Message-ID: <4024634.1075842813551.JavaMail.evans@thyme>
Date: Fri, 20 Apr 2001 08:28:00 -0700 (PDT)
From: christian.yoder@enron.com
To: gerald.nemec@enron.com
Subject: Re: Setoff Language
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X-From: Christian Yoder
X-To: Gerald Nemec
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Your clause is not as finely tuned as it could be, but it is difficult to=
=20
give you exactly the precise wording to make it more finely tuned because i=
t=20
exists in a context of a number of related provisions in the Master=20
Agreement.  Here is how I would ultimately like to see the clause work:

After calculation of a Termination Payment in accordance with Section ___, =
if=20
the Defaulting Party would be owed the Termination Payment, the=20
Non-Defaulting Party shall be entitled, at its option and in its discretion=
,=20
to (i) set off against such Termination Payment any amounts due and owing b=
y=20
the Defaulting Party or any of its Affiliates to the Non-Defaulting Party o=
r=20
any of its Affiliates under any other natural gas, energy or other commodit=
y=20
or financial agreements, instruments or undertakings  between the Defaultin=
g=20
Party or any of its Affiliates and the Non-Defaulting Party or any of its=
=20
Affiliates and/or (ii) to the extent the Transactions are not yet liquidate=
d=20
in accordance with Section ___, withhold payment of the Termination Payment=
=20
to the Defaulting Party.  =20

If you could get whoever is helping you with your deal to work these concep=
ts=20
into the gas agreement you would be much better protected by the clause tha=
n=20
you are with the one you just sent me. ---cgy




To: Christian Yoder/HOU/ECT@ECT
cc: =20
Subject: Setoff Language

The following provisions are proposed to be added into the Confirms for the=
=20
Firm GTC.  Please review and revise as appropriate.



If a Triggering Event occurs, the Notifying Party may (at its election) set=
=20
off any or all amounts which the Affected Party owes to the Notifying Party=
=20
or it Affiliates (under this Agreement or otherwise) against any or all=20
amounts which the Notifying Party owes to the Affected Party (either under=
=20
this Agreement or otherwise).


"Affiliate=018 means, with respect to any person, any other person (other t=
han=20
an individual) that, directly or indirectly, through one or more=20
intermediaries, controls, or is controlled by, or is under common control=
=20
with, such person.  For this purpose, "control" means the direct or indirec=
t=20
ownership of fifty percent (50%) or more of the outstanding capital stock o=
r=20
other equity interests having ordinary voting power.  [Probably want to nam=
e=20
EPMI specifically]