothing in the Plan or the Confirmation Order shall discharge any or all obligations of

each Debtor under PROMESA and, from and after the Effective Date, the Oversight Board’s

powers and responsibilities under PROMESA shall continue, and the Debtor’s duties and

obligations shall continue and be unaffected by the Plan and the consummation thereof.

C. Preemption of Laws

As of the Effective Date, and to the extent not previously preempted pursuant to an order

of the Title III Court, provisions of Commonwealth laws, rules, or regulations that affect PREPA

or Reorganized PREPA and are inconsistent with PROMESA shall be preempted for the reasons,

and to the extent, set forth in Exhibit “A” to the Findings of Fact and Conclusions of Law, such

preempted laws, rules, and regulations include, without limitation, pursuant to Section 4 of

PROMESA, all laws, rules, and regulations (or such portions thereof) of the Commonwealth of

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Puerto Rico to the extent they give rise to obligations of the Debtor discharged or altered by the

Plan and the Confirmation Order pursuant to PROMESA, and such discharge shall prevail over

any general or specific provisions of territory laws, rules, and regulations, are preempted to the

extent inconsistent with the Plan’s discharge of the Debtor’s obligations and all such laws shall

not be enforceable to the extent they are inconsistent with the Plan’s discharge of the Debtor’s

obligations or any of the transactions contemplated by the Plan. Without in any way limiting the

foregoing, (y) the Commonwealth laws preempted by PROMESA that affect the Debtor include,

without limitation, those listed on Schedule D hereto for the reasons and to the extent set forth in

Exhibit “A” to the Findings of Fact and Conclusions of Law, and (z) all litigation in which any

Government Party is a defendant, over whether Commonwealth law listed on Schedule D hereto

is preempted by PROMESA shall be dismissed, with prejudice, as of the Effective Date and the

parties thereto shall provide the Oversight Board prompt notice of such dismissal. For the

avoidance of doubt, the non-inclusion of a payment obligation arising from a valid law in a

certified Fiscal Plan or PREPA budget is not a basis for disallowance of such obligation to the

extent the claim arising therefrom otherwise satisfies the requirements for allowance of a claim

under the relevant provisions of the Bankruptcy Code.

ARTICLE XXXV

RETENTION OF JURISDICTION

The Title III Court shall retain all its exclusive and concurrent subject matter jurisdiction,

as the case may be, over any matter arising under PROMESA, arising in or related to, the Title III

Cases and the Plan, or that relates to the following:

1. allow, disallow, determine, liquidate, classify, estimate, or establish the priority,

secured or unsecured status, or amount of any Claim not compromised or settled hereby,

including the resolution of any request for payment of any Claim and the resolution of any and all

objections to the secured or unsecured status, priority, amount, or allowance of Claims not

compromised or settled hereby;

2. resolve any matters related to Executory Contracts or Unexpired Leases,

including: (a) the assumption or assumption and assignment of any Executory Contract or

Unexpired Lease to which PREPA is party or with respect to which PREPA may be liable and to

hear, determine, and, if necessary, liquidate, any Cure Claim, including pursuant to Bankruptcy

Code section 365; (b) any potential contractual obligation under any Executory Contract or

Unexpired Lease that is assumed or assumed and assigned; and (c) any dispute regarding whether

a contract or lease is or was executory or expired;

3. ensure that distributions to Holders of Allowed Claims are accomplished pursuant

to the provisions of the Plan and adjudicate any and all disputes arising from or relating to

distributions under the Plan;

4. adjudicate, decide, or resolve any motions, adversary proceedings, contested or

litigated matters, and any other matters, and grant or deny any applications involving PREPA or

the Reorganized Debtor that may be pending on the Effective Date or brought thereafter;

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5. decide and resolve all matters related to the granting and denying, in whole or in

part, any applications for allowance of compensation or reimbursement of expenses to

Professionals authorized pursuant to PROMESA, the Plan, or orders entered by the Title III

Court;

6. enter and implement such orders as may be necessary or appropriate to execute,

implement, consummate, or enforce the provisions of (a) contracts, instruments, releases,

indentures, and other agreements or documents approved by Final Order in the Title III Case and

(b) the Plan, the Confirmation Order, and any other contracts, instruments, securities, releases,

indentures, and other agreements or documents created in connection with the Plan;

7. adjudicate, decide, or resolve any cases, controversies, suits, disputes, or other

challenges of any kind that may arise in connection with the consummation, interpretation, or

enforcement of the Plan, the Confirmation Order, or any other contract, instrument, security,

release, or other agreement or document that is entered into or delivered pursuant to the Plan or

any Entity’s rights arising from or obligations incurred in connection with the Plan or such

documents, including, for the avoidance of doubt, any issues relating to setting, implementing,

and enforcing the Legacy Charge and rate covenant and any amendments to the Legacy Charge

and rate covenant, as well as PREB’s authorization over the Legacy Charge and any amendments

to the Legacy Charge;

8. approve any modification of the Plan or approve any modification of the

Confirmation Order or any other contract, instrument, security, release, or other agreement or

document created in connection with the Plan or the Confirmation Order, or remedy any defect or

omission or reconcile any inconsistency in any order, the Plan, the Confirmation Order, or any

other contract, instrument, security, release, or other agreement or document created in

connection with the Plan or the Confirmation Order, or enter any order in aid of confirmation

pursuant to Bankruptcy Code sections 945 and 1142(b), in such manner as may be necessary or

appropriate to consummate the Plan;

9. adjudicate, decide, or resolve any matters relating to PREPA’s compliance with

the Plan and the Confirmation Order consistent with Bankruptcy Code section 945;

10. determine any other matters that may arise in connection with or relate to the Plan,

the Disclosure Statement, the Confirmation Order or any other contract, instrument, security,

release, or other agreement or document entered into or delivered in connection with the Plan, the

Disclosure Statement, or the Confirmation Order, in each case, solely to the extent that any such

document does not provide for another court or courts to have exclusive jurisdiction;

11. issue injunctions, enter and implement other orders, or take such other actions as

may be necessary or appropriate to enforce or restrain interference by any Entity with

consummation or enforcement of the Plan or the Confirmation Order;

12. adjudicate any and all controversies, suits, or issues that may arise regarding the

validity of any actions taken by any Entity pursuant to or in furtherance of the Plan or

Confirmation Order, including, without limitation, issuance of the New Bonds, and enter any

necessary or appropriate orders or relief in connection with such adjudication;

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13. determine any other matters that may arise in connection with or relate to the Plan,

the Disclosure Statement, the Confirmation Order, the Definitive Documents, or any other

contract, instrument, security, release, other agreement, or document created in connection with

the Plan, in each case, solely to the extent that any such document does not provide for another

court or courts to have exclusive jurisdiction;

14. enforce the New Bonds and the New Master Indenture, including, without

limitation, the Interest Rate Covenant, or, in the event that the Title III Court declines such

retention of jurisdiction or the Title III Case has been closed in accordance with the terms and

provisions of PROMESA, the United States District Court for the District of Puerto Rico is

hereby designated to enforce the New Bonds and the New Master Indenture, including, without

limitation, the Interest Rate Covenant;

15. enter and implement such orders as are necessary or appropriate if the

Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;

16. enter an order or final decree concluding or closing the Title III Case pursuant to

Bankruptcy Code section 945(b);

17. enforce and clarify any orders previously entered by the Title III Court in the Title

III Case; and

18. hear any other matter over which the Title III Court has jurisdiction under the

provisions of PROMESA subject to any limits on the Title III Court’s jurisdiction and powers

under PROMESA sections 305 and 306.

ARTICLE XXXVI

MISCELLANEOUS PROVISIONS

A. Title to Assets

Except as otherwise provided in the Confirmation Order or this Plan, on the Effective Date,

title to all Assets and properties of the Debtor encompassed by the Plan shall vest in the

Reorganized Debtor, free and clear of all Liens (except the Liens granted pursuant to the Plan and

Confirmation Order).

B. No Waiver

Notwithstanding anything to the contrary contained herein, the releases and injunctions set

forth in the Plan shall not, and shall not be deemed to, limit, abridge or otherwise affect the rights

of the Oversight Board, AAFAF, the Reorganized Debtor, the Fuel Line Lender PSA Creditors

(consistent with the Fuel Line Lender PSA), or National (consistent with the National PSA) to

enforce, sue on, settle or compromise the rights, claims, and other matters expressly retained by

any of them.

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C. Supplemental Injunction

Notwithstanding anything contained herein to the contrary, except to the limited extent

provided in the Plan, all Entities, including Entities acting on their behalf, who currently hold or

assert, have held or asserted, or may hold or assert, any Released Claims against any of the

Released Parties based upon, attributable to, arising out of or relating to the Title III Case or any

Claim against the Debtor, whenever and wherever arising or asserted, whether in the U.S. or

anywhere else in the world, whether sounding in tort, contract, warranty, statute, or any other

theory of law, equity or otherwise, shall be, and shall be deemed to be, permanently stayed,

restrained and enjoined from taking any action against any of the Released Parties for the purpose

of directly or indirectly collecting, recovering or receiving any payment or recovery with respect

to any Released Claims arising prior to the Effective Date (including prior to the Petition Date),

including, but not limited to:

1. Commencing or continuing in any manner any action or other proceeding of any

kind with respect to any such Released Claim against any of the Released Parties

or the assets or property of any Released Party;

2. Enforcing, attaching, collecting, or recovering, by any manner or means, any

judgment, award, decree, or order against any of the Released Parties or the assets

or property of any Released Party with respect to any such Released Claim;

3. Creating, perfecting, or enforcing any Lien of any kind against any of the Released

Parties or the assets or property of any Released Party with respect to any such

Released Claim;

4. Except as otherwise expressly provided in the Plan or the Confirmation Order,

asserting, implementing or effectuating any setoff, right of subrogation,

indemnity, contribution, or recoupment of any kind against any obligation due to

any of the Released Parties or against the property of any Released Party with

respect to any such Released Claim; and

5. Taking any act, in any manner, in any place whatsoever, that does not conform to,

or comply with, the provisions of the Plan or the Confirmation Order, provided,

however, that the Debtor’s compliance with the formal requirements of

Bankruptcy Rule 3016 shall not constitute an admission that the Plan provides for

any injunction against conduct not otherwise enjoined under the Bankruptcy

Code.

D. Immediate Binding Effect

Pursuant to Bankruptcy Code section 944(a), applicable to the Title III Cases pursuant to

PROMESA section 301, and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or any

other provision, upon the occurrence of the Effective Date, the terms of the Plan and the Plan

Supplement shall be immediately effective and enforceable and deemed binding on any and all

Holders of Claims and their respective successors and assigns, whether or not the Claim of any

such Holder is Impaired under the Plan and whether or not such Holder has accepted the Plan.

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The releases, exculpations, and settlements effected under the Plan shall be operative, and subject

to enforcement by the Title III Court, from and after the Effective Date, including pursuant to the

injunctive provisions of the Plan. Once approved, the compromises and settlements embodied in

the Plan, along with the treatment of any associated Allowed Claims, shall not be subject to

collateral attack or other challenge by any Entity in any court or other forum. As such, any Entity

that opposes the terms of any compromise and settlement set forth in the Plan must (a) challenge

such compromise and settlement prior to confirmation of the Plan and (b) demonstrate

appropriate standing to object and that the subject compromise and settlement does not meet the

standards governing settlements under Bankruptcy Rule 9019 and other applicable law.

E. Additional Documents

On or before the Effective Date, the Oversight Board may file with Clerk of the Title III

Court such agreements and other documents as may be necessary or appropriate to effectuate and

further evidence the terms and conditions of the Plan, the Fuel Line Lender PSA, and the

National PSA. The Debtor and all Holders of Claims receiving distributions pursuant to the Plan

and all other parties in interest, from time to time, may prepare, execute, and deliver any

agreements or documents and take any other actions as may be necessary or advisable to

effectuate the provisions and intent of the Plan.

F. Reservation of Rights

Except as expressly set forth herein, the Plan shall have no force or effect unless the Title

III Court shall enter the Confirmation Order. None of the filing of the Plan, any statement or

provision contained in the Plan, or the taking of any action by the Debtor with respect to the Plan,

the Disclosure Statement, or the Plan Supplement shall be or shall be deemed to be an admission

or waiver of any rights of the Debtor with respect to the Holders of Claims prior to the Effective

Date. Except as expressly set forth herein, the rights and powers of the government of the

Commonwealth under the Puerto Rico Constitution and PROMESA, including, without

limitation, under PROMESA sections 303 and 305, are expressly reserved (subject to any

limitation thereon imposed by the Puerto Rico Constitution, the U.S. Constitution or

PROMESA), and nothing herein shall be deemed a waiver of any such rights and powers.

G. Successors and Assigns

Except as expressly provided otherwise in the Plan, the rights, benefits, and obligations of

any Entity named or referred to in the Plan or the Confirmation Order shall be binding on, and

shall inure to the benefit of any heir, executor, administrator, successor or assign, Affiliate,

officer, director, agent, representative, attorney, beneficiaries, or guardian, if any, of each Entity.

H. Post-Effective Date Fees and Expenses

From and after the Effective Date, the Reorganized Debtor shall, in the ordinary course of

business and without the necessity for any approval by the Title III Court, retain professionals

and pay the reasonable professional fees and expenses incurred by the Reorganized Debtor

related to implementation and consummation of the Plan without further approval from the Title

III Court. Without limiting the foregoing, from and after the Effective Date, the Reorganized

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Debtor shall, in the ordinary course of business and without the necessity for any approval by the

Title III Court, but in no event later than forty-five (45) days following the submission of

invoices or statements with respect to the incurrence of fees and expenses to the Reorganized

Debtor, pay the reasonable and documented fees and reimburse the expenses of the Oversight

Board and its professionals related to the implementation and consummation of the Plan and in

connection with its duties and responsibilities pursuant to PROMESA and the terms and

provisions of the Plan.

I. Securities Act Exemption

Pursuant to Bankruptcy Code section 1145 and/or Securities Act section 3(a)(2), the

offering, issuance, and distribution of the New Bonds and CVI pursuant to the terms hereof shall

be exempt from registration under the Securities Act and any state or local law requiring

registration for the offer, issuance or distribution of securities, including, but not limited to, the

registration requirements of Securities Act section 5 and any other applicable state or federal law

requiring registration and/or prospectus delivery or qualification prior to the offering, issuance,

distribution, or sale of securities.

J. Governing Law

Except to the extent that other federal law is applicable, or to the extent that an exhibit

hereto or any document to be entered into in connection herewith provides otherwise, the rights,

duties, and obligations arising under this Plan shall be governed by, and construed and enforced

in accordance with, PROMESA (including the provisions of the Bankruptcy Code made

applicable under section 301 of PROMESA) and, to the extent not inconsistent therewith, the

laws of the Commonwealth of Puerto Rico, giving effect to principles of conflicts of laws.

K. Closing Case

The Oversight Board shall, promptly upon the full administration of the Title III Cases, file

with the Title III Court all documents required by Bankruptcy Rule 3022 and any applicable

order of the Title III Court. Notwithstanding the closing of the Title III Cases, the Title III Court

shall retain jurisdiction of all of the matters set forth in Article XXXV of the Plan.

L. Section Headings

The section headings contained in this Plan are for reference purposes only and shall not

affect in any way the meaning or interpretation of the Plan.

M. Document Retention

From and after the Effective Date, the Reorganized Debtor may maintain documents in

accordance with its standard document retention policy, as may be altered, amended, modified, or

supplemented by the Reorganized Debtor.

N. Service of Documents

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All notices, requests to, demands, or other document(s) required by the Plan or the

Confirmation Order to be served on or delivered to the Oversight Board, PREPA, or AAFAF to

be effective shall be in writing including by facsimile transmission and unless otherwise

expressly provided herein, shall be deemed to have been duly given or made when actually

delivered or, in the case of notice by facsimile transmission, when received and telephonically

confirmed, addressed as follows:

PREPA or the Oversight Board Financial Oversight and Management

Board for Puerto Rico

268 Muñoz Rivera

Ave, Suite 107

San Juan, PR 00918-1813

Attn: Executive Director

– with a copy to –

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Attn: Martin J. Bienenstock, Esq.

 Paul V. Possinger, Esq.

 Ehud Barak, Esq.

 Daniel S. Desatnik, Esq.

Tel: (212) 969-3000

Fax: (212) 969-2900

AAFAF Fiscal Agency and Financial Advisory Authority

Roberto Sánchez Vilella (Minillas) Government Center

De Diego Ave. Stop 22

San Juan, Puerto Rico 00907

– with a copy to –

O’MELVENY & MYERS LLP

Seven Times Square

New York, NY 10036

Attn: John Rapisardi, Esq.

 Peter Friedman, Esq.

 Maria J. DiConza, Esq.

Tel: (212) 326-2000

Fax: (212) 326-2061

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O. Term of Injunctions or Stays

Unless otherwise provided herein or in the Confirmation Order, all injunctions or

stays in effect in the Title III Case (pursuant to Bankruptcy Code sections 105, 362, or 922

or any order of the Title III Court) and existing on the Confirmation Date (excluding any

injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full

force and effect until the Effective Date. All injunctions or stays contained in the Plan or

the Confirmation Order shall remain in full force and effect in accordance with their

terms.

P. Entire Agreement

Except as otherwise indicated, the Plan supersedes all previous and contemporaneous

negotiations, promises, covenants, agreements, understandings, and representations on such

subjects, all of which have become merged and integrated into the Plan. Notwithstanding the

foregoing, the Fuel Line Lender PSA (other than the Term Sheet defined under and attached to

the Fuel Line Lender PSA) shall continue to apply and remain in full force and effect according

to its terms until the Effective Date, and the Plan does not supersede any rights or obligations

otherwise arising under the Fuel Line Lender PSA (other than the Term Sheet defined under and

attached to the Fuel Line Lender PSA) until the Effective Date. Notwithstanding the foregoing,

the National PSA shall continue to apply and remain in full force and effect according to its

terms until the Effective Date, and the Plan does not supersede any rights or obligations

otherwise arising under the National PSA until the Effective Date.

Q. Plan Supplement Exhibits

All exhibits and documents included in the Plan Supplement are incorporated into and are

a part of the Plan as if set forth in full in the Plan. Upon the filing of the Plan Supplement with

the Clerk of the Title III Court, copies of the documents contained therein shall be made

available upon written request to the Oversight Board’s counsel at the address above or by

downloading such documents from https://dm.epiq11.com/case/prepa/info or the Title III Court’s

website, available via PACER. After the exhibits and documents are filed, copies of such

exhibits and documents shall be made available upon written request to the Oversight Board’s

counsel at the address above or by downloading such exhibits and documents from

https://dm.epiq11.com/case/prepa/info or the Title III Court’s website, available via PACER.

Unless otherwise ordered by the Title III Court, to the extent any exhibit or document in the Plan

Supplement is inconsistent with the terms of any part of the Plan that does not constitute the Plan

Supplement, such part of the Plan that does not constitute the Plan Supplement shall control;

provided, however, that with respect to the matters governed by the New Master Indenture, to the

extent that any provisions of the Plan are inconsistent with the New Master Indenture, the New

Master Indenture shall control.

R. Non-Severability

Except to the extent otherwise expressly specified in this Plan, if any term or provision of

the Plan is held by the Title III Court to be invalid, void, or unenforceable, the Title III Court, in

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each case at the election of and with the consent of PREPA, shall have the power to alter and

interpret such term or provision to make it valid or enforceable to the maximum extent

practicable, consistent with the original purpose of the term or provision held to be invalid, void,

or unenforceable, and such term or provision shall then be applicable as altered or interpreted.

Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and

provisions of the Plan shall remain in full force and effect and shall in no way be affected,

impaired, or invalidated by such holding, alteration, or interpretation. The provisions of the Plan,

including its release, injunction, exculpation, and compromise provisions, are mutually

dependent and non-severable. The Confirmation Order shall constitute a judicial determination

and shall provide that each term and provision of the Plan is: (a) valid and enforceable pursuant

to its terms; (b) integral to the Plan and may not be deleted or modified without the consent of

PREPA; provided, that any such deletion or modification must be consistent with (i) the Fuel

Line Lender PSA with respect to provisions that directly impact the rights of the Fuel Line

Lenders under the Plan and the Fuel Line Lender PSA and (ii) the National PSA with respect to

provisions that directly impact the rights of National under the Plan and the National PSA; and

(c) non-severable and mutually dependent.

S. Votes Solicited in Good Faith

Upon entry of the Confirmation Order, PREPA will be deemed to have solicited votes on

the Plan in good faith and in compliance with the Bankruptcy Code, and pursuant to Bankruptcy

Code section 1125(e), PREPA and its agents, representatives, members, principals, shareholders,

officers, directors, employees, advisors, and attorneys will be deemed to have participated in

good faith and in compliance with the Bankruptcy Code in the offer, issuance, sale, and purchase

of securities offered and sold under the Plan and any previous plan, and, therefore, neither any of

such parties or individuals or PREPA will have any liability for the violation of any applicable

law, rule, or regulation governing the solicitation of votes on the Plan or the offer, issuance, sale,

or purchase of the securities offered and sold under the Plan and any previous plan.

T. Waiver or Estoppel

Each Holder of a Claim shall be deemed to have waived any right to assert any argument,

including the right to argue that its Claim should be Allowed in a certain amount, in a certain

priority, secured, or not subordinated by virtue of an agreement made with PREPA or its counsel,

or any other Entity, if such agreement was not disclosed in the Plan, the Disclosure Statement, or

papers filed with the Title III Court prior to the Confirmation Date.

Respectfully submitted,

PUERTO RICO ELECTRIC POWER

AUTHORITY, by and through the Financial

Oversight and Management Board for Puerto Rico

as its sole Title III representative

By: /s/ David A. Skeel 

Name: David A. Skeel

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Title: Chairman

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Document comparison by Workshare 9.5 on Sunday, February 26, 2023

11:39:58 PM

Input:

Document 1 ID interwovenSite://DMS/CURRENT/134007403/72

Description

#134007403v72<CURRENT> - PREPA - Title III Plan of

Adjustment (to be filed TBD) [FLL Agreement & National

Settlement]

Document 2 ID interwovenSite://DMS/CURRENT/134007403/77

Description

#134007403v77<CURRENT> - PREPA - Title III Plan of

Adjustment (to be filed 2.26.2023) [FLL Agreement &

National Settlement]

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