Enron/Delta Turbine Transaction/ Comments to Letter Agreement

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Per our conversations on Friday and our discussions with our clients at
Delta today, attached please find a pdf file that contains a draft timeline
for the transaction and our comments to the Letter Agreement.
?
Please note that many of our comments reflect?a change to the structure
whereby the Escrow Agent would ultimately pay out the ENA fee and the
progress payments to GE under the Turbine Contract on behalf of the LLC.??We
prefer this structure and believe it?does not alter the underlying economics
of the deal.? It is also our understanding that Enron has agreed to a
financing condition precedent to DAL's obligation to make the initial
deposit into the Escrow Account and our mark-up reflects this understanding.
?
Regarding the LLC Agreement, our principal comment is to add an allowance
for a pledge of the DAL Membership Interest without consent in connection
with third party financing in Section 6.1© thereof.? Of course other
changes to conform the Letter Agreement may be needed as well.
?
We will provide additional comments to the draft Guaranty tomorrow; however,
we will expect that the obligations be capped at specific dollar amount and
that the term of the Guaranty would end upon the earliest occurrence of any
of the events set forth in Section 5.3© of the Letter Agreement.? We will
also need to discuss changes to the Escrow Agreement in light of our
comments to the Letter Agreement.
?
In the interests of time, we are distributing these comments?before
our?clients have had time to review them. As such, they remain subject to
their further comments and review.? Please feel free to contact John Hawkins
or me with regard to any of the foregoing. We look forward to discussing our
comments with you at your earliest convenience.
?
Greg Lang
?
?
?
Gregory F. Lang
Paul, Hastings, Janofsky & Walker LLP
1055 Washington Blvd.
Stamford, CT 06901
?
203.961.7446 (p)
203.674.7646 (direct fax)
203.359.3031 (firm fax)
gregorylang@paulhastings.com
?
- Stamford.pdf