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Enron Mail |
Kay,
I have not yet heard back from Eric about this e-mail. I was waiting for him to forward it to you with his comments, but understand from talking to Tom Suffeild that they're pretty swamped right now so I am forwarding it in the interest of time. I believe that the outline below is a good starting point and that Eric will have be able to take the draft you build from it and add his conditions that they need to accept the deal. Also, I have gotten a copy of the turbine purchase agreement and will bring a copy of it to you shortly. Looks like we're not going to get this stuff inked this week - but it will probably heat up pretty quickly, so I wanted to give you this as a starting point. ---------------------- Forwarded by Rusty Stevens/Corp/Enron on 07/13/2000 02:28 PM --------------------------- Rusty Stevens 07/12/2000 10:46 AM To: Eric LeDain/CAL/ECT@ECT cc: Duncan Croasdale/CAL/ECT@ECT, Fred Mitro/HOU/ECT@ECT, Ben Jacoby/HOU/ECT@ECT, Laura Luce/Corp/Enron@Enron (bcc: Rusty Stevens/Corp/Enron) Subject: PERC Turbine Purchase Agreement Outlined below is the basis for the turbine purchase agreement between Enron and PERC. Please review the bullet points and comment. Eric will add to this outline and forward his comments to Kay Mann so she can begin to draft the agreement. Our plan is to present this document to PERC by Friday - assuming we can get it drafted and reviewed internally by that time. This agreement constitutes a binding agreement - under the terms and conditions stated below - for Enron Canada Corporation ("ECC") to acquire a set of ABB/Alstom Power ("ABB") 11N2 single burner combustion turbines ("Units") from Peoples Energy Resources Corporation ("PERC"). The obligation by ECC to acquire the Units shall be conditioned upon those items as further described below being met ("Conditions Precedent") by not later than September 1, 2000. ECC will acquire the Units through assignment of that certain Turbine Purchase Agreement ("Contract") between ABB and PERC dated __________, as renegotiated in accordance with the Conditions Precedent below, which shall include good faith negotiations between ECC/PERC and ABB in order to reform the Contract terms to better accomodate the use of the Units by ECC. PERC and ECC hereby agree that ECC shall be authorized by PERC to negotiate directly with ABB in order to attempt to secure the Contract amendments described in the Conditions Precedent, and PERC will indemnify ECC from any adverse claims or causes of action against ECC as a result of those negotiations except and unless they are a result of gross negligence or willfull misconduct on the part of ECC. Further, prior to ECC entering into said negotiations with ABB, PERC shall secure written acceptance of ABB's agreement to negotiate directly with ECC and ABB's acknowledgement that they waive their rights to any recourse to ECC in relation to said negotiations. Price: The price for the Units - and all associated ancilliary equipment being provided under the Contract - is $56 million (US - a joke for your benefit Eric). Term: This agreement shall be in effect until the earlier of the following: (a) the formal transfer of title and contract takes place, or (b) September 1, 2000. Conditions Precedent: The above stated price shall include delivery to the Moore Project site at ABB's sole expense. The exictor modifications required to make the Units operationally feasible in Canada will be made by ABB at no additional cost to ECC, and shall be made in the field or in the shop - at ABB's discretion - but in no case shall the delivery date of the units be later than November, 2000. The repair/replace terms of the contract shall be modified such that ECC shall be able to opt - at their sole discretion - to replace parts versus repairing them, in order to maximize run-time (and the determination as to what maximizes run-time shall also be in ECC's sole discretion). Eric, I will let you fill in the blanks on the other conditions that you want changed in the contract. I think I have captured the spirit of the deal here. I have attempted to cover us for intervention/interference issues. I am concerned about the Term provisions - how long do we want to keep this thing alive if ABB is unwilling to meet the terms we need to make this deal viable ?
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