Subject: PERC Turbine Purchase Agreement
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Thu, 13 Jul 2000 07:37:00 -0700 (PDT)

Kay,

I have not yet heard back from Eric about this e-mail.  I was waiting for him 
to forward it to you with his comments, but understand from talking to Tom 
Suffeild that they're pretty swamped right now so I am forwarding it in the 
interest of time.  I believe that the outline below is a good starting point 
and that Eric will have be able to take the draft you build from it and add 
his conditions that they need to accept the deal.

Also, I have gotten a copy of the turbine purchase agreement and will bring a 
copy of it to you shortly.  Looks like we're not going to get this stuff 
inked this week - but it will probably heat up pretty quickly, so I wanted to 
give you this as a starting point.

---------------------- Forwarded by Rusty Stevens/Corp/Enron on 07/13/2000 
02:28 PM ---------------------------

Rusty Stevens
07/12/2000 10:46 AM
To: Eric LeDain/CAL/ECT@ECT
cc: Duncan Croasdale/CAL/ECT@ECT, Fred Mitro/HOU/ECT@ECT, Ben 
Jacoby/HOU/ECT@ECT, Laura Luce/Corp/Enron@Enron (bcc: Rusty 
Stevens/Corp/Enron)

Subject: PERC Turbine Purchase Agreement

Outlined below is the basis for the turbine purchase agreement between Enron 
and PERC.  Please review the bullet points and comment.  Eric will add to 
this outline and forward his comments to Kay Mann so she can begin to draft 
the agreement. 

Our plan is to present this document to PERC by Friday - assuming we can get 
it drafted and reviewed internally by that time.

This agreement constitutes a binding agreement - under the terms and 
conditions stated below - for Enron Canada Corporation ("ECC") to acquire a 
set of ABB/Alstom Power ("ABB") 11N2 single burner combustion turbines 
("Units") from Peoples Energy Resources Corporation ("PERC").
The obligation by ECC to acquire the Units shall be conditioned upon those 
items as further described below being met ("Conditions Precedent") by not 
later than September 1, 2000. 
ECC will acquire the Units through assignment of that certain Turbine 
Purchase Agreement ("Contract") between ABB and PERC dated __________, as 
renegotiated in accordance with the Conditions Precedent below, which shall 
include good faith negotiations between ECC/PERC and ABB in order to reform 
the Contract terms to better accomodate the use of the Units by ECC.
PERC and ECC hereby agree that ECC shall be authorized by PERC to negotiate 
directly with ABB in order to attempt to secure the Contract amendments 
described in the Conditions Precedent, and PERC will indemnify ECC from any 
adverse claims or causes of action against ECC as a result of those 
negotiations except and unless they are a result of gross negligence or 
willfull misconduct on the part of ECC.  
Further, prior to ECC entering into said negotiations with ABB, PERC shall 
secure written acceptance of ABB's agreement to negotiate directly with ECC 
and ABB's acknowledgement that they waive their rights to any recourse to ECC 
in relation to said negotiations.
Price:  The price for the Units - and all associated ancilliary equipment 
being provided under the Contract - is $56 million (US - a joke for your 
benefit Eric).
Term:  This agreement shall be in effect until the earlier of the following: 
(a) the formal transfer of title and contract takes place, or (b) September 
1, 2000.

Conditions Precedent:  

The above stated price shall include delivery to the Moore Project site at 
ABB's sole expense.
The exictor modifications required to make the Units operationally feasible 
in Canada will be made by ABB at no additional cost to ECC, and shall be made 
in the field or in the shop - at ABB's discretion - but in no case shall the 
delivery date of the units be later than November, 2000.
The repair/replace terms of the contract shall be modified such that ECC 
shall be able to opt - at their sole discretion - to replace parts versus 
repairing them, in order to maximize run-time (and the determination as to 
what maximizes run-time shall also be in ECC's sole discretion).
Eric,  I will let you fill in the blanks on the other conditions that you 
want changed in the contract.

I think I have captured the spirit of the deal here.  I have attempted to 
cover us for intervention/interference issues.  I am concerned about the Term 
provisions - how long do we want to keep this thing alive if ABB is unwilling 
to meet the terms we need to make this deal viable ?