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Enron Mail |
Hello again,
If these contracts are going to be assigned immediately to Mitsui, isn't the issue of a guaranty a Mitsui issue? Is this addressed in the EPC contracts? If an Enron entity must give a guaranty, I would think we would want ENA to give it, to be replaced by a Mitsui guaranty unless we have some safeguard against the possibility of paying Mitsui and Mitsui not paying GE, so that we would have to pay twice. Kay ---------------------- Forwarded by Kay Mann/Corp/Enron on 06/12/2000 01:31 PM --------------------------- jeffreye.smith@ps.ge.com on 06/12/2000 01:06:56 PM To: Brian.D.Barto@enron.com, Kay.Mann@enron.com cc: tim.lederach@ps.ge.com, Jeff.Blumenthal.ECT@enron.com Subject: RE: Tax Language Changes to On/Off Shore Contracts for Vitro Brian, Thanks. The changes to the on & off-shore contracts are OK. I have replied to an e-mail from Kay concerning the "letter agreement", of earlier today. As far as I am concerned, we are ready to go there (you were copied). Kay indicated that the consolidation agreement would be today's focus of attention. I have not seen any feedback pursuant to my 1/Jun/00 e-mail. <<Enron Monterrey/Vitro<< Your comment about the parent company guaranty reminds me that the above e-mail also called for such a guaranty from Enron, as Enron NA is no longer the purchaser. Regards, Jeff Smith -----Original Message----- From: Brian D Barto [mailto:Brian.D.Barto@enron.com] Sent: Monday, June 12, 2000 11:10 AM To: Jeffreye.smith@ps.ge.com; Kay Mann; Jeff Blumenthal Cc: tim.lederach@ps.ge.com Subject: Tax Language Changes to On/Off Shore Contracts for Vitro << File: VITRO5-on-r1e.wpd << << File: VITRO5-off-r1e.wpd << Jeff: I have picked up the changes to Section 5.2.2 per the email exchange by Tim and Jeff B. Please note that Jeff B. condition that a parent guarantee be provided has been picked up in Section 3.7 and Exhibit C-1 has been modified to show General Electric Company as the parent. These are the final versions to date: (See attached file: VITRO5-on-r1e.wpd)(See attached file: VITRO5-off-r1e.wpd) Jeff Smith: PS Kay Mann said she would close up the Consolidation Agreement discussions with you too. ----- Sender: jeffreye.smith@ps.ge.com To: Brian.D.Barto@enron.com Cc: Kay.Mann@enron.com, stephen.swift@ps.ge.com, patricia.gonzalez@ps.ge.com, karl.siverling@ps.ge.com, william.danaher@ps.ge.com, john.schroeder@ps.ge.com, scott.terhune@ps.ge.com, alfredo.graciansilva@ps.ge.com Subject: Enron Monterrey/Vitro Date: Thu, 1 Jun 2000 23:09:27 -0400 Importance: high X-Priority: 1 X-Mailer: Internet Mail Service (5.5.2651.58) Brian, Here are my comments on several items. * The consolidation agreement. * In 1.b, thanks for reflecting the GE suggestion. However, near the end of the paragraph, the word "remedy" should move to immediately after "exclusive". * In 8, the reference should be to paragraph 10.a, not 11.a. * In 10.a, it does not look like the wording in my 30/May/00 e-mail was picked up. * In 12 and 13, Enron has added new wording since the preceding issuance of this document. * In 13, is all of this wording necessary and applicable. At the end of the first long sentence, the word "turnkey" is used. Of course, this is an equipment supply contract for GE. Also, I believe the contracts do state what is in GE scope via clauses 1.27, 1.86 and 3.1. So, the last sentence is redundant. * More importantly, these two clauses could be interpreted as establishing a GEPS/GEIOC consortium. This is something GE had advocated as the approach in as single contract for tax purposes in Mexico. GE can still go either way, although the single document approach is more straightforward (and that is what we initialed in your offices last month). Enron wanted split contracts. These clauses may undo what Enron was attempting to achieve in this regard. * In 14, which has been added by Enron in the latest version of the consolidation agreement, the GE entities seem to be prevented from getting an extension of time under one contract if there is a problem with performance under the other. This is contrary to the words in the former Enron clause 5, which has now been eliminated. This clause 14 should be removed. * Regarding the "swap" payments for tax purposes, to benefit both Enron and GE: * The amount paid to date on the Monterrey unit, under the MOU, is $25,101,733. What GE proposes it to: * Revise the payment schedule for the contracts such that payments totaling this amount are due 2-3 days after contract signing. * Execute a separate letter, to be signed at the same time as the contracts, formally dissolving the MOU. The letter would call for GE to refund this same amount 2-3 days after receipt of the payment under the contracts. We need to draft this letter, which will hopefully be one page. The text of such a letter could include the following wording: "Pursuant to clause 30.3 of the now executed On and Off Shore contracts for this project, the MOU dated ______ is made null and void. Once the initial payment(s) called for in said contracts have been made, the monies in the amount of $25,101,733.00, which were paid under the MOU will be refunded to (Enron entity)." * This would get the monies to the appropriate Enron and GE entities. In a related matter, since the legal Enron entity has changed, GE requests a parent guarantee (using form already shown in the contract(s)). Regards, Jeff Smith -----Original Message----- From: Brian D Barto [mailto:Brian.D.Barto@enron.com] Sent: Wednesday, May 31, 2000 11:01 AM To: jeffreye.smith@ps.ge.com; Kay Mann Subject: Consolidation Agreement << File: Mac Word 3.0 << Kay and Jeff: Please review and comment. Kay's comments are included and do not look unreasonable. Jeff please edit this document and send back to Kay and I to see what you are thinking about in the clause that used to be 11, now 10, I think. (See attached file: GE Vitro WRAP rev 2.doc)
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