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Enron Mail |
Attached are David's comments. The gathering facilities that Independent=
=20 will be constructing (in their individual corporate capacity) are valued at= =20 approximately $750,000. ---------------------- Forwarded by Gerald Nemec/HOU/ECT on 08/09/99 09:29 = AM=20 --------------------------- =20 =09Enron Capital Management =09 =09From: David Marshall 08/06/99 09:47 AM =09 To: Gerald Nemec/HOU/ECT@ECT cc: =20 Subject: Re: Construction Agreement =20 Gerald, I've reviewed the facilities construction agreement "FCA"and the Exhibit F = to=20 the LLC agreement that you provided. Suggest that we simply incorporate th= e=20 Exhibit F requirements into the FCA by reference, and add an additional=20 requirement that Independent procure Builders All Risk insurance coverage i= n=20 an amount sufficent to cover the full replacement cost of the 'work' and it= s=20 components while intrasit to the jobsite, in temporary offsite storage and= =20 while awaitng installation at the site. Additionally, if the project is=20 finaced, lenders may require insurance coverage for scheduled p & i payment= s=20 if the proejct suffers a delay in start-up as a result of a physical damage= =20 loss. In the absence of a lender mandate, the purchase of DSU coverage=20 becomes a commercial decision. Suggest the following sample wording: A. Builders Risk Insurance Naming Owner, Contractor, Lenders, (the =01&Project Counterparties=018) as = Insureds=20 and providing coverage for physical loss of or damage to property intended= =20 for incorporation into the Work: i) While at the jobsite awaiting installation, during testing and=20 commissioning and at all times prior to Final Completion (use appropriate= =20 term as is consistent with the EPC document)=20 ii) While intransit to the jobsite. iii) While in temporary offsite storage Subject to limits of liability as follows: i) Equal to the full insurable vale of the EPC Contract, $ = =20 . ii) Adequate to cover the exposure or $10,000,000 per conveyance, whichever= =20 is greater. iii) Adequate to cover the exposure or $15,000,000 per occurrence, whicheve= r=20 is greater. B. Delay in Start Up Insurance In an amount sufficient to cover x months fixed operating expenses and debt= =20 service obligations. Such coverage to apply in the event of the occurrence= =20 of a physical damage loss covered under the Builders Risk policy. Additional Requirements=20 Coverages A and B herein shall apply as primary insurance for the Work and= =20 shall be without any rights of contrbution from any similar insurance whihc= =20 may be maintained by the parties hereto.=20 In the event that any insurance (including limits and deductibles thereof)= =20 hereby required to be maintained under this Insurance Coverage section A or= =20 B, shall not be available at commercially reasonable terms because of the= =20 refurbished nature of any equipment to be incorporated at the Facility,=20 (Project Counterparties) shall not unreasonably withhold its agreement to= =20 waive such requirement, provided that Independent shall first request any= =20 such waiver in writing.
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