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Enron Mail |
We can not agree to even present to senior management the increase in advance rate to 50% from 30% on the utility billed AR. The changes in the Eligible Accounts language has to do with the aggregation of the NewPower AR from it's customers, which the utility purchases. Thus the many customer receivables are replaced by one large utility receivable. I would appreciate legal comments with this and elsewhere.
As I had send in my e-mail message to Todd Hermanson last Saturday, and repeated again on the telephone on Wednesday, these terms have not been approved in accordance with Enron Corp's Transaction Approval Process. Any communication should clearly state this. -----Original Message----- From: Marc.Manly@NewPower.com [mailto:Marc.Manly@NewPower.com] Sent: Friday, October 12, 2001 6:07 PM To: Eickenroht, Robert; Mellencamp, Lisa Cc: david.burns@bakerbotts.com; Tribolet, Michael; Bradford, William S.; Nettelton, Marcus; elizabeth.guffy@bakerbotts.com; joseph.cialone@bakerbotts.com; wesley.shields@bakerbotts.com Subject: Amendment to Master Credit Agreement Lisa and Robert: I attach a revised (new draft from NewPower) version of the Amendment and General Security Agreement, together with a blacklined version of this redraft against the last document we received from you. Our changes, which we have not had the opportunity to discuss directly with you, include the following: a revision of the security interest from a general lien to a lien on all receivables and inventory only, and an increase in the October cap from $20 to $25 million (which I understand were agreed between Cronin and Tribolet); a revision in the definition of Eligible Accounts to reflect receivables purchase arrangements with certain utilities (which I understand was agreed between Hermanson and Tribolet); a proposed revision in the advance factor for utility billed receivables from 30% to 50% (which has not been agreed but is our proposed fix to give us comfort that the Eligible Accounts get us up to the $25 million and $40 million limits) and certain other changes to correct typos or to clarify certain points as to which I believe we are in agreement. Notably, this draft contains no provisions that would protect NewPower against the risk of losing surety collateral, or the risk of commodity price declines that would require the posting of additional collateral. As to the latter risk, my clients and yours have been exploring swaps and other arrangements that we may employ to mitigate that risk. I also attach copies of proposed resolutions for the Business Review Committee and the Board of Directors in connection with these documents. On the assumption that these documents are acceptable, we have scheduled a meeting of the Business Review Committee for this upcoming Tuesday afternoon (we could not get a quorum any time today or Monday) and assuming a positive recommendation by the BRC, immediately thereafter we would schedule a telephone Board Meeting for all necessary approvals, at which point the documents could be executed and an 8-K disclosure filed. Marc E. Manly (See attached file: 2ndamend-NPW-101201-clean.doc)(See attached file: 2ndamend-NPW-101201-blk.doc)(See attached file: secagmt-NPW-101201-clean.doc)(See attached file: secagmt-NPW-101201-blk.doc)(See attached file: BRC Report.doc)(See attached file: BRC resolutions.doc)
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