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At Lisa Mellencamp's request I am sending you the amendment agreements that we have drafted with respect to the physical and financial masters between KCS and Enron.
Drafts of these agreements were sent to Harry Stout earlier this week and some changes have been made since then.
I am enclosing both clean and marked copies.
If you have any questions, please call me or Lisa.
My number is 853-3989.
Carol
|
KCS Master Agreement Amendments
|
Enclosed is a revised draft of the policy without any modifications on the exclusions as this is an area that ACE is apparently continuing to develop.
As I mentioned yesterday, we will talk with you about this on Monday at 1(Houston time).
Our commercial team would then like to have a call with ACE sometime after our call to talk about exclusions, subrogation rights and matters relating to books and records that are addressed in the policy.
I don't think that all of you need to be on this call but was wondering if any of you would be available for this call.
Please let me know.
|
policy
|
Alicia The only comment that I have to the swap schedules is that I think we need to have an exception built into the arbitration language that permits us to go to court to enforce the remedies that we describe in the confidentiality section.
This probably hold true for all of the docs where we have arbitration and a ca provision.
Alos, there may be some defined terms that are now used in the new confidentiality language that haven't been defined (i.e, Enron, Enron Put Agreement etc) Finally, should we upper case "affiliates" in the confidentiality language and either use the ISDA def or some other def?
Carol
|
Comments
|
Suzanne: I reserved this class in my own name so that Samantha Boyd, our new legal assistant who is starting today, could attend.
Could you please contact whoever needs to be contacted and switch names.
Erica, Please put this class on Samantha's calendar.
Carol
|
Development Center Class Reminder - Wellhead to Burner Tip
|
Taffy: Sara and i need about thirty minutes with Mark.
Can you set something up for either tomorrow or before our group meeting on Wednesday?
Today is bad for me.
Thanks.
Carol
|
Meeting With Mark
|
Susan and Susan: Just wanted to give you the heads up that we will need a deemed ISDA done for this counterparty.
Jarrod and I are working on the details but could one of you undertake to get this drafted by early afternoon tomorrow?
Thanks.
carol
|
Wine Bars
|
Joe: If we need to develop a form of confirm for this, are you the person that I should work with or would someone else handle this?
Rod, Since we are doing a separate GTC for this product, we will not be able to "net" on any payment date what we owe the counterparty under this product against what the counterparty may owe us under other derivative products.
Are you okay with this?
Alos, we have been assuming that there are no other counterparty credit issues with this product since other than the upfront premium, payments will be made from us to them.
Are we safe in assuming this?
Carol
|
Reliable Power Product Description and GTCs
|
Rob: Enclosed is what I think should be the final form of the Schedules.
I have made some clean-up chnages.
In the LC,.
my notes indicate that we were going to keep the renewal language in.
Please let me know if this draft is okay with you and then we will coordinate getting it executed.
Thanks for your help.
Carol
|
Final Form of Schedules
|
Randy: Enclosed is a draft of the ETA letter that has been approved by the head of the online group.
Sorry that this took so long.
CArol
|
ETA Letter
|
Sara and I met with Richard Sanders today to resolve some questions that we had concerning the arbitration and process agent language in our forms and here is what we concluded needed to be done: 1.
If arbitration is chosen, there is no need to insert Waiver of Jury Trial language 2.
Pending discussions that he will be having with Mark Haedicke and Jim Derrick, no chnages need to be made to our arbitration language.
3.
Our Process Agent language will be revised such that under all circumstances it will say the following: Party A appoints as its Process Agent , ____________, having an office in
|
Arbitration/Process Agent Language in Form
|
Jeff: We have received a request from the above counterparty to alter the format of the confirmation process on physical and financial deals.
In lieu of signing each confirm that is sent to them, what they want to send back to us is a letter signed by them in which they describe the confirm and indicate whether or not they accept or disagree with the terms thereof and if they disagree with such terms, they will return the confirm.
Are you okay with this procedure?
Carol
|
Southern Company Energy Marketing LP
|
Susan: Regarding Kate's e-mail, I have left a voice mail for Richard Sanders as to which office we should designate.
If you need to send out the ISDA draft before I hear back from him and before Kate hears back from Canada, go ahead and leave the address blank and we can fill it in later.
Carol
|
Process Agent Language
|
Mark and Sara: Tana came into my office last night and seemed to be very upset about how the other 2 legal assistants were treating her, especially Susan Bailey, and also about the fact taht Susan Bailey was going to be part of Samantha's training and that this was a surprise to her.
On the latter issue, I explained to her that given that the 2 Susan's were involved in the day to day routine, it made perfectly good sense for 1 of them to handle this part of Samantha's training especially since Tana was now out of the day to day stuff.
I am very concerned that Tana is going to interfere with Susan's training process given her attitude toward the whole thing which I really feel is ridiculous.
The only possibly valid point that she might have is the fact that we didn't tell her that this was going to work this way, but even so, again it's Tana's way of not be able to let go and not being a team player.
I explained to her that both she and Tana had different roles to play with respect to Samantha's training and that they both were important and taht in my opinion, Susan was more than qualified to handle this part of Samantha's training.
On the first point, I told Tana that the only way that this group is gong to work better is through "communicating" to each other.
I firmly believe taht there are 2 sides to this and taht all 3 of them are guilty of treating the other 2 at time in a not so pleasant way.
Tana of course will not admit this.
I have no answers for this issue other than the fact that I am tired of hearing about why they can't get along.
I also told Tana taht it was my perception that Susan Bailey has been under alot of pressure given her increased workload and other things and taht that could explain her attitude which even I have noticed has been a little different lately.
I'm letting the both of you know about this because I don't want any of this to negatively impact Samantha to the extent that it can be avoided.
Carol
|
Meeting with Tana
|
Rhett: I have asked the attorney that I am working with on this to call you directly about their proposed tax rep language as well as their deletion of the language in Part 3 regarding the delivery of tax docs.
I have enclosed below the language that we currently have in the Schedule which they would not accept and I believe you have their proposed language on the tax reps.
Thanks again for your help.
I just think that at this point it is easier for the tax folks to talk directly to each other.
Carol
|
Dresdner Bank
|
Tana: Mark has asked me to handle the Mexico issues in connection with EOL trading.
I understand that you have copies of what has been sent to and received from Mexican counsel.
Could you before you leave tomorrow give me copies of all correspondence as well as copies of the more current questionnaires taht we have been sending out so that I can start following up with them on Monday?
Thanks.
Carol
|
Mexico EOL Issues
|
Brant: In response to your voice mail regarding El Paso, Occidental and Aquila Canada, I can follow up with my contacts at El Paso and Occidental.
Please provide me with the name of the attorney at Aquila Canada and I will call him or her.
Carol
|
Status Update
|
Mark: Just 2 thoughts on the new draft: 1.
In the definition of Global Early Termination Date, how does this work with the new Section 16 concept that Alicia has added to the Schedules whereby the termination of Transactions that raise Section 16 problems may be delayed?
2.
Does Section 5.06 conflict at all with the proviso in the Limitation of Liability sections of both Schedules?
Carol
|
Master Hedging Agreement
|
John: Could you please leave me a quick e-mail message and let me know where things stand on the redraft as my credit people have been asking about it.
Thanks.
carol
|
Status Update
|
Jason: I thought that your drfat letter of intent looked fine.
Just a few commments.
In section 6 - Conditions, could you put something in there similar to the "Approvals" section in the November 10th letter since possibly HSR and FERC approval may be needed?
Alos, in Attachment A, in Section 3 could you sya something to the effect that if tthere is no master in place with Enron and a particular counterparty then Enron needs to be satisfied with the terms of the master that is in place between Mrechant and such counterparty.
I thought that the Assignment Agreement was very weak and that we need something more than that.
Withg respect to the consent, the concept of the assigned transaction be goverened by our Master needs to be in there.
Enclosed is the template that we have used in the Columbia deal.
Call me if you have any questions.
The only time that I won't be reachable today is from 11:30-2.
Carol
|
Letter of Intent
|
Gaurav: I sent to Bruce Wright our comments to the policy last night and asked that he incorporate them into his mark-uo and distribute it to ACE and us.
Please e-mail him with your fax number as well as the fax numbers for the people at Ace.
Thanks.
Carol
|
Policy Comments
|
Cement: Enclosed is the Enron Guaranty that we need executed in connection with an ISDA Master Agreement that we have finalized with Idacorp Energy Solutions LP.
We would like to have the Master become effective next week so would it be possible to have this signed next week?
If you have any questions, please call me or Susan Flynn.
Carol
|
Idacorp Enron Guaranty
|
Rob: I received the documents and Susan Flynn will get them executed along with the Enron Guaranty and the other certificates and get them back to you next week.
My question for you is when you consider the agreement to be effective for trading purposes?
I'm assuming you want to wait for the Enron Guaranty and that any trades done before the Guaranty is sent to you would not be confirmed under the Master.
Please let me know your thoughts on this.
I have asked Enron's counsel to process the Guaranty ASAP.
Thanks.
Carol
|
ISDA Master
|
David: Shari passed on to me their form of CA which I will review.
We typiocally prefer to use our form but I can mark this one up if hat is what you wnat me to do.
Please advise.
Carol
|
CA with Risk Managemnt Solutions
|
Ladies: I just wanted to thank you again for your thoughtfulness, support and hard work in making today such a special event for me and Charles Eugene!
As I said at the shower, I'm lucky to have people like you as friends and co-workers and each of you throughout the last year has helped me get through this pregnancy and the events leading up to it, for which I am extremely grateful.
I am truly overwhelmed by everyone's generosity and look forward to finally putting all of my gifts to good use in the upcoming weeks.
Carol
|
Thank You Again
|
Scott: At Paul Radous' request I am sending you the form of LC for the prospective issuing bank to look at.
I'm at ext.
33989 if you have any questions.
Carol
|
LC Form
|
Carolyn: I'm hoping that you can help me with this.
One of the gifts that I received on Friday was 2 outfits from Baby Gap.
There was no card.
The only people that were at the shower that I couldn't account for based on the gifts that I received with cards and group gift list that I saw were Anne Yaeger, Mark Taylor, Tana Jones and Mary Heinitz.
Could you please confirm for me that these people did not participate on the group gift?
Thanks.
Carol
|
Shower Gift
|
Tana: Can you tell me if any of the more recent ETA amendment letters that we have sent out for execution refer to the new termination number?
My recollection is that maybe only 1 or 2 did.
Carol
|
Terminations number
|
Robin: Did either the high chair or the stroller come with an instruction booklet that I could have?
If so, just let me know who to contact and I will do so.
If not, I suppose I can spend the next few years trying to figure out how they work!!
Thanks.
Carol
|
Misc
|
Anne: I'm slightly embarrassed to be asking you this, but there was one gift from Baby Gap that we can't seem to figure out who the "giver" was, and we've narrowed it down to a group that includes you.
It was 2 outfits with animal patterns on it.
Are you the mystery giver?
Alos, again I just wanted to say congratulations again on your engagement.
I am really happy for you and Trushar and wish you all the best.
I will try to see if we can get together for lunch before I leave.
Carol
|
Shower Gift
|
Brant: Let me know what you think about this.
I am enclosing the section out of our comments that he wants to replace with his language.
Carol
|
ISDA Discussions
|
Please plan to attend a lunch this coming Friday in 30C2 with Sara and I and possibly some of the newer credit people to go through basic ISDA, CSA and confirmation issues.
We'll get started around Noon and probably go until 1:30.
Carol
|
Friday's Lunch
|
Tanya: This coming Friday Sara and I are going to walk the legal assistants through some basic concepts with respect to the ISDA and CSA Schedules and confirmations.
Do you think that we should invite some of the newer credit people to this and if so, who?
Some of this will be a repeat of what we did a few weeks ago but at a more basic level.
We were thinking that it may be beneficial for Nidia Mendoza and Cathy Tudon.
Let me know what you think.
Carol
|
Upcoming Lunch
|
Paul: Shari recommended that I forward these questions to you.
We are trying to finalize an ISDA Master with dresdner bank in Germany and they wanted to make some chnages to our FX and Currency Option language which I have attached.
Can you help me with this?
|
FX/Currency Option Questions
|
Dave and Grant: I understand from lisa Lees that there is now a push to get Crestar signed up.
You may recall that they had alot of commnets to the ETA which I sent to you both with my thoughts on certian of the comments.
What is the next step with them?
Dave, do you have any thoughts on their comments?
Carol
|
Crestar
|
Willie: Thanks for your voice mail message.
As I explained to Joe and David, on all of the counterparties where we have "EOL Issues" I need to know what those issues are and then I will call them.
Could you please advise Joe and/or David about this and then I will follow up.
The only issue that we discussed was the issue that these counterparties are thinking that the clicking requirement in the ETA applies to confirms which it doesn't.
Thanks
|
EOL Issues
|
We are planning to hold another informal lunch this coming Friday in Conference Room 38C2 from 12-1:30 to go over in more depth how the ISDA Master and ISDA Credit Support Annex works.
If you are interested in attending, could you please contact my assistant, Suzanne Adams at 37340 TODAY so that she can get a head count for lunch.
Thanks and sorry about the short notice.
|
Upcoming Lunch
|
Joe: Here is my stab at a form of confirm reply letter.
This one assumes that we are the confirming party but it can be modified if the counterparty is the confirming party and we want to send this.
I will work on modifying Southern's cover letter into something that we could send to our counterparties.
Call me if you have any questions.
Carol
|
Confirm Reply Letter
|
David: Per my voice mail I have bolded the sections of the CA that I want you to look at.
One is a description of the info that they are providing to us.
Carol
|
Risk Management CA
|
Taffy: Here is the list of invitees Paul Radous Cathy (Mary) Tudon Brad Schneider Veronica Espinoza Nidia Mendoza Ed Sacks me sara Susan F. Susan B. Jason Tana Samantha Boyd You are welcome to attend as well.
I am not sure who from the credit group has RSVP'd yes but why don't you send out the notice to everyone and copy me and Suzanne.
Thanks Carol PS - Paul Radous has a brother Kevin and I think that Paul is in the Enron directory.
|
Tomorrow's Lunch
|
Molly: Here is a draft letter for Statoil.
Under the Master, they have a 1 Business Day cure period after they receive notice from us of their failure to post collateral before we can declare an event of Default.
Please call me to discuss after you have had a chance to decide what you want to do.
Carol
|
statoil Letter
|
Tanya: Thank you for suggesting the group that we talked to today.
They all seemed to be at the same level and hopefully got something out of what we said today.
I mentioned to them that you have all of the latest LC and Guaranty forms and that you would be sending those around to them.
I will work on the form of confidentiality agreement and send that to you next week.
Before I go on maternity leave, I will send down to you a binder with hard copies of all of our forms, along with the User's Guides to the ISDA and CSA.
We are still putting the finishing touches on the ISDA and CSA Schedules.
Could you also mention/remind the group that now Samantha Boyd's name should be added to all credit worksheets and Tana'a name taken off and that all day to day matters should be handled through the 2 Susan's and Samantha, as Tana is off the day to day stuff and working primarily on special projects?
Thanks.
|
Credit Lunch
|
Group: Mark has okay'ed having a going away lunch for Rod.
Looks like the week of June 26th works best for Rod.
Please e-mail Suzanne Adams by Monday of next week any days that week that do not work for you so we can pick a date.
Thanks.
|
Lunch For Rod Nelson
|
Paul: I have spoken with Dave Kistler about the form of CA that you sent to him.
What we prefer to do is to use the form that was agreed to a year ago (a copy of which I have attached).
We can either (1) do a new CA based on this form or (2) since this CA does not expire for another year, do a side letter that provides that the term "Project" as used in this CA means both the project that is currently described and the new project that we are about to engagae in with you.
Please let me know your preference.
My number is 713-853-3989.
Carol
|
Confidentiality Agreement
|
Leslie and Elizabeth: I should have sent this to you as well.
Could you please take a look at this form and let me know if it is okay with you?
Seems like there are more situations that are coming up where our counterparties are wanted to execute 1 Guaranty to cover all types of transactions and this is our attempt to develop a form that credit can use.
I look forward to hearing from you.
Carol
|
Multi Purpose Form of Guaranty
|
Brant: Just a reminder that we need to discuss matters relating to Occidental (their proposed change to the MAC language) and Chautauqua Airlines.
Alos, with respect to Aquila/Utilicorp, apparently they cannot have all of the online paperwork completed until next Tuesday.
They submitted a PA today but the guy that needs to authorize the sub-user accounts is not in the office until Tuesday.
The current plan would be for them to do that on Tuesday and then to make the switch from Aquila to Utilicorp effective next Wednesday.
I'll keep you posted but we still have not declared the Utilicorp ISDA effective.
Carol
|
reminder
|
Please update me on where things stand.
We need to get this wrapped up before I go on maternity leave.
i'm hopeful that you are close and amybe done to 1 or 2 counterparties.
Thanks.
Carol
|
CES
|
Brad and John: We have not sent out the ISDA draft on energen because I need calrification on the following points: 1.
Is the $75MM Guaranty cap meant to cover both physical and financial combined or are we doing separate Guarantys each with a $75MM cap amount?
2.
How does the $50MM collateral threshold work?
I noticed in the physical master that it appears as if we subtract from the $50MM threshold our exposure under the ISDA to arrive at the Counterparty's threshold, although the language in the physical says "the exposure" and it is not clear whose exposure they are talking about.
Is that how it is suppposed to work?
Carol
|
Energen
|
Jeff: Just a few comments: 1.
In the definition of termination Event, I think that the words "due to" need to be put after the word "means" in the first line.
2.
In Section 3.4(a), I noticed that the bracketed langugae "as it relates to the Assigned Interest" has now been deleted.
Pursuant to my earlier comment on this, what this maens to me is that with respect to the Fixed Payment piece of this, we can never terminate the swap based on something that happens to Pelican .
Is that the way it is supposed to work?
If so, plaese explain why.
3.
With respect to the lnagugae in Section 3.6(a), instead of saying in the first sentence of such Section "the amount determined..." shouldn't it say "the fair market value of Party A's remaining payment obligations under the Transaction".
Section 2(x) of the confirm just refers to Disputed Matters and it is not claer to me what is in dispute when an Event of Default or Termination Event occurs and what amount Party A has to pay when these events occur.
What is the priocedure for coming up with this amount?
Does each party calculate it and then send it to the experts or do the experts just determine it?
|
June 16th draft of swap assignment
|
Joya: I want to make sure that while I am out on leave that I can access my computer here.
I noticed that since Lotus Notes changed I cannot access my e-mail from my computer at home.
Would it be better for me to take a laptop home and is that possible?
Please advise.
carol
|
Computer for Home
|
Suzanne: Can you order me some boxes?
I want to start going through my office and figuring out what to send home when I go on leave.
thanks.
Carol
|
Boxes
|
Sara: I'll go with whatever you and mark think is the right thing to do but O honestly have a hrad time justifying why tana or Susan Flynn should be recognized, particularly Susan Flynn.
I would much rather take Susan B. out to lunch rather than recognize all 3.
Carol
|
Legal assts.
|
Patricia: Frank forwarded to em your chnages to the ETA Agreement and here is our response: 1.
I would like to discuss with you your chnages to Sections 1 and 2 (a).
2.
We cannot accept the chnages that were made to section 2(b).
Any confidential info that you give us will be subject to the confidentiality provisions of the ETA.
3.
We cannot accept the first deletion in Section 3(a) and with respect to the remaining deletions in Section 3(a) and the deletions in Section 3(d), I just want to make sure that we both understand how this will work in the vent that you want to trade a product on the website and there is no Master in place.
Please call me at your convenience.
|
ETA Agreement
|
Joe: Did you ever contact them about the confirms that they sent to us?
Are they now signing our confirms?
Please advise as to what, if anything, I need to be doing on this.
Thanks.
Carol
|
CLECO
|
Andrea: I just wanted to confirm that you received my revised draft of the ISDA Schedule by fax last week.
If you didn't.
let me know.
have the tax people spoken with each other?
|
Our Revised draft
|
Jeff: As I think you are aware, the Meixco and online group want to implement online trading for Mexican counterparties.
Are there any tax issues taht we should be aware of?
If we conduct online trades using ENA and telephone trades with an Enron Mexican entity, will the exercise of setoff rights create any tax issues?
My understanding is that the Enron counterparty will be ENA.
Carol
|
Online Issues - Mexico
|
Mike: I have discussed your proposed language with Brant Reves, our credit person, and we are okay with the concept except that we would like for the ratings trigger to be based only on either a drop in the S&P rating or a failure to have an S&P rating.
In addition, Brant has advised me that should we put in place a CSA, that the following would be the credit matrix for collateral threshold: BB to BB+ $2,500,000 Below BB Zero I look forward to hearing from you.
Should we send you our form of Credit Support Annex?
|
MAC Language
|
Bruce and Scott: I just received this from our guys.
I no nothing about the call at 4 tomorrow or who is on it and when our guys want to talk to us about this, but as soon as I find out, I will let you know.
Carol
|
Agreements
|
Russell: Susan gave me the draft ISDA to review.
The Guaranty taht was signed in January is deficient in that I don't feel that it adequately describes financial derivatives and the termination provision doesn't work.
How do you want to proceed?
Carol
|
Cinergy
|
Gentlemen: Here is the new draft of the policy.
We have left a message with ACE about a call at 9 (houston time) tomorrow.
If that chnages, I will let you know.
|
Agreement
|
Susan: Sara and I would like to meet with you sometime on Monday to go over all outstanding work items so we are aware of what can be accomplished before you leave and what may need to be given to the other paralegals.
Can we do that at 10 and can you send to us before then an updated list of your outstanding work assignments?
Thanks.
Carol
|
Monday Meeting
|
Tanya: Thanks for your message.
All El Paso wants to put in the LC form is language that states that the original LC will accompany any draw that is made for endorsement of the drawing amount and that it will be returned to the Beneficiary unless it is fully drawn upon.
I don't see any problem with this and while it may be unnecessary, if it males them feel better to have it, i would like to keep it in.
Are you okay with this?
Carol
|
LC Language
|
Clement: We are trying to finalize our ISDA with Deutsche Bank.
In the Guaranty where we have the setoff and counterclaim language they want to add a proviso that basically states that Enron Corp. would be entitled to get the benefit of the rights, setoffs, counterclaims and other defenses that ENA is entitled to only to the extent taht it would have had the benefit of those rights if it were the direct counterparty.
I think that I am okay with this but wanted your input.
Let me know what you think.
Thanks.
carol
|
Guaranty Issue
|
Rhett: Does this work for you?
This is language from Deutsche Bank in lieu of the= ir=20 proposed modifications to the defined term "Indemnifiable Tax" which you=20 looked at a few weeks ago.
Carol
|
Indemnifiable Tax language
|
Russell: Based on my review of the 6/23 draft of ISDA Schedule here are my credit questions: 1.
There is no Credit Support Provider for Equitable.
Should there be?
2.
What should the cross default thresholds be and who should they apply to?
3.
Are you satisfied with the Additional Termination Event?
I'm assuming that in clause (i) of the definition of Debt Coverage Amount, it makes sense to take "future" revenues from the preceding year and subtract from it asset sales made during the current year?
How will we know what assets sales are made?
Will the future net revenue calculation be shown on the reserve report that we receive annually?
When will this calculation be done?
Are you satisfied with their definition of Internal and External debt?
4.
In Part 3(a), looks like we would only receive an annual reserve report.
Is that sufficient?
When should we get it?
Alos, whose financials do you want to receive?
5.
In Part 5(c) - Setoff, I'll just note that this only applies to amounts due and owing between the parties and does not include "affiliates".
6.
In Part 5(f)- Assignment, we need to decide what conditions precedent we want to apply to the limited partnership entity that they assign it to given the fact that once assigned, we will have no recourse to the partners, even the GP.
For example, should the LP have a minimum asset value at the time of the transfer?
It is not clear to me what assets this LP would own at the time of the transfer and I'm assuming that we would want it to meet some minimum credit criteria prior to such transfer.
In addition, are you satisfied with the debt and asset sale limitations?
On asset sales, I think that they need an annual limit as it is not clear to me how the $2,000,000 limit currently works.
Alos, I think that all of these limitations in Section (f) should either be additional Events of Default or Additional termination Events.
Please call when ready to discuss.
Carol
|
Equitable Credit Issues
|
Susan: We are ready to execute the ISDA with El Paso.
Here are the schedules and the Enron Guaranty.
Please coordinate with John Shuttee at El Paso the execution of the docs.
His number is 420-7168.
I just sent him the form of Guaranty taht we want them to use and I will forward to you that e-mail.
Thanks.
|
El Paso
|
Steve: Enron's general counsel has accepted the concept that we discussed last week in the Guaranty re setoff, defenses etc.
I will try to send you a revised Guaranty shortly.
Carol
|
Guaranty Issues
|
Karen: Here is our response to your e-mail comments: 1.
We can put back VI(c)(i) but the reason that we deleted it was because the provisions in VI(c)(ii) and VI(E) really deal with how an LC can be drawn upon and the language in VI(c)(i) seemed unnecessary and perhaps inconsistent with those sections.
If we put it back in, it should be made subject to those other sections.
2.
With respect to your points regarding the amount that can be drawn, I am unclear as to what your position is.
In one place you want to limit it to amounts owed and in another you want to limit it to Exposure Amount.
What is your position.
We thought that the formula that we set forth in Section 4(b) of the amendment was what everyone had agreed to.
3.
The reason for the change in E.4.
(c) is because the Event of Default situation has already been addressed in VI(c)(ii).
4.
I need to check with our credit people regarding the transferability issue.
I will note that the current form that is attached to the Master permits transfers.
Why is this an issue with you?
I look forward to hearing from you.
My number is 713-853-3989.
Carol
|
Response to Comments
|
Bill: Could you please forward this to the business folks at Ace since this is a critical point and I don't want them caught by surprise tomorrow.
Thanks.
Carol
|
Policy
|
Sara: What we have negotiated with Southern was limited to financial trades done under the ISDA.
This was a form that they sent to us that we revised.
It was my understanding that they were going to contact Leslie separately about EPMI physical trades and Stacy about physical gas trades.
Carol.
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Confirmation Reply Letter
|
Luanne: Our credit person is fine with revising the MAC language to say taht a MAC would be triggered if either (1) an entity's Credit Support Provider's rating from S&P is below BBB- by S&P or Baa3 by Moody's or (2) if such Credit Support Provider fails to be rated by both S&P and Moody's.
Also, in Sections 4.5 and 4.6 of the ISDA Schedule we would like to change the reference to "Goldman Group" to "The Goldman Sachs Group, Inc." I will have Tana Jones draft an amendment and send it to you.
Call me if there are any problems with the above.
Tana, Please draft an amendment for my review.
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MAC Amendment
|
Teresa: As I indicated in my voice mail message I have the following questions about the maternity leave policy: 1.
I am assuming that any vacation time that I still have left I can use up at 100% pay.
2.
My understanding is that in order to go beyond the 6 week period I would need a letter from my doctor indicating the medical condition that exists and justifying sick leave pay at 90% 3.
If I want to take after the 6 week period an unpaid leave of absence, whose approval do I need?
Does unpaid leave affect any of my current benefits (i.e., options that are due to vest, medical, parking etc.)
If I am on unpaid leave and Enron offers a stock option program at year end, am I still eligible?
I will contact Carmen about the forms that I need to fill out.
Please let me know if you are not the right person to answer these questions.
I am scheduled to meet with mark haedicke tomorrow afternoon at 2 to go over my plans.
|
Benefits Questions
|
Pam: We have an opening in our group for a legal assistant position.
Do you know of anyone over there that might be interested?
We would prefer someone with transactional experience.
Salary ranges vary depending upon experience, but I think we are pretty competitive.
If you know of anyone please have them call me as we are looking to fill this position ASAP.
Also, would it be possible for you and I to get together 1 more time for lunch before I leave?
How does the week of July 10th look?
|
Legal Assistant Position
|
Russell: Here are the credit related comments that Pancanadian Energy Services Inc. made 1.
They want the definition of Specified Indebtedness to exclude obligations with Affiliates.
This is how it is defined in the Canadian Master.
2.
They want a Minimum Transfer Amount for each of us of $100,000.
3.
They want rounding to be reduced to $100,000 for each of us.
4.
In the definition of Letter of Credit, they want the LC Bank to either be a major US or Canadian Bank, but not a foreign bank with a US branch office.
5.
In the definition of Material Adverse Change, they want to delete the Current assets/Current Liabilities ratio trigger.
Carol
|
PanCanadian's Credit Comments
|
Mary: Enclosed is the Counterparty form that we have come up with for Multi-Product Guarantys.
Depending upon the products that need to be covered, each Guaranty will need to be modified to make sure that it describes the proper entities and products.
I will send along the Enron form of this shortly but please pass this along to the appropriate people in the credit group.
Jeff, Stacy and Harry, Are you going to change the Physical product form of Guaranty to look more like this?
Power has changed their form and it may help for us to all be consistent especially when we are asked to amend an existing Guaranty to include more products.
If you do decide to amend your form, please send the new form to credit.
Thanks for everyone's input.
|
Multi-Product Counterparty Guaranty
|
HR confirmed that Stephanie is still interested and has not been hired by anyone else.
Please let me know if you feel we should contact her for purposes of indicating to her our interest in her and obtaining salary information from her.
Carol
|
Stephanie Panus
|
Russell: Their attorney finally contacted me and we talked about the ESP rules.
She is going to do further research in light of the fact that for regulatory purposes Utilicorp, the GP, cannot furnish a Guaranty.
I alos mentioned to her that at the very least we would like to make Utilicorp a "Specified Entity" so that they would be part of the credit-related Events of Default in the ISDA Master.
As a general rule, we recommend in circumstances where the counterparty is an LP and you are relying on the GP's credit, making the GP a "Specified Entity" so that for example their bankruptcy would trigger an Event of Default.
Call me if you have any questions.
carol
|
EnergyOne Ventures
|
Mark and Leslie: Claudio wants to talk to someone about this weather/power online product that he is working on.
Enclosed is info on it.
Who should he be talking to about this?
He is anxious to meet and I told him that as soon as we figured out who his legal contact would be we would meet with him.
Please let me know your thoughts.
Carol
|
PJM Power Demand
|
Mary: Enclosed is the form of Enron Guaranty that we would propose using for multi-products.
Again, like the counterparty form that I sent around earlier, this form will need to be modified depending upon the products that need to be covered and the parties involved.
Please distribute as appropriate to the credit group.
|
Enron Multi-Product Guaranty
|
John: I understand from Tana Jones that we are going to try to put an ISDA in place today.
We should be sending you the draft shortly.
Please call me directly with any comments or questions that you may have.
Please pass the information below to anyone else that may be working on this from your end.
Thanks.
I look forward to hearing from you.
|
ISDA Draft
|
Susan: Please update me with where things stand on Columbia, both with respect to the assignment of transactions with Columbia Masters to our Masters and assignment of confirms without Masters to our Master, to the extent that we have one.
Thanks.
Carol
|
Columbia
|
Tanya: Here are the credit related comments that we received from Quaker Oats' counsel: 1.
They prefer Market Quotation instead of Loss.
This will obviously be a discussion point given the type of commodity that we anticipate.
trading with them 2.
They want a Minimum Transfer Amount just for them of $250,000.
3.
They want to reduce rounding to $25,000.
4.
They do not want the provisions of section 6(c) of the CSA to apply at any time.
5.
They deleted the concept that a party holding an LC could draw on it if there was an Event of Default, meaning that we would have to wait to terminate and have a payment obligation owing to us before we could draw.
6.
They do not want any LC to be transferable.
7.
They want the Enron Guaranty to cover our obligation to return collateral taht has been posted to us, which I guess means that if we didn't return collateral to them then they could go after Enron for that amount.
Without this language they would have to declare an Event of Default, terminate and then go after Enron for any amount that we owed them.
To the extent that we were holding cash colateral, they could offset that amount against amounts that they might owe us.
This is an interesting issue and one that I have not seen before.
8.
They want the Guaranty cap to be rased to $25,000,000.
Where does this ISDA stand on the priority list?
Is this something I should try to push forward in the next week or 2 while I am hear or can it wait?
Carol
|
Quaker Oats
|
Robert: I am still waiting to hear back from our credit person on some of the credit comments that you made, but here is my response to the legal and certain of the credit comments: 1.
I am okay with the first paragraph of Insert 1.
I would like to talk to you about the second paragraph.
2.
We have a strong preference and policy towards using Loss rather than Market Quotation.
3.
Inserts 2, 3, 4 and 5 are okay.
In addition.
our tax people are now advising us to require the delivery of W-9's to part 3.
4.
NY is okay with governing law.
5.
On arbitration, other than changing the location, I would prefer to go
|
Response to Comments
|
Mary: After reviewing heir form of Guaranty, I would prefer that we use our multi-product form.
Their form is more suited to guarantees of debt.
If they insist on using our form , I would be happy to mark it up but the mark-up would be fairly substantial.
Let me know what you want to do.
Carol
|
Duke Guaranty
|
Brant: Just wanted to follow up with you on this.
Did you ever talk to the Counterparty about how we were going to treat the "Additional Amount" collateral that they posted?
Carol
|
chatauqua
|
Debra: Susan Flynn mentioned that you might be able to help me out on getting some Enron stuff for the kids that I teach Junior Achievement to at my son's school.
I have been trying to contact someone that would be willing to give this class some Enron freebies with no luck.
I think that Marge Nadasky was the last person that my secretary talked to.
Do you know of anyone that can help me out?
Carol
|
Misc
|
Steve and/or Rhett: We are trying to finalize an ISDA with the above counterparty which is a Bermuda company.
They made 1 tax comment to our Schedule.
Currently, they rep to us that Each payment received or to be received by them in connect with the Master Agreement will not be effectively connected with its conduct of a trade or business in the US.
They want to add the following to this rep: Each payment to be received by it in connection with the Master Agreement will be either foreign source income under the Code or portfolio interest within the meaning of Section 881(c) of the Code or gain derived from the cash settlement of an option.
Is this okay?
As my days are numbered here if there is any way that I could get some feedback on this this week that would be great so that at least I can respond to them.
Thanks.
Carol
|
Commercial Risk Reinsurance Company Limited
|
Luanne: I made a mistake on the language that we sent you on MAC.
On the last part where it talks about a failure to be rated, my understanding from our discussions is that a MAC would only be triggered if a party's credit support provider failed to be rated by either S&P or Moody's so that if it lost one rating but maintained the other rating a MAC would not be triggered.
For this reason the amendment should read ...or its Credit Support Provider shall fail to have a rating from either S&P or Moody's.
Please confirm that this is your understanding and sorry for the confusion.
|
MAC Language
|
Tana: As we discussed, here is my list of amendments that are according to my records in various stages of negotiation: 1.
Allegheny energy - Patricia Clark sent to Frank Davis her comments on June 15th by e-mail.
I responded on June 19th and have never heard back from her.
Most of her comments we could not accept.
None of her comments have been run by Dave.
2.
Imperial Oil - Grant Oh was handling this.
They had 3 comments.
most of which we could not accept.
I spoke with Grant about this around June 6th and have never heard back from him.
None of their proposed changes have been run by Dave.
3.
Kennecott Coal Sales Company - A draft amendment letter which Dave F. has approved was sent to them on May 15th.
My contact there is Jim Sobule Wayne Gresham is alos involved in this.
I have never heard back from Jim.
4.
Arco - We received by e-mail comments from David Dyck at Arco in March.
Tori Kuykendall and Grant Oh are involved from the Enron side.
I responded to David Dyck by e-mail on March 10th and have never heard anything further on this.
None of their comments or my response has been reviewed by Dave.
5.
Chevron - Canada - I received a letter from Bruce Borwick on January 31st which I responded to and have never heard anything further from them.
Dave has not reviewed their comments or my response.
6.
Cargill - I sent to Mike Pederson a form of amendment letter which I don't think has been signed.
They wanted a minor change to the confidentiality language.
Dave has not seen this but in the event that Cargill comes back to life, i doubt that he will have a problem with it.
7.
Cinergy - I sent a draft amendment letter which dave approved to John Dirheimer on May 15th.
To my knowledge it has not been signed.
8.
Duke Energy - I sent a draft amendment letter to John Puett on May 15th which Dave approved.
To my knowledge, it has not been signed.
9.
Talisman - we have been exchanging drafts of a revised ETA for months.
My contact there is Ann Love.
We are close to reaching agreement with them and mark has been involved in some of the early discussions.
I am sending to Dave a mark-up of the revised agreement for his approval.
All of the ETA amendment letters and the Talisman revised ETA are in my directory under specproj/online.
Carol
|
Status of Online Amendments
|
Here is my first cut at a proposed form of amendment.
I have added a rep and an additional Event of Default to cover the 'Lien" issue in light of the fact that Barrett's Credit Agreement restricts them from entering into any agreement that contains a negative pledge.
I winged the amendment to the Confirmations since I have not seen them yet.
Please call me with any comments.
Carol
|
Barrett Amendment
|
Russell: Here is a summary of the ownership chain of Global Companies LLC: 1.
Its members are Global Petroleum Corp. ("GPC"), YPF Distribution Company ("YPF") and Montello Oil Corporation ("Montello").
From what they sent to us, I could not tell the ownership percentages.
2.
The affairs of Global are managed by a "Board of Governors" who are selected by the members.
Specifically, GPC and Montello collectively get to choose 3 board members and YPF gets to choose 3 board members.
I your credit worksheet, you had specified as a "MAC" trigger if YPF, SA fails to own at least 51% of Global Companies.
Is this the same entity as YPF Distribution Company?
Do you want this as a MAC or as an Additional Event of Default or Termination Event?
Carol
|
Global Companies LLC
|
Susan and Samantha: We are in the process of completing a quarter end project called Project Margaux and have completed the Raptor II project.
With respect to Project Margaux, please coordinate with Mark Evans in London to get closing sets of documents.
With respect to Raptor II, I will leav a message with Alicia Curry at V&E to send you the closing sets.
I will leave with you my closing binder on Raptor I. Sara, It might not be a bad idea to meet with Brenda Funk in the next few weeks to get updated on all of the qaurter end delas.
Carol
|
Project Margaux and Raptor II
|
David: Mark and I were reviewing the Eligible Swap Participant rules and the following issue came up: If our counterparty is a limited partnership but our credit group is relying on the credit of the GP, do the rules require a written guaranty from the GP or is it enough to rely on the fact that under law the GP is jointly and severally liable for the LP's obligations?
One of our counterparties is a limited partnership whose GP is a utility and their counsel has advised us that for regulatory reasons, the GP cannot enter into a Guaranty.
I look forward to hearing from you.
Carol
|
ESP Question
|
Alicia: I'm assuming that I will be gone when the closing sets for raptor II are sent out.
Could you please send one set to Susan Bailey, a legal assistant in our group, so we have one for the swap files?
Susan's number is 853-4737.
Thanks.
|
Raptor II
|
Susan and Samantha: Who has inherited this file from Susan?
I have a mrk-up based on comments that I have been discussing with thier counsel that I need to give to someone.
Carol
|
Equitable LLC
|
Rod: I don't know if you are still handling this.
We are close to getting this finalized.
One credit comment from them that I need someone's thoughts on.
They want the Issuer of LC's to maintain a credit rating of A from S&P and A2 from Moody's.
We usually put A- and A3.
are you okay with this?
If I need to run this by someone else please let me know.
|
Deutsche Bank
|
Mr. Davis: Susan Flynn passed on to me your comments to the ISDA draft.
Please call me when you are ready to discuss.
With respect to the Guaranty amendment that we had requested, it is just meant to clarify in the termination section that if the Guaranty is terminated then the Guarantor is still responsible for all of the Counterparty's obligations with respect to any transactions that were entered into prior to the termination date, even if such obligations are incurred after the termination date.
I do not feel that the termination language, as currently written in both the WPS and Enron Guarantys clearly reflects this concept as the language as currently written states that the Guaranty "is revocable only with respect to liabilities occurring on or after the termination date."
I look forward to hearing from you.
|
ISDA Comments
|
Susan and Samantha: This is a file that apparently Shari worked on and Susan Flynn gave to me.
I have resolved the last tax issue and I will mark up the existing draft which then should be ready to sign.
There are some Guaranty issues that I need to take care of but in the meantime I will need one of you to revise the draft and coordinate getting it signed by the counterparty.
Carol
|
Commercial Risk Reinsurance Company Limited
|
Tana: I sent to Luke Mickum a new draft of the Engage US amendment.
He never did send me his comments.
The file with the new draft will be with the files near the window just in case.
He wants to resolve the US one before we resolve the Canada one.
Coastal is now going to Guaranty the US one.
I'm not yet sure if they will also Guaranty the Canada one so we might end up now with 2 separate guarantys.
I'll keep you posted.
Carol
|
Engage
|
Zulie: I am teaching a junior achievement course to a third grade class at my son's school.
I would like to reward these kids for the work that they have done and someone in my group mentioned that in some cases, Enron has something akin to a "goodie bag" that they give out to kids.
Would I be eligible for this?
I wasn't sure if I would and thought that at least it doesn't hurt to ask.
My extension is 33989.
Carol
|
Junior Achievement Class
|
Suzanne: Could you obtain a few of each of these for me or if they are available on-line let me know where?
We alos need to talk about getting my office ready for the move.
Please stop by when you can.
Thanks.
Carol
|
Other Forms we may need
|
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