From: kay.mann@enron.com
To: roseann.engeldorf@enron.com, sheila.tweed@enron.com, lisa.bills@enron.com, ben.jacoby@enron.com, scott.dieball@enron.com
Date: 2000-11-28 11:47:00+00:00
Subject: Turbine assignment clause

Hi there,

I made some revisions to the language Rose proposed.

Here are some questions/comments:

I deleted the references to changing any delegation of rights/obligations.  
I'm not yet clear as to what the agency language will look like, and what 
rights we need/want to change (i) the identity of the agent (ii) the role of 
the agent (iii) whether the agency can be terminated.  I'm just not that 
familiar with the structure yet, but if I can get that information, I'll work 
on it. 

I suggest we consider using a credit rating instead of "substantially 
similiar" comparison.  Just easier to decipher.

Rose/Lisa, I've added some SPV language.

I'm added receipt of final payment as an exception to the credit rating 
standard.  In other words, if they have received their final payment, they 
can't use credit as a reason to not give consent.

I don't think we should agree to provide a list of power projects done by the 
assignee in the past 5 years.  I also think 3 years is a bit much on audited 
financials, but I didn't comment there.

I don't like their language that an affiliate must be intending to 
own/operate the plant.  I've just bracketed the langauge and added 
"construct", since I don't know if this point has already been agreed.

Enough explanation, here it is (with Word file attached below):



Except for as described in Section ___ [ next paragraph], neither Party shall 
assign any or all of their duties or rights under this Contract without prior 
written consent from the other Party; such consent not to be unreasonably 
withheld, conditioned or delayed.

Notwithstanding the foregoing:  (i) either Party [Agent, too?] may assign any 
or all of its duties or rights to any Affiliate or subsidiary without the 
other Party,s consent; (ii) Purchaser may assign any or all of its duties or 
rights to any Affiliate of Enron Corp., without Seller,s consent, [provided 
that such assignee shall construct, own or operate the [Units] for the 
purpose of generating electric power for revenue], and (iii) Purchaser may 
assign any or all of its rights and obligations without Seller,s consent 
following [delivery/substantial completion?].  In each instance the 
assignment shall be effective as of the time the assignor delivers notice to 
the other party in accordance with [Section ]. [form to be agreed now?]

Seller shall only be deemed to be reasonable in withholding its consent if 
the proposed assignee: (i) does not have [a credit rating of ___] 
[substantially the same or better credit quality than Agent] unless (a) the 
proposed assignee provides appropriate guaranties, letters of credit or other 
assurances of payment issued by an entity or person with [a credit rating of 
___] [substantially the same or better credit quality than Agent], or (b) the 
assignor agrees to remain liable for all liability under this Agreement until 
[delivery/substantial completion], or (c) is a party participating in or 
providing financing or financing structures, including, without limitation, 
structures related to leasing arrangements and project financing, including a 
special purpose vehicle receiving financing to develop and/or construct the 
project for which Purchaser [or Agent] purchased the Equipment [add 
requirement of  delivery of  &rep letter8 from Enron regarding financing 
sufficiency], or (d) final payment (except for the retention amount) has been 
made to Seller;  (ii) is a direct competitor of Seller in the turbine 
manufacturing business, (iii) is an adverse party to Seller in any material 
litigation, or (iv) if purchasing the Equipment, such assignee is not 
purchasing such Equipment (or rights thereto) as part of a transaction in 
which Purchaser, Agent or their Affiliates is providing related goods and/or 
services to such assignee.  

Purchaser or Agent shall have the right to assign or pledge, from time to 
time, all or any portion of their respective right, title and interest in, to 
and under the Agreement as collateral for financing of this Facility without 
Seller,s consent.

In the instances where consent is required, the party requesting consent 
shall request such consent in writing, including the following:

(a) the legal name and address and the form and place of incorporation or 
organization of the proposed assignee;

(b) the current published annual report of the proposed assignee, or if no 
such report is published three years of audited financial statements and a 
description of the proposed assignee,s business, if available; and

(c) [a descriptive list of power generation projects completed by the 
assignee during the preceding five years].

Seller shall respond to any request for consent within thirty (30) days 
following its receipt of such request.   Seller,s consent if granted shall be 
in the form of Appendix __ hereto.  Any failure to respond in writing within 
the foregoing period shall be deemed to constitute consent.

When duly assigned in accordance with this Article, (including, following any 
collateral assignment, upon foreclosure by any collateral assignee), (i) this 
Agreement or the rights and/or obligations so assigned shall be binding upon 
and shall inure to the benefit of the assignee (and all rights and/or 
obligations so assigned, including, without limitation, any and all warranty 
rights, shall be assigned to the assignee as if such assignee were an 
original party hereto), (ii) the assignor shall be irrevocably relieved of 
and forever discharged from all liability under this Agreement so long as the 
assignee executes an assumption of this Agreement and such liabilities and 
obligations herein, and (iii) Seller shall look only to such assignee for the 
performance of the obligations so assigned.  Any assignment other than as 
permitted herein shall be void and without force or effect.