FYI.
---------------------- Forwarded by Kay Mann/Corp/Enron on 06/20/2000 11:37=
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AM ---------------------------
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=09Enron North America Corp.
=09
=09From: Kay Mann 05/18/2000 05:00 PM
=09

To: Peggy Banczak/HOU/ECT@ECT
cc: Sheila Tweed/HOU/ECT@ECT=20

Subject:=20

Peggy,

Here are my observations on the Vitro turbine purchase agreement, for you t=
o=20
consider, pass along, ignore, modify, etc. I=01,m ignoring some issues, an=
d=20
considering where the transaction is at this point, you may want to overloo=
k=20
more.

The project company should be the signatory to all three contracts. Brian =
is=20
changing this. Purchaser and Owner will then be the same entity, so some=
=20
changes within the document will be necessary. By the way, is everything=
=20
being shipped via rail or land? If there is any marine transport which mig=
ht=20
necessitate EEIM chartering a vessel, the organization docs may need to be=
=20
check to make sure that is covered (ran into this problem on another projec=
t).

Comments to offshore contract:

Commercial operation is a key term, yet isn=01,t defined. (an example of us=
e is=20
14.1.1)

5.3 This should be integrated with the change order procedure in Article XI=
.=20
As I recall the same is true for both cost and schedule extensions.

10.3.2 GE isn=01,t subject to delay ld=01,s unless Purchaser is subject to =
similar=20
delay ld=01,s with Owner. This will need to be changed since Owner will be=
=20
Purchaser, but I don=01,t like this concept. Maybe it is covered by the EPC=
wrap.

The term Takeover Performance criteria is used in 10.9.7, with a reference=
=20
back to 10.3.2; it is probably reasonable to construe the first few criteri=
a=20
as being Takeover Performance criteria, but better practice would have it=
=20
defined.

10.14 A =01&provided that=018 should be added after (a). This change shoul=
d=20
probably be made as a clarification.
=20
14.3 Five days for GE to provide a service representative for a warranty=20
problem is fairly generous since the Owner can=01,t work on the equipment i=
n the=20
meanwhile. I don=01,t know what the EPC contract says on the point, so the=
re=20
may be some protection. Probably too late and too commercial.

14.6 The first and second sentence of this paragraph are not consistent. T=
he=20
second sentence is the better one.

Note that a strike against GE is a force majeure event for which GE can get=
=20
schedule and cost relief. Too late for this deal, though.

21.3 the confidentiality provisions have no time limit.

I didn=01,t notice a FCPA provision, but I might have overlooked it.

I assume the onshore contract has some of the same issues. =20

As for the onshore/offshore split, it would seem that some coordination wit=
h=20
the onshore/offshore epc contract would be in order, especially if the tax=
=20
risk is ours. My initial impression of the proposed split on the turbine=
=20
contract is that the onshore contract still contains too much relating to t=
he=20
offshore scope. =20

Brian is working on the consolidation agreement.

Steve is working on the payment issue.

By the way, I'll be on vacation tomorrow and next week. =20

Kay