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Enron Mail |
Rhett:
Let me know what you think. carol ----- Forwarded by Carol St Clair/HOU/ECT on 05/25/2000 05:28 PM ----- steven.kessler@db.com 05/25/2000 05:10 PM To: Carol.St.Clair@enron.com cc: Subject: ISDA Schedule Hi Carol: Enclosed is redlined version of ISDA Schedule and CSA, marked against the July 7, 1999 version (please note that open items I left as is unless otherwise indicated). Also note that the Indemnifiable Tax clause is a head office policy issue--DB's position is that, in cross-border transactions, the Payee may not be in a position to learn of a Tax imposed due to a Change in Tax Law in the Payor's jurisdiction which is based upon the Payee's connection with the Payor's jurisdiction, no matter how tenuous that connection. In such a situation, the Tax would not be an IndemnifiableTax and therefore would not be grossed-up. Further, although such a change would be a Tax Event and therefore the Payee could terminate the Agreement upon learning of the Tax, the Payee, because of its inability to learn of the tax law change might not be able to terminate in a timely manner and would be precluded from choosing not to enter into the Transaction. The worse-case scenario would be a Transaction entered into shortly prior to the Change in Tax Law, in which case the Tax would not be grossed-up because it is not an Indemnifiable Tax, and the Payee could not terminate the Transaction because a Tax Event is triggered off of a Change in Tax Law occurring on or after the Transaction has been entered into. We think this risk is reciprocal in cross-border transactions. The Indemnifiable Tax revision simply shifts this incremental risk from the Payee to Payor. I can also provide alternative language whereby we maintain the same gross-up provisions as in the standard ISDA Master, but extend the "notice" period to sixty days prior to the date a Transaction is entered into (rather than on the date in which a Transaction is entered into), thus providing a window for learning of legislation in other jurisdictions. On other open issues, I believe you are to check on (i) CEUM, (ii) the Event of Default, (iii) Payment Netting, (iv) Securities Act Reps (v) Transfer language, and (vi) Arbitration. I need to review your comments on (i) the Guarantee and (ii) your new L/C Agreement. I look forward to hearing from you soon. Regards, Steve (See attached file: enron schedule.doc)(See attached file: ENRON PARAGRAPH 13.doc) - enron schedule.doc - ENRON PARAGRAPH 13.doc
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