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my thought was that if some of the capacity is unsold after 60 days, Mavrix=
has to pay TW 100 cents on the dollar, on an npv basis. I know that could= result in a double recovery if we then resell the space, but what the heck= !=20 -----Original Message----- From: =09Watson, Kimberly =20 Sent:=09Friday, August 03, 2001 2:22 PM To:=09Fossum, Drew Subject:=09RE: Mavrix: ATTORNEY CLIENT PRIVILEGE Drew, If TW cannot sell all of the Mavrix capacity within 60 days, then will TW t= hen take the financial risk after this time and not hold Mavrix responsible= for the difference? This may be OK as we may wish to re-sell the capacity = in different packages of time. KW. -----Original Message----- From: =09Fossum, Drew =20 Sent:=09Friday, August 03, 2001 11:57 AM To:=09Harris, Steven; Hartsoe, Joe; Miller, Mary Kay; Kilmer III, Robert; '= fkelly@gbmdc.com'; 'sstojic@gbmdc.com'; 'cmoore@akingump.com'; 'rnuschler@a= kingump.com'; Watson, Kimberly Cc:=09Hayslett, Rod; McCarty, Danny; Corman, Shelley Subject:=09Mavrix: ATTORNEY CLIENT PRIVILEGE Further to our discussions yesterday, attached is a draft letter agreement = under which Transwestern would agree to terminate the Mavrix transportation= contracts. Note that Mavrix is required to indemnify TW for any revenue s= hortfall if the turned back capacity is not purchased by another customer a= t the same or better rate within 60 days. I believe this approach allows T= W to accomodate Mavrix's request to terminate without TW taking any financi= al risk or exposing itself to requests from other shippers that TW release = them from their contract obligations without penalty. =20 Upon execution of the letter agreement, the capacity will be posted on the = TW bulletin board as generally available capacity. There is some chance th= at a customer interested in the capacity will want to know where it came fr= om. I would suggest that the appropriate and accurate explanation is that = "capacity becomes available from time to time for a variety of reasons inc= luding contract expirations or terminations, waivers or expirations of ROFR= rights, and contract MDQ stepdowns. Such capacity is posted on the EBB as= soon as Transwestern becomes aware of its availabity." If the questioning= customer wants to know who's space it was, I believe it is our consistent = policy to not disclose any information about any shipper's contract to any = other shipper and that policy should be followed here as well. Of course, = if the Commission's Market Monitoring group or other FERC personnel call, t= he confidentiality problem does not arise and the shipper's identity should= be disclosed. The explanation in that circumstance, if the caller wants m= ore detail, is that "Mavrix is an Enron affiliate that was in the business = of trading interstate pipeline capacity but is winding down its business an= d terminating its contracts. Transwestern has agreed to contract terminati= on subject to an indemnity or "keep whole" mechanism."=20 I'm including the legal team on this distribution as an FYI. I will follow= up on this later today. DF=20 << File: Mavrix Termination.doc <<
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