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Enron Mail |
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<<Collateral Trust and Security Agr ver 1.doc<<
I received Gerald's voice mail last night that El Paso cannot handle an agency agreement wherein Enron would be our agent for the limited purpose of exercising the recall right on only three of the capacity packages. Although I find this disappointing, we obviously need to address this development. We think the proper approach is to retain the firm recallable release structure we developed. That creates a present release into Enron's hands of the contracts, which was Barry's stated desire. We would retain a recall right BUT we could only exercise it in accordance with the Support Agreement (e.g., monthly, so long as not in default). We understand that you might want some further assurance that we would not misuse that right. To that end, I have resuscitated the Collateral Trust and Security Agreement. In other words, we would give you a first priority lien on the applicable transportation packages so that if we improperly recalled the capacity (which we of course would not), you would still be the senior secured party on the capacity and be entitled to exercise your remedies of foreclosure. Moreover, as Lisa and I discussed when we first considered the security interest, this security interest would be exempted from the automatic stay in accordance with Section 362(b)(17) of the Bankruptcy Code and thus you would be in a position to exercise your lien notwithstanding even the meltdown scenario of a bankruptcy. Please respond at youre earliest convenience. Peter PG&E National Energy Group and any other company referenced herein that uses the PG&E name or logo are not the same company as Pacific Gas and Electric Company, the regulated California utility. Neither PG&E National Energy Group nor these other referenced companies are regulated by the California Public Utilities Commission. Customers of Pacific Gas and Electric Company do not have to buy products from these companies in order to continue to receive quality regulated services from the utility. - Collateral Trust and Security Agr ver 1.doc
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