FYI.
---------------------- Forwarded by Kay Mann/Corp/Enron on 06/20/2000 11:37 
AM ---------------------------
   
	Enron North America Corp.
	
	From:  Kay Mann                           05/18/2000 05:00 PM
	

To: Peggy Banczak/HOU/ECT@ECT
cc: Sheila Tweed/HOU/ECT@ECT 

Subject: 

Peggy,

Here are my observations on the Vitro turbine purchase agreement, for you to 
consider, pass along, ignore, modify, etc.  I,m ignoring some issues, and 
considering where the transaction is at this point, you may want to overlook 
more.

The project company should be the signatory to all three contracts.  Brian is 
changing this.  Purchaser and Owner will then be the same entity, so some 
changes within the document will be necessary.  By the way, is everything 
being shipped via rail or land?  If there is any marine transport which might 
necessitate EEIM chartering a vessel, the organization docs may need to be 
check to make sure that is covered (ran into this problem on another project).

Comments to offshore contract:

Commercial operation is a key term, yet isn,t defined. (an example of use is 
14.1.1)

5.3 This should be integrated with the change order procedure in Article XI. 
As I recall the same is true for both cost and schedule extensions.

10.3.2 GE isn,t subject to delay ld,s unless Purchaser is subject to similar 
delay ld,s with Owner.  This will need to be changed since Owner will be 
Purchaser, but I don,t like this concept. Maybe it is covered by the EPC wrap.

The term Takeover Performance criteria is used in 10.9.7, with a reference 
back to 10.3.2; it is probably reasonable to construe the first few criteria 
as being Takeover Performance criteria, but better practice would have it 
defined.

10.14 A &provided that8 should be added after (a).  This change should 
probably be made as a clarification.
 
14.3 Five days for GE to provide a service representative for a warranty 
problem is fairly generous since the Owner can,t work on the equipment in the 
meanwhile.  I don,t know what the EPC contract says on the point, so there 
may be some protection. Probably too late and too commercial.

14.6 The first and second sentence of this paragraph are not consistent.  The 
second sentence is the better one.

Note that a strike against GE is a force majeure event for which GE can get 
schedule and cost relief. Too late for this deal, though.

21.3 the confidentiality provisions have no time limit.

I didn,t notice a FCPA provision, but I might have overlooked it.

I assume the onshore contract has some of the same issues.  

As for the onshore/offshore split, it would seem that some coordination with 
the onshore/offshore epc contract would be in order, especially if the tax 
risk is ours.  My initial impression of the proposed split on the turbine 
contract is that the onshore contract still contains too much relating to the 
offshore scope.  

Brian is working on the consolidation agreement.

Steve is working on the payment issue.

By the way, I'll be on vacation tomorrow and next week.  

Kay