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Ana M.

Files - Table of Contents

Exhibit 1: Organic Power LLC Corporation


Exhibit 2: PRIDCO - PREAA and MCC Contract
Exhibit 3: Organic Power-SBA Loan
Exhibit 4: Organic Power-PRLA Loan
Exhibit 5: Organic Power-PRLA Lease
Exhibit 6: Organic Power-Financing Statement #1 - PRDCOS
Exhibit 7: Organic Power-Gegloma-Oriental Bank PSA
Exhibit 8: Organic Power-Gegloma Contract of Sale
Exhibit 9: PRDCOS-Financing Statement
Exhibit 10: Organic Power-Financing Statement #2 - PRDCOS
Exhibit 11: Organic Power - Deed of Mortgage, Short Loan v1
Exhibit 12: Organic Power - Oriental Bank-PR Dept of Finance Bank Certification
Exhibit 13: Organic Power - Mortgage 2 - English
Exhibit 14: Organic Power-Mortgage 2-Spanish
Exhibit 15: Ana Matosantos Oversight Board Financial Disclosure
Exhibit 16: Caribbean Business PRMA Special Commercial Coverage
Exhibit 17: Organic Power-Miguel Perez MCC Email
Exhibit 18: Oriental-News Is My Business Article
Exhibit 19: Oriental Reports Sale of PREPA Position
Exhibit 20: Oriental-Report 3Q17 Results
Exhibit 21: Oriental-2016 Credit Risk
Exhibit 22: Oriental - Reports 2Ql 7 Results
Exhibit 23: Oriental-2017 Credit Risk
The Ana M. Files: Secret Energy Assets

Matosantos Commercial Corporation. Ana Matosantos is a director of the Matosantos


Commercial Corporation (MCC), a large family-owned conglomerate involved in food
distribution, imports and exports, and real estate in Puerto Rico. MCC is the center of the
family's network of corporate interests that include: Eurocaribe Packing Company; and Gegloma
Realty Corporation. MCC is heavily invested in China through World Trade International
Industrial Ltd., which is a potential new source for private investment for Puerto Rico.
Interestingly, Puerto Rico hosted the first China Investment Forum a month into Governor
Rossell6's term.

Private Power Plan. Hidden from the public and misunderstood until now is the Matosantos
family's large investments in renewable energy assets. After a month's long investigation that
began in May 2017 by the National Legal and Policy Center, we have uncovered at least two
renewable energy generation assets worth millions of dollars owned by the Matosantos web of
compames.

This raises deep concerns and questions over Ana Matosantos's role in the Financial Oversight
and Management Board's (FOMB) decision to take PREPA to Title III bankruptcy. The
decision to take PREPA to Title III was not unanimous, and in fact, passed on a 4-3 vote. Jose
Carrion, the chair of the FOMB, likes to say, PREPA's Title III vote was "The only deal that we
did not make unanimously." Unfortunately, the FOMB is not transparent with its voting records,
and the roll call vote remains a secret.

Furthermore, since PREPA entered bankruptcy, the FOMB has moved to privatize the utility. In
an op-ed si gned by four members of the FOMB, including Ana Matosantos, the board members
write, ''privatization would enable PREPA to attract the investments needed to reduce expenses
and provide the island with a more reliable electric power system."

The decision to take PREPA into bankruptcy and pursue privatization of the utility has serious
repercussions for the island. The FOMB has set a target of sourcing 60% of the island's energy
requirements from renewable energy going forward. This has the potential to be a huge financial
windfall for the Matosantos family's corporate interests.

As a director of the Matosantos Commercial Corporation, Ana Matosantos had direct knowledge
of her family's business - including the family's two energy generation assets - directly and
through their network of companies, including Eurocaribe Packing Company, Gegloma Realty
Corporation and Organic Power LLC. This presents a serious conflict of interest and possible
criminal violation of federal law. Moreover, the paper trail of public documents raise questions
on how these energy assets were financed.

In Violation of Federal Law. PROMESA requires FOMB personal financial interests to be


governed under 18 U.S.C. § 208. Here's what the code says, "18 US.C. § 208, the basic
criminal conflict ofinterest statute, prohibits an executive branch employeeji-om participating
personally and substantially in a particular Government matter that will affect his own financial
interests, as well as the financial interests of .. An organization in which he serves as an officer,
director, trustee, general partner or employee ... "

Her involvement in PREPA-related matters, including the vote to send PREPA into Title III is
now under a cloud of suspicion. NLPC believes Matosantos should have recused herself from all
matters regarding PREPA, and since she did not, we believe she has violated 18 USC 208 and
PROMESA.

Renewable Energy Asset #1: 999kW Solar Generation Farm.

• The Matosantos Commercial Corporation owns and operates a taxpayer subsidized solar
energy generation farm in Vega Baja, Puerto Rico. This plant stands to benefit from the
privatization of PREPA.

• Documents reveal that the Matosantos Commercial Corporation obtained an incentive


payment of $1,152,156 in June 2013 from the Puerto Rico Energy Affairs Administration
(PREAA), an agency under PRlDCO, to build a 999kW solar energy farm at the family's
Vega Baja headquarters. As a condition to receive the money, the construction on the
solar energy farm had to be completed in one year (i.e. June 2014). However, the Puerto
Rico Green Energy Fund extended the completion date to March 2015. (See EXHIBIT
#2)

• Documents from 2015 highlight a previously unknown agreement between MCC's solar
energy farm and PREPA, which connected the family's solar power generators to the
Island's power grid.

Renewable Energy Asset #2: Organic Power LLC.

• A series of documents reveal that the Matosantos Commercial Corporation is the


beneficial owner of Organic Power LLC, despite an elaborate scheme by the Matosantos
family and a network of friends, associates and employees to conceal or obscure this fact
from the public, Congress, Judge Swain and the FOMB. They also raise serious
questions on how the company was financed and secured the land.

• Organic Power LLC was set up solely to generate renewable energy by recycling organic
material, and operates today at the Matosantos family's Cabo Caribe industrial park in
Vega Baja.

• According to Puerto Rico Department of State files, Organic Power LLC was
incorporated by Miguel Perez Valdez on October 26, 2012. (See EXHIBIT #1) Mr.
Valdez is also the Finance Director of Matosantos Commercial Corporation and listed as
Secretary of Gegloma Realty Corporation on documents from the purchase of the
family's Vega Baja industrial park where Organic Power now operates. Despite being set
up as a company supposedly owned and controlled by Perez, he has used his email

__________A.,__.___ ---. -
address as an MCC employee to do official business with the Puerto Rico Secretary of
State on behalf of Organic Power. (See EXHIBIT #17)

• On December 8, 2015, Organic Power LLC obtained a $3,763,000 loan from the U.S.
Small Business Administration for as-yet unknown purposes. (See EXHIBIT #3) On the
same day, December 8, 2015, Organic Power LLC signed a $250,000 contract with the
Commonwealth of Puerto Rico's Land Authority for ''purchase, sale and/or rental of
buildings" (See EXHIBIT #4) It appears that the Land Authority contract was a 10-year
lease taken out by Organic Power on two lots of undeveloped land close to the
Matosantos family's Vega Baja industrial park. (See EXHIBIT #5)

• In February 2016, PRIDCO quietly passed a resolution authorizing Gegloma Realty to


sell part of the Matosantos family's Vega Baja industrial park to Organic Power LLC.
(See EXHIBIT #6) The PRIDCO Resolution notes that the main purpose of the sale is for
Organic Power to build and operate a plant for recycling organic material and generating
renewable energy. But curiously, the resolution also states, "this project is of great
strategic importance for the Matosantos group of companies and for the entire region for
its economic and environmental impact. It represents an investment of $10. 7 million in
capital and will create around 15 direct jobs and 45 indirect jobs." All other public
documents around Organic Power have obscured the Matosantos family's role in Organic
Power, but the PRIDCO Resolution establishes a clear connection, indicating the
enormous financial investment being made in this energy generation asset. It also
obscured the fact that Miguel Perez, the MCC executive listed as the owner of Organic
Power, was also the Secretary of Gegloma Realty when the Matosantos family first
bought the Vega Baja industrial park from PRIDCO in 2010. This frames the entire
operation as being orchestrated by Matosantos Commercial Corporation and the family's
web of companies for the benefit of the family's commercial interests.

• On March 22, 2017, as a member of the FOMB, Ana Matosanto testified before the U.S.
House of Representatives Natural Resources Committee. In her testimony, she advocated
for changes to PREPA to allow for private power generation in Puerto Rico. Nowhere in
the disclosure forms at the FOMB (See EXHIBIT #15), or as required to testify before
Congress, did she disclose the family's private energy generation assets, nor the
Commonwealth and federal taxpayer funds those assets have received.

• On June 1, 2017, shortly after our on-the-ground investigation began, the Matosantos
family began a campaign in Puerto Rico to obscure their role in Organic Power. A feature
story appears in Caribbean Business depicting an individual named Brian Healy, as "the
chief operating officer and co-founder of Organic Power." (See EXHIBIT #16) The story
says the company was "founded in 2015" and is recycling organic material for animal
feed, but also "providing clean energy to clients such as Matosantos Commercial Corp
and its manufacturing subsidiaries at Caho Caribe Industrial Park in Vega Baja" using
propane gas. Here's the problem: No public records can be found that identify Brian
Healy as an owner or officer of Organic Power and no mention of MCC financial director
Miguel Perez's role in the energy company. This is an attempt to obfuscate the truth, and

. . ..
a deliberate attempt to hide the Matosantos family's beneficial ownership of the
company.
The Ana M. Files - The Organic Power Money Trail

Financing Organic Power. Part One of the National Legal and Policy Center's investigation
into Ana Matosantos uncovered an elaborate scheme to hide the Matosantos Commercial
Company's (MCC) beneficial ownership of Organic Power, and the serious conflicts of interest
and violations of federal law this could mean for Ana Matosantos. (See The Ana M Files -
Secret Energy Assets).

Part Two of our investigation centers on how Ana Matosantos' family financed Organic Power.
The answer to that question begins to emerge from a series of documents obtained by NLPC that
center around a suspicious land deal financed by a local Puerto Rican bank where millions of
dollars changed hands just days in and around Ana Matosantos' official appointment to the
FOMB.

Before Official Appointment.

• July 28, 2016: Ana Matosantos publicly named as a candidate for the FOMB. Public
reports first began to surface that Ana was a candidate for the Oversight Board, beginning
with an analysis by noted Puerto Rican lawyer and blogger, [John Mudd].

• August 3, 2016: The Matosantos family holds a $375,000 land sale between two of its
companies. Six days after Ana's name is made public, the Matosantos family signed a
land deal at its Cabo Caribe industrial park in Vega Baja between their real estate arm
Gegloma Realty, and their secretly held energy company Organic Power, whose titular
head, Miguel Perez, is an executive at MCC. The contract of sale indicates the deal is
worth $375,000. (See EXHIBIT 8)

Oriental Bank Steps Up In A Big Way.

• August 3, 2016: On the very same day, Oriental Bank transfers $9 million in a lump
sum to Organic Power. On the same day the two Matosantos companies - Gegloma and
Organic Power - signed the contract of sale, Oriental Bank moved almost $9 million to
Organic Power in a single transfer (See EXHIBIT 12), purportedly to finance the land
deal.

• No collateral is shown to explain the gap between the value of the deal and the
money injected by Oriental Bank. Nowhere in the documents signed by Oriental Bank
as part of the land deal is there any description of collateral or other explanation why
Oriental Bank would loan $9 million to Organic Power for a $375,000 land purchase.
Two sets ofUCC Fixture Financing Statements (See EXHIBITS 4 and 5) specified only a
propane engine being on the property along with all fixtures included in the $375,000
land value.
Questionable Mortgages.

• There is also great disarray in the mortgage paperwork with Oriental. While the $9
million was transferred promptly to the family's energy company around noon on August
3, 2016 from Oriental Bank, the mortgage paperwork is a mess.

• Two mortgages issued for one land purchase. The purchase and sale agreement signed
by Oriental Bank on August 3, 2016, stated it would issue two mortgages to Organic
Power, one for $5.2 million over five years, and another for $3. 7 million for 20 years.
(See EXHIBIT 7). No explanation was given on how two mortgages, each worth at least
10 times the documented value of the land, were to be issued on the same property.

• Only one deed of mortgage found on the sale date. Two mortgages are mentioned in
the contract, but only one deed of mortgage (See EXHIBIT 11) for $5.2 million could be
found as issued on the date that Oriental Bank wired almost $9 million to Organic Power.
That deed, written in English, says the foreclosure value of the $375,000 property was
$5.2 million, but doesn't explain how that figure was reached. An August 3 deed for the
$3.7 million mortgage was never found.

• Then a second set of deeds appeared, but left more questions than answers. Adding
more questions and suspicions, a second set of deeds of mortgage were issued on
September 16, 2016, a month and a half after Oriental transferred the cash to Organic
Power and after Ana joined the Board on August 31, 2016. The second version of the
$5.2 million deed (See EXHIBIT 13) was identical to the one issued on the sale date (See
EXHIBIT 11), but a $3.7 million deed issued in Spanish on September 16 (See EXHIBIT
14) stated the foreclosure value of the property was not $3. 7 million but like the other
deed, it didn't explain how Oriental Bank could collect almost $9 million foreclosing on
property worth a tiny fraction of that amount.

• Numbers don't lie, or do they? Finally, the total financing from the two mortgages
described in all the sales and mortgage documents does not add up to the amount that
Oriental Bank transferred to Organic Power on August 3, 2016. The sale and mortgage
documents unanimously detail the two mortgages as being $5,257,625.00 and
$3,763,000.00, totaling $9,020,625.00. But the electronic transfer certificate from
August 3, 2016 (See EXHIBIT 12) shows Oriental Bank transferred $8,937,962.00 to
Organic Power. No explanation is given for the difference of $82,663 missing from the
transfer.

Suspicious Timing.

A shady land deal with a questionable mortgage within days of Ana named to the FOMB.
The suspicious timing, the chaos in the financial paper trail, and the many unanswered questions
around the millions that changed hands all suggest that the land deal and the payment were a
rushed and irregular transaction. Nothing about the financing of this land deal makes any sense,
except that Oriental Bank gave $9 million to a company secretly held by Matosantos
Commercial Corporation six days after Ana Matosantos, a director of that company, surfaced as
a serious candidate for the FOMB. A closer look at Oriental's holdings may give us a better
understanding.

Blurred Lines between Ana Matosantos and Oriental Bank

While none of the documents explain the collateral behind Oriental Bank's loan to Organic
Power, the intersection of interests between Matosantos Commercial Corporation, Oriental Bank
and Ana Matosantos' appointment to the FOMB might emerge from a wider review of Oriental's
holdings.

In particular, in years 2016 and 2017, Oriental Bank remained highly exposed with loans to
municipalities.

• At December 2016, Oriental "had approximately $197.9 million of credit exposure" to


certain municipalities in Puerto Rico. (See EXHIBIT 21)

• At December 2017, Oriental "had approximately $145.2 million of credit exposure" to


certain municipalities in Puerto Rico. (See EXHIBIT 23)

According to Oriental's own reports, "If the government restructuring affects the ability of the
municipalities to pay their obligations to us as they become due, or under certain other
circumstances, we may be required to adversely classify such loans and increase the provision
for loan losses in connection therewith. Such provision may significantly impact our earnings. "

In fact, the FOMB has chosen not to restructure municipalities by designating them as covered
entities under PROMESA and seeking Title TIT bankruptcy. It is common knowledge that the
municipalities in Puerto Rico are in bad shape, and choosing not to restructure their liabilities
and the entities is masking a ticking time bomb. Her family's relationship with Oriental Bank,
and questionable mortgages raise significant questions about Ana's role in deciding whether the
Board should designate municipalities as covered entities and pursue Title III restructuring.
Further, the FOMB's decision to pursue a consensual Title VI restructuring of the Government
Development Bank - which is a source of key liquidity for the municipalities - rather than a
Title III court process raises yet more red flags about Ana's role, and what Oriental Bank stood
to lose under a Title III scenario for the municipalities and the GDB.

Her close family and business ties to Oriental Bank, which could have impacted their financial
viability should the municipalities and the GDB been taken to Title III, put's Ana under a greater
cloud of suspicion. NLPC believes Matosantos should have recused herself from all matters
regarding municipalities and the Government Development Bank, and since she did not to the
public's knowledge, we believe she has possibly violated 18 USC 208 and PROMESA.
EXHIBIT 1
Organic Power LLC Incorporation
Government of Puerto Rico
Department of State

Transaction Date: 26-0ct-2012


Register No: 318435
Order No: 500511

Government of Puerto Rico


Department of State

= ---__ ��=
Certificate of Formation of a Limited Liability Company
Article J ::- Limited LJability_Co!ll�any_�a:n_,� _ _ _ _ . __ _ _ ·_ J
The name of the Limited Liability Company Domestic is: ORGANIC POWER, LLC
Desired term for the corporation's name is: LLC

Its principal office in the Commonwealth of Puerto Rico will be located at:
Street Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Mailing Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646

The name, street and mailing address of the Resident Agent in charge of said office is:
Name PEREZ VALDEZ, MIGUEL E.
Street Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Mailing Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Email mep62@libertypr.net

�rticl_�II � Nature o!_..!3m;in�ss - -- _


This is a For Profit corporation whose nature of business or purpose is as follows:
ALL LAWFUL PURPOSES UNDER THE LAWS OF PUERTO RICO

The name, street and mailing address of each Authorized Person is as follows:
Name PEREZ VALDEZ, MIGUEL E.
Street Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Mailing Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Email mep62@libertypr.net

If the faculties of the Authorized Persons will end upon the filing of the Certificate of Formation of a
Limited Liability Company, the names, physical and mailing address of the persons who will act as
Administrators until the first annual meeting of the members or until their successors replace them are
as follows:
Name PEREZ VALDEZ, MIGUEL E.
Title President, Secretary, Treasurer
Street Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646

Certificate of Formation of a Limited Liability Company Page 1 of 2

Document Version 1, Created On 26-oct-2012 05:35 p.m.


ORGANIC POWER, LLC Domestic Limited Liability Company

Mailing Address 3 CAMINO DEL TURPIAL, SABANERA DE DORADO, DORADO, PR, 00646
Email mep62@libertypr.net

The term of existence of this corporation will be:


Perpetual

The date from which the corporation will be effective is:


26-oct-2012

Supporting·Documents,':i,-.:__:,r.r:.:; ·; __..._ ·, .\ · ::_ � ._ 11_·.- -_ . : -. • • •,

Document Date Issued

IN WITNESS WHEREOF, I/We PEREZ VALDEZ, MIGUEL E., the authorized person(s), for the purpose
of forming a limited liability company pursuant to the General Corporation Law of Puerto Rico, hereby
swear that the facts herein stated are true. This 26th of October, 2012.

Certificate of Formation of a Limited Liability Company Page 2 of 2

Document Version 1, Created On 26-oct-2012 05:35 p.m.


Commonwealth of Puerto Rico
Department of State

Filing Date: 08-abr-2013


Register No: 318435
Order No: 541071

Commonwealth of Puerto Rico


Department of State
2012 LIMITED LIABILITY COMPANY ANNUAL DUE
General "lnforJ!lati_9_n , _ - ._ -..:- __ --= _ '----_ _ _ __ __ , _ _ _ _ =--::: =-:I
Register No. 318435
Name ORGANIC POWER, LLC
Formation Date 26-oct-2012 05:35 p.m. Class Limited Liabili ty
Company
Jurisdiction Domestic - Type For Profit
_ _ -
Authorized Pers�n :_- -
-- ---
- �-
-- - ��
Name Perez Valdez, Miguel E ___;-
- - -
Address 3 Camino del Turpial Sabanera Dorado Dorado PR 00646
Telephone (787) 661-9196 -
Email Address miguelp@matosantos.com--

- -

Document Version 1, Created On 08-abr-2013 02:20 p.m.


EXHIBIT 2
PRIDCO-PREAA and MCC Contract
/,1
,.,
CONTRACT NO: 2013-132285
CONSULTANT: MATOSANTOS COMMERCIAL, CORP.
GREEN ENERGY FUND
RESERVATION AGREEMENT
Tica· 2

2012-24-0017

Between

THE PUERTO R,ICQ ENERGY AFFAIRS ADMINISTRATION


:'

and

Manuel Matosantos
(CUSTOMER)

and

Alexis J. Mfranda Ramirez


(AUTHORIZED REPRESENTATIVE, IF APPLICABLE)

THIS RESERVATION AGREEMENT is made as of 0�\1\g. l/ . 20Jl, by and


among Mcrlosantos Commercial, Corp., represented herein by its Pre�·ident, Manuel }.,fa1ost111tos,
of legal age, 111arried1 and a resident of Dorado, ffi, who is the "Customer" as defined in the
Green Energy Fund (Tier 1 and Tier 2) Regulation No. 8038 (the "Regulation") and incentive
holder ('(Recipient"); if applicable: Cobo Ca1·ibe Solar, LLC., represen�ed herein by Alexis J.
Mircmda Ramirez, of legal age, married, and a resident of San Juan, PR, who is the Customer's
Authorized Representative as defined in the Regulation; and the PUERTO RICO ENERGY
AFFAIRS ADMINISTRATION, an agency of the Commonwealth of Pue1to R ico represented
herein by its Executive Dh-ector Jose G, Mneso Gonzalez, of legal age, married, and resident of
Sa11 Juan, Puerto Rico ("PREAA") (each of Recipient, Authorized Representative and PREAA
individually a "Pa11y" and collectively the "Patties").
RECITALS:
WHEREAS, Recipient has submitted to PREAA an application and proposal seeking to
receive an incentive under the Green Energy Fund created by Act No. 83 of July 19, 2010
("Act 83") for the installation of a 999 kW Solar Energy System, at the following location Caho
Car/be Industrial Parle, A Street Lot 23 Vega Baja, PR, 00693 ("Facility"), as further described
in this Agreement; and

App, A-1
�·
·,· '
l
,1

WHEREAS, PREAA desires to provide such incentive on the terms aud conditions set
fol'th herein, in accordance with the Regulation aod the applicable Reference Guide (the
"Guide"):

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


contained in this Agl'eement and for other good at1d valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto agi·ee as follows:
1. Definitions and Interpretation
1.1. Specific Terms. Capitalized terms (whether singular or plural) used in this
Agreement, unless otherwise· defined hereii;i, shall have the meaning ascribed to
such terms in the Regulation.
1.1.1. "Act 83" shall have the meaning ascribed to this term in the Recitals
hereto.
1.1.2. "Agreement" shall mean this Green Ene1·gy Fund Reservation
Agreement.
1.1.3. "Authorized Representative'' shall have the meaning ascribed to this
term in the Regulation, namely the optional third party that the Customer
designated in writing as delegate to apply to the GEF and to represent
Customer. Use of this term Ol' references to the obligations of the
Authorized Representative in tlris Agreeme.nt shall be disregarded in
cases where Customer did not designate any Authorized Representative.
1.1.4. "Final Inspection" shall have the meaning ascribed to this term in
Section 3.4.
1.1.5. "GEF" shall mean the Gl'een Energy Fund created under Act 83.
1.1.6. "GEP" or "P1·oject" shall mean the 999 kW Green Energy System at the
Facility, as was described in the application documents and in the
Proposal, whose Proposal and application documents are incorporated
herein as Appendix A ru1d made an integral part of this Agreement, as
such Project may have been modified with PREAA's approval, with
Project Number 2012-24-0017;
1.1.7. "Guide" shall have the meaning ascribed to such te1m in the Recitals
hereto.
1.1.8. ''Incentive Reservation Notice" shall mean the reservation notice letter
issued by PREAA and included as part of Appendix A hereof.
1.1.9. "Incentive Payment'' shall have the- meaning ascribed to this ten11 in
Section 8.1.
I
' I

1.1.10. "Indemnified Parties" shall mean: (i) the Commonwealth of Puerto Rico,
including the Department of Economic Development and Commerce
("DEDC"). (ii) PREAA; (iii) DEDC's and PREAA's officials, directors,
officers, employees, agents, successors and assigns; and (iv) all persons
or entities acting on behalf of any of the foregoing,
1.1.11. "Losses" shall mean any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, judgments, fees, expenses and costs of
whatsoever kind and nature (including legal fees and expenses and costs
of investigation, of prosecuting or defending any Loss described above)
whether or not such Loss be founded 01· unfounded, of whatsoever ldnd
and nature.
1.1.12. uPREAA" shall mean the Puerto Rico Energy Affairs Administration
,
1.1.13. "Project Completion, shall mean when the Project has been constructed
or installed, pennitted, is fully capable of being placed into operation, a
Final Inspection detennination has been issued and has satisfied the
l'equirements of Section 3.2 of this Agreement.
1.1.14. "Recipient " shall have the meaning ascribed to such term in the
introductory pru1 hereto;
1.1.15. "Regulation" shall have lhe meaning ascribed to such term in the
introductory pa11 hereto;
1. l, 16. "Reservation Period'' shall have the meaning ascribed to this term in
Section 2.3 of this Agreement.
1.1, 17. "Ince11tive Payment" shall mean any and all funds allocated 01· disbursed
to Recipient under this Agreement.
'

1.2. Additional Tenns, The terms "as directed," "as required,, or "as permitted" and
siinilar terms shall refer to the direction, requirement, or permission of PREAA.
The terms "sufficient," "necessal'y" or "prnper" and similar terms shall mean
sufficient, necessary or proper in the sole judgment of PREAA. The te1ms
"approval," "acceptable" or "satisfactory'' or similar terms shall mean approved
by, 01· acceptable to, or satisfactory to PREAA. The terms "include," "included,,
or "including" and similar terms shall be deemed to be followed by the words
"without limitation".
1.3. Refoi·ences to this Agreement. Refel'ences to this Agreement include: (a) any and
all appendices, exhibits, schedules, attachments hereto; (b) any and all statutes,
regulations or other documents expressly incorporated by 1•efe1·ence herein,
including Act 83, the Guides and the Regulation; and (c) any and all amendments,
modifications or supplements hereto made in accordance with Section 20.3.
References to a1ticles, sections, subsections or appendices refer to articles,
sections or subsections of or appendices to this Agreement, unless otherwise

App. A-3
r'
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expressly stated. Terms such as "hereunde1·," "herein" or "hereto" refer to this


Agreement as a whole.
2. Term of Ag1·eement and Rese1·vation Period
2.1. Effective Date. This Agreement shall become effective on the date first above
wdtten (the "Effective Date").
2.2. Term of Agreement. The tenn of this Agreement ("Term") shall commence on the
Effective Date. Unless the Agreement is te1minated earlier as set forth herein,
such te1m shalt end on the date falling on the second year anniversary of the
Effective Date, as such term may be extended by written agl'eement of the Parties.
2.3, Duration of the Incentive Reservation Period. Notwithstanding the Te1m of this
Agreement, the GEP shall reach Project Completion within the period of twelve
(12)...( months ft n the Effective Date hel'eof, namely until
91
:.Lu..�,t q , "tO f_1 ("Reservation Period"). The
Reservation P�l'iod, however, may be extended in PREAA's discretion taking into
account pat'ticulal' circumstances and Project contingencies and/or Force Majeure
events. In no case, however, shall the time granted for the Project Completion
exceed a total of twenty-four (24) months, as stated in the Regulation and Act 83.
Requests for extension of Reservation Period shall be presented in writing to
PREAA at least thii1y (30) calendar days before the e11d of the Reservation
Pedod. If the Project is not completed within the Rese1·vation Period, as it may
have been extended by PRBAA upon duly received request from Recipient, the
incentive reservation will be cancelled.

3. Implementation of Project
3.1. Implementation of P1·oject; Coopewtion with Monitoring. Recipient shall, in
good faith and with diligence, undertake the constmction and operation of the
Project, as presented in the application and Proposal, and in accordance with the
terms and conditions set forth in this Agreement, the Regulation, and the Guide.
Recipient shall not materially change the nature or scope of the Project without
the priol' written consent of PREAA. Recipient shall cooperate in good faith with
PREAA in any evaluation, planning, a\1diting or monitoring activities conducted
or authorized by PREAA to verify compliance with this Agreement, the
Regulation, the Guide, and/or Project Completion to authol'ize disbursement of
the incentive.

3 .2. Once the Project is constrncted, permitted and fully capable of being placed into
operation, before the Incentive Payment can be disbursed, Recipient (ol' System
Owner if Recipient will be assigning payment to a System Owner different from
Recipient) shall submit a reservation claim, including the following documents;
3.2.1. Evidence of payment of Total Project Costs;
3.2.2. Government required certifications.

App. A-4
• I

I'
.ti I I

3.2.2.l Certificate issued by the Pue1to Rico '.freasury DepaL'tment


evide11ci11g that there is 110 income tax debts outstanding, or if
a debt is outstanding, thel'e is a validly agreed and current
payment plan.
3.2.2.2 Certificate of filing income tax retums with Puerto Rico
Treasury Department for the prior five (5) years. If Recipient
(or System Owner, if applicable) has been organized or doing.
business in Puerto Rico for less than 5 years, it will submit a
swom statement, in fo1m and substance acceptable to PREAA,
detailing such circumstances.
3.2.2.3 Department of Labo1· and Human Resources Certificatio11 -
Certification to the effect that it has paid to the Department of
Labor and Human Resources ("DLHR") any required and
applicable employee contributions, in accordance with the
Puerto Rico Employment Security Act (unemployment,
temporary disability or sickness or social security for
chauffeurs).
3.2.2.4 Municipal Revenues Collection Center Certification -
Certification issued by the Municipal Revenues Collection
Center stating that it has paid any and all applicable property
Taxes and does not owe any property Taxes.
3.2.2.5 Act 428 Sworn Statement included as an Appendix C hereto.
3.2.2.6 Cettificate of no debt for child support under Puerto Rico law
issued by ASUME or under the law of any other state of the
United States.
3.2.3. Sig11ed Interconnection Agreement with, and interconnection permit
from, PREPA (or evidence of filing of application to interconnect with
PREPA and in accordance with Section 6.14 of Chapter 1 of the
Regulation);
3.2.4. Renewable Energy System Installation Certificate in accordance with
OGPe Joint Regulation, Title XII, Chapter 55, Rule 55.6;

3.2.5. GEP .owner's designation of responsible party from the North American
Renewables Registt·y and/or any other document required by PREAA to
ensure that the ownership of any and all of the environmental attributes
and renewable energy certificates associated with the Project will be
transferred to PREAA;
3.2.6. Evidence of compliance with insul'ance requirements stated in Section 14
below; and
,.
f I

3.2.7. Cel'tification and evidence of jobs created and payroll paid during
construction. Evidence of ongoing jobs expected to be created shall also
be presented to support the number ofjobs indicated in the Pl'Oposal.
3.3. Once the Recipient notifies PREAA that the Project is constructed, pemutted and
fully capable of being placed into operation, and submits all required
documentation listed i11 Section 3,2 above, PREAA will send an inspector to
vel'ify that the Project complies with the descdption of the GEP in the Proposal
and application documents, the te1ms of the Incentive Rese1vation Notice and
herein.
3.4. An inspection will be completed within thh1y (30) Business Days from the date of
receipt of the Recipient's reservation claim with all required documentation. An
inspection showing full compliance with the description of the GEP in the
Proposal and application documents, the terms of the Incentive Reservation
Notice and this Agreement will become a final inspection determi11atio11 ("Final
Inspection").
3.5. In the case that the inspection shows that the Project has a smaller System
Capacity than described herein and in the Incentive Reservation Notice, the
inspection determination will become final but shall reflect an adjustment in the
Total Incentive Amount propottional to the reduction in the OEP System
Capacity. However, a modification in System Capacity that reduces the project to
a ·I00kW or less GEP will be considered a significant variation under Section 4.14
of the Regulation, in which case, Recipient will have the option to, within thirty
(30) Business Days from receipt of notice of failed inspection:
3,5.1. Modify the GEP in accordance with this Agreement and reapply for a
Final Inspection; OR
3.5.2. Withdraw the reservation of the incentive and notify PREAA in wliting,
in which case, the Rese1vation Guarantee shall be retained by PREAA.
3.6. An inspection showing that the Recipient or the location or site of the OEP is
diffel'ent fl-om those specified herein, shall constitute a failed inspection and will
result in the cancelation of the reservation, in which case, the Reservation
Gual'antee shall be l'etained by PREAA.
3.7. Completed OEPs with larger System Capacity than described herein will receive
the Total Incentive Amount as stated herein) unadjusted,
3.8. Completed GEPs with significant variations other than as described above wiH
have the same options described in Section 3.5 above, within thirty (30) Business
Days from receipt of notice of failed inspection.
3.9. Reservations for GEPs that l'eflect significant val'iatious will be cancelled if
Applicant does not act within thirty (30) Business Days from receipt of the notice

App. A-6
tJ I I

failed inspection, in which case, the Reservation Guarantee shall be retained by


PREAA.
4. Compliance with Laws and Regulation
4.1. Each of Recipient and Authorized Representative acknowledges having read and
understood the Regulation. Each of Recipient and Authorized Representative
fm1her acknowledges and agrees that the Regulation sets fodh additional terms,
conditio11s and requfrements to be able to receive the incentive under this
Agreement. TherefOl'e, they agree to comply with, and be bound by all
requirements in the Regulation, the Guide and herein.
4.2. All applicable requirements of the Regulation and the Guide are incorporated
herein by reference as though set forth in full in this Agreement.
4.3. Licenses and Permits. Recipient, at his/her/its own expense to the extent not
covered or permitted under the Regulation, has obtained and will maintain all
licenses and permits needed to pe1-form work on the Project and for installation
and operation of the Project at the Facility.
4.4. Compliance with Other Laws and Applicable Safety and Pel'formance Standards.
Recipient shall keep itself fully informed of Green Energy Fund guidance and
regulations; applicable municipal codes; ordinances and regulations; and alt laws,
rules and regulations affecting the performance of this Agreement, and shall at all
times comply with such codes, ordinances, and regulations, rules and laws. In
/b addition, the Project must meet all applicable safety and perfmmance standards
established by PREAA, PREPA and any other applicable regulatory body.
5. Disclosures
5, l, Disclosures. Each of Recipient and Authorized Representative hereby authorizes
PREAA to share with, and request and receive from, PREPA, other entities of the
Commonwealth of Puerto Rico and federal agencies, any and all information
regarding Recipient and Authorized Representative, including any information
about the Facility, the Project, Recipient and Authorized Representative, to
confinn accuracy of information submitted in the application documents and
Proposal, and to verify eligibility and tmthfulness of information included therein,
and/or to investigate or prosecute possible violations or civil or criminal Puerto
Rico and United States laws. Disclosed information may be posted in the Intemet
and published in any other media by the Government of Puerto Rico to comply
with legal and regulatory requirements.

6. No Endm·sement by PREAA
6.1. Each of Recipient and Authorized Representative understands that PREAA's
review of the Project and authorization for the Incentive Payment shall not be
construed as confirming or endorsing (i) the qualifications of any persons
involved with the Project, includillg but not limited to the Project designers,
,.
:, 1 •

installers or manufacturers; (ii) endorsing the Project's design; or (iii) warranting


the economic value, safety, durability or 1·eliability of the Project. Neither
Recipient nor Autholized Representative shall use PREAA's or the GEF name,
logo, trademark, trade name, identity, or affiliation for any reason or purpose,
without prior written consent of PREAA.

6.2. The Recipient and Authorized Representative are solely responsible for the
Project, including selection of any designer, manufacturer, contrnctor, and
installer, as long as it is certified by PREAA. Each of Recipient and Authorized
Representative understands that s/he, and any third parties involved with the
Project, are independe11t contl'actors and arc not authorized to make any
representations on behalf of PREAA or the GEF.

7. Environmental Attl'ibutes and Renewable Energy Certificates


7 .1. Each of Recipient and Authorized Representative acknowledges and agrees that
the ownership of any and all environmental attl'ibutes, including but not limited to
renewable energy certificates, associated with the Project (collectively, "RECs")
shall be transferred to PREAA prior to payment of the Incentive Payment to
Recipient. Any assignee of the Incentive Payment shall be informed by Recipient
of the nonwtransferability of the RECs. Each of the Recipient, and the System
Owner iflncentive Payment is assigned, ag1·ees that it 1) will not sell or otherwise
encumber the RECs from the Project to or for the benefit of any other person or
entity and 2) will, at PREAA's requesl, execute any additional documents or
instruments to effectuate the intent of Act 83 a11d this Section 7.1, including,
executing a Generator Owner's Designation of Responsible Party from the North
American Renewables Registry.

8. Maximum Amount of Incentive Payment


8.1. In no event shall the amount of incentive payment disbursed hereunder exceed
ONE MILLION ONE HUNDRED FIFTHY TWO THOUSAND ONE
HUNDRED FIFTY SIX DOLLARS ($1152156). ("htcentive Payment").
Payments under this agreement are budgeted and will be paid from the Green
Energy Fund, Account No. 274-1320000-081-2011.

8.2. Disbursement Procedures. The hlcentive Payment shall be disbursed to Recipient


as follows:

8.2.1. PREAA shall have no obligation to disburse any portion of the Incentive
Payment requested in the application until all conditions of this
Agreement, the Guide and the Regulation have been complied with.

8.2.2. PREAA shall make a single disbursement of the Incentive Payment.

8.2.3. PREAA shall make all disbursements of the Incentive Payment by check
payable to Recipient or its authorized assignee, as indicated below and
permitted by the Regulation, sent via U.S. mail or wfre transfer not later

App. A-8
l)

than thhty (30) days from issuance of a Final Inspection showing full
compliance with all terms and conditions of this Agl'eement Ol' from the
date of issuance of Final Inspection determination after modification of
the GEP in accordance with the provisions of Sections 3 .S and 3 .8 above.
8.2.4. Incentive Payments may be disbursed to third parties (including System
Owners and Authorized Representatives) when such third party l1as
partially or completely paid for the cost of the GEP, provided a payment
release and assignment document is submitted by Recipient and assig11ee
toPREAA.

9. Reporting; Audits; False Claims


9.1. Books and Records. Recipient shall establish and maintain accurate files and
records of all aspects of the Project and the matters funded in whole or in part
with the Incentive Payment during the term of this Agreement, including all of the
files, l'ecords, books, invoices, documents, payrolls and other data l'equired to be
maintained under this Section i11 a readily accessible location and condition for a
period of not less than six (6) years after final payment under this Agreement or
until any final audit has been fully completed, whichever is later.
9.2. Inspection and Audit. Recipient shall make available to PRE AA, its employees
and authorized representatives, during regulal' business hours, or during such
other times as the Parties 11.1ay mutually agree, all of the files, records, books,
invoices, documents, payrolls and other data required to be established and
maintained by Recipient under Section 9.1. Recipient herein authorizes PREAA,
its employees and authorized representatives to inspect, photograph, vide0Nreco1·d,
audit, examine and make excerpts and transcripts from any of the foregoing. The
rights of PREAA pursuant to the second sentence of this Section shall remain in
effect so long as the Project equipment/systems shall remain installed in the
Facility, which shall not be less than five (5) years from its completion.
9.3. Recapture Period. As stated in the Regulation, GEF incentives recipients will be
required to comply with a recapture period of at least five (5) years. If the System
Ow11er removes the GEP from the Facility during this five (5) year pedod
(hereinafter "disqualifying event"), the GEF incentive payment must be repaid to
the GEF as follows: 100% of the payment must be repaid if the disqualifying
event takes place within one yea\' from the date placed in service; 80% of the
payment must be repaid if the disqualifying event takes place after one year but
before two years :from the date placed in service; 60% of the payment must be
repaid if the disqualifying event takes place after two years but before three yeal's
from the date placed in service; 40% of the payment must be repaid if the
disqualifying event takes place after three years but before four years from the
date placed in service; and 20% of the payment must be repaid if the disqualifying
event takes place after four years but before five years from the date placed in
service.

App. A-9
9.4. Submitting False Claims; Monetary Penalties. Any Recipient or Authorized
Representative who submits a false claim to the GEF shall be liable to PREAA for
the amount of damages which PRBAA sustains because of the false claim. A
Recipient who submits a false claim shall also be liable for the costs, including
attorney's fees, of a civil action brought to recover any of those damages. A
Recipient or Authorized Representative will be deemed to have submitted a false
claim to PREAA ifs/he (a) knowingly presents or causes to be presented to an
officer or employee of PREAA a false claim or request for payment or approval;
(b) knowingly makes, uses, or causes to be made or used a false record or
statement to get a false claim paid or approved by PREAA; (c) conspires to
defraud PREAA or the Puerto Rico government by getling a false claim allowed
or paid by PREAA; (d) knowingly makes, uses, or causes to be made or used a
false recol'd or statement to conceal, avoid, or decrease an obligation to pay or
ttansmit money 01· property to PREAA; or (e) is a beneficia1·y of an inadvertent
submission ofa false claim to PREAA, subsequently discovers the falsity ofthe
claim, and fails to disclose the false claim to PREAA within a reasonable time
after discovery of the false claim.
10. Taxes
I 0.1. Recipient shall pay to the appropriate governmental authority, as and when due,
any and all taxes, fees, assessments or other govermnental charges, including
p1·operty taxes and Puerto Rico sales and use taxes, levied upon or in connection
with this Agreement, the Pl'oject, the Incentive Payment or any of the activities
contemplated by this Agreement.
11. Indemnification and General Release of Liability
11.1. Indemnification. Each ofRecipient and Authorized Representative, for itself and
their respective predecessors, successors and assigns, shall indenmify and save
harmless PREAA and its officers, agents and employees ("Indemnified Persons")
from, and, if requested, shall defend the Indemnified Persons against any and all
loss, cost, damage, injury, liability, and claims thereof fot• injury to or death of a
person, including Recipient and Authorized Representative, or loss of or damage
to property, arising directly 01· indirectly from (1) injury to or death of persons,
including but not limited to employees of PREAA, Recipient, Authorized
Representative or any third party; (2) injury to property or other interests of
PREAA, Recipient, Authorized Representative, or any third patty; (3) violation of
local, state, or federal common law, statute, or regulation, i11cludi11g but not
limited to environmental laws or regulations; (4) strict liability imposed by any
law or regulation; 01· (5) generation system performance sho1tfall; so long as such
h1jury, violation, strict liability, 01· sho1tfal1 arises from or is in any way connected
with the Project, including Recipient's, Authorized Representative's or any third
pru.ty's pe1formance or failllfe to perform with respect to the Project, however
caused, regardless of the negligence of, and regardless of whether liability without
fault is in1posed or sought to be imposed on PREAA or any other lnde1m1ified
Persons, except to the extent that such indemnity is void or othe1wise

App. A-10
1) ••

unenforceable under applicable law in effect 011 or validly retroactive to the date
of this Agreement, and except where such loss, damage, injury, liability or claim
is the result of the willful misconduct of PREAA or any other fademnifted Person
and is not contributed to by any act ot: or by any omission to perform some duty
imposed by law or agreement on Recipient, Authorized Represe11tative, each of
their respective subcontractors or either's agent or employee. The foregoing
indemnity shall include, without limitation, reasonable fees of attorneys,
consultants m1d experts and related costs and Indemnified Person's costs of
investigating any claims against any of the Indemnified Persons.
11.2. Each of Recipient and Authorized Representative acknowledges that any claims,
demands, losses, damages, costs, expenses, and legal liability that arise out of,
result from, or are in any way connected with the rel�ase or spill of any hazardous
material or waste as a result of the work performed in connection with the Project
are expressly within the scope of this indem.nity, and that the costs, expenses, and
legal liability for environmental inve.'rtigations, monitoring, containment,
abatement, removal, repair, cleanup, restoration, remedial work, penalties, and
fines arising from strict liability, or violation of any local, state, or federal law or
regulation, attorney's fees, disbursements, and other response costs incurred as a
result of such releases or spills are expressly within the scope of this indemnity.
12. Duty to Defend; Notice of Loss
12.1. In addition to Recipient's and Authorized Representative's obligation to
indemnify the Iudemnified Persons, each of Recipient and Authorized
Representative specifically acknowledges and agrees that it has an immediate and
independent obligation to defend the h1de11mified Persons from any claim which
actually or potentially falls within this indemnification provision, even if the
allegations are or may be groundless, false or fraudulent, which obligation adses
at the time such claim is tendered to Recipient or Authorized Representative by
PREAA and continues at all times thereafter.
12.2. No insurance policy covering the Recipient with regards to this Agreement shall
operate to limit the Recipient's and Authorized Rep1·esentative's liability under
this provision. Nor shall the amount of insurance covel'age operate to limit the
extent of such liability.

13. Limitation on PREAA's Liability


13.1. PREAA's payment obligations under this Agreement shall he limited to the
Incentive Payment. Notwithstanding any other provision of this Agreement, in no
event shall PREAA be liable, regardless of whether any claim is based on contract
or tort, for any special, consequential, indirect or incidental damages, including,
but not limited to, lost profits, arising out of or in connection with the GEF, the
Regulation, the Guide or this Agreement or PREAA's performance or
nonperformance of its obligations under this Agreement.

App. A-11
() I'

14. Insnnnce

Recipient, directly or thl'Ough Installers or System Owne1·s must meet and maintain the same
policies of insul'ance required in OGPe Joint Permits Regulation for Constl'Uction Works and
Land Use (Joiut Regulation), Title XII, Chapter 55, Rule 55.6(d). Policies shall be issued by
insurance companies authorized to do business in Puerto Rico, and to that effect they shall
provide, in original, certificates of insurance and endorsements, as follows:

(a) An endol'sement including this Agreement under contractual liability coverage


and identifying it by number, date and the Parties.
(b) Waiver of Subrogation in favor of PREAA.
(c) The breach of any of the warran.ties or co11ditions in these policies by the
Applicant, Installer or System Owner, as applicable, shall not prejudice PREAA's
rights under the policies.

14.1. Additional Requirements for Covernge. The general liability insurance policies
shall:

14.1.1. Name as additional insured Recipient (if Installer �s the main insured
patfy) and PREAA. using ISO Additional Insured Endorsement
CG 20 26 11 85 01· a substitute providing equivalent coverage

14.1.2. Provide that such policies are primary insurance to any othe1· insurance
available to the additional insureds, with respect to any claims arising out
of this Agreeme11t, and that insurance applies separately to each insured
against whom claim is made or suit is brought, except with respect to
limits of liability.

14.1.3. h1clude hold harmless endorsement in favo1· of Recipient and PREAA.

14.2. Additional Requirements for All Policies. All policies shall be endorsed to
provide at least thirty (30) days' advance written notice to Recipient and PREAA
of cancellation of policy for any reason, nonrenewal or reduction in coverage and
specific notice mailed to PREAA at:

Pue1to Rico Energy Affairs Administration


c/o PRIDCO Insurance Office
#355 FD Roosevelt Avenue
Suite 404 Hato Rey, Puerto Rico 00918
Tel.787-758-4747
Fax: 787-764-1415

14.3. Continuance of Coverage. Failure to maintain insurance shall constitute a material


breach of this Agreement and may result in the cancelation of the Incentive
Payment.

14.4. Effect of Approval. Approval of any insurance by PREAA shall not relieve 01·
decrease the liability of Recipient hereunder.

App. A-12
ti

14.5. Waiyer. If the requirements of Sections 14.1 or 14.2 prevent the Recipient from
obtaining the insurance required in this Section, then upon Recipient's writte11
notice to PREAA, the 1·equirements of Sections 14.1 or 14.2 may be waived.

15, Events of Default and Remedies


15.1. Events of Default. The occu11·e11ce of any one or more of the following events
shall constitute an "Event of Default" under this Agreement:

15.1.1. False Statement. Any statement, representation 01· wananty contained in


this Agreement, in the application documents, Proposal, or in any other
document submitted to PREAA as part of the application process or
under this Agreement is found by PREAA to be false, misleading,
altered or forged.

15.1.2. Failure to Provide Insurance. Recipient, or if applicable, the Contractor


responsible for installing the Project, fails to provide or maintain in
effect any policy of insurance required in Al1icle 14 or as othe1wise
acceptable to PREAA.

15 .1.3. Failure to Perform. Recipient or Authorized Representative fails to


perfo11n and complete the Project as specified in the application and
Pl'Oposal and as further required herein, or breaches any provision or
covenant of this Agreement to be observed as a11d when performance or
observance is due and such failure or breach continues for a pedod of ten
(10) days after receipt of written notice to cure from PREAA.

15.1.4. Failure to Comply with Program Rules. Failure to complete the Project
and comply with the Regulation, the Guide and any other requirement set
forth thel'ein or herein, including but not limited to:

15.1.4.1 Failed permitting of the Project;

15.1.4.2 Failed inspection of the Prnject;

15.1.4.3 Completed Project is not co11sistent with application and


Pro}Josal and it has not been modified in acco1·dance with
Section 3.5 above;

15.1.4.4 Recipient combines the incentive under this Agreement with


other non"pennitted grants, incentives or assistance;

15.1.4.5 Project is not pennanent;

15.1.4.6 Equipment or installers at·e not certified as required under the


Regulation;

15.1.4.7 Equipment is not new;

App. A-13
.• .,
,,

15.1.4.8 Recipient receives more than 100% of Total Project Costs


when i11centives hereunder are combined with other federal or
state incentives;
15.1.4.9 Failure to interconnect;
15.1.4,10 Failure to show evidence of green jobs creation in accordance
with the Pmposal; or
15.1.4.11 Failure to abide by any material Guide or Regulation
provisions.
15.2, Remedies upon Event of Default. Upon and during the co11tinua11ce of an Event of
Default, PREAA may do any of the following, i..11dividually or in combination
with each other or any other remedy:
15.2.1. Termination. PREAA may terminate this Agreement by giving a written
termination notice to Recipient or Authorized Representative. On the
date specified in such notice this Agreement shall terminate and all rights
of Recipient hereunder shall be extinguished. The termination of this
Agreement shall not operate to discharge any liability which has been
incurred by Recipient or Authorized Representative p1'ior to the effective
date of such temrination. For the avoidance of doubt, PREAA shall not
be l'equired to pay any Incentive Payment to the Recipie11t if the
Agreement is terminated because the Project fails to meet all the
requirements of the Regulation, the Guide and this Agreement.
15.2.2. Withholding of the Incentive Payment. PREAA may withhold all or a11y
portion of the Incentive Payment not yet disbursed hereunder, rega1·dless
of whether Recipient has previously submitted e,n application for such
payment or whether PREAA has approved the disbursement of the
Incentive Payment requested in any application. Any Incentive Payr.nent
withheld pursuant to this Section and subsequently disbursed to
Recipient after cure of applicable Events of Default shall be disbursed
without interest.
15.2.3. Ban, PREAA may ban Recipient, Authorized Representative and/or
System Owner from futm·e participation unde1· any of the GEF programs.
15.2.4. Offset. PREAA may offset against all or any p011ion of undisbursed
Incentive Payment hereunder or against any payments due to Recipient
under any other agreement between Recipient and PREAA the amount of
any outstanding loss incull'ed or suffered by PREAA, including any loss
incurred as a result of a11 Event of Default.
15.2.5. Return of the fncentive Payment. PREAA may demand the immediate
1·etum of any previously disbursed lllcentive Payment that has been
claimed or expended by Recipient in b1·each of the terms of this

App. A-14
,,

Agreement, together with interest thereon from the date of disbul'sement


at the maximum rate permitted under applicable law.

15.3. Remedies Nonexclusive. Each of the remedies provided fo1· i11 this Agreement
may be exercised individually or in combination with any other remedy available
hereunder or under applicable laws, rules and regulations. The remedies contained
herein are in addition to all other remedies available to PREAA at law or in equity
by statute or otherwise and the exercise of any such remedy shall not preclude 01·
in any way be deemed to waive any other remedy.

16. Notices and Othel' Communications


16.1. Requirements. Unless otherwise specifically provided herein, all notices,
consents, directions, approvals, instructions, requests and other communications
hereunder shall be in writing, shall be addressed to the person and address set
fol1h below and shall be (a) sent via electronic mail in accordance with the
provisions stated in the Regulation with 1·espect to electronic communications,
(b) deposited in the U.S. mail, first class, certified with retum receipt requested
and with appropriate postage, (c) hand delivered or (d) sent via facsimile (if a
facsimile number is provided below):

IftoPREAA:

Puerto Rico Energy Affail's Administration


P.O. Box41314
San Juan,P.R. 00940
Attn: Jose G. Maese Gonzalez
Facsimile No. 787-999-2246
E-mail: jmaeso@aae.gobierno.pr

If to Custome1·:

PO Box4435
Vega Baja, PR 00694
Attn: Manuel Matosantos
Facsimile No. (787) 793-0454
E-mail: ma11uelm@matosantos.com

App. A-15
,
.'

Ifto Authorized Representative:

PO Box 9022947
San Juan, PR 00902-2947 ..
Attn: Alexis J. Miranda Ramirez
Facsimile No. (787) 707-1850
E-mail: amr@gvelop.com
16.2. Effective Date. All communications sent in accordance with Section 16.1 shal1
become effective 011 the date of receipt. Such date of receipt shall be dete1·mined
by: (a) date when electronic c01mmmication was sent; (b) if mailed, the return
receipt, completed by the U.S. postal service; (c) if sent via hand delivery. a
receipt executed by a duly authorized agent of the party to whom the notice was
sent; or (d) if sent via facsimile, the date of telephonic confirmation of receipt by
a duly authorized agent of the party to whom the notice was sent or, if such
confirmation is not reasonably practicable, the date indicated in the facsimile
machine transmission report of the patty giving such notice.
16.3. Change of Address. F1·om time to time any paity hereto may designate a new
address for purposes of this Article 10 by notice to the other party.
17. Additional Requil'ements
17.1. No Previous Crimes. Neither Recipient nor Authorized Representative has bee11
convicted nor to the best of his/her lmowledge, is under investigation by any
Puerto Rico or Federal administrative, judicial or legislative body, for crimes
against public funds, the public trnst or related to the misuse of public property or
funds. Recipient has not been banned from receiving federal or Puerto Rico funds,
contracts or assistance.
17.2. Recipient and Authorized Representative each acknowledges and agrees that it
has received a copy of Act No. 84 of June 18,. 2002 lmown as the Code of Ethics
of Contt·actors, Service Pi-oviders and Applicants for Economic Incentives from
the Agencies of the Government of Pue1to Rico, included herein as Appendix B,
and has complied during the application process and will continue to comply with
this Code of Ethics at all times in com1ection with the Project and the Incentive
Payment by PREAA.
18. [Reserved]
19, Recipient and Autbol'izecl Representative Representations

19.1. Each of the undersigned Recipient and Authorized Representative represents and
decla1·es under penalty of pe1jlll'y under the laws of the Commonwealth of Puerto
Rico that:
19 .1.1. S/he/it is duly authorized by all necessary action, to execute, deliver and
perform this Agreement, and has duly executed and delivered this

App. A-16
II

Agreement, which Agreement constitutes a legal, valid and binding


obligation of Recipient and Authorized Representative, enforceable
against each of Recipient and Authorized Representative h1 accordance
with the terms hel·eof;
19.1.2. The Project, when completed, will meet all GEF, Regulation and Guide
requirements;
19.1.3. The Project will be c01n11leted, inspected, new and intended to offset part
or all of the Recipient's electrical needs at the Facility;
19.1.4. The Project Site is located within Puerto Rico at the geographic location
specified in the Pl'oposal and application documents;
19.1.5. No document fumished or to be furnished by Recipient or Authorized
Representative to PREAA ill conneclio.n with the Proposal and related
application documents, this Agreement, or any other document relating
to any of the foregoing including its exhibits, schedules and other
documents or instmments delivered or to be delivered to PREAA,
electronically tlU'ough tbis website or subsequently as part of any
information request as PREAA may require, contains or will contain any
untrue statement of material fact or omits or will omit a material fact
necessary to make the statements contained therein not misleading, w1der
the circumstances under which any such statement shall have been made;
19.1.6. The Recipient has the authority to install the Project at the Facility, or
has obtained the permission of the legal owner of the Facility, to install
the generating system;
19.1. 7. The Proposal and application were presented voluntarily;
19.1.8. Authorized Representative was given full authority by Recipient and has
represented and will continue to represent Customer/Recipient with full
understanding of the binding nal11re of his/her actio11s on behalf of
Customer/Recipient, who is also informed of the binding authority of
Authorized Representative;
19.1.9. Autho1'ized Representative has and will continue at all times to inform
Customer/Recipient of all communications received from PREAA;
19.1.10. Recipient and Authol'ized Representative have read, understand and
agree to be bound by the te1ms and conditions contained in the
Regulation, in the Reference Guides, in this Agreement and in the Terms
and Conditions for the Website.
19.1.11. The Application and actions of Recipient and/or Authorized
Representative will not be in any respect fraudulent or collusive.

App. A-17
• I
IJ • t

19.1.12. Recipient and Authorized Representative a�laiowledge and agree that the
Application Fee is non-refundable and that the Reservation Guarantee
may be 11011-refundable if the Project is not completed in accordance with
the terms and conditions stated in this Agreement, the Regulation and the
Reference Guide.

20. MisceJlaneous
20.1. No Assignment by Recipient. Recipient shall not, either directly or indirectly,
assign, transfer, hypothecate, subcontract or delegate all 01· any po1tion of this
Agreement or any rights, duties or obligations of Recipient hereunder without the
prior written consent of PREAA and in the circumstances stated in Section 8.2.4
hereof. This Agreement shall not, nor shall any interest herein, be assignable as to
the interest of Recipient involuntarily or by operation of law without the prior
written consent of PREAA. A change of ownership or control of Recipient or a
sale or transfer of substantially all of the assets of Recipient shall be deemed a11
assig11ment for purposes of this Agreement. Any agreement made in violation of
this Section 20.1 shall confer no lights on any person or entity and shall
automatically be null and void.
20.2. No Waivex. No waiver by PREAA of any default or breach of this Agreement
shall be implied from any failure by PREAA to take action on account of such
default if such default persists or is repeated. No express waiver by PREAA shall
affect a11y default other than the default specified in the waiver and shall be
operative only for the time and to the extent therein stated. Waivers by PREAA of
any covenant, term 01· condition contained herein shall not be construed as a
waiver of any subsequent breach of the same covenant, term or condition. The
consent or approval by PREAA of any action requiring further consent or
approval shall not be deemed to waive or render unnecessary the consent or
approval to or of any subsequent similal' act.
20.3. Modification. This Agreement may not be modified, nor may compliance with
any of its terms be waived, except by written instrument executed and approved in
the same manner as this Agreement.
20.4. Administrative Remedy for Agreement Interpretation. Should any ques.tion arise
as to the meaning or intent of this Agreement, the question shall, prior to any
other action or res01t to any other legal remedy, be refe1Ted to the Executive
Director of PR.BAA who shall decide the tl'ue meaning and intent of the
Agreement. Such decision shall be final and conclusive.
20.5. Goveming Law; Venue. The interpretation and performance under this
Agreement shall be governed by the laws of the Commonwealth of Puerto Rico,
without regard to its conflict of laws pl'inciples. The Patties voluntadly submit to
the Courts of the Commonwealth of Puerto Rico in San Ji1an.

App. �-18
20,6. Headings. All aliicle and section headings and captions contained in this
Agreement are for reference only and shall not be considered in construing this
Agreement.
20.7. Entire Agreement. This Agl'eement, the Regulation and the Application
Documents set forth the entire Agreement between the parties, and supersede all
other oral or written provisions. If there is any coni1ict between the terms of this
Agreement and the Application Documents, the terms of this Agreement shall
govem,
20.8. Severability. Should the applicati011 of any provision of this Agreement to any
pa11icular facts or circumstances be found by a court of competent jurisdiction to
be invalid or unenforceable, then (a) the validity of other provisions of this
Agreement shall not be affected or impaired thereby, and (b) such provision shall
be enforced to the maximum extent possible so as to effect the intent of the parties
and shall be reformed without further action by the parties to the extent necessary
to make such provision valid and enforceable.

20.9. Successors; No Third-Party Beneficiaries. The terms of this Agreement shall be


binding upon, and inure to the benefit of, the parties hereto and their successors
and assigns, Nothing in this Agreement, whether express 01· implied, shall be
construed to give any person or entity (other than the parties hereto and their
respective successm-s and assigns and, in the case of A.t1icle 7, the Indemnified
Parties) any legal or equitable right, remedy 01· claim under or in respect of this
Agl.'eement or any covenants, conditions or provisions contained herein.
20.10. Survival of Terms. The obligations of Recipient and the terms of the following
provisions of this Agreement shalt survive and continue following expil.'ation or
te1mi11ation of this Agreement: Sections 5, 7, 9, 11, 12, 13, 15.1.1, 15.1.4, 15.2.3,
15.2.4, 15,2.5, and this Section 20.11.

App. A-19
IN WITNESS WHEREOF, the pa11ies hereto have caused this Agl'eement to be duly
executed as of the date first specified herein. '\

By: �jo>,!>{olOo�G;SZ
PREAA
Pl'int Name: Jose 0, Maeso Gonzalez
Tax I.D. numbe1·

By:___-,_________
RECIPIENT

a;�
P1int Name· · anuel Matosantos
Tax I.D. 11u1. her

By:
Azyf'HORIZED REPRESENTATIVE
Print Name: Alexis .T. Miranda Ramirez
Tax I.D. numbeJ
I I

Appendix A

PROPOSAL, APPLICATION DOCUMENTS AND INCENTIVE RESERVATION


NOTICE

App. A-21
EXHIBIT 3
Organic Power - SBA Loan
6123/2017 Transaction Details

TRANSACTION DETAILS
« Go to Award Summary

ORGANIC POWER, LLC 8092275005

RECIPIENT

PROJECT AWARD

ACTION

Fiscal Year 2016


Quarter
Action Type A: New assistance action
Face Value of Loan or Guarantee $3,763,000
Obligation Action Date 12/8/2015
Record Type 2: Individual action
Corrected Fiscal Year Quarter 20161

PRINCIPAL PLACE OF PERFORMANCE

EXECUTIVE COMPENSATION

https://www.usaspending.gov/transparency/Pages/rransactionDetails.aspx?RecordlD=7E46F1 C4-BCCD-4F2F-8742-7F643986C41A&AwardID=49105216&Aw... 1/1


EXHIBIT4
Organic Power - PRLA Loan
7/11/2017 Contract Data

UTAPO l.lDIIE ASOCl-'110 PE rUEllTO RICO

OFICINADELCONIRALOR
SearchlAboul uslOlllce of the Complroler1Help
Contract Data

Entity;
l 3000 - LandAuthority Of Puerto Rico

Contract number.
r
i 2016-()0()126
Amendment:

R-lvedln:
� o-mber 17, 201511:15:44 am

Awarded In:
o-mber 8, 2015
Elfecllva From:
0-ber 8, 2015

Durallon Untl Contract:


December 7, 2025

Vlllld Unll Renewal:


No Automatic Renewal

�1VIC!9 �taqory:
i 2 • PURCHASE, SALE AND/ OR RENTAL OF BUILDINGS

Type of aervlce:
2,0010 • GROUNDS

; o • Not Exampt
Exempt Type;

Amount
$2.40,952.ti0

Account number
Budgetary Items:

I
N/A

Dlapenaatlon:
Yu •Donot

Prlvatlzatlon:
Yu •Do not

Haa Document:
•vu Donot

ORGANIC POWER, LLC.

http://contratos.ocpr.gov.pr/DataContratoFonn.aapx 1/1
EXHIBIT 5
Organic Power - PRLA Lease
-----,CONTRATO DE ARRENDAMIENTu--------
-En la eluded de San Juan, Puerto Rico, a los a dias del mes de didernbre del ano dos mil

quince (2015).--------
I!' -COMPARECEN
-DE UNA PARTE: LA AUTORIDAD DE TIERRAS DE PUERTO RICO, en adelanle denominado en este
documenlo "La Arrendadora", una corporaci6n publlca e lnstrumentalldad gubemamental del Estado
Libre Asociado de Puerto Rico, representada en este acto por su Director Ejeculivo, DON SALVADORE.
RAMIREZ CARDONA, mayor de edad, casado, agr6nomo y vecino de Bayamon, Puerto Rlcoi---­
-Y DE LA OTRA PARTE: ORGANIC POWER, LLC., representada por MIGUEL E. PEREZ VALDEZ,

mayor de edad, casado, Conlable, y vecino de Dorado, Puerto Rico, en adetanle denom!nado en este
documenlo EI Arrendatarlo�. Dlrecci6n postal: PMB 632 Calle Sierra Morena 267 Sari Juan, Puerto Rico
0

0096 /I Tel. (787) 651-9196. ----------------­


---------Las partes arriba nombradas, por el presente, ---------
----------r:XPONEN--------------

-PRIMERO: Que 11La Arrandadora" es duena en piano domln!o de la propiedad iomueble a que se hace
referencia mas adelanle y por la presenle CEDE Y DA en arrendamfento a "El Arrandatarlo" dlcha
propiedad inmueble bajo los t6nnlnos y condlclones consignados en esle documento. Las propledades

inmuebles, objelos del arrendamiento, que aparecen descrilas mas adelanle, fonnan parte de las Flncas
Matojal y Cayures, radlcadas en el Barrio Caho Caribe del tArm!no n1unlc!pal de Vega Baja, Puerto
Rico.-•--·-,---------------------·------

-SEGUNDO: Descripcion: los predios objetos del presenle arrendamlento llenen una cabida superficial
aproximada de 321.27 cuerdas en total perteneclentes a le finca antes menclonada y que se describen a
conllnuacl6ri: __________,___________,
ROSTICAS:
FINCA MATOJAL:
Predlo radlcado en el Banio Cabo Caribe def llmnlno munlclpal de Vega Baja, Puerto Rico; con una
cabida s�rllclal apmximada de 140.27 cuerdas. En llndes: por el NORTE, con le1Tenos propledad
de la Aulolfdad de Tlarras de Puerto Rlco: por el SUR, con l!lll'enos plivados: por el ESTE, con
terrenos privados, lerrenos propledad de la AulOridad de Tieiras de Puerto Rico y coo Ramal de la
Carrelera PR,6671; y por el OESTE, con terrenos privados. ----------

1
FINCA CAYURES:
Piedlo radlcado en el Barrio Cabo Ceribe clel termlno municipal de Vega Baja, Puerto Rlco; con una
cablcla superflclal aproxlmada de 181.00 cuerdas. En 1-ldes: por el NORTE, con lerrenos privados;
por el SUR, con lerrenos propledad de la Auloridad de lierras de Puerto Rico; por el ESTE, con
servldumbre de la Carrelera Estala! PR-686; y por el OESTE, con lerrenos pnvados. ----

Este predio aparece geogralicamenle deUmllado en el craquis que se acompalla y se hace lormar parte de

este contrato comoAnejo "A".--------------------­

-TERCERO: Termlnos y Condiclones: _,....._,....."·-·---------·--·-·--·---......

-1) El tennlno del arrendamienlo sera par un perlodo da dlez (10) allos, a partlr de la fecha de la
flrma de este contrato. ---------------------­

-2) Las canlidades a pagar por conceplo de este arrendamienlo se desglosan a conlinuaci6n: ---
---···- ·· ····
Perlodo USO Canon
Allos1al5 Mensu.al I Anual
321.27 cdas @ $50.0D cdalalio S1 338.63 I i16,063.50
Parlodo Pastoa majorados Canon
Mos 6 al 10 (Napier Gran) Mensual
I Anual
321.27 cdas@ $1D0.00 cda/af\o
... - -- s2,s11.2s 1 $32,127.oo

- En caso de que el CRIM o alglin lrlbunal con Jurlsdlccl6n lmponga el pago de contribuclonas

terrltoriales por el predio arrandado, al pago aeli asumldo por "El Arrendatarlo". Oisponifmdose

ademas, que cualquier aumento conlribulivo que se imponga a la misma sera tambien responsabllidad de

"El Arrandatarlo" el que debera de pagar a "La Arrendadorau.----·

- Los pagos se efectuaran par mes adelantado, en las oliclnas de "la Arrendadora", localizadas en la

Parada 19½, Avenida Fernandez Juncos, Numero 1311, en Santurce. "El Arrendalarlo" queda advertldo

que "La Arrendadora" se reserva el derecho a cambiar el clclo de facturacl6n, segun esllme necesario sin

que lo anterior conlleve camblo ni modincaci6n alguna a los 16rminos del presenle conlrato. "El

Arrendatario" se compromete y obllga a pagarle a "La Arrandadora" intereses anuales sobre cualquier

cantldad que adeudare y tuvlere en atraso, ulilizando como base el uno por ciento (1 %) sobre esle, a la

recha que ocurra tal accl6n.------------

- Para garanllzar el pago de las canones correspondientes a un termlno de dlez (10) anos, "El

Arrendatario" presenl6 a "La Arrendadora" la cantldad de $8,031,75 como fianza a garanlla de pago

de los canones de arrendamlenlo, Dicha canlidad deposilada no generara inlereses a favor del

Paticionario y le ser� devuella a "El Arrendatarlo" una vez culmine o se dA por tennlnado el contrato de

arrendamlento sujelo a cualquier deducci6n apficable por dnones no pagados. El Arrendatarlo" pagaril

la canlldad de $481.90 para cubrir parte de loa gaatas admlnfstraUvos. Adamas, "El Arrendatarlo'
2
entregara a "La A1Tendadora", y mantendril en vigor durante la vlgencia del contralo de arrendamlento, una
fianza preslada por DOS (2) PERSONA$ de reconocida solvencia econ6mica. La flanza d8beril ser

aceplada por "La Arrendadora".


-3) "El Anandatario" se compromete a no construlr en la propiedad aJT8ndada edlflcacion alguna, ni
permltlrll que persona alguna construya, siendo responsable a "La Arrendadorah de los danos y

perjuicios que la vlolaci6n de esla condlcl6n ocaslone. En caso de qua fuese necesario conslruir alguna
edlficaci6n para realizer los prop6sllos de esle conlralo "El Arrandatarfo" vendra obllgado a sollcilar
autorizaci6n previa y por escrilo at Director Ejeculivo de "la Arrendadora". Oicha sollcitud sera evaluada
y su resullado sera oportunamenle informado por escrtto a "El Arrendatarlo". -------­
-4) "El Arrendatarlo" se compromete a ullllzar la propledad arrendada imlca y excluslvamente

para PASTOS MEJORADOS (NAPIER GRASS), dlsponl6ndose que sl se vlolare esta condicl6n, "La
Arrendadora" podr6 resolver el contrato de arrandamlanto lnmedlatamente. "El Arrendatario"

exprasamante raconoce que esta prohlbldo utllizar la propiedad arrendada para cualquier uso no
contemplado en al praaente contrato. ----·------�-------­
--5) Las partes convlanen qua el acceso a laa propledades arrendadas serli por la Carretera Estatal
PR-686 y Ramal 6671 para la llnca Matojal y para la flnca Cayures por la Carratera Estatal PR•686.
"El Arrandatarlo" debera mantener y conservar en buenas condiciones el carnlno de acceso y los
caminos o callejones que dlscurran por la propledad arrendada con malertales reslslentes, tales como
tosca o caliche. Oueda tenninantemenle prohlbido el uso de gravma, asfalto o cualquler Hpo de matertal
parecido. "El Arrendatarlo" se obRga a respetar las servidumbres eslablecidas sobre el inmueble objeto
de esle arrendamlenlo e lmpedlrll que se establazcan nuevas servidumbres y derechos de peso sin el
consentimienlo escrilo de "La Ammdadora".-----------------­

-6) "El Arrendatarlo" se oblige a cuidar la propiedad arrendada con la diligencia de un buen padre de

famllla compromatl6ndosa a entregar la mlsma en iguales o mejores candlclones de las que la recibe al
comenzar el conlrato, salvo el delerioro natural que sufra la misma. ----------­
-7) "El Arrendatarlo" reconoce y acepta que el predlo objeto de esle contrato se esl� a1Tendando en su
condlcion actual ("as is') y por tanto se oblige a hacer en la propledad a1Tendada, durante el termino del
arrendamiento, aquellos trabajos que sean necesartos para conforrnarla y conservarfa en eslado de servir
para el uso a que habra de deslin�rsele, lodo ello por su cuenla sin gasto o desembolso alguno para "La

Arrendadora11 .---