PUERTO RICO ELECTRIC POWER AUTHORITY

PROFESSIONAL SERVICES CONTRACT

2C19 -P00092

APPEAR

As party of the First Part: The Puerto Rico Electric Power Authority (PREPA),

a public corporation and government instrumentality of the Commonwealth of

Puerto Rico, created by Act No. 83 of May 2, 1941, as amended, represented in

this act by its Chief Executive Officer/Executive Director, mister José F. Ortiz

Vázquez, of legal age, married, engineer and resident of San Juan, Puerto Rico.

As party of the Second Part: Power Constructors, Inc. (Contractor), a

corporation organized and existing under the laws of the State of Idaho, with offices

at 3940 Glenbrook Drive, Hailey, ID 83642, herein represented by its Vice President,

mister Gerry Murray, of legal age, Professional Engineer, married, and a resident

of Idaho, United States of America, duly authorized to appear in representation

of the Contractor by Resolution dated February 28, 2019.

Both PREPA and Contractor are herein individuals referred to as a "Party"

and collectively referred to as the "Parties".

WITNESSETH

WHEREAS, PREPA, by virtue of its enabling act (Act No. 83), has the authority

to engage those professional, technical, and consulting services necessary and

convenient to the activities, programs, and operations of PREPA;

WHEREAS, pursuant Section 205(2)(d) of Act No. 83 competitive bidding shall

not be necessary when professional or expert services or work are required and

PREPA deems it in the best interests of good administration for such works or services

to be contracted without such announcements;

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WHEREAS, on July 2, 2017, PREPA filed a debt adjustment case (the "Title

Ill Case") under Title Ill of the Puerto Rico Oversight, Management, and Economic

Stability Act, Public Law No. 114-187 dated June 30, 2016 (hereinafter, "PROMESA")

with the U.S. District Court for the District of Puerto Rico (the "District Court");

WHEREAS, PREPA acknowledges that pursuant to the provisions of

PROMESA, the Parties are not required to seek the District Court's authorization for

the approval of this Contract and PREPA further acknowledges that it is acting within

the scope of its authority in the execution of this Contract;

WHEREAS, according to the Integrated Resource Plan (IRP), PREPA has

developed a long term plan to improve and modernize PREPA's generation system;

WHEREAS, with the IRP, PREPA pursues to obtain a transformation to

reduce reliance on fuel oil, increase availability of clean burning natural fuel oil,

increase availability of clean burning natural gas, increase renewable energy,

comply with environmental requirements and improve economic dispatch through

implementation of modern technologies;

WHEREAS, in order to comply with the established goals, PREPA will require

the services of a technical consultant to provide advice with respect to PREPA's

Grid Initiatives Plan, among others. PREPA will receive from the consultant all the

necessary advice and support to comply with the transformation plan;

WHEREAS, PREPA needs the services of a consultant with a strong

knowledge of utility energy efficiency programs, operations and infrastructure

reconstruction. Also, PREPA needs to identify interconnection locations for various

1777

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forms of generation including Solar PV, battery energy storage systems, flexible

fossil -fired and combined cycle generation;

WHEREAS, the Contractor has vast experience in conducting similar

analytical studies that will help Puerto Rico regain the most efficient, sustainable, and

resilient power generation mix, which will result in significant benefit to PREPA and

consequently, will substantially contribute to PREPA's Title Ill Case;

WHEREAS, PREPA is interested in obtaining the services of the Contractor

for consulting services; and

WHEREAS, the Contractor states that it is ready, willing and able to provide

the services pursuant to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual promises and the terms

and conditions set forth herein, PREPA and the Contractor agree as follows:

I. TYPE OF CONTRACT

A. Scope of Services

1. In accordance with the terms and conditions set forth herein, the

Contractor will provide, to PREPA, a skilled team with appropriate

qualifications to provide expert consulting services focused on the

outcomes below (the "services"):

a) The Contractor will provide services, which includes the

validation of PREPA's PSS/E power flow model, and update the

model, if it is necessary. The validated model will be used to

analyze the electrical energy injection capacity of PREPA's

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Transmission and Distribution system at buses that operate at

38.8kV or higher.

b) Project administration - Determine data requirements, develop a

"request for information", and coordinate data acquisition with

PREPA staff. Schedule and attend kick-off meeting with PREPA

staff. The relevant meetings will occur in person.

c) Technical Advisory Support - Specialized advisory services to

refine results, provide expert testimony or input thereto, perform

sensitivity analyses, provide regulatory support, or management

services.

d) Project Injection Study - Validate PSS/E model, on -site, with

PREPA Staff. Perform transmission analysis with validated model

to identify and rank the electrical energy injection capability of the

T&D system buses that operate at 38.8 kV or higher. Review

Siemens PSS/E model, which was used as part of the IRP, to

identify any significant differences and work with Siemens to

resolve any differences.

e) Generation Facility Site Selection - Based on the Injection Study

Results, Contractor will evaluate potential sites for Solar PV,

BESS, flexible generation, and new combined -cycle generating

assets. Site selection will consider transmission capacity,

constructability, land use, suitability, and resource availability.

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B. Additional Provisions Regarding the Services

1. Any and all changes and/or modifications to the scope of the Services shall

be in writing and must be signed by both Parties.

2. The Contractor represents that it has or shall obtain, or cause to be

obtained, all personnel necessary to undertake and provide the Services

in a manner satisfactory to PREPA.

3. The Contractor may not subcontract any of the Services that it has

committed to perform or provide pursuant to this Contract without the prior

written approval of the Chief Executive Officer of PREPA or any of his or

her authorized representatives. Such consent to subcontract shall not

relieve the Contractor of its full responsibilities under this Contract.

Consent to the subcontracting of any part of the services shall not be

construed to be an approval of said subcontract or of any of its terms but

shall operate only as an approval of the Contractor's request for

execute a contract with its chosen subcontractor (hereinafter a

"Subcontractor"). The Contractor shall be responsible for all services

performed by the Subcontractor and all such services shall conform to the

provisions of this Contract.

4. Both Parties acknowledge that both the inherent nature of the services,

as well as the quantity and sequencing of services detailed above, will

preclude completion of all the tasks detailed above before June 30, 2019.

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5. The Contractor will conduct the services primarily on Contractor's

corporate offices, located outside Puerto Rico, but is expected to make its

staff available to meet with and support PREPA staff as appropriate.

6. This Contract shall not be used to acquire services the nature of which

would require Contractor to act in the capacity of a licensed engineer

pursuant to Acts No. 173-1988 and No. 185-1997, as amended, and its

implementing regulations, as applicable to the practice of engineering in

Puerto Rico.

7. Contractor represents that it will perform its Services in accordance with

generally accepted professional or technical practices existing at the time

of performance. No other representation, express or implied, is made or

intended by the performance of the Services provided. If required within

the scope of the Services, the Contractor shall make visits to the land or

premises on which the potential sites are located (the "Sites") at intervals

appropriate to the study, in order to observe site conditions. It is

understood and agreed that the Contractor shall have no constructive use

or control of the Sites, and therefore shall have no responsibility

whatsoever for any activities by other Parties at the Sites.

II. TERM OF CONTRACT; TERMINATION

A. Term

This Contract shall be in effect from the date of its execution until

June 30, 2019 (the "Contract Period"). The Contract may be extended, at

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the exclusive option of PREPA, for additional annual fiscal periods, subject

to the availability of funds.

The Parties acknowledge that any action taken in accordance with this

Section shall not be construed as a violation of the automatic stay under

Section 362 of the Bankruptcy Code, 11 U.S.C. § 362, as incorporated to

PROMESA, this Contract is being executed after the filing of the Title Ill

Case and the Parties had not engaged in business or executed any

agreements prior to the filing of such Case.

B. Termination for Convenience

Either Party shall have the right to terminate this Contract for convenience,

at any moment, by providing the other Party thirty (30) days written notice

by registered mail, return receipt requested, or overnight express mail. If

notice is given, this Contract shall terminate upon the expiration of thirty

(30) days and PREPA shall be obligated to pay all fees and expenses

incurred up to the day of effective termination, in accordance with the

terms of this Contract. The rights, duties and responsibilities of the Parties

shall continue in full force and effect during the thirty (30) day notice period.

Contractor shall have no further right to compensation except for what has

been accrued for services rendered under this Contract until said date of

effective termination.

C. Termination for Cause

Either Party shall have the right to terminate this Contract immediately in

the event of negligence, dereliction of duty, noncompliance, or material

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breach by the other Party, as determined in the reasonable discretion

of the non -breaching Party, or for any other reason described elsewhere

in this Contract as a basis for termination. In the event the Contract is

terminated for cause, PREPA shall be obligated to pay all fees and

expenses incurred up to the day of effective termination, in accordance

with the terms of this Contract. Contractor shall have no further right to

compensation except for what has been accrued for services rendered

under this Contract until said date of effective termination.

Ill. COMPENSATION AND PAYMENT

As compensation for services rendered under this Contract, PREPA agrees

and the Contractor accepts that the total amount to be paid under this Contract

shall not exceed four hundred six thousand eight hundred ninety one dollars

($406,891), (the "Contract Amount"), including reimbursable expenses.

However, nothing herein shall preclude the Parties from agreeing to increase

the Contract Amount. PREPA will only pay for services that are evidenced by

properly submitted invoice for services rendered. Notwithstanding the

foregoing, any increase to the Contract Amount shall be evidenced in writing

and signed by both Parties. PREPA will not be required to make advance

payments for any service to be rendered by Contractor under this Contract.

Contractor shall promptly notify PREPA when the billing under the present

Contract amounts to seventy five percent (75%) of the Contract Amount. Once

this notification has been issued, Contractor, in coordination with PREPA, will

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ensure that no services will be rendered in excess of the Contract Amount,

except when a written amendment is agreed upon by both Parties.

A. In addition, Contractor shall present with each invoice a reasonably itemized

list of the remaining billable work that is in progress under the Contract.

B. PREPA shall pay the Contractor, for the Services at the rate established in the

Annex A of the Contract.

C. All payments performed under this Contract will be charged to PREPA's

budget account number 01-4019-92319-556-673.

D. Contractor shall submit monthly invoices within the first thirty (30) days

following the period invoiced that will include a description of the services

rendered and the number of hours spent. Each invoice for professional

services shall be itemized with a reasonably detailed description of the

work performed, the purpose of the task, and the FEMA Project Worksheet

(PW) to which it pertains, if applicable. Invoices must be duly certified by an

authorized representative of Contractor. Contractor shall allocate any

invoiced fees between: (i) activities undertaken outside of Puerto Rico; and

(ii) those relating to activities undertaken within Puerto Rico.

E. PREPA will review the invoices within thirty (30) days of receipt, and if they

are in compliance with the requirements set forth in this Contract, it will

proceed with payment. Payment is due within 60 days of receipt. PREPA

VV reserves the right to conduct the audits it deems necessary, and it will not

be subject to finance charges regarding invoice payments subject to an audit.

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F. Invoices must also include a written and signed certification stating that

no officer or employee of PREPA, and their respective subsidiaries or affiliates,

will personally derive or obtain any benefit or profit of any kind from this

Contract, with the acknowledgment that invoices that do not include this

certification will not be paid. This certification must read as follows:

We certify under penalty of absolute nullity that no public

servant of PREPA is a party or has any interest in

the benefit or profit product of the Contract which is the

basis of this invoice. If such benefit or profit exists, the

required waiver has been obtained prior to entering

into the Contract. The only consideration to be

received in exchange for the delivery of Services

provided is the agreed -upon price that has been

negotiated with an authorized representative of

PREPA. The total amount shown on this invoice is

true and correct. The Services have been rendered,

and no payment has been received.

Contractor's Signature

G. Contractor shall submit bank account wiring instructions to PREPA on or

before submission of its first invoice to facilitate payment by means of

electronic transfer, if applicable.

H. As required by Act No. 48-2013, as amended, PREPA will withhold a special

contribution of one -point five percent (1.5%) of the gross amounts paid under

this Contract.

I. In compliance with Executive Order 1991 OE- 24; and C.F.R. Part 404 et. seq.,

the Contractor will be responsible for rendering and paying the Federal Social

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Security and Income Tax Contributions for any amount owed as a result of

the income, from this Contract.

J. PREPA shall deduct and withhold ten percent (10%) of all payments to

residents of the Commonwealth of Puerto Rico as required by the Internal

Revenue Code of Puerto Rico. In case of U.S. citizens and non-U.S. citizens,

which are nonresidents of the Commonwealth of Puerto Rico, the Contractor

will retain twenty percent (20%) and twenty-nine percent (29%) respectively.

PREPA will remit such withholdings to the Government of Puerto Rico's

Treasury Department (Departamento de Hacienda de Puerto Ríco). The

Contractor will request PREPA not to make such withholdings if, to the

satisfaction of PREPA, the Contractor timely provides a release from such

obligation by the Government of Puerto Rico's Treasury Department.

3 L.P.R.A. § 8611 et seq., 2011 L.P.R. 232; 232-2011.

K. All compensation and reimbursable expenses described herein shall be

considered administrative expenses under Sections 503 and 507(a)(2) of the

Bankruptcy Code, 11 U.S.C. §§ 503, 507(a)(2), as incorporated to Title Ill of

PROMESA, Section 301, 48 U.S.C. §2161.

L. In the event that PREPA fails to timely pay in the ordinary course of business,

the Contractor shall be entitled to file a motion for allowance of administrative

expenses, which shall request the District Court to grant any amounts owed

under the terms of this Contract as administrative expenses and shall request

their immediate payment.

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M. PREPA hereby acknowledges, agrees, covenants and warrants that no court

approval is required under applicable state or federal law for the

compensation and reimbursements described in this Contract, including but

not limited to, authorization from the District Court in connection with

PREPA's Title Ill Case under PROMESA.

N. The Contractor will maintain records in support of any fees incurred in

connection with the services it performs and will provide reasonably detailed

descriptions of those services rendered, the time expended in providing those

services, and the individuals who provided the Services. The Contractor will

present such records to the District Court in the event that it has to file a

motion for allowance of administrative expenses in PREPA's Title Ill Case.

IV. REIMBURSABLE EXPENSES

A. Limitation

PREPA shall reimburse Contractor for out of pocket expenses incurred

in providing the Services, subject to the terms of this Contract. As

established in Appendix A reimbursable expenses shall not exceed six

percent (6%) of the Contract Amount and will be reimbursed by PREPA

through the presentation of acceptable evidence for such expenses.

B. Travel Expenses

Contractor agrees to adhere to PREPA's travel expense policy attached

hereto as Appendix A. Reimbursement for air travel expenses is restricted

to lowest available economy airfares. PREPA shall not pay for travel

time, provided, however, that Contractor personnel may work while

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traveling, and such time is compensable as otherwise provided under this

Contract. Payment for travel time shall be made only if the invoice details

the services rendered and the time billed on each matter as required in this

Contract.

Any travel and lodging expense for which a reimbursement is requested

shall be reasonable and necessary, and any travel and lodging expenses

shall be authorized in writing and in advance by PREPA. PREPA will

not reimburse expenses that do not comply with this provision and

Appendix A. Under no circumstances will expenses for alcoholic beverages

be reimbursed.

C. Third -Party Vendors and/or Out of Pocket Expenses

PREPA shall reimburse Contractor for costs that may be invoiced to

Contractor by third party vendors for goods or services (related, for example,

to telecommunication services, research, print materials, court reporters,

or messengers) necessary to support the Services and provided exclusively

for the benefit of PREPA.

V. CONFLICTS OF INTEREST

A. Contractor acknowledges that in the performance of Services pursuant to

this Contract, it has an obligation of complete loyalty towards PREPA,

including having no conflict of interests. "Conflict of interests" includes

representing clients who have or may have interests that are contrary to

PREPA, but does not include rendering services that are unrelated to this

engagement. This duty includes the continued obligation to disclose to

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PREPA all circumstances of its relations with clients and third parties which

would result in a conflict of interest, and any adverse interest which would

influence Contractor when executing the Contract or while it is in effect.

B. This conduct by one of Contractor's partners, members, directors,

executives, officers, clerks or employees shall be attributed to Contractor

for purposes of this prohibition. Contractor shall endeavor to avoid even

the appearance of the existence of a conflict of interest that has not

otherwise been waived.

C. Contractor acknowledges the power of PREPA's Chief Executive Officer

to oversee the enforcement of the prohibitions established herein. If the

PREPA's Chief Executive Officer determines the existence or the

emergence of conflict of interest with Contractor, he shall inform such

findings in writing and his intentions to terminate the Contract within a

fifteen (15) day term. Within such term, Contractor can request a meeting

with the PREPA's Chief Executive Officer to present its arguments

regarding the alleged conflict of interest. This meeting shall be granted in

every case. If such meeting is not requested within the specified term, or if

the controversy is not settled satisfactorily during the meeting, this Contract

shall be terminated at the end of said fifteen (15) day period.

D. Contractor certifies that at the time of the execution of this Contract, it does

not have nor does represent anyone who has interests that are in conflict with

PREPA. If such conflicting interests arise after the execution of this Contract,

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Contractor shall, to the extent consistent with its obligations to other clients,

notify PREPA immediately.

E. No employee, officer, or agent of PREPA shall participate in the selection,

or in the award or administration of a contract, supported by Federal funds,

if a conflict of interest, real or apparent, would be involved.

VI. RESPONSIBILITIES OF PREPA

PREPA shall use reasonable efforts to cooperate with the Contractor, including

by providing any information reasonably requested by Contractor and providing

access to any facility at which the Services are to be performed at such times

as may reasonably be requested by the Contractor.

VII. OWNERSHIP AND USE OF DOCUMENTS

Except for Contractor's working papers, its pre-existing intellectual property

and electronic record, PREPA will retain ownership of all information, drafts,

documents, reports, papers, and other materials ("Contract Documents")

developed and prepared by the Contractor, its agents or representatives, for

purposes of performing the obligation hereunder, including all intellectual

property rights embodied therein. In the event of any termination, Contractor

shall deliver copies of such Contract Documents to PREPA, in hard copy

and/or electronic form, and the Contractor recognizes PREPA's right to

request such documentation and/or electronic data. Should Contractor fail

to deliver said information, PREPA may seek a judicial order to enforce its

rights. PREPA shall retain copies, including reproducible copies, of the Contract

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Documents for PREPA's information, reference and use in connection with the

Services.

VIII. NON -DISCLOSURE AND CONFIDENTIALITY

A. onfidential Information (the "Confidential Information"): Definition

The term Confidential Information, as used throughout this Contract,

means any information concerning PREPA and/or PREPA's operations

and that of its Contractor (e.g., the projects, computer processing

systems, object and source codes, and other business and financial affairs

of PREPA). The term Confidential Information shall also be deemed to

include all notes, analysis, compilations, studies, and interpretation or

other documents prepared by Contractor, its agents or representatives

in connection with PREPA's operations.

B. Non -Disclosure

1. Contractor and its employees, affiliates, and authorized subcontractors

agree to take all reasonable steps or measures to keep private all

Confidential Information and will not, at any time, present or future,

without PREPA's express written authorization, use, sell, market, or

disclose any Confidential Information to any third party, firm, corporation,

or association for any purpose whatsoever. Contractor further agrees

that, except as they relate to the normal course of the service, the

Contractor will not make copies of the Confidential Information except

upon PREPA's express written authorization, signed by an authorized

representative of PREPA, and will not remove any copy or sample of

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Confidential Information without the prior written authorization from

PREPA. Contractor retains the right to control its work papers subject

to these confidentiality provisions.

2. "Confidential Information" shall not apply to any information which:

i. is generally known to the public at the time of disclosure to Contractor

or becomes generally known through no wrongful act on the part

of Contractor;

ii. is in Contractor 's possession at the time of disclosure otherwise than

as a result of Contractor 's breach of any legal obligation;

iii. becomes known to Contractor through disclosure by sources having

the legal right to disclose such information other than PREPA and

Contractor; or

iv. is independently developed by Contractor without reference to or

reliance upon the Confidential Information.

In addition, these provisions shall not prohibit Contractor from making

any disclosure pursuant to any subpoena or order of a court or a

Governmental or Administrative tribunal which may assert jurisdiction

over Contractor; provided that, to the extent legally permissible,

Contractor shall promptly notify PREPA of any such disclosure

obligations and reasonably cooperate with PREPA's efforts to lawfully

avoid and/or minimize the extent of such disclosure.

3. Contractor will not disclose any Confidential Information relating to

the work that Contractor performs under this Contract. Contractor may

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divulge Confidential Information to íts employees who need to know

such information to fulfill the purposes of this engagement provided that

such persons:

i. shall have been advised of the confidential nature of such information

and Contractor shall direct them, and they shall agree, to treat such

information as confidential and to return all materials to Contractor

upon request, but for one copy for record purposes only; and

ii. in each case, such person shall be bound by the terms of this Contract.

4. In connection with the services rendered under this Contract, Contractor

will furnish PREPA any necessary reports, analyses, or other such

materials that exist as of the date requested, as PREPA may reasonably

request. Contractor shall not invoice the time spent to gather and deliver

such information. PREPA, however, acknowledges that Contractor may

develop for itself, or for others, problem solving approaches, frameworks

or other tools and processes developed in performing the services and

any additional services provided hereunder, and nothing contained

herein precludes Contractor from developing or disclosing such

materials and information provided that the same do not contain or

reflect Confidential Information.

C. Return of Documents

Excepting Contractor's right to retain an electronic record consistent with

good professional practice for legal and archival reasons and subject to the

restrictions on disclosure contained in this Contract, Contractor shall return

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or destroy all Confidential Information, as well as any other document that

may relate to its work under this Contract, to PREPA within thirty (30)

days after date of the expiration or earlier termination of this Contract, and

shall certify that all the information has been returned to PREPA or

destroyed, but for electronic information held in archive and/or backup files

to the extent such files cannot be deleted without unreasonable effort

or expense and created in the ordinary course pursuant to established

data backup/archive procedures; provided, however, Contractor may retain

its own work product as long as it maintains the confidentiality of

PREPA's Confidential Information as otherwise provided in this Contract.

During this thirty (30) day period, and except to the extent making such

documents available would result in the loss of legal privilege for PREPA,

these documents shall be available for inspection by the Office of the

Comptroller of Puerto Rico. This Article shall survive the termination,

expiration, or completion of this Contract.

D. Equitable Relief

Contractor's material negligent discharge or the breach of the

confidentiality clause hereinabove continuing after receipt of written

warning or abandonment of the duties assigned hereunder shall

constitute a breach of this Contract by Contractor and PREPA will be

entitled to terminate this Contract forthwith, without having to comply

with the requirements of notice set forth in Section II. B above, without

limitations of any other rights and remedies under law.

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IX. TERMINATION BY THE CHIEF OF STAFF

The Chief of Staff shall have the authority to terminate this Contract at any

time. If so directed by the Chief of Staff, PREPA will terminate this

Contract by delivering to the Contractor a notice of termination specifying

the extent to which the performance of the work under this Contract is

terminated, and the effective date of termination. Upon the effective date

of termination, the Contractor shall immediately discontinue all services

affected and deliver to PREPA all information, studies and other materials

property of PREPA. In the event of a termination by notice, PREPA shall

be liable only for payment of services rendered up to and including the

effective date of termination.

X. INTERAGENCY SERVICES

Both Parties acknowledge and agree that the Services may be provided to

another entity of the Executive Branch which enters into an interagency

agreement with PREPA or by direct disposition of the Office of the Chief of

Staff. Such work will be performed under the same terms and conditions in

terms of hours of work and compensation set forth in this Contract. For the

purpose of this clause, the term "entity of the Executive Branch" includes

all agencies of the Government of Puerto Rico, as well as public

instrumentalities, public corporations.

XI. COMPLIANCE WITH THE COMMONWEALTH OF PUERTO RICO

CONTRACTING REQUIREMENTS

The Contractor will comply with all applicable Law, Regulations, or

Executive Orders that regulate the contracting process and requirements

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of the Commonwealth of Puerto Rico. The Contractor shall provide to

PREPA the Certifications mentioned on the list below, within 10 days after

the signature of the Contract. The sworn statement related to the Anti -

Corruption Code shall be provided by the Contractor at the date of the

Contract signature.

A. Filing of Puerto Rico Income Tax Returns

In compliance with Executive Order Number 0E-1991-24 of June 18, 1991,

the Contractor hereby certifies that it has filed all the necessary and required

income tax returns to the Government of Puerto Rico for the last five

(5) years. As evidence thereof, Contractor has delivered to PREPA an

Income Tax Return Filing Certificate, issued by the Treasury Department

of Puerto Rico assuring that Contractor has filed his Income Tax Return

for the last five (5) tax years (Form SC 6088). The Contractor accepts

and acknowledges its responsibility for requiring and obtaining a similar

warranty and certification from each and every Contractor and

Subcontractor whose service the Contractor has secured in connection

with the services to be rendered under this Contract and shall forward

evidence to PREPA as to its compliance with this requirement.

B. Payment of Puerto Rico Income Taxes

In compliance with Executive Order Number 0E-1991-24 of June 18,

1991, the Contractor, hereby certifies that it has complied and is current

with the payment of all income taxes that are, or were due, to the

Government of Puerto Rico. As evidence thereof, Contractor has

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delivered to PREPA a certification issued by the Treasury Department

of Puerto Rico indicating that Contractor does not owe taxes to the

Commonwealth of Puerto Rico; or is paying such taxes by an installment

plan in full compliance with its terms (Form SC 6096). During the term

of this Contract, the Contractor agrees to pay and/or to remain current

with any repayment plan agreed to by the Contractor with the

Government of Puerto Rico. The Contractor accepts and acknowledges

its responsibility for requiring and obtaining a similar warranty and

certification from each Subcontractor whose service the Contractor has

secured in connection with the services to be rendered under this Contract

and shall forward evidence to PREPA as to its compliance with this

requirement.

C. Compliance with Reauirements of the Department of Labor and

Human Resources of the Commonwealth of Puerto Rico.

Pursuant to Executive Order Number 1992-52, dated August 28, 1992

amending 0E-1991-24, the Contractor certifies and warrants that it has

made all payments required for unemployment benefits, workmen's

compensation and social security for chauffeurs, whichever is applicable,

or that in lieu thereof, has subscribed a payment plan in connection with

any such unpaid items and is in full compliance with the terms thereof.

As evidence thereof, Contractor has delivered to PREPA:

1. A certification issued by the Bureau of Employment Security

(Negociado de Seguridad de Empleo) of the Puerto Rico

Department of Labor and Human Resources certifying that

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Contractor does not owe taxes regarding Unemployment or

Disability Insurance.

2. A certification issued by the Program for Social Security for

Chauffeurs and Other Employees of the Puerto Rico Department

of Labor and Human Resources certifying that contractor has no

debt with respect to such program.

D. Income Tax Return Filing Certificate, issued by the Treasury Department

of Puerto Rico assuring that Contractor has filed his Income Tax Return

for the last five (5) tax years (Form SC 6088).

E. Real and Personal Property Taxes

Contractor hereby certifies and guarantees that it does not have any

current debt regarding property taxes that may be registered with the

Government of Puerto Rico's Municipal Tax Collection Center (Centro

de Recaudación de Ingresos Municipales ("CRIM')). The Contractor

further certifies to be current with the payment of any and all property

taxes that are or were due to the Government of Puerto Rico. The

Contractor shall provide:

1. A certification issued by the Municipal Revenues Collection Center

("MRCC"), assuring that Contractor does not owe any tax accruing

during the last five (5) years to such governmental agency with respect

to personal property; or negative Debt certification issued by the MRCC

with respect to personal property taxes and a sworn statement

executed by Contractor indicating that (i) its revenues are derived from

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the rendering of professional services, (ii) during the last 5 years (or the

time in which it has been providing professional services) it has

had no taxable business or personal property on the 1st of January of

each year, (iii) that for such reasons it has not been required to file

personal property tax returns, as required under Article 6.03 of

Act 83-1991, as amended and (iv) that for such reason it does not

have an electronic tax file in the MRCC's electronic system.

2. All Concepts Debt Certification issued by the MRCC assuring that

Contractor does not owe any taxes to such governmental agency with

respect to real and personal property; or Negative certification issued

by the MRCC with respect to real property taxes.

F. Sales and Use Taxes

The Contractor has delivered to PREPA:

1. a Certification issued by the Puerto Rico Treasury Department

indicating that Contractor does not owe Puerto Rico Sales and Use

taxes to the Commonwealth of Puerto Rico; or is paying such taxes by

an installment plan and is in full compliance with its terms.

2. a Puerto Rico Sales and Use Tax Filing Certificate, issued by

the Treasury Department of Puerto Rico assuring that Contractor has

filed his Puerto Rico Sales and Use Tax for the last sixty (60)

contributory periods.

3. A copy of Contractor's Certificate of Merchant's Registration issued

by the Treasury Department of Puerto Rico.

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G. Puerto Rico Child Support Administration (ASUME)

Contractor hereby certifies that it is not duty bound to pay child support,

or if so, that Contractor is up to date or has a payment plan to such effects.

As evidence thereof, the Contractor has delivered to PREPA a

certification issued by the Puerto Rico Child Support Administration

(Administración Para El Sustento de Menores (ASUME) certifying that

the Contractor have any debt, outstanding debt, or legal procedures to

collect child support payments that may be registered with ASUME.

H. Compliance with Act No. 1 of Governmental Ethics

The Contractor will certify compliance with Act No. 1-2012, as amended,

known as the Ethics Act of the Government of Puerto Rico, which stipulates

that no employee or executive of PREPA nor any member of his or

her immediate family (spouse, dependent children, or other members of

his or her household or any individual whose financial affairs are under the

control of the employee) shall have any direct or indirect pecuniary

interest in the services to be rendered under this Contract, except as

may be expressly authorized by the Governor of Puerto Rico in

consultation with the Secretary of Treasury and the Secretary of Justice

of the Government. 3 L.P.R.A. § 8611 et seq.

I. Law 168-2000: Law for the Strengthening of the Family Support

and Livelihood of Elderly People

The Contractor will certify that if there is any Judicial or Administrative

Order demanding payment or any economic support regarding

Act No. 168-2000, as amended, the same is current and in all aspects in

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compliance. Act No. 168-2000 "Law for the Strengthening of the Family

Support and Livelihood of Elderly People" in Spanish: "Ley para el

Fortalecimiento del Apoyo Familiar y Sustento de Personas de Edad

Avanzada", 3 L.P.R.A. §8611 et seq.

J. Law Num. 127. May 31. 2004: Contract Registration in the

Comptroller's Office of Puerto Rico Act

Payment for Services under this Contract will not be made until this Contract

is properly registered in the Office of the Comptroller of the Government

of Puerto Rico pursuant to Law Number 18 of October 30, 1975, as

amended.

K. Prohibition with respect to execution by public officers: (3

L.P.R.A. 8615(c))

No public officer or employee authorized to contract on behalf of the

executive agency for which he/she works may execute a contract between

the agency for which he/she works and an entity or business in which he/she

or any member of his/her family unit has or has had direct or indirect

economic interest during the last four (4) years prior to his/her holding

office.

L. Prohibition with respect to contracting with officers or

employees: L3 L.P.R.A. 8615(d))

No executive agency may execute a contract in which any of its officers

or employees or any member of their family units has or has had direct

or indirect economic interest during the last four (4) years prior to their

holding office, unless the Governor gives authorization thereto with the

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previous recommendation of the Secretary of the Treasury and the

Secretary of Justice.

M. Prohibition with respect to contracts with officers and employees

of other Government enti ies: (3 L.P.R.A. 8615(eí)

No public officer or employee may be a party to or have any interest in

any profits or benefits produced by a contract with any other executive

agency or government dependency unless the Governor gives express

authorization thereto with previous recommendation from the Secretary

of the Treasury and the Secretary of Justice.

N. Prohibition with respect to evaluation and approval by public

officers: 13 L.P.R.A. 8615(f))

No public officer or employee who has the power to approve or authorize

contracts shall evaluate, consider, approve or authorize any contract

between an executive agency and an entity or business in which he/she

or any member of his/her family unit has or has had direct or indirect

economic interest during the last four (4) years prior to his/her holding

office.

O. Prohibition with respect to execution by public officers contracts

with former public officers: (3 L.P.R.A. 8615(h))

No executive agency shall execute contracts with or for the benefit

of persons who have been public officers or employees of said

executive agency until after two (2) years have elapsed from the time said

person has ceased working as such.

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P. Dispensation

Any and all necessary dispensations have been obtained from any

government entity and that said dispensations shall become part of the

contracting record.

Q. No Compensation forAppointments: (3 L.P.R.A. 861510

The Contractor acknowledges and accepts that he or she receives

no payments or compensation for regular services rendered under a

designation from any other public entity, except those authorized by law.

R. Rules of Professional Ethics

The Contractor acknowledges and accepts that it is knowledgeable of

the rules of ethics of his or her profession and assumes responsibility for

his or her own actions.

S. Anti -Corruption Code_for aNew Puerto Rico

1. Contractor agrees to comply with the provisions of Act No. 2-2018,

as the same may be amended from time to time, which establishes

the Anti -Corruption Code for a New Puerto Rico.

2. The Contractor hereby certifies that it does not represent particular

interests in cases or matters that imply a conflict of interest, or of public

policy, between the executive agency and the particular interests

it represents.

3. Contractor shall furnish a sworn statement to the effect that neither

Contractor nor any president, vice president, executive director or any

member of a board of officials or board of directors, or any person

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performing equivalent functions for Contractor has been convicted

of or has pled guilty to any of the crimes listed in Article 6.8 of

Act No. 8-2017, as amended, known as the Act for the Administration

and Transformation of Human Resources in the Government of

Puerto Rico or any of the crimes included in Act No. 2-2018.

4. Contractor hereby certifies that it has not been convicted in Puerto Rico

or United States Federal court for under Articles 4.2, 4.3, or 5.7

of Act No. 1-2012, as amended, known as the Organic Act of the Office

of Government Ethics of Puerto Rico, any of the crimes listed in

Articles 250 through 266 of Act No. 146-2012, as amended,

known as the Puerto Rico Penal Code, any of the crimes typified in

Act No. 2-2018, as amended, known as the Anti -Corruption Code for a

New Puerto Rico or any other felony that involves misuse of public

funds or property, including but not limited to the crimes mentioned in

Article 6.8 of Act No. 8-2017, as amended, known as the Act for the

Administration and Transformation of Human Resources in the

Government of Puerto Rico.

5. PREPA shall have the right to terminate the Contract in the event

Contractor is convicted in Puerto Rico or United States Federal court

for under Articles 4.2, 4.3, or 5.7 of Act No. 1-2012, as amended,

known as the Organic Act of the Office of Government Ethics of

Puerto Rico, any of the crimes listed in Articles 250 through 266 of

Act No. 146-2012, as amended, known as the Puerto Rico Penal

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Code, any of the crimes typified in Act No. 2-2018, as amended,

known as the Anti -Corruption Code for a New Puerto Rico or any other

felony that involves misuse of public funds or property, including but

not limited to the crimes mentioned in Article 6.8 of Act No. 8-2017,

as amended, known as the Act for the Administration and

Transformation of Human Resources in the Government of

Puerto Rico.

T. - visions Required under Act No. 14-2004:

Contractor agrees that articles extracted, produced, assembled,

packaged or distributed in Puerto Rico by enterprises with operations in

Puerto Rico, or distributed by agents established in Puerto Rico shall be

used when the service is rendered, provided that they are available.

U. Consequences of Non -Compliance

The Contractor expressly agrees that the conditions outlined throughout

this Section are essential requirements of this Contract. Consequently,

should any one of these representations, warranties or certifications be

incorrect, inaccurate or misleading, in whole or in part, there shall be

sufficient cause for the PREPA to render this Contract null and void, and

the Contractor shall reimburse the PREPA all moneys received under this

Contract. If any of the certifications listed in items A through F of this

Section XI shows a debt, and Contractor has requested a review or

adjustment of this debt, Contractor hereby certifies that it has made such

request at the time of the Contract execution. If the requested review

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or adjustment is denied and such determination is final, Contractor

will provide, immediately, to PREPA a proof of payment of this debt;

otherwise, Contractor accepts that the owed amount be offset by PREPA

and retained at the origin, deducted from the corresponding payments.

The Contractor accepts and acknowledges its responsibility for requiring

and obtaining a similar warranty and certification from each and every

Contractor and Subcontractor whose service the Contractor has

secured in connection with the services to be rendered under this Contract

and shall forward evidence to PREPA as to its compliance with this

requirement.

XII. INSURANCE

The Contractor shall secure and maintain in full force and effect during the life of

this Contract as provided herein, policies of insurance covering all operations

engaged in by the Contract as follows:

1. Commonwealth of Puerto Rico Workmen's Compensation Insurance

The Contractor shall provide Workmen's Compensation Insurance as required

by the Workmen's Compensation Act 45-1935 of the Commonwealth of

Puerto Rico. The Contractor shall also be responsible for compliance with

said Workmen's Compensation Act by all its subcontractors, agents, and invitees,

if any. The Contractor shall furnish a certificate from the Puerto Rico State

Insurance Fund showing that all personnel employed in the work are covered

by the Workmen's Compensation Insurance, in accordance with this Contract.

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2. Employer's Liability Insurance

The Contractor shall provide Employer's Liability Insurance with a minimum bodily

injury limits of $1,000,000 for each employee and $1,000,000 for each accident

covering against the liability imposed by Law upon the Contractor as result of bodily

injury, by accident or disease, including death arising out of and in the course

of employment, and outside of and distinct from any claim under the

Workmen's Compensation Act of the Commonwealth of Puerto Rico.

3. Commercial General Liability Insurance

The Contractor shall provide a Commercial General Liability Insurance with limits of

$1,000,000 per occurrence and $1,000,000 aggregate.

4. Commercial Automobile Liability Insurance

The Contractor shall provide a Commercial Automobile Liability Insurance with

limits of $1,000,000 combined single limit covering all owned, non -owned, and

hired automobiles.

5. Professional Liability Insurance

The Contractor shall provide a Professional Liability Insurance with limits of

$1,000,000 per claim and $1,000,000 aggregate.

Requirements under the Policies

The Commercial General Liability and Commercial Automobile Liability Insurance

required under this Contract shall be endorsed to include:

a. As Additional Insured:

Puerto Rico Electric Power Authority

(PREPA) Risk Management Office

PO Box 364267

San Juan, Puerto Rico 00936-4267

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b. A 30 day cancellation or nonrenewable notice to be sent to the above address.

c. An endorsement including this Contract under contractual liability coverage

and identifying it by number, date and parties to the contract.

d. Waiver of subrogation in favor of Puerto Rico Electric Power Authority

(P RE PA).

e. Breach of Warranties or Conditions:

"The Breach of any of the Warranties or Conditions in this

policy by the Insured shall not prejudice PREPA's rights

under this policy."

Furnishing of Policies

All required policies of insurance shall be in a form acceptable to PREPA and shall

be issued only by insurance companies authorized to do business in Puerto Rico.

The Contractor shall furnish a certificate of insurance in original signed by an

authorized representative of the insurer in Puerto Rico, describing the coverage

afforded.

XIII. NOTICES

All notices and other communications hereunder shall be in writing and shall

be deemed given when delivered personally or sent by telecopy, or sent,

postage prepaid, by registered, certified or express mail (return receipt

requested) or reputable overnight courier service and shall be deemed given

when so delivered by hand, or telecopied, or if mailed, three days after

mailing (one business day in the case of express mail or overnight courier

service) to the Parties at the following addresses:

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If to Contractor:

Gerry Murray

Vice President

Power Constructors, Inc.

3940 Glenbrook Drive

PO Box 1066

Hailey, Idaho 83333

If to PREPA:

José F. Ortiz Vázquez

Chief Executive Officer

Puerto Rico Electric Power Authority

PO Box 364267

San Juan, Puerto Rico 00936-4267

XIV. COUNTERPARTS

This Contract may be executed in any number of counterparts, each of which

shall be deemed to be an original, but all of which together shall constitute

one and the same instrument.

XV. INDEPENDENT CONTRACTOR

The Contractor shall be considered as an independent contractor for all

material purposes under this Contract, and all persons engaged or

contracted by Contractor for the performance of its services herein shall be

considered as its partners, employees, contractors or agents or those of its

subcontractors, and not as partners, employees, contractors or agents of

PREPA. In consequence, Contractor is not entitled to any fringe benefits

such as: but not limited to: vacation, sick leave, and other.

XVI. RESPONSIBILITY FOR DAMAGES

The appearing Parties agree that their responsibilities for damages under this

Contract will be governed by the Puerto Rico Civil Code and its case law,

as dictated by the Supreme Court of Puerto Rico.

In no event shall Contractor be liable for consequential, special, indirect,

incidental, punitive, or exemplary loss, damage, or expense (including, without

limitation, loss profit and opportunity cost), relating to this Contract. In

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circumstances where all or any portion of the provisions of this paragraph

is finally judicially determined to be unavailable, the aggregate liability

of the Contractor for any claim shall not exceed an amount which is

proportional to the relative fault that its conduct bears to all other conduct

giving rise to such claim.

Notwithstanding any other provision of this Contract to the contrary, PREPA

agrees to limit Contractor's liability to the total compensation received by

Contractor for the services under which the liability arises.

XVII. APPLICABLE LAW AND VENUE

This Contract shall be governed by and construed in accordance with the laws

of the Commonwealth of Puerto Rico. Also, the Parties expressly agree that

only the state courts of Puerto Rico will be the court of competent and exclusive

jurisdiction to decide over the judicial controversies that the appearing Parties

may have among them regarding the terms and conditions of this Contract.

The Parties shall attempt in good faith to resolve any dispute arising out of or

relating to this Contract, or any breach hereof or any Services performed

hereunder, promptly by negotiation between executives who have authority

to settle the controversy. Any Party may give the other Party written notice of

any dispute not resolved during the normal course of business. Such notice

shall include a statement of that Party's position and documentation

supporting that parties claim and the name and title of the executive who will

be representing that party and any other person who will accompany the

executive. The receiving Party shall respond in kind within fifteen (15) days

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of the date of notice. Within thirty (30) days after delivery of the initial notice,

the executives of both Parties shall meet at a mutually acceptable time and

place and use good faith efforts to resolve the dispute. If dispute is not then

resolved, either Party may give the other written notice that these executive

negotiations are concluded. Negotiations pursuant to this section shall be

confidential and shall be treated as compromise and settlement negotiations

for purposes of Law and rules of evidence. Time requirements herein may be

modified upon mutual written consent of the Parties.

In the event that the Parties are unable to settle the dispute through direct

negotiations as set forth above, all remaining controversies or claims shall

then be submitted to mediation within ten (10) days from written notice of

concluded negotiations following the Commercial Mediation Rules published

by the American Arbitration Association. Unless the Parties agree otherwise,

mediation shall be held in San Juan, Puerto Rico. This agreement to mediate

and any other agreement or consent to mediate entered into in accordance

with this Contract shall be specifically enforceable under the prevailing law of

any court having jurisdiction.

XVIII. SEPARABILITY

If a court of competent jurisdiction or other tribunal declares any of the Contract

provisions as null or invalid, such holding will not affect the validity and

-a-i* effectiveness of the remaining provisions of the Contract and the Parties agree

to comply with their respective obligations under such provisions not included

by the judicial declaration.

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XIX. SAVE AND HOLD HARMLESS

The Contractor agrees to hold harmless and to indemnify PREPA for all

expenses and costs of any nature (including reasonable attorney's fees)

incurred by PREPA arising out of any third party claim made by any person

for bodily injuries, including death, or for physical damage to tangible

property, to the extent directly caused by the Contractor's negligent act or

omission in the performance or nonperformance of its obligations under the

Contract, but not to the extent directly caused by negligence or tort of PREPA

or a third party, which is not an employee or subcontractor of the Contractor.

With respect to any indemnity set forth in this Contract, each indemnitee shall

give prompt notice of its receipt of any threat, indication or other notice of

any claim, investigation or demand that might give rise to any losses required

to be indemnified hereunder and shall reasonably cooperate in the defense

of such claim. The indemnifying party shall have the right, but not the

obligation, to conduct defense of such action at its sole expense.

XX. CHANGE IN LAW

During the term of this Contract, any change in law, including, but not limited

to changes in applicable tax law, which cause an increase in the

Contractor's costs when providing the services, shall be the Contractor's

responsibility and PREPA shall not be obligated to increase the Contract

f* Amount.

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XXI. FORCE MAJEURE

The Parties shall be excused from performing their respective responsibilities

and obligations under this Contract and shall not be liable in damages

or otherwise, if and only to the extent that they are unable to perform, or

are prevented from performing by a force majeure event.

For purposes of this Contract, force majeure means any cause without the fault

or negligence, and beyond the reasonable control of, the Party claiming

the occurrence of a force majeure event. Force majeure may include, but not

be limited to, the following: Acts of God, industrial disturbances, acts of the

public enemy, war, blockages, boycotts, riots, insurrections, epidemics,

earthquakes, storms, floods, civil disturbances, lockouts, fires, explosions,

interruptions of services due to the acts or failure to act of any governmental

authority; provided that these events, or any other claimed as a force

majeure event, and/or its effects, are beyond the reasonable control and

without the fault or negligence of the party claiming the force majeure

event, and that such party, within ten (10) days after the occurrence of the

alleged force majeure, gives the other party written notice describing the

particulars of the occurrence and its estimated duration. The burden of proof

as to whether a force majeure event has occurred shall be on the party claiming

the force majeure.

XXII. NOVATION

The Parties expressly agree that no amendment or change order, which could

be made to the Contract during its term, shall be understood as a contractual

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novation, unless both Parties agree to the contrary, specifically and in writing.

The previous provision shall be equally applicable in such other cases where

PREPA gives the Contractor a time extension for the compliance of any of

its obligations under this Contract, or where PREPA dispenses the claim

or demand of any of its credits or rights under the Contract.

XXIII. ENTIRE CONTRACT

Subject to any additional Federal or Commonwealth requirements not

specified herein, this Contract and its attachments, (and any executed

amendments to either), constitutes the entire Contract between the Parties

and supersedes all prior agreements and understandings, oral or written, with

respect to the subject matter hereof. This Contract will inure to the benefit of,

and be binding upon, the Parties and their respective successors and

assigns.

IN WITNESS THEREOF, the Parties hereto execute this Contract as of

the 12 of April 2019.

PUERTO RICO ELECTRIC POWER POWER CONSTRUCTORS, INC.

AUTHORITY

José F. Ort' Vázquez

Chief E - utive Officer

Tax ID Number: 660-43-3747

Gerry Murray

Vice President

Tax ID Number: 26-0036475

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Annex A

POWER Constructors Inc.

Professional Services Rates

PREPA FY2019

Category HOME OFFICE FIELD

Project Manager / Senior Technical Consultant $ 324.57 $ 418.32

Mid -Level Technical Consultant $ 221.50 $ 281.99

Junior Technical Consultant $ 150.96 $ 190.95

Project Administration / Invoice Accounting $0.00 $0.00

Submitted 03/15/2019

Valid through 06/30/2019

lif

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