Speaker 2 | 22:28
The contract is the one where we believe there are four to five cents of savings. We were obviously not getting the same price from Natural Gas, which is why we went down a different path on the diesel. So, I think it's only really worth your time if we could work with Lionel and the proper team to see if we can really find a way to access your guy's contract and not Natural Gas, not naturally, independently.
Then your Natural Gas supply agreement with NF in the North, probably not relevant, but that's actually really a diesel-based contract anyway. So, we didn't see it there as materially different in pricing, in emissions, yes, in pricing, no.
Speaker 3 | 23:19
Okay, so basically, to summarize, you're saying that you're focusing on diesel, and if the prepa eventually would like to transition into LNG, then you will be supporting that option. That would represent a discount of four to five cents on the pricing.
Speaker 2 | 23:36
Yeah. in today's today's.
Speaker 3 | 23:38
Markets in today's market. Mr. Santa, do you have any comments regarding issue number one?
Speaker 4 | 23:46
No, that's okay, we can continue.
Speaker 3 | 23:49
Okay, thank you. Okay, so then.
Speaker 2 | 23:52
And Lionel, you know what I'm referring to in the NFE contract really being a diesel contract?
Speaker 4 | 24:02
Well, I know that in the beginning, we had a lot of instances in which NF was providing diesel instead of natural gas, but if you care to explain, I'm all ears.
Speaker 2 | 24:21
Yeah, it's not really that relevant, but their LNG contract in the North, even though it's LNG, it's priced off of diesel, so you're still getting the diesel price, but in the form of LNG. So, there's probably not that much cost savings there.
Plus, it's not relevant because it's a different delivery point. Your existing Naturgy contract at Costa Solar or E-Electrica, that's a good contract, and that's a contract where the prices are based on Henry Hub pricing, and that is a good contract.
Speaker 4 | 25:03
Okay, got it. Thank you.
Speaker 2 | 25:08
And don't want to belabor this point. When we were offered prices from Naturgy, we were not offered prices based on Henry Hub pricing. But we were offered prices based on TTF, which is the European gas indices, which is materially higher than the Henry Hub gas indices. Which is why the Naturgy contract that they offered us didn't work because it was a much higher price than what you guys currently have.
Plus, they were asking for a fixed take-or-pay for a year fixed volumes, which we know that you guys, at least as of now, don't want to commit to volumes. And so you want this to become dispatchable. So, that was part of the reason why, when we were coming up with our business plan, we first focused all on natural gas on LNG and then we pivoted because we couldn't get a flexible natural gas supply contract from Naturgy. They wanted fixed volumes for the term, and it was at a very high price.
So, the way we came up with our business plan to give as much optionality as possible is by setting up this diesel arrangement where you don't have to commit to dispatch for the year. It gives you full flexibility.
Speaker 4 | 26:42
Understood? Yeah. Thank you. Okay.
Speaker 3 | 26:50
Do you want to move on to issue number two?
Speaker 2 | 26:53
Sure.
Speaker 3 | 26:55
Okay, so permit costs and permit tension costs. Article 2.6 and Article 3.3, the changes in the agreement, the cost of obtaining permits for the commissioning of the units are on the buyer. The buyer must bear all costs related to the obtaining permits for the extension of the term.
Speaker 2 | 27:17
Yes, Miriam, this is a very critical component of our deal. We are definitely not in the position to take the permitting risk here in Puerto Rico. We moved very quickly to put together this design and project, and that is more in Puerto Rico's control.
So we've done the best we could. But I have no comfort or ability to really risk-assess permits, and that's really in Puerto Rico's hands. My understanding is, pursuant to this emergency process, we will be waived of all permits, most importantly, I guess, the air mission permit.
But we don't know. We have no commitment that we will be able to get the air mission permit if this waiver is not extended for years 2 and 3. So of course we want to extend this project for years 2 and 3, but we can't bear the risk.
We need to work with Puerto Rico to make sure either (a) the waivers stay in place or (b) we get the permits and hand over is required.
Speaker 3 | 28:41
Mister Santa, do you have any comments? I know that I have participated in other meetings where the discussion was that the permits were to be presented by the supplier, and that Prepa. Hera. Luma would be assisting them with the permitting situations. What do you think is the way that this is structured?
Speaker 4 | 29:06
No, you're absolutely correct. We just want to understand where they're coming from. We won't obviously be the siding today, but this is all useful information.
Speaker 5 | 29:23
If I may, are you familiar with executive order? 2025 dash 16?
Speaker 3 | 29:32
Yes.
Speaker 5 | 29:33
Okay, that executive order exempts Prepa Luma genera as a decoectria?
Speaker 2 | 29:43
From any of.
Speaker 5 | 29:45
Permit requirements pertaining to emergency generation. You know, being that this project would be procured for purposes of precisely obtaining emergency generation, set forth in the order, our thinking is that this know.
Speaker 2 | 30:07
This is.
Speaker 5 | 30:08
Squarely covered within. Within the four corners of the executive order, if it's not... I think we ought to get clarification from the EPA about this? Because, as you and I know, obtaining permits for such an urgent project like this would simply derail the whole thing.
Speaker 4 | 30:31
So. no, regardless, I totally agree. We've had this conversation before. We're just, as far as I know, you're absolutely right. But we're fine-tuning this understanding of the end of the executive order with the different governmental agencies.
Because, as you know, everybody has their own book, unfortunately, and we're trying to get everybody on board for this.
Speaker 5 | 30:58
But you're the one thing that's not within Puerto Rico's control is the Clean Air Act exemption from permitting for temporary air emissions sources. That's why we refer to twelve months in the agreement, right?
Going beyond the twelve months then, you know, it's something that needs to be discussed with the EPA and try to get to an understanding. Our understanding is that the temporary generation units that have been installed have continued to operate beyond twelve months through a combination of administrative Interpretations.
Speaker 2 | 31:54
E you know, no.
Speaker 5 | 31:58
No action letters, no action assurance letters from the EPA and so on, but not actually a permit because, as we know, permits for again, this type of facility would take And.
Speaker 4 | 32:16
Yes, Carlos, I totally agree with you. There's an ongoing meeting as we speak with the EPA and the DOE. Right now, I have to be over here, but there are other people on that meeting. Okay.
Speaker 3 | 32:36
Okay. So we're going to take the assignment, go back and get more straightforward and verify what the determination is from the EPA. We can if we can have anything that will... Do we have the executive order?
I agree with your position, Mr. Fernández, so let me see if we can get something reassuring for this particular project. Does that would that make sense, Mister Santa?
Speaker 4 | 33:03
Sure.
Speaker 2 | 33:04
Sure.
Speaker 3 | 33:04
Okay, we'll take that assignment.
Okay, so we can move on to issue number three: Monthly services capacity and O&M article 2.1 and article 2.6. The buyer shall make monthly capacity and O&M service payments regardless of the SOS provisions of the power generation services. In particular, the service payment is due if the services are not provided due to force majeure, nonperformance by the diesel supplier Corco, as of governmental authority, or the operator of the transmission system. Monthly service payments. The sum of: a. The capacity payment calculated in accordance with Exhibit B1. b. The fuel main. The fuel payment calculated in accordance with Exhibit B2. c. The fixed O&M payment calculated in accordance with Exhibit B3 and D.
And the buyer has made the Blackstart election pursuant to article 9.1 D, the tariff fee calculated in accordance with Exhibit B5. Mr. Stone.
Speaker 2 | 34:23
Yeah, I think, for us just to go through a few points. One, I'm comfortable with everything that happens offshore. I am the diesel supplier. At the end of the day, if there is a problem with my supply, that's my problem, and I should take on that risk.
But the moment I loaded in Corco, I'm a bit concerned. Not because there's anything wrong with Corco. But I've never done business with them before, and I'm new to this market. I will note that I believe Lionel... I went through the various fuel supply contracts, which I think you could assume I'm familiar with many of them.
I've studied them and maybe you'll remember there are force majeure rights in the fuel supply agreements, the historical ones when Prepped was owning it, around the barge operation and some of the inland transfers.
So to me, that felt like that was precedent in Puerto Rico that they've seen issues before when it comes to fuel supply, that the inland accommodation is a force majeure event or an indemnifiable bet.
So because I saw precedent and because of my. Despite Coral being frankly wonderful to deal with in this entire process, I don't have a long history with them. I felt uncomfortable taking that risk. But again, I thought there was precedent for it from other fuel supply deals. When it comes from acts of government authority, definitely that's under Puerto Rico's control. As of the operator of the transmission, again, that's under Puerto Rico's control.
I think on the force majeure. Generally, I think the major issue that I'm confronted with is this is a very short-term contract, and all of my vendors want to get paid. And they don't necessarily want to take the Puerto Rico risk. It's weather or otherwise, if this was a longer-term contract, I think there would probably be some willingness to give force majeure days of leeway or flexibility.
But I think because of the very short-term nature of this deal, people want to get paid on time. They've delivered their equipment. What goes on in Puerto Rico, from their perspective, stays in Puerto Rico.
So that's a little bit the pressure I'm under again. If you decide you wanted a longer-term contract, I believe I would have more flexibility to negotiate my own arrangements.
Speaker 4 | 38:06
When you say a longer contract, you're considering the possible extensions. So you might have over three years, right?
Speaker 2 | 38:19
No, I'm not. What I'm thinking right now is your commitment is only for one year. I know if I got even a two-year commitment with an option for the third year, then there would be... I think on a lot of these terms, flexibility. To be frank, I'm leaning towards the unfortunate reality.
Again, I know this is there's no hiding it. I know this is expensive. Trust me, nobody's happy about it. The unfortunate reality is that when we went out for generators, and I'm not sure if you've heard this from other people, there really isn't much supply there.
And.
Fabian Velez | 39:03
On the company, the second Miro or.
Speaker 2 | 39:04
And, you know, we were Even Negotiating to get Generators in Basra, Iraq. Because we were so desperate to find generators, and the reason why is that, as you guys may know, power demand in the US, especially the US, is going through the roof.
We're competing with data centers and people like META, Tesla, Google, and Microsoft, who are basically hovering up the generators and entering into long-term arrangements.
So, unfortunately, doing a one-year arrangement in Puerto Rico is just not at the top of the agenda for a lot of the suppliers of generators because their business model is long-term deals with investment-grade credits.
So, I believe we are all, I guess, subject to the fact that because of the term and because of Puerto Rico, things are just unfortunately very expensive.
Fabian Velez | 40:17
Belloso. I'm okay, but yeah, I'm bulldozing. Yeah, ca-goo-mot-braja. So, as a neo, and then Amelia, Amelia, the transit, the Tamil, the compriga moment them.
Speaker 2 | 40:23
I do believe Javelin and our balance sheet. We are in effect credit wrapping the Puerto Rico risks because everybody's looking to my balance sheet, not yours.
Fabian Velez | 40:36
And another area that was... You are the America cellar order with the America said go. It has the key of Dora, and the Matel, the Lewy, the paja on an old woman.
Speaker 2 | 40:43
And I think, that gives a lot of people a lot of comfort from a credit perspective. But ultimately, then the term becomes the biggest problem for people to do all this work getting generators, moving them here, building the balance of plant, and then leaving one year later is not a good deal for anyone if they could.
If they could get a commitment for, I think even two years, that would be very helpful. I would be more than happy to go back in and try to negotiate.
Speaker 3 | 41:23
Mr Stone, I have a question. We don't have the authority to determine anything, but for the record, and I don't even know if you're in a position to have this answer right now, but you discussed two issues.
If the contract was to be two years and that was the term, the force majeure conditions, and pricing, do you have an idea of what the force majeure would vary from what you presented on a two-year term contract? How would that impact the pricing of your proposal?
Speaker 2 | 41:51
Unfortunately, I don't know. On pricing, on force majeure, you know, I'm making something up. I'm not committed to this, but what I would ask is to go back to my vendors and see if we can get 30 days or 60 days of force majeure before payments need to start again.
I think it's in the realm of probably 30-plus days. Miriam, it's not going to be three months or six months of force majeure where people are going to be sitting on the sidelines and waiting.
Okay.
Speaker 4 | 42:37
No thank you for that. Sorry, Tve, there's a call that I have to make right now. I got a text message, it won't take me more than three minutes. Can you please give me a second?
Speaker 2 | 42:56
No problem. I'm happy to take a 3-5 minute break, if that's okay with you.
Fabian Velez | 43:00
And.
Speaker 2 | 43:00
Mary. all I just rushed here to panic sometimes, get a breath.
Speaker 3 | 43:04
I have all afternoon.
Speaker 2 | 43:07
Okay? So we'll just put on you.
Fabian Velez | 43:09
Miro photo.
Speaker 2 | 43:09
We'll wait for Lionel to tojoin.
Fabian Velez | 43:11
No, really got a.
Speaker 3 | 43:11
Yes, thank you.
Fabian Velez | 44:19
I'll. Okay.
In general, luck as always, but see, as you're so pay-roll fatal, they don't give a take. Else says you ceremony of baby steps is the full...
No, perfect.
I said, could you press the I mean, I want to press you to the elector center, you people in to pressure. He said, I want to say to me, I'll be boy.
I said, Kombrando. Com. But as I look at it, it's included pressure accounting. I said, "My
hand up for the distinct factor and the can." Then press. Asa...
Where will we gos?
Speaker 4 | 46:59
Okay, I'm back. We can proceed when you're ready.
Speaker 2 | 47:04
Okay.
Speaker 4 | 47:06
Thank you, Greg. We're here.
Speaker 2 | 47:19
Lionel, while we're waiting for Miriella, can you hear me?
Speaker 6 | 47:26
Sure, yes.
Speaker 2 | 47:27
So maybe Mary Alice is joining, okay? Well, we'll give her a sac.
Fabian Velez | 47:28
Yes. She's coming in. Theres.
Speaker 2 | 47:37
Okay, great. I was just saying, before I forget, our team had a great visit today at Costa Sewer. Luma sent a nice team of, I think, five or six people.
What became clear to us is that there's a lot of coordination we need to do with Luma if we want to hit the ground running. So we want to know if there is a way where we can just start discussing with them now. Every day, obviously copying you guys and inviting the 3PO to every meeting, but really coordinating now such that, if and when we get through this, we then don't have a week or two weeks of disruption because we're not coordinated with Luma.
There are quite a few things that need to be organized and agreed between the two groups. So if you guys could just put some thought to it. Mariela, if you think we could start engaging with them in real time, obviously with your guys' supervision, I think that would really speed up the process and get us started on the right foot.
Speaker 4 | 48:59
Yes, actually, Mariela had made a request to share documentation with Luma and Haneta. Which I agreed to earlier today. Nevertheless, we may have to sign an NDA more so with Haneta than with Luma because of the relation to New Fortress.
Yes, I don't think that makes absolute sense. We'll let you know as soon as that happens, which should be between today and tomorrow.
Speaker 2 | 49:47
And then that'll be great.
Speaker 4 | 49:49
Engage them once they have all the documentation we're sending over.
Speaker 2 | 49:56
Great. Then what we would love is for Luma/Stork Prepa to allocate the project manager who is responsible for leading this process with us. If there's ever a moment where we need to escalate things because they're not happening, who's the right person to talk to?
So just understanding who's who. Then if something's not happening, who do we raise it to? We're very focused on making sure we hit the ground running right away. Everybody's doing their job.
If it's not going the way we were hoping, if there needs to be some escalation, it's a very clear line of reporting of who we go to.
Speaker 3 | 50:44
Yes.
Speaker 6 | 50:45
Mr think I was just gonna say, as Spencer, it might make sense that at some point you meet the president of Ma in Puerto Rico if you have not done so already. So that line of communication is at the highest levels.
Speaker 2 | 50:59
Right? Would love that.
Speaker 3 | 51:02
Yes, absolutely. To that point, when we were conducting the RFP, we did ask Luma to give us a chain of command with the point of contact and who was going to be in charge of the technical affairs.
So. And right now, my point of contact is Mary ASA, and the person supposedly in charge is of firing in YAC. But if you please, allow us to make sure that as of today, that is the accurate change of command.
We'll sign those NDAs and we will gladly share all the information in contact with you and help you and assist you in any way we can.
Speaker 5 | 51:40
Great.
Speaker 2 | 51:41
Okay. If you could just send us that NDA when you're ready, that'll be great.
Speaker 3 | 51:45
Fantastic. We do. Okay, so Mr. Santa, do you have any other concerns, questions regarding issue number three?
Speaker 4 | 51:59
No, we can move on, thank you.
Speaker 3 | 52:01
Okay, fantastic. On to issue number four. So it's a female reimbursement eligibility article 4.2. The buyer shall reimburse all costs and expenses associated with any compliance obligations or costs imposed on the seller related to FEMA reimbursement eligibility. The seller made a footnote that these costs are subject to further review. Mr. Sloan.
Speaker 2 | 52:29
So Mariela, we didn't, to be frank, know what the FEMA reimbursement procedures and administrative requirements were by the time we sent our PPA. Since then, we have found the lady who I believe does the FEMA reimbursement for your Spencer.
Speaker 6 | 53:00
So yes, just to set this as long as you are okay that you know that she was not on a restricted party, so we can contact the Susetti, as I think is her last name.
Fabian Velez | 53:12
[Laughter].
Speaker 6 | 53:12
Who has handled, as you guys know, the Paircraft FEMA paperwork and submissions for some time now?
We thought that, given that she knows the process and so on, and she agreed to be part of our team as long as the PPA was okay with that, so that we can then have her be the person helping those out, obviously, along with the rest of the team in terms of having the paperwork that needs to be submitted.
Speaker 3 | 53:37
Thank you. I would like to go back a little bit and maybe explain what the whole process in the FEMA involvement is. So originally, when they were going to do the project, they were trying to pass the interconnection cost through the FEMA PW. So there's a PW project worksheet number for the damages suffered in costs assessed, and there's another PW.
So what they were trying to do is that to try to have FEMA pay for the interconnection cost. That is something that's going to take time and therefore it was not contemplated originally in the whole RFP specifically, but there is an intent Faoan, I think. Please put yourself in a...
Okay. So, the interconnection cost. And they're... They're going to try to put them through the mitigation program. And in order for FEMA to pay for those, if they qualify, those have to be identified separately.
That's why we have asked for a quotation of the interconnection separately. So in case they do pay for it, we have a way of telling FEMA this is what the cost was, and we can get paid for that. But otherwise, the purpose of this was that the interconnection costs were going to be paid through the price of the kilowatt. Nevertheless, eventually, if FEMA pays for that, then we would get reimbursed for for.
Speaker 2 | 55:18
That's I think... It sounds good, and we should do record keeping. Miro, it's... I don't think it doesn't cost that much, so we should do it. For us, everything it will just be at the cost of what SLA costs.
It sounds like she knows exactly what to do. So, let's build in all the record keeping we can.
Speaker 3 | 55:48
Fantastic. Well, that one thing.
Speaker 6 | 55:53
One thing to add, Spencer. Again, I'm sorry I was late to the call, but I don't know if you had a chance to comment on that. You know, one of the things that we've been thinking, of course, the last two emergency deployments in Puerto Rico after Maria and then a couple of years ago were all, as we all know, paid by FEMA, Army Corps of Engineers, and so on.
Obviously, this is different and so on, but one thing, Spencer, you might want to... Besides what we're doing, we would love to work with the Commonwealth to see if we can go together, holding hands to the federal government, and see if we can find pockets of monies that may be available from FEMA or the Department of Energy to pay for this project. Obviously, that will take time and so on, but that's something you want to share with them.
Speaker 3 | 56:37
Okay. So, Mr. Gonzalez, just to make sure that I heard you correctly. Part of your strategy is to verify if you can identify additional funding sources to help the government of Puerto Rico.
Speaker 6 | 56:50
Well, what I'm trying to suggest is, we're going with the plan that you guys have outlined and so on, and you've probably heard, and again, I missed the first two points. But after this thing is going to take time.
To the extent that the Commonwealth is actively looking to identify and secure federal funds for this project, of course, we will be.
Speaker 2 | 57:16
Happy to be helpful.
Speaker 6 | 57:18
On those efforts. But that's something that's on the come. No, that's something separate from what's been negotiated here.
Speaker 3 | 57:27
Okay, I get you. So, the issue here is that you're going to be sure that you're going to do the monitoring and record-keeping and to be solid in case that we qualify for additional federal funds. We are documented correctly.
Okay, fantastic. Thank you. Okay, noted.
Okay, Mr. Santa, do you have any other concerns or comments regarding this issue?
Speaker 4 | 57:59
No, I'm just trying to picture what those compliance obligations would be, since it's Prepa as the subrecipient of the funds, the one taxed with the responsibility to comply with all FEMA requirements.
Right? But nevertheless, this is not that big a deal. We can move on.
Speaker 3 | 58:33
Right? I am assuring that they're referring to making sure that they comply with all the federal clauses regarding the contract execution and management of federal-funded CLA and clear like Clean Water Act and all those things that are necessary to be in compliance with federal-funded projects.
Speaker 4 | 58:58
Yes, you're right. Got it. Okay.
Speaker 3 | 59:02
Well, then let's move to issue number five, which is change in law costs, article 16. If any law or regulation changes during the term of the agreement, any resulting increase in seller's costs will be passed through to the buyer.
If the buyer refuses to accept these increased costs, it can immediately terminate the agreement and draw on the amount of the buyer's security deposit as described in Mr. Sow.
Speaker 2 | 59:34
Yeah, Martin, I think it just goes to some of my original points, which is I think what goes on in Puerto Rico stays in Puerto Rico. This is not a risk I even know how to think about, and I don't even think I should price it.
So, I think these are things that are under your control or Puerto Rico's control and really shouldn't be a risk that I should take on. I'm focused on bringing the gensets.
Speaker 3 | 01:00:18
Mister Santa, do you have any concerns or additional comments to this issue?
Speaker 4 | 01:00:22
No, not at all. We can move on, thank you.
Speaker 3 | 01:00:25
Okay, that's issue number six. The mobilization payments. Article 9.1a Exhibit A. The buyer must pay a mobilization fee in two installments: 50% within five business days of the effective date and the remaining 50% after the first commercial operation date. The turbine mobilization fee alone is approximately $16,500 with additional costs for other equipment mobilization. Mobilization fee. The sum of the turbine mobilization fee plus excess BP mobilization cost, with the turbine mobilization fee being approximately $16,500 and additional cost for other equipment mobilization. See Exhibit A. Mr. Stone, would you like to comment?
Speaker 2 | 01:01:15
Yeah. My first comment is when I first got proposals back from vendors, this was times more expensive. So I think I've achieved a lot in getting it down to this level. People really wanted to be prepaid upfront for coming to Puerto Rico, not only to cover their costs, but they wanted to be prepaid a lot of money.
So, Lionel, this is probably 50% from where I started. I've tried my best. I'm not going to be able to get it down. It's the cost of doing business. This is the mobilization fee for the seven units. Lionel, I'm sure it doesn't cost $16.5 million to move this stuff to Puerto Rico, but this is the best I can get.
This is what was required by all my vendors.
Speaker 4 | 01:02:22
Understood. Ultimately, it's obviously not my call, but this could be a very sticky point here. We'll have to get back to management and talk about it, but we're not dropping off anything yet. We're here to talk.
So, I understand your point. We can continue.
Speaker 2 | 01:02:55
I think I don't know if there's... Yeah, this is all the money that goes out the door for me, and so... For me, the risk I'm taking is credit intermediating getting paid for by Puerto Rico.
So, if there's a letter of credit or some other sort of credit mitigated comfort, I could get that the payments will be made in short order. If there's a technical reason why you couldn't do it,
I'm very certain I'm going to get paid. Then I can bridge the gap. So, I have the balance sheet to do it. I just need to have the comfort that I'll definitely be paid. So this is definitely a cost that I have and that is... There's no compromise with the vendors. This is as low as I could get it.
Again, it's 50% less than where I started or where they started.
Speaker 4 | 01:04:11
No, Understood.
Speaker 6 | 01:04:14
Hey Spencer. This is such a key point. You may want to spend just one more minute on the difference between the source of payment and the actual person making the payment and the potential backstop or credit support of a third party.
How those two things are intertwined, but they're different.
Speaker 2 | 01:04:38
I sorry, Francisco. I got confused. Can you say that again?
Speaker 6 | 01:04:43
Now you may want to spend just one more minute on the difference between a storage of payment and the entity making the payments and potential trade support from a third party. And thus, those issues obviously are intertwined, correct?
Yeah. So, you might... I think what I'm hearing you saying is we need this amount of money to make your payments, but you have a balance sheet and the right trade support back-ups are in place. Then there's something that you could potentially do if the CRA support is there.
So, it's the difference. I just want to make sure that prepa, when they look at the flow fronts here and the needs, because they have their particular liquidity math, they need to do your comments.
These requests are in the context of the fact that there's a source of payment prepa and then there's the credit support that may or may not be available here that will allow them for this to work for everyone.
Speaker 2 | 01:05:58
Yeah, I think it's what we touched on with Lionel last time. It goes to the same points, which is obviously the best thing for us is a letter of credit. It makes my life very simple, but I'm sure it makes your life very difficult.
So, we know that there needs to be some constructive here. At the end of the day, we asked Lionel to go back and find out what, other than taking preper risk and the concerns we have about administrative claims, can he do in order to help risk mitigate?
Those things can be Commonwealth guarantees, FEMA guarantees, letters of credit deposits. I promise not to say the word prepayment and anything. Lionel knows better than I do what levers they have to pull. I'm just making it up. I don't know how it works here, but I think you appreciate the concern and are just waiting for you guys to get back.
I think it's the same discussion with this upfront payment, this mobilization payment, it's a very real payment that has to be made, and so happy to intermediate it. I'm sorry, happy to fund it, but it all gets back to the same question, which is who is going to pay us or who's going to provide the credit support to make sure I get paid?
Speaker 4 | 01:07:36
Yes, and it's understood. We talked about it. We don't have a final answer yet, but we're working on it.
Speaker 2 | 01:07:46
Okay, thank you.
Speaker 6 | 01:07:48
And last comment I'll shut up after this for a while is that in Seattle, if you want us to participate and be in front of a faith or any of your sister entities in Puerto Rico so that they can understand some of the inertia or nuance of all this stuff, we're happy to be whenever you need us to be with a faith or anybody else.
Fabian Velez | 01:08:09
You say, what's your step there?
Speaker 4 | 01:08:13
Thank you, appreciate it.
Speaker 3 | 01:08:21
Well, I'm pretty clear, Mister Santa, do you have any additional comments or concerns regarding this issue?
Speaker 4 | 01:08:27
No, please. Let's move on.
Speaker 3 | 01:08:29
Okay, fantastic. Let's move into issue number seven: Termination Payments. Article 1, 4.1. If the seller is a non-defaulting party, the termination payment payable to the seller upon termination includes: 1) the remaining monthly service payments that would have been payable during the term but for the early terminations; 2) all fixed fees payable with the term of the agreement plus two costs and losses; 3) the economic loss to the seller, if any; 4) exclusive costs resulting from the termination of this agreement, determined in a commercially reasonable manner, which is in this case for the seller, shall include the remaining monthly service payments that would have been payable during the term but for the early terminations; 5) costs with respect to the seller's brokerage fees, commissions and other similar third-party transaction costs and expenses recently incurred by such party, either in terminating or restructuring any agreements pursuant to which it has hedged its obligations, or in terminating or restructuring any required contract or similar agreements; 6)
all reasonable attorney fees and expenses, including indemnification payments, incurred by the non-defaulting party in connection with the terminations of this agreement.
Speaker 2 | 01:09:50
Yeah. On the first part, to actually scroll up a little bit, Marriella, on the first part, Lionel, I think plain and simple, everyone that I'm working with is asking me to enter into Take-or-Pay Hell or Highwater. They're not here to again, they're not taking any risk. I'm wearing it all.
So that's why the provision is as difficult as it is because I'm being asked to do the same thing. Trust me, I've tried very hard not to do that, but there is a real concern, rightly or wrongly, around Puerto Rico, and people just don't want to actually have to think about the risk or take it to their boards and talk about these are all the things that could go wrong in Puerto Rico from their perspective. They go to their boards and they say, "We have a one-year take-or-pay with Javelin," they've got the balance sheet to support it, and then an easy transaction for them.
Yeah, trust me, I'm not happy about it either. And then costs and losses. I think in all instances, that's probably a pretty small number. The one area where I did have probably a larger concern is that if this becomes a baseload operation or let's just say you're dispatching it more than that, maybe you're anticipating it. Today, I suspect that there are going to be discussions between us around fixing the fuel price, especially if you find an opportunity to do it.
Fabian Velez | 01:11:43
This is my joy. On the north side of town.
Speaker 2 | 01:11:45
If then the contract is terminated.
Fabian Velez | 01:11:47
Unless you want to taste what's in that suitcase there.
Speaker 2 | 01:11:48
I will have what we call Mark-to-market losses on my hedges.
Fabian Velez | 01:11:51
I watch my own Stepfa.
Speaker 2 | 01:11:53
Will. Which will need to be compensated for. So I want to be able to fix the price of fuel when you want to do it.
If you want to do it.
Fabian Velez | 01:12:02
Was beautiful.
Speaker 2 | 01:12:03
But that means if you don't perform or for some reason this terminates.
Fabian Velez | 01:12:04
I don't know who you are, Mr., but you just made a pound. I'm George Miller with the Faday electric guard.
Speaker 2 | 01:12:08
I may have losses on my hedging transactions in order that I had to do to back and do a fixed-price deal with Puerto Rico.
So that's the cost side of the equation. Everything else, Miriella, I think in that bucket of costs is fairly de minimis. They're not going to be big ticket items. It's really the hedging, which is a big concern for me.
Again, if you don't hedge, then this is all, I think, frictional costs and being terminated and having to mobilize and move and do whatever I need to do.
Speaker 4 | 01:12:51
Okay, that's pretty clear. Thank you.
Speaker 3 | 01:12:59
Okay, perfect. Well, let's then move on to issue number eight. Okay, Hormon Saales is willing to join. Okay, so issue number 8 is duties, taxes, and charges imposed on the buyer. Article 10. The agreement faces most tax burdens on the buyer. Only income tax and dividend withholding tax are included. Taxes and duties as responsibility. While any remaining taxes are to be paid by the buyer. The Exhibit...
If the project does not receive as 60 tax benefits, the price will be adjusted, and the additional costs shall be on the buyer. Mr. so.
Speaker 2 | 01:13:44
You this again, just with my general obsession with reading the fuel supply agreements of Puerto Rico, I've seen this provision multiple times in PREPA agreements with fuel suppliers that all taxes and tariffs are passed through to Puerto Rico, and that the way it's dealt with in all the fuel supply agreements.
We can point you, if you'd like, to some of the language. What we would do is when we give you the invoice, we would allocate the invoice, which is our charges, and then on top of that, annotate what are the different pass-through of taxes, tariffs, or otherwise.
For us, we see this and we see this in many of your fuel supply contracts. So, we felt like it was the normal course of business for us. Then, one, it felt like the normal course of business.
Then, two, to be frank, this moves so fast. I have no idea. I had no time to even really risk-assess or think through the taxes that I may or may not have to pay, so I felt that rather than trying to study this and then factor it into my price, I might as well just do something that is based on precedent, which is the fuel supply contracts, and make it all a pass-through to Puerto Rico one way or another.
Fabian Velez | 01:15:18
About this. I'm going to make you a swell to take over.
Speaker 2 | 01:15:23
Mariela it's going to be charged.
It's just a matter of whether it's included in my price or just added on top of my price.
Fabian Velez | 01:15:34
A good man.
Speaker 2 | 01:15:35
And thought just Mariela the fact that there's precedent out there.
Fabian Velez | 01:15:36
And spoke to your face. Hey, you're doing a real job. He says nothing you'd be.
Speaker 2 | 01:15:42
I thought it would probably be easier for Prepa to understand and accept.
Speaker 3 | 01:15:51
Okay. And to make sure. Mr. Santos, on the way that you presented your proposal is that your price is you have your price and then these additional aspects of taxes are to be presented additionally on your invoice. Yes.
Okay, Mr. Santos, do you have any questions?
Speaker 4 | 01:16:12
No, we can proceed. Thank you.
Speaker 3 | 01:16:14
Thank you for the clarification.
Speaker 2 | 01:16:16
I leonell I actually noticed in the recent NFE LNG contract their income taxes are passed through as well. So I think it's you know, hopefully this is all understood.
Speaker 4 | 01:16:38
There have been many instances in which, Prepa, has not had the best part of the deals. And I think that's one of them. I still remember the negotiation for the original New Fortress contract and one of our outside consultants. That was after Maria, when Prepa was basically run by consultants.
Somebody said that was the best contract that had been negotiated in the history of Prepa. I guess they failed to say for which of the parties, but he may have been right. Please continue.
Speaker 2 | 01:17:42
You know, I don't know, Lil, if you were there when I presented, during the previous three PPOL processes for the management of the legacy assets that I was in, the convention center presenting, and I was not.
Speaker 4 | 01:18:01
I was not.
Speaker 2 | 01:18:02
And of the things I want to do for Puerto Rico is become the procurement agent or the trading organization for Puerto Rico so I can run. You know, it's my goal is maybe one day to set up an effectively a job and sales and trading desk for Puerto Rico to make sure you're no longer a hard target of the trading companies and that you're actually getting the best deal.
So I think the only way you're ever going to get to the best deal is having a trader work for you, not against you. It's not going to come from consultants.
Speaker 4 | 01:18:41
I believe I was in a team meeting in which you explained that and it made a whole lot of sense to me. What you were saying, and that's always an option we have to look at. It's just that there are so many moving parts right now, and this is going full speed ahead. We all have our plates full.
It's like getting on a merry-go-round. You know, you really can't do much until it stops, but yes, I know what you're talking about. I heard it from you, and it made a lot of sense to us.
Speaker 2 | 01:19:35
So my goal here is to really build my and Javelin's reputation through this process. Then hopefully, I get in front of you in a few months, and I tell you it's time for phase two, and we look at some of these other opportunities.
Let's hopefully I have that conversation with you in a few months.
Speaker 4 | 01:20:04
Let's hope so.
Speaker 2 | 01:20:07
Okay, Mariela, next one.
Speaker 3 | 01:20:10
Fantastic issue number nine, indemnity, council fees, article 8.4, if any of them, that are proceedings, the indemnified party can elect to be represented by independent counsel at the expense of the indemnifying party.
Speaker 2 | 01:20:31
Maybe that's not to let the lawyer step in.
Speaker 5 | 01:20:34
That's not unusual. You know. Indemnity covering, fees in connection with indemnity, that's not atypical.
Speaker 2 | 01:20:44
Well, this is just our covering our council's costs in case there's an indemnity or damages or just generally speaking, if lawyers need to get mobilized, they get covered.
Speaker 5 | 01:20:59
By the way, that's by that.
Speaker 3 | 01:21:03
That's what. Excuse me.
Speaker 5 | 01:21:05
It's bilateral. It applies to both sides.
Speaker 4 | 01:21:09
Yes, it works both ways, depending on who comes out on top. Right.
Speaker 3 | 01:21:17
Okay, well, I think that's pretty clear. We jump into issue number ten, dispatch damages, article 4.1. If the buyer makes real-time changes to the expected dispatch schedule and this results in a dispatch shortfall, the buyer shall pay the seller liquidated damages. Exhibit B6 damages are calculated as dispatch shortfall times three times the fixed fa.
Speaker 2 | 01:21:49
Miro gave us... Sorry, one... Miriella.
Speaker 3 | 01:21:57
Yes, please.
Fabian Velez | 01:22:08
I saw a straight cash... [Laughter] Next, I made 24 sales. You don't say... Not for a CR like George.
Every no is one step closer to the state. Certainly, if you're a daily dollar short, time... A hundred dollars, to be precise. Billir is the big winner. Two dozen irons. That puts me ahead by seven.
That smell toward... You'll certainly get your commission, but the contest is just a tally.
Speaker 2 | 01:22:40
Miriella. On this one, I do have to rethink this one.
Fabian Velez | 01:22:44
You said.
Speaker 2 | 01:22:52
My original concern. My concern is if you agree to a dispatch schedule. I need to then procure the fuel. And if you don't dispatch... Okay, now I remember. As I'm going through it, this is all about freight from my perspective.
If you agree, if you decide you want to dispatch, I am going to be booking vessels based on that dispatch profile and the need for diesel fuel. Sometimes, the majority of how I think I will bring in fuel is through large MR1 class vessels, which are about 260,000 barrels. 270,000 barrels.
I don't have that much excess inventory in storage. So if you guys tell me you're going to dispatch and then you don't dispatch, I'm going to have a vessel on the water, and then I'm in trouble. So what does trouble mean? Trouble means that I could potentially bring the vessel to Puerto Rico, and it just sits there, demerging,
and we have to pay demurrage fees. The longer it sits there, the more expensive it's going to be. Reputationally, when I want to bring in diesel again, no ship owner likes having it sit there for 30, 60, or 90 days.
It's kind of like you get that you made that mistake once, people learn really quickly that they're going to price it in again. That's a bad day for a lot of people, including myself. So, if you call for dispatch, you need to realize that it calls for me to start bringing in vessels.
If you then don't dispatch, I'm going to have a really big problem with the vessel. So, to me, this looks punitive to you, but it's actually not. The shortfall times three. It probably doesn't even cover the cost of the damages that I would have or could potentially have if I have to redirect the ship and take a loss or if I have to sit there on demurrage waiting to be unloaded and having no idea when you're actually going to dispatch if you were to agree upfront or quarterly. If you were to agree on a dispatch, the more time you give me, the easier it is for me to manage my fuel supply risks.
But because you want to be more real-time, I believe I put in this... I think you need to tell me, I don't know, 40, 56, sorry, 64, 560. I forgot exactly what it was. 60 days in advance. That into itself is not that long of a period for me to manage.
So, the moment you tell me you want to dispatch... I now need to start calling all the different refineries. I need to negotiate a deal and then I need to ship it. More likely than not, where a lot of the diesel comes from in Puerto Rico is from eastern Canada.
So then I have to think about my shipping days, negotiating a deal, getting a ship, loading a ship, and then shipping the sailing days all the way down to Puerto Rico. I need to do that in a relatively short time span because you only want to give me short-term notice.
Then, if I do that and then you don't dispatch, I've got a lot of problems. So rather than getting you down into the complexity of demerger, which will make your head spin if I get you into those calculations, the best way for me to think about it is just to do it as a short walk times three to try to make everyone's life easier.
Speaker 4 | 01:28:01
Okay, so just to be clear, what you're saying is if we agree on our schedule, and for some reason, I request that you bring us additional fuel faster than the agreed schedule, and then we don't dispatch, that's when this would kick in, or would this apply to the agreed schedule?
Speaker 2 | 01:28:50
No, this is where we agree. So right now, you haven't agreed on anything. Okay, according to this, the contract is written, you haven't agreed on anything, and so you need to nominate. I forgot, I think it's 60 days in advance.
Sorry, my traders, my fuel guys, were the ones who dropped this. But I believe it's 60 days in advance.
Speaker 4 | 01:29:15
That's okay now. Yeah, that's okay. Continue, please.
Speaker 2 | 01:29:22
Yeah. So you need to nominate, you know, square bracket 60 days in advance, then everyone gets the fuel, and we're going to load probably a large vessel. Then, if you don't dispatch, and I can let's just say I have more inventory than I actually needed in the storage units, then it backs up the entire supply chain.
So that's the problem I have. So day one, what I'm probably going to do is I'm probably going to fill the tanks. Day one up to the two up to two tanks. I think that's around 260,000 barrels. So this way I'm available for you always.
Then if you give me a dispatch profile. That 260,000 barrels is about 30 days to 45 days of inventory. And you need to tell me 60 days in advance how much more you're going to dispatch.
And what ends up happening is that because I'm bringing in such a large vessel. If you don't liquidate all that inventory that was already in storage, then I can't unload my vessel and it just sits there in a queue.
And I have to pay a lot of money for that. So long as you dispatch what you tell me you're going to dispatch, then no problem. If you want to dispatch more than you told us you wanted to dispatch on a best efforts basis, we'll try to satisfy that.
So long as we have the inventory. But if you tell us the dispatch. If you tell us the dispatch schedule. And then you actually don't do it. It will cause all sorts of bottlenecks all along the supply chain, and that's what I'm concerned about.
Speaker 4 | 01:31:26
Yes, I understand, and I completely understand how it works. Maybe we could add... For example, since you've been studying all those contracts, you might have seen some clause in at least one of them saying that you would use commercially reasonable efforts to sell that inventory elsewhere in the region as your first choice to avoid precisely those bottlenecks.
Then in if that's not possible, then everything else kicks in.
Speaker 2 | 01:32:26
Yes, I can. I can do that.
Eight.
Speaker 5 | 01:32:40
We expected the expected dispatch schedule is one month ahead, so it's not even 60 days.
Speaker 2 | 01:32:45
Now I think it's a bit more than that, we'll go through it later, but it's a bit more than that. I think it's the it's no later than.
Speaker 5 | 01:32:54
Fifteen 15th of each month. Buyers will provide dispatch scale, specifying the early dispatch of the following months.
Speaker 2 | 01:33:00
Yeah, I know. So it's forty five days. It's forty five days, so it's forty five days as of right now. You know.
It's tight. It's not a it's definitely not.
Fabian Velez | 01:33:17
You said 10:00 pm Mr Ho, it's after hours call study. I'm sure it was ten no to know there's a city ordinance that says you can't have as after 9 o'clock.
Speaker 2 | 01:33:21
I would tell you if I could get more days, it's easier to manage. For 45 days, it's tight, but we can feel comfortable we can manage it, which is why we're committing to it.
Fabian Velez | 01:33:28
What? No, I wasn't doing well. All made mistakes.
Speaker 2 | 01:33:34
And what we can include the, you know, is a some a provision along the lines of what you outlined.
Fabian Velez | 01:33:35
Some.
Speaker 2 | 01:33:43
Okay.
Speaker 3 | 01:33:45
Okay, so just to be clear, Javelin is suggesting increasing the 45 suggesting.
Speaker 2 | 01:33:56
Yeah, if we could do 60 days, I think that would be great. That helps us to manage it. Then, when it comes to the damages calculation, we'll have some sort of best efforts to mitigate the
We'll draft something to address, rightly, what LEL brought right.
Speaker 3 | 01:34:23
That's regarding the commercially reasonable efforts to sell the inventory elsewhere.
Speaker 2 | 01:34:29
Yeah, I mean, it could be that LEL or it's. Let me try and come up with some language. Le know, you know the because what's kind of weird is like you may not want it and then you may want immediately what you did dispatch you may want it the next week even more.
And so I think it, let me if you don't mind, let me think it through. To try to address your concern and come up with something constructive here, I hear loud and clear what you want.
Speaker 4 | 01:35:07
Thank you. Appreciate it.
Speaker 3 | 01:35:11
Okay. So that means we're moving forward to issue number eleven, which is very long. I don't know if you want me to read it or you prefer to read it on your own and let me know when you're done and we can discuss it.
Speaker 2 | 01:35:22
Sure, let me. Let me read it. What's that?
Can you scroll that out in the rail? That's good, K and
let's go to the first one. Okay, so it's article
you have one second and Y.
Fabian Velez | 01:37:06
Women who just have a tendency to gnaw and hu. You.
Speaker 5 | 01:38:14
2.
Speaker 2 | 01:38:17
Hey, Mariela. So, on the first one, we could agree to the 90% availability. To be quite frank, we expect to operate far in excess of that. But if we are below the 90% availability, there are available availability guarantees damages that we included in the contract, which is for every... It's more or less for I believe for every one percent below the 90%, it's a one percent deduction from our monthly capacity payment.
So there is an implication for us not to perform. Usually, the availability periods, I think we set it up as every six months is the availability period.
So, you know, there may be months from time to time where something happens. We just want to make sure that we can sometimes overperform if there was a month where we underperformed.
Speaker 3 | 01:39:40
And can you repeat that last sentence, Mr. Sow, please? You want to make sure that.
Speaker 2 | 01:39:45
We said it had to. Availability measurement periods. Mariela, which is every six months we measure the availability of the unit. Usually, what we see in a more normal course of transactions is that it gives us a period of time, particularly in the early days where... Not necessarily in the early days.
But if something happens to a unit, we have an ability to recover in months two, three, and four. So, it may happen that something goes down, but we know we have a very short window in order to comply in order to meet the 90%.
So, we don't have availability damages.
Speaker 3 | 100:36
I think I understand. Mister Santa, do you have any questions regarding that aspect?
Speaker 4 | 100:41
No, I don't. Okay.
Speaker 2 | 100:46
Article 2.3, the seller shall use commercial and visible efforts to timely respond to requests to add additional delivery points or make other modifications. Sure. I mean, it's self-explanatory if you want to change the delivery point to a different transmission pole or a different location. To be quite frank, when we were going through this, we didn't know exactly what works and what doesn't work and what constraints you have.
So, at the end of the day, we'll do our best, right, to always try to respond. We're here to build a long-term relationship.
Speaker 5 | 101:24
Remember that the context here is that the way a contract is drafted, it talks about both Costa and Agidri. This project is only about Agidri. So, we really didn't know what you were talking about in having additional delivery points. Everything's been designed to deliver power there at Costa, not elsewhere.
Speaker 4 | 101:49
Yes, understood, and it's reasonable. Okay.
Speaker 2 | 102:01
The next one is, the seller has the right to declare the start of the commercial operation in its sole discretion. Just give me a moment, Mariela, let me look through the draft.
Hey, Mark, are you there? From McGuire Woods.
Speaker 7 | 103:29
I'm here.
Speaker 2 | 103:30
All right, there he goes, this is his moment. Mark, can you walk through the conditions of the commercial operations? I didn't have time to read the whole provision.
Speaker 7 | 103:43
Yeah. Hello, everyone. So look, the inclusion of commercially reasonable efforts here in 2.6 is really just an effort to try to avoid a fault situation essentially. Right? We have an obligation to install, commission, and set up these units.
There are events of default that are defined in the agreement. So really, this is just a reference to the fact that we're going to do what we're saying we're going to do in a reasonable manner in a way that we all agree needs to be done.
It's trying to avoid a situation where there could be a fault. All this wasn't installed or mobilized in the way that we thought it was going to be. Therefore, there is an event of default under the agreement.
It's really not intended to add some additional standard beyond what is reasonable in the ordinary course and the way we all expect these units to be mobilized, installed, and commissioned. So that's really the purpose of the inclusion of commercially reasonable efforts now.
Speaker 4 | 104:44
Understood. What office does McGuire Woods operate from?
Speaker 7 | 104:52
We are out of Baltimore.
Speaker 4 | 105:04
Okay, we can move on.
Speaker 3 | 105:17
We still have two issues to discuss under item number 11.
Speaker 5 | 105:26
I think we just covered 5.1D.
Speaker 2 | 105:28
I think we went through that. Mark, do you have anything to add to 5.1D or did we already cover that?
Speaker 7 | 105:34
No, the same concept will try to act reasonably, but think about it, real-time changes made to the dispatch schedule. We'll try to accommodate them if we don't... within five minutes versus an hour or half a day. Things like that, we don't want to have a fight over that. We just want it to be applied to that commercially reasonable standard and not be an argument over time frames and things like that.
That's the purpose of it.
Speaker 2 | 106:08
Then, Mark, do you mind reviewing the prudent industry practices language? Sure.
Speaker 7 | 106:15
So, prudent industry practices, a lot of times you'll see good industry practices or prudent industry standards, those terms are all synonymous and the same.
Speaker 1 | 106:16
Hello, see that.
Speaker 7 | 106:24
I'm just trying to generally capture the idea that Javelin will operate in accordance with generally accepted practices that are specific to the power industry located in Puerto Rico. That doesn't necessarily mean it's the best, most optimum practice here, but what is generally accepted as reasonable and prudent in the power industry in Puerto Rico.
Speaker 1 | 106:36
A territory-ally... I don't really... Take me at the jam. Okay, Dall like.
Speaker 7 | 106:46
I was just trying to put some guardrails around the standards that we're going to comply with, which is, if you read through the definition here, it captures methods, optimum, generally accepted practices overall here, but not necessarily trying to be the most or only one single way of doing things.
It's trying to capture, on an aggregate basis, what people in this industry generally do.
Speaker 4 | 107:15
I'm glad you clarified that, because I've been to bookstores all over the island and never found those two booklets. The commercially reasonable efforts and the prudent and improved practices. Well.
Speaker 5 | 107:31
You know this term of art, "industry practices," it's all over proper contracts. This shouldn't be done on...
Speaker 1 | 107:47
This is why I let Mark take it. This is why I didn't answer it.
Speaker 2 | 107:50
This is why I didn't answer it.
Speaker 3 | 107:56
Okay, well, then let's move to issue number 12.
Speaker
1 | 107:57
Conditions precedent, article 3.1.
Speaker 3 | 107:59
Conditions precedent, article 3.1.
Speaker 1 | 108:00
The seller's obligations are subject to numerous conditions.
Speaker 3 | 108:02
The seller's obligations are subject to numerous conditions precedent, including receipts of all permits at the cost of the buyer.
Speaker 1 | 108:03
Pre-receipts of all permits at the cost of the buyer. Execution of all necessary third-party contracts, including contracts with the supplier of TP units.
Speaker 3 | 108:11
Execution of all necessary third-party contracts, including contracts with the supplier of TPG units,
suppliers of diesel fuel, DCP contractors for the balance of power plant work, fuel storage services provider, drive and logistics services provider, and water treatment service providers at 60 benefits the buyer by providing all required buyer security. Speaker 1 | 108:15 Suppliers of diesel fuel, DCP contractors for the balance of power plant work, fuel storage services provider, drive and logistics services provider, and water treatment service providers at 60 benefits the buyer by providing all required buyer security. The same approach applies to the extension of the term.
Speaker 3 | 108:36
The same approach applies to the extension of the term.
Speaker 1 | 108:40
So, Mariela, I think as I might have said to you all two days ago, we have been running with all urgency to deal with all these vendors and all these issues.
Speaker 2 | 108:43
So, Mariela, I think as I might have said to you all two days ago, we have been running with all urgency to deal with all these vendors and all these issues.
Speaker 1 | 108:58
Of course, I recognize that we put this CP in because we were running and we didn't have everything locked up.
Speaker 2 | 109:00
I recognize that we put the CP in because we were running and we didn't have everything locked up.
Speaker 1 | 109:06
It was a very short time frame.
Speaker 2 | 109:08
It was a very short time frame.
Speaker 1 | 109:09
So, I would say right now, for the generators, we are largely done.
Speaker 2 | 109:11
So, I would say right now, for the generators, we are largely done. For the EPC, we are largely done. I have a little bit more work to do on the water treatment.
Speaker 1 | 109:36
And... I don't think that's going to be a showstopper or go...
Speaker 2 | 109:39
And, but I don't think that's not going to be a showstopper.
Speaker 1 | 109:46
We already have the contract on...
Speaker 2 | 109:47
Corco, we already have the contract done.
Speaker 1 | 109:48
I got to tell you, these have been the easiest people we've had the ability to work with since we've been in this project.
Speaker 2 | 109:50
I got to tell you, these have been the easiest people we've had the ability to work with since we've been in this project.
Speaker 1 | 109:55
There's AI... I forgot what the guy's name is, but I think he's learning the guy.
Speaker 2 | 109:58
There's AI... I forget what the guy's name is, but I think he's eighty years old.
Speaker 1 | 110:03
I have to say he's been the best to work with.
Speaker 2 | 110:04
He's been super supportive of this.
Speaker 1 | 110:07
He's been super supportive of this.
Speaker 2 | 110:10 He's been super supportive of this. Speaker 1 | 110:12
So they have really been...
Speaker 2 | 110:14
So they have really been...
Speaker 1 | 110:14
So I think the...
Speaker 2 | 110:20
So I think the really everything is going to be in order, before we sign this or everything will be signed on the same day. Simultaneous to this, of course, we need the site access agreement agreed.
And as part of the site... other things that are related to PREPA, we need to deal with the water supply and the sewage, which are things that we need to go through. But I am very confident that these CPS will largely be gone or executed the same day or within 24 hours of this agreement.
So as I see it right now, this is not going to be... This is not a showstopper for us. We have been taking matters into our own hands a little bit on the Act 60 Benefits. We have been speaking to the various agencies. We had calls today on it. We will be submitting some more information, but we are hoping by sometime next week, we will get some confirmation that this is considered a strategic project for Act 60 purposes and some clarity around the tax-exempt status of this business. Again, we've been running through this because we're trying to keep the price of our contract down as much as possible for PREPA.
So that means we have to run and try to sort out the Act 60 in order to reduce the cost for PREPA we're running. So I'm hoping that by the end of next week, we're going to be in a good spot on the Act 60 as well.
So from my perspective, when I look at this list, the two things that are of concern to me are...
Speaker 1 | 112:32
I want it as a photo. And being... Yes, you being...
Speaker 2 | 112:40
Mariela from doing this deal is it's the permits and making sure that's all in order and working with you all on that and making sure we get the waiver and then really, it's how we deal with the preper credit risk and the buyer security.
Speaker 1 | 112:43
I see.
Okay. No.
Speaker 2 | 113:03
So long story short, we've been running we've been tackling a lot of the CPS and I don't think a lot of CPS will hopefully come off the list before the end of next week.
Speaker 1 | 113:06
Identity for hang or a moo value at a seller to the on but they would do so. Manila okay so complain okay that the re by.
Speaker 2 | 113:26
Okay, now, does that make sense?
Speaker 4 | 113:30
Yes, thank you.
Speaker 2 | 113:31
Continue.
Speaker 3 | 113:32
I have one question regarding the permits. I already took the assignment on verifying that we can get some documents specifically saying that this project will definitely be waived of all permits.
And we were going to schedule a meeting with the EPA to verify the clear ad. But when you say the cost of all permits, do you expect that when you say cost, we're going to be in charge of doing the efforts of the permitting department, or do you want PREPA to pay for all the costs particular to this reading?
Speaker 5 | 114:09
You're referring to an item. Which item? I'm sorry.
Speaker 2 | 114:16
You want to address that, Mark? I think you drafted it.
Speaker 5 | 114:20
Because the expectation, as I mentioned when we started this conversation, is that no permits will be required from a Puerto Rico standpoint. But since we have no certainty on this, that's why it's in there. Hopefully, as I mentioned, it's either a clarification of the executive order or some kind of document that assures and provides that interpretation that is the case that there's no going to be permits applicable to this emergency temporary generation project. Then it would do away with that requirement.
Speaker 3 | 115:05
No, I understand.
Speaker 2 | 115:07
And I guess the only other... Unless Mark thinks otherwise. If there is a requirement that we need to install scrubbers on these units in order to get the permit, that's not something that we factored into our costs.
So I think if there's anything that's being imposed on us in order to get the permits, otherwise if we have the waiver and everything's good to go, I don't see any real issue here, Mark, do you see otherwise?
Speaker 7 | 115:42
No, I don't. I think we have that in there as a condition precedent for all the reasons you all stated. But know if there's something... a permit that we need with the site right that we need to get in order to operate to put the units there right. Those kind of things we need to make sure that we have those in hand to actually operate in accordance with Puerto Rico law.
We can't be operating outside of applicable law. So we need to make sure we have those permits and we have everything squared away before we can actually perform. So, it may be covered by the executive order, as you all discussed, but again, that's why we put this in there just because, as you mentioned, we're thinking that the permits will be required.
But again, as we were drafting this, we wanted to have that in there just to make sure that it is something we'll need to do and obtain all those permits. But again, it may be something that goes away. We're feeling better about the permit situation based on where we land the executive order.
Speaker 3: 116:39
Okay, thank you for that clarification, because I think I have it very clear now. What you're saying is that for any chance, the permits cannot be waived, which we are not. We don't think that's going to be what happens.
But if any additional requirements by the permitting offices are in place and that additional requirement is not factored into the pricing.
Speaker 2: 116:58
Okay, thank you. That's right. That's alright.
Speaker 3: 117:01
That's perfect. Thank you for the clarification. Maybe it's just me, but I wasn't here. Okay, so that we discussed issue number twelve is Mr. Santa, do you have any other concerns regarding that issue?
Speaker 4: 117:17
Well, no, I don't, and let me, for clarification purposes, in my house, La Santa Eposa Metolea.
Speaker 1: 117:27
[Laughter].
Speaker 4: 117:28
I'm just Santa. For the record.
Speaker 3: 117:32
Once I've said it, I corrected myself. Okay, so let's go to issue number...
Speaker 2: 117:40
I think Lionel made one comment on that, and that is for us to keep running and making sure we get rid of as many of these CPS as possible. So we were foreseeing this. So we're on it. We're running, guys. We're really running.
Speaker 4 | 117:56
Great.
Speaker 3 | 117:58
Fantastic. Okay, so issue number 13, termination rights and suspension of services, article 14. The seller has broad rights to terminate or suspend services. Additionally, the buyer's failure to meet credit security requirements is an event of default, giving the seller another pathway to terminate the agreement. Exhibit D lists events of default for the buyer, including a buyer fails to comply or cost compliance with the buyer security requirements of Article 21 and Exhibit M, including, but not limited to, the occurrence of a letter of credit default.
Speaker 2 | 118:41
Yeah, it just gets back to our original points, which is we need to get comfortable with the credit arrangements with Prepay. Lean is going to get back to us on it, and whatever credit arrangements are, so long as they stay in place, everything's good.
But if those credit arrangements fall away at any time, that would be an important event to fall for us.
Speaker 3 | 119:15
Okay? Okay. Yeah, okay. So let's go into risk allocation and limited liability, issue number 14, force majeure. I think this is long. Maybe you want to read it by yourselves.
It's retaining article 2.22, 66, 11.1 and Exhibit L. Let me know if you want me to read it, or if you prefer to read it on your own.
Speaker 2 | 119:44
I'm going to shortcut this one, Mariela, and just leave it to Mark. Mark, what do you go for?
Speaker 3 | 119:50
You're right.
Speaker 7 | 119:52
Yeah, I mean, the general idea, hereby, is consistent with what Spencer mentioned at the top of the call, or given the timing that we have here and what we're trying to do, Javelin is not willing to take on risks for things that are outside of Javelin's control, essentially.
That is the common theme that you will see with the events of Force Majeure that have been included in the draft. So happy to talk about any of the specific ones that you guys would like to address or talk through.
But overall, that is a general... We don't feel it's appropriate given the amount of time that we have here and the need to bring these units online to serve Puerto Rico for us to be able to adequately assess diligence and do all those things to be able to take on that risk for things that are outside of our control.
So I'll stop there if there's any specific questions, any of these bullets you guys want to talk to or focus on. Happy to do that.
Speaker 3 | 120:48
I think that this one, particularly the liberty damages of 30% for shortfall exceeding 20%, are deleted, and the sole exclusive remedy in case of breach of commercial or reasonable efforts to comply with the ability bit standard to availability damage 1% actually pay of capacity payment of each 1% of availability shortfall. I don't know if Mr. Santa... That was something that was addressed in our previous meetings
and the conversations we had previously.
Speaker 4 | 121:18
Yes, it's still something that we have to discuss with management, which we have not had the opportunity to do. So we should be doing it very soon. Still, we'll get back to you on that particular matter. What is that? I understand.
I mean, I understand the fact that you want to rule out anything that's out of your control. But, you should have at least some sort of responsibility in terms of securing the fuel. Except that I said that out.
Unless there's an actual force majeure, as we usually define it in 99.9% of the contracts.
Speaker 2 | 122:35
Yes. On that point, DNL, that's probably you're right that's an overreach from us. We can work through that language on fuel supply, and we should have a responsibility on the fuel supply to Corco other than your typical fuel supply contracts. Force majeure issues that I don't... I think you are correct on that.
Speaker 1 | 123:00
I am taking customer no that plan if theonum e alamoca.
Speaker 4 | 123:08
Thank you. We'll discuss it in more detail, hopefully, very soon.
Speaker 3 | 123:18
I think that the other aspects already discussed. Okay, well, if anybody has any other concerns, issue number 14, we can move on to 15. There we go. Limited indemnity, article 8.1. Indemnity is limited to cases of gross negligence or willful misconduct, which protects the seller more than the buyer, as the seller has more positive obligations under the contract.
Speaker 2 | 123:52
Miriella, I'm going to pass the potato here. Mark, do you want to address this?
Speaker 7 | 123:57
Yeah. So I'm looking at the language on the other screen of what we have in our red line draft to your document that was submitted with your RFP so I'm not sure I understand that. So I think what we have in here in terms of gross negligence or willful misconduct is essentially that unless we are grossly negligent or act willfully and do something willfully wrong, I believe this is saying that doesn't apply to...
So I'm having trouble understanding the issue here.
Speaker 5 | 124:40
In other words, the limitation on the indemnity applies unless it's an instance of gross negligence or willful misconduct, which can then negate that limitation. That's not unusual, by the way.
Speaker 4 | 124:58
No, it is not. Regardless of it's not the one I like, but it's not unusual, especially as of late. That's what most pre-per contracts say, and in this particular case, when we're buying power from you,
I don't think it's unreasonable. I'll have to discuss it again with management, but I don't think it's unreasonable. We can move on.
Speaker 3 | 125:53
Let's move on to our 16 environmental indemnity, article 8.3. The buyer must identify the seller and its affiliates, agents, directors, employees for environmental issues caused by the ident emissions of fire, genera, the operator of the transmission system, and the respective affiliates, representatives, employees, or agents. The seller may require credit support for the environmental indemnity.
Speaker 5 | 126:25
I think I can pick that one. As we all know, Costa is a heavily impacted place. Jaman will be coming into the site to install new generation. There may be numerous conditions there anecdotally. We have no danger to those situations, obviously.
Speaker 4 | 126:53
Environmental law being what it is.
Speaker 2 | 126:56
You know any.
Speaker 5 | 126:58
Any entity basically just the presence they could land javeling in a claim from EPA or from third parties. So that's the reason for the expansiveness of this environmental indemnity. It of course covers, you know, the actions of prepa genera and over-transsmission Luma because they are basically overrating at the site.
And potentially any environmental condition could be caused by that.
Speaker 2 | 127:34
Yeah, I would add. Mariela, this is actually probably the one thing my external shareholder brought up in our board meeting just today. We are probably going to ask that we could do a phase one study on this something quick.
People are quite concerned. We don't reputationally want to be dragged into any claims on environmental liabilities or having caused anything that is at the site. It's a very big reputational concern for us.
Okay?
Speaker 3 | 128:18
Understood. Mr. Santa, do you have any questions?
Speaker 4 | 128:23
I'm looking at it again.
I was gonna say you wanted to drop in the gross negligence or willful misconduct standard. Hold on a second. Give me two two seconds here. Please. No.
One.
Okay, I'm back. Okay, no, I think what you're talking about is preexisting.
Speaker 5 | 131:20
Sure, sorry, before you react, note that this bilateral yes.
Speaker 4 | 131:26
Yes, but your concern is or pre-existing conditions, right?
Speaker 5 | 131:34
Exactly, yeah.
Speaker 4 | 131:37
So you don't want to be liable for any preexisting conditions.
Speaker 5 | 131:45
We that language on pre-existing is not there. Spencer just mentioned that phase one is something that could be addressed when we have more information. As I said, anecdotally, we understand that the place is heavily impacted.
Speaker 4 | 132:04
Sure, I'll bill you for the idea later.
Speaker 3 | 132:10
Okay.
Speaker 4 | 132:14
Yes, let us think about it a bit more in terms of how it's drafted, but I know where you're coming from, and I absolutely understand it. Okay, let us look at it again. You were going to say something?
Sorry.
Speaker 2 | 132:38
Yeah. No, I was just going to say it's a hypersensitive point for some of my shareholders, so you'd be making my life a lot easier.
Speaker 4 | 132:49
It should be.
Speaker 2 | 132:50
I mean, this is a big reputational concern for everyone.
Speaker 4 | 132:56
Sure, what? As long as there's a balance, because, for example, it's only fair that you do not... You're not liable for pre-existing conditions, but there may be some instances in which, due to a negligent act, you may contribute to those pre-existing conditions or worsen them, of course. I wouldn't mind including the pre-existing conditions language in...
But then the threshold cannot be simply gross negligence or willful misconduct because I don't think any of your team is going to blow up COR or something of that sort. Now, let us think about it, and we can have a chat over this one.
Speaker 2 | 134:14
So my one other point is all. By the way, I'm not the most qualified to say this, but as I understood from my team, there's really some very limited instances where we can contribute to any damage and any environmental liability in a material way.
It's my understanding, and again, I'm not a professional, but I just the scope of what we're doing, I think, is very limited. So I'm not sure we could really even cause that much of a material issue.
So if you could just think about that in the context of what we're doing, whether it's we can keep the... If you could help me with the language, that'd be great.
Speaker 3 | 135:04
Okay, so we went back to number fifteen. We don't have any comments on number sixteen. Mr. Sampson? No. Okay, let's move on to number seventeen. Sellers' liability cap. Article 12.5 and 14.1. The seller's liability is capped at the greater of 20% of the amount of capacity payments paid to the seller in any contract year during the term or $20 million.
If the agreement is terminated for cause, the only liability of the seller is non-payment by the buyer of the remaining annual amount of capacity payments and availability damages up to the liability or remedies other than those expressly provided in the contract. Availability damages, the above are waived by the buyer.
Speaker 2 | 136:07
Yeah, so the first paragraph, Lionel, we looked at the... I think we looked at the Energy ASA contract, which was, I think, for 400 megawatts of gas for a power plant. And that was a much larger operation.
That liability cap was capped at 20 million. We just kept the same number rather than trying to prorate it for a smaller operation.
Speaker 4 | 136:47
Sorry, Mariela, what was the capping, the original RF draft contract?
Speaker 3 | 136:55
The cap on the original RF draft, Eling and Francisco's legal, I don't remember right now. I'm thinking of multi-side. Francisco...
Is here.
Speaker 2 | 137:21
I'm here, I'm very fine.
Speaker 3 | 137:23
Okay, thank you.
Speaker 2 | 137:25
Yeah, I don't remember what it was either, Lionel. And so we just really reflected on Energy, to put something that we thought was just maybe more identifiable. Okay, the next paragraph. If the agreement is terminated for call, the only line out is the buyer. The remaining annual amount of the capacity payments and availability limits up to liability count.
Speaker 3 | 137:57
Right. I'm asking...
Speaker 2 | 138:00
Yeah, is there anything else Mark to add on paragraphs two and three?
Speaker 7 | 138:05
No. Happy to respond to any specific questions you guys have about it, but I don't have anything else to add. I don't know that we saw a liability cap for the seller in the initial DRFT, so we just wanted to make sure that we did have a liability cap in the agreement.
As Spencer mentioned, we tried to tailor the structure to what we've seen in the past just to keep things familiar.
Speaker 1 | 138:24
Yesterday, a man told me if I buy a car, I must buy one with a pass. And a car that women the like...
Speaker 7 | 138:31
But happy to talk more.
Speaker 1 | 138:32
Yes, but where do you keep this magnet?
Speaker 7 | 138:34
If you guys have any other questions...
Speaker 3 | 138:37
We're looking for the tab. We'll share with you shortly. Other than the cap, do we have any concerns? We can get back to this one as soon as we get the number.
Speaker 4 | 138:54
Now we can continue.
Speaker 3 | 138:56
Okay, we'll leave the spending to the number, okay? Okay, and sure, both GAs and diesel supplies can be used. Article 2.5. The agreement requires that the facility be capable of utilizing both diesel and natural GAs for power generation. Although diesel will be used initially, the parties shall work together in good faith to determine if it is economically and practically feasible to implement GAs services in lieu of diesel services and shall determine and mutually agree upon the required modifications to this agreement to implement the agreed-upon GAs services.
Speaker 1 | 139:25
It as does this have a POS in my... No, the DES if I give you a good price, will you please put in POS like that?
Speaker 3 | 139:34
I believe that has been addressed.
Speaker 2 | 139:37
Yeah, and, well, have the work through you, the connectivity, and make sure everything works. And if there's a spend on it, then we need to address it. But, I think it's self-explanatory. Everyone has to work in good faith throughout this entire process.
Speaker 1 | 139:52
But there's... There's no such thing in this country as a man.
Speaker 2 | 139:56
It should be required.
Speaker 1 | 139:56
If this can drive into a group of gypsies, we would...
Speaker 3 | 140:01
Mister Santa, do you have any questions? Okay, positive obligations of the buyer, 18, ensure that both GAs and... 19 integration of power delivery at the sites. Article 5.3. The buyer is responsible for integrating the facility into its transmission and dispatch network facilities. Only obligation is to take all actions reasonably required with respect to equipment and associated infrastructure on the seller side of the delivery point.
Speaker 2 | 140:42
Yeah, Lionel, it's a big point. Nobody wants to take responsibility for what Prepa or Luma may not do or their schedule. We will connect it to the delivery point, which we have more control over, which is the first transmission pole next to our transformer.
Then actually connecting it to the substation is all under Prepa's control. So we don't want to take responsibility for that and any delays that may cause.
Speaker 4 | 141:24
So that the delivery points have already been established and you've had the chance to visit the sites, right?
Speaker 3 | 141:32
Yes. Are you referring here to the switching yard?
Speaker 2 | 141:40
No. So I don't know if there's anyone technical online, but right next to the transformer there's a transmission, there's a pole, and we will connect it to that transmission pole. And that we have largely control over that.
Then actually connecting that pole to the substation or the power cables that then go to the substation. That's all in Prepa's control.
Speaker 3 | 142:07
Okay, well, I think we were in several meetings where Ma was very clear that nobody could do that work, but it was just them who were capable and could do that work.
Speaker 1 | 142:18
Yeah, any of the damage to the car. It depends on how far you hit him and all that.
Speaker 3 | 142:20
I just have to say what because they specifically mentioned the switchyard.
Speaker 1 | 142:21
It's hard to stop that. Hard you. If somebody rolls on the windshield, that could crack your windshield.
Speaker 3 | 142:24
But that's something that we definitely need to clear out. So once we sign the NDA, we can cross this one out to make sure who's going to be responsible for this.
Speaker 1 | 142:27
How fast do I need to go to guarantee I kill you? Let me tell you something. This vehicle here probably going 35-40 miles an hour.
Speaker 2 | 142:34
Yeah, and it's just... It's the concept.
Speaker 1 | 142:34
Would doing great?
Okay. Now, yes?
Speaker 2 | 142:37
We'll do everything up to the point where we're in control. But once there's a handover responsibility by Ma, that's for them to take care of. I don't want our project to be delayed because other people are not doing their work.
Speaker 5 | 142:57
Perfect, but by the way, this would be consistent with the strategy that's following in other prepa projects. Work within active facilities is typically undertaken by LUMA or their contractors, not the contractor providing power to drive up.
Speaker 1 | 143:05
Did you try to say the same, your breezy cock sucker? I thought it was all about manners and treating people as gentlemen until they prove otherwise. All you've proven is you're receiving. Little prick who shows up where he doesn't belong. Since we need your permission to...
Look at the ocean. Look at my ocean.
Speaker 4 | 143:25
Okay, I hear you, Carlos. I have to look at that again, but that shouldn't be a big issue. Yeah, okay.
Speaker 3 | 143:47
Okay, we're moving on. I'm ratifying the other aspect. Okay, so no more comments regarding this issue.
Speaker 4 | 143:56
No. Okay.
Speaker 3 | 143:58
I'm from the issue number 20, credit support article 21. The buyer must provide substantial credit support. Multiple letters of credit, fixed payments, LC 5 million. Exhibit capacity payments starting at 254,000, 100,000 fuel payments, LC 35 million, and the mobilization LC 10 million. These LCs are condition precedents to the effectiveness of the contract, and any issues with such letters going forward may be a trigger for terminations.
Speaker 2 | 144:43
Yeah, and listen, it's as we described before. There's definitely a lack of creativity here on our part. It's because we don't know what levers you guys have. Again, my overarching comment, same one to Lionel. I'm happy to be constructive here. I'm not solving for perfection. Granted, the solution here was perfection.
But not solving for perfection. I definitely need a significant credit support than just prepa. Despite I think just to repeat a little bit from last time, you we appreciated Kura's report. We agree it will probably be an administrative claim, but for us, at the end of the day, we don't know how valuable really.
At the end of the day, an administrative claim is particularly with all the hedge fund activity. Who? We know some of those hedge funds. To be very frank, we're scared of some of those hedge funds. We avoid them at all costs in other transactions.
It's not the way we do business. They're smarter than us in at least this regard and distress, credit, and whatever. I think I know they know more, and I don't need to tell Lionel they're aggressive. So, I don't know how many administrative expenses there can be, maybe billions. The administrative expenses themselves may lead to the inability of prepa to emerge.
So, I really didn't take much comfort. I appreciated the point from Akura. We agree with the legal analysis, but it wasn't it doesn't really add to a lot of comfort from a credit perspective. And then two, it's not only a credit perspective, but it's a timing perspective, which is maybe I am an administrative claim, but I don't think anyone in this room is going to say when PREP is going to emerge from bankruptcy.
And I can. I can assure you, Lionel. And I'm going assure you, Lionel and Mariela, that all of my vendors are not going to sit and wait. They expect immediate payment by me. There is there's no forgiveness on my side with my vendors.
So it's a huge a I think it's a big credit risk to rely on administrative claim. Almost as importantly or just as importantly, it's a massive time risk between when I get paid and what I have to pay my vendors.
Speaker 1 | 147:42
Since your boss trying to lif a hundred grand out of my pocket, Mister Rostein.
Speaker 2 | 147:46
And it's not something that, to be quite frank, we can do a deal to rely on.
Speaker 1 | 147:46
Don't change that way, Mr Rostein, or in this town. You went to New York, maybe I heard of it.
Speaker 2 | 147:51
So we need something from.
Speaker 1 | 147:52
You like it around here, though, do you?
Speaker 2 | 147:54
We need more from prepa.
Speaker 1 | 147:54
I like the view between that. Gahs. Lakes?
Speaker 2 | 147:58
And it could be a mixture of, you know, multiple things the Commonwealth guarantee, FEMA guarantee, some letters of credit, a mixture of all the above and whatever else you could possibly come up with.
Speaker 1 | 148:02
You're referring to Julian Dermany? Is that a name?
Speaker 2 | 148:12
So you let us know what leverage you have. I think you understand my concern. And to me, this is obviously the number one thing that I think we need to get through.
Speaker 6 | 148:25
And not to beat a dead horse, we'll be happy to go hand in hand with you guys to see a FAF to talk to Akura, who was our advisor both of Prepa and AFF, and they come off and be a part of this discussion of how to get this done in a way that works for everyone.
Speaker 4 | 148:43
Yes, thank you. Understood. As I said before, we're working on that, and you should have an answer from us very promptly.
Speaker 3 | 149:00
Concern regarding this issue.
Speaker 4 | 149:04
Well, everybody's concerned regarding...
Speaker 2 | 149:06
This issue.
Speaker
3 | 149:20
One of my questions is going to be which of these amendments or clauses are going to probably impact the price of your proposal, and I'm assuming that if the government of Puerto Rico somehow identified these credits, the deter of credits, would that impact your pricing?
Speaker 2 | 149:41
So say that again, Mariela.
Speaker 3 | 149:44
What I would like to know is that we're coming to the end, and we can leave that to the end of this discussion, but it is this issue number 20 if Prepa would identify some letters of credit. Would this impact your pricing of your proposal for per kilowatt hour?
Speaker 2 | 150:06
Not really, and I think more importantly, Mariela, even if I don't have this, but I come into a nice middle ground. I'm not going to increase the price either. I just need to feel good about the deal.
And I, for lack of any other solution, sought for perfection. But, I'm credit intermediating ultimately this deal at the end of the day with everyone, and we want to feel some reasonable comfort.
Speaker 3 | 150:42
Okay, understood. Well, then, let's move on to issue number 21 related agreements. The buyer must enter into a license agreement providing site access to the seller and potentially into any other agreements designated by the seller as such and required for the provision by the center of its services.
Speaker 2 | 151:03
Yeah, this was definitely a... It was a catch-all because we were rushing Lionel and Mariela. We didn't know what other related things we might need. But of course, the license agreement is the site access agreement. Some of the things that we've already edited, but frankly, we didn't want to send you edits on top of our edits.
But we definitely need a clearly defined agreement, and we think we can make it as part of the license agreement for water supply and sewage services. I think we can make it as part of the license agreement. Water supply and sewage services. I think that's largely... I don't see anything else really out there, Mariela, of a related agreement that we need or a big adjustment.
Speaker 1 | 151:57
The tapianodos inos inqu 20 quarter million.
Speaker 2 | 152:02
It's really just making sure we have an arrangement in place with Prepa on water supply and sewage.
Speaker 1 | 152:02
So I always want mass for diesel trains. Incomianes ti belon trent is a million.
Speaker 2 | 152:09
We've already talked about the EPC contract, which were largely complete again, the gentsets largely complete.
I do have a little bit of work to do on the water treatment plant. I want to be frank, but I hope to get that done shortly.
Speaker 1 | 152:27
Paracel I cari tulvien montal cal hygride so synthes in quant qual egal phase one, millionairean mi porvo I compared to aging.
Speaker 2 | 152:29
But I think that's... If there's anything else, Miriella, we'll let you know that I might be missing. But I think that's largely it.
Speaker 3 | 152:43
Okay, well...
Speaker 2 | 152:44
We'll let you know if there's anything that I'm missing of significance, I'll let you know, but I think that's largely it. Okay.
Speaker 3 | 152:54
Mr. Santa, any comments on that? Okay, so... Settlement disputes, expert determination, Article 19. The proposal removes the expert determination mechanism and instead stipulates that senior executives from both parties must attempt to resolve disputes with direct negotiations.
Speaker 1 | 153:14
Neither that them. Okay.
Speaker 3 | 153:23
Judicial and other remedies become available only after specific negotiation with those parties. Executives of senior managers are both parties in one level above the personnel who have previously been involved in the dispute.
If the matter has not been resolved within 30 days from the referral of the dispute to such executives or senior managers, or if no meeting of such executives has taken place within 15 days after there is such referral, either party may seek all remedies available at law or in equity.
Speaker 2 | 154:04
Yeah. Mariela, Lionel. I absolutely hate going to court, hate going through disputes so much. I always think it's helpful that before people pull that trigger, that ultimately the bosses get in a room and they try to sort it out in good faith.
That's really what I'm trying to do here, right? Sometimes, issues get dealt with at the middle management level, and people don't see the bigger picture. The next thing you know, lawyers are engaged,
and waste the time and money where I could have just sat in the room with someone and tried our best to just get it done without having to go down a bad path. So I can't imagine anyone disagrees with that idea.
Speaker 4 | 155:01
No, I don't disagree. I was going to suggest simply, why don't you? Then instead of getting rid of that expert determination step, you place it after the executives or senior management meeting and prior to anything else.
You know, stack that in the middle because it's a lot of times it's very useful, right? Because some things are hard when things are very subjective, but sometimes you need expert determination when things are more technical, mathematical, et cetera.
So it's a step that I wouldn't...
Speaker 5 | 155:58
Roll out one thing I would note is that I understand the applicability and usefulness of expert determinations.
Speaker 1 | 156:09
Missus Darmody is free to do as she pleases.
Speaker 5 | 156:09
In long-term contracts, this provision was referring to things like feel or power quality.
Speaker 1 | 156:12
Not always to her benefit, but I strongly suggest you treat her in every particular with the utmost regard, Charles.
Speaker 5 | 156:18
Really, that is not a criteria here for the type of play that we're dealing with. But I think what you're saying is to put that as...
Speaker 1 | 156:28
Righty, everything you see here...
Speaker 5 | 156:33
As an alternative, if the matter is of a technical nature, you...
Speaker 1 | 156:35
It's mine. By a drink. Place of bet. Ride the fucking Ferris wheel. And if you steal, I took. No, you steal Charles from my men, you steal from me a pack of guineas you came down here with and tell your boss in New York. I don't know what you're talking about.
Speaker 4 | 156:42
What I'm saying is... Well, of course you would use them if it's of a technical nature, but that would be a step after you have some sort of mediation amongst management and senior... How?
Speaker 1 | 156:58
Jesus Christ.
Speaker 2 | 156:58
We do both, Lionel, we could do both, right?
Speaker 1 | 157:00
What are you doing? You said to knock in a manly fashion.
Speaker 2 | 157:03
The more management senior management talks, the better my regard, my review.
Speaker 1 | 157:04
Leave the door on the hinges. What do you want? Is a shroger?
Speaker 2 | 157:08
So I would rather... I'm happy to do senior management talks.
Speaker 1 | 157:10
Yes, it's very happy with the accommodations.
Speaker 2 | 157:12
So we can't come to an agreement that we could go down the path of expert determination.
Speaker 1 | 157:15
Good, you can go.
Speaker 2 | 157:16
We get the results.
Then senior management talks again. I'm totally happy with that.
Speaker 1 | 157:20
Thank you very much, Mr. Thompson, for showing me how it's done here 2FA. Fuck, I'm a fucking idiot.
Speaker 2 | 157:21
I just want to make sure that everyone has an obligation to raise it to senior management. It's so one-sided. It's harder in organizations, maybe like yours, to get to the senior level.
Speaker 1 | 157:29
I'm sorry.
Please, Mr. Thompson, for the love of Christ.
Speaker 2 | 157:36
Obviously, in my organization, I'm involved in everything, fortunately or unfortunately for people who work for me.
So I just like to put the obligation on bigger organizations. This way, it forces the top guys to sit in the room with me so we could just try and sort it out amicably. Okay.
Speaker 3 | 158:07
Any other concerns? I think we're good to go to number 23 and last issues, at least on our behalf. Sure, it's assignment and sovereign immunity. Assessment of the contract waiver of sovereign immunity, articles 37 and 38, assignment. The seller may assign the contract to any affiliate without the buyer's or sponsor's consent. Any party may assign the contract or any accounts, revenues, or proceeds in connection with any financing. Sovereign immunity. The agreement requires a buyer to explicitly waive sovereign immunity, treating the deal as purely commercial activity.
Speaker 4 | 158:57
Well, first of all, I don't think... I can't recall of an instance in which Paya claimed sovereign immunity. I don't even know if Paya has sovereign immunity. We're a public corporation. We're not part of the central government.
I'm not going to and I'm just not going to do a legal investigation regarding that topic.
Speaker 1 | 159:22
So my dad is grilling outside.
Speaker 4 | 159:23
So I don't mind.
Speaker 1 | 159:24
It's like 80-something degrees.
Speaker 4 | 159:25
But in terms of the assignment, our standard clause usually says that it requires the other parties' authorization, which authorization will not be unreasonably withheld, right?
Speaker 1 | 159:31
I'm sorry you didn't get that, but many of you then look at me.
Four days.
Speaker 4 | 159:53
So that would go both ways. That would protect both.
Speaker 1 | 159:55
That's how long the longest freak-off that Diby had with Paya lasted.
Speaker 5 | 159:57
That's what it says there, by the way.
Speaker 1 | 160:03
Hello, my friend.
Speaker 5 | 160:03
Sorry, the proposal that we drafted is written in that fashion that you just described.
Speaker 1 | 160:04
It is Paya. The pride medium.
Speaker 5 | 160:11
Neither party shall sign this agreement or any portion thereof, without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.
And then there's the collateral assignment provision that you are familiar with for purposes of financing.
Speaker 4 | 160:36
Okay. And the successor with great worthiness that's equal
or higher than
the party. Again, it's this is bilateral, it applies to both prepa and Jarn.
So we've already set up our new entity, LEL. We just set it up today. I think it is called O Global Power Services PR LLLC. For us, usually, the only time we need to assign is if it's for something tax-related.
But it's going to be subject to your consent. So I think it's neither here nor there. I know we built in this flexibility for things, for financing purposes. I don't intend, I don't have any idea of financing now on my mind, just so you know. It doesn't mean it may not be something that we want to have the options in the future.
I don't really see anything being done, so we just like to have some generic language in order to do it if we needed it on the sovereign immunity. Of course, not for prepa.
But if the Commonwealth were to provide you a guarantee, would they have sovereign immunity? Would we need this language then? If it's the Commonwealth who provides the guarantee under this contract.
Speaker 4 | 162:31
Okay. So you are going to make me do a legal investigation after that? Okay, of course, sure. Yes, that's something that we would have to talk about if the central government gets involved, right?
Yeah, got it.
Speaker 2 | 163:03
Okay, shall we go to the next point?
Speaker 3 | 163:07
Mariela, I think we are done. I think these are the changes that we have identified, at least on our behalf. We don't have any further issues, and I don't know if Mr. Santa has anything other than he would like to discuss or anybody from Martin that I missed.
Speaker 4 | 163:32
No, I would like to thank everybody for their time and effort. I think it's been very productive meeting. We just have to continue working on each of our sides and get back together again. Very soon. I guess we can do this over a Teams platform.
If you guys are leaving Puerto Rico, I don't know exactly when I would have to check my schedule. Part of the team's schedule and allow for a couple of days to discuss a lot of the matters we've discussed here.
Right. So that we can get back to you as soon as possible with an answer to each and every one of these. Okay.
Speaker 2 | 164:38
Of course, Lena and Mary Allen, PHB, and thank you guys for all your effort. We know it's a lot. We're going to continue running on our side. Mariela, I think the most important thing I think we need from you is the NDA and the right to work with Luma and Hanara and just making sure from their side that there's a very clear authority given to one person to be the manager that we deal with and that, if we have any problems, we
know who to escalate to. We are absolutely focused on hitting the ground running. We know how important this is and we want to be frank, we want to exceed expectations. It has longer-term reputational impacts for Javelin.
We have a vision for all the things that we want to do with the island. So my phase two strategy in Puerto Rico that I have with Lionel in two to three months is actually much more than I've already outlined for him.
So I've got to prove myself first.
Speaker 4 | 166:09
Great. Thank you again. Once again, I just wanted to ask Mark. Mark, do you happen to know Gilbert Shelby or Joe Engler? I think they're from the Atlanta office.
Speaker 7 | 166:23
Gilbert and Joe Engler. I don't know them personally. I don't know if my colleague Brian Kelly does as well, but I can look them up and I don't know them personally, unfortunately.
Speaker 4 | 166:35
Okay, that's okay. Great guys.
Speaker 7 | 166:38
So good. Glad to hear it. Yeah, I'll look them up for sure.
Speaker 4 | 166:44
Well, guys, if there's anything else, I'm going to go have lunch.
Speaker 3 | 166:55
Last meeting and just to make sure, even if it's just to say hello. Yes, I think so. So to make sure that we're on track, and today is what they say, the fourteenth. Okay, so it's Wednesday, the fourteenth.
Maybe we will try to work on this tomorrow. How about Friday? Let's take a day off and work on this and then let's circle back on Friday. What? So Mr. Santa, when are you available on Friday? What's a good time for everyone?
Speaker 4 | 167:34
I would prefer Friday afternoon, 3 pm.
Speaker 3 | 167:53
Okay, Haan, maybe you can create a link and share with everyone so we can connect at 3 pm. I have Edwin and Francisco. Mr. Santa, would you like us to take care of that NDA for you?
Speaker 4 | 168:12
Yes, please. And as I suggested in my email, it should be boilerplate, a simple cookie-cutter model of an NDA.
I mean, so that it's simple. My only concerns, as I said, are that since Haneta is so closely linked to New Fortress, I want to avoid any... Well, it can be avoided, but at least I try that the information will not go over whatever information they get from this particular venture.
So that's about it. If you can just do that, I think I'll thank you for it.
Speaker 3 | 169:04
Absolutely. So, Francisco, on this call, please take care of that. Let's make sure we have that ready before 10 am tomorrow so we can circle back to Haneta and get those signs and we can share the sign as soon as possible.
Speaker 4 | 169:18
I get a touch with them after.
Speaker 5 | 169:21
The call and we could...
Speaker 2 | 169:22
Set up everything so well, thank you.
Speaker 3 | 169:26
Okay, well, I think we did good.
Speaker 4 | 169:29
Thank you.
Speaker 2 | 169:31
Thank you very much, everyone. Thank you, Mary Allen, thank you guys.
Speaker 1 | 169:33
Bye. Bye.
Speaker 2 | 169:35
Okay, thank you, but...
Speaker 3 | 01:40:35
I think I understand. Mister Santa, do you have any questions regarding that aspect?
Speaker 4 | 01:40:40
No, I don't. Okay.
Speaker 2 | 01:40:45
Article 2.3, the seller shall use commercial and visible efforts to timely respond to request to add additional delivery points or make other modifications. Sure. I mean, it's self explanatory if. If you want to change the delivery point to a different transmission pole or a different location. To be quite frank, when we were going through this, we didn't know exactly what works and what doesn't work and what constraints you have. 
So at the end of the day, we're we'll do our best, right to always try to respond. We're here to build a long term relationship.
Speaker 5 | 01:41:23
Remember that the context here is that the way a contract is drafted, it talks about both about Costa and Agidri. This project is only about Agidri. So we really didn't know what you were talking about. In having additional delivery points. Everything's been designed to deliver power there at Costa, not elsewhere.
Speaker 4 | 01:41:48
Yes, under understood, and it's, you know, it's reasonable. Okay.
Speaker 2 | 01:42:00
The next one is, the sells the right to declare the start of the commercial operation in its sole discretion. Just give me a moment Mariela, let me look through the draft. 
Hey, Mark, are you there? From McGuire Woods.
Speaker 7 | 01:43:28
I'm here.
Speaker 2 | 01:43:29
All right, there he goes, this is his moment. Mark, can you walk through the conditions? Can you walk through the conditions the commercial operations. I didn't have that I didn't have time to read the whole provision.
Speaker 7 | 01:43:42
Yeah. Hello, everyone. So look, the inclusion of commercially reasonable efforts here in 2.6 is really just it's an effort to try to avoid a foot fault situation essentially. Right? We have, you know, an obligation to install, commission and set up these units. 
And there's events of default that are defined in the agreement. So really this is just a reference to the fact that we're going to do what we're saying we're going to do in a reasonable manner in a way that we all agree needs to be done. 
But it's trying to avoid a situation where there could be, a footfall. All this wasn't installed or mobilized in the way that we thought it was going to be. And therefore there is an event of default under the agreement. 
It's really not intended to, you know, add some additional standard beyond what is reasonable in the ordinary course. And the way we all expect these units to be mobilized installed at commission. So that's really the purpose of the inclusion of commercial reasonable e now.
Speaker 4 | 01:44:43
Understood what mwire Woods office do you operate from?
Speaker 7 | 01:44:51
We are out of Baltimore.
Speaker 4 | 01:45:03
Okay, we can move on.
Speaker 3 | 01:45:16
We still have two issues to discuss under item number 11.
Speaker 5 | 01:45:25
I think we just covered five one D.
Speaker 2 | 01:45:27
I think we went through that. Mark, you have anything to add to 5.1 D or did we already cover that?
Speaker 7 | 01:45:33
No, the same concept will try to Act reasonably, but you know, it's again if think about it, you know, real time changes made to the dispatch schedule. We'll try to accommodate them if we don't accommodate them within five minutes, you know, versus an hour or half a day, things like that. We don't want to have a fight over that. We just want it to be, you know, applied to that commercially reasonable standard and not being an argument over, you know, time frames and things like that. 
And that's the purpose of it.
Speaker 2 | 01:46:07
And then. Mark, do you mind, reviewing the prudent industry practices language? Sure.
Speaker 7 | 01:46:14
So prudent industry practices, a lot of times you'll see good industry practices or prudent industry standards, those terms are all synonymous and same.
Fabian Velez | 01:46:15
Hello. See that.
Speaker 7 | 01:46:23
I'm just trying to generally capture the idea that Javelin will operate in accordance with generally accepted practices that are specific to the power industry located in Puerto Rico. That doesn't necessarily mean it's the best, most optimum practice here way, but what is generally accepted as reasonable and prudent in the power industry in Puerto Rico.
Fabian Velez | 01:46:35
A territorylyim d not really. Take me at the jam. Okay, Dall like.
Speaker 7 | 01:46:45
I was just trying to put some guardrails around the standards that we're going to comply with, which is, you know, if you read through the definition here, captures, methods optimum, you know, generally accepted practices overall here, but not necessarily trying to be the most or only like one single way of doing things. 
And it's trying to capture, on aggregate basis, what people in this industry generally do.
Speaker 4 | 01:47:14
I'm glad you clarified that, because I've been to bookstores all over the island, never found those two booklets. The commercially reasonable efforts and the prudent and improved practices. Well.
Speaker 5 | 01:47:30
You know this term of art pent industry practices and you know, is all over proper contracts. This they shouldn't be doing on.
Fabian Velez | 01:47:46
This is why I let Mark take it. This is why I didn't answer it.
Speaker 2 | 01:47:49
This is why I let Mark take it.
Fabian Velez | 01:47:49
[Laughter] Okay, well, then let's move to issue number 12.
Speaker 2 | 01:47:50
This is why I didn't answer it.
Speaker 3 | 01:47:55
Okay, well, then let's move to issue number 12.
Fabian Velez | 01:47:56
Conditions Precedent Article 3.1.
Speaker 3 | 01:47:58
Conditions precedent, article 3.1.
Fabian Velez | 01:47:59
The seller's obligations are subject to numerous conditions.
Speaker 3 | 01:48:01
The seller's obligations are subject to numerous conditions precedent, including receipts of all permits at the cost of the buyer.
Fabian Velez | 01:48:02
Pre receipts of all permits at the cost of the buyer. Execution of all necessary third party contracts, including contracts with the supplier of TP units.
Speaker 3 | 01:48:10
Execution of all necessary third party contracts, including contracts with supplier of TPG units, suppliers of diesel fuel ECP contractors for balance of power plant work, fuel storage services provider, fight and logistics services provider and water treatment service providers at 60 benefits the buyer providing all required buyer security.
Fabian Velez | 01:48:14
Suppliers of diesel fuel DCP contractors for balance of power plant work, fuel storage services provider, drive and logistics services provider and water treatment service providers at 60 benefits the buyer providing all required buyer security. The same approach applies to extension of the term.
Speaker 3 | 01:48:35
The same approach applies to extension of the term.
Fabian Velez | 01:48:39
So Marriella, I think as I might have said to you all two days ago, we have been running with all urgency to deal with all these vendors and all these issues.
Speaker 2 | 01:48:42
So Mariela, I think as I might have said to you all two days ago, we have been running with all urgency to deal with all these vendors and all these issues.
Fabian Velez | 01:48:57
Of course, I recognize that this we put this CP in because we were running and we didn't have everything locked up.
Speaker 2 | 01:48:59
I of course I recognize that this we put the CP in because we were running and we didn't have everything locked up.
Fabian Velez | 01:49:05
It was a very short time frame.
Speaker 2 | 01:49:07
It was a very short time frame.
Fabian Velez | 01:49:08
So, I would say right now the for the generators, we are largely done for the EPC, we are largely done a bit more work to do on the water treatment.
Speaker 2 | 01:49:10
So I would say, right now, the, for the generators, we are largely done. For the EPC, we are largely done. I have a little bit more work to do on the water treatment.
Fabian Velez | 01:49:35
And. But I don't think that that's not going to be a showstopper or go.
Speaker 2 | 01:49:38
And, but I don't think that's not going to be a showstopper.
Fabian Velez | 01:49:45
We already have the contract on.
Speaker 2 | 01:49:46
Corco, we already have the contract done.
Fabian Velez | 01:49:47
I got to tell you, these have been the easiest people we've had the ability to work with since we've been in this project.
Speaker 2 | 01:49:49
I gotta tell you, these have been the easiest people we've had the ability to work with since we've been in this project.
Fabian Velez | 01:49:54
There's AI forgot what the guy's name is, but I think he learn the guy.
Speaker 2 | 01:49:57
There's a I forget what the guy's name is, but I think he's eighty years old.
Fabian Velez | 01:50:02
I have to say he's been the best to work with.
Speaker 2 | 01:50:03
And the guy at this day, he's been the best to work with.
Fabian Velez | 01:50:06
He's been super supportive of this.
Speaker 2 | 01:50:09
He's been super supportive of this.
Fabian Velez | 01:50:09
So they have really grownful.
Speaker 2 | 01:50:11
So they have really run these guys you don't already know them, they've been wonderful.
Fabian Velez | 01:50:13
You don't already know that? They've been. Wonderful. So I think the.
Speaker 2 | 01:50:19
So I think the really everything is going to be in order, before we sign this or everything will be signed on the same day. Simultaneous to this, of course, we need the site access agreement agreed. 
And as part of the site a scre other things that are related to PREPA, we need to deal with the water supply and the sewage, which are things that we need to go through. But I am very confident that these CPS will largely be gone or executed the same day or within 24 hours of this agreement. 
So as I see it right now, this is not going to be. This is not a showstopper for us. We have been taking matters into our own hands a little bit on the Act 60 Benefits. We have been speaking to the various agencies. We had calls today on it. We will be submitting some more information, but we are hoping by sometime next week, we will get some confirmation that this is would be considered a strategic project for Act sixty purposes and some clarity around the taxes or the tax exempt status of this business. Again, we've been running through this because we're trying to keep the price of our contract down as much as possible for PREPA. 
And so that means we have to run and try to sort out the Act sixty in order to reduce the cost for PREPA we're running. So I'm hoping that by the end of next week, we're going to be in a good spot on the Act sixty as well. 
So from my perspective, when I look at this list, the two things that, are of concern to me.
Fabian Velez | 01:52:31
I want it as a photo. And being. Yes, you being.
Speaker 2 | 01:52:39
Mariela from doing this deal is it's the permits and making sure that's all in order and working with you all on that and making sure we get the waiver and then to, really it's how we deal with the preper credit risk and the buyer security.
Fabian Velez | 01:52:42
I see. 
Okay. No.
Speaker 2 | 01:53:02
So long story short, we've been running we've been tackling a lot of the CPS and I don't think a lot of CPS will hopefully come off the list before the end of next week.
Fabian Velez | 01:53:05
Identity for hang or a moo value at aa seller to the on but they would do so Manila okay so complain okay that the re by.
Speaker 2 | 01:53:25
Okay, now, does that make sense?
Speaker 4 | 01:53:29
Yes, thank you.
Speaker 2 | 01:53:30
Continue.
Speaker 3 | 01:53:31
I have one question regarding the permits. I already took the assignment on verifying right that we can get some documents specifically saying that this project will definitely be waived of all permits. 
And we were going to schedule a meeting with the EPA to verify the clear ad. But when you say the cost of all permits, do you expect when you say cost is that we're going to be in charge of doing the efforts of the caring departmentmits or you want prepa to pay for all cost particular to this reading.
Speaker 5 | 01:54:08
You're referring to an item. Which item? I'm sorry.
Speaker 2 | 01:54:15
You want to address that, Mark. I think you drafted it.
Speaker 5 | 01:54:19
Because the expectation, as I mentioned when we started this conversation, is that no permits will be required from a Puerto Rico standpoint. But since. Since we have no certainty on this. That's why it's in there. Hopefully, as I mentioned, it's either a clarification of the executive order or, you know, some kind of document that assures provides that interpretation that is the case that there's no going to be permits applicable to this emergency temporary generation project, you know, then it would do away with that requirement.
Speaker 3 | 01:55:04
No, that I understand.
Speaker 2 | 01:55:06
And I guess the only other. Unless Mark thinks otherwise. You know, if there is a requirement that we need to install scrubbers on this. On these units in order to get the permit, you know, that's not something that we factored into our costs. 
And so I think if there's anything that's being imposed on us in order to get the permits. Otherwise if we have the waiver and everything's good to go, it's I don't see any real issue here, Mark, do you see otherwise?
Speaker 7 | 01:55:41
No, I don't. I think we have that in there as a condition precedent for all the reasons you all stated. But know if there's something a permit that we need with the site right that we need to get in order to operate to put the units there right. Those kind of things we need to make sure that we have those in hand to actually operate in accordance with Puerto Rico law. 
You know, we would we can't be operating outside of applicable law. So we need to make sure we have those permits and we have everything squared away before we can actually perform. So you know, it may be covered by the executive order, as you all discussed, but that's again, why, you know, we put this in there just because, you know, as you mentioned, that you know, we're thinking that the permits will be required. 
But again, as we were drafting this right, we wanted to have that in there just to make sure that is something we'll need to do and obtain all those permits. But again, it may be something that goes away. We're feeling better about, you know, the permit situation based on where we land the executive order.
Speaker 3 | 01:56:38
Okay, thank you for that clarification, because I think I have it very clear now. And what you're saying is that for any chance, the permits cannot be waived, which we are not. We don't think that's going to be what happens. 
But if any additional requirements by the permitting offices are in place and that additional requirements are not factored into the pricing.
Speaker 2 | 01:56:57
Okay, thank you. That's right. That's alright.
Speaker 3 | 01:57:00
That's perfect. Thank you for the clarification. Maybe it just me, but I wasn't here. Okay, so that we discussed issue number twelve is. Mr Santa, do you have any other concerns regarding that issue?
Speaker 4 | 01:57:16
Well, no, I don't, and let me, you know, for clarification purposes, in my house, La Santa Eposa Metolea.
Fabian Velez | 01:57:26
[Laughter].
Speaker 4 | 01:57:27
I'm just Santa. For the record.
Speaker 3 | 01:57:31
Once I've said it, I corrected myself. Okay, so let's go to issue number.
Speaker 2 | 01:57:39
I think Lionel one one comment on that is for us to keep running and making sure we get rid of as many of these CPS as possible. So we were foreseeing this. So we're on it. We're running, guys. We're really running.
Speaker 4 | 01:57:55
Great.
Speaker 3 | 01:57:57
Fantastic. Okay, so issue number 13, termination rights and suspension of services, article 14. The seller has broad rights to terminate or suspend services. Additionally, the buyer's failure to meet credit security requirements is an event of default, giving the seller another pathway to terminate the agreement. Exhibit D lists events of default for the buyer, including a buyer fails to comply or cost compliance with the buyer security requirements of Article 21 and Exhibit M, including, but not limited to, the occurrence of a letter of credit default?
Speaker 2 | 01:58:40
Yeah, I mean, it's just it gets back to sort of our original points, which is we need to get comfortable with the credit arrangements with Prepa. Leanl is going to get back to us on it. And whatever credit arrangements are, so long as they stay in place, everything's good. 
But if those credit arrangements fall away at any time, that would be an important event to def fall for us.
Speaker 3 | 01:59:14
Okay? Okay. Yeah. Okay, we definitely we've discussed before. Okay, so let's go into risk allocation and limited of limitation of liability issue number 14, force majeure. I think this is long. Maybe you want to read it by yourselves. 
It's retaining article 2.22 .66 .1 11.1 and Exhibit L. Let me know if you want me to read it, or if you prefer to read it on your own.
Speaker 2 | 01:59:43
I'm going to shortcut this one, Mariela, and just leave it to Mark. Mark, what do you go for?
Speaker 3 | 01:59:49
You're right.
Speaker 7 | 01:59:51
Yeah, I mean, general. General idea hereby, consistent with what Spencer mentioned at the top of the call. Or given the timing that we have here and what we're trying to do, Javelin is not willing to take on risks for things that are outside of Javelin's control, essentially. 
And that's that is the common theme that you will see with the events of Force Majeure that have been included in the draft. So happy to talk about any of the specific ones that you guys would like to address or talk through. 
But overall, that is a general. Just we don't feel it's appropriate given the amount of time that we have here and the need to bring these units online to serve Puerto Rico for us to be able to adequately assess and diligence and do all those things to be able to take on that risk for things that are outside of our control. 
So I'll stop there if there's any specific questions, any of these bullets you guys want to talk to or focus on. Happy to do that.
Speaker 3 | 02:00:47
I think that this one, particularly the liberty. Damages of 30% for shortfall exceeding 20% are deleted and the sole exclusive remedy in case of breach of commercial or reasonable efforts to comply with the ability bit standard to availability damage 1% actually pay of capacity payment of each 1% of availability shortfall. I don't know if Mr Santa. That was something that was addressed in our previous meetings. 
And on the expectations with conversations we had previously.
Speaker 4 | 02:01:17
Yes, it's still something that we have to discuss with management, which we have not had the opportunity to do. So we should be doing it very soon. And still, we'll get back to you on that. On that particular matter, what is that? I understand. 
I mean, I understand the fact that you want to rule out anything that's out of your control. But, you know, you should have at least some sort of responsibility, you know, in terms of securing the fuel. E except that I said that out. 
Unless there's an actual force majeure, as we usually define it in 99.9% of the contracts.
Speaker 2 | 02:02:34
Yeah. LEL on that point. DNL that's probably you're right that's an overreach from us. We can work through that language on fuel supply and we should have a responsibility on the fuel supply to Corco other than sort of your typical fuel supply contracts force major issues that I don't I think you're you are correct on that.
Fabian Velez | 02:02:59
I am taking customer no that plan if theonum e alamoca.
Speaker 4 | 02:03:07
Thank you. We'll discuss it in more detail hopefully very soon.
Speaker 3 | 02:03:17
I think that the other aspects already discussed. Okay, well, if anybody has any other concerns, issue number 14, we can move on to 15. There we go. Limited indemnity, article 8.1. Indemnity is limited to cases of gross negligence or willful misconduct, which protects the seller more than the buyer, as the seller has more positive obligations under the contract.
Speaker 2 | 02:03:51
Miriella, I'm gonna pass the potato here. Mark, you want to address this?
Speaker 7 | 02:03:56
Yeah. So. I'm. I'm looking at the language on the other screen of what we have in our red line draft to your document that was submitted with your RFP so I'm not sure I understand that. So I think what we have in here in terms of, you know, gross negligence or willful misconduct is essentially that unless, you know, we are grossly negligent or, you know, Act willfully and do something willfully wrong. I believe this is saying that doesn't apply to. 
So I'm. I'm having trouble understanding the issue here.
Speaker 5 | 02:04:39
In other words, the limitation on the indirity applies unless it's an instance of gross negligence or willful misconduct, which can then negates that limitation. That's not unusual, by the way.
Speaker 4 | 02:04:57
No, it is not. I regardless of it's not the one I like, but it's not unusual, especially as of late. That's what most preper contracts say and in you know, in this particular case when you're when we're buying power from you. 
You know, I don't think it's unreasonable. I'll have to discuss again with management, but I don't think it's unreasonable. Pocature. We can move on.
Speaker 3 | 02:05:52
Let's move on to our 16 environmental indemnity article 8.3. The buyer must identify the seller and its affiliates agents, directors, employees for environmental issues caused by the ident acts of themissions of fire, genera, the operator of the transmission system and the respective affiliates, representatives, employees or agents. The seller may require credit support for the environmental indemnity.
Speaker 5 | 02:06:24
I think I can pick that one. As we all know, Costa is a heavily impacted place. Jaman will be coming into the site to install new generation. There may be anecdotally numerous conditions there. We have no obviously no danger to those situations. 
However.
Speaker 4 | 02:06:52
Environmental law being what it is.
Speaker 2 | 02:06:55
You know any.
Speaker 5 | 02:06:57
Any entity basically just the presence they could land javeling in a claim from EPA or from third parties. So that's the reason for the expansiveness of this environmental indemnity. And it of course covers, you know, the actions of prepa genera and over transsmission Luma because they are, you know, basically overrating at the site. 
And potentially any environmental condition could be caused by that.
Speaker 2 | 02:07:33
Yeah, I would add. Mariela, this is actually probably the one thing my external shareholder brought up in our board meeting just today. We are probably going to ask that we could do a phase one study on this something quick. 
But people are quite concerned. We don't reputationally want to be dragged into any claims on environmental liabilities or having caused anything that is at the site. It's a very big reputational concern for us. 
Okay?
Speaker 3 | 02:08:17
Understood. Mr Santa, do you have any questions?
Speaker 4 | 02:08:22
I'm. I'm. I'm looking at it again. 
I was gonna say you wanted to drop in the gross negligence or, you know, willful misconduct standard. Hold on a second. Give me two two seconds here. Please. No. 
One. 
Okay, I'm back. Okay, no, I okay, I think what you're talking about is preexisting.
Speaker 5 | 02:11:19
Sure, sorry, before you react, note that this bilateral yes.
Speaker 4 | 02:11:25
Yes, but your concern is or pre existing conditions, right?
Speaker 5 | 02:11:33
Exactly, yeah.
Speaker 4 | 02:11:36
So you don't want to be liable for any preexisting conditions.
Speaker 5 | 02:11:44
We that language on pre existing is not there. Spencer just mentioned that phase one, that's something that could be addressed when we have more information. As I said, anecdotally, we understand that the place is heavily impacted.
Speaker 4 | 02:12:03
Sure, I'll bill you for the idea later.
Speaker 3 | 02:12:09
Okay.
Speaker 4 | 02:12:13
Yes, let us think about it a bit more in terms of how it's drafted and but I know where you're coming from, and I absolutely understand it. Okay, let us look at it again. You were. You were going to say something? 
Sorry.
Speaker 2 | 02:12:37
Yeah. No, I was just going to say it's a hypersensitive point for some of my shareholders, so you'd be making my life a lot easier.
Speaker 4 | 02:12:48
It should be.
Speaker 2 | 02:12:49
I mean, this is a big reputational concern for this is a big reputational concern for everyone.
Speaker 4 | 02:12:55
Sure, what? I. You know, as long as there's a balance, because, for example. Okay, I'm. It's only fair that you do not. You're not liable for pre existing conditions, but there may be some instances in which, due to a negligent Act, you may contribute to those preexisting conditions. Worsen them, of course. I wouldn't. I wouldn't mind including the preexisting conditions language in. 
But. But then the threshold cannot be simply gross negligence or willful misconduct because I don't think any of your anyone in your team is going to, you know, blow up COR or something of that sort, you know? Now, let us think about it and we can have a chab over this one.
Speaker 2 | 02:14:13
So my one other point Le all. And by the way, I'm not the most qualified to say this, but as I understood from my team, there's really some very limited instances where we can contribute to any damage and any environmental liability in a material way. 
It's very my understanding. And again, I'm not a professionalist, but I just the scope of what we're doing, I think, is very limited. So I'm not sure we could really even cause that much of a material issue. 
So if you could just think about that in the context of what we're doing, whether it's we can keep the. If you could help me with the language, that'd be great.
Speaker 3 | 02:15:03
Okay, so we went back to number fifteen. We don't have any comments on 16. Mr Sampa? No. Okay, let's move on to number 17. Sellers's liability cap. Article 12.5 and 14.1. The seller's liability is capped at the greater off 20% of the amount of capacity payments paid to the seller in any contract year during the term or $20 million. 
If the agreement is terminated for cause, the only liability of the seller is non payment by the buyer of the remaining annual amount. The capacity payments and availability damage up to the liability or remedies other than those expressly provided in the contract. Availability, damages, the above are waived by the buyer.
Speaker 2 | 02:16:06
Yeah, so the first paragraph, Lionel, we looked at the I think we looked at the energy ASA contract, which was, I think for 400 megawatt a GAs for power plant. And, you know, that was a much larger operation. 
And that liability cap was capped at 20 million. We just kept the same number rather than trying to prorate it for a smaller operation.
Speaker 4 | 02:16:46
Sorry, Mariela, what was the capping, the original RF draft contract.
Speaker 3 | 02:16:54
The cap on the original RP draft, Eling and Francisco legal, I don't remember right now. I'm. I'm thinking of multi side. Francisco. 
Is here.
Speaker 2 | 02:17:20
I'm here, I'm very fine.
Speaker 3 | 02:17:22
Okay, thank you.
Speaker 2 | 02:17:24
Yeah, I don't remember what it was either, Lionel. And so we just we really just reflected on Energza, to put something that we thought was just maybe more identifiable. Okay, the next paragraph. If the agreement is terminated for call the only lin out the buyer. The remaining annual amount of the capacity payments and availability limits up to liability count.
Speaker 3 | 02:17:56
Right. I'm asking.
Speaker 2 | 02:17:59
Yeah, is there anything else Mark to add on paragraphs two and three?
Speaker 7 | 02:18:04
No. Happy to respond to any specific questions you guys have about it, but I don't have anything else to add. I don't know that we saw a liability cap for seller in the initial DRFT so we just we wanted to make sure that we did have a liability cap in the agreement. 
And as Spencer mentioned, we tried to tailor the structure to what we've seen in the past just to keep things familiar.
Fabian Velez | 02:18:23
A man yesterday told me if I buy a car, I must buy one with a puss. And a car that women the like.
Speaker 7 | 02:18:30
But happy to talk to more.
Fabian Velez | 02:18:31
Yes, but where do you keep this mag magnet?
Speaker 7 | 02:18:33
If you guys have any other questions.
Speaker 3 | 02:18:36
We're looking for the tab. We'll share with you shortly. Other than the cap, do we have any concerns? We can get back to this one as soon as we get the number.
Speaker 4 | 02:18:53
Now we can continue.
Speaker 3 | 02:18:55
Okay, we'll leave the spending to the number, okay? Okay, and sure, the both GAs and diesel supplies can be used. Article 2.5. The agreement requires that the facility be capable of utiling both diesel and natural GAs for power generation. Although diesel will be used initially, the parties shall work together in good faith to determine if it is economically and practically feasible to implement GAs services in lieu of diesel services and shall determine and mutually agree upon the required modifications to this agreement to implement the agreed upon GAs services.
Fabian Velez | 02:19:24
It as do this have a POs in my no, the DES if I give you good price, will you please put in pus like that?
Speaker 3 | 02:19:33
I believe that has been addressed.
Speaker 2 | 02:19:36
Yeah, and, you know, well, have the work through you, the connectivity and, you know, make sure everything works. And if there's a spend on it, then we need to address it. But, I think it's, self explanatory. Everyone. Everyone has to work in good faith throughout this entire process.
Fabian Velez | 02:19:51
But there's. There's no such thing in this country as a man.
Speaker 2 | 02:19:55
It should be required.
Fabian Velez | 02:19:55
If this can drive into a group of gypsies would.
Speaker 3 | 02:20:00
Mister Santa, do you have any questions? Okay, positive obligations of the buyer, 18, ensure that both GAs and. 19 integration of power delivery at the sites. Article 5.3. The buyer is responsible for integrating the facility into its transmission and dispatch network facilities. Only obligation is to take all actions reasonably required with respect to equipment and associated infrastructure on the seller side of the delivery point.
Speaker 2 | 02:20:41
Yeah, Lionel, it's a big point. Nobody wants to take responsibility for what Prepa or Luma may not do or their schedule. We will connect it to the delivery point, which we have more control over, which is the first transmission pole next to our transformer. 
And then actually connecting it to the substation is all under pre control. So we don't want to take responsibility for that and any delays that may cause.
Speaker 4 | 02:21:23
So that the delivery points have already been established and you've had the chance to visit the sites, right?
Speaker 3 | 02:21:31
Yes. Are you referring here to the switching yard?
Speaker 2 | 02:21:39
No. So I don't know if there's anyone technical online, but right next to the transformer there's a transmission, there's a pole, and we will connect it to that transmission pole. And that we have largely control over that. 
And then actually connecting that pole to the substation or the power cables that then go to the substation. That's all in prep control.
Speaker 3 | 02:22:06
Okay, well, I think we were in several meetings where Ma was very clear that nobody could do that work, but it was just them who were capable and could do that work.
Fabian Velez | 02:22:17
Yeah, any of damage to the car. It depends on how far you hit him and all that.
Speaker 3 | 02:22:19
I just have to say what because they specifically mentioned the switch yard.
Fabian Velez | 02:22:20
It's hard to stop that. Hard you. If somebody rolls on the windshield, that could crack your windshield.
Speaker 3 | 02:22:23
But we that's something that we definitely need to clear out. So once we sign the ND, we can cross this one out to make sure who's going to be responsible for this.
Fabian Velez | 02:22:26
How fast do I need to go to guarantee I kill you? Let me tell you something. This vehicle here probably going 35 40 miles an hour.
Speaker 2 | 02:22:33
Yeah, and it's just leonal, it's there's just the concept.
Fabian Velez | 02:22:33
Would doing great. 
Okay. And now, yes?
Speaker 2 | 02:22:36
We'll do everything up to the point where we're in control. But once there's a handover responsibility by Ma, that's for them to take care of. I don't want our project to, be delayed because, you know, other people are not doing their work.
Speaker 5 | 02:22:56
Perf but by the way, this would be consistent with the strategy that's following in other prepa projects, work within active facilities is typically undertaken by lu my interconnectional work, I mean it's typically undertaken by Luma and or their contractors not the but not the contractor providing power to drive up.
Fabian Velez | 02:23:04
Did you try to sa me, your breasy cock supp? I thought it was all about manners and treat people as gentlemen until they prove otherwise. All you've proven is you're receiving. Little prick who shows up where he doesn't belong. Since we need you. Permission. To. 
Look at the ocean. Look at my ocean.
Speaker 4 | 02:23:24
Okay, I hear you, Carlos, I have to look at that again, but that shouldn't be a big issue. Yeah, okay.
Speaker 3 | 02:23:46
Okay, we're moving on. I'm ratifying the other aspect. Okay, so no more comments regarding this issue.
Speaker 4 | 02:23:55
No. Okay.
Speaker 3 | 02:23:57
I'm from to issue number 20 credit support article 21. The buyer must provide substantial credit support. Multiple letters of credit fixed OM payments LC 5 million. Exhibit capacity payments starting at 254000100 100000 fuel payments LC 35 million and the mobilization LC 10 million. These L CS are condition precedents to the effectiveness of the contract, and any issues with such letters going forward may be a trigger for terminations.
Speaker 2 | 02:24:42
Yeah, and listen, it's as we described before. There's definitely a lack of creativity here on our part. It's because we don't know what levers you guys have. Again, my overarching comment, same one to Lionel. I'm happy to be constructive here. I'm not solving for perfection. Granted, the solution here was perfection. 
But not solving for perfection. But I definitely need a significant credit support than just prepa. And despite I think just to repeat a little bit from last time you we appreciated a Kura's report. We agree it will probably be an administrative claim, but for us, at the end of the day, we don't know how valuable really. 
At the end of the day, an administrative claim is particularly with all the hedge fund activity. Who? We know some of those hedge funds. To be very frank, we're scared of some of those hedge funds. We avoid them at all costs in other transactions. 
It's not the way we do business. They're smarter than us in at least this regard and distress, credit and whatever. I think I know they know more, and I don't need to tell Lele they're aggressive. So I don't know how many administrative expenses there can be, maybe billions. The administrative expenses and into themselves. May lead to the inability of prepa to emerge. 
So a I really didn't take much comfort. I appreciated the point from Akura. We agree with the legal analysis, but it wasn't it doesn't really add to a lot of comfort from a credit perspective. And then two, it's not only a credit perspective, but it's a timing perspective, which is maybe I am an administrative claim, but I don't think anyone in this room is going to say when PREP is going to emerge from bankruptcy. 
And I can. I can assure you, Lionel. And I'm going assure you, Lionel and Mariela, that all of my vendors are not going to sit and wait. They expect immediate payment by me. There is there's no forgiveness on my side with my vendors. 
So it's a huge a I think it's a big credit risk to rely on administrative claim. Almost as importantly or just as importantly, it's a massive time risk between when I get paid and what I have to pay my vendors.
Fabian Velez | 02:27:41
Since your boss trying to lif a hundred grand out of my pocket, Mister Rostein.
Speaker 2 | 02:27:45
And it's not something that, to be quite frank, we can do a deal to rely on.
Fabian Velez | 02:27:45
Don't change that way, Mr Rostein, or in this town. You went to New York, maybe I heard of it.
Speaker 2 | 02:27:50
So we need something from.
Fabian Velez | 02:27:51
You like it around here, though, do you?
Speaker 2 | 02:27:53
We need more from prepa.
Fabian Velez | 02:27:53
I like the view between that. Gahs. Lakes?
Speaker 2 | 02:27:57
And it could be a mixture of, you know, multiple things the Commonwealth guarantee, FEMA guarantee, some letters of credit, a mixture of all the above and whatever else you could possibly come up with.
Fabian Velez | 02:28:01
You're referring to Julian Dermany? Is that a name?
Speaker 2 | 02:28:11
So you let us know what leverage you have. I think you understand my concern. And to me, this is the obviously it's the number one thing that I think we need to get through.
Speaker 6 | 02:28:24
And not to beat a dead horse. We'll be happy to go hand in hand with you guys to see a faf to talk to Akura, who was, you know, our advisors both of Prepa and AFF, and they come off and be in a part of this discussion of how to get this done in a way that works for everyone.
Speaker 4 | 02:28:42
Yes, thank you. Understood. And as I said before, we're working on that. And you should have an answer from us very promptly.
Speaker 3 | 02:28:59
Concern regarding this issue.
Speaker 4 | 02:29:03
Well, everybody's concerned regarding.
Speaker 2 | 02:29:05
This issue.
Speaker 4 | 02:29:06
But here we can move to one.
Speaker 2 | 02:29:11
It's to deal with.
Speaker 3 | 02:29:19
One of my questions as is going to be which of these amendments or clauses are going to probably impact the price of your proposal? And I'm assuming that if the government of Puerto Rico would somehow identify these credit, the deters of credit, would that impact in your pricing?
Speaker 2 | 02:29:40
So say that again, Mariela.
Speaker 3 | 02:29:43
What I would like to know. We're coming to an end, and we can leave that to the end of this discussion, but it is this issue number 20 if Prepa would identify some letters of credit. And would this impact your pricing of your proposal for per kilowatt hour?
Speaker 2 | 02:30:05
Not really. And I think more importantly, Mariela, even if I don't have this. But I come into a nice middle ground. I'm not going to increase the price either. I just need to be. I need to. I just need to feel good about the deal. 
And I. For lack of any other solution, we just sought for perfection. But, I'm credit intermediating ultimately this deal at the end of the day with everyone, and we want to feel some reasonable comfort.
Speaker 3 | 02:30:41
Okay, understood. Well, then, let's move on to issue number. Twenty one related agreements. The buyer must enter into a license agreement providing site access to the seller and potentially into any other agreements designated by the seller as such and required for the provision by the center of its services.
Speaker 2 | 02:31:02
You. Yeah, this was definitely a. It was a catch all because we were. We were rushing Lionel and Mariela. We didn't know what other related things we might need. But of course, the license agreement is the site access agreement. Some of the things that we've already edited, but frankly, we didn't want to send you edits on top of our edits. 
But we definitely need a clearly defined agreement, and we think we can make it as part of the license agreement. Water supply and sewage services. And I think, you know, I think we. I think that's largely I don't see anything else really out there. Mariela of a sort of a related agreement that we need or big adjust.
Fabian Velez | 02:31:56
A the tapianodos inos inqu 20 quarter million.
Speaker 2 | 02:32:01
It's really just making sure we have an arrangement in place with Prepa on water supply, sewage.
Fabian Velez | 02:32:01
So I always want mass for diesel trains. Incomianes ti belon trent is a million.
Speaker 2 | 02:32:08
We've already talked about the EPC contract, which were largely complete again, the gentsets largely complete. 
I do have a little bit of work to do on the water treatment plant. I want to be frank, but I hope to get that done shortly.
Fabian Velez | 02:32:26
Paracel I cari tulvien montal cal hygride so synthes in quant qual egal phase one millionairean mi porvo I compared to aging.
Speaker 2 | 02:32:28
But I think that's, you know, if there's anything else, Miriella, we'll let you know that I might be missing. But I think that's largely. I think that's largely it.
Speaker 3 | 02:32:42
Okay, well.
Speaker 2 | 02:32:43
We'll let you know if there's anything that I'm missing of significance, I'll let you know, but I think that's largely it. Okay.
Speaker 3 | 02:32:53
Mr Santa, any comments on no. Okay, so. Settlement disputes. Expert determination. Article 19. The proposal removes expert determination mechanism and instead stipulates that senior executives from both parties must attempt to resolve disputes with direct negotiations.
Fabian Velez | 02:33:13
Neither that them. Okay.
Speaker 3 | 02:33:22
Judicial and other remedies become available only after specific negotiation with those labses. Executives of senior managers are both parties in one level above. The personnel who have previously been involved in the dispute shall meet at a mutually acceptable time and place within ten days after delivery of such notice and thereafter as often as they reasonably deem necessary to attempt to resolve the dispute. 
If the matter has not been resolved within 30 days from the referral of the dispute to such executives or senior managers, or if no meeting of such executives has taken place within 15 days after there is such referral, either party may seek all remedies available at law or in equity.
Speaker 2 | 02:34:03
Yeah. Mariela Lionel. I absolutely hate going to court, hate going through disputes so much. I always think it's helpful that before people pull that trigger, that ultimately the bosses get in a room and they try to sort it out in good faith. 
And that's really what I'm trying to do here, right? Sometimes it's, you know, issues get dealt with at the middle management level and people don't see the bigger picture. And next thing you know, lawyers are engaged. 
And to waste the time and money where, you know, I could have just sat in the room with someone and tried our best to just get it done with without having to go down a bad path. So I can't imagine anyone disagrees with that idea.
Speaker 4 | 02:35:00
No, I don't disagree. I was going to suggest simply, why don't. Why don't you? Then instead of getting rid of that expert determination step, you place it after the executives or senior management meeting and prior to anything else. 
You know, stack that in the middle because it's a lot of times it's very useful, right? Because some things are, you know, it's hard when things are very subjective, but sometimes you need expert determination when things are more technical, mathematical, et cetera. 
So it's a step that I wouldn't.
Speaker 5 | 02:35:57
Roll out one one thing I would note that is that I understand the applicability and usefulness of EXPER determinations.
Fabian Velez | 02:36:08
Missus Darmody is free to do as she pleases.
Speaker 5 | 02:36:08
And in long term contracts. In this case, this provision was referring to things like feel or power quality.
Fabian Velez | 02:36:11
Not always to her benefit, but I strongly suggest you treat her in every particular with the utmost regards, Charles.
Speaker 5 | 02:36:17
Really that is not a criteria here for the type of play that we're dealing with. But I you know, I think, you know, what you're saying is put that as.
Fabian Velez | 02:36:27
Righty everything you see here.
Speaker 5 | 02:36:32
As an alternative, if the matter is of a technical nature, you.
Fabian Velez | 02:36:34
It's mine. By a drink. Place of bet. Ride the fucking Ferris wheel. And if you steal, I took. No, you steal Charles from my men, you steal from me a pack of guineas you came down here with and tell your boss in New York I don't know what you're talking about.
Speaker 4 | 02:36:41
What I'm saying is. Well, of course you would use them if it's of a technical nature, but that would be a step after you have some sort of mediation amongst management and senior. How?
Fabian Velez | 02:36:57
Jesus Christ.
Speaker 2 | 02:36:57
We do both, Lionel, we could do both, right?
Fabian Velez | 02:36:59
What are you doing? You said to knock in a manly fashion.
Speaker 2 | 02:37:02
The more management senior management talks, the better am I my regard my review.
Fabian Velez | 02:37:03
Leave the door on the hinges. What do you want? Is a shroger?
Speaker 2 | 02:37:07
So. So I would rather I'm happy to do senior management talks.
Fabian Velez | 02:37:09
Yes, it's very happy with the accommodations.
Speaker 2 | 02:37:11
So we can't come to an agreement that we could go down the path of expert determination.
Fabian Velez | 02:37:14
Good, you can go.
Speaker 2 | 02:37:15
We get the results. 
And then senior management talks again. I'm totally happy with that.
Fabian Velez | 02:37:19
Thank you very much, Mister Thompson for showing me how it's done here 2FA fuck, I'm a fucking idiot.
Speaker 2 | 02:37:20
I just want to make sure that everyone has an obligation to raise it to senior management. It's so ones it's harder in organizations, you know, maybe like yours, to kind of get to the senior level.
Fabian Velez | 02:37:28
I'm sorry. 
Please, Tonado, for the love of Christ ch.
Speaker 2 | 02:37:35
Obviously, in my organization, I'm involved in everything, fortunately or unfortunately for people who work for me. 
So I just like to put the obligation on bigger organizations. So this way it forces the top guys to sit in the room with me so we could just try and sort it out amicably. Okay.
Speaker 3 | 02:38:06
Any other concerns? I think we're good to go to number 23 and last issues, at least on our behalf. Sure, it's assignment and sovereign immunity. Assment of the contract waiver of sovereign immunity article 37 and 38 assignment. The seller may assign the contract to any affiliate without the buyers or generous consent. Any party may assign the contract or any accounts, revenues or proceeds in connection with any financing. Sovereign immunity. The agreement requires a buyer to explicitly waive sovereign immunity, treating the deal as purely commercial activity.
Speaker 4 | 02:38:56
Well, first of all, I don't think. I can't recall of an instance in which Pa claimed sovereign immunity. I don't even know if Prepa has soign immunity. We're a public corporation. We're not part of the central government. 
You know, and I'm not going to and I'm just not going to do a legal investigation regarding that topic.
Fabian Velez | 02:39:21
So my dad is grilling outside.
Speaker 4 | 02:39:22
So I don't mind.
Fabian Velez | 02:39:23
It's like 80 something degrees.
Speaker 4 | 02:39:24
But in terms of the assignment, our standard clause usually says that it requires the other parties, authorization, which authorization will not be unreasonably withheld, right?
Fabian Velez | 02:39:30
I'm sorry you didn't get that, but many of you then look at me. 
Four days.
Speaker 4 | 02:39:52
So that would go both ways. That would protect both.
Fabian Velez | 02:39:54
That's how long the longest freak off that Diby had with pay lasted.
Speaker 5 | 02:39:56
That's what it says there, by the way.
Fabian Velez | 02:40:02
Hello, my friend.
Speaker 5 | 02:40:02
Sorry, the proposal that we drafted is written in that fashion that you just DESCRIED.
Fabian Velez | 02:40:03
It is Perez. The pri de medium.
Speaker 5 | 02:40:10
Neither party shall sign this agreement or any portion thereof, without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. 
And then there's the collateral assignment provision that you are familiar with for purposes of financing.
Speaker 4 | 02:40:35
Okay. And the successor.
Speaker 5 | 02:40:36
And the successor with great worthiness that's equal.
Speaker 2 | 02:40:41
Or higher than.
Speaker 5 | 02:40:42
Than the party. And again, it's this is bilateral it applies to both prepa and Jarn.
Speaker 2 | 02:40:54
So we've already just so you know, we've already set up our new entity LEL we just set it up. I think today it is called O Global Power Services PR LLLC and so for us, usually the only time we need to assign is if it's for something tax related. 
But you know, it's going to be subject to your consent. So I think it's neither here nor there. I know we built in this flexibility for things for financing purposes. I don't intend, I don't have any idea of financing now on my mind, just so you know. Doesn't mean it may not be something that we want to have the options in the future. 
But I don't to be quite practical, I don't see I don't really see anything being done. So we just like to have some generic language, in order to do it if we needed it on the sovereign immunity. Of course not, Prepa. 
But if the Commonwealth were to provide you a guarantee, would they have sovereign immunity? Would we need this language then? If it's the Commonwealth who provides the guarantee under this contract.
Speaker 4 | 02:42:30
Okay. So you are gonna make me do a legal investigation after that? Okay? Okay, of course, sure. Yes, that's something that we would have to something that we would have to talk about if the central government gets involved, right? 
Yeah, got it.
Speaker 2 | 02:43:02
Okay, shall we go to the next point?
Speaker 3 | 02:43:06
Mariela I think we are done. I think these are the changes that we have identified, at least on our behalf. We don't have any further issues, and I don't know if Mr Santa has anything other that he would like to discuss or anybody from Martin that I missed.
Speaker 4 | 02:43:31
No, I would like to thank everybody for their time and effort. I think it's been very productive meeting. We just have to continue working on each of our sides and get back together again. Very soon. I guess we can do this over a teams platform. 
If you guys are leaving Puerto Rico, I don't know exactly when I would have to check my schedule. Part of the team's schedule and allow for a couple of days to discuss a lot of the matters we've discussed here. 
Right. So that we can get back to you as soon as possible with an answer to each and every one of these. Okay.
Speaker 2 | 02:44:37
Of course, Lena and Mary Allen PHB and thank you guys for all your effort. We know it's a lot. We are we're going to continue running on our side. Mariela, I think the most important thing I think we need from you is the NDA and the right to work with Luma and Hanara and just making sure from their side that there's a very clear, authority given to one person to be the manager that we deal with and that, you know, if we have any problems. 
You know who do we escalate to? We are absolutely focused on hitting the ground running. We know how important this is and we want to be frank, we want to exceed expectations. It has longer term reputational impacts for Javelin. 
And we have a vision for all the things that we want to do with the island. And so my phase two strategy in Puerto Rico that I have with Lionel in two three months, it's actually much more than I've already outlined for him. 
So I've got to prove myself first.
Speaker 4 | 02:46:08
Great. Thank you. Once again, I just I wanted to ask Mark. Mark, do you happen to know Gilbert Shelby or Joe Engler? I think they're from the Atlanta office.
Speaker 7 | 02:46:22
Shel Joe Engler. I don't know them personally. I don't know if my colleague Brian Kelly does as well, but I can look them up and I don't know them personally fortun.
Speaker 4 | 02:46:34
Okay, that's okay. Great guys.
Speaker 7 | 02:46:37
So good. Glad to hear it. Yeah, I'll look them up for sure.
Speaker 4 | 02:46:43
Well, guys, if there's anything else, I'm going to go have lunch.
Speaker 3 | 02:46:54
Last meeting and just to make sure, even if it's just to say hello. Yes, I think so. So to make sure that we're on track, and today is what they say, the fourteen. Okay, so it's Wednesday, the fourteen. 
Maybe we will try to work on this tomorrow. How about Friday? Let's Friday, let's take a day off and work on this and then let's circle back on Friday. What? So Mr Santa, when are you available on Friday? What's a good time for everyone?
Speaker 4 | 02:47:33
I would prefer Friday afternoon. 03:30.
Speaker 3 | 02:47:52
Okay, Haan, maybe you can create a link and share with everyone so we can connect at 3 pm and I have Edwin and Francisco Mio. Mr Santa, would you like us to take care of that NDA for you?
Speaker 4 | 02:48:11
Yes, please. And I as I suggested in my email, it should be boilerplate the, you know, simple. I don't want Luma or Haneta to start getting picky. Very simple, you know, cookie cutter model of an NDA. 
I mean, so that it's. You know, my only concerns, as I said, is, since Haneta is so closely linked to New Fortress. I want to, you know, avoid any. Well, it can be avoided, but at least I try that, you know, the information will not go over whatever information they get from this particular venture. 
So that's about it. If you can just do that, I think I thank you for it.
Speaker 3 | 02:49:03
Absolutely. So, Li Francisco on this call, please take care of that. Let's make sure we have that ready before 10:00 am tomorrow so we can circle to Haneta and get those signs and we can share the sign as soon as possible.
Speaker 4 | 02:49:17
I get a touch with. They're doing after.
Speaker 5 | 02:49:20
The call and we could.
Speaker 2 | 02:49:21
Set up everything so well, thank you.
Speaker 3 | 02:49:25
Okay, well I think we did good.
Speaker 4 | 02:49:28
Thank you.
Speaker 2 | 02:49:30
Thank you so thank you very much everyone, thank you, Mary Allen, thank you guys.
Fabian Velez | 02:49:32
Bye. Bye.
Speaker 2 | 02:49:34
Okay, thank you, but.