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)