EXHIBIT 10 

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EXECUTION VERSION 

FORBEARANCE AGREEMENT

This Forbearance Agreement (as amended or modified from time to time, the 

“Agreement”) is dated as of August 14, 2014 and is entered into by and among Puerto Rico 

Electric Power Authority (“PREPA”), National Public Finance Guarantee Corporation 

(“National”), Assured Guaranty Corp., Assured Guaranty Municipal Corp. (together with 

Assured Guaranty Corp., “Assured”), Syncora Guarantee Inc. (“Syncora”), and the undersigned 

members of the Ad Hoc Group of PREPA Bondholders identified on Annex A (the “Ad Hoc 

Group”). National, Assured, and Syncora, and any of their affiliates and predecessors that have 

insured Bonds (as herein defined) will be referred to herein collectively as the “Insurers,” the Ad 

Hoc Group, together with persons who execute a joinder to this Agreement in the form of Annex 

B, will be referred to herein collectively as the “Holders,” and the Insurers and the Holders will 

be referred to herein collectively as the “Forbearing Creditors.” All parties hereto will be 

referred to herein collectively as the “Parties.” 

RECITALS 

A. PREPA is the issuer of power revenue bonds (collectively, the “Revenue Bonds”) and 

power revenue refunding bonds (collectively, the “Refunding Bonds” and together with the 

Revenue Bonds, the “Bonds”) issued pursuant to that certain Trust Agreement, dated as of 

January 1, 1974, as amended and supplemented through August 1, 2011, between PREPA and 

U.S. Bank National Association, as successor trustee (the “Trustee” and, with respect to said 

trust agreement, as amended, the “Trust Agreement”). Terms used but not defined in this 

Agreement shall have the meanings given to such terms in the Trust Agreement. 

B. Each individual series of Bonds issued under the Trust Agreement was authorized 

pursuant to specific resolutions of PREPA authorizing the issuance of such series of Bonds. 

C. In connection with the issuance of certain of the Bonds (such Bonds, the “Insured 

Bonds”), PREPA entered into various insurance agreements with the Trustee corresponding to 

insurance policies issued by various insurers (such insurance policies to which any of the 

Insurers is currently a party, and the insurance agreements related thereto, collectively, the 

“Bond Insurance Agreements” and, together with the Trust Agreement, the Bonds, and any 

other agreements, supplements, amendments, or other documents executed or delivered in 

connection with the issuance or maintenance of the Bonds, including the Amendment (as defined 

herein), the “Transaction Documents”). 

D. PREPA has requested, and the Forbearing Creditors have agreed, subject to the terms and 

conditions of this Agreement, to consent to an amendment of the Trust Agreement in the form 

and substance attached hereto as Annex C (the “Amendment”). 

E. The Bond Insurance Agreements provide the Insurers the sole right in lieu of the 

beneficial owners of the applicable Insured Bonds to consent to the Amendment, for so long as 

the Insurers are not in default under the Bond Insurance Agreements. 

F. As of the date hereof, $8,322,405,000 in principal amount of Bonds is outstanding. 

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G. As of the date hereof, the total outstanding principal amount of Bonds insured by 

National under the Bond Insurance Agreements is $1,397,520,000. 

H. As of the date hereof, the total outstanding principal amount of Bonds insured by Assured 

under the Bond Insurance Agreements is $940,260,000. 

I. As of the date hereof, the total outstanding principal amount of Bonds insured by Syncora 

under the Bond Insurance Agreements is $212,855,000. 

J. As of the date hereof, the total outstanding principal amount of Bonds that are not Insured 

Bonds that are beneficially owned by each Holder is listed on each respective Holder’s signature 

page to this Agreement. 

K. The Forbearing Creditors collectively control more than 60% of the total outstanding 

principal amount of the Bonds for purposes of consenting to the Amendment. 

NOW, THEREFORE, in consideration of the mutual promises set forth herein 

and for other good and valuable consideration, the receipt and sufficiency of which are hereby 

acknowledged, the Parties hereby agree as follows: 

1. Forbearing Creditors’ Agreement to Consent to the Amendment and Forbear. 

(a) Each of the Forbearing Creditors (i) consents to the execution and 

delivery by PREPA and the Trustee of the Amendment and (ii) shall take all reasonably 

necessary actions to effectuate the Amendment, including, without limitation, transmitting its 

consent to its Depository Trust Company participants, and any other person whose action is 

required to effectuate the Amendment (but without any obligation to indemnify the Trustee). 

(b) During the period from the Effective Date (as such term is defined in 

Section 2 of this Agreement) until the Forbearance Termination Date (as such term is defined in 

Section 5 of this Agreement) (the “Forbearance Period”), subject to the terms and conditions set 

forth herein, each of the Forbearing Creditors agrees as follows: 

(i) With respect to the Trust Agreement, such Forbearing Creditor will 

forbear from exercising, or consenting to the exercise of, any right to 

direct the Trustee to enforce or exercise any rights or remedies available 

to the Trustee under the Trust Agreement or applicable law arising 

solely by reason of any default or event of default under any Transaction 

Document that may have occurred or may subsequently occur as 

identified on Annex D attached hereto (the “Potential Defaults”). 

(ii) Such Forbearing Creditor will forbear from enforcing or exercising any 

rights or remedies available to such Forbearing Creditor under the 

Transaction Documents or applicable law in respect of the Potential 

Defaults. 

(c) Notwithstanding anything to the contrary contained herein, solely to the 

extent that any entity challenges any trust rights, security interests, collateral, pledges of assets, 

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liens, or any other property rights under the Transaction Documents for the benefit of the Trustee 

or the Bonds, either held directly by holders or insurers of Bonds or held through the Trustee (the 

“Security Rights”), nothing in this Agreement shall limit or restrict any of the Forbearing 

Creditors or the Trustee from taking any action that the Trustee or any such Forbearing Creditor 

may take under its respective Transaction Documents, at law or in equity, that is necessary or 

appropriate to preserve, protect or defend (but not to enforce) any of the Security Rights against 

such challenge, including, without limitation, (i) defending, intervening in or filing any legal 

proceedings relating to any such Security Rights, (ii) sending notices to any persons, 

governmental authorities or entities concerning the existence of any such Security Rights, or 

(iii) otherwise preserving any of the rights, remedies, positions or defenses of such Forbearing 

Creditor or the Trustee, all of which are hereby expressly reserved. 

(d) During the Forbearance Period, PREPA’s obligations to pay any and all 

Principal and Interest Requirements when due in accordance with the terms of the Transaction 

Documents shall continue; provided, however, that the Forbearing Creditors agree and 

acknowledge that, except as otherwise required by the Amendment, PREPA shall not be required 

to make transfers to the Revenue Fund or the Sinking Fund pursuant to Sections 506 or 507 of 

the Trust Agreement during the Forbearance Period. 

(e) Except as expressly provided herein and in the Amendment, none of the 

existence, execution, delivery or performance of any term or provision of this Agreement or the 

Amendment shall (i) constitute a modification or relinquishment of any term or aspect of, or any 

right or remedy under or with respect to, the Transaction Documents; (ii) constitute a consent to, 

waiver of, or admission of any default or event of default (or the absence of a default or event of 

default) in any of the Transaction Documents; (iii) extend the due date of any obligations under 

the Transaction Documents; (iv) give rise to any obligation to extend, amend, waive or otherwise 

modify any term or condition of any of the applicable Transaction Documents, or in the case of 

the Forbearing Creditors, to direct the Trustee with respect to any of the foregoing; (v) give rise 

to any defenses or counterclaims to PREPA or the Forbearing Creditors, or to any right of the 

Forbearing Creditors to direct the Trustee under the Transaction Documents, to compel payment 

of the obligations under any of the applicable Transaction Documents or to otherwise enforce 

rights or remedies thereunder; (vi) prohibit any Forbearing Creditor from instituting, 

commencing, prosecuting, joining, interceding in, supporting or otherwise participating directly 

or indirectly in any way in any legal proceedings regarding the validity, enforceability or 

application of the Puerto Rico Public Corporation Debt Enforcement and Recovery Act, Act No. 

71-2014 (as amended, supplemented, modified, superseded, or replaced with other legislation in 

respect of a restructuring of PREPA, the “Recovery Act”) or any provision thereof, or 

intervening or otherwise participating in any lawsuit filed by any party regarding the Recovery 

Act (any such legal proceedings, actions or lawsuits, “Recovery Act Legal Actions”); or 

(vii) prejudice the rights of any party to the Recovery Act Legal Actions. Except as expressly 

limited herein, each Forbearing Creditor and PREPA hereby expressly reserves all of its rights, 

remedies, positions and defenses under or with respect to the Transaction Documents and under 

applicable law, and waives none. From and after the Forbearance Termination Date (as herein 

defined), each Forbearing Creditor and PREPA shall be entitled to enforce any of its rights, 

remedies, positions and defenses under or with respect to the Transaction Documents in 

accordance with their respective terms. 

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2. Conditions to Effectiveness. This Agreement shall become effective as of the 

date (the “Effective Date”) that each of the following shall have occurred: 

(a) All Parties shall have duly executed a counterpart of this Agreement; 

(b) PREPA shall have executed agreements (the “Citibank/Scotiabank 

Forbearance Agreements”) in form and substance acceptable to the 

Forbearing Creditors with Citibank, N.A. (“Citibank”), as lender under that 

certain Trade Finance Facility Agreement, dated as of July 20, 2012 (as 

amended, restated, extended, supplemented or otherwise modified and in 

effect from time to time, the “Citibank Credit Agreement”) and Scotiabank 

de Puerto Rico (“Scotiabank”), as agent, and the requisite threshold of other 

lenders (together with Scotiabank, the “Scotiabank Lenders”) that are 

parties to that certain Credit Agreement, dated as of May 4, 2012 (as 

amended, restated, extended, supplemented or otherwise modified and in 

effect from time to time) (the “Scotiabank Credit Agreement,” and together 

with the Citibank Credit Agreement, and any related documents to each, the 

“Citibank/Scotiabank Lines of Credit”); 

 For the avoidance of doubt, nothing in this Agreement or in the Citibank/Scotiabank 

Forbearance Agreements shall prejudice any of the Forbearing Creditors’, Citibank’s or the 

Scotiabank Lenders’ right to contest or defend, formally or informally, the priority of repayments 

of the Citibank/Scotiabank Lines of Credit relative to the Bonds. Notwithstanding the foregoing 

or anything herein to the contrary, the Forbearing Creditors and PREPA agree not to take any 

position, whether formally or informally, regarding the priority of repayments of the 

Citibank/Scotiabank Lines of Credit relative to the Bonds on the basis of (x) any of the following 

actions or agreements by Citibank and the Scotiabank Lenders on the Effective Date and during 

the Forbearance Period: (i) forbearing, delaying or failing to exercise remedies, (ii) agreeing to a 

postponement or delay in payment of interest or principal, (iii) granting an extension of any 

maturity date, (iv) not requiring the repayment or readvance of any loans under the 

Citibank/Scotiabank Lines of Credit or not requiring any loans under the Citibank/Scotiabank 

Lines of Credit to be revolving loans or (y) the inclusion in this Agreement as a Potential 

Default, and the inclusion in the Trust Agreement (as amended by the Amendment), as a 

“Potential Default” (as defined in the Trust Agreement, as amended by the Amendment) of 

PREPA’s use of monies from the General Fund to service its debt under the Citibank/Scotiabank 

Lines of Credit, and none of the Forbearing Creditors or PREPA shall (or direct the Trustee to) 

use any such actions as a basis for contesting whether any expense, claim, liability or amount 

shall be construed as a Current Expense under the Trust Agreement by virtue of the foregoing or 

use any such actions in making any argument, filing any pleading or complaint, or supporting 

any other person in doing the same. 

(c) PREPA shall have executed an agreement (the “GDB Forbearance 

Agreement”) in form and substance acceptable to the Forbearing Creditors 

with Government Development Bank for Puerto Rico (“GDB”); 

(d) No proceeding pursuant to the Recovery Act or any other action or 

proceeding that seeks to adjust the claims of its creditors pursuant to any 

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federal, state, or Puerto Rico statute, now or hereinafter enacted, has been 

instituted by or on behalf of PREPA; 

(e) PREPA shall have provided an initial 13-week cash flow statement (the 

“Initial 13-Week Cash Flow Statement”) to the Forbearing Creditors; and 

(f) PREPA shall have received and provided written confirmation to all 

Forbearing Creditors of all approvals required to enter into and perform this 

Agreement, including, without limitation, submission to the Forbearing 

Creditors of (A) resolution(s) duly adopted by the board of directors of 

PREPA authorizing PREPA to enter into and perform this Agreement and 

(B) an opinion of counsel that PREPA has the legal right, power and 

authority to enter into the Amendment. 

3. Representations. 

(a) Mutual Representations. Each Party hereby represents and warrants to the 

other as follows (each of which is a continuing representation and warranty, 

and shall be true throughout the Forbearance Period): 

(i) it has the legal right, power and authority to enter into this Agreement 

and consummate the transactions contemplated hereby; 

(ii) this Agreement is a legal, valid and binding obligation of such Party, 

enforceable against it in accordance with its terms (subject to applicable 

bankruptcy, reorganization, insolvency, moratorium or similar laws 

affecting creditors’ rights generally and subject, as to enforceability, to 

equitable principles of general application (regardless of whether 

enforcement is sought in a proceeding at equity or law)); 

(iii) (A) with respect to PREPA, it is a public corporation of the 

Commonwealth of Puerto Rico, duly existing under the laws of the 

Commonwealth of Puerto Rico, and (B) with respect to each other Party, 

it is duly organized and validly existing and in good standing under the 

laws of the jurisdiction of its organization with full power and authority 

to execute and deliver, and to perform and observe the terms and 

provisions of, this Agreement; and 

(iv) the execution, delivery, performance and observance of this Agreement 

by such Party (A) have been duly authorized by all necessary action on 

the part of such Party, do not and will not conflict with, or result in a 

violation of, any law applicable to it, and do not require it to obtain any 

permit, consent, approval, order or authorization of, or provide notice to 

or make a filing with, any court, governmental or regulator agency or 

authority or other person or entity that has not been obtained, provided 

or made, as applicable, (B) (1) with respect to PREPA, do not 

contravene, or constitute a default under, any provision of applicable law 

or regulation or of any agreement, judgment, injunction, order, decree or 

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other instrument binding on PREPA and (2) with respect to each other 

Party, do not and will not violate, conflict with or result in the breach of 

any provision of its organizational or governance documents and (C) do 

not and will not result in any breach of, constitute a default (or event 

which with the giving of notice or lapse of time, or both, would become 

a default) under, require any consent under or give to others any rights 

of termination, amendment, acceleration, suspension, revocation or 

cancellation of, any note, bond, mortgage, indenture contract, 

agreement, lease, sublease, license, permit, franchise or other instrument 

or arrangement (including without limitation the Transaction 

Documents) to which it is a party, which would materially adversely 

affect its ability to carry out its obligations under and otherwise observe 

this Agreement or cause the occurrence of a Termination Event (as 

defined herein). 

(b) Representations of PREPA. PREPA hereby represents and warrants as 

follows (each of which is a continuing representation and warranty, and 

shall be true throughout the Forbearance Period): 

(i) except to the extent that a Potential Default has occurred, no default 

under any Transaction Document has occurred and is continuing to the 

best of its knowledge; 

(ii) PREPA is in full compliance with, and no breach or default has occurred 

or is continuing in respect of, the covenants contained in Section 712 of 

the Trust Agreement; 

(iii) PREPA has made available to the Forbearing Creditors true and correct 

copies of any agreement relating to money borrowed by PREPA in the 

amount of $25 million or more; 

(iv) PREPA acknowledges that the Trustee has engaged Maslon Edelman 

Borman & Brand, LLP and Ballard Spahr LLP (the “Trustee Advisors”) 

to provide legal advice to the Trustee in connection with this Agreement 

and the Amendment, and the Trustee Advisors may be compensated in 

accordance with the terms of the Trust Agreement; and 

(v) each of the representations in the Recitals set forth above as to PREPA is 

true and accurate as of the date hereof. 

(c) Representations of the Insurers. Each of the Insurers hereby represents and 

warrants as follows (each of which is a continuing representation and 

warranty, and shall be true throughout the Forbearance Period): 

(i) with respect to the Insured Bonds identified on its respective signature 

page hereto, the applicable Insurer has the sole right in lieu of the 

beneficial owners of the applicable Insured Bonds to consent to the 

Amendment; 

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(ii) no default or event of default has occurred with respect to it under any 

Bond Insurance Agreement to which it is a party; 

(iii) it has not transferred any voting, consent or direction rights related to the 

applicable Insured Bonds; and 

(iv) each of the representations in the Recitals set forth above as to such 

Insurer is true and accurate as of the date hereof. 

(d) Representations of the Holders. Each of the Holders hereby represents and 

warrants as follows (each of which is a continuing representation and 

warranty, and shall, subject to the provisions herein relating to Transfer (as 

defined in Section 7, below) be true throughout the Forbearance Period): 

(i) it owns or has investment management responsibility for accounts that 

own Bonds that are not Insured Bonds in the principal amounts set forth 

on its respective signature page hereto or Forbearing Creditor Joinder (as 

applicable), and that it has not sold, assigned, transferred, participated or 

otherwise pledged such Bonds, or any voting, consent or direction rights 

related to such Bonds, to any other person or entity, in each case, except 

as permitted by Section 7 of this Agreement; and 

(ii) each of the representations in the Recitals set forth above as to the 

Holders is true and accurate as of the date hereof. 

4. Covenants by PREPA. PREPA hereby covenants as follows: 

(a) It shall provide the following to each of the Forbearing Creditors (or such 

Forbearing Creditor’s financial and legal advisors if so directed by such 

Forbearing Creditor in writing): 

(i) Within two (2) business days after receipt, any default, event of default 

or termination notice received by PREPA under the Citibank/Scotiabank 

Lines of Credit, the GDB Loan Agreements (as defined in the GDB 

Forbearance Agreement) or any other agreement under which PREPA 

could owe more than $10 million if a counterparty exercises remedies 

thereunder; 

(ii) Within five (5) business days after the end of any month, a cash report 

showing account balances for the General Fund and the Construction 

Fund; 

(iii) Within five (5) business days after execution by PREPA, copies of any 

agreements with vendors for the delivery of fuel oil or for the purchase 

of power with projected annual spend of greater than $50 million; 

(iv) Within two (2) business days after PREPA has agreed to accept such 

proposal, any proposal accepted by PREPA (whether formal or 

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informal) that concerns any new financing, loan, or “debtor in 

possession” facility (including, but not limited to, the provision of any 

commitment fee, or the payment of any prepayment premium or any 

prepayment under a forward delivery contract or other agreement for 

services), or any proposed recovery program or debt enforcement plan; 

(v) Weekly updates to the Initial 13-Week Cash Flow Statement in the same 

form as the Initial 13-Week Cash Flow Statement (the “Rolling 13-

Week Cash Flow Statement”), including a weekly variance report 

showing the variance to the Initial 13-Week Cash Flow Statement or the 

prior Rolling 13-Week Cash Flow Statement, as applicable; 

(vi) No later than seven (7) business days prior to the end of the period 

covered by the Initial 13-Week Cash Flow Statement and each 

subsequent 13-week period, PREPA will provide to the Forbearing 

Creditors a budget covering the next 13-week period including the same 

categories as the Initial 13-Week Cash Flow Statement (such budget, a 

“Subsequent 13-Week Budget”); 

(vii) Written notice of any default (A) by PREPA under this Agreement, 

(B) other than a Potential Default, by PREPA under the Trust 

Agreement, or (C) or termination under the Citibank/Scotiabank 

Forbearance Agreements or the GDB Forbearance Agreement, and in 

the case of clause (C) the waiver or cure of any such default, in each 

case within two (2) business days of the occurrence of such default, or 

after the same shall become known to PREPA; and 

(viii) On or before the fifth (5th) business day of each month, a report that 

displays, for the prior month and cumulatively during the Forbearance 

Period: (A) weekly disbursements from the Construction Fund, 

identifying whether such disbursements were applied to pay for the cost 

of Improvements or Current Expenses, and (B) weekly receipts of 

moneys credited to the Construction Fund, identifying whether such 

receipts were the result of replenishment of the Construction Fund by 

PREPA in accordance with the Amendment. 

(b) Absent the consent of Forbearing Creditors holding beneficially or insuring 

at least 85% of the principal amount of the Bonds outstanding subject to this 

Agreement, PREPA shall not agree to any amendments, modifications, or 

supplements to the Citibank/Scotiabank Lines of Credit, 

Citibank/Scotiabank Forbearance Agreements, the GDB Loan Agreements, 

or the GDB Forbearance Agreement or other material financial agreements 

to which PREPA and any of such institutions are parties (collectively, the 

“Other Forbearing Creditor Agreements”) that (i) prejudice or impair the 

Forbearing Creditors’ rights under this Agreement, the Trust Agreement or 

any other Transaction Document, (ii) enhance the existing rights of the 

Scotiabank Lenders, Citibank, or the GDB, or (iii) without limiting the 

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preceding clauses (i) or (ii), modify any of the Other Forbearing Creditor 

Agreements in any way that is adverse to the Forbearing Creditors. 

Prior to entering into any amendment, modification or supplement to the 

Other Forbearing Creditor Agreements, PREPA shall provide written notice 

of any such proposed amendment (each, a “Proposed Amendment”) to the 

Forbearing Creditors. If PREPA does not receive any written objection to a 

Proposed Amendment from a Forbearing Creditor within five (5) business 

days after providing such notice, no consent of the Forbearing Creditors 

shall be required pursuant to the preceding paragraph prior to PREPA’s 

entry into the applicable Proposed Amendment; 

(c) It shall use reasonable commercial efforts to respond to any reasonable 

written request for information concerning further diligence requests made 

by any Forbearing Creditor; 

(d) It shall use reasonable commercial efforts and work constructively with the 

Forbearing Creditors to develop a five-year business plan and a recovery 

program in respect of PREPA’s operations. The business plan (the 

“Business Plan”) will be based in part on the integrated resource plan 

referenced in Section 4(e) of this Agreement, as well as the work of PREPA, 

including a chief restructuring officer or similar officer, once appointed, and 

PREPA’s advisors in respect of operational and financial improvements for 

PREPA. The Business Plan will include, but will not be limited to (i) a 

monthly set of financial projections (profit and loss statement, balance sheet, 

cash flow statement) for the fiscal year beginning July 1, 2015, a quarterly 

set of financial projections for the fiscal year beginning July 1, 2016, and 

annual projections for the three (3) fiscal years beginning July 1, 2017, (ii) 

projections for maintenance, development and environmental capital 

expenditures during the period covered by the Business Plan, and (iii) a 

proposed set of cost saving and revenue enhancement initiatives to be 

evaluated for implementation prior to and during the period covered by the 

Business Plan. For purposes of clarity, the Business Plan shall not include a 

proposed capital structure for PREPA or proposed adjustments to the 

existing debt of PREPA; 

(e) It shall provide to the Forbearing Creditors and their advisors reasonable 

access to its management and advisors (including any chief restructuring 

officer or similar officer and the consulting engineering firm responsible for 

developing in consultation with PREPA management an integrated resource 

plan for PREPA) from time to time, including, without limitation, if 

requested, weekly meetings with the financial advisors to the Forbearing 

Creditors to discuss, among other things, any of the reports provided 

pursuant to Section 4(a) of this Agreement, and shall use reasonable 

commercial efforts to provide reasonable access to the management of the 

GDB associated with the potential restructuring or reorganization of PREPA 

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through regular meetings among such management and advisors and the 

Forbearing Creditors and/or their advisors; 

(f) Within ten (10) days after the Amendment Effective Date, PREPA shall pay 

to each Forbearing Creditor (or its designee) a forbearance fee equal to its 

pro rata share (calculated as a percentage of principal amount of Bonds 

insured or beneficially owned by such Forbearing Creditor compared to the 

principal amount of all Bonds insured or beneficially owned that are subject 

to this Agreement) of $1,400,000, upon PREPA’s receipt of a written 

certification by such Forbearing Creditor (or its designee) that such pro rata 

share does not exceed the aggregate amount of fees and expenses incurred 

by such Forbearing Creditor relating to work performed in connection with 

the negotiation and documentation of this Agreement and related diligence, 

which shall be creditable against any obligation of PREPA to pay any fees 

and expenses of such Forbearing Creditor; 

(g) No later than the first (1st) business day of each month after the Amendment 

Effective Date during the Forbearance Period, counsel for any Forbearing 

Creditor shall, by written notice to all Parties, subject to the confidentiality 

provisions of Section 6(b), advise PREPA of any changes in the aggregate 

principal amount of Bonds insured or beneficially owned by its clients that 

are Forbearing Creditors. On the fifteenth (15th) day of each month after 

the Amendment Effective Date (or the first business day thereafter), starting 

on September 15, 2014, PREPA shall pay, in arrears, an amendment fee to 

each Forbearing Creditor that is a Forbearing Creditor at such time (or such 

Forbearing Creditor’s designee) its pro rata share (based on the aggregate 

principal amount of Bonds insured or beneficially owned subject to this 

Agreement) of the sum of $1,000,000, which shall be creditable against any 

obligation of PREPA to pay any fees and expenses of such Forbearing 

Creditor; 

(h) It shall use commercially reasonable efforts to pursue any overdue accounts 

in respect of its accounts receivable from all of its customers (including, 

without limitation, all governmental entities and municipalities) and take all 

reasonable actions to seek to collect such Revenues; 

(i) It shall consult, in good faith, with the Forbearing Creditors regarding the 

retention of a chief restructuring officer or similar officer whose scope of 

authority would include the matters set forth on Annex E, and shall 

consider, in good faith, any recommendations made by the Forbearing 

Creditors with respect to such retention; 

(j) It shall keep the Forbearing Creditors reasonably informed regarding 

PREPA’s process with respect to (i) any new financing, loan, or “debtor in 

possession” facility (including, but not limited to, the provision of any 

commitment fee, or the payment of any prepayment premium or any 

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prepayment under a forward delivery contract or other agreement for 

services), or (ii) any recovery program or debt enforcement plan; 

(k) It shall attempt, in good faith, to minimize potential setoff risks in 

conducting its cash management practices; 

(l) It shall execute the Amendment and take all reasonably necessary actions to 

effectuate the Amendment in the event that the requisite percentage of 

beneficial owners or insurers of the Bonds deliver written consents to the 

Amendment. For purposes of this Agreement, “Amendment Effective 

Date” shall mean the date on which the Amendment becomes effective 

pursuant to its terms; 

(m) It shall satisfy, when due and in accordance with their terms, its payment 

obligations under (i) the interest rate swap transaction between PREPA and 

UBS AG, Stamford Branch, evidenced by a confirmation dated April 18, 

2007, as amended and supplemented from time to time; and (ii) the interest 

rate swap transaction between PREPA and JPMorgan Chase Bank, N.A., 

evidenced by a confirmation dated April 27, 2007, as amended and 

supplemented from time to time (together, the “Assured Swaps”); 

(n) To the extent such practice is not already in effect, for the period from and 

after September 1, 2014 (and, for the avoidance of doubt, not on a 

retroactive basis), PREPA shall record (i) revenue from municipalities and 

associated receivable balances on a gross basis, without reflecting any offset 

or accounting adjustment for Contributions in Lieu of Taxes (“CILT”); and 

(ii) CILT liabilities on a gross basis; and 

(o) PREPA shall post the following to its publicly accessible website within two 

(2) business days after the date such documents are delivered to the Trustee: 

(i) the annual report of the consulting engineers required under Section 706 

of the Trust Agreement and (ii) the monthly statements under Section 710 of 

the Trust Agreement. 

5. Termination. 

(a) This Agreement shall terminate at 11:59 p.m. (prevailing Eastern Time) on 

March 31, 2015 (the “Forbearance Termination Date”), unless terminated 

earlier in accordance with the terms of this Agreement. 

(b) In addition, this Agreement shall terminate automatically if: 

(i) The Amendment is not effective on or before fifteen (15) business days 

after the Effective Date; or 

(ii) A suspension period notice or proceeding pursuant to the Recovery Act 

or any other action or proceeding that seeks to adjust or challenge the 

claims of PREPA’s creditors pursuant to any federal, state, or Puerto 

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12 

Rico statute, now or hereinafter enacted, is instituted by or on behalf of 

PREPA, in which case the Forbearance Termination Date shall be 

deemed to have occurred. 

(c) In addition, PREPA shall have the right, upon written notice to the Forbearing 

Creditors, Citibank, Scotiabank and the GDB to terminate this Agreement 

upon the occurrence of any of the following events (each, a “PREPA 

Termination Event”): 

(i) Any of the Forbearing Creditors fails to comply with any of the material 

terms, covenants, provisions, or conditions of this Agreement or any 

such material terms, provisions or conditions are otherwise subject to 

any breach, default or violation on the part of any Forbearing Creditor, 

or any of the material representations or warranties of any of the 

Forbearing Creditors as set forth in this Agreement is not true or 

accurate in any material respect at any time during the Forbearance 

Period (each of the foregoing, a “Forbearing Creditor Default”), which 

Forbearing Creditor Default, if capable of being cured, is not cured 

within five (5) business days after receipt of a written notice thereof 

from PREPA; 

(ii) PREPA determines, after consultation with counsel, to terminate the 

Agreement in the exercise of its fiduciary or statutory duties; and 

(iii) Any Forbearing Creditor commences, prosecutes, joins, intercedes, or 

otherwise supports by filing pleadings or appearing to argue in any way 

in a Recovery Act Legal Action, other than any Forbearing Creditor that 

has, prior to the Effective Date, filed a Recovery Act Legal Action, and 

any affiliate of such Forbearing Creditor. 

The Forbearance Termination Date shall be deemed to have occurred as of the 

date and time when PREPA delivers such written notice. 

(d) In addition, if PREPA fails to satisfy its payment obligations under the 

Assured Swaps on October 1, 2014 or January 1, 2015, Assured shall have the 

right in either case, upon written notice to PREPA, Citibank, Scotiabank, the 

GDB, and the advisors to the other Forbearing Creditors, in each case, solely 

to the notice addresses listed for such advisors in Section 14 hereof, to 

withdraw from this Agreement, in which case Assured shall no longer be 

considered a Forbearing Creditor as of the date of delivery of such written 

notice. 

(e) In addition, upon the occurrence of any of the following events, each member 

of the Ad Hoc Group shall have the right, upon written notice to PREPA, 

Citibank, Scotiabank, the GDB, and the advisors to the other Forbearing 

Creditors, in each case, solely to the notice addresses listed for such advisors 

in Section 14 hereof, to withdraw from this Agreement, in which case it shall 

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no longer be considered a Forbearing Creditor as of the date of delivery of 

such written notice: 

(i) A default, event of default, or termination event has occurred with 

respect to PREPA’s obligations under any of the Citibank/Scotiabank 

Forbearance Agreements or the GDB Forbearance Agreement and such 

default, event of default, or termination event has not been waived by 

Citibank, the Scotiabank Lenders or the GDB, as applicable, or if subject 

to a cure period, has not been cured by PREPA within the applicable 

cure period (a “Cross-Termination Event”); or 

(ii) During the Forbearance Period, except as expressly permitted under this 

Agreement, PREPA (A) makes any principal repayment under either the 

Citibank/Scotiabank Lines of Credit or the GDB Loan Agreements, or 

(B) enters into any new financing, loan, or “debtor in possession” 

facility (including the provision of any commitment fee, or the payment 

of any prepayment premium or any prepayment under a forward 

delivery contract) to borrow greater than $10 million (not including any 

insurance premium financing, any unsecured federally guaranteed loan 

financing, or any vehicle or equipment leases), in the aggregate, whether 

or not such arrangement would comply with or otherwise require the 

consent of holders of Bonds pursuant to the Trust Agreement or any 

other Transaction Document (a “Financing Termination Event”). 

(f) [Reserved]

(g) In addition, after 11:59 p.m. (prevailing Eastern Time) on January 15, 2015, 

Forbearing Creditors holding beneficially or insuring at least 25% of the 

principal amount of the Bonds outstanding subject to this Agreement, shall 

have the right, upon written notice to PREPA, to terminate this Agreement. 

The Forbearance Termination Date shall be deemed to have occurred as of the 

date and time when any such Forbearing Creditors deliver such written notice. 

(h) In addition, upon the occurrence of any of the following (each a “Termination 

Event”), Forbearing Creditors holding beneficially or insuring at least 66 

2/3% of the principal amount of the Bonds outstanding subject to this 

Agreement, shall have the right, upon written notice to PREPA and the other 

Forbearing Creditors, to terminate this Agreement: 

(i) A default by PREPA or an event of default (except for the Potential 

Defaults) has occurred and is continuing under any Transaction 

Document and, if subject to a cure period, has not been cured by PREPA 

within the applicable cure period; 

(ii) Measured as of (A) the end of the fourth (4th) week of the Initial 13-

Week Cash Flow Statement or (B) the end of each week during a 

Subsequent 13-Week Budget (taking into account for purposes of the 

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following calculations, the necessary number of weeks from the 

previous budget period such that the calculations are made over a four 

(4)-week period), a variance of: 

(x) 10% or more occurs in respect of actual results in the collections line 

item in the Initial 13-Week Cash Flow Statement or Subsequent 13-

Week Budget then in effect, such that total actual collections on the 

measurement date are, in the aggregate, 10% less than the budgeted 

amounts, it being agreed and acknowledged that if collections in a prior 

week during the applicable 13-week period exceed the budgeted 

amounts such amounts shall carry forward to subsequent weeks within 

the 13-week period; or 

(y) 20% or more occurs in respect of actual results in the disbursements 

and capital expenditure line items included in the Initial 13-Week Cash 

Flow Statement or Subsequent 13-Week Budget then in effect, such that 

actual disbursements and capital expenditures are, in the aggregate, 20% 

greater than the budgeted amounts, it being agreed and acknowledged 

that if disbursements and capital expenditures are not used in a prior 

week during a 13-week period, such amounts shall carry forward to 

subsequent weeks within the 13-week period, provided that (1) 

professional fees shall be excluded from the disbursements test, and (2) 

any #6 fuel oil purchases will be included in the Initial 13-Week Cash 

Flow Statement at current prices and 60-day terms, with no credit limit, 

and (3) for purposes of the disbursement test, such amounts will be 

reflected either at the then-in effect terms or contract terms, as 

applicable; 

(iii) If PREPA makes a disbursement to GDB of a type that is not 

contemplated by the Initial 13-Week Cash Flow Statement or a 

Subsequent 13-Week Budget, as applicable; 

(iv) Any Puerto Rico law is enacted or a legal action is commenced by a 

party other than a holder of Bonds either of which has a material adverse 

effect on PREPA or the rights or interests of the Forbearing Creditors, in 

their capacity as creditors of PREPA; provided, that in no event shall a 

Recovery Act Legal Action constitute a material adverse effect on 

PREPA; 

(v) A Cross-Termination Event; 

(vi) A Financing Termination Event; 

(vii) PREPA fails to comply with any of the material terms, covenants, 

provisions, or conditions of this Agreement or any such material terms, 

covenants provisions or conditions are otherwise subject to any breach, 

default or violation on the part of PREPA, or any of the material 

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representations or warranties of PREPA as set forth in this Agreement is 

not true or accurate in any material respect at any time during the 

Forbearance Period, other than as set forth in subsection (viii) below) 

(each of the foregoing, a “PREPA Forbearance Default”), which 

PREPA Forbearance Default, if capable of being cured, is not cured 

within five (5) business days after receipt of a written notice thereof 

from any Forbearing Creditor; 

(viii) If PREPA does not provide to the advisors to the Forbearing Creditors 

the Rolling 13-Week Cash Flow Statement in accordance with Section 

4(a)(v), including the weekly variance report described in such Section 

4(a)(v), or a Subsequent 13-Week Budget in accordance with Section 

4(a)(vi), if such failure to so provide is not cured within three (3) 

business days; 

(ix) If a Subsequent 13-Week Budget is not in form and substance 

reasonably acceptable to such Forbearing Creditors; provided, however, 

that such Forbearing Creditors may only issue a written notice under this 

section in the seven (7) business day period prior to such Subsequent 

13-Week Budget becoming effective unless PREPA, at the request of 

any Forbearing Creditor, agrees to extend such period for up to five (5) 

business days; 

(x) If PREPA does not retain a chief restructuring officer or similar officer 

with the scope of authority set forth on Annex E that is reasonably 

acceptable to the Forbearing Creditors on or before September 8, 2014; 

(xi) If PREPA does not hire FTI Consulting, which shall consult in good 

faith with the Forbearing Creditors in the course of its work to (w) 

examine, evaluate and make recommendations with respect to PREPA’s 

billing practices, (x) examine, evaluate and make recommendations with 

respect to collection of the outstanding receivables owed to PREPA by 

the Commonwealth, and the public corporations, agencies, 

municipalities or other instrumentalities of the Commonwealth, 

(y) examine, evaluate and make recommendations with respect to CILT, 

and (z) develop and recommend “best practices,” and a proposed 

timeline for implementing such best practices, in a report to be produced 

to PREPA no later than November 15, 2014 (with a copy to the 

Forbearing Creditors); 

(xii) If PREPA has not delivered a Business Plan by December 15, 2014; or 

(xiii) If PREPA has not delivered a proposed recovery program or debt 

enforcement plan that is reasonably acceptable to Forbearing Creditors 

holding beneficially or insuring at least 66 2/3% of the principal amount 

of the Bonds outstanding subject to this Agreement on or before March 

2, 2015; 

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The Forbearance Termination Date shall be deemed to have occurred as of the 

date and time when Forbearing Creditors holding beneficially or insuring at 

least 66 2/3% of the principal amount of the Bonds outstanding subject to this 

Agreement issue such written notice. 

(i) Once a Party is no longer a Party to this Agreement, such Party shall be 

entitled to exercise any rights or remedies it may have under the Transaction 

Documents or applicable law, at law or in equity, and any applicable statutes 

of limitation with respect to any such rights or remedies shall be tolled during 

the Forbearance Period applicable to such Party. 

(j) Except with respect to PREPA’s obligations pursuant to Sections 4(f) and 4(g) 

of this Agreement and any Party’s obligations pursuant to the second 

paragraph of Section 2(b) and Sections 7, 9, 10 or 11 or as otherwise set forth 

in this paragraph, the sole and exclusive remedy of any Party for any breach 

of this Agreement by any other Party shall be termination under this Section 5, 

and such breach shall not give rise to any claims against any Party at law or in 

equity; provided, however, that notwithstanding the foregoing, the Parties 

agree that irreparable damage would occur in the event that any Forbearing 

Creditor does not perform in accordance with the specific terms of this 

Agreement, and accordingly PREPA shall be entitled to equitable relief, 

including specific performance, in the event of any breach or threatened 

breach of this Agreement by a Forbearing Creditor. 

6. Disclosure of Information. 

(a) Notwithstanding anything herein to the contrary: 

(i) PREPA shall not be required to provide any documents or information 

that is confidential information to any Forbearing Creditor that is not a 

party to a non-disclosure agreement that is in effect at the time of such 

disclosure (an “NDA”). 

(ii) PREPA may elect to designate as confidential information, including on 

an advisors-only basis, any documents or information that (A) are not 

otherwise required to be provided to the Trustee under the Trust 

Agreement, any Transaction Document, or applicable law or (B) have 

not been transmitted to other entities without an NDA. 

(b) Notwithstanding anything herein to the contrary, information concerning the 

Bonds beneficially owned or insured by the Forbearing Creditors, including, 

without limitation, the description of such Bonds reflected on the signature 

pages hereto, the description of such Bonds on any documentation related to 

the Amendment, and information delivered pursuant to Section 7(c), below, 

shall be confidential, and shall not be disclosed to any person without the 

prior written consent of the applicable Forbearing Creditor, except to 

PREPA’s and the other Forbearing Creditors’ attorneys or advisors (solely 

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17 

to the extent necessary for it to perform its obligations under this 

Agreement) (collectively, the “Authorized Persons”); provided, however, 

that an Authorized Person that receives such confidential information shall 

be permitted to disclose such information (i) to the extent required by any 

law, rule or regulation or by any subpoena or similar judicial and/or 

administrative order, or other regulatory authority (including any selfregulatory organization having jurisdiction or claiming to have jurisdiction 

over such person), or (ii) to the extent that such information is or becomes 

generally available to the public other than as a result of disclosure by an 

Authorized Person; provided further, however, that an Authorized Person 

that receives such confidential information concerning the Bonds 

beneficially owned or insured by the Forbearing Creditors shall be permitted 

to disclose to its respective clients the aggregate percentage of Bonds 

beneficially owned or insured by the any group of Holders, without 

disclosure of the amount or percentage of Bonds beneficially owned or 

insured by any individual Holder. 

(c) PREPA authorizes the Trustee to disclose to a beneficial holder or insurer of 

Bonds, upon request of such holder or insurer, (i) any reports or certificates 

required to be filed with the Trustee under the following sections of the 

Trust Agreement: 502 (revisions of rates), 504 (annual and supplemental 

budgets), 505 (report of expenditure in excess of annual budget), 706 (report 

of the Consulting Engineers), 710 (monthly reports on income, expense and 

other matters set forth therein, annual audits and additional reports or audits 

required by law) and 712 (abandonment, sale or lease of any part of the 

system); and (ii) the balances for any funds or accounts held by the Trustee 

for the benefit of holders of Bonds. 

7. Transfer of Interests and Securities; Holders’ Disclosures. 

(a) For the period commencing as of the date any Forbearing Creditor executes 

this Agreement until the earliest to occur of (i) the fifteenth (15th) business 

day following such date if the Effective Date has not occurred and 

(ii) termination of this Agreement pursuant to the terms hereof (the 

“Transfer Limitation Period”), such Forbearing Creditor shall not sell, 

assign, transfer or otherwise pledge or dispose of (“Transfer”) any Bonds 

beneficially owned by such Forbearing Creditor, or any voting, consent or 

direction rights related to such Bonds, except such Transfer may be made 

(A) if the transferee is a Forbearing Creditor at the time of the Transfer, (B) 

if the transferee is not a Forbearing Creditor, such transferee (a “Qualified 

Transferee”) delivers to each of the Forbearing Creditors, PREPA, Citibank 

and Scotiabank at or prior to the time of the Transfer, the joinder attached 

hereto as Annex B, pursuant to which such transferee shall assume all 

obligations of the Forbearing Creditor transferor hereunder in respect of the 

Bonds Transferred (such transferee, if any, shall also be a “Forbearing 

Creditor” hereunder), or (C) if the Bonds sold, assigned, transferred or 

otherwise pledged or disposed of are Insured Bonds, and the representations 

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and warranties of the applicable Insurer contained in Section 3(c) hereof are 

true at that time with respect to such Bonds. In addition, subject to 

subclause (C) above and without limiting the foregoing, each of the Insurers 

agrees that it will not transfer any voting, consent or direction rights related 

to Insured Bonds during the Transfer Limitation Period unless the transferee 

agrees to be bound by the terms of this Agreement and delivers notice of 

such agreement to each of the Forbearing Creditors, Citibank, Scotiabank, 

and PREPA. To the extent that a Transfer violates the provisions of this 

section, the Transfer shall be void ab initio and the applicable Bonds and 

Forbearing Creditor shall continue to remain subject to the terms of this 

Agreement. This Agreement shall in no way be construed to preclude any 

of the Forbearing Creditors from acquiring additional Bonds; provided that 

any such acquired Bonds shall automatically and immediately upon 

acquisition by a Forbearing Creditor be deemed subject to all of the terms of 

this Agreement. 

(b) Notwithstanding anything contained in this Agreement to the contrary, a 

Forbearing Creditor may transfer (by purchase, sale, assignment, 

participation or otherwise) any right, title or interest in the Bonds to a 

Qualified Marketmaker, acting in its capacity as a Qualified Marketmaker, 

without the requirement that such Qualified Marketmaker be or become a 

Forbearing Creditor; provided that such Qualified Marketmaker transfers 

(by purchase, sale, assignment, participation or otherwise) such right, title 

and or interest within ten (10) business days after receipt thereof to a 

Forbearing Creditor or a Qualified Transferee; provided further that such 

Forbearing Creditor shall notify such Qualified Marketmaker that it is party 

to this Agreement prior to transferring any right, title or interest in the 

Bonds to such Qualified Marketmaker and such Qualified Marketmaker 

shall have no duty to make any investigation or inquiry as to whether any 

transferred Bond is subject to this Agreement. 

“Qualified Marketmaker” means an entity that (i) holds itself out to the 

market as standing ready in the ordinary course of its business to purchase 

from customers and sell to customers debt securities such as the Bonds or 

enter with customers into long and short positions in debt securities such as 

the Bonds, in its capacity as a dealer or market maker in such Bonds; (ii) is 

in fact regularly in the business of making a market in debt securities; and 

(iii) is registered with the Securities and Exchange Commission and 

Financial Institutions Regulatory Authority. 

(c) No later than the first (1st) business day of each month, and upon PREPA’s 

reasonable request, each Holder shall disclose to PREPA, the aggregate 

principal amount of Bonds beneficially owned by such Holder, which 

disclosures shall be treated as confidential information by PREPA in 

accordance with Section 6(b). The foregoing shall not prohibit PREPA 

from disclosing the approximate aggregate holdings of all Forbearing 

Creditors collectively. 

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8. Announcements. None of the Parties shall issue any press release or other public 

statement announcing this Agreement without the consent of the other Parties, which consent 

shall not be unreasonably withheld or delayed. 

9. Release of Claims and Waiver of Defenses. In further consideration of the 

Forbearing Creditors’ entry into and performance under this Agreement, PREPA, on behalf of 

itself and its successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, 

agents and attorneys hereby forever, fully, unconditionally and irrevocably waives and releases 

the Forbearing Creditors and their respective successors, assigns, parents, subsidiaries, affiliates, 

officers, directors, employees, attorneys and agents (collectively, the “Releasees”) from any and 

all claims, liabilities, obligations, debts, causes of action (whether at law or in equity or 

otherwise), defenses, counterclaims and setoffs of any kind, whether known or unknown, 

liquidated or unliquidated, matured or unmatured, fixed or contingent, or otherwise, directly or 

indirectly arising out of, connected with, resulting from or related to any act or omission by the 

Forbearing Creditors or any other Releasee with respect to the Trust Agreement, the Bond 

Insurance Agreements, or any other Transaction Documents, except to the extent that any such 

claims, liabilities, obligations, debts, causes of action, defenses, counterclaims and setoffs are 

found in a final, nonappealable judgment of a court of competent jurisdiction to have resulted 

from the gross negligence or willful misconduct of the Releasees. Nothing herein shall release 

any obligations of the Insurers under the Bond Insurance Agreements. 

10. Amendment. Once effective, this Agreement may not be modified, amended, 

supplemented or otherwise altered (except as expressly provided herein), and no term or 

condition may be waived, except in a writing signed by PREPA and Forbearing Creditors 

holding beneficially or insuring at least 85% of the principal amount of the Bonds outstanding 

subject to this Agreement. Notwithstanding the foregoing, (a) any such modification, 

amendment, or supplement that alters (i) the percentage of Bonds required for determining 

consents, amendments, terminations, extensions or other actions hereunder or (ii) any provision 

relating to termination or extension of this Agreement, including, without limitation, Section 5 of 

this Agreement, or (b) materially and adversely affects the rights or obligations of any 

Forbearing Creditor in a manner disproportionate to those of any other Forbearing Creditor or 

group of Forbearing Creditors (provided that a disproportionate effect cannot arise solely on the 

basis that certain Forbearing Creditors are Holders and others are Insurers), in each case, shall 

not be effective unless in writing and signed by PREPA and each Forbearing Creditor. In 

addition, absent the consent of Citibank and Scotiabank, acting as agent on behalf of the 

Scotiabank Lenders, this Agreement shall not be amended, modified or supplemented in any way 

that would (i) prejudice or impair Citibank or the Scotiabank Lenders’ rights under this 

Agreement, the Citibank/Scotiabank Lines of Credit or the Citibank/Scotiabank Forbearance 

Agreements, (ii) enhance the existing rights of the Forbearing Creditors, or (iii) without limiting 

the preceding clauses (i) or (ii), modify the provisions of this Agreement in any way that is 

adverse to Citibank or the Scotiabank Lenders. Prior to entering into any amendment, 

modification or supplement this Agreement, PREPA shall provide written notice of any such 

proposed amendment (each, a “Proposed Forbearance Amendment”) to Citibank and 

Scotiabank, acting as agent on behalf of the Scotiabank Lenders. If PREPA does not receive any 

written objection to a Proposed Forbearance Amendment from Citibank or Scotiabank, acting as 

agent on behalf of the Scotiabank Lenders within five (5) business days after providing such 

notice, no consent of Citibank or Scotiabank, acting as agent on behalf of the Scotiabank 

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Lenders, shall be required pursuant to this paragraph prior to PREPA’s entry into the applicable 

Proposed Forbearance Amendment. 

11. Successors and Assigns. This Agreement shall be binding upon and inure to the 

benefit of the parties hereto and their respective successors, legal representatives and assigns. 

PREPA shall not assign or transfer its rights under this Agreement without the consent of each of 

the Forbearing Creditors. No Forbearing Creditor shall assign or transfer its rights under this 

Agreement other than in connection with a Transfer pursuant to Section 7 of this Agreement. 

This Agreement is entered into for the exclusive benefit of the parties hereto, no other party shall 

derive any rights or benefits herefrom, and all third-party beneficiary rights are hereby expressly 

disclaimed, other than (a) Citibank and the Scotiabank Lenders, which are made express third 

party beneficiaries to Sections 1(a)-(b), 2(b) (second paragraph), 5(j) and 10 hereof, provided the 

remedy of such third-party beneficiaries shall be limited to specific performance thereof, and (b) 

the Trustee, which is made an express third party beneficiary to Sections 1(c), 3(b)(iv) and 6(c) 

hereof. 

12. Further Assurances. The parties hereto agree that upon the reasonable request of 

any other Party to this Agreement, each such Party will execute and deliver to the requesting 

Party such other additional instruments and documents or perform or cause to be performed such 

other and further acts and things, as may be reasonably necessary to more fully consummate the 

transactions as set forth in this Agreement; provided, however, that performance by any Party 

under this paragraph shall not create any new liability or obligation on the performing Party 

whatsoever. 

13. Reaffirmation of Transaction Documents. PREPA hereby ratifies and reaffirms 

all of the terms, provisions and covenants contained in each of the Trust Agreement, as amended 

by the Amendment, and Transaction Documents to which it is a party, which continue to be in 

full force and effect as written and, except as provided in the Amendment, unmodified hereby. 

14. Notices. All notices or demands given or made by one Party to the other relating 

to this agreement shall be in writing and either personally served or sent by registered or certified 

mail, postage paid, return receipt requested, overnight delivery service, or by electronic mail 

transmission with a copy by first-class mail, and shall be deemed given for purposes of this 

Agreement on the earlier of the date of actual receipt or three (3) days after the deposit thereof in 

the mail. Unless a different or additional address for subsequent notices is specified in a notice 

sent or delivered in accordance with this Section, such notices or demands shall be sent solely to 

the notice addresses listed below for advisors to the Forbearing Creditors and the other belowlisted entities: 

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21 

If to PREPA: 

Richard J. Cooper, Esq. and 

Sean A. O’Neal, Esq. 

Cleary Gottlieb Steen & Hamilton LLP 

One Liberty Plaza 

New York, NY 10006 

rcooper@cgsh.com 

soneal@cgsh.com 

and 

Puerto Rico Electric Power Authority 

Attention: Office of the General Counsel 

P.O. Box 364267 

San Juan, Puerto Rico 00936-4267 

If to GDB: 

Jose R. Coleman Tió 

Government Development Bank for Puerto 

Rico 

P.O. Box 42001 

San Juan, PR 00940-2001 

Jose.R.Coleman@bgfpr.com 

If to Syncora: 

c/o Richard F. Hahn, Esq. and 

My Chi To, Esq. 

Debevoise & Plimpton LLP 

919 Third Avenue 

New York, NY 10022 

rfhahn@debevoise.com 

mcto@debevoise.com 

If to National: 

Marcia Goldstein, Esq. and 

Debra A. Dandeneau, Esq. 

Weil, Gotshal & Manges LLP 

767 Fifth Avenue 

New York, NY 10153 

Marcia.goldstein@weil.com 

Debra.dandeneau@weil.com 

and 

Patricia Ferrari and 

Adam Bergonzi 

National Public Finance Guarantee Corporation 

113 King St. 

Armonk, NY 10504 

Trish.Ferrari@optinuityar.com 

Adam.bergonzi@nationalpfg.com 

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22 

If to Assured: 

Lary Stromfeld, Esq. and 

Howard Hawkins, Esq. 

Cadwalader, Wickersham & Taft LLP 

One World Financial Center 

New York, NY 10281 

Lary.stromfeld@cwt.com 

Howard.hawkins@cwt.com 

and 

Kevin Lyons 

Assured Guaranty Municipal Corp. 

31 W. 52nd St. 

New York, NY 10019 

klyons@assuredguaranty.com 

If to the Ad Hoc Group: 

Thomas Moers Mayer, Esq. and 

Amy Caton, Esq. 

Kramer Levin Naftalis & Frankel LLP 

1177 Avenue of the Americas 

New York NY 10036 

tmayer@kramerlevin.com 

acaton@kramerlevin.com 

and 

Ari Gabinet 

Michael Sternhell 

Oppenheimer Funds 

Two World Financial Center 

225 Liberty Street, New York, NY 10281 

agabinet@ofiglobal.com 

msternhell@ofiglobal.com 

If to Citibank: 

Citibank, N.A. 

Physical #271 Muñoz Rivera Ave. 

6th Floor 

San Juan, Puerto Rico 00918 

Attn: Guillermo Gómez, 

guillermo.gomez@citi.com 

and 

Citibank, N.A. 

388 Greenwich Street 

New York, New York 10013 

Attn: Tatiana Iliczewa, 

tatiana.iliczewa@citi.com 

and 

Davis Polk & Wardwell LLP 

450 Lexington Avenue 

New York, NY 10017 

Attn: Donald S. Bernstein 

(donald.bernstein@davispolk.com) and 

Brian M. Resnick 

(brian.resnick@davispolk.com) 

If to Scotiabank: 

Richard G. Mason and 

Austin T. Witt 

Wachtell, Lipton, Rosen & Katz 

51 West 52nd Street 

New York, NY 10019 

rgmason@wlrk.com 

awitt@wlrk.com 

and 

Rafael Flores 

Scotiabank de Puerto Rico 

Scotiabank Plaza 

290 Jesus T. Pinero Avenue 

8th Floor 

San Juan, PR 00918 

Rafael.flores@scotiabank.com 

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23 

15. Governing Law. This Agreement, but for the avoidance of doubt, not the 

Amendment, shall be governed and construed and enforced in accordance with the laws of the 

State of New York. Terms used in the Amendment that are defined herein shall be construed in 

accordance with the laws of the Commonwealth of Puerto Rico. 

16. Jurisdiction. Any dispute arising under or in connection with this Agreement 

shall be brought in the exclusive jurisdiction and venue of the courts of the Commonwealth of 

Puerto Rico or the United States District Court for the District of Puerto Rico. 

17. WAIVER OF TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT 

HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, 

DEMAND, ACTION OR CAUSE OF ACTION ARISING SOLELY OUT OF THIS 

AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE 

MODIFICATION THEREOF, WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE 

OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER 

SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY 

AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN 

ORIGINAL COUNTERPART OR COPY OF THIS SECTION WITH ANY COURT AS 

WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER 

OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY. 

18. Survival. The following provisions shall survive the termination of this 

Agreement and shall remain in full force and effect notwithstanding the occurrence of the 

Forbearance Termination Date: Sections 1(e), 2(b) (second paragraph), 4(f), 4(g), 5(i), 5(j), 6, 9, 

11, 13, 15, 16, 17, 18, and 19. 

19. Counterparts. This Agreement may be executed in any number of counterparts, 

all of which taken together shall constitute one and the same instrument and either of the parties 

hereto may execute this Agreement by signing any such counterpart. Delivery of an executed 

signature page of this Agreement by facsimile or email transmission shall be effective as delivery 

of a manually executed counterpart hereof. 

20. Business Day. The term “business day” means any day other than a Saturday, 

Sunday, or legal holiday on which the banking institutions in the Municipality of San Juan, 

Puerto Rico are authorized by law to be closed. 

21. Entire Agreement. This Agreement and the Amendment constitute the entire 

agreement, and supersedes any prior agreements, including any deemed agreements, among the 

Parties regarding the subject matter hereof. 

[Signature Pages Follow]

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KL2 2860194.1 

Annex A – Ad Hoc Group 

AG ELEVEN PARTNERS, L.P. 

ANGELO GORDON CENTRE STREET PARTNERSHIP, L.P. 

AG CAPITAL RECOVERY PARTNERS VIII, L.P 

AG MM, L.P. 

AG SUPER FUND, L.P. 

AG PRINCESS, L.P. 

NUTMEG PARTNERS, L.P. 

AG SUPER FUND INTERNATIONAL PARTNERS, L.P. 

APPALOOSA MANAGEMENT L.P. on behalf of: 

 APPALOOSA INVESTMENT LIMITED PARTNERSHIP I 

PALOMINO FUND LTD. 

THOROUGHBRED FUND L.P. 

THOROUGHBRED MASTER LTD. 

BLUEMOUNTAIN CAPITAL MANAGEMENT LLC, as investment manager for: 

 BLUEMOUNTAIN DISTRESSED MASTER FUND L.P. 

 BLUEMOUNTAIN GUADALUPE PEAK FUND L.P. 

 BLUE MOUNTAIN CREDIT ALTERNATIVES MASTER FUND L.P. 

 BLUEMOUNTAIN CREDIT OPPORTUNITIES MASTER FUND I L.P. 

BLUEMOUNTAIN LONG/SHORT CREDIT MASTER FUND L.P. 

BLUEMOUNTAIN STRATEGIC CREDIT MASTER FUND L.P. 

BLUEMOUNTAIN TIMBERLINE LTD. 

BLUEMOUNTAIN LONG/SHORT CREDIT AND DISTRESSED REFLECTION 

FUND, A SUB-FUND OF AAI BLUEMOUNTAIN FUND PLC 

FRANKLIN ADVISERS, INC. on behalf of: 

CALIFORNIA INTERMEDIATE TERM TAX FREE INCOME FUND 

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KL2 2860194.1 

CALIFORNIA HIGH YIELD MUNICIPAL BOND FUND 

TENNESSEE MUNICIPAL BOND FUND 

CALIFORNIA TAX FREE INCOME FUND 

NEW YORK TAX FREE INCOME FUND 

FEDERAL TAX FREE INCOME FUND 

DOUBLE TAX FREE INCOME FUND 

COLORADO TAX FREE INCOME FUND 

GEORGIA TAX FREE INCOME FUND 

PENNSYLVANIA TAX FREE INCOME FUND 

HIGH YIELD TAX FREE INCOME FUND 

MISSOURI TAX FREE INCOME FUND 

OREGON TAX FREE INCOME FUND 

VIRGINIA TAX FREE INCOME FUND 

FLORIDA TAX FREE INCOME FUND 

LOUISIANA TAX FREE INCOME FUND 

MARYLAND TAX FREE INCOME FUND 

NORTH CAROLINA TAX FREE INCOME FUND 

NEW JERSEY TAX FREE INCOME FUND 

FRANKLIN STRATEGIC INCOME FUND 

FIST-FRANKLIN TOTAL RETURN FUND 

FRANKLIN STRATEGIC INCOME FUND 

FTIF - FRANKLIN US TOTAL RETURN FUND 

FTVIP-FRANKLIN STRATEGIC INCOME VIP FUND 

FDP SERIES FT TOTAL RETURN FDP FUND 

FTIF - FRANKLIN STRATEGIC INCOME FUND 

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KL2 2860194.1 

FT OPPORTUNISTIC DISTRESSED FUND, LTD. 

KNIGHTHEAD CAPITAL MANAGEMENT, LLC, as investment advisor for: 

KNIGHTHEAD (NY) FUND, L.P. 

KNIGHTHEAD MASTER FUND, L.P. 

LMA SPC for and on behalf of the MAP 84 SEGREGATED PORTFOLIO 

OPPENHEIMER ROCHESTER AMT-FREE MUNICIPAL FUND 

OPPENHEIMER ROCHESTER AMT-FREE NEW YORK MUNICIPAL FUND 

OPPENHEIMER ROCHESTER CALIFORNIA MUNICIPAL FUND 

OPPENHEIMER ROCHESTER LIMITED TERM CALIFORNIA MUNICIPAL FUND 

OPPENHEIMER ROCHESTER LIMITED TERM MUNICIPAL FUND (A SERIES OF 

OPPENHEIMER MUNICIPAL FUND) 

OPPENHEIMER ROCHESTER LIMITED TERM NEW YORK MUNICIPAL FUND (A 

SERIES OF ROCHESTER PORTFOLIO SERIES) 

OPPENHEIMER ROCHESTER NEW JERSEY MUNICIPAL FUND (A SERIES OF 

OPPENHEIMER MULTI-STATE MUNICIPAL TRUST) 

OPPENHEIMER ROCHESTER PENNSYLVANIA MUNICIPAL FUND (A SERIES 

OF OPPENHEIMER MULTI-STATE MUNICIPAL TRUST) 

OPPENHEIMER ROCHESTER HIGH YIELD MUNICIPAL FUND (A SERIES OF 

OPPENHEIMER MULTI-STATE MUNICIPAL TRUST) 

OPPENHEIMER ROCHESTER FUND MUNICIPALS 

OPPENHEIMER ROCHESTER OHIO MUNICIPAL FUND 

OPPENHEIMER ROCHESTER MICHIGAN MUNICIPAL FUND 

OPPENHEIMER ROCHESTER MASSACHUSETTS MUNICIPAL FUND 

OPPENHEIMER ROCHESTER VIRGINIA MUNICIPAL FUND 

OPPENHEIMER ROCHESTER ARIZONA MUNICIPAL FUND 

OPPENHEIMER ROCHESTER MARYLAND MUNICIPAL FUND 

OPPENHEIMER ROCHESTER NORTH CAROLINA MUNICIPAL FUND 

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KL2 2860194.1 

OPPENHEIMER ROCHESTER MINNESOTA MUNICIPAL FUND 

OPPENHEIMER ROCHESTER INTERMEDIATE TERM MUNICIPAL FUND 

OPPENHEIMER ROCHESTER SHORT TERM MUNICIPAL FUND 

OPPENHEIMERFUNDS, INC., as investment adviser for the following investment accounts: 

MassMutual International Holding MSC 

MassMutual Unified Traditional Separate Account: 

REDWOOD CAPITAL MANAGEMENT, LLC, as investment manager for:

REDWOOD MASTER FUND, LTD. 

REDWOOD DRAWDOWN MASTER FUND, L.P. 

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Annex B – Forbearing Creditor Joinder

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FORM OF JOINDER 

This Joinder to the Forbearance Agreement (as amended, supplemented or otherwise 

modified from time to time, the “Forbearance Agreement”), dated as of August [●], 2014 by and 

among: [INITIAL PARTIES] and the Forbearing Creditors from time to time party thereto, is 

executed and delivered by [___________] (the “Joining Forbearing Creditor”). Each capitalized 

term used herein but not defined herein shall have the meaning set forth in the Forbearance 

Agreement. 

1. Agreement to be Bound. The Joining Forbearing Creditor hereby agrees 

to be bound by all of the terms of the Forbearance Agreement. The Joining Forbearing Creditor 

shall hereafter be deemed to be a “Forbearing Creditor” and a Party for all purposes under the 

Forbearance Agreement. 

2. Representations and Warranties. With respect to the aggregate principal 

amount of Bonds held by the Joining Forbearing Creditor upon consummation of the Transfer of 

such Bonds to the Joining Forbearing Creditor, the Joining Creditor Party hereby makes, as of 

the date hereof, the representations and warranties of the Holders set forth in Sections [3(a) and 

3(d)] of the Forbearance Agreement to each of the other Parties to the Forbearance Agreement. 

3. Governing Law. Section 15 of the Forbearance Agreement is incorporated 

by reference as if set forth fully herein, except that any references to “Agreement” shall be 

replaced with references to “Joinder”. 

* * * * 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 

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IN WITNESS WHEREOF, the Joining Forbearing Creditor has caused this Joinder to be 

executed as of the date first written above. 

Entity Name of Joining Forbearing Creditor 

Authorized Signatory: 

By: ________________________________ 

Name: 

Title: 

Address: 

Principal amount of Bonds beneficially owned by Joining Forbearing Creditor, or 

beneficially owned by accounts for which Joining Forbearing Creditor has investment 

management responsibility, that are not Insured Bonds: 

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Annex C – Amendment

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SIXTEENTH SUPPLEMENTAL AGREEMENT

THIS SIXTEENTH SUPPLEMENTAL AGREEMENT, dated for convenience of 

reference as of the [____ day of August], 2014, by and between 

PUERTO RICO ELECTRIC POWER AUTHORITY, 

a government instrumentality of the Commonwealth of Puerto Rico (formerly Puerto Rico Water 

Resources Authority), and 

U.S. BANK NATIONAL ASSOCIATION, 

a national banking association existing under the laws of the United States of America and 

having an office in the Borough of Manhattan, City and State of New York, which is authorized 

under such laws to exercise corporate trust powers and is subject to examination by federal 

authority, successor Trustee under the Agreement hereinafter referred to (hereinafter sometimes 

called the “Trustee”), 

W I T N E S S E T H: 

WHEREAS, Puerto Rico Electric Power Authority (hereinafter sometimes called 

the “Authority”) and the Trustee have heretofore caused to be executed and delivered a Trust 

Agreement, dated as of January 1, 1974, as amended (the “Agreement”), for the purpose of 

fixing and declaring the terms and conditions upon which revenue bonds are to be issued, 

authenticated, delivered, secured and accepted by all persons who shall from time to time be or 

become owners thereof, and in order to secure the payment of all the bonds at any time issued 

and outstanding thereunder, and the interest thereon, according to their tenor, purport and effect; 

and 

WHEREAS, Section 1102 of the Agreement provides that the Authority and the 

Trustee may, from time to time, enter into such agreements supplemental thereto as shall be 

deemed necessary or desirable by the Authority for the purpose of modifying, altering, 

amending, adding to, repealing or rescinding, in any particular, any of the terms and conditions 

contained in the Agreement or in any supplemental agreement, with certain exceptions not here 

applicable, upon receipt of the written consent of the holders of not less than sixty percent (60%) 

in aggregate principal amount of the bonds then outstanding; and 

WHEREAS, the Trustee has received an opinion of counsel (the “Sixteenth 

Supplemental Opinion”) that (a) the Authority has the right, power and authority to enter into 

this Sixteenth Supplemental Agreement, (b) this Sixteenth Supplemental Agreement is duly 

authorized, executed and delivered by the Authority, and is enforceable against the Authority in 

accordance with its terms, (c) this Sixteenth Supplemental Agreement complies with the 

provisions of the Agreement, and that it is proper for the Trustee to join in the execution hereof 

under the provisions of Article XI of the Agreement with the written consent of the holders of at 

least sixty percent (60%) in aggregate principal amount of the outstanding bonds, (d) all of the 

conditions precedent to the execution and delivery by the Trustee of this Sixteenth Supplemental 

Agreement have been satisfied, and (e) this Sixteenth Supplemental Agreement (including the 

Authority’s use of moneys on deposit in the Construction Fund and Reserve Account for 

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purposes that are permitted by the Agreement as amended by this Sixteenth Supplemental 

Agreement) will not have an adverse effect on the exclusion of interest on the outstanding bonds 

from gross income for federal income tax purposes; and 

WHEREAS, the execution and delivery of this Sixteenth Supplemental 

Agreement have been duly authorized by the resolution of the Governing Board of the Authority, 

and the Authority has requested the Trustee to join with it in the execution of this Sixteenth 

Supplemental Agreement; and 

WHEREAS, the notice and publication requirements of Section 1102 of the 

Agreement for this Sixteenth Supplemental Agreement have been satisfied; and 

WHEREAS, the Trustee has received written evidence of the consent of the 

holders or (without duplication) insurers of at least sixty percent (60%) in aggregate principal 

amount of the outstanding bonds in a form acceptable to the Trustee under Section 1001 of the 

Agreement; and 

WHEREAS, all other acts, conditions and things required by the Puerto Rican 

Federal Relations Act and the Constitution and laws of the Commonwealth of Puerto Rico and 

by the rules and regulations of the Authority to happen, exist and be performed precedent to and 

in the execution and delivery of this Sixteenth Supplemental Agreement have happened, exist 

and have been performed as required and the Authority has delivered to the Trustee a certificate 

dated the date of this Sixteenth Supplemental Agreement, representing the same; and 

WHEREAS, the Trustee in reliance on the foregoing has accepted the trusts 

created by this Sixteenth Supplemental Agreement and in evidence thereof has joined in the 

execution hereof; 

NOW, THEREFORE, THIS SIXTEENTH SUPPLEMENTAL AGREEMENT 

WITNESSETH, that in consideration of the premises and of the existing rights and duties of the 

parties under the Agreement, it is mutually agreed and covenanted by and between the parties 

hereto, as follows: 

1. The Agreement is hereby amended and supplemented in the following respects: 

A. Section 101 is hereby amended or modified by the addition of and changes 

to the following definitions in appropriate alphabetical order in said Section (and all capitalized 

terms that are used but not defined herein shall have the same meanings as given in the 

Agreement): 

“The term ‘Additional Construction Fund Usage’ shall have the meaning given to 

it in Section 405. 

“The term ‘Ad Hoc Group’ shall mean such term as defined in the Forbearance 

Agreement. 

“The term ‘Amending Creditors’ shall mean Assured Guaranty Corp., Assured 

Guaranty Municipal Corp., National Public Finance Guarantee Corporation, 

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Syncora Guarantee Inc., and the Ad Hoc Group, including successors and assigns 

thereof. For the purposes of this Agreement, the Trustee shall be entitled to rely 

on a certification of an Amending Creditor that it is an Amending Creditor. 

“The term ‘Amending Creditor Bonds’ shall mean, with respect to any date, all 

outstanding bonds that are beneficially owned or (without duplication) insured by 

the Amending Creditors as of such date (which outstanding bonds that are 

beneficially owned by the Amending Creditors shall only include such bonds of 

which the other Amending Creditors have received written notice, which notice 

will be effective one (1) business day after receipt). For purposes of this 

Agreement, the Trustee shall be entitled to rely on a certification by an Amending 

Creditor that it beneficially owns or (without duplication) insures certain principal 

amount of outstanding bonds. 

“The term ‘Amendment’ shall refer to this Sixteenth Supplemental Agreement, 

dated [August , 2014], by and among the Authority and the Trustee. 

“The term ‘Amendment Effective Date’ shall mean [August [ ], 2014], being the 

effective date of this Amendment. 

“The term ‘Amendment Period’ shall mean the period from the Amendment 

Effective Date until the Amendment Termination Date. 

“The term ‘Amendment Period Budget’ shall mean the Initial 13-Week Cash 

Flow Statement or Subsequent 13-Week Budget, as applicable (each as defined in 

the Forbearance Agreement). 

“The term ‘Amendment Termination Date’ shall mean the earliest of (a) the 

Scheduled Amendment Termination Date, (b) the filing of a proceeding by or on 

behalf of the Authority pursuant to the Puerto Rico Public Corporation Debt 

Enforcement and Recovery Act or any other action or proceeding that seeks to 

adjust or challenge the claims of its creditors pursuant to any federal, state, or 

Puerto Rico statute, now in effect or enacted after the Amendment Effective Date, 

and (c) the date on which (i) the “Forbearance Period” (as defined in the 

Forbearance Agreement) has expired or terminated, and (ii) the Trustee has 

received written notice from the Authority or the Required Amending Creditors 

confirming the same. 

“The term ‘Construction Fund Replenishment Amount’ shall mean in respect of a 

Construction Fund Replenishment Date an amount equal to: 

(a) the aggregate amount of all Additional Construction Fund Usages prior to 

such Construction Fund Replenishment Date, 

less, the sum of: 

(b) the aggregate amount that the Authority has applied to the cost of 

Improvements from any source other than the Construction Fund from or after the 

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Amendment Effective Date, irrespective of whether such amount has been applied 

prior to or after the commencement of any bankruptcy proceeding, insolvency 

proceeding, proceeding under the Puerto Rico Public Corporation Debt 

Enforcement and Recovery Act, Act No. 71-2014, or any similar proceeding, and 

(c) the aggregate amount theretofore credited to the Construction Fund by the 

Authority pursuant to Section 406 of this Agreement. 

“The term ‘Citibank/Scotiabank Forbearance Agreements’ shall mean the 

forbearance agreements, dated August 14, 2014, by and among the 

Citibank/Scotiabank Lenders and the Authority, as the same may be amended 

from time to time as therein permitted. 

“The term ‘Citibank/Scotiabank Lenders’ shall mean Citibank, N.A. and the 

Lenders (as defined in the Scotiabank Credit Agreement). 

“The term ‘Citibank/Scotiabank Lines of Credit’ shall mean that certain Trade 

Finance Facility Agreement, dated as of July 20, 2012, between the Authority and 

Citibank, N.A. as amended or otherwise modified from time to time, and the 

Scotiabank Credit Agreement. 

“The term ‘Construction Fund Replenishment Date’ shall mean the twenty-fifth 

(25) day of each month (or if such day is not a business day, the immediately 

succeeding business day) on which the Construction Fund Replenishment 

Amount is greater than zero. 

“The term ‘Forbearance Agreement’ shall mean the forbearance agreement, dated 

August 14, 2014, by and among the Amending Creditors and the Authority, as the 

same may be amended from time to time as therein permitted. 

“The term ‘Fractional Defeasance Amount’ shall mean $34,112,097.79. 

“The term ‘Potential Default’ shall mean each of the events specified on Schedule 

1, the occurrence of which would give rise to a default under this Agreement. 

“The term ‘Required Amending Creditors’ shall mean Amending Creditors that 

beneficially own or (without duplication) insure not less than two-thirds (66 

2/3%) of the aggregate principal amount of the Amending Creditor Bonds. 

“The term ‘Retained General Fund Amount’ shall mean $50,000,000. 

“The term ‘Scheduled Amendment Termination Date’ shall mean 11:59 p.m. 

(prevailing Eastern Time) on March 31, 2015. 

“The term ‘Scotiabank Credit Agreement’ shall mean that certain Credit 

Agreement, dated as of May 4, 2012, between the Authority, as borrower, the 

lenders party thereto, and Scotiabank de Puerto Rico, as administrative agent, as 

amended or otherwise modified from time to time. 

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“The term ‘Specified Period Principal and Interest Requirements’ shall mean the 

Principal and Interest Requirements for all outstanding bonds which accrue and 

are payable on or before January 1, 2015, excluding for purposes of the 

calculation of such Requirements any Federal Subsidy Payments. 

“The term ‘Specified Period Defeasance Fund’ shall have the meaning given to it 

in Section 517. 

B. The following definitions in Section 101 shall be amended as follows: 

The following sentence shall be added at the end of the definition of ‘Current 

Expenses’: 

“Notwithstanding the foregoing or anything herein to the contrary, none of the 

holders, the Trustee, and the Authority shall contest whether an expense, claim, 

liability, or amount shall be construed as a Current Expense under this Agreement 

based solely on (x) the Citibank/Scotiabank Lenders’ actions on the Amendment 

Effective Date or during the Amendment Period, including (i) forbearing, 

delaying or failing to exercise remedies, (ii) agreeing to a postponement or delay 

in payment of interest or principal, (iii) granting an extension of any maturity 

date, or (iv) not requiring the repayment or reborrowing of any loans or not 

requiring any loans to be revolving loans, or (y) the inclusion in this Agreement 

as a Potential Default, and the inclusion in the Forbearance Agreement as a 

“Potential Default” (as defined in the Forbearance Agreement) of the Authority’s 

use of moneys from the General Fund to service its debts under the 

Citibank/Scotiabank Lines of Credit.” 

The last sentence of “Reserve Account Insurance Policy” shall be deleted and 

replaced with the following: 

“The issuer providing such insurance shall be a municipal bond insurer that is 

rated, at the time of deposit into the Reserve Account, in one of the three highest 

rating categories (without regard to gradations within a category) by either (i) 

Standard & Poor’s Corporation or its successor, or Moody’s Investors Service, 

Inc. or its successors or (ii) if both such corporations shall be dissolved or 

liquidated or shall no longer perform the functions of a securities rating agency, a 

nationally recognized rating agency.” 

C. Section 401 shall be amended by the addition of the following paragraph 

immediately preceding Section 402: 

“Notwithstanding the foregoing, during the Amendment Period, moneys in the 

Construction Fund shall be held by the Authority in trust, separate and apart from all other funds 

of the Authority, and shall be applied: 

(a) to the payment of the cost of any Improvements, provided that such cost is 

in accordance with the Amendment Period Budget, inclusive of any permitted variances 

specified in the Forbearance Agreement; or 

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(b) as provided in Section 405; 

and, except for any moneys in separate accounts in the Construction Fund 

received from the United States Government or any agency thereof or from the Commonwealth 

of Puerto Rico or any agency thereof, pending such application, shall be subject to a lien and 

charge in favor of the holders of the bonds issued and outstanding under this Agreement and for 

the further security of such holders until paid out or transferred as herein provided.” 

D. Section 402 shall be amended to read as follows: 

“Section 402. Payments from Construction Fund. Payment of the cost of 

Improvements or any other payment permitted pursuant to Section 401 shall be made from the 

Construction Fund as herein provided. Moneys in the Construction Fund shall be disbursed by 

check, voucher, order, draft, certificate or warrant signed by the Executive Director or by any 

officer or employee of the Authority designated by him for such purpose.” 

E. A new Section 405 shall be added immediately preceding Section 406 to 

read as follows: 

“Section 405. Additional application of moneys in Construction Fund. During the 

Amendment Period, the Authority may apply moneys in the Construction Fund to the payment of 

the cost of any Current Expense that is not a cost of Improvement (each such application, an 

“Additional Construction Fund Usage”), provided that: 

(a) there are not sufficient moneys to pay such Current Expense held by the 

Authority in the General Fund in excess of the Retained General Fund Amount on the date such 

payment is required; 

(b) the representations of the Authority given in Section 3(b) of the 

Forbearance Agreement are true and correct as of the date of such application; 

(c) such Current Expense is in accordance with the Amendment Period 

Budget in effect at the time of such payment, inclusive of any permitted variances specified in 

the Forbearance Agreement; 

(d) none of the material facts that formed the basis for the officer’s certificate 

delivered by the Authority in connection with the Sixteenth Supplemental Opinion has changed 

since the date of such certification and the Current Expense to be paid with such Additional 

Construction Fund Usage is in compliance with the covenants of the Authority in such 

certification; and 

(e) the Trustee and the Amending Creditors receive a certification from the 

Authority (in the form of Exhibit A hereto) specifying the amount of moneys to be applied and 

the Current Expenses to be paid with such moneys, and certifying that the statements in 

paragraphs (a) through (d) above are true as of the date of the certification, signed by the 

Executive Director or by any other officer or employee of the Authority with fiscal authority, 

designated by the Executive Director for such purpose. The Trustee shall have no duty to review 

any such certification for any purpose, except to confirm that a certification has been made, and 

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the Trustee shall be authorized to provide any requesting bondholder with a copy of any such 

certifications received.” 

F. A new Section 406 shall be added immediately preceding Article V to 

read as follows: 

“Section 406. Replenishment of the Construction Fund. On any Construction 

Fund Replenishment Date, to the extent that moneys in the General Fund exceed the Retained 

General Fund Amount, the Authority shall transfer from the General Fund to the credit of the 

Construction Fund an amount equal to the lesser of (x) the excess over the Retained General 

Fund Amount and (y) the Construction Fund Replenishment Amount, in accordance with Section 

505 of this Agreement.” 

G. Section 502 is hereby amended by the addition of the following paragraph 

immediately prior to Section 503 to read as follows: 

“Notwithstanding the foregoing, during the Amendment Period, in the event that 

the Authority shall fail to adjust the schedule of rates and charges in accordance with the 

provisions of this Section, the Trustee, without regard to whether an event of default, as defined 

in Article VIII of this Agreement, shall have occurred, shall, upon the request of the holders of a 

majority in principal amount of all bonds then outstanding upon being indemnified to its 

satisfaction, institute and prosecute in a court of competent jurisdiction an appropriate suit, 

action or proceeding to compel the Authority to adjust such schedule in accordance with the 

requirements of this Section, and the Authority covenants that it will adopt and charge rates and 

charges in compliance with any judgment, order or decree entered in any such suit, action or 

proceeding.” 

H. Section 505 shall be amended by the addition of the following sentence 

immediately prior to Section 506 to read as follows: 

“On each Construction Fund Replenishment Date, the Authority shall apply 

moneys credited to the General Fund to satisfy its replenishment obligation under Section 406 

prior to using such moneys for the payment of Current Expenses. Notwithstanding anything in 

this Agreement to the contrary, after the Amendment Period, the obligation to replenish the 

Construction Fund in accordance with Section 406 shall be junior and subject to the obligation to 

pay Current Expenses in accordance with this Section 505 and to transfer moneys from the 

General Fund to the Revenue Fund in accordance with Section 506 of this Agreement until the 

bonds are paid or deemed paid in full under the provisions of this Agreement.” 

I. The second sentence of Section 506 shall be amended by the addition of 

the following language at the beginning of such sentence: 

“Other than during the Amendment Period,” 

J. A new Section 510A shall be added as follows: 

“Section 510A. Additional application of moneys in Reserve Account. 

Notwithstanding the provisions of Section 510 of this Agreement, on the Amendment Effective 

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Date and on the first (1st) business day of each month thereafter through and including 

December 1, 2014, the Trustee shall withdraw the Fractional Defeasance Amount from the 

Reserve Account, and credit this amount to the Specified Period Defeasance Fund; provided, 

however, that if the Amendment Effective Date occurs on or after September 1, 2014, the 

Trustee shall withdraw two times the Fractional Defeasance Amount on the Amendment 

Effective Date. 

K. A new Section 517 shall be added as follows: 

 “Specified Period Principal and Interest Requirements Defeasance. A special 

fund within the Reserve Account is hereby created and designated the “Puerto Rico Electric 

Power Authority Revenue Bonds Specified Period Defeasance Fund” (herein sometimes called 

the “Specified Period Defeasance Fund”) to be held by the Trustee separate and apart from all 

other funds and accounts held under this Agreement. The transfer of moneys from the Reserve 

Account to the Specified Period Defeasance Fund in accordance with Section 510A hereof shall 

constitute an irrevocable deposit of such moneys in trust solely for the purpose of paying the 

Specified Period Principal and Interest Requirements, and such moneys will not constitute 

property of the Authority. Upon such transfer and deposit to the Specified Period Defeasance 

Fund, the obligation of the Authority to pay the Specified Period Principal and Interest 

Requirements will be discharged to the extent of each such deposit, and the sole recourse of the 

holders of outstanding bonds in respect of the portion of the Specified Period Principal and 

Interest Requirements equal to the aggregate of amounts so deposited shall be to the amounts 

then to the credit of the Specified Period Defeasance Fund. The transfer and deposit set forth 

above shall not in any way affect the obligations of the Authority to pay the Principal and 

Interest Requirements with respect to the outstanding bonds other than the obligation to pay the 

portion of the Specified Period Principal and Interest Requirements equal to the aggregate of the 

amounts that are credited to the Specified Period Defeasance Fund. On each date on which any 

Specified Period Principal and Interest Requirements are payable, the Trustee shall apply 

moneys in the Specified Period Defeasance Fund to pay the Specified Period Principal and 

Interest Requirements that are payable on such date. Any amounts remaining in the Specified 

Period Defeasance Fund after all Specified Period Principal and Interest Requirements are paid 

in full shall be transferred to the Reserve Account. Moneys held in the Special Period 

Defeasance Fund shall, as nearly as may be practicable, be continuously invested and reinvested 

by the Trustee in Government Obligations which shall mature, or which shall be subject to 

redemption by the holder thereof at the option of such holder, not later than the respective dates 

when moneys held in said Fund will be required for the purposes intended.” 

L. Section 802(h) is hereby amended by the addition of the following 

language immediately prior to the semi-colon: 

“provided, however, that during the Amendment Period, the Trustee may give 

such notice only upon the written request of the holders of a majority in the aggregate principal 

amount of the bonds then outstanding” 

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M. The first paragraph of Section 804 is hereby amended by the addition of 

the following language in the last sentence immediately before the period: 

“provided, further, that during the Amendment Period, the Trustee may proceed to 

take action pursuant to this paragraph only upon the written request of the holders of not less 

than a majority in the aggregate principal amount of bonds then outstanding” 

2. The modifications to the Agreement contained in this Sixteenth Supplemental 

Agreement shall remain in effect only during the Amendment Period and shall terminate 

automatically on the Amendment Termination Date, except (a) the amendments in Section 1.F. 

and Section 1.H., and any related definitions, which will continue in effect until the 

replenishment obligations in Section 406 of the Agreement are satisfied in full and (b) Section 

1.B and 1.K., and any related definitions, which will continue in effect until all series of bonds 

outstanding under the Agreement have been paid or deemed paid in full in accordance with the 

Agreement. The Authority shall, and the Trustee shall be authorized to, notify all holders of 

bonds of any Amendment Termination Date and the basis therefor. 

3. The recitals, statements and representations contained herein shall be taken and 

construed as made by and on the part of the Authority and not by the Trustee, and the Trustee 

assumes and shall be under no responsibility for the correctness of the same. 

4. This Sixteenth Supplemental Agreement may be amended and supplemented in 

accordance with the provisions of Article XI of the Agreement. 

5. Except to the extent expressly modified herein, all terms and provisions of the 

Agreement shall remain in full force and effect. 

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 IN WITNESS WHEREOF, Puerto Rico Electric Power Authority has caused this 

Sixteenth Supplemental Agreement to be executed by its Executive Director and its corporate 

seal to be impressed hereon and attested by its Secretary or an Assistant Secretary, and U.S. 

Bank National Association, has caused this Sixteenth Supplemental Agreement to be executed in 

its behalf by one of its Assistant Vice Presidents and its corporate seal to be impressed hereon 

and attested by one of its Trust Officers, all as of the day and year first above written. 

(SEAL) 

Attest: 

 

 Secretary 

Attest: 

 

 Trust Officer 

PUERTO RICO ELECTRIC POWER AUTHORITY 

By: 

Executive Director 

U.S.BANK NATIONAL ASSOCIATION, 

as successor Trustee 

By: 

Vice President 

 

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COMMONWEALTH OF PUERTO RICO ) 

 ) ss.: 

MUNICIPALITY OF SAN JUAN ) 

On the ______ day of ________, in the year 2014, before me personally came 

______________, to me known, who, being by me duly sworn, did depose and say that he 

resides in the Municipality of ____________, Puerto Rico; that he is the Executive Director of 

Puerto Rico Electric Power Authority, the body corporate described in and which executed the 

above instrument; that he knows the seal thereof; that the seal affixed to said instrument is the 

corporate seal of Puerto Rico Electric Power Authority; that it was so affixed by order of the 

Governing Board of Puerto Rico Electric Power Authority; and that he signed his name thereto 

by like order. 

Affidavit #_____ 

My commission expires: 

(SEAL) 

 

 NOTARY PUBLIC 

STATE OF NEW YORK ) 

 ) ss.: 

COUNTY OF NEW YORK) 

On the _________ day of __________, in the year 2014, before me personally 

came _____________________________, to me known, who, being by me duly sworn, did 

depose and say that he resides at _______________________________; that he is an Assistant 

Vice President of U.S. Bank National Association, the banking association described in and 

which executed the above instrument; that he knows the seal of said association; that the seal 

affixed to said instrument is the corporate seal of said association; that it was so affixed by 

authority of Board of Directors of said association; and that he signed his name thereto by like 

authority. 

 

 NOTARY PUBLIC 

My commission expires: 

(SEAL) 

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Schedule 1 

1. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 501 of the 

Trust Agreement insofar as such noncompliance or failure is a result of PREPA’s failure to 

establish and enforce reasonable regulations in relation to the collection of bills for services and 

facilities provided by PREPA. 

2. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 502 of the 

Trust Agreement insofar as such noncompliance or failure is a result of PREPA’s failure to 

revise the rates and charges for the services and facilities furnished by PREPA, or the result of 

PREPA’s failure to revise its regulations in relation to the collection of bills for such services and 

facilities. 

3. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 503 or section 

505 of the Trust Agreement, insofar as such noncompliance or failure is a result of PREPA’s use 

of monies from the General Fund to service its debt under the Citibank/Scotiabank Lines of 

Credit. 

4. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 504 of the 

Trust Agreement, insofar as such noncompliance or failure is a result of PREPA’s failure to 

adopt and file a budget that is consistent with the procedural and/or substantive requirements of 

section 504. 

5. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 506 of the 

Trust Agreement, insofar as such noncompliance or failure is a result of PREPA’s failure to 

transfer monies from the General Fund to the Revenue Fund in a manner consistent with section 

506. 

6. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 507 of the 

Trust Agreement, insofar as such noncompliance or failure is a result of PREPA’s failure to 

transfer monies from the Revenue Fund to the Sinking Fund in a manner consistent with section 

507. 

7. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 702 of the 

Trust Agreement, insofar as such noncompliance or failure is a result of PREPA’s failure to 

operate in an efficient and economical manner, maintain the system in good repair and sound 

operating condition (including by making all necessary repairs, renewals and replacements), or 

as a result of PREPA’s employment of more persons than are necessary and compliance with all 

valid and applicable rules, regulations, and orders. 

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8. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to keep accurate records or complete and file its audited financial 

statements within the time periods specified in section 710 of the Trust Agreement. 

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Exhibit A – Form of Certification

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CERTIFICATION OF ADDITIONAL CONSTRUCTION FUND USAGE 

To: THE TRUSTEE 

 THE AMENDING CREDITORS 

From: PUERTO RICO ELECTRIC POWER AUTHORITY 

Date: [ ] 

Trust Agreement, dated as of January 1, 1974, as amended, restated, supplemented or otherwise modified 

from time to time, between Puerto Rico Electric Power Authority (the “Authority”) and U.S. Bank, as 

successor trustee (the “Trustee” and, with respect to said trust agreement, as amended, the “Trust 

Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such 

terms in the Trust Agreement. 

1. We refer to the Trust Agreement. This is a certification of Additional Construction Fund Usage (as 

defined below). 

2. The Authority wishes to apply moneys in the Construction Fund to the payment of the cost of any 

Current Expense that is not a cost of Improvement (each such application, an “Additional 

Construction Fund Usage”) on the following terms: 

a. Date of application: [ ] 

b. Amount to be applied from the Construction Fund: U.S.$[ ] 

c. Current Expense to be paid: [ ] 

3. There are not sufficient moneys to pay such Current Expense held by the Authority in the General 

Fund in excess of the Retained General Fund Amount on the date such payment is required. 

4. The representations of the Authority given in Section 3(b) of the Forbearance Agreement are true and 

correct as of the date of such application. 

5. Such Current Expense is contemplated by the Amendment Period Budget currently in effect, 

inclusive of any permitted variances. 

6. None of the material facts that formed the basis for the officer’s certificate delivered by the Authority 

in connection with the Sixteenth Supplemental Opinion has changed since the date of such 

certification and the Current Expense to be paid with the Additional Construction Fund Usage set 

forth above is in compliance with the covenants of the Authority in such certification. 

PUERTO RICO ELECTRIC POWER AUTHORITY 

By: ____________________________________ 

 Name: 

 Title:

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Annex D – Potential Defaults 

1. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 501 of the 

Trust Agreement or any similar provision of any other Transaction Document, insofar as such 

noncompliance or failure is a result of PREPA’s failure to establish and enforce reasonable 

regulations in relation to the collection of bills for services and facilities provided by PREPA. 

2. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 502 of the 

Trust Agreement or any similar provision of any other Transaction Document, insofar as such 

noncompliance or failure is a result of PREPA’s failure to revise the rates and charges for the 

services and facilities furnished by PREPA, or the result of PREPA’s failure to revise its 

regulations in relation to the collection of bills for such services and facilities. 

3. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 503 or section 

505 of the Trust Agreement or any similar provision of any other Transaction Document, insofar 

as such noncompliance or failure is a result of PREPA’s use of monies from the General Fund to 

service its debt under its line of credit with Scotiabank de Puerto Rico and/or its line of credit 

with Citibank, N.A. in accordance with the Citibank/Scotiabank Forbearance Agreements in 

effect as of the Effective Date. 

4. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 504 of the 

Trust Agreement or any similar provision of any other Transaction Document, insofar as such 

noncompliance or failure is a result of PREPA’s failure to adopt and file a budget that is 

consistent with the procedural and/or substantive requirements of section 504 of the Trust 

Agreement or any such similar provision contained in the Transaction Documents, as applicable. 

5. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 506 of the 

Trust Agreement or any similar provision of any other Transaction Document, insofar as such 

noncompliance or failure is a result of PREPA’s failure to transfer monies from the General 

Fund to the Revenue Fund in a manner consistent with section 506 of the Trust Agreement or 

any such similar provision contained in the Transaction Documents, as applicable. 

6. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 507 of the 

Trust Agreement or any similar provision of any other Transaction Document, insofar as such 

noncompliance or failure is a result of PREPA’s failure to transfer monies from the Revenue 

Fund to the Sinking Fund in a manner consistent with section 507 of the Trust Agreement or any 

such similar provision contained in the Transaction Documents, as applicable. 

7. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to comply with or perform its obligations under section 702 of the 

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Trust Agreement or any similar provision of any other Transaction Document, as applicable, 

insofar as such noncompliance or failure is a result of PREPA’s failure to operate in an efficient 

and economical manner, maintain the system in good repair and sound operating condition 

(including by making all necessary repairs, renewals and replacements), or as a result of 

PREPA’s employment of more persons than are necessary and non-compliance with all valid and 

applicable rules, regulations, and orders. 

8. Any default or event of default under section 802(h) of the Trust Agreement as a 

result of PREPA’s failure to keep accurate records or complete and file its audited financial 

statements within the time periods specified in section 710 of the Trust Agreement or any similar 

provision of any other Transaction Document; provided that the failure to cause to be filed with 

the Trustee and the Consulting Engineers the monthly reports required by section 710 of the 

Trust Agreement shall not be a Potential Default. 

9. Any default or event of default under Section 802(i) of the Trust Agreement. 

10. Any default or event of default under the Bond Insurance Agreements as a result 

of PREPA’s failure to pay or reimburse the Insurers for any and all charges, fees, costs and 

expenses incurred by the Insurers in connection with the Bond Insurance Agreements. 

11. Any default or event of default under the Bond Insurance Agreements as a result 

of PREPA’s failure to comply with any reporting requirements to the Insurers under the Bond 

Insurance Agreements. 

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Annex E – Scope of CRO Authority

The Chief Restructuring Officer (“CRO”) shall report to the Board of Directors (the “Board”) of 

the Puerto Rico Electric Power Authority (“PREPA”). 

The CRO shall work alongside PREPA’s CEO (Executive Director) to develop, organize and 

manage a financial and operational restructuring of PREPA on terms to be approved by the 

Board. 

The CRO shall, subject to applicable law and regulations: 

1. Provide overall leadership of the restructuring process. 

2. Serve as the primary point of contact on behalf of PREPA in communications and 

negotiations with PREPA’s creditors. 

3. Provide expert testimony with respect to any case filed by PREPA under 

provisions of Chapter 2 and/or Chapter 3 of the Puerto Rico Public Corporation 

Debt Enforcement and Recovery Act. 

4. Serve on and participate in the Integrated Resource Plan (“IRP”) committee. 

5. Lead PREPA’s process to develop a comprehensive business plan (the “Business 

Plan”) which will serve as the underpinning for the overall Restructuring. 

6. Work alongside PREPA’s CEO to improve PREPA’s worker protection and 

safety record. 

7. Work alongside PREPA’s CFO to lead the efforts for any revenue improvement 

and cost reduction plans that are necessary or appropriate for the implementation 

of the Business Plan. 

8. Work alongside PREPA’s CFO to oversee and implement cash and liquidity 

management/preservation activities. 

9. Work alongside PREPA’s CEO to improve analysis, tracking and collection 

efforts and related processes for accounts receivables. 

10. Work alongside the CEO to review, refine and implement improvements to 

PREPA’s capital expenditure plan, including the timing and amount of capital 

expenditures. 

11. Work alongside the CEO to develop generation, transmission, distribution and 

other operational improvements. 

12. Attend and participate in all meetings of the Board. 

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13. Subject to the approval of the Board and CEO, appoint additional officers that 

report to the CRO, with responsibilities for specific operational and financial 

aspects of the Restructuring. 

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