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Enron Mail |
Bob -
My initial response is that the amendment can be provided. I am not sure, however, that we satisfy the rationale behind the collateral/lc by doing this. Remember, until the counterparty actually confirms with Enron (or performs the transaction), Enron does not maintain any direct contractual relationship with the Counterparty. All Enron has is a confirmation from the broker, the party with whom we have contracted through the BrokerClient product. In this situation, both the broker and Enron are really in the same position as if the transaction were a telephone trade by a broker. I will give this a bit more thought and discuss possible options with Mark. Maybe it is as simple as obtaining a document from the counterparty under which they acknowledge (1) the broker is authorized to act on its behalf, (2) the relationship is truly one of agent and principal such that the actions of the broker (e.g., transacting online) are really the actions of the counterparty and (3) the counterparty agrees to be liable to Enron as if the counterparty had, itself, performed the transaction online. The last point could be used to tie any breach of a transaction to the master agreement/GTC's between Enron and the counterparty - the same method that is currently employed to calculate the Liquidated Damages under the BETA. Let's talk further next week after I have discussed this with Mark. Mark Senior Counsel, ENA Phone: 713-345-8897 Facsimile: 713-646-3940 E-Mail: Mark.Greenberg@enron.com Bob Shults@ECT 04/06/2001 03:59 PM To: Mark Greenberg cc: Subject: Broker Client Andy and I have worked to come up with a way to give the Brokers a greater incentive to execute via Broker Client. To date we have only had 7 executions. 4 out of the 5 Brokers have not even given us security yet and are therefore not able to execute. What we would like to do is draft an amendment that would have the brokers warrant that they have confirmed with the counterparty. We will be willing to free them from responsibility under the liquidated damages (assuming no fraud, misrepresentation...) once they have confirmed each day. We would expect them in return that the broker use all means possible to help us get the counterparty to perform. Andy would like me to implement this by April 15th. Can you draft an amendment to do this.
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