Re: Assignment

Scott,

As I preliminary answer, this language hasn't been approved by Deffner's
group, although it is based on language they have seen before. It was my
understanding that you wanted to keep this deal off their radar screen, as
you didn't want them entering into the structuring picture until later. We
can ask for a blessing on the language, but that will probably lead to
questions about how the deal will be structured, etc. I am happy to access
the resources in their group, however.

FCE hasn't seen any of this language. It was something I pulled together for
you to look at.

As for FCE's desire to assign in case of merger, etc, I think the language is
too broad. In fact, I think assignment by them should require our consent.
Otherwise, it needs to be conditioned on the acquiring party to be acquiring
a bunch of stuff: the know how, the patent rights, the manufacturing
facilities, etc. If they are going to merge with another company or sell
their shares, they don't need an assignment clause, unless there is something
peculiar in Conn. law. They only need assignment language for an asset sale.

Kay

From: Scott Healy @ ECT 11/10/2000 11:30 AM

To: Kay Mann/Corp/Enron@ENRON
cc: Stephen Plauche/Corp/Enron@Enron

Subject: Re: Assignment

Questions/Comments:

1. How do we handle assignments to state agencies like CRRA...will they be
rated in the fashion described?
2. Shouldn't the credit standard only apply if it is an assignment of
obligations? Why would this apply if it were only rights?
3. Isn't #2 the same as #3, except with no specific ownership requirement.
My reading of #2 is that it allows #3, but #3 narrows #2
4. My guess is that FCE will want condition 6(a) to apply to all the
assignments.
5. Has anyone from Deffner's group approved this language?
6. My guess is that FCE will reject this language as being too broad. Have
you run it by them?
7. For condition #1 to apply to CRRA, would we have to assign the agreement
to CRRA and then to the project financing? The most likely scenario is this,
so we should make certain that it can happen under the agreement.
8. What about the acquisition language that FCE proposed. Assignment should
be allowed if Purchaser is acquired.