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Enron Mail |
Just so you know what may be coming, I have spent roughly half of my time in
the office over the last six weeks negotiating these sorts of requests. It is very time consuming. My comments below in red. Best of luck and feel free to call with any issues. Mark Louise Kitchen 01/17/2000 02:25 PM To: Mark Taylor/HOU/ECT@ECT cc: Justin Boyd/LON/ECT@ECT, David Forster/LON/ECT@ECT Subject: Eastern - Summary of their Response to PA/ETA Please deal with this for me - but my initial thoughts are that we cannot address the majority of these. Thanks ---------------------- Forwarded by Louise Kitchen/LON/ECT on 01/17/2000 08:22 PM --------------------------- David Forster 01/14/2000 06:43 PM To: Louise Kitchen/LON/ECT@ECT cc: Subject: Eastern - Summary of their Response to PA/ETA I'm running out of time - can you handle? Thanks, Dave ---------------------- Forwarded by David Forster/LON/ECT on 14/01/2000 18:41 --------------------------- Justin Boyd 14/01/2000 11:36 To: David Forster/LON/ECT@ECT cc: Edmund Cooper/LON/ECT@ECT Subject: Eastern - Summary of their Response to PA/ETA PA They wish to amend the PA such that: Enron warrants that their use of the passwords and the Website does not cause them to breach any third party rights Does this mean that Enron's use does not violate third party rights or Eastern's? This doesn't really make sense to me: if it is Enron's use then that's our problem and I don't see Eastern's concern and if it is Eastern's use that should be their problem, not ours - how will we know what arrangements they have in place with third parties? No one else has raised this issue - is this something that is particularly of concern in the UK? they only notify us of unauthorised disclosure or use of passwords upon their learning of the same. When they notify us is not an issue - as long as they understand that they will be liable for anything that happens with their passwords - whether authorized or not. they can withdraw or amend information provided to Enron from time to time What is there in the PA that would prevent them from telling us about changed information? ETA They do not want to be bound by future terms and conditions imposed by Enron (see 1(iii)) This language refers to a variety of language on the site - including things like the submission screen, the Mater User's abilities to restrict sub-user id's, the long descriptions, etc. It is simply not possible to create a list of every single item on the website that controls how the site is used and contracts are created. This is one they will just have to live with. They have to give their traders the credit to read what they are doing and if they don't like it they can stop trading. They wish to restrict our use of information to Enron Group companies (see last sentence of 2(b)) I think 2(b) already limits our use of the information to "Enron" which is defined pretty much as Enron and its affiliates. Are they asking for more than that? You can point them to section 5 which severely limits what we can do with confidential information. They feel unable to make the statement in the first sentence of 2(d), since they trade through various group company agents on behalf of a BV principal EOL is not set up to allow one entity to trade on behalf of another. How would we ever know who our counterparty really was? If they want to trade for several counterparties, they need to fill out a separate PA (and separately click on the ETA) for each legal entity. They should subsequently restrict the sub-user id's for each of those entities to trade only the products appropriate to that entity. To establish a tangible audit trail and for verification, they wish to be able to verify our paper confirms (see 3(e)) We have agreed that we will continue to furnish confirmations where we have a master agreement in place that calls for us to send confirms. I've had a number of counterparties ask for this and have explained that even when there is not a master in place, in most cases we intend to continue to send confirms. In fact, it is our intention (and the instructions you and I have received from Louise in no uncertain terms) that the trading should look as close as possible to its current form. That includes contractual terms and the sending of confirms. Having said all that, the commercial people look forward with fondness to a time when confirms will become electronic and therefore this language was put in the ETA. I would be surprised if, should we ever reach such a time, we would refuse to send confirms to those counterparties stuck in the dark ages of "blue ink on dead trees." Given the frequency with which this on comes up, I wonder if future versions of the ETA should omit the offending language. They wish to restructure the indemnity entirely (see 4), such that each party is liable for losses suffered by the other due to its own wilful default/negligence/omission. This strikes me as a non-starter. The best we can do is to exclude damage we suffer by reason of our own gross negligence, fraud or willful misconduct. If they want to be without risk, they can continue to use the phone. They wish to have the right to terminate the ETA (see 6(a)), and wish that electronic notices be deemed sent when the sender receives notice from the system of delivery or failed delivery (see 6(e)). They can stop trading at any time and do not need to terminate the agreement. We have agreed on rare occasions that we will deactivate their password if we receive written notice from them requesting deactivation. I have suggested that they might feel more comfortable giving the Mater User ID and password to someone in their control group so that they don't have to worry about the trader leaving and taking the important password along. The Master User can always turn off a sub-user immediately. I'm uncomfortable with the delivery issue since I usually don't get "notice from the system of delivery" when I send an e-mail. Even if return receipts were always used, I don't know that they always work and I wouldn't want the counterparty to be able to prevent our giving notice simply by refusing to open our e-mails. Certainly no one would successfully assert that an e-mail notice was effective unless properly addressed. On the other hand, to be practical, if the issue is critical, we will not be relying on an e-mail notification in any event and I can understand their concern that someone might be on holiday when the e-mail is received - not as big an issue with a fax or letter that can be easily opened by someone else. Some of these are more important than others, but there are some key points. Please let me know what you think - thanks In some cases you just have to wait these guys out. I know the traders are anxious to get people online and trading, but remember that the same is true on the other side. Luckily for us, Louise is willing to back us up on this and tell our counterparties to just sit back and watch the rest of the world get the good prices if they don't like our agreements. In several cases, counterparties who have called with difficult legal departments like this ultimately just went ahead and clicked on the thing to start trading. Justin
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