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Enron Mail |
If the PA and ETA are still structured as they were when I last saw them, the
PA (which will be manually signed) binds the counterparty to the ETA and the ETA says that transactions will be governed by a master agreement, if any, or GTCs, if no master. Assuming that is still the case, it seems to me that a letter sent to the counterparty, but not signed by it, will likely not override the PA and ETA already agreed to. This seems particularly problematic if the reason for trying to override the ETA is to take advantage of better credit terms in the GTCs. It seems to me that we would be better off either changing the ETA or supplementing it on-line; that way, we would at least have a click agreement, which the counterparty has agreed to be bound by. Perhaps we should discuss further. Thanks. <<< "Mark Taylor" <mtaylo1@ect.enron.com< 10/21 11:34 AM <<< This issue comes up when the Credit Group is not happy with the credit provisions built into the already executed Master Agreement - they want the ability to use the GTC with the credit provisions that allow us to call for a letter of credit whenever we want to instead of having the online trade governed by the master (as provided for automatically in the ETA). What do you think about Edmund's solution? Mark ---------------------- Forwarded by Mark Taylor/HOU/ECT on 10/21/99 10:29 AM --------------------------- Edmund Cooper 10/20/99 12:08 PM To: Jeffrey T Hodge/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT cc: Leslie Hansen/HOU/ECT@ECT, David Forster/LON/ECT@ECT, Amita Gosalia/LON/ECT@ECT, Justin Boyd/LON/ECT@ECT Subject: Online Trading - GTC/Master variation Dear Jeff and Mark, Justin and I have been discussing the way we should approach variation of the ETA in respect of counterparties with whom we have an existing master agreement, but for whom we want to have transactions governed by the applicable GTC for the product in question. The initial plan was to issue a letter to the counterparty asking it to sign and return a letter agreement which would vary the provision of ETA which states that a master agreement will govern all transactions. We have now reformulated our position and drafted a letter (attached below) which will simply be sent to the relevant counterparty, but which will not require it to sign and return any documents. We believe that this letter will provide for an effective variation of the ETA by stating that the counterparty's acceptance of the GTC on the EOL system will mean that that GTC will govern transactions, and not the master agreement. We do not think that we need to make an explicit reference to the ETA. Obviously for this to work, such counterparty will have to be presented with the 'Accept GTC' button at the usual juncture in the system. In addition, we thought it best to remove an explantory paragraph stating that we will be writing to the counterparty at a future date to revise the credit provisions of the master (the whole reason for having the counterparty accept the GTC over the master!!). Obviously we welcome your thoughts on this issue and the attached draft. I also presume you will need to take a view as to whether varying the ETA in this way will be effective under New York law. Best regards, Edmund. (See attached file: EOL variation letter.doc) ------------------------------------------------------------------------------ This e-mail is sent by a law firm and contains information that may be privileged and confidential. If you are not the intended recipient, please delete the e-mail and notify us immediately.
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