Message-ID: <4340287.1075845922164.JavaMail.evans@thyme> Date: Thu, 6 Jul 2000 06:24:00 -0700 (PDT) From: kay.mann@enron.com To: sheila.tweed@enron.com Subject: Re: ABB Agreement for Review Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Kay Mann X-To: Sheila Tweed X-cc: X-bcc: X-Folder: \Kay_Mann_June2001_3\Notes Folders\Sent X-Origin: MANN-K X-FileName: kmann.nsf For your reading pleasure... ---------------------- Forwarded by Kay Mann/Corp/Enron on 07/06/2000 01:24 PM --------------------------- Enron North America Corp. From: Kay Mann 07/06/2000 09:45 AM To: Lisa Bills/Corp/Enron@ENRON cc: Ben Jacoby/HOU/ECT@ECT, Herman Manis/Corp/Enron@ENRON, Matthew Berry/HOU/ECT@ECT, Carl Tricoli/Corp/Enron@Enron, Thomas M Suffield/Corp/Enron@ENRON, Matthew F Gockerman/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, robtaylor@andrews-kurth.com, Kathleen Clark/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: ABB Agreement for Review Lisa, Thank you for the timely comments. Credit support. On the issue of credit support for a project company partially owned by Enron, ABB has some concerns even when Enron still holds an equity interest due to some late payment problems they had in the past with an Enron project company. Also, the ABB and GE payment schedules are different, with GE being more front end loaded. For example, GE will have received 45% of the total payments due by the time the first 4 units are ready to ship; by the time the last 6 units are ready to ship, they will have received 95% of the payment. In contrast, we hold 25% of the price of each ABB unit until delivery (15%) and acceptance (10%) of that particular unit. Effective date. The typical reason for an earlier effective date is to capture any work which ABB may have chosen to do during the option period in order to hold their guaranteed completion dates. In the GE contract we addressed the issue in section 30.3, stating that it governs all work performed pursuant to the agreement in principle. It is fine with me to make the effective date a current one. Price change. I will confirm why the prices changed $78,000 from the latest option agreement. I suspect there were changes in the specifications since the data sheets have changed. Hope this was helpful. Kay Enron North America Corp. From: Lisa Bills 07/05/2000 09:02 PM To: Kay Mann/Corp/Enron@Enron cc: Ben Jacoby/HOU/ECT@ECT, Herman Manis/Corp/Enron@ENRON, Matthew Berry/HOU/ECT@ECT, Carl Tricoli/Corp/Enron@Enron, Thomas M Suffield/Corp/Enron@ENRON, Matthew F Gockerman/HOU/ECT@ECT, Roseann Engeldorf/Corp/Enron@ENRON, robtaylor@andrews-kurth.com Subject: ABB Agreement for Review Here are my comments: Assignment Language: in (i) "WestLB" should be changed to "Purchaser" in (ii) - although this is a business point I think it is important to question: why should we provide credit support to the JV/partnership/llc when we are required to keep a min. 19.5% interest? This is not a GE requirement and it is a doubling up of Enron-type support which will make the venture much more expensive to finance. Purchase Agreement: Def. of Business Day: let's add New York since this is where WestLB funds from. 2.1(B): It should be "Agent's" person to approve change orders, not "Purchaser's" 2.2: "Purchaser" should be used rather than "WestLB" since it is not as limiting. 7.1: Why is the Effective Date backdated to the date of the first option agreement execution date? Exhibit N - Purchase Amount Reconciliation: The total amount of the three purchase amounts is $78M less than the same amounts detailed in the latest Option Agreement. I'd like to understand why this is, especially in light of the Effective Date in 7.1, to insure that AA won't determine that the Option Premiums paid were somehow a deposit or credit toward the purchase price of the transformers. Regards, Lisa ---------------------- Forwarded by Lisa Bills/Corp/Enron on 07/05/2000 08:45 PM --------------------------- Matthew Berry@ECT 07/05/2000 02:43 PM To: Lisa Bills/Corp/Enron@ENRON cc: Subject: ABB Agreement for Review ---------------------- Forwarded by Matthew Berry/HOU/ECT on 07/05/2000 03:42 PM --------------------------- From: Kay Mann @ ENRON 07/05/2000 02:36 PM To: Herman Manis/Corp/Enron@ENRON, Matthew Berry/HOU/ECT@ECT, Carl Tricoli/Corp/Enron@Enron, Thomas M Suffield/Corp/Enron@ENRON, Matthew F Gockerman/HOU/ECT@ECT, Ben Jacoby/HOU/ECT@ECT cc: Subject: ABB Agreement for Review Gentlemen, I've made some changes to the assignment language of the ABB contract. The language is not identical to the LM 6000 language, but is substantially the same, and in some respects better. Please let me know if you have any substantive comments: I am also attaching the current draft of the contract. It is being revised to incorporate delivery dates and to clarify the scope to include installation obligations of ABB (haul and install). Also, in the fourth line of the first paragraph, the word "Purchaser" will be added to the parenthetical, after "WestLB". Any other changes should be very minor or technical. We are trying to get this finished this week. Please let me know if you have any questions or comments. Kay ---------------------- Forwarded by Kay Mann/Corp/Enron on 07/05/2000 02:25 PM --------------------------- From: Kathleen Clark@ENRON_DEVELOPMENT on 06/30/2000 01:40 PM To: ben.jacoby@enron.com, kay.mann@enron.com cc: Subject: ABB Agreement for Review Attached is the latest ABB agreement for your review: