November19,2017

DearMr.Gonzalez,

Thankyouforthecallyesterday.AswediscussedandaswenotedinouremailtoMr.NelsononFriday,
PREPAhasfailedtotimelypayWhitefishEnergyinaccordancewiththecontractforworkperformed
datingbacktomidOctober.PREPAsimproperdelays,inturn,hasdelayedpaymentsto
subcontractors.PREPAiscontractuallyrequiredtopayWhitefishEnergysinvoiceswithinthree(3)
calendardaysafterapproval,butnolaterthanten(10)calendardaysafterinvoicesubmission.

WhitefishRequiresTimelyPaymenttoPaySubcontractors

UnderWhitefishEnergyssubcontractswithmostofitssubcontractors,WhitefishEnergypaysits
subcontractorsafterWhitefishEnergyreceivespaymentfromPREPAforthesubcontractorswork(i.e.,
paywhenpaid).PREPAsfailuretotimelypayWhitefishEnergymeansthatWhitefishEnergyhasnot
receivedthenecessaryfundstopayitssubcontractorsforworkperformed.Todate,WhitefishEnergy
hastimelypaiditssubcontractorsforallinvoicesforwhichWhitefishEnergyreceivedpaymentfrom
PREPA.Infact,WhitefishEnergyhasroutinelypaiditssubcontractorsmorepromptlythanthepayment
termssetforthintheapplicablesubcontractsinanefforttofacilitatetheircontinuedworkgiventhe
urgencyoftheworktothecitizensofPuertoRico.Inthissamevein,WhitefishEnergyhasevenprepaid
someofitssubcontractorsinvoicesbeforereceivingpaymentfromPREPAtoensurethatwork
continues.However,thiscannotcontinue,andWhitefishmustreceivetheoutstandingandoverdue
paymentsfromPREPAtofundtheworkandthesupportcostsforsuchsubcontractors,suchaslodging,
meals,etc.

WhitefishEnergyReliedonPREPAsCriticalRepresentationsintheContract

PREPArepresentedtoWhitefishEnergyinthecontractthatithadauthoritytoenterintothecontract
withWhitefishEnergy,includingbutnotlimitedtowithrespecttotheGovernmentOversightBoardand
allotherrelevantentities.PREPAalsorepresentedtoWhitefishEnergythatthecontractwouldbe
FEMAfunded,whichwasthebasisfortheFirstAmendmentofthecontractonOctober17,
2017.WhitefishEnergyreliedonthesecriticalrepresentationsfromPREPAwhenitenteredintothe
contractandagreedtoamendthecontract.

Specifically,aspartofPREPAsrequesttoamendthecontracttomakeitFEMAcompliant,PREPA
insistedthatWhitefishEnergyprovidefixedratesforalltypesofwork,includinglabor,equipment,
lodgingandperdiems.AsexplainedtoPREPAatthetime,thisnewstructuremeantthatthe
subcontractorratesthatwerepreviouslypassedthroughtoPREPAasinvoiced,plusanamounttocover
overheadandothercosts,wouldinsteadneedtobesetatonefixedamountforallcurrentandfuture
subcontractors.PREPAdidnotwanttotakeontheriskofincreasedcosts,andinsteadputthatriskon
WhitefishEnergy,whichWhitefishEnergyaccepted,includingtheriskofpriceandcommodity
instabilities(e.g.,fuel,water,food,housing,airfare,etc.)onahurricanetornisland.PREPAsdelayed
paymentshavecauseddelaysinpaymentstothesubcontractorsand516workerswhohavebeen
workingaroundtheclocktorestore50%ofthepowergenerationtransmissionontheisland.

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WhitefishEnergyhasContinuedtoPerform,DespitePREPAsDelaysandFailures

WhitefishEnergyhasdiligentlyperformedallworkunderitscontractwithPREPA,includinghonoring
the30dayterminationprovisionandcontinuingtoperformworkdirectedbyPREPAfollowingWhitefish
EnergysreceiptoftheterminationnoticefromPREPA.Further,WhitefishEnergyhasworkedwith
PREPAtofacilitatethetransitionofitssubcontractorstoworkforotherentitiesafterthecompletionof
itsworkunderthecontract.WhitefishEnergyhastakenalloftheseactionswithoutrequiringsecurity
fromPREPA,inrelianceonPREPAsrepresentationsinthecontract,andingoodfaiththatPREPAwould
honoritscommitmentsunderthecontracttopayWhitefishEnergy,sothatWhitefishEnergycaninturn
payitssubcontractorsanditsownhardworkingunionemployees.

PREPA'sfailureandrefusaltotimelypayWhitefishEnergyunderthecontracthascreatedsignificant
reluctanceonthepartofWhitefishEnergyssubcontractorstocontinueperformingworkinsupportof
WhitefishEnergyscontractwithPREPA.Infact,theAPPAutilitiesthataresubcontractorstoWhitefish
EnergyareinsistingonimmediatelydemobilizingfromPuertoRicoandarereadyingtheirequipment
andworkersforimmediatedeparture.However,thecontractrequiresPREPAtopayforsuch
demobilizationcostsinadvance,andWhitefishEnergymustmakedepositsinordertoarrangeforthe
demobilizationofsubcontractorsandtheirworkersandequipment.PREPAsfailuretotimelypayfor
workperformedandlinesenergizedhascausedWhitefishEnergyssubcontractorstobeconcerned
abouttheirabilitytodemobilizeandreturntheirworkersandequipmenthomesafely.WhitefishEnergy
hasbegunmakingthesearrangementsandfrontingthesecosts,butsuchanapproachisnot
sustainable.

WeverymuchappreciatethatitiscriticaltothecitizensofPuertoRicothatWhitefishEnergybeableto
completeitsworkontransmissionline50900becausethatwillcompletealoop,that,combinedwith
WhitefishEnergysearlierrepairsoflines50100and50200,willallowPREPAtomanagetheflowof
powerfromtheSouthtotheNorth,andcreateredundancyforthedemandcentersoftheNorth,
includingthecityofSanJuan.Thisneedforredundancywashighlightedbytherecenttemporary
outages,whichasyouknow,hadnothingtodowithWhitefishEnergyscompletedworkonthose
energizedlines.Thiscriticalworkonline50900isthetypeofhelicopteronlyaccessworkinwhich
WhitefishEnergyspecializes.

IthasbeenWhitefishEnergyscommitmenttoitsmissionandthepeopleofPuertoRicothathas
compelledWhitefishEnergytocontinuetoperformworkonthiscriticallinedespitethemounting
outstandinginvoicesandnonpayment.However,itisnolongerpossibleforWhitefishEnergyorits
subcontractorstocontinuetoincurthesesubstantialcostswithoutpaymentforpriorworkperformed,
assurancesofpaymentforfutureworkperformed,andpaymentofWhitefishEnergysandits
subcontractorsdemobilizationcosts,allasrequiredunderthecontract.

Conclusion

ThereisnobasisforPREPAtowithholdpaymentsfromWhitefishEnergyandPREPAsrefusaltomake
timelypaymentsisabreachofthecontract.WhitefishEnergyhasdiligentlyworkedwithPREPAto
accommodateitsnumerouschangesinitsinvoicesubmissionrequirements,aswellasitschangesin
approvalprocesses.YettheseinternalchangesandconfusionwithinPREPAdonotjustifyitsfailureto
maketimelypaymentsunderthecontract.Asshownintheattachedinvoicelog,todate,Whitefish
EnergyhassubmittedinvoicestoPREPAtotaling$64,809,561.81forworkperformedand
$39,404,336.20foranticipateddemobilizationcosts,whichPREPAisrequiredtopayinadvanceunder

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thecontract.Ofthisamount,$83,036,305.09remainsunpaid,$26,012,747.04ofwhichhasbeen
auditedandapprovedbyPREPAmorethanthree(3)daysago.

IfWhitefishEnergydoesnotreceiveevidencethatwiresforallpastdueinvoiceshavebeeninitiatedby
11:00amlocaltimeonMonday,November20,2017(includingthosethathavealreadybeenaudited
andtheamountsowedunderthedemobilizationinvoice),WhitefishEnergywillhavenochoicebutto
immediatelysuspendallworkunderthecontractasof12:00pmlocaltimeonMonday,November20,
2017,duetoPREPAsmaterialbreachofthecontractandtomitigateWhitefishEnergysdamages
resultingfromPREPAsbreach.Ofcourse,oncePREPApaysWhitefishEnergy,thenWhitefishEnergy
willcontinuetopromptlyforwardpaymenttoitssubcontractorsfortheirworkinaccordancewiththe
termsofWhitefishEnergyssubcontractswiththosesubcontractors,andWhitefishEnergyandits
subcontractorswillbeabletoresumeworkunderthecontract.

WelookforwardtoreceiptofpaymentfromPREPAsothatwecangetbacktocontinuingtocomplete
thecriticalworkthatWhitefishEnergyanditssubcontractorshavebeendiligentlyaroundtheclock
sinceOctober2,2017torestoreelectricalpowertothepeopleofPuertoRicoassoonaspossible.

Whitefishreservestherighttopursueanyandallremediesavailableunderthecontractandapplicable
law.

Sincerely,

AndyTechmanski
ChiefExecutiveOfficer
WhitefishEnergyHoldings,LLC

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