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Enron Mail |
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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Mann, Kay </O=ENRON/OU=NA/CN=RECIPIENTS/CN=KMANN< X-To: Sager, Elizabeth </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Esager<, Portz, David </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Dportz< X-cc: X-bcc: X-Folder: \ESAGER (Non-Privileged)\Inbox X-Origin: SAGER-E X-FileName: ESAGER (Non-Privileged).pst As requested. -----Original Message----- From: Marissa L. Morelle [mailto:Marissa.Morelle@cwt.com] Sent: Friday, June 29, 2001 9:37 AM To: Mann, Kay Cc: David Mitchell Subject: Definitions of Eligible Contract Participant and EligibleCommercial Entity Pursuant to your telephone conversation with David Mitchell, please find below a description of the definitions of "eligible contract participant" ("ECP") and "eligible commercial entity" ("ECE") which appear in Sections 1a(11) and 1a(12), respectively, of the Commodity Exchange Act, as amended (the "Act"). We also have set forth certain additional representations and warranties which we believe EPMI should consider requesting from the Mississippi cities with which it will be doing business. Under the Act, with certain exceptions not here relevant, a municipality is an ECP only if it (i) is an ECE or (ii) owns and invests on a discretionary basis at least $25,000,000 or more in investments. Assuming that the Mississippi cities do not have a $25,000,000 investment portfolio, each will have to qualify as an ECE in order to be an ECP. In order for a municipal entity to be an ECE, it must, in connection with its business, (i) have a demonstrable ability, directly or through separate contractual arrangements, to make or take delivery of the underlying commodity; or (ii) incur risk, in addition to price risk, related to the commodity; or (iii) be a dealer. Thus, it would be prudent to obtain a representation from the municipality that it has the demonstrable ability to make or take delivery of the underlying commodity in the transaction. Additional representations that EPMI may want to request of each city are as follows: the city will engage in all Transactions as principal and accordingly, the city will determine the appropriateness for it of such Transactions and address any legal, tax or accounting considerations applicable to it; the city is knowledgeable of and experienced in the risks of entering into Transactions its engages in, is capable of evaluating the merits and risks of Transactions and is able to bear their economic risks; the person who is executing this Agreement on the city's behalf is duly authorized to sign this Agreement in the city's name; no advice furnished to the city by EPMI shall form a primary basis for any decision by the city; EPMI is not a fiduciary or adviser with respect to the city unless it has agreed otherwise in a written agreement under which EPMI receives compensation specifically identified as consideration for EPMI acting as a fiduciary or adviser; any trading recommendations and market or other information communicated to the city by EPMI are incidental to the conduct of EPMI's business as a dealer and do not constitute an offer to sell or the solicitation of an offer to buy any product; and/or such information provided by EPMI, although based upon information obtained from sources believed by EPMI to be reliable, may be incomplete, may not be verified, and may be changed without notice to the city. Please feel free to call David Mitchell (212-504-6285) or, in his absence, Marissa Morelle (212-504-6150) with any questions. ============================================================================== NOTE: The information in this email is confidential and may be legally privileged. If you are not the intended recipient, you must not read, use or disseminate the information. Although this email and any attachments are believed to be free of any virus or other defect that might affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by Cadwalader, Wickersham & Taft for any loss or damage arising in any way from its use. ==============================================================================
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