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Enron Mail |
Peter, here are preliminary comments from Pat Mackin on the PSA. Michelle
---------------------- Forwarded by Michelle Cash/HOU/ECT on 12/07/2000 01:33 PM --------------------------- FMackin@aol.com on 12/07/2000 01:10:56 PM To: Michelle.Cash@enron.com, dlenfes@enron.com cc: Subject: Re: Project Canary - Asset Purchase Agreement Michelle, I reviewed the Project Canary Asset Purchase and Sale Agreement and offer the following observations: In an asset transaction, where the buyer did not want to acquire or assume the employee benefit plans of the seller, I have always recommended to include such plans and liabilities in the statement of excluded assets. Based on the recitals for this transaction, and other provisions of the Agreement (Sections 7 and 10) it appears that the employee benefit plans are not excluded. Generally, when such employee benefit plans are included in an asset transaction, the buyer wants to obtain representations as to the funding, compliance and administration of the plans. These kinds of representations are not in the Agreement. The bottom line is that the buyer needs to rely on Canadian counsel and actuaries to gives buyer the level of comfort it desires to have with respect to these issues of funding, compliance and administration so that they can be inserted into the financial model for determining the offering price. You may wish to obtain a formal opinion letter from the Canadian counsel and actuary regarding the level of comfort the buyer requires. Pat
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