Message-ID: <19760184.1075858587225.JavaMail.evans@thyme> Date: Thu, 2 Aug 2001 07:19:39 -0700 (PDT) From: lance.jameson@enron.com To: legal <.taylor@enron.com>, martin.bucknell@enron.com, jenny.rub@enron.com, keith.dziadek@enron.com, pete.castrejana@enron.com Subject: MFN Contract Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Jameson, Lance X-To: Taylor, Mark E (Legal) , Bucknell, Martin , Rub, Jenny , Dziadek, Keith , Castrejana, Pete X-cc: X-bcc: X-Folder: \MTAYLO1 (Non-Privileged)\Taylor, Mark E (Legal)\Archive\2001/08 X-Origin: Taylor-M X-FileName: MTAYLO1 (Non-Privileged).pst I have reviewed the MFN agreement and believe that should MFN fail to live = up to its end of the Agreement our sole remedy is termination. (see section= s extracted below). =20 I understand from Pete Castrejana that should MFN fail to provide service w= e have no functionally equivalent fall-back position, at least in the short= term. Given this, I believe we have placed ourselves in an unenviable ris= k position going forward. =20 It is my suggestion that irrespective of the resolution to this lien issue = or MFN financing issues, we reopen negotiations to obtain the right to inte= rvene and negotiate on our own behalf with any party contracted with by MFN= . We should attempt to include language which contractually binds MFN to m= ake such contracted services and "Authorizations" assignable to us should M= FN fail to perform. =20 =20 Termination as our sole remedy is, in this case, not sound risk mitigation. =20 =20 =20 Section 7.1 states [emphisis added]: "Prior to delivery MFN will obtain all material and applicable authorizatio= ns, leases, licenses, easements, rights of way, franchises, approvals, perm= its, orders, consents, and all other rights required for MFN to operate and= maintain the MFN Network and provide Leased Fiber to Customer (collectivel= y the "Authorizations"), and will use commercially reasonable efforts to ma= intain or renew all such Authorizations throughout the Lease Term. If any = Authorizations are modified or terminated, threatening to cause or causing = material financial harm to MFN, or preventing or materially interfering wit= h MFN's control, possession and/or use of the MFN Network or its ability to= provide the Leased Fiber, then MFN, in its sole discretion will: (i) provi= de Customer with a comparable product on alternate portions of MFN's then e= xisting MFN Network or on networks of third parties, or (ii) terminate this= Agreement with respect to the affected Leased Fiber without further obliga= tion or liability to Customer. The forgoing is MFN's sole and exclusive li= ability and Customer's sole and exclusive remedy with respect to terminatio= n as a result of the loss of an Authorization." =20 Section 10 "LIMITATION OF LIABILITY; INDEMNIFICATION specifically excludes = our seeking any consequential, punitive, indirect damages, or lost revenue = even in the event of a breach of contract.