Afternoon,
    I was able to go through Colorado Springs financials, but was unable to distinguish between natural gas system operations and the general "utility", outside of book value of the various gas, electric and water plants.  As such, if we are unable to acquire statements for the gas system itself, I don't think we can agree to CSU's redline of Scope of Agreement (point # 1 below).  
    

-----Original Message-----
From: Nemec, Gerald 
Sent: Wednesday, September 19, 2001 3:08 PM
To: Sonnonstine, Max
Subject: RE: Enfolio agreement


Max,  The agreement calls for them to provide to ENA certification that they have set aside special funds to meet their payment obligations to ENA under this agreement.  A letter from the mayor or city manager indicating such budget approvals are sufficient.  To the extent they don't provide this, an Early Termination event occurs.  We can still call for collateral in accordance with Section 4.5 if they don't meet the thresholds.  The item added in your Sentence #1 below does concern me.  This seems to be a floated revenue system and I am not sure how we get comfortable that the revenues will be there.  I need to review these additions with Colorado Springs, because it is not clear to me how they think such provisions operate in the context of the existing language concerning the budget certification requirements.  We probably need to get on a conference call with them.
 
I am probably OK with the arbitration provision, depending on how the other items turn out.
 
Tyrell,  do you want to set something up a call with Marcus and his attorney to discuss these issues?  

-----Original Message-----
From: Sonnonstine, Max 
Sent: Tuesday, September 18, 2001 3:38 PM
To: Nemec, Gerald
Cc: Harrison, Tyrell
Subject: RE: Enfolio agreement


A couple of thoughts regarding the redline:
 
1) Scope of Agreement: .."judgement resulting from this Agreement shall be made only from the revenues received from Customer's natural gas system operations.."  I need to re-review the financials to determine how much the gas system operations is worth.  Because of this clause, $15mm in credit may be too much.  Once I can get on the net, I'll review.
 
2) Scope of Agreement:  "Furthermore, in accordance with the Colorado Springs City Charter, performance of Customer's obligations.....expressly subject to appropriation of funds for such purpose by the City Council."  In case we are in a position to call for margin, what is the process of getting it?  Do they have to get permission / authorization from the city, etc..? Tyrell had asked me the process how we call and what we accept for margin, but I'd like to understand the ease and/or difficulty of receiving margin from them.  We may never hit the threshold, but if we do and we can't get margin, we may have a big problem.  
 
3) Gerald, I assume you're ok with the arbitration clauses?  
 
Give me a call if anyone wants to discuss further.  
(713) 345-8261  
 
thanks.  

-----Original Message-----
From: Nemec, Gerald 
Sent: Monday, September 17, 2001 3:44 PM
To: Sonnonstine, Max
Cc: Harrison, Tyrell
Subject: FW: Enfolio agreement


Max,  Please see attached redline from Colorado Springs.  They revised the Collateral limits in Section 4.5.  Let me know your thoughts.
-----Original Message-----
From: Harrison, Tyrell 
Sent: Friday, September 07, 2001 10:08 AM
To: Nemec, Gerald
Subject: FW: Enfolio agreement


I'll follow with a call.
-----Original Message-----
From: Marcus Eller [mailto:meller@csu.org]
Sent: Wednesday, September 05, 2001 8:51 AM
To: Harrison, Tyrell
Subject: Enfolio agreement



The attached contract highlights the changes we have discussed.  The only other matter is the re-writing of the legal opinion.  Please look this over and we can discuss. 

Marcus 


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