Opinion
22-01517
10-25-2022
In re PUERTO RICO PUBLIC FINANCE CORPORATION, Applicant.
PROSKAUER ROSE LLP Eleven Times Square O’NEILL & BORGES LLC Attorneys for the Financial Oversight and Management Board as Administrative Supervisor O’MELVENY & MYERS LLP PIETRANTONI MENDEZ & ALVAREZ LLC Attorneys for Puerto Rico Public Finance Corporation as Issuer and AAFAF as Fiscal Agent
PROSKAUER ROSE LLP
Eleven Times Square
O’NEILL & BORGES LLC
Attorneys for the Financial Oversight and Management Board as Administrative Supervisor
O’MELVENY & MYERS LLP
PIETRANTONI MENDEZ & ALVAREZ LLC
Attorneys for Puerto Rico Public Finance
Corporation as Issuer and AAFAF as Fiscal Agent
QUALIFYING MODIFICATION PURSUANT TO PROMESA TITLE VI FOR THE PUERTO RICO PUBLIC FINANCE CORPORATION
TABLE OF CONTENTS ............................................... Page
ARTICLE I DEFINITIONS ............................................................................................................1
1.1 AAFAF ....................................................................................................................1
1.2 Administrative Supervisor .......................................................................................1
1.3 Affiliate ....................................................................................................................1
1.4 Approval Date ..........................................................................................................1
1.5 Approval Order ........................................................................................................1
1.6 Assets .......................................................................................................................1
1.7 Bankruptcy Code .....................................................................................................1
1.8 Bond Documents ......................................................................................................1
1.9 Business Day ............................................................................................................1
1.10 Calculation Agent ....................................................................................................1
1.11 Cash..........................................................................................................................2
1.12 Causes of Action ......................................................................................................2
1.13 Claim ........................................................................................................................2
1.14 Commonwealth ........................................................................................................2
1.15 Commonwealth Plan ................................................................................................2
1.16 Commonwealth Plan Effective Date ........................................................................2
1.17 Commonwealth Title III Case ..................................................................................2
1.18 Confirmation Order ..................................................................................................2
1.19 Creditor ....................................................................................................................3
1.20 CUSIP ......................................................................................................................3
1.21 Defeasance Funds ....................................................................................................3
1.22 Defeased Bonds .......................................................................................................3
1.23 Disbursing Agent .....................................................................................................3
1.24 DRA .........................................................................................................................3
1.25 DRA Bond Indenture ...............................................................................................3
1.26 DRA Bond Trustee ..................................................................................................3
1.27 DRA Parties .............................................................................................................3
1.28 Entity ........................................................................................................................3
1.29 Escrow Deposit Agreement .....................................................................................3
1.30 Final Order ...............................................................................................................3
1.31 GDB .........................................................................................................................4
1.32 GDB Title VI QM ....................................................................................................4
1.33 Government Parties ..................................................................................................4
1.34 Information Agent ....................................................................................................4
1.35 Issuer ........................................................................................................................4
1.36 Lien ..........................................................................................................................4
1.37 Notes ........................................................................................................................4
1.38 Notes Counterparty ..................................................................................................4
1.39 Notes Released Claims ............................................................................................4
1.40 Notes Released Parties .............................................................................................4
1.41 Oversight Board .......................................................................................................5
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1.42 Person .......................................................................................................................5
1.43 PET ..........................................................................................................................5
1.44 PET/PFC Claim .......................................................................................................5
1.45 PFC ..........................................................................................................................5
1.46 PFC Bonds ...............................................................................................................5
1.47 PFC Bond Trustee ....................................................................................................5
1.48 PFC Bond Trustee Fees ...........................................................................................5
1.49 PFC Bond Trustee GDB Claim................................................................................5
1.50 PFC Bond Trustee GDB Recovery ..........................................................................5
1.51 PFC Bond Claims ....................................................................................................6
1.52 PFC Distribution ......................................................................................................6
1.53 PFC Effective Date ..................................................................................................6
1.54 PFC Filing Date .......................................................................................................6
1.55 PFC Restructuring Support Agreement ...................................................................6
1.56 PFC RSA Parties ......................................................................................................6
1.57 PFC Trust Agreement ..............................................................................................6
1.58 Pool ..........................................................................................................................7
1.59 Professional ..............................................................................................................7
1.60 PROMESA ...............................................................................................................7
1.61 Pro Rata Share..........................................................................................................7
1.62 Qualifying Modification ..........................................................................................7
1.63 Qualifying Modification Supplement ......................................................................7
1.64 Related Persons ........................................................................................................7
1.65 Released Claims .......................................................................................................7
1.66 Released Parties .......................................................................................................8
1.67 Releasing Parties ......................................................................................................8
1.68 Securities Act ...........................................................................................................8
1.69 Sinking Fund ............................................................................................................8
1.70 Title III .....................................................................................................................8
1.71 Title III Court ...........................................................................................................8
1.72 Title VI .....................................................................................................................8
1.73 Title VI Case ............................................................................................................8
1.74 Title VI Court ...........................................................................................................8
1.75 Voting Deadline .......................................................................................................8
1.76 Other Definitions .....................................................................................................9
1.77 Rules of Interpretation .............................................................................................9
ARTICLE II COMPROMISE AND SETTLEMENT OF DISPUTES ...........................................9
2.1 Compromise of Controversies .................................................................................9
2.2 PFC Bond Claims/Voting ........................................................................................9
2.3 Releases, Injunctions and Exculpation ....................................................................9
ARTICLE III PROVISIONS RELATING TO PFC BOND TRUSTEE AND
HOLDERS OF PFC BOND CLAIMS ..................................................................10
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3.1 PFC Bond Trustee Fees .........................................................................................10
3.2 Actions of PFC Bond Trustee ................................................................................10
3.3 Review and Appeal Rights.....................................................................................10
3.4 Non-Severability ....................................................................................................11
ARTICLE IV ESTABLISHMENT OF POOLS ............................................................................11
4.1 Establishment of Pools ...........................................................................................11
ARTICLE V PROVISIONS FOR TREATMENT OF PFC BOND CLAIMS (POOL 1) ............................................................................................................................11
5.1 Treatment of PFC Bond Claims .............................................................................11
ARTICLE VI PROVISIONS GOVERNING DISTRIBUTIONS .................................................11
6.1 Time and Manner of Distribution ..........................................................................11
6.2 Timeliness of Payments .........................................................................................12
6.3 Distributions by the Disbursing Agent ..................................................................12
6.4 Manner of Payment Pursuant to this Qualifying Modification ..............................12
6.5 Delivery of Distributions .......................................................................................12
6.6 Cancellation of Notes, Instruments, Certificates, and Other Documents ..............12
6.7 Withholding and Reporting Requirements ............................................................13
6.8 Allocation of Distributions Between Principal and Interest ..................................13
6.9 Undeliverable/Reserved Distributions ...................................................................13
ARTICLE VII ACCEPTANCE OR REJECTION OF THE QUALIFYING MODIFICATION ..................................................................................................14
7.1 Acceptance by Pool of Creditors ...........................................................................14
ARTICLE VIII RIGHTS AND POWERS OF DISBURSING AGENT .......................................14
8.1 Exculpation ............................................................................................................14
8.2 Powers of the Disbursing Agent ............................................................................15
8.3 Fees and Expenses Incurred From and After the PFC Effective Date ...................15
ARTICLE IX CONDITIONS PRECEDENT TO THE PFC EFFECTIVE DATE ......................15
9.1 Conditions Precedent to the Effective Date ...........................................................15
9.2 Issuance of PFC Bond Trustee GDB Recovery Not Condition Precedent ............16
9.3 Waiver of Conditions Precedent ............................................................................16
9.4 Effect of Non-Occurrence of Conditions to PFC Effective Date ..........................17
ARTICLE X MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE QUALIFYING MODIFICATION.........................................................................17
10.1 Modification of Qualifying Modification ..............................................................17
10.2 Revocation or Withdrawal .....................................................................................17
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10.3 No Admission of Liability .....................................................................................17
ARTICLE XI CORPORATE GOVERNANCE AND MANAGEMENT OF ISSUER ...............18
11.1 Corporate Action ....................................................................................................18
ARTICLE XII PROVISIONS REGARDING OVERSIGHT BOARD AND COMPLIANCE WITH PROMESA ......................................................................18
12.1 Effect of Approval .................................................................................................18
12.2 Ongoing Role of the Oversight Board ...................................................................18
ARTICLE XIII RETENTION OF JURISDICTION .....................................................................19
13.1 Retention of Jurisdiction ........................................................................................19
ARTICLE XIV MISCELLANEOUS PROVISIONS ....................................................................20
14.1 Title to Assets ........................................................................................................20
14.2 Scope of Discharge ................................................................................................20
14.3 Discharge and Release of Claims and Causes of Action .......................................20
14.4 Injunction on Claims ..............................................................................................21
14.5 Integral to Qualifying Modification .......................................................................21
14.6 Releases by the Government Parties ......................................................................22
14.7 Releases Relating to the Notes ...............................................................................22
14.8 Injunction Related to Releases ...............................................................................22
14.9 Exculpation ............................................................................................................23
14.10 Bar Order ...............................................................................................................23
14.11 No Waiver ..............................................................................................................24
14.12 Supplemental Injunction ........................................................................................24
14.13 Severability ............................................................................................................24
14.14 Governing Law ......................................................................................................25
14.15 Section Headings ...................................................................................................25
14.16 Inconsistencies .......................................................................................................25
14.17 Document Retention ..............................................................................................25
14.18 Immediate Binding Effect ......................................................................................25
14.19 Additional Documents ...........................................................................................25
14.20 Reservation of Rights .............................................................................................26
14.21 Successors and Assigns..........................................................................................26
14.22 Notices ...................................................................................................................26
14.23 Term of Injunctions or Stays..................................................................................29
14.24 Entire Agreement ...................................................................................................30
14.25 Qualifying Modification Supplement ....................................................................30
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The Financial Oversight and Management Board for Puerto Rico, as Administrative Supervisor, the Puerto Rico Public Finance Corporation, as Issuer, and the Puerto Rico Fiscal Agency and Financial Advisory Authority, as Fiscal Agent for the Issuer, hereby propose the following Qualifying Modification for the Puerto Rico Public Finance Corporation pursuant to Title VI of the Puerto Rico Oversight, Management and Economic Stability Act.
ARTICLE I
DEFINITIONS
As used in the Qualifying Modification, the following terms have the respective meanings set forth below and are equally applicable to the singular and plural of the terms defined:
1.1 AAFAF: The Puerto Rico Fiscal Agency and Financial Advisory Authority, a public corporation and instrumentality of the Commonwealth.
1.2 Administrative Supervisor: The Oversight Board, as Administrative Supervisor pursuant to Section 601(a)(1) of PROMESA.
1.3 Affiliate: With respect to any specified Entity, any other Entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Entity.
1.4 Approval Date: The date on which the Clerk of the Title VI Court enters the
Approval Order on the docket.
1.5 Approval Order: The order of the Title VI Court approving the Qualifying Modification pursuant to Section 601(m)(1)(D) of PROMESA.
1.6 Assets: With respect to the Issuer, (a) all “property” of the Issuer, including, without limitation, such property as it may be reflected on the Issuer’s books and records, and (b) all Causes of Action, and any subsequent proceeds thereof, that have been or may be commenced by the Issuer or other authorized representative for the benefit of the Issuer and its Creditors, unless modified or released pursuant to the Qualifying Modification or a Final Order.
1.7 Bankruptcy Code: Title 11 of the United States Code, as amended, §§101, et seq.
1.8 Bond Documents: The PFC Trust Agreement and such other agreements, supplements, amendments, and documents executed or delivered in connection with the issuance or maintenance of the PFC Bonds.
1.9 Business Day: A day other than a Saturday, Sunday, or any other day on which commercial banking institutions in New York, New York and San Juan, Puerto Rico are required to close by law or executive order.
1.10 Calculation Agent : Kroll Restructuring Administration LLC.
1.11 Cash: Lawful currency of the United States, including, but not limited to, bank deposits, checks representing good funds that are not subject to a stop order, and legal equivalents thereof.
1.12 Causes of Action: All claims, actions, causes of action, rights to payment, choses in action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, remedies, rights of set-off, third-party claims, subrogation claims, contribution claims, reimbursement claims, indemnity claims, counterclaims, and cross claims (including, but not limited to, all claims for breach of fiduciary duty, negligence, malpractice, breach of contract, aiding and abetting, fraud, inducement, avoidance, recovery, and subordination) that are pending or may be asserted against any Entity whether arising on or before the PFC Effective Date, based in law or equity, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise and whether asserted or unasserted as of the PFC Effective Date.
1.13 Claim: Any right to payment or performance, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, known or unknown or asserted or unasserted; or any right to an equitable remedy for breach or enforcement of performance, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured, and all debts, suits, damages, rights, remedies, losses, liabilities, obligations, judgments, actions, Causes of Action, demands, or claims of every kind or nature whatsoever, in law, at equity, or otherwise.
1.14 Commonwealth: The Commonwealth of Puerto Rico.
1.15 Commonwealth Plan: The confirmed Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, et al., dated January 14, 2022 (ECF No. 19784 in Case No. 17-3283), including, without limitation, the exhibits and schedules hereto, as the same is amended, supplemented, or modified from time to time in accordance with the provisions of PROMESA, the Bankruptcy Code, and the terms of each of the foregoing.
1.16 Commonwealth Plan Effective Date: March 15, 2022, the date on which the Commonwealth Plan was substantially consummated in accordance with its terms and the provisions of the Commonwealth Plan and the Confirmation Order.
1.17 Commonwealth Title III Case: The Title III case under PROMESA pending for the Commonwealth in the Title III Court, captioned as In re Financial Oversight & Management Boardfor Puerto Rico, as representative of The Commonwealth of Puerto Rico, et al., Case No. 17-3283-LTS (D.P.R.).
1.18 Confirmation Order: The Order and Judgment Confirming Modified Eight Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico, and the Puerto Rico Public Buildings Authority, dated January 18, 2022 (Case No. 17-03283-LTS, ECF No. 19813).
1.19 Creditor: Any Entity holding a Claim against the Issuer or any Issuer’s Assets, in each case, solely in such Entity’s capacity as such.
1.20 CUSIP: The Committee on Uniform Securities Identification Procedures ninedigit numeric or nine-digit character alphanumeric code.
1.21 Defeasance Funds: The approximately Thirty-Five Million Dollars, ($35,000,000.00) of Cash deposited with the PFC Bond Trustee pursuant to the Escrow Deposit Agreement, and held in trust for the benefit of holders of the Commonwealth Appropriation Bonds, Series 2001E, issued by PFC, which mature on August 1, 2026 and August 1, 2027, and with respect to which the PFC Bond Trustee is obligated to maintain, invest and distribute such funds in future years.
1.22 Defeased Bonds: Collectively, the PFC Bonds listed on Exhibit A attached hereto which have been legally or economically defeased prior to the PFC Effective Date.
1.23 Disbursing Agent: Such Entity or Entities designated by the Oversight Board, after consultation with AAFAF, on or prior to the PFC Effective Date to make or to facilitate distributions in accordance with the provisions of the Qualifying Modification.
1.24 DRA: The GDB Debt Recovery Authority established pursuant to the GDB Title VI QM.
1.25 DRA Bond Indenture: That certain Bond Indenture, dated November 29, 2018, between the DRA, as issuer, and Wilmington Trust, N.A., as Indenture Trustee.
1.26 DRA Bond Trustee: Wilmington Trust, N.A., solely in its capacity as trustee with respect to the DRA Bond Indenture.
1.27 DRA Parties: Collectively, (i) AmeriNational Community Services, LLC (as servicer for the DRA) and (ii) Cantor-Katz Collateral Monitor LLC (as collateral monitor for the DRA Bond Trustee), together with any successors in interest thereto.
1.28 Entity: A Person, a corporation, a general partnership, a limited partnership, a limited liability company, a limited liability partnership, an association, a joint stock company, a joint venture, an estate, a trust, an unincorporated organization, a governmental unit or any subdivision thereof, including, without limitation, the office of the United States Trustee, or any other entity.
1.29 Escrow Deposit Agreement: That certain Escrow Deposit Agreement relating to the Commonwealth Appropriation Bonds, Series 2004B, issued by PFC pursuant to the Trust Agreement and the resolution of PFC adopted on June 10, 2004 providing for refunding or defeasance of various bonds outstanding at the time of execution of the PFC Trust Agreement, including, without limitation, the Commonwealth Appropriation Bonds, Series 2001E, issued by PFC.
1.30 Final Order: An order or judgment of a court of competent jurisdiction that has been entered on the docket maintained by the clerk of such court and has not been reversed, vacated, or stayed and as to which (a) the time to appeal, petition for certiorari, or move for a new trial, re-argument, or rehearing has expired and as to which no appeal, petition for certiorari, remand proceeding, or other proceedings for a new trial, re-argument, or rehearing shall then be pending or (b) if an appeal, writ of certiorari, new trial, re-argument, or rehearing thereof has been sought, (i) such order or judgment shall have been affirmed, reversed or remanded in part or in full, with no further proceedings on remand, by the highest court to which such order was appealed, certiorari shall have been denied, or a new trial, re-argument, or rehearing shall have been denied or resulted in no modification of such order and (ii) the time to take any further appeal, petition for certiorari, or move for a new trial, re-argument, or rehearing shall have expired; provided, however, that the possibility that a motion pursuant to Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule, may be filed relating to such order shall not prevent such order from being a Final Order, except as provided in the Federal Rules of Appellate Procedure or any other analogous rules.
1.31 GDB: The Government Development Bank for Puerto Rico.
1.32 GDB Title VI QM : The qualifying modification for GDB pursuant to Title VI of PROMESA, approved by the U.S. District Court for the District of Puerto Rico by order, entered November 7, 2018, in In re The Government Development Bank for Puerto Rico, Case No. 18-1561 (LTS) (D.P.R.).
1.33 Government Parties: Collectively, (a) the Oversight Board, as Administrative Supervisor in the Title VI Case, (b) committees and subcommittees of the Oversight Board, including, without limitation, the Special Claims Committee of the Oversight Board, (c) the Commonwealth of Puerto Rico, including, without limitation, any of its agencies, (d) the Issuer, and (e) AAFAF; provided, however, that under no circumstances shall “Government Parties” include the DRA or the DRA Parties.
1.34 Information Agent : Kroll Restructuring Administration LLC.
1.35 Issuer : PFC.
1.36 Lien: Any charge against or interest in property to secure payment of a debt or performance on an obligation.
1.37 Notes: Any and all promissory notes that were issued to the order of PFC by a Notes Counterparty and that have not been cancelled prior to the PFC Effective Date, including, without limitation, the Notes identified on Exhibit B attached hereto; provided, however, that the failure to identify any Note on Exhibit A shall not exclude it from the definition of Notes.
1.38 Notes Counterparty: The departments, units, agencies, public corporations, and other instrumentalities of the Commonwealth that issued the Notes, which, for the avoidance of doubt, shall include the Commonwealth.
1.39 Notes Released Claims : The Claims and Causes of Action relating to the Notes to be released pursuant to the terms and provisions of Section 14.7 hereof and the Approval Order.
1.40 Notes Released Parties : The parties to be released pursuant to the terms and provisions of Section 14.7 hereof and the Approval Order.
1.41 Oversight Board: The Financial Oversight and Management Board for Puerto
Rico established pursuant to Section 101 of PROMESA, as Administrative Supervisor in the Title VI Case.
1.42 Person: An individual, general partnership, limited partnership, corporation, limited liability company, limited liability partnership, cooperative, trust, unincorporated organization, association, joint stock company, joint venture, estate, government, or agency or political subdivision thereof, or any other form of legal entity.
1.43 PET: The Public Entity Trust created pursuant to the GDB Title VI QM.
1.44 PET/PFC Claim : The portion of the PET interests, attributable to PFC, which portion totals Twenty Eight Million, Six Hundred Twenty-One Thousand, Five Hundred SeventySeven Dollars and Ninety-Two Cents ($28,621,577.92).
1.45 PFC: Puerto Rico Public Finance Corporation.
1.46 PFC Bonds: Collectively, the following bonds issued by PFC in accordance with the terms of the PFC Trust Agreement: (a) Commonwealth Appropriation Bonds, Series 2011A, issued in the original principal amount of Two Hundred Forty-Two Million Four Hundred Thirty Thousand Dollars ($242,430,000.00); (b) Commonwealth Appropriation Bonds, Series 2011B, issued in the original principal amount of Four Hundred Thirty-Seven Million Six Hundred Forty Five Thousand Dollars ($437,645,000.00); and (c) Commonwealth Appropriation Bonds, Series 2012A, issued in the original principal amount of Four Hundred Ten Million Six Hundred Sixty-Five Thousand Dollars ($410,665,000.00); provided, however, for purposes hereof, PFC Bonds does not include the Defeased Bonds.
1.47 PFC Bond Trustee: Collectively, U.S. Bank Trust National Association and U.S. Bank National Association, solely in their capacity as trustee with respect to the PFC Bonds.
1.48 PFC Bond Trustee Fees: All fees, charges, and out-of-pocket expenses incurred by the PFC Bond Trustee pursuant to the terms of the PFC Trust Agreement, including, without limitation, the fees, and out-of-pocket expenses of the PFC Bond Trustees’ outside counsel (collectively, “Fees and Costs”), including, but not limited to, (a) all unpaid Fees and Costs incurred up to and including the PFC Effective Date, (b) all Fees and Costs incurred in connection with the Commonwealth Title III Case or negotiating and documenting and implementing the PFC Restructuring Support Agreement and this Qualifying Modification, (c) all Fees and Costs incurred in implementing distributions under, effectuating or complying with, this Qualifying Modification, and (d) a reserve in the amount of One Hundred Thousand Dollars ($100,000.00) for the Fees and Costs incurred or to be incurred by the PFC Bond Trustee in connection with the maintenance and distribution of the Defeasance Funds.
1.49 PFC Bond Trustee GDB Claim: All of the rights and claims of the PFC Bond Trustee related to that certain contingent and unliquidated Claim identified on Exhibit C of the DRA Bond Indenture in the allowed amount of Eighty-Six Million Seven Hundred Ten Thousand One Hundred Twelve Dollars ($86,710,112.00).
1.50 PFC Bond Trustee GDB Recovery: Subject to the terms and provisions of Section 9.2 hereof, bonds issued on account of the PFC Bond Trustee GDB Claim in accordance with the terms of Section 2.13 of the DRA Bond Indenture in the original principal amount of FortySeven Million Six Hundred Ninety Thousand Five Hundred Sixty-One Dollars and Sixty Cents ($47,690,561.60); provided, however, that, in the event the Title VI Court determines that such bonds (i) are not authorized to be issued pursuant to the applicable documents, (ii) may be issued in an amount less than that contemplated in the Qualifying Modification, or (iii) otherwise cannot be issued pursuant to the Qualifying Modification or the Approval Order, then the PFC Bond Trustee and/or each holder of a PFC Bond Claim shall be entitled to assert the rights set forth in Section 3.3 hereof; provided, further, that, subject to the written consent of the Administrative Supervisor, the PFC Bond Trustee (provided that, in the case of the PFC Bond Trustee, only upon the affirmative direction, indemnification and funding by holders of PFC Bond Claims in accordance with the terms and provisions of the Bond Documents), and the Issuer, in the event that PFC RSA Parties and the DRA Parties agree, in writing, to the issuance of bonds in accordance with the terms of Section 2.13 of the DRA Bond Indenture in an amount less than contemplated in the Qualifying Modification, during the period from the date hereof up to and including the PFC Effective Date or thereafter, including, without limitation, in connection with the exercise of rights set forth in Section 3.3 hereof, such modified amount of bonds to be issued shall be deemed to constitute the PFC Bond Trustee GDB Recovery and be included in the Qualifying Modification Supplement; and, provided, further, that only holders of PFC Bond Claims as of the PFC Effective Date shall be entitled to receive the bonds with respect to any agreement entered into pursuant to the second proviso hereof.
1.51 PFC Bond Claims: Collectively, all Claims against PFC arising from or relating to the PFC Bonds.
1.52 PFC Distribution: Collectively, subject to the terms and provisions of Section 3.3 hereof, (a) Thirteen Million Eight Hundred Thousand Dollars ($13,800,000.00) in Cash and (b) the PFC Bond Trustee GDB Recovery, minus such amounts as necessary to satisfy the PFC Bond Trustee Fees.
1.53 PFC Effective Date: The first (1st) Business Day on which all the conditions precedent to the substantial consummation of the Qualifying Modification and occurrence of the PFC Effective Date specified in Section 9.1 hereof shall have been satisfied or waived, as provided in Section 9.3 hereof.
1.54 PFC Filing Date: The date of the commencement of the Title VI Case in the Title VI Court.
1.55 PFC Restructuring Support Agreement: That certain PFC Restructuring
Support Agreement, dated as of January 20, 2022, by and among the Oversight Board, AAFAF, PFC, and the PFC RSA Parties, as amended pursuant to that certain First Amendment to Restructuring Support Agreement, dated as of October 25, 2022, and as it may be further amended, modified, or supplemented in accordance with the terms thereof.
1.56 PFC RSA Parties: Collectively, the parties to the PFC Restructuring Support Agreement, other than the Oversight Board, AAFAF, and PFC.
1.57 PFC Trust Agreement: That certain Trust Agreement, dated as of June 1, 2004, between PFC and the PFC Bond Trustee, together with all amendments, exhibits, schedules, resolutions, and other documents attached thereto or executed in connection therewith.
1.58 Pool: A category of holders of Claims set forth in Article IV of the Qualifying Modification.
1.59 Professional: An Entity employed in the Title VI Case by the Government Parties (in the Government Parties’ sole and absolute discretion) and to be compensated for services rendered prior to or on the PFC Effective Date.
1.60 PROMESA: The Puerto Rico Oversight, Management, and Economic Stability Act, Pub. L. No. 114-187, 130 Stat. 549 (2016), 48 U.S.C. § 2101, et. seq., as it may be amended or modified.
1.61 Pro Rata Share: With respect to PFC Bond Claims, the proportion that a PFC Bond Claim bears to the sum of all PFC Bond Claims within the Pool, excluding accrued, but unpaid, interest (if any).
1.62 Qualifying Modification: This Qualifying Modification Pursuant to PROMESA Title VI for the Puerto Rico Public Financing Corporation, including, without limitation, the exhibits and schedules hereto, as the same is amended, supplemented, or modified from time to time in accordance with the provisions of PROMESA and the terms hereof.
1.63 Qualifying Modification Supplement: A separate volume, if any, to be filed with the Clerk of the Title VI Court as soon as practicable (but in no event later than seven (7) days) prior to the Voting Deadline, or on such other date as the Title VI Court establishes, and which shall be deemed incorporated into and part of the Qualifying Modification as if set forth herein in full.
1.64 Related Persons: With respect to any Entity (including for the avoidance of doubt, the Government Parties and the PFC Bond Trustee), its predecessors, successors and assigns (whether by operation of law or otherwise) and their respective current and former employees, managers, elected or appointed officials, directors, officers, board members, principals, members, equity holders (whether such interests are held directly or indirectly), partners, financial advisors, attorneys, accountants, consultants, agents and professionals (including, without limitation, any and all Professionals retained by the Issuer, the Administrative Supervisor and AAFAF), or other representatives, nominees or investment managers, each acting in such capacity, and any Entity claiming by or through any of them (including their respective officers, directors, managers, shareholders, partners, employees, members and professionals), each in its respective capacity as such.
1.65 Released Claims: Collectively, (a) with respect to those Entities party to the PFC Restructuring Support Agreement, PFC Bond Claims and related Causes of Action released hereunder and in accordance with the PFC Restructuring Support Agreement, (b) PFC Bond Claims and related Claims and Causes of Action that arise in, are related to or have been or could have been asserted against the Issuer, the Notes Counterparties, or their respective Assets in the Title VI Case, (c) Claims and Causes of Action arising from or relating to the PFC Bonds, including, without limitation, any all Claims arising from or relating to the PET/PFC Claim, the PFC Trust Agreement, or the Notes, and (d) Claims that otherwise arise from or relate to the Title VI Case, the Qualifying Modification, or the PFC Restructuring Support Agreement, and the compromises set forth herein, including, without limitation, in connection with or related to any of the Government Parties, and their respective subsidiaries, assets, liabilities, operations, or property; provided, however, that, “Released Claims” is not intended to include, nor shall it have the effect of including, Claims or Causes of Action unrelated to the Issuer, the PFC Bonds, the PFC Trust Agreement, or the Notes, or that result from an act or omission to the extent that such act or omission is determined in a Final Order to have constituted gross negligence, intentional fraud or willful misconduct; and, provided, further, that “Released Claims” is not intended to release, nor shall it have the effect of releasing, (i) any party from the performance of its obligations in accordance with the Confirmation Order, the Approval Order, the Commonwealth Plan, the PFC Restructuring Support Agreement, or the Qualifying Modification, or (ii) indemnities, directions or other contractual undertakings by the PFC RSA Parties in favor of the PFC Bond Trustee; and, provided, further, that “Released Claims” shall not include claims against any party other than the Released Parties, including, but not limited to, Claims arising under the PFC Bond Trustee GDB Claim, which shall be allowed on the terms set forth in the DRA Bond Indenture.
1.66 Released Parties: Collectively, solely to the extent provided in the Qualifying Modification, (a) the Government Parties, (b) the PFC Bond Trustee, (c) the PFC RSA Parties, (d) each Note Counterparty, and (e) with respect to the foregoing clauses (a) through (d), each of their respective Related Persons.
1.67 Releasing Parties: Collectively, solely to the extent provided in the Qualifying Modification, (a) all holders of Claims against the Issuer or its Assets; (b) such holders’ current and former Affiliates and (c) with respect to the foregoing clauses (a) and (b), each such Entity’s current and former Related Persons; provided, however, that except to the extent permitted pursuant to PROMESA Section 601(m), Releasing Parties shall not include any holder of a PFC Bond Claim that “opts out” of the releases by electing the appropriate option on The Depository Trust Company’s Automated Tender Offer Program platform.
1.68 Securities Act : The Securities Act of 1933, 15 U.S.C. §§ 77a-77aa, as amended, or any similar federal, state or local law.
1.69 Sinking Fund: The PFC Restructuring Sinking Fund held in trust by the PFC Bond Trustee for the purposes described in Section 401 of the PFC Trust Agreement, together with all separate accounts therein, including, but not limited, to the Defeasance Funds.
1.70 Title III: Title III of PROMESA.
1.71 Title III Court: The United States District Court of the District of Puerto Rico or such other court having jurisdiction over the Commonwealth Title III Case.
1.72 Title VI: Title VI of PROMESA.
1.73 Title VI Case: The Title VI case to be commenced for PFC for the approval of this Qualifying Modification pursuant to Section 601(m)(1)(D) of PROMESA and District of Puerto Rico Local Civil Rule 3.1.
1.74 Title VI Court: The United States District Court of the District of Puerto Rico or such other court having jurisdiction over the Title VI Case.
1.75 Voting Deadline: November 21, 2022 at 5:00 P.M. Eastern Standard Time.
1.76 Other Definitions: Unless the context otherwise requires, any capitalized term used and not defined herein or elsewhere in the Qualified Modification that is defined in PROMESA shall have the meaning assigned to that term in PROMESA. Unless otherwise specified, (a) all section, schedule, or exhibit references in the Qualifying Modification are to the respective section in, article of, or schedule or exhibit to, the Qualifying Modification, as the same may be amended, waived, or modified from time to time and (b) all references to dollars are to the lawful currency of the United States of America. The words, “herein,” “hereof,” “hereto,” “hereunder,” and other words of similar import refer to the Qualifying Modification as a whole and not to any particular section, subsection, or clause contained in the Qualifying Modification.
1.77 Rules of Interpretation: For purposes of the Qualifying Modification, (a) unless otherwise specified, any reference herein to a contract, lease, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (b) unless otherwise specified, any reference herein to a definition, an existing document, schedule, or exhibit, shall mean such document, schedule, or exhibit, as it was, or is amended, modified, or supplemented; (c) unless otherwise specified, all references herein to “Articles” and “Sections” are references to Articles and Sections, respectively, hereof or hereto; (d) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Qualifying Modification; (e) unless otherwise specified, references to docket numbers of documents filed in the Commonwealth Title III Case or in the Title VI Case are references to the docket numbers under the Title III Court’s CM/ECF system or the Title VI Court’s CM/ECF system, as applicable; (f) the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, and shall be deemed to be followed by the words “without limitation”; and (g) any immaterial effectuating provisions may be interpreted by the Administrative Supervisor in such a manner consistent with the overall purpose and intent of the Qualifying Modification all without further notice to or action, order, or approval of the Title VI Court or any other Entity.
ARTICLE II
COMPROMISE AND SETTLEMENT OF DISPUTES
2.1 Compromise of Controversies: This Qualifying Modification sets forth the terms and conditions for a global compromise and integrated settlement of, among other issues, asserted and unasserted disputes concerning the rights of holders of PFC Bond Claims against PFC, the GDB, the DRA, and the Commonwealth.
2.2 PFC Bond Claims/Voting: On the PFC Effective Date, for purposes of voting on this Qualifying Modification, PFC Bond Claims shall be calculated as provided in Section 7.1 hereof; provided, however, that the PFC Bond Claims shall be deemed to be in the aggregate amount of One Billion Five Hundred Thirty-Four Million Eight Hundred One Thousand Seven Hundred SeventySeven Dollars ($1,534,801,777.00).
2.3 Releases, Injunctions and Exculpation: The releases, injunctions and exculpation provided in Article XIV hereof are integral to obtaining the value provided hereunder and constitute an essential component of the compromises reached and are not severable from the other provisions of this Qualifying Modification.
ARTICLE III
PROVISIONS RELATING TO PFC BOND TRUSTEE AND HOLDERS OF PFC BOND CLAIMS
3.1 PFC Bond Trustee Fees: Notwithstanding anything contained in the Qualifying Modification to the contrary, in order to compensate the PFC Bond Trustee for all Fees and Costs incurred under the PFC Trust Agreement or otherwise in connection with this Qualifying Modification (including without limitation, in implementing distributions under, effectuating or complying with, this Qualifying Modification), subject to the entry of the Approval Order, on the PFC Effective Date, the PFC Bond Trustee shall be entitled to receive the PFC Bond Trustee Fees, payable from the PFC Distribution before distributions to holders of PFC Bond Claims pursuant to this Qualifying Modification, other than distributions to holders of PFC Bond Claims from the Defeasance Funds or any separate account in the Sinking Fund dedicated to a special purpose payment pursuant to the PFC Trust Agreement.
3.2 Actions of PFC Bond Trustee: Except as may be provided otherwise hereunder, the PFC Bond Trustee shall be empowered to (a) take all steps and execute all instruments and documents necessary to effectuate the Qualifying Modification, (b) make distributions by it as contemplated by the Qualifying Modification, (c) comply with the Qualifying Modification and the obligations thereunder, and (d) exercise such other powers as may be vested in the PFC Bond Trustee pursuant to order of the Title VI Court, pursuant to the Qualifying Modification, pursuant to the PFC Trust Agreement, or as deemed by the PFC Bond Trustee to be necessary and proper to implement the provisions of the Qualifying Modification.
3.3 Review and Appeal Rights: In the event the Title VI Court determines that the bonds in connection with the PFC Bond Trustee GDB Recovery (i) are not authorized to be issued pursuant to the applicable documents, (ii) may be issued in an amount less than that contemplated in the Qualifying Modification, or (iii) otherwise cannot be issued pursuant to the Qualifying Modification or the Approval Order, the PFC Bond Trustee and/or each holder of a PFC Bond Claim shall have the right, but not any obligation (and with respect to the Trustee, only upon the affirmative direction, indemnification and funding by holders of PFC Bond Claims in accordance with the terms and provisions of the Bond Documents), to seek review of the Title VI Court’s decision (pursuant to a motion for reconsideration, appeals or otherwise) solely with respect to such issue and the Government Parties shall have no legal obligation to participate in or otherwise support an appeal in any respect nor to expend any time or expense in respect thereof or in relation thereto, but will not, nor encourage any other person to, take any action which would, or would reasonably be expected to, oppose or be inconsistent with any such request for review; provided, however, that, in the event that any such review process results in an award in respect of the PFC Bond Trustee GDB Recovery greater than what was awarded by the Approval Order, then with respect to the Government Parties, the Government Parties shall comply with the terms of such court order solely to the extent of issuing instructions in accordance with the terms and provisions of the DRA Bond Indenture and any other applicable documents and taking other reasonable actions incidental thereto; provided, further, that the Government Parties shall be under no obligation or duty to issue any indebtedness of the Government Parties; and, provided, further, that only holders of PFC Bond Claims as of the PFC Effective Date shall be entitled to receive the greater amount, if any, of the PFC Bond Trustee GDB Recovery.
3.4 Non-Severability: The payment of the PFC Bond Trustee Fees as set forth in this Article III to compensate the PFC Bond Trustee for fees, charges, and out-of-pocket expenses constitute an essential component of the compromises and settlements embodied herein and are not severable from the other terms and provisions set forth herein.
ARTICLE IV
ESTABLISHMENT OF POOLS
4.1 Establishment of Pools: Pursuant to Section 601 (d) of PROMESA, the following Pool has been established and certified by the Administrative Supervisor:
(a) Pool 1: PFC Bond Claims
ARTICLE V
PROVISIONS FOR TREATMENT OF PFC BOND CLAIMS (POOL 1)
5.1 Treatment of PFC Bond Claims: On the PFC Effective Date, each holder of a PFC Bond Claim shall be entitled to receive in full consideration, satisfaction, release and exchange of such PFC Bond Claim (subject to the terms and provisions of Sections 1.50 and 3.3 hereof), such holder’s Pro Rata Share of (a) the PFC Distribution based on the outstanding principal amount (before any accrued and unpaid interest or premium thereof) of PFC Bonds such holder held at the close of business on the date distributions are made pursuant to Article VI hereof, and (b) to the extent entitled thereto, in accordance with the terms of any controlling agreement, the Sinking Fund, or any separate account created in accordance with the terms and provisions of the PFC Trust Agreement; provided, however, that, for the avoidance of doubt, (a) the PFC Bond Claims do not include claims in respect of the Defeased Bonds and (b) the Defeased Bonds shall not be affected by this Qualifying Modification and shall continue to be paid from the Defeasance Funds in accordance with the terms of the controlling agreement(s).
ARTICLE VI
PROVISIONS GOVERNING DISTRIBUTIONS
6.1 Time and Manner of Distribution: Except as otherwise provided herein, as soon as reasonably practicable within ten (10) Business Days following the PFC Effective Date, the Disbursing Agent shall distribute, or cause to be distributed (i) to the PFC Bond Trustee, the PFC Bond Trustee Fees, and (ii) to the holders of PFC Bond Claims, the PFC Distribution in accordance with the terms and provisions of Section 5.1 hereof. The Disbursing Agent shall also disburse to the holders of PFC Bond Claims any PFC Distribution resulting from a review or appeal process (if any) as contemplated by Section 3.3 hereof. Except as otherwise provided herein, the PFC Bond Trustee shall distribute to holders of PFC Bonds entitled to payment from the Sinking Fund, or any separate account created in accordance with the terms and provisions of the PFC Trust Agreement, the proceeds of the Sinking Fund, or any separate account created in accordance with the terms and provisions of the PFC Trust Agreement, in accordance with the terms and provisions of any controlling agreement and Section 5.1 hereof; provided, however, the PFC Bond Trustee may transfer to the Disbursing Agent for distribution to holders of PFC Bond Claims funds in the Sinking Fund other than Defeasance Funds.
6.2 Timeliness of Payments: Any payment or distribution to be made pursuant to the Qualifying Modification shall be deemed to be timely made if made as soon as reasonably practicable within ten (10) Business Days after the date specified in the Qualifying Modification. Whenever any distribution to be made under this Qualifying Modification shall be due on a day other than a Business Day, such distribution shall instead be made, without interest, on the immediately succeeding Business Day, but shall be deemed to have been made on the date due.
6.3 Distributions by the Disbursing Agent: Except as otherwise provided herein, all distributions under the Qualifying Modification shall be made by the Disbursing Agent. The Disbursing Agent shall be deemed to hold all property to be distributed hereunder in trust for the Entities entitled to receive the same. The Disbursing Agent shall not hold an economic or beneficial interest in such property.
6.4 Manner of Payment Pursuant to this Qualifying Modification: Unless the Entity receiving a payment agrees otherwise, any payment in Cash to be made by the Disbursing Agent shall be made, at the election of the payor, by check drawn on a domestic bank or by wire transfer from a domestic bank.
6.5 Delivery of Distributions: Except as provided in the Approval Order or herein, distributions and deliveries to holders of PFC Bond Claims shall be made through The Depository Trust Company or, to the extent a distribution cannot be made through The Depository Trust Company, such distributions and deliveries shall be made at the address of the holder of the PFC Bond Claim; provided, however, that the Disbursing Agent may make distributions of the PFC Bond Trustee Fees in a manner mutually agreed upon between the PFC Bond Trustee and the Disbursing Agent. The Issuer, its agents and servicers, the PFC Bond Trustee, and the Disbursing Agent shall have no obligation to recognize any transfer of PFC Bond Claims after the date distributions are made pursuant to the terms and provisions of Section 6.1 hereof.
6.6 Cancellation of Notes, Instruments, Certificates, and Other Documents: Except (a) as provided in any contract, instrument or other agreement or document entered into or delivered in connection with the Qualifying Modification, (b) for purposes of evidencing, implementing and effectuating a right to distribution under the Qualifying Modification (including in connection with a review or appeal process), or (c) as specifically provided otherwise in the Qualifying Modification, on the PFC Effective Date, the PFC Trust Agreement, the PFC Bonds and all instruments and documents related thereto, including, without limitation, the Notes, will be deemed automatically cancelled, terminated and of no further force or effect against the Issuer, the PFC Bond Trustee, or any Note Counterparty, as applicable, without any further act or action under any applicable agreement, law, regulation, order or rule, with the Issuer, the PFC Bond Trustee, or such Note Counterparty, as applicable, having no continuing obligations or duties and responsibilities thereunder and the obligations of the parties to the Issuer, as applicable, under the PFC Trust Agreement or the PFC Bonds and all instruments and documents related thereto, including, without limitation, the Notes, shall be discharged; provided, however, that, notwithstanding anything contained herein to the contrary, the PFC Trust Agreement, the PFC Bonds and such other instruments and documents shall continue in effect solely (i) to allow the Disbursing Agent to make any distributions as set forth in the Qualifying Modification and to perform such other necessary administrative or other functions with respect thereto, (ii) to allow holders of PFC Bond Claims to receive distributions in accordance with the terms and provisions of the Qualifying Modification, (iii) for any trustee, agent, contract administrator or similar entity under all instruments and documents related thereto, to perform necessary functions, including making distributions, in accordance with the Qualifying Modification (and for the avoidance of doubt, including in connection with a review or appeal process) and to have the benefit of all the rights and protections and other provisions of such instruments and documents, as applicable, and all other related agreements, (iv) for purposes of pursuing rights preserved in accordance with the terms and provisions of Section 3.3 hereof, or (v) to set forth the terms and conditions applicable to parties to such documents and instruments other than the Issuer. Notwithstanding the foregoing, and except as otherwise expressly provided in the Qualifying Modification, such bonds or bond documents that remain outstanding shall not form the basis for the assertion of any Claim against the Issuer or any Note Counterparty.
6.7 Withholding and Reporting Requirements: Any party issuing any instrument or making any distribution under the Qualifying Modification shall comply with all applicable withholding and reporting requirements imposed by any United States federal, state or local tax law or tax authority, and all distributions under the Qualifying Modification shall be subject to any such withholding or reporting requirements. Notwithstanding the above, each holder of a PFC Bond Claim that is to receive a distribution pursuant to the Qualifying Modification shall have the sole and exclusive responsibility for the satisfaction and payment of any taxes imposed on such holder by any governmental unit, including income, withholding and other tax obligations, on account of such distribution. Any party issuing any instrument or making any distribution pursuant to the Qualifying Modification has the right, but not the obligation, to not make a distribution until such holder has made arrangements satisfactory to such issuing or disbursing party for payment of any such withholding tax obligations and, if any party issuing any instrument or making any distribution pursuant to the Qualifying Modification fails to withhold with respect to any such holder’s distribution, and is later held liable for the amount of such withholding, the holder shall reimburse such party. The Disbursing Agent may require, as a condition to the receipt of a distribution, that the holder complete the appropriate Form W-8 or Form W-9, as applicable to each holder of a PFC Bond Claim.
6.8 Allocation of Distributions Between Principal and Interest: To the extent that any PFC Bond Claim entitled to a distribution pursuant to the Qualifying Modification consists of indebtedness and other amounts (such as accrued but unpaid interest thereon), for purposes of the Issuer, any distribution shall be deemed allocated first, to interest accrued and unpaid as of the date immediately preceding the PFC Effective Date, second, to the principal amount of the Claim (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claim, to such other amounts; provided, however, that the Issuer's treatment of any distributions for its tax purposes will not be binding on any Creditor or holder of a PFC Bond as to the treatment of such distributions for any regulatory, tax or other purposes.
6.9 Undeliverable/Reserved Distributions :
(a) Holding of Undeliverable Distributions by the Disbursing Agent: If any distribution to any holder of a PFC Bond Claim is returned to the Disbursing Agent as undeliverable, no further distribution shall be made to such holder unless and until the Disbursing Agent is notified, in writing, of such holder’s then-current address. Subject to the terms and provision of Section 6.9(b) hereof, undeliverable distributions shall remain in the possession of the Disbursing Agent until such time as a distribution becomes deliverable. All Entities ultimately receiving previously undeliverable Cash shall not be entitled to any interest or other accruals thereon of any kind. Nothing contained in the Qualifying Modification shall require the Disbursing Agent to attempt to locate any holder of a PFC Bond Claim.
(b) Failure to Claim Undeliverable Distributions: If (i) a check is sent, by the Disbursing Agent to a holder of a PFC Bond Claim in respect of distributions and such check is not negotiated within one hundred twenty (120) days following the date on which such check was issued, or (ii) any other form of distribution to a holder of a PFC Bond Claim is otherwise undeliverable, the Disbursing Agent (or its duly authorized agent) shall, on or prior to the date that is one hundred eighty (180) days from the PFC Effective Date, file a list with the Title VI Court setting forth the names of those Entities for which distributions have been made hereunder that have not been negotiated or have been returned as undeliverable as of the date thereof. Any holder of a PFC Bond Claim on such list that does not identify itself and assert its rights pursuant to the Qualifying Modification to receive a distribution within three (3) months from the date so listed shall have its entitlement to such undeliverable distribution discharged and shall be forever barred from asserting any entitlement pursuant to the Qualifying Modification or Commonwealth Plan, against Issuer, the Commonwealth, the PFC Bond Trustee, or their respective professionals, agents, or property, and any (1) Cash in the possession of the Disbursing Agent or the trustee with respect to existing securities, as the case may be, shall be released to Issuer or Commonwealth, as applicable, for use to discharge operating expenses of Issuer or Commonwealth, as applicable.
ARTICLE VII
ACCEPTANCE OR REJECTION OF THE QUALIFYING MODIFICATION
7.1 Acceptance by Pool of Creditors: Each holder of a PFC Bond Claim shall be entitled to vote separately to accept or reject the Qualifying Modification. The Pool of holders entitled to vote shall have accepted the Qualifying Modification if the Qualifying Modification is accepted by at least two-thirds (2/3) in Outstanding Principal amount of the PFC Bond Claims in that Pool that have timely voted to approve or reject the Qualifying Modification; provided, however, that not less than a majority of the aggregate Outstanding Principal of the PFC Bonds in the Pool have voted to approve the Qualifying Modification.
ARTICLE VIII
RIGHTS AND POWERS OF DISBURSING AGENT
8.1 Exculpation: From and after the PFC Effective Date, the Disbursing Agent shall be exculpated by all Entities, including, without limitation, holders of Claims and other parties in interest, from any and all claims, Causes of Action, and other assertions of liability arising out of the discharge of the powers and duties conferred upon such Disbursing Agent by the Qualifying Modification or any order of the Title VI Court entered pursuant to or in furtherance of the Qualifying Modification, or applicable law, except for actions or omissions to act arising out of the gross negligence or willful misconduct of such Disbursing Agent. No holder of a Claim or other party in interest shall have or pursue any claim or cause of action against the Disbursing Agent for making payments in accordance with the Qualifying Modification or for implementing the provisions of the Qualifying Modification.
8.2 Powers of the Disbursing Agent: Except as may be provided otherwise hereunder, the Disbursing Agent shall be empowered to (a) take all steps and execute all instruments and documents necessary to effectuate the Qualifying Modification, (b) make distributions contemplated by the Qualifying Modification, (c) comply with the Qualifying Modification and the obligations thereunder, and (d) exercise such other powers as may be vested in the Disbursing Agent pursuant to order of the Title VI Court, pursuant to the Qualifying Modification, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions of the Qualifying Modification.
8.3 Fees and Expenses Incurred From and After the PFC Effective Date: Except as otherwise ordered by the Title VI Court, the amount of any reasonable fees and expenses incurred by the Disbursing Agent in its capacity as Disbursing Agent from and after the PFC Effective Date and any reasonable compensation and expense reimbursement claims, including, without limitation, reasonable fees and expenses of counsel, incurred by the Disbursing Agent, shall be paid in Cash without further order of the Title VI Court.
ARTICLE IX
CONDITIONS PRECEDENT TO THE PFC EFFECTIVE DATE
9.1 Conditions Precedent to the Effective Date: The occurrence of the PFC Effective Date is subject to satisfaction of the following conditions precedent:
(a) Entry of the Approval Order: The Clerk of the Title VI Court shall have entered the Approval Order approving the Qualifying Modification, which shall be acceptable to the Administrative Supervisor and reasonably acceptable to the PFC Bond Trustee, the PFC RSA Parties, and the Issuer, and which shall, among other things:
(i) Authorize Issuer to take all actions necessary to enter into, implement, and consummate the contracts, instruments, releases, trust agreements, and other agreements or documents created in connection with the Qualifying Modification;
(ii) Authorize Issuer to (1) make all distributions and issuances as required in accordance with the Qualifying Modification, and (2) enter into any agreements and transactions necessary to make such distributions or otherwise implement the Qualifying Modification, including as set forth in the Qualifying Modification Supplement;
(iii) Authorize the implementation of the Qualifying Modification in accordance with its terms;
(iv) Determine the Approval Order is full, final, complete, conclusive and binding upon and shall not be subject to collateral attack or other challenge in any court or other forum by any Entity or any Entity’s heirs, successors, assigns, trustees, executors, administrators, officers, directors, agents, representatives, attorneys, beneficiaries or guardians;
(v) Provide that no person or entity shall enact, adopt, or implement any law, rule, regulation, or policy that impedes, financially or otherwise, consummation and implementation of the transactions contemplated by the Qualifying Modification; and
(vi) Provide that the Issuer, the PFC Bond Trustee, and the DRA shall take any and all actions necessary to consummate the transactions contemplated by the Qualifying Modification.
(b) No Injunction: The Approval Order shall not be stayed in any respect.
(c) Authorizations: All authorizations, consents, regulatory approvals, rulings, or documents, if any, that are necessary to implement and effectuate the Qualifying Modification have been obtained or entered and not revoked or reversed.
(d) Execution of Documents; Other Actions: All actions and all contracts, instruments, settlements, releases and other agreements or documents necessary to implement the terms and provisions of the Qualifying Modification are effected or executed and delivered, as applicable, and are in full force and effect.
(e) Commonwealth Plan Effective: The Commonwealth Plan Effective Date shall have occurred.
9.2 Issuance of PFC Bond Trustee GDB Recovery Not Condition Precedent: In the event the Title VI Court approves the Qualifying Modification and the distribution of Thirteen Million Eight Hundred Thousand Dollars ($13,800,000.00), in Cash and all other conditions precedent and terms set forth herein have been satisfied, but (a) the Title VI Court determines that the bonds to be issued in connection with the PFC Bond Trustee GDB Recovery (i) are not authorized to be issued pursuant to the applicable documents, (ii) may be issued in an amount less than that contemplated in the Qualifying Modification, or (iii) otherwise cannot be issued pursuant to the Qualifying Modification or the Approval Order, or (b) the PFC Bond Trustee GDB Recovery includes a settlement in connection with the issuance of such bonds agreed to between the PFC RSA Parties and the DRA Parties pursuant to the second proviso of Section 1.50 hereof, the Qualifying Modification shall be consummated and become effective (provided that the rights set forth in Section 3.3 hereof shall subsist and not be limited thereby). A holder of a PFC Bond Claim voting in favor of the Qualifying Modification shall be deemed to accept the risk that (y) the PFC Bond Trustee GDB Recovery may not be part of the consideration approved by the Title VI Court to be distributed in connection with the Qualifying Modification or (z) the PFC RSA Parties and the DRA Parties may agree to the issuance of bonds in an amount less than contemplated in the Qualifying Modification pursuant to the second proviso of Section 1.50 hereof, and such holder of a PFC Bond Claim will be bound by its vote regardless of (A) the outcome of the Title VI Court’s decision regarding distribution of the PFC Bond Trustee GDB Recovery, subject to the rights set forth in Section 3.3 hereof, or (B) the terms and conditions of any agreement entered into pursuant to the second proviso of Section 1.50 hereof.
9.3 Waiver of Conditions Precedent: Subject to the provisions of the PFC Restructuring Support Agreement, the Administrative Supervisor, after consultation with AAFAF, the PFC Bond Trustee, and the PFC RSA Parties, may waive any of the conditions to the PFC Effective Date set forth in Section 9.1 hereof at any time, without any further notice to or action, order, or approval of the Title VI Court; provided, however, that any such waiver shall not materially and adversely alter the terms of the Qualifying Modification to the detriment of the PFC Bond Trustee or the holders of PFC Bond Claims.
9.4 Effect of Non-Occurrence of Conditions to PFC Effective Date: If prior to the PFC Effective Date, the Approval Order is vacated pursuant to a Final Order, then, except as provided in any order of the Title VI Court vacating the Approval Order, as applicable, the Qualifying Modification will be null and void in all respects, and nothing contained in the Qualifying Modification shall: (a) constitute a waiver or release of any Claims, or Causes of Action; (b) prejudice in any manner the rights of the Issuer, AAFAF, the Administrative Supervisor, the PFC Bond Trustee, or any other Entity; or (c) constitute an admission, acknowledgment, offer, or undertaking of any sort by the Issuer, AAFAF, the Administrative Supervisor, the PFC Bond Trustee, or any other Entity.
ARTICLE X
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE QUALIFYING MODIFICATION
10.1 Modification of Qualifying Modification: Subject to the terms and provisions of the PFC Restructuring Support Agreement, the Administrative Supervisor, after consultation with AAFAF, the PFC Bond Trustee, and the PFC RSA Parties may alter, amend or modify the Qualifying Modification or the Exhibits in a manner that otherwise does not materially and adversely alter the terms of the Qualifying Modification to the detriment of the PFC Bond Trustee or the holders of PFC Bond Claims at any time prior to or after the Approval Date but prior to the PFC Effective Date. A holder of a Claim that has accepted the Qualifying Modification shall be deemed to have accepted the Qualifying Modification as altered, amended or modified so long as the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim of such holder.
10.2 Revocation or Withdrawal:
(a) Subject to the terms and provisions of the PFC Restructuring Support Agreement, the Qualifying Modification may be revoked or withdrawn prior to the Approval Date by the Administrative Supervisor.
(b) If the Qualifying Modification is revoked or withdrawn prior to the Approval Date, or if the Qualifying Modification does not become effective for any reason whatsoever, then the Qualifying Modification shall be deemed null and void. In such event, nothing contained herein shall be deemed to constitute a waiver or release of any claim by the Issuer, the PFC Bond Trustee, or any other Entity, or to prejudice in any manner the rights of the Issuer, the PFC Bond Trustee, or any other Entity in any further proceeding.
10.3 No Admission of Liability:
(a) The submission of this Qualifying Modification is not intended to be, nor shall it be construed as, an admission or evidence in any pending or subsequent suit, action, proceeding or dispute of any liability, wrongdoing, or obligation whatsoever (including as to the merits of any claim or defense) by any Entity with respect to any of the matters addressed in this Qualifying Modification.
(b) None of this Qualifying Modification (including, without limitation, the Exhibits hereto), or any settlement entered, act performed or document executed in connection with
this Qualifying Modification: (i) is or may be deemed to be or may be used as an admission or evidence of the validity of any claim, or any allegation made in any related actions or of any wrongdoing or liability of any Entity; (ii) is or may be deemed to be or may be used as an admission or evidence of any liability, fault or omission of any Entity in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal; (iii) is or may be deemed to be or used as an admission or evidence against the Issuer or any other Entity with respect to the validity of any Claim. None of this Qualifying Modification or any settlement entered, act performed or document executed in connection with this Qualifying Modification shall be admissible in any proceeding for any purposes, except to carry out the terms of this Qualifying Modification, and except that, once confirmed, any Entity may file this Qualifying Modification in any action for any purpose, including, but not limited to, in order to support a defense or counterclaim based on the principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim.
ARTICLE XI
CORPORATE GOVERNANCE AND MANAGEMENT OF ISSUER
11.1 Corporate Action: On the PFC Effective Date, all matters provided for under the Qualifying Modification that would otherwise require approval of the directors of the Issuer, including, without limitation, to the extent applicable, the authorization to enter into any of the documents contained in the Qualifying Modification Supplement, shall be authorized and approved in all respects and without further action by any Entity under any other applicable law, regulation, order, or rule. Other matters provided under the Qualifying Modification involving the corporate structure of Issuer or corporate action by Issuer, as applicable, shall be deemed to have occurred, be authorized, and shall be in effect without requiring further action by any Entity under any other applicable law, regulation, order, or rule. Without limiting the foregoing, from and after the Approval Date, the Issuer shall take any and all actions deemed appropriate in order to consummate the transactions contemplated herein.
ARTICLE XII
PROVISIONS REGARDING OVERSIGHT BOARD AND COMPLIANCE WITH PROMESA
12.1 Effect of Approval: Nothing in this Qualifying Modification or the Approval Order shall discharge, substitute, alter or otherwise modify the powers and responsibilities of the Oversight Board pursuant to PROMESA or the obligations of the Issuer under PROMESA. From and after the PFC Effective Date, the Issuer shall continue to have all of its obligations pursuant to PROMESA, including, without limitation, the terms and conditions of Titles I and II thereof.
12.2 Ongoing Role of the Oversight Board: Nothing in the Qualifying Modification or the Approval Order shall discharge any or all obligations of PFC under PROMESA and, from and after the PFC Effective Date, the Oversight Board’s powers and responsibilities under PROMESA shall continue, and PFC’s duties and obligations under PROMESA shall continue and be unaffected by the Qualifying Modification and the consummation thereof.
ARTICLE XIII
RETENTION OF JURISDICTION
13.1 Retention of Jurisdiction: The Title VI Court shall retain and have exclusive jurisdiction over any matter arising under PROMESA, arising in or related to, this Title VI Case and the Qualifying Modification, or that relates to the following:
(a) to ensure that distributions to holders of PFC Bond Claims are accomplished pursuant to the provisions of the Qualifying Modification and adjudicate any and all disputes arising from or relating to distributions under the Qualifying Modification;
(b) to adjudicate, decide, or resolve any motions, contested or litigated matters, and any other matters, and grant or deny any applications involving the Issuer that may be pending on the PFC Effective Date or brought thereafter;
(c) to enter and implement such orders as may be necessary or appropriate to execute, implement, consummate or enforce the provisions of (a) contracts, instruments, releases, indentures, and other agreements or documents approved by Final Order in this Title VI Case and (b) the Qualifying Modification, the Approval Order, and any other contracts, instruments, securities, releases, indentures, and other agreements or documents created in connection with the Qualifying Modification,
(d) to resolve any cases, controversies, suits, disputes or other challenges of any kind that may arise in connection with the consummation, interpretation or enforcement of the Qualifying Modification, the Approval Order, or any other contract, instrument, security, release or other agreement or document that is entered into or delivered pursuant to the Qualifying Modification or any Entity’s rights arising from or obligations incurred in connection with the Qualifying Modification or such documents;
(e) to approve any modification of the Qualifying Modification or approve any modification of the Approval Order or any contract, instrument, security, release or other agreement or document created in connection with the Qualifying Modification or the Approval Order, or remedy any defect or omission or reconcile any inconsistency in any order, the Qualifying Modification, the Approval Order or any contract, instrument, security, release or other agreement or document created in connection with the Qualifying Modification or the Approval Order, in such manner as may be necessary or appropriate to consummate the Qualifying Modification;
(f) to adjudicate, decide or resolve any matters relating to PFC’s compliance with the Qualifying Modification and the Approval Order;
(g) to determine any other matters that may arise in connection with or relate to the Qualifying Modification, the Approval Order, or any contract, instrument, security, release or other agreement or document created, entered into or delivered in connection with the Qualifying Modification or the Approval Order, in each case, solely to the extent that any such document does not provide for another court or courts to have exclusive jurisdiction;
(h) to enter and implement other orders, or take such other actions as may be necessary or appropriate to enforce or restrain interference by any Entity with consummation or enforcement of the Qualifying Modification or the Approval Order;
(i) to adjudicate any and all controversies, suits or issues that may arise regarding the validity of any actions taken by any Entity pursuant to or in furtherance of the Qualifying Modification or Approval Order and enter any necessary or appropriate orders or relief in connection with such adjudication;
(j) to enter and implement such orders as are necessary or appropriate if the Approval Order is for any reason modified, stayed, reversed, revoked, or vacated;
(k) to enter an order or final decree concluding or closing this Title VI Case;
(l) to enforce and clarify any orders previously entered by the Title VI Court in this Title VI Case; and
(m) to hear any other matter over which the Title VI Court has jurisdiction.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Title to Assets: Except as provided in the Approval Order, on the PFC Effective Date, title to all Assets of the Issuer shall vest in the Issuer, free and clear of all Liens, Claims or other interests supporting the PFC Bonds, including, without limitation, any Liens, Claims or other interests possessed by the PFC Bond Trustee. The Approval Order approving this Qualifying Modification shall constitute a judicial determination, as of the PFC Effective Date, of the discharge and release of all such Liens, Claims, Causes of Action or other interests supporting the PFC Bonds, and shall be conclusive evidence of the cancellation, discharge, and release of all such Liens, Claims, Causes of Action and other interests supporting the PFC Bonds.
14.2 Scope of Discharge: Notwithstanding anything else contained in this Qualifying Modification, this Qualifying Modification provides for the treatment and discharge of only the PFC Bond Claims and the Notes pursuant to Section 601(m) of PROMESA. No other obligations of or Claims against PFC shall be deemed to have been adjusted, impaired, discharged, or otherwise affected by this Qualifying Modification.
14.3 Discharge and Release of Claims and Causes of Action:
(a) Except as expressly provided in the Qualifying Modification or the Approval Order, all distributions and rights afforded under the Qualifying Modification shall be, and shall be deemed to be, in exchange for, and in complete satisfaction, settlement, discharge and release of, all Claims or Causes of Action against the Released Parties that arose, in whole or in part, prior to the PFC Effective Date, relating to the PFC Bonds, including, without limitation, any and all Claims arising from or relating to the PET/PFC Claim, the PFC Trust Agreement, the Title VI Case, the Issuer or any of its Assets, property, or interests of any nature whatsoever, including any interest accrued on such Claims, and regardless of whether any property will have been distributed or retained pursuant to the Qualifying Modification on account of such Claims or Causes of Action, solely arising from or relating to the PFC Bonds. Upon the PFC Effective Date, the Issuer shall be deemed discharged and released from any and all PFC Bond Claims that arose, in whole or in part, prior to the PFC Effective Date.
(b) Except as expressly provided in the Qualifying Modification or the Approval Order, all Entities shall be precluded from asserting any and all PFC Bond Claims against the Issuer and its Assets, property and rights, remedies, Claims or Causes of Action or liabilities of any nature whatsoever, relating to this Title VI Case, the Issuer or its Assets and property, and regardless of whether any property will have been distributed or retained pursuant to the Qualifying Modification on account of such Claims. In accordance with the foregoing, except as expressly provided in the Qualifying Modification or the Approval Order, the Approval Order shall constitute a judicial determination, as of the PFC Effective Date, of the discharge and release of all such PFC Bond Claims and related Causes of Action, and such discharge shall void and extinguish any judgment obtained against the Issuer and/or its Assets and property at any time, to the extent such judgment is related to a discharged Claim, debt or liability. As of the PFC Effective Date, and in consideration for the value provided under the Qualifying Modification, each holder of a PFC Bond Claim shall be and hereby is deemed to release and forever waive and discharge such PFC Bond Claim as against the Issuer, the Commonwealth, and their respective Assets and property.
14.4 Injunction on Claims: Except as otherwise expressly provided in the Qualifying Modification, the Approval Order or such other Final Order of the Title VI Court that may be applicable, all Entities who have held, hold or may hold PFC Bond Claims or any other debt or liability that is discharged or released pursuant to this Qualifying Modification or who have held, hold or may hold Claims or any other debt or liability that is discharged or released pursuant to this Qualifying Modification, including the Notes, are permanently enjoined, from and after the PFC Effective Date, from (a) commencing or continuing, directly or indirectly, in any manner, any action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) of any kind on any such Claim or other debt or liability that is discharged pursuant to the Qualifying Modification against any of the Released Parties or any of their respective assets or property, (b) the enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree or order against any of the Released Parties or any of their respective assets or property on account of any Claim or other debt or liability that is discharged pursuant to the Qualifying Modification, (c) creating, perfecting, or enforcing any encumbrance of any kind against any of the Released Parties or any of their respective assets or property on account of any Claim or other debt or liability that is discharged pursuant to the Qualifying Modification, and (d) except to the extent provided, permitted or preserved pursuant to the common law right of recoupment, asserting any right of setoff, subrogation or recoupment of any kind against any obligation due from any of the Released Parties or any of their respective assets or property, with respect to any such Claim or other debt or liability that is discharged pursuant to the Qualifying Modification. Such injunction shall extend to all successors and assigns of the Released Parties and their respective assets and property.
14.5 Integral to Qualifying Modification: Each of the discharge, injunction, exculpation and release provisions provided in this Article is an integral part of the Qualifying Modification and is essential to its implementation. Each of the Released Parties shall have the right to independently seek the enforcement of the discharge, injunction and release provisions set forth in this Article.
14.6 Releases by the Government Parties: Except as otherwise expressly provided in the Qualifying Modification or the Approval Order, on the PFC Effective Date, and for good and valuable consideration, each of the Government Parties, the Disbursing Agent and each of the Government Parties’ Related Persons shall be deemed to have and hereby does irrevocably and unconditionally, fully, finally and forever waive, release, acquit, and discharge the Released Parties and the PET from any and all Claims or Causes of Action that the Government Parties, and the Disbursing Agent, or any of them, or anyone claiming through them, on their behalf or for their benefit, have or may have or claim to have, now or in the future, against any Released Party that are Released Claims or otherwise are based upon, relate to, or arise out of or in connection with, in whole or in part, any act, omission, transaction, event or other circumstance relating to the PFC Bonds, including, without limitation, any and all Claims arising from or relating to the PET/PFC Claim, the PFC Trust Agreement, the Notes, the Title VI Case or the Issuer, or this Qualifying Modification taking place or existing on or prior to the PFC Effective Date, and/or any Claim, act, fact, transaction, occurrence, statement, or omission in connection therewith or alleged or that could have been alleged, including, without limitation, any such Claim, demand, right, liability, or cause of action for indemnification, contribution, or any other basis in law or equity for damages, costs or fees.
14.7 Releases Relating to the Notes . Except as otherwise expressly provided in the Qualifying Modification or the Approval Order, on the PFC Effective Date, and for good and valuable consideration, each of the Issuer, the PFC Bond Trustee, each holder of a PFC Bond Claim, and each of such party’s Related Persons shall be deemed to have and hereby does irrevocably and unconditionally, fully, finally and forever waive, release, acquit, and discharge the Issuer, Notes Counterparties and the PFC Bond Trustee, as applicable, from any and all Claims or Causes of Action that such party or any of them, or anyone claiming through them, on their behalf or for their benefit, including, without limitation, holders of PFC Bond Claims, have or may have or claim to have, now or in the future, against the Issuer, any Notes Counterparty and the PFC Bond Trustee, as applicable, that are based upon, relate to, or arise out of or in connection with, in whole or in part, any act, omission, transaction, event or other circumstance relating to the Notes, the PFC Trust Agreement, or the PFC Bonds.
14.8 Injunction Related to Releases: As of the PFC Effective Date, all Entities that hold, have held, or may hold a Released Claim or Notes Released Claim that is released pursuant to Article XIV of the Qualifying Modification, are, and shall be, permanently, forever and completely stayed, restrained, prohibited, barred and enjoined from taking any of the following actions, whether directly or indirectly, derivatively or otherwise, on account of or based on the subject matter of such discharged Released Claims or Notes Released Claims: (a) commencing, conducing or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including, without limitation, any judicial, arbitral, administrative or other proceeding) in any forum; (b) enforcing, attaching (including, without limitation any prejudgment attachment), collecting, or in any way seeking to recover any judgment, award, decree, or other order; (c) creating, perfecting or in any way enforcing in any matter, directly or indirectly, any Lien; (d) setting off, seeking reimbursement or contributions from, or subrogation against, or otherwise recouping in any manner, directly or indirectly, any amount against any liability or obligation owed to any Entity released under Article XIV hereof; and (e) commencing or continuing in any manner, in any place or any judicial, arbitration or administrative proceeding in any forum, that does not comply with or is inconsistent with the provisions of the Qualifying Modification or the Approval Order.
14.9 Exculpation:
(a) Government Parties: The Oversight Board, AAFAF, the Issuer, and each of their respective Related Persons, solely acting in its capacity as such at any time up to and including the PFC Effective Date, shall not have or incur any liability to any Entity for any act taken or omitted to be taken in connection with the Title VI Case, the formulation, preparation, dissemination, implementation, confirmation or approval of the Qualifying Modification or any compromises or settlements contained therein, or any contract, instrument, release or other agreement or document provided for or contemplated in connection with the consummation of the transactions set forth in the Qualifying Modification; provided, however, that the foregoing provisions of this Section shall not affect the liability of any Entity that otherwise would result from any such act or omission to the extent that such act or omission is determined in a Final Order to have constituted intentional fraud or willful misconduct. Nothing in the foregoing provisions of this Section shall prejudice the right of any of the Government Parties, and the Government Parties’ officers and directors serving at any time up to and including the PFC Effective Date, and each of their respective professionals to assert reliance upon advice of counsel as a defense with respect to their duties and responsibilities under the Commonwealth Plan or Qualifying Modification.
(b) PFC Bond Trustee and the PFC RSA Parties: The PFC Bond Trustee, the PFC RSA Parties, and their respective Related Persons shall not have or incur any liability to any Entity for any act taken or omitted to be taken consistent with the Qualifying Modification, the Commonwealth Plan, or in connection with the formulation, preparation, dissemination, implementation, acceptance, confirmation or approval of the Qualifying Modification or the Commonwealth Plan or any compromises or settlements contained in either, or any contract, instrument, release or other agreement or document provided for or contemplated in connection with the consummation of the transactions set forth in the Qualifying Modification, including the PFC Restructuring Support Agreement; provided, however, that the foregoing provisions of this Section shall not affect the liability of any Entity that otherwise would result from any such act or omission to the extent that such act or omission is determined in a Final Order to have constituted intentional fraud or willful misconduct.
14.10 Bar Order: Except to the limited extent otherwise provided in the Qualifying Modification, each and every Entity is permanently enjoined, barred and restrained from instituting, prosecuting, pursuing or litigating in any manner any and all Claims, demands, rights, liabilities, or causes of action of any and every kind, character or nature whatsoever, in law or in equity, known or unknown, direct or derivative, whether asserted or unasserted, against any of the Released Parties and Notes Released Parties, based upon, related to, or arising out of or in connection with (i) any of the Released Claims (including, without limitation, Claims and Causes of Action based upon, related to, or arising out of or in connection with the PFC Bonds and the PFC Trust Agreement) and the Notes Released Claims, respectively, (ii) approval and consummation of the Qualifying Modification, (iii) the negotiation and consummation of the PFC Restructuring Support Agreement, or (iv) any claim, act, fact, transaction, occurrence, statement or omission in connection with or alleged or that could have been alleged in the Title VI Case, including in each case, without limitation, any such claim, demand, right, liability or cause of action for indemnification, contribution, or any other basis in law or equity for damages, costs or fees incurred arising directly or indirectly from or otherwise relating to the Title VI Case, either directly or indirectly by any Person arising from or related to the claims, acts, facts, transactions, occurrences, statements or omissions that are, could have been or may be alleged in the related actions or any other action brought or that might be brought by, through, on behalf of, or for the benefit of any of the Released Parties (whether arising under federal, state or foreign law, and regardless of where asserted).
14.11 No Waiver: Notwithstanding anything to the contrary contained in this Qualifying Modification, the releases and injunctions set forth in such sections shall not, and shall not be deemed to, limit, abridge or otherwise affect the rights of the Oversight Board or the PFC Bond Trustee to enforce, sue on, settle or compromise the rights, claims and other matters expressly retained by any of them.
14.12 Supplemental Injunction: Notwithstanding anything contained herein to the contrary, except to the limited extent provided otherwise in the Qualifying Modification, all Entities, including Entities acting on their behalf, who currently hold or assert, have held or asserted, or may hold or assert, any Released Claims against any of the Released Parties based upon, attributable to, arising out of or relating to the PFC Bonds, the PFC Trust Agreement, the Notes, the Title VI Case or any Claim against the Issuer, whenever and wherever arising or asserted, whether in the United States or anywhere else in the world, whether sounding in tort, contract, warranty, statute, or any other theory of law, equity or otherwise, shall be, and shall be deemed to be, permanently stayed, restrained and enjoined from taking any action against any of the Released Parties for the purpose of directly or indirectly collecting, recovering or receiving any payment or recovery with respect to any Released Claims arising prior to the PFC Effective Date (including prior to the PFC Filing Date), including, but not limited to:
(a) Commencing or continuing in any manner any action or other proceeding of any kind with respect to any such Released Claim against any of the Released Parties or the assets or property of any Released Party;
(b) Enforcing, attaching, collecting or recovering, by any manner or means, any judgment, award, decree or order against any of the Released Parties or the assets or property of any Released Party with respect to any such Released Claim;
(c) Creating, perfecting or enforcing any Lien of any kind against any of the Released Parties or the assets or property of any Released Party with respect to any such Released Claim;
(d) Except as otherwise expressly provided in the Qualifying Modification or the Approval Order, asserting, implementing or effectuating any setoff, right of subrogation, indemnity, contribution or recoupment of any kind against any obligation due to any of the Released Parties or against the property of any Released Party with respect to any such Released Claim; and
(e) Taking any act, in any manner, in any place whatsoever, that does not conform to, or comply with, the provisions of the Qualifying Modification or the Approval Order.
14.13 Severability: Subject to the terms and provisions of the PFC Restructuring Support Agreement, if, prior to the Approval Date, (a) any term or provision of the Qualifying Modification shall be held by the Title VI Court to be invalid, void or unenforceable, the Title VI Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted or (b) the Oversight Board, with the written consent of the Issuer, the PFC Bond Trustee, and the PFC RSA Parties, which consent shall not be unreasonably withheld, determines to modify or amend the Qualifying Modification, the Qualifying Modification provisions applicable thereto shall be deemed severed and to be of no force or effect.
14.14 Governing Law: Except to the extent that other federal law is applicable, or to the extent that an exhibit hereto or any document to be entered into in connection herewith provides otherwise, or to the extent applicable to and provided in the Bond Documents with respect to any rights, duties, and obligations of the PFC Bond Trustee, the rights, duties, and obligations arising under this Qualifying Modification shall be governed by, and construed and enforced in accordance with, PROMESA and, to the extent not inconsistent therewith, the laws of the Commonwealth of Puerto Rico giving effect to principles of conflicts of laws.
14.15 Section Headings: The section headings contained in this Qualifying Modification are for reference purposes only and shall not affect in any way the meaning or interpretation of the Qualifying Modification.
14.16 Inconsistencies: To the extent of any inconsistency between the terms and provisions of the Qualifying Modification and the terms and provisions of the Approval Order, the terms and provisions of the Approval Order shall govern and be deemed a modification of the Qualifying Modification; provided, however, that under no circumstances shall the Approval Order modify the economic terms set forth herein absent consent of the Oversight Board, the Issuer, the PFC RSA Parties and the PFC Bond Trustee.
14.17 Document Retention: From and after the PFC Effective Date, the Issuer may maintain documents in accordance with their standard document retention policy, as may be altered, amended, modified, or supplemented by the Issuer.
14.18 Immediate Binding Effect: Upon the occurrence of the PFC Effective Date, the terms of the Qualifying Modification and the Qualifying Modification Supplement shall be immediately effective and enforceable and deemed binding on any and all holders of PFC Bond Claims and their respective successors and assigns, whether or not the Claim of any such holder is impaired under the Qualifying Modification and whether or not such holder has accepted the Qualifying Modification. The releases, exculpations, and settlements effected under the Qualifying Modification shall be operative, and subject to enforcement by the Title VI Court, from and after the PFC Effective Date, including pursuant to the injunctive provisions of the Qualifying Modification. Once approved, the compromises and settlements embodied in the Qualifying Modification, along with the treatment of any associated Claims, shall not be subject to collateral attack or other challenge by any Entity in any court or other forum. As such, any Entity that opposes the terms of any compromise and settlement set forth in the Qualifying Modification must (a) challenge such compromise and settlement prior to confirmation of the Qualifying Modification and (b) demonstrate appropriate standing to object and that the subject compromise and settlement does not meet the standards governing settlements under applicable law.
14.19 Additional Documents: On or before the PFC Effective Date, (a) the Administrative Supervisor or (b) AAFAF or the Issuer, with the consent of the Administrative Supervisor, may file with Clerk of the Title VI Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Qualifying Modification. The Issuer and all holders of PFC Bond Claims receiving distributions pursuant to the Qualifying Modification and all other parties in interest, from time to time, may prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Qualifying Modification.
14.20 Reservation of Rights: Except as expressly set forth herein, the Qualifying Modification shall have no force or effect unless the Title VI Court shall enter the Approval Order. None of the filing of the Qualifying Modification, any statement or provision contained in the Qualifying Modification, or the taking of any action by the Issuer or AAFAF with respect to the Qualifying Modification or the Qualifying Modification Supplement shall be or shall be deemed to be an admission or waiver of any rights of the Issuer or AAFAF with respect to the holders of Claims prior to the PFC Effective Date.
14.21 Successors and Assigns: Except as expressly provided otherwise in the Qualifying Modification, the rights, benefits, and obligations of any Entity named or referred to in the Qualifying Modification or the Approval Order shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, Affiliate, officer, director, agent, representative, attorney, beneficiaries, or guardian, if any, of each Entity.
14.22 Notices: All notices, requests to, demands or other document(s) required by the Qualifying Modification or the Approval Order to be served on or delivered to the Oversight Board, the Issuer, AAFAF, the PFC Bond Trustee, or the PFC RSA Parties to be effective shall be in writing including by facsimile transmission and unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows:
If to the Oversight Board, to: Financial Oversight and Management Board for Puerto Rico 268 Munoz Rivera Avenue, Suite 1107 San Juan, PR 00918-1813 Attn: David A. Skeel, Jr., Chairman of the Board
- with a copy to -
PROSKAUER ROSE LLP Eleven Times Square New York, NY 10036 Attn: Martin J. Bienenstock, Esq. Brian S. Rosen, Esq. Tel: (212) 969-3000 Fax: (212) 969-2900 - and -
O’NEILL & BORGES LLC 250 Munoz Rivera Avenue, Suite 800 San Juan, PR 00918-1813 Attn: Hermann Bauer, Esq. Tel: (787) 764-8181 Fax: (212) 753-8944
If to the Issuer, to: Puerto Rico Public Finance Corporation Roberto Sanchez Vilella (Minillas) Government Center de Diego Ave. San Juan, PR 00907 - with a copy to - O’MELVENY & MYERS LLP Seven Times Square New York, NY 10036 Attn: John Rapisardi, Esq. Peter Friedman, Esq. Maria J. DiConza, Esq. Tel: (212) 326-2000 Fax: (212) 326-2061
PIETRANTONI MENDEZ & ALVAREZ LLC Popular Center 19th Floor 208 Ponce de Leon Avenue San Juan, PR 00918 Attn: Maria D. Trelles Hernandez, Esq. Oreste Ramos, Esq. Tel: (787) 274-1212 Fax: (787) 274-1 470
If to AAFAF, to: Fiscal Agency and Financial Advisory Authority Roberto Sanchez Vilella (Minillas) Government Center De Diego Avenue, Stop 22 San Juan, Puerto Rico 00907 - with a copy to - O’MELVENY & MYERS LLP Seven Times Square New York, NY 10036 Attn: John Rapisardi, Esq. Peter Friedman, Esq. Maria J. DiConza, Esq. Tel: (212) 326-2000 Fax: (212) 326-2061
If to the PFC Bond Trustee, to: U.S. Bank National Association Global Corporate Trust Services 60 Livingston Ave. St. Paul, MN 55107 Attn: Tim Sandell Michelle Mena-Rosado Tel: (651) 466-5867 Fax: (651) 466-7430 - with a copy to - HOGAN LOVELS US LLP 390 Madison Avenue New York, NY 10017 Attn: Ronald J. Silverman Sara M. Posner Tel: (212)-918-3000 Fax: (212)-918-3 100
If to Invesco, to: Invesco 350 Linden Oaks Rochester, NY 14625 Attn: Elisabeth Mossow Tel: (585)-383-1300 -and- Invesco 225 Liberty Street New York, NY 10281 Attn: Alissa Clare Tel: (212)-323-5621 - with a copy to - Kramer Levin Naftalis & Frankel, LLP 1177 Avenue of the Americas New York, New York 10020 Attn: Amy Caton Douglas Buckley Tel: (212)-715-9532 Fax: (212) 715-8332
If to FirTree, to: Fir Tree Partners 55 West 46th Street New York, New York 10036 Attn: Brian Meyer LegalNotices@firtree.com - with a copy to - Lowenstein Sandler LLP 1251 Avenue of the Americas, 17th Floor New York, New York 10020 Attn: Andrew Behlmann Tel: (973)-597-2332 Fax: (973)-597-2333
14.23 Term of Injunctions or Stays: All injunctions or stays contained in the Qualifying Modification or the Approval Order shall remain in full force and effect in accordance with their terms.
14.24 Entire Agreement: Except as otherwise indicated, the Qualifying Modification supersedes all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Qualifying Modification.
14.25 Qualifying Modification Supplement: All documents included in the Qualifying Modification Supplement, if any, are incorporated into and are a part of the Qualifying Modification as if set forth in full in the Qualifying Modification. Upon the filing of the Qualifying Modification Supplement with the Clerk of the Title VI Court, copies of the documents contained therein shall be made available upon written request to the Oversight Board’s counsel at the address above or by downloading such documents from https://cases.ra.kroll.com/puertorico/or the Title VI Court’s website, available via PACER. Unless otherwise ordered by the Title VI Court, to the extent any document in the Qualifying Modification Supplement is inconsistent with the terms of any part of the Qualifying Modification that does not constitute the Qualifying Modification Supplement, such part of the Qualifying Modification that does not constitute the Qualifying Modification Supplement shall control.
THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as Administrative Supervisor
Name: David A. Skeel, Jr. Title: Chairman
THE PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY, on behalf of THE PUERTO RICO PUBLIC FINANCE CORPORATION, as Issuer
Name: Nelson J. Perez Mendez Title: Deputy Executive Director
THE PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY, as fiscal agent
Name: Nelson J. Perez Mendez Title: Deputy Executive Director
Exhibit A
Defeased Bonds
Bond Name
CUSIP
Outstanding Principal
Interest Rate
Maturity Date
Puerto Rico Public Finance Corporation 2001 Series E
745291SW5
15,000,000.00
6.00%
08/01/2026
Puerto Rico Public Finance Corporation 2001 Series E
745291SX3
15,000,000.00
5.50%
08/01/2027
Exhibit B
Notes
A. Promissory Notes Pledged To Secure PFC Series 2011 Bonds
1. Promissory Note by the “OFFICE FOR THE IMPROVEMENT OF PUBLIC SCHOOLS OF PUERTO RICO” in the Principal Amount of Four Hundred Twenty-Five Million Dollars ($425,000,000), to the order of the Puerto Rico Public Finance Corporation, or its assigns, executed as of June 28, 2004.
2. Promissory Note by the “HOTEL DEVELOPMENT CORPORATION” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
3. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of Health”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
4. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of Health”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of the Allocable Share (as defined in the Promissory Note), of the 2004 Series B Bonds of PFC, as such principal amount may be increased or decreased from time to time.
5. Promissory Note by the “HOUSING FINANCE AUTHORITY OF PUERTO RICO” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
6. Promissory Note by the “PUERTO RICO AQUEDUCT AND SEWER AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
7. Promissory Note by the “PUERTO RICO AQUEDUCT AND SEWER AUTHORITY” in the Principal Amount of Three Hundred Ninety Million Dollars ($390,000,000) to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004.
8. Promissory Note by the “PUERTO RICO INFRASTRUCTURE FINANCING AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
9. Promissory Note by the “PUERTO RICO SOLID WASTE AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
10. Promissory Note by the “PUERTO RICO LAND AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
11. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of the Treasury”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed by Johnny Rullan as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
12. Promissory Note by the “PUERTO RICO MARITIME SHIPPING AUTHORITY” in the Principal Amount of Three Hundred Ten Million Dollars ($310,000,000) to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004.
13. Promissory Note by the “PUERTO RICO LAND AUTHORITY” to the order of the Government Development Bank for Puerto Rico (“GDB”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will be adjusted so that at all times, such Principal Amount is equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in case of capital appreciation bonds) of all Act 164 PFC Bonds (as such term is defined in the Promissory Note), as such principal amount may be increased or decreased from time to time.
B. Promissory Notes Pledged To Secure PFC Series 2012 Bonds
1. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of Health”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of the Allocable Share (as defined in the Promissory Note), of the 2012 Series A Bonds of PFC, as such principal amount may be increased or decreased from time to time.
2. Promissory Note by the “OFFICE FOR THE IMPROVEMENT OF PUBLIC SCHOOLS OF PUERTO RICO” in the Principal Amount of Four Hundred Twenty-Five Million Dollars ($425,000,000), to the order of the Puerto Rico Public Finance Corporation, or its assigns, executed as of June 28, 2004.
3. Promissory Note by the “HOTEL DEVELOPMENT CORPORATION” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
4. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of Health”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
5. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of Health”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of the Allocable Share (as defined in the Promissory Note), of the 2004 Series B Bonds of PFC, as such principal amount may be increased or decreased from time to time.
6. Promissory Note by the “HOUSING FINANCE AUTHORITY OF PUERTO RICO” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
7. Promissory Note by the “PUERTO RICO AQUEDUCT AND SEWER AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
8. Promissory Note by the “PUERTO RICO AQUEDUCT AND SEWER AUTHORITY” in the Principal Amount of Three Hundred Ninety Million Dollars ($390,000,000) to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004.
9. Promissory Note by the “PUERTO RICO INFRASTRUCTURE FINANCING AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
10. Promissory Note by the “PUERTO RICO SOLID WASTE AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
11. Promissory Note by the “PUERTO RICO LAND AUTHORITY” to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
12. Promissory Note by the “COMMONWEALTH OF PUERTO RICO, acting through the Department of the Treasury”, to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed by Johnny Rullan as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will at all times be equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in the case of Capital Appreciation Bonds) of all Act 164 PFC Bonds, as such principal amount may be increased or decreased from time to time.
13. Promissory Note by the “PUERTO RICO MARITIME SHIPPING AUTHORITY” in the Principal Amount of Three Hundred Ten Million Dollars ($310,000,000) to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004.
14. Promissory Note by the “PUERTO RICO LAND AUTHORITY” to the order of the Government Development Bank for Puerto Rico (“GDB”), or its assigns, executed as of June 28, 2004 (“Promissory Note”), the Principal Amount of which will be adjusted so that at all times, such Principal Amount is equal to the Applicable Percentage (as defined in the Promissory Note) of the aggregate principal amount (Accreted Value in case of capital appreciation bonds) of all Act 164 PFC Bonds (as such term is defined in the Promissory Note), as such principal amount may be increased or decreased from time to time.
15. Amended Promissory Note by the “PUERTO RICO AQUEDUCT AND SEWER AUTHORITY” in the Principal Amount of Three Hundred Ninety Million Dollars ($390,000,000) to the order of the Puerto Rico Public Finance Corporation (“PFC”), or its assigns, executed as of June 28, 2004.