Message-ID: <5054391.1075852326095.JavaMail.evans@thyme> Date: Wed, 17 Oct 2001 11:25:42 -0700 (PDT) From: debra.perlingiere@enron.com To: gerald.nemec@enron.com Subject: Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Perlingiere, Debra X-To: Nemec, Gerald X-cc: X-bcc: X-Folder: \GNEMEC (Non-Privileged)\Inbox X-Origin: NEMEC-G X-FileName: GNEMEC (Non-Privileged).pst 4.5. Termination Offset. Upon the designation or deemed designation of an= Early Termination Date, the Notifying Party may, at its option and in its = discretion, setoff, against any amounts Owed to the Affected Party by the N= otifying Party or any Affiliate of the Notifying Party under this Agreement= or under any other agreement(s), instrument(s) or undertaking(s), any amou= nts Owed by the Affected Party to the Notifying Party or any of the Notifyi= ng Party's Affiliates under this Agreement or under any other agreement(s),= instrument(s) or undertaking(s). The obligations of the Affected Party an= d the Notifying Party under this Agreement in respect of such amounts shall= be deemed satisfied and discharged to the extent of any such setoff exerci= sed by the Notifying Party and/or the Notifying Party's Affiliates. The No= tifying Party will give the Affected Party notice of any setoff effected un= der this section as soon as practicable after the setoff is effected provid= ed that failure to give such notice shall not affect the validity of the se= toff. For purposes of this Section 4.5, "Owed" shall mean any amounts owed= or otherwise accrued and payable (regardless of whether such amounts have = been or could be invoiced) as of the Early Termination Date. Amounts subje= ct to the setoff permitted in this Section 4.5 may be converted by the Noti= fying Party into any currency in which any obligation Owed is denominated a= t the rate of exchange at which the Notifying Party, acting in a reasonable= manner and in good faith, would be able to purchase the relevant amount of= the currency being converted. If an obligation is unascertained, the Noti= fying Party may in good faith estimate that obligation and setoff in respec= t of the estimate, subject to the relevant party accounting to the other wh= en the obligation is ascertained. Nothing in this Section 4.5 shall be eff= ective to create a charge or other security interest except as may be provi= ded under applicable law. This setoff provision shall be without prejudice= and in addition to any right of setoff, netting, off-set, combination of a= ccounts, counterclaim, lien or other right to which any party is at any tim= e otherwise entitled (whether by operation of law, contract or otherwise). = Each of the parties represent and acknowledge that the rights set forth in= this Section 4.5 are an integral part of the agreement between the parties= and that without such rights the parties would not be willing to enter int= o Transactions. The parties further acknowledge that each is executing thi= s Agreement on behalf of itself as principal and, with respect to this Sect= ion 4.5, as agent on behalf of its Affiliates, which Affiliates shall recei= ve the benefits of this Section 4.5 and otherwise be bound as if such Affil= iates had entered into this Agreement as its relates to Section 4.5. Notwi= thstanding any provision to the contrary contained in this Agreement, the N= otifying Party shall not be required to pay to the Affected Party any amoun= t under Section 4.5 until the Notifying Party receives confirmation satisfa= ctory to it in its reasonable discretion (which may include an opinion of i= ts counsel) that all other obligations of any kind whatsoever of the Affect= ed Party to make any payments to the Notifying Party or any of its Affiliat= es under this Agreement or under any other agreement(s), instrument(s) or u= ndertaking(s), which are Owed as of the Early Termination Date have been fu= lly and finally satisfied. Debra Perlingiere Enron North America Legal 1400 Smith Street, EB 3885 Houston, Texas 77002 dperlin@enron 713-853-7658 713-646-3490 Fax