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Enron Mail |
Rey,
This email explains why Jeff and I tried calling you this am. Any comments? Thanks, Kay ---------------------- Forwarded by Kay Mann/Corp/Enron on 06/02/2000 01:44 PM --------------------------- Enron North America Corp. From: Kay Mann 06/02/2000 10:57 AM To: Brian D Barto/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Jeff Blumenthal/HOU/ECT@ECT, Peggy Banczak/HOU/ECT@ECT, Steve Irvin/HOU/ECT@ECT Subject: Re: Enron Monterrey/Vitro Brian, I see from Jeff's email that splitting the contracts was an Enron request, and GE is amenable to a single contract. From a legal standpoint, the single contract would be the preferred approach for an owner like Enron. In speaking with Jeff Blumenthal, he was unaware of a tax advantage to Enron to have the split; however, he is going to confer with others to verify. Perhaps there is an Enron reason for the split which I am not aware of. As for the parent guaranty issue, will GE require an Enron guaranty if the contract is to be assigned to the contractor, and if not, can the Enron guaranty be replaced upon assignment? Thanks, Kay Brian D Barto@ENRON_DEVELOPMENT 06/02/2000 09:04 AM To: Kay Mann@ENRON cc: Subject: Enron Monterrey/Vitro Kay, can you help me grapple with these comments. I will forward Jeffs last email which is relative to his comment that I did not address his comments to clause 10 They are against this file: ---------------------- Forwarded by Brian D Barto/ENRON_DEVELOPMENT on 06/02/2000 09:05 AM --------------------------- jeffreye.smith@ps.ge.com on 06/02/2000 06:55:35 AM 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 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 a 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, as a complete document, 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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