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Enron Mail |
Pls see email from IBJ with my comments in red. I look forward to receivin=
g=20 your respective input where indicted. Thanks heaps to both of you. Jane McBride I am also attaching my memorandum to them. =20 ----- Forwarded by Jane McBride/AP/Enron on 11/09/2000 03:34 PM ----- =09"Teruyo Suzuki" <teruyo.suzuki@ibjbank.co.jp< =0911/08/2000 08:49 PM =09=09=20 =09=09 To: <Jane.McBride@enron.com< =09=09 cc: "Yamato Konishi" <yamato.konishi@ibjbank.co.jp< =09=09 Subject: Re: Fw: IBJ ISDA MASTER AGREEMENT Dear Jane, Reviewing your comments, our current position is as follows. Part 1 (b) US$50,000,000 Basically our company=10_fs guideline for the Threshold Amount is US$1,000,= 000 but it seems very small for significant customers and we can change it to US$10,000,000. As this amount is usually agreed in the Master Agreement with major commercial banks, we hope this is acceptable to you, too. John - is there any way we can accept this? I think it is going to be=20 difficult to get them to agree so, if you still can't accept it, is there a= ny=20 way you can agree to the 10 million limit if at the same time something els= e=20 is changed? (g) As for (1), we would like to add =10_gthe obligations of such resultin= g, surviving, or transferee entity hereunder are guaranteed by Enron Corp.=10_= h in=20 5th line after =10_gEnron Corp.=10_h IBJ could accept to continue the Transactions = with the counterparty when it merges with the other company and becomes materially weaker if the surviving company is guaranteed by Enron Corp. Sara - Do you think we can accept this? We would not be agreeing necessaril= y=20 to give a corporate guarantee, but instead would have the option of putting= =20 one in place to avoid a default. If the concept is OK on your side, I thin= k=20 we should add "hereunder" as indicted above or something to restrict the=20 obligations which need to be guaranteed. Sara, I would also like to add a ")" after "party" at the end of line 4 of= =20 paragraph (g) of Part 1 of the Schedule. OK? =20 Regarding (2), please delete it because it refers to Credit Support Annex which we are not going to enter into for the time being Sara - the question is whether we just delete the language or replace it wi= th=20 something else. The second option would be better and given the discretion= Y=20 would have in this situation IBJ should not object provided the drafting=20 works. Do you have any ideas of anything which would work within the=20 framework of the rest of the schedule and the master? The final sentence= =20 should go anyway I guess.=20 John - I guess you may need to consider above with Sara. (h) Agreed. (k) Agreed. Part 3 Regarding further document for certification, we can include the following language. =10_gAny certificate or document reasonably requested by the other party evidencing or certifying that the execution, delivery and performance of this Agreement by the party requested has been duly authorized=10_h I think this sounds OK. As for annual report, we will revert to you. John - As you can see from my memo, as a starting point, I have asked them = to=20 tell us what they have available re financials and will revert when I hear= =20 back from them to see what you think. Part 4 (a) Agreed. (f) Even if there are 20 Transactions between us which settle on the same day, our operation can not net the payment of the same currency. Our syste= m does not allow the payment netting of more than one Transaction. John - They want to delete "not" from this provision. I think we need to= =20 assume that they are telling us the truth and that they just can't do it. = =20 The question is then, do we delete "not" or do we delete the entire paragra= ph=20 (f) from Part 4 of the schedule. Pls let me know what you want to=20 do.' =20 (h) New York Branch address 1251 Avenue of The Americas, New York, NY 10020, U.S.A. Part 5 (a) When an option buyer who fully paid the premium goes bankrupt, we believe it will be more practicable that the other party (option seller) terminate a transaction according to Section 6(a) and pay the amount payabl= e under Section 6(e), if any, to the option buyer. If option seller does not terminate the transaction, it sounds unnatural that the option seller pay the remaining payment on each payment date to the receiver of the defaulting party (option buyer). =10_@We do not usually include the safety = net provision for a technical default. Even if payment default due to operational error, there is ample (three days) grace period for nonpayment party after receiving the notice of non-payment by the other party. Sara - what do you think, how flexible do you think we can be on this? =20 (e) Agreed. (g) I understand the benefit that non-defaulting party could setoff its Affiliate=10_fs obligation against defaulting party=10_fs obligation. Bu= t in Japan only setoff between the parties who entered into the Agreement is allowed. If you know the case that in any country an applicable law permits to setoff the amount owed by the non-defaulting party=10_fs Affilia= te against the amount owed by the defaulting party, please let us know. Sara - any comments? I am checking whether what they saying about Japanese= =20 law is true. (h) As we should also obtain our Credit Department=10_fs approval of cred= it line for the transferee before agreeing the transfer, we would like to insert the following words at the end of a new Section 7©. =10_gAnd provided, further, that the transferring party has notified non-transferring party of the proposed transfer and the non-transferring party has not objected to the proposed transfer within 20 days of such notification, it being understood that the sole grounds for objection shall be the non-transferring party=10_fs good faith belief that the proposed transfer would give rise to an adverse tax, regulatory or, legal or interna= l credit policy consequences or material credit concerns to the non-transferring party, or that necessary internal credit approval has not been granted=10_h Sara - As noted in my memo to them, I had thought we may be willing to add = to=20 the end of this paragraph "and provided that the transfer does not cause an= y=20 adverse tax consequences for the other party in relation to which the=20 transferring party is not willing to indemnify the other party." They have= =20 asked us to go far further than this now and I am not sure that we should b= e=20 willing to agree to anything after "legal" in line 6 given that the guarant= ee=20 provision should give their credit department comfort. =20 Part 6 We can accept (a), (b) and (e) but cannot agree with ©,(d),(f),(g) and (h). Sara - your thoughts? =20 If you have any question or uncertainty about the above items, please let me know. Thank you for your assistance in this matter. Teruyo Suzuki Industrial Bank of Japan 813-3214-3872 813-5200-7427
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