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Enron Mail |
Hey Russell (as well as Dan and Debra),
Pursuant to our conversation of this morning, I just want to confirm the following. 1. We have agreed that we will use separate guarantees (for the obligations of Engage Energy Canada, L.P. ("Engage Canada")) with respect to each of Enron Canada Corp. ("ECC") and Enron North America Corp. ("ENA"). This will allow for the appropriate guarantees to reference the peculiarities of each of Canadian and American law (as applicable) as well as deal with the potential "permanent establishment" tax issues we discussed. As a result, Dan does not need to review the draft guarantee I sent to him on Wednesday. 2. You are going to send me a revised credit sheet for the ECC-Engage Canada master physical agreement which removes references to the obligations of Engage Canada to ENA (likely requiring a guarantee of Westcoast Gas Inc. (on behalf of Engage Canada) to ECC in the amount of US$15million (the "New ECC Guarantee"). 3. Dan is to coordinate negotiating/obtaining a new guarantee from Westcoast Gas Inc. (on behalf of Engage Canada) to ENA in the amount of US$5 million (pursuant to the master physical agreement between Engage Canada and ENA). 4. I am still not sure what we are doing with respect to the "Enron Corp." guarantee which was provided to Engage Canada and Engage Energy US, L.P. ("Engage US") in the amount of US$35million (which guarantees the obligations of ENA, EPMI and ECC) (the "Existing Enron Corp. Guarantee"). According to the credit sheet last provided to me, Enron Corp. is to provide a guarantee in the amount of US$25million but you were going to check to see if we were leaving the Existing Enron Corp. Guarantee in place. If we are replacing/amending the Existing Enron Corp. Guarantee, we need to coordinate with counsel from all three of ENA, EPMI and ECC to ensure that we are properly revoking the Existing Enron Corp. Guarantee or amending it appropriately. Ultimately, I would prefer that the Existing Enron Guarantee be amended to remove the references to ECC such that we can arrange for a separate Enron Corp guarantee on behalf of ECC. This would allow for greater flexibility/efficiency in the event that the industry or trading relationship between ECC and Engage Canada develops and future amendments are required. Please let me know how you would like me to proceed with respect to point 4. Thanks, Mark Powell To: Mark Powell/CAL/ECT@ECT cc: Dan J Hyvl/HOU/ECT@ECT, Debra Perlingiere/HOU/ECT@ECT Subject: Re: Engage Energy Canada L.P. Guarantee Mark, The guaranty you are providing to Engage Energy Canada should cover both ECC and ENA although should only reference the Master Firm Contract between ECC and Engage Canada. Dan has been working on a separate guaranty that will reference the Master Contract between ENA and Engage US that is currently being drafted. The reason ENA is included on the guaranty for Engage Canada is because of business done at Dawn in Eastern Canada through ENA. If you and Dan want to issue one guaranty to Engage US and Engage Canada referencing both contracts I think that would be a good idea, the guaranty amount should be between $45MM and $50MM and include several Enron entities: ENA, HPL, EPMI (referencing the Master Energy agreement), Clinton Energy Management Services, Inc and ECC. Let's discuss further in the morning as to how about resolving this. Thanks Russell From: Mark Powell\CAL\ECT 09/20/2000 02:53 PM Sent by: Mark Powell To: Dan J Hyvl/HOU/ECT@ECT cc: Russell Diamond/HOU/ECT@ECT Subject: Engage Energy Canada L.P. Guarantee In furtherance of the message which I left for you, please find attached a copy of a replacement guarantee for your review. As you are aware, Enron is currently in the process of amending a number of guarantees with respect to various Engage Energy entities. Under the project, the US$25 million guarantee provided to Enron Corp. and its subsidiaries to guarantee the obligations of Engage Energy Canada L.P. and Engage Energy US L.P. ,as provided by The Coastal Corp. (the "Existing Guarantee"), is to be replaced with a number of guarantees which are segmented by the Engage Energy entities and the type of contract (i.e. physical v. financial). As part of this project, Russell Diamond has provided Enron Canada Corp. with revised credit terms for dealing with Engage Energy Canada, L.P. under which Westcoast Gas Inc. is to provide a US$20million guarantee of the obligations of Engage Energy Canada L.P. under the existing master physical gas purchase/sale agreement between the Engage Energy Canada L.P. and Enron Canada Corp. (the "ECC Physical Master") as well as the master physical gas purchase/sale agreement between Engage Energy Canada L.P. and Enron North America Corp. (the "ENA Physical Master"). Russell had allocated US$15 million of the replacement guarantee to the ECC Physical Master and US$5million to the ENA Physical Master. Due to other inadequacies in the ECC Physical Master, we have prepared an "Amended and Restated" ECC Physical Master which includes a number of significant terms in addition to referring to the replacement guarantee (which we are quite eager to have Engage execute). As a result, I have prepared a draft of replacement guarantee (to be received from Westcoast Gas Inc.) to accompany the Amended and Restated ECC Physical Master. However, to ensure that the replacement guarantee meets your requirements, I am looking for your input. Please find attached a copy of the draft replacement guarantee as blacklined to indicate the changes which have been made to the Enron Canada Corp. standard guarantee to incorporate the obligations owing to Enron North America Corp. As you will see, there are a few bullets for which I require your assistance in completing (i.e. date the of ENA Physical Master and the appropriate contact information for notices). When you get the opportunity, could you please review the blacklined replacement guarantee? Once again, we are quite eager to send out the Amended and Restated ECC Physical Master. Thanks for your help. Mark Powell ((403) 974-6708) Note to Russell: Russell, you were going to confirm for me that the existing Enron Corp. guarantee delivered to Engage Energy Canada L.P. and Engage Energy US L.P. to secure the obligations of Enron Canada Corp., Enron North America Corp. and Enron Power Marketing, Inc. (in the amount of $35 million) dated June 1, 1998 is NOT to be replaced. Has there been any progress on this front?
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