Sorry I didn't come up with more concrete examples.  I'm really concerned 
about my dad, although I try to deny it.  

I still think that we should insulate ENA on the next deal.

Kay


From: Carlos Sole on 03/19/2001 05:15 PM
To: Stephen Thome/HOU/ECT@ECT, Jake Thomas/HOU/ECT@ECT
cc: kay.mann@enron.com 

Subject: Salmon Energy Post-Closing Risks Justifying Guaranty

Steve, per our phone conversation, the following are examples of post-closing 
risks that justify Delta's provision of a Parent Guaranty:

- Delta Affiliate issues a $5 million Change Order to GE, but doesn't have 
the money to pay for it; Enron decides to pay for that change order in order 
to maintain our relationship with GE and then Enron's recourse is limited to 
the Delta Affiliate that defaulted on the GE Change Order payment in the 
first place

- Delta Affiliate stops paying for the Insurance that the LLC must have; 
Enron decides to make the Insurance payments and then must recover the costs 
from the Delta Affiliate

- Despite its representations, Delta Affiliate has incurred a brokerage fee, 
defaults in that payment, Enron covers it and then must recover from Delta 
Affiliate

- Delta Affiliate incurs some third party personal injury liability and Enron 
becomes liable for it, and can seek recovery from the Delta Affiliate

- Delta Affiliate breaches the agreement and Enron seeks damages which are 
limited to what it can recover only from the Delta Affiliate

As a compromise, there could be a monetary cap on the guaranty that it be 
tied to the Transaction Value (ie $68 million)