I concur legally and contractually.  That was the intent of the agreement.  
All we gave up was our right to LD claims for construction schedule and 
initial performance, not for warranty claims.

However, given that the total amount is on the order of $0.4MM and given that 
SW's cooperation is vital in getting a written letter stating that running 
the Gleason units through the summer will not be detrimental, and 
vane/diagram replacement will be under warranty in October, I believe it 
might prove more valuable to wait until after closing to initiate a claim.

Legally speaking, once we close, do we still have the right to collect on a 
warranty claim??

Mitch 


From: Stuart Zisman@ECT on 04/20/2001 09:34 AM
To: Ross Newlin/HOU/EES@EES
cc: Mitch Robinson/Corp/Enron@Enron, Don Miller/Enron@EnronXGate, Kay 
Mann/Corp/Enron@Enron 

Subject: Westinghouse - State Group Claims

I spoke with Kay and she agreed that her interpretation of the settlement 
letter was the same as mine (i.e. no waiver of warranty claims or claims of 
faulty construction/design).  Subject to Mitch's agreement (because he had 
the primary role in the negotiation of that settlement with Westinghouse), we 
would suggest writing a letter alerting Westinghouse of our claim and of our 
desire to meet quickly to discuss this matter.  The letter might also suggest 
that if we are not able to resolve this matter quickly we expect to draw down 
on the letter of credit.  This latter threat might gain the level of 
attention that we desire.  Of course, I would be careful about how it is 
phrased (it might be worthwhile to run it by Andy Edison, the litigator).

Stuart