John:
The call is set up for tomorrow [Friday] 4 pm your time [London]/ 10am my 
time [Houston] to discuss this. David Way will be in a meeting just prior to 
this time so we wanted to give him time to get back to his office.

The broker,s concern is that if this contract is to apply to a variety of 7FA,
s with various rating, etc., the underwriter could view them differently and 
require subrogation rights on some of them. We need to understand how this 
contract language will be used to purchase what equipment before insurance 
language can be suggested.
Paul

 -----Original Message-----
From:  Rigby, John  
Sent: Thursday, May 17, 2001 5:45 AM
To: Parrish, Paul E.
Cc: Marshall, David; Bouillion, James L.; Mann, Kay; Dieball, Scott; Tweed, 
Sheila
Subject: Re: INSURANCE EXHIBIT FORTURBINE PURCHASE AGREEMENT- Paul call 
please.

Paul- when will your review of the language be complete.  This language has 
been given to outside counsel to incorporate in the world hunger standard.  
Please keep in mind that in this case the contracting party is a vendor whose 
job is manufacture the equipment and deliver it to the site, the vendor is 
not involved in the construction other than providing technical direction of 
installation.

Paul-  we need to talk- I thought I heard that the 7FA' are not considered 
new technology.  I need to hear this from you, David  and Wortham before 
opening up the subject of collateral damage and allowing the insurer to 
subrogate.  I do not understand your comment on your naming the vendor as an 
additional insured.  We are doing so in the case of Arcos.  What we are doing 
in Arcos is making the vendor responsible under its warranty obligations for 
colleteral damage.

I need to have a very clear understanding of what we can and cannot do it the 
case of GE 7FA units.  Deviating from the past practice on 7FA's where there 
is not a new technology issue will be a painful and expensive ordeal.

I can be reached in London  via Scott Dieball's cell phone 713-504-2742.  
Please call.






	Paul E Parrish/ENRON@enronXgate
	05/16/2001 03:56 PM	 
		 To: John G Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Scott 
Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt
		 cc: Sheila Tweed/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron, David 
Marshall/ENRON@enronXgate, James L Bouillion/ENRON@enronXgate
		 Subject: INSURANCE EXHIBIT FORTURBINE PURCHASE AGREEMENT


John:
The changes I suggested on the watercraft wording are still being reviewed 
for completeness. I think what I gave you will work for most situations where 
the watercraft is incidental to the work or is far removed from our being 
involved [contractor to sub to sub contractor] but it does not address every 
situation that we could be involved in. We may need to expand our wording 
accordingly.

Likewise, your question on giving to the turbine venders the waiver of 
subrogation and additional insured is an even bigger concern. You are asking 
us to obligate ourselves in providing waiver and additional insured status to 
GE which we cannot do.   As you know, we went many years with providing 
turbine venders protection under the insurance because the market was soft 
and underwriters agreed to it. Now they balk at giving it because of the 
losses they have incurred and we cannot predict what they will agree to. It 
does not matter if the machines are proto-type or not, there is a good chance 
right now that they will not agree to insuring the vender. Everyone says it 
only takes money and in many cases we could probably include venders on the 
insurance but I cannot recommend committing to it in a long term contract ) 
we have to arrange the insurance at the time we need it in order to determine 
if it is available. 

If you need to have some language in the agreement, I would recommend that we 
not give the waive and additional insured to GE or any vender. When we need 
the insurance and begin placing it, we can then determine if the underwriter 
will cover the vender and ask for a price reduction from GE to move their 
risk to the underwriter.

I am sorry I cannot make this easier but that is the nature of the insurance 
beast.
Paul