Message-ID: <19709600.1075845884669.JavaMail.evans@thyme>
Date: Wed, 16 May 2001 22:45:00 -0700 (PDT)
From: john.rigby@enron.com
To: paul.parrish@enron.com
Subject: Re: INSURANCE EXHIBIT FORTURBINE PURCHASE AGREEMENT- Paul call
 please.
Cc: david.marshall@enron.com, james.bouillion@enron.com, kay.mann@enron.com, 
	scott.dieball@enron.com, sheila.tweed@enron.com
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Paul- when will your review of the language be complete.  This language has=
=20
been given to outside counsel to incorporate in the world hunger standard. =
=20
Please keep in mind that in this case the contracting party is a vendor who=
se=20
job is manufacture the equipment and deliver it to the site, the vendor is=
=20
not involved in the construction other than providing technical direction o=
f=20
installation.

Paul-  we need to talk- I thought I heard that the 7FA' are not considered=
=20
new technology.  I need to hear this from you, David  and Wortham before=20
opening up the subject of collateral damage and allowing the insurer to=20
subrogate.  I do not understand your comment on your naming the vendor as a=
n=20
additional insured.  We are doing so in the case of Arcos.  What we are doi=
ng=20
in Arcos is making the vendor responsible under its warranty obligations fo=
r=20
colleteral damage.

I need to have a very clear understanding of what we can and cannot do it t=
he=20
case of GE 7FA units.  Deviating from the past practice on 7FA's where ther=
e=20
is not a new technology issue will be a painful and expensive ordeal.

I can be reached in London  via Scott Dieball's cell phone 713-504-2742. =
=20
Please call.





=09Paul E Parrish/ENRON@enronXgate
=0905/16/2001 03:56 PM
=09=09=20
=09=09 To: John G Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Scott=20
Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt
=09=09 cc: Sheila Tweed/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron, David=20
Marshall/ENRON@enronXgate, James L Bouillion/ENRON@enronXgate
=09=09 Subject: INSURANCE EXHIBIT FORTURBINE PURCHASE AGREEMENT

John:
The changes I suggested on the watercraft wording are still being reviewed=
=20
for completeness. I think what I gave you will work for most situations whe=
re=20
the watercraft is incidental to the work or is far removed from our being=
=20
involved [contractor to sub to sub contractor] but it does not address ever=
y=20
situation that we could be involved in. We may need to expand our wording=
=20
accordingly.

Likewise, your question on giving to the turbine venders the waiver of=20
subrogation and additional insured is an even bigger concern. You are askin=
g=20
us to obligate ourselves in providing waiver and additional insured status =
to=20
GE which we cannot do.   As you know, we went many years with providing=20
turbine venders protection under the insurance because the market was soft=
=20
and underwriters agreed to it. Now they balk at giving it because of the=20
losses they have incurred and we cannot predict what they will agree to. It=
=20
does not matter if the machines are proto-type or not, there is a good chan=
ce=20
right now that they will not agree to insuring the vender. Everyone says it=
=20
only takes money and in many cases we could probably include venders on the=
=20
insurance but I cannot recommend committing to it in a long term contract =
=01)=20
we have to arrange the insurance at the time we need it in order to determi=
ne=20
if it is available.=20

If you need to have some language in the agreement, I would recommend that =
we=20
not give the waive and additional insured to GE or any vender. When we need=
=20
the insurance and begin placing it, we can then determine if the underwrite=
r=20
will cover the vender and ask for a price reduction from GE to move their=
=20
risk to the underwriter.

I am sorry I cannot make this easier but that is the nature of the insuranc=
e=20
beast.
Paul