Message-ID: <22383707.1075845884780.JavaMail.evans@thyme> Date: Thu, 17 May 2001 01:44:00 -0700 (PDT) From: paul.parrish@enron.com To: john.rigby@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, cflourno@jwortham.com, rward@jwortham.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: david.marshall@enron.com, james.bouillion@enron.com, kay.mann@enron.com, scott.dieball@enron.com, sheila.tweed@enron.com, cflourno@jwortham.com, rward@jwortham.com X-From: Paul E Parrish X-To: John G Rigby X-cc: David Marshall, James L Bouillion, Kay Mann, Scott Dieball, Sheila Tweed, "Charles Flournoy (E-mail)" @SMTP@enronXgate, "Ray Ward (E-mail)" @SMTP@enronXgate X-bcc: X-Folder: \Kay_Mann_June2001_2\Notes Folders\Ge general X-Origin: MANN-K X-FileName: kmann.nsf John: The call is set up for tomorrow [Friday] 4 pm your time [London]/ 10am my= =20 time [Houston] to discuss this. David Way will be in a meeting just prior t= o=20 this time so we wanted to give him time to get back to his office. The broker=01,s concern is that if this contract is to apply to a variety o= f 7FA=01, s with various rating, etc., the underwriter could view them differently an= d=20 require subrogation rights on some of them. We need to understand how this= =20 contract language will be used to purchase what equipment before insurance= =20 language can be suggested. Paul -----Original Message----- From: Rigby, John =20 Sent: Thursday, May 17, 2001 5:45 AM To: Parrish, Paul E. Cc: Marshall, David; Bouillion, James L.; Mann, Kay; Dieball, Scott; Tweed,= =20 Sheila Subject: Re: INSURANCE EXHIBIT FORTURBINE PURCHASE AGREEMENT- Paul call=20 please. 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=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