Enron Mail

From:scott.healy@enron.com
To:tom.swank@enron.com
Subject:UAE
Cc:mike.miller@enron.com, benjamin.rogers@enron.com
Bcc:mike.miller@enron.com, benjamin.rogers@enron.com
Date:Wed, 29 Mar 2000 06:29:00 -0800 (PST)

Here is the UAE transaction structure I discussed with the accountants:

1. UAE to execute a financial gas contract which is highly in our favor
(large to market value) with a buyout provision equal to our targeted option
premium ($4-6 million). UAE can cancel the contract by a defined date by
forfeiting their $4-6 million deposit/option premium. We should be able to
mark the deposit because it is our worst case payment. UAE should be
motivated to cancel the contract because it will be out of the money to them.

2. UAE to negotiate a purchase agreement for the turbines. This purchase
agreement will be conditioned upon the execution of a tolling agreement under
defined terms and upon UAE making an initial payment for the turbines by a
defined date in the future (one of the dates discussed at our meeting). Up
until this date, the turbine purchase agreement shall be cancellable at no
cost to UAE.

The gas contract should be markable as long as it is delinked to the turbine
purchase agreement. We can capture the effective of an option in the turbine
purchase agreement by making it cancellable at no cost up to some defined
date.

What do you think?