Message-ID: <25974053.1075842788458.JavaMail.evans@thyme> Date: Tue, 24 Apr 2001 13:55:00 -0700 (PDT) From: steve.hooser@enron.com To: david.marshall@enron.com Subject: Securities Purchase Agreement (Highstar/ENA) Cc: gerald.nemec@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: gerald.nemec@enron.com X-From: Steve Van Hooser X-To: David Marshall X-cc: Gerald Nemec X-bcc: X-Folder: \Gerald_Nemec_Dec2000_June2001_2\Notes Folders\All documents X-Origin: NEMEC-G X-FileName: gnemec.nsf Per my earlier e:mail. Thanks Steve Van Hooser Enron North America Corp. 1400 Smith EB3877 Houston, Texas 77002 713-853-7238 ----- Forwarded by Steve Van Hooser/HOU/ECT on 04/24/01 08:52 PM ----- "Jay Sonnenberg" 04/23/01 09:07 PM To: , , , , cc: "Clark Thompson" , , , Subject: Securities Purchase Agreement (Highstar/ENA) This time with attachments... Attached are both clean and marked copies of the revised draft of the Securities Purchase Agreement, which incorporates the changes discussed in our meetings last week in NY. As to the revised draft, please note the following: 1) The revised draft does not consider any of the changes to the structure of the deal that will be required to solve the brokerage issues discussed earlier today among the lawyers. We are not sure at this point as to how these problems will be overcome, but will get back to you with our thoughts as soon as we can, and any assistance from the Buyer's perspective would be much appreciated. In the meantime, ENA has told us to try to keep moving forward to the extent we can on the SPA. 2) There are still a number of issues in the SPA which the parties have not yet resolved. Included in these open points are the following: a) ENA feels very strongly about the need for a cap on liabilities and that the proposed amount of the cap in this case is already one of the highest agreed to in recent transactions. b) Reps and warranties - after considerable discussion among various parties at ENA, we have left out a number of the "Material Adverse Effects" and "Knowledge" qualifiers that were proposed in our original draft, as discussed in NY. However, we have added back a few where it was the strong consensus at ENA that these were market terms accepted in prior similar transactions. The standard for applying materiality is still open - in some cases we left the Buyer's proposed "could reasonably be expected" language; in other places we went back to the "is likely to have" language because in prior transactions, buyers have accepted the much stronger "would have" standard, which we should probably have insisted on from the beginning. We have also limited the real estate and environmental reps as discussed because of the insurance that ENA has already purchased and paid for to protect the Buyer from these risks. The IP reps were deleted because of the lack of any material known IP related to the Facilities. c) We have limited the opinions to be delivered to certain regulatory opinions only and omitted the Buyer's opinion entirely because of the size of this deal and the feeling that further internal opinions from ENA did not provide the Buyer with any further assurances. Please call us with any questions or comments on the SPA or the above. We are also still waiting for your conceptual list of comments on the Asset Management Agreement. Best regards, Clark and Jay Jay Sonnenberg Bracewell & Patterson, L.L.P. 711 Louisiana St., Suite 2900 Houston, TX 77002-2781 (713) 221-1417 (Ph) (713) 221-2158 (Fax) - #1269388 vRED - SECURITIES PURCHASE AGREEMENT (AIG).doc - #1269388 v8 - SECURITIES PURCHASE AGREEMENT (AIG).doc