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Enron Mail |
Harlan E. Murphy Enron Wholesale Services - Legal 1400 Smith Street, EB 3811 Houston, Texas 77002 Tel: 713.345.2679 Fax: 713.646.3490 E-mail: Harlan.Murphy@Enron.com -----Original Message----- From: "David C Rosen" <drosen@cgsh.com<@ENRON Sent: Monday, November 19, 2001 3:26 PM To: Murphy, Harlan Cc: shaun.pacious@americas.bnpparibas.com; john.powers@americas.bnpparibas.com; Lech.Kalembka@cwt.com; Seth GROSSHANDLER Subject: Enron-BNPP Master Netting, Setoff and Security Agreement Dear Harlan: The comments below are in addition to, and should be read with, the hand mark-up we faxed to you on Friday. Notwithstanding that these comments remain subject to the resolution of the business issues, we hope to close out as many outstanding items as possible to expedite the final execution of the agreement. Please feel free to call me at (212) 572-5398 if you have any questions. Yours truly, David Rosen Not yet admitted to the bar Temporary Location Information: Cleary Gottlieb Steen & Hamilton 153 E. 53rd Street (Citigroup Center) 38th Floor New York, NY 10022 Phone: (212) 572-5398 Voicemail: (212) 572-5202 x2532 Mobile: (646) 479-3283 Fax: (212) 572-5399 Email: drosen@cgsh.com; dcrosen@home.com 1. Replace Paragraph 1 with: This Master Netting, Setoff, and Security Agreement (this "Agreement") is made and entered into effective as of November [ ], 2001 by and among BNP Paribas (including all branches and agencies thereof, "BNPP"), BNP Paribas Commodity Futures Inc. ("PFI") and BNP Paribas Commodity Futures Limited ("BNPPCML"), and Enron Corp. ("Enron"), Enron North America Corp. ("ENA"), Enron Power Marketing, Inc. ("EPMI"), Enron Risk Management and Trading International Corp. ("ERMTIC"), Enron Capital & Trade Resources International Corp. ("ECTRIC"), Enron Credit Limited ("ECL"), Enron Metals Limited ("EML") and Enron Capital & Trade Resources Limited ("ECTD"). 2. Change definition of BNPP Party to "means each of BNPP, PFI and BNPPCML." 3. Change definition of Enron Party to " means each of Enron, ENA, EPMI, ECTRIC, ERMTIC, ECL, EML and ECTD." 4. In the definition of Transaction, insert before the word "between" "(i)" and add at the end the following: or (ii) held at a contract market, exchange, board of trade or clearing organization by any Party on behalf of a member of the other Group pursuant to an Underlying Master Agreement. 5. In Section 2(b), in (i), replace the phrase "all Transactions under one or more Underlying Master Agreements" with "each Transaction". 6. In Section 2(b), at the end of (ii) and (v) before the semi-colon, insert the following: , under any other agreement or under applicable law or equity, whether in respect of the Transactions thereunder, or otherwise 7. In Section 2(b), at the end of (iii), after "applicable law", insert "or equity" 8. In Section 4, in the third sentence, after the words "from whom such payment is due" insert the following: to such Party or Parties as the Non-defaulting Group determines are entitled to such payment 9. In Section 7(b), in each of the forth and the twelfth lines between the words "hereby" and "grants", insert "except as provided in the next sentence" and in each of the ninth and the sixteenth lines replace the text beginning "Obligations, " until the end of each sentence with: Obligations. Without limiting the rights referred to in Section 5, the security interest granted in the immediately preceding sentence shall not apply to the Final Settlement Amount. 10. At the beginning of Sections 7© and 7(e), insert the words "Subject to Section 3,". 11. In Section 15(b), following the words "on the basis of a payment owed", insert the words "(including margin)". 12. With respect to Section 17, our client has indicated that it would not be useful or efficient to have the issue of arbitration (which is clearly not central to the risk reducing purposes of the arrangements) mixed up with the proposed agreement, which has arisen from the circumstances of Enron that have developed over the last few months. BNP Paribas' primary reason for not wanting to include an arbitration clause (even with the suggested language changes) is that, although the concept of arbitration is being considered generally, BNP Paribas has, of yet, not made any definitive decisions as to the implicit or necessary value of arbitration clauses and such a decision would require significant internal review and discussion. Over the next few months, further consideration can be given as to including arbitration in this agreement. 13. Please note that BNP Paribas contemplates at least one long-form confirmation as an Underlying Master Agreement. This message is being sent from a law firm and may contain information which is confidential or privileged. If you are not the intended recipient, please advise the sender immediately by reply e-mail and delete this message and any attachments without retaining a copy.
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