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Enron Mail |
I would include language which also obligates Calpine to take assignment of
the Precedent Agreement with Kern and any associated firm transport contracts and to meet Kern's credit requirements in doing so. I would propose the following in addition to the Guarantee language; Calpine agrees to satisfy any requirements of Kern River and execute any and all documents as may be reasonably necessary to effectuate, as of the Closing, the permanent assignment/release from Enron North America Corp. to Calpine of (i) that certain Precedent Agreement for Firm Transportation Service between Enron North America Corp. and Kern River dated _______, 2001 (the "Precedent Agreement") and/or (ii) any firm transportation agreements entered into in accordance with the Precedent Agreement ((i) and (ii) collectively referred to as the "Kern Transport") such that Kern River (a) agrees to look solely to Calpine for all obligations with respect to the Kern Transport and (b) unconditionally releases ENA from all obligations for demand/reservation charges, and all other charges related to the Kern Transport. Obviously there is still the risk that if Calpine doesn't close or meet Kern River's credit requirements, then ENA is still left holding this contract. If you have any question, please contact me at (713) 853-3512. Ron Coker@ENRON 03/07/2001 07:17 PM To: Stephanie Miller/Corp/Enron@ENRON, Barry Tycholiz/NA/Enron@ENRON, Gerald Nemec/HOU/ECT@ECT cc: Karen E Jones/HOU/ECT@ECT, Andrew Kelemen/HOU/ECT@ECT Subject: Pastoria PSA Here's the PSA language. Sorry. (a) Buyer agrees to obtain the release of Seller under Seller's guarantee, dated [_____], in favor of Kern River Gas Transmission Company effective as of the Closing, and in furtherance thereof, agrees that Buyer shall either provide its own guarantee in favor of Kern River Gas Transmission Company or such other form of security as shall be acceptable to Kern River Gas Transmission Company in order to obtain such release. ----- Forwarded by Ron Coker/Corp/Enron on 03/07/2001 07:16 PM ----- Ron Coker 03/07/2001 07:16 PM To: Stephanie Miller/Corp/Enron@ENRON, Barry Tycholiz/NA/Enron@ENRON, Gerald Nemec/HOU/ECT@ECT cc: Karen E Jones/HOU/ECT@ECT, Andrew Kelemen/HOU/ECT@ECT Subject: Pastoria PSA Below is the covenant we have in the PSA regarding release of the gas credit support. When will a shipper be required to put up the credit support? Would anticipate we would have trouble obtaining a written release from Kern if Calpine agreed to provide the required support? Would we receive a written release if Enron puts up a guarantee (which by definition covers the entire 15-year term) and Calpine puts up a three year evegreen LC? Thanks.
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