See my comments in blue below.




To: Scott Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt, Brian D 
Barto/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John 
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Martin W 
Penkwitz/NA/Enron@Enron, Roseann Engeldorf/Corp/Enron@ENRON, Sheila 
Tweed/HOU/ECT@ECT, Ben Jacoby/HOU/ECT@ECT
cc:  

Subject: GE Language

I'm not particularly wild about many of the changes proposed by GE.  Agree.  
Seems that it would be a good idea to get a consensus on how to respond.  
Here are the issues I see:

Indemnity issues:
They should indemnify us from claims by their employees/subcontractors.  Kay 
- Is your comment in connection with GE's comment to Section 27.1(iii) (carve 
out of the 100% LOL for "gross acts" of its subcontractors, vendors, ect.)?  
GE is in an aggressive outsource mode and needs to remain solely and totally 
responsible for the actions and liabilities for its subcontractors and 
vendors.  I think Section 20.2(a) as written covers simple negligence of GE's 
subcontractors and vendors and I would argue that we need to keep Section 
27.1(iii) as written dealing with gross negligence of GE's subcontractors and 
vendors. 
Indemnity should be triggered by strict liability as well as negligence.  
Agree - Maybe we could agree to GE's strike out in 20.2(a) provided the 
phrase "negligent or willfully wrongful" is replaced with "negligent, at 
fault or strictly liable without fault" (or some variation thereof).
What is a cognizant government?  Don't know!  This was not discussed with 
MIke so I am not sure what is the meaning of adding this term.  We need to 
also think in terms of how we could be harmed in a situation where GE fails 
to comply with law, and instead of Enron incurring a monetary penalty, is 
ordered to shut down the facility.

Limit of liability issues:
They want to limit their indemnity obligations for complying with laws, 
patent infringement, liability for haz. waste and liens to 100% of purchase 
price.  
They want the limit of liability to apply to gross negligence, if possible.  
Agree - See 1st comment above re indemnity. 
They don't want to clarify that they have to indemnify us for another party's 
claim for consequentials (as in a personal injury claim).  Agree.

We've don't have anything concrete on assignment yet.  Agree.

Comments?  I suggest we get together before our next scheduled conf. call to 
discuss our game plan.

Sheila has asked that we change Wednesday's call to 1100 Central, or 100 
Central if 1100 doesn't work.  Is this a problem?  Works for me...just let me 
know when, where, ect.

Kay


They should have to 
---------------------- Forwarded by Kay Mann/Corp/Enron on 09/11/2000 04:07 
PM ---------------------------


michael.barnas@ps.ge.com on 09/07/2000 07:46:07 PM
To: stephen.swift@ps.ge.com, Sheila.Tweed.@enron.com, 
Roseann.Engeldorf@enron.com, Kay.Mann@enron.com, Scott.Dieball@enron.com, 
Martin.W.Penkwitz@enron.com
cc: kent.shoemaker@ae.ge.com 

Subject: GE Language


Folks,

Having conferred at last with my colleagues, I can now forward to you our
draft language for the Indemnity and LOL clauses.  As Steve mentioned in his
earlier message, he has suggested some issues to discuss which could bring
us closer to resolution on that issue.  Please let me know if you have any
question!

Best regards,



 Mike
g _____________
Michael C. Barnas
Counsel, Power Plants Commercial Operations
GE Power Systems
One River Road - Building 37, Room 307
Schenectady,  NY 12345  USA
Phone 8*235-7602       (518) 385 7602
Fax     8*235 5466        (518) 385 5466
Mobile 518 369 9538






 - MajorClausesGE01.doc