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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
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