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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Jeffrey A Shankman X-To: Cliff Baxter X-cc: X-bcc: X-Folder: \Jeffrey_Shankman_Jun2001\Notes Folders\All documents X-Origin: Shankman-J X-FileName: jshankm.nsf As promised. Jeff ---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/02/2000 02:10 PM --------------------------- James M Bannantine@ENRON_DEVELOPMENT 09/26/2000 11:17 AM To: Bruce Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Kristina Mordaunt@Enron Communications, Scott Sefton@ECT, Frank Sayre/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Vicki Sharp@EES, John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Stephen Wallace@ENRON, Mark E Haedicke@ECT, Daniel R Rogers/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Michael Moran@ENRON, Randy Young@ECT, Sandeep Katwala/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Elizabeth Labanowski@ECT, Eric Newell@ENRON, Janet Place@ENRON, Mark A Evans/HOU/EES@EES, Al Alexanderson@Enron, Stephanie Harris@ENRON, Rob Walls/NA/Enron@Enron, Rex Rogers@ENRON, Greg Whalley@ECT, Ken Rice@ENRON COMMUNICATIONS, Andrew S Fastow@ECT, Lou L Pai@EES, Larry L Izzo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sanjay Bhatnagar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rick Bergsieker/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David W Delainey@ECT, Stanley Horton@ENRON, Bill Donovan@ECT, Diomedes Christodoulou/SA/Enron@Enron, James L Noles/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill Cordes@ENRON, Larry DeRoin@ENRON, Peggy Fowler@ENRON, Lance Schuler@ECT, Mark Frevert@Enron, Mike McConnell/HOU/ECT@ECT, Jeffrey A Shankman@ECT, Wade Cline/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shawn Cumberland/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeffrey McMahon@ECT, Jeffrey Sherrick@ENRON, J Mark Metts@Enron, James A Hughes/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rebecca McDonald/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: FOR IMMEDIATE REVIEW: Agreement Restricting Power Generation Competition in Asia Pacific Region I have not followed this closely but question why we would give a noncompete for this much of Asia in exchange for what I gather is an increased expectation in the valuation of Newco in the future if we want to sell. This was the one question I have asked about Dragon all along. It is a big piece of the world to do everything as a minority with these two other partners going forward (or have them have a right of first refusal over whatever we do). It is difficult to predict the future and this seems restricitive. Maybe I don't understand it all. Bruce Lundstrom 09/25/2000 03:54 PM Sent by: Liz N Martinez To: Kristina Mordaunt@Enron Communications, Scott Sefton@ECT, Frank Sayre/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Vicki Sharp@EES, John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Stephen Wallace@ENRON, Mark E Haedicke@ECT, Daniel R Rogers/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Michael Moran@ENRON, Randy Young@ECT, Sandeep Katwala/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Elizabeth Labanowski@ECT, Eric Newell@ENRON, Janet Place@ENRON, Mark A Evans/HOU/EES@EES, Al Alexanderson@Enron cc: Stephanie Harris@ENRON, Rob Walls/NA/Enron@Enron, Rex Rogers@ENRON, Greg Whalley@ECT, Ken Rice@ENRON COMMUNICATIONS, Andrew S Fastow@ECT, Lou L Pai@EES, Larry L Izzo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sanjay Bhatnagar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rick Bergsieker/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David W Delainey@ECT, Stanley Horton@ENRON, Bill Donovan@ECT, James M Bannantine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Diomedes Christodoulou/SA/Enron@Enron, James L Noles/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill Cordes@ENRON, Larry DeRoin@ENRON, Peggy Fowler@ENRON, Lance Schuler@ECT, Mark Frevert@Enron, Mark A Evans/HOU/EES@EES, Mike McConnell/HOU/ECT@ECT, Jeffrey A Shankman@ECT, Wade Cline/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shawn Cumberland/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeffrey McMahon@ECT, Jeffrey Sherrick@ENRON, J Mark Metts@Enron, James A Hughes/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rebecca McDonald/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: FOR IMMEDIATE REVIEW: Agreement Restricting Power Generation Competition in Asia Pacific Region General Counsels - At the direction of the Enron APACHI Office of the Chairman, I am sending this e-mail to you pursuant to the Enron Corp. Policy on Noncompetition. I would appreciate if you would check with your CEO/COO regarding this e-mail and respond to me by Friday, September 29 if you have questions or concerns. Enron APACHI may need to commit to the following provisions (that bind Enron affiliates) by Monday, October 2. Given the consolidating power generation market in Asia Pacific, Enron Asia Pacific/Africa/China (Enron APACHI) is proposing to enter into a transaction with Marubeni and Sithe Asia to combine the respective power generation portfolios into a single company (Newco). Newco would be charged with making the shareholders' investments as liquid as possible to allow for sale of the shareholders' respective stakes in Newco. The shareholders believe that Newco must not be seen by the market as a "dumping ground" for existing power projects but rather as the vehicle through which the investors will continue to pursue power generation opportunities in Asia. As a result, Enron APACHI proposes to include competition restrictions in the Marubeni/Enron Shareholder Agreement that would bind their respective affiliates. The following is a summary of these competition provisions: Enron affiliates (with the exceptions stated below) could only develop or own power projects in the Asia Pacific Region (as defined below) after first offering the opportunity to Newco. If Newco declines the opportunity, Enron would be free to own the project itself or offer the project to third parties provided that the terms do not materially improve. Development or ownership does not include the provision of construction, O&M, offtaker or risk management services. There are a number of exceptions to this rule: (a) small projects involving 20 MW or less; (b) projects in which Enron owns less than a 1/3 interest; © projects initiated by our SK joint venture; (d) Korean projects using natural gas produced by Enron; (e) projects obtained in a corporate acquisition in which Asia generation is less than 20% of the value of the acquisition; and (f) situations in which any Enron company would be exposed to fiduciary liability to another shareholder in complying with the competition restriction. "Affiliates" will be defined to exclude Enron affiliates which are publicly-owned (e.g., Azurix). "Asia Pacific Region" will be defined to include Brunei, China (including Hong Kong and Macau), South Korea, North Korea, Taiwan, Vietnam, Laos, Cambodia, Thailand, Myanmar, the Philippines, Malaysia, Indonesia, East Timor, Singapore, Papua New Guinea and the Pacific Islands (including Guam, Saipan, the Federated States of Micronesia, and Fiji, but excluding Hawaii). It does not include Japan and Australia. The competition clause would survive until the earlier of (a) Enron selling its interest in Newco or (b) December 31, 2003. Thank you, Bruce Lundstrom, General Counsel, Enron APACHI
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