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I concur legally and contractually. That was the intent of the agreement.
All we gave up was our right to LD claims for construction schedule and initial performance, not for warranty claims. However, given that the total amount is on the order of $0.4MM and given that SW's cooperation is vital in getting a written letter stating that running the Gleason units through the summer will not be detrimental, and vane/diagram replacement will be under warranty in October, I believe it might prove more valuable to wait until after closing to initiate a claim. Legally speaking, once we close, do we still have the right to collect on a warranty claim?? Mitch From: Stuart Zisman@ECT on 04/20/2001 09:34 AM To: Ross Newlin/HOU/EES@EES cc: Mitch Robinson/Corp/Enron@Enron, Don Miller/Enron@EnronXGate, Kay Mann/Corp/Enron@Enron Subject: Westinghouse - State Group Claims I spoke with Kay and she agreed that her interpretation of the settlement letter was the same as mine (i.e. no waiver of warranty claims or claims of faulty construction/design). Subject to Mitch's agreement (because he had the primary role in the negotiation of that settlement with Westinghouse), we would suggest writing a letter alerting Westinghouse of our claim and of our desire to meet quickly to discuss this matter. The letter might also suggest that if we are not able to resolve this matter quickly we expect to draw down on the letter of credit. This latter threat might gain the level of attention that we desire. Of course, I would be careful about how it is phrased (it might be worthwhile to run it by Andy Edison, the litigator). Stuart
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