Message-ID: <22723145.1075844923939.JavaMail.evans@thyme> Date: Mon, 23 Apr 2001 02:50:00 -0700 (PDT) From: sara.shackleton@enron.com To: caroline.abramo@enron.com Subject: Valentis/CD Holding Cc: paul.radous@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: paul.radous@enron.com X-From: Sara Shackleton X-To: Caroline Abramo X-cc: Paul Radous X-bcc: X-Folder: \Sara_Shackleton_Dec2000_June2001_2\Notes Folders\Sent X-Origin: SHACKLETON-S X-FileName: sshackle.nsf Caroline: I am in the midst of preparing these annexes now. You should take special note of the credit that Paul is insisting upon (seems to be similar to AIG). This is all credit - but note his Additional Termination Event if the ISDA is not executed within 60 days. You must discuss all of the items with your counterparty. Also, if you do the deal(s), give me the name, phone/fax numbers, email addresses of all commercial and legal for your counterparties. Sara Shackleton Enron North America Corp. 1400 Smith Street, EB 3801a Houston, Texas 77002 713-853-5620 (phone) 713-646-3490 (fax) sara.shackleton@enron.com ----- Forwarded by Sara Shackleton/HOU/ECT on 04/23/2001 09:45 AM ----- Paul Radous/ENRON@enronXgate 04/19/2001 05:43 PM To: Sara Shackleton/HOU/ECT@ECT cc: Caroline Abramo/Corp/Enron@Enron Subject: Valentis Here are the credit worksheets for Valentis (25% of the trade and Independent amount should be allocated here) and CD Holdings (75% allocated here). This will work for the ISDA, and I am hearing from Caroline that they are ok with posting this up front amount in cash. So, for purposes of the Deemed ISDA, we may as well include all of the credit provisions, but make the $2MM a "Special Independent Amount" applicable to the counterparty, which may be increased by Enron up to $5MM. This Special Independent Amount should be added to the Independent Amount as that term is used in the ISDA in order to give us the ability to demand more collateral at will with respect to the long term hedge. Given the fact that the c/p can post cash instead of LC's I see no reason for us to always have the Special Independent Amount in cash. That is, if we are $2MM out of the money on the position, I do not have a problem returning their cash, so long as it is in increments of the rounding amount. So I think we should just go ahead and put credit into these Deemed ISDAs, and require that the failure of the parties to execute an ISDA within 60 days will constitute a termination event. Caroline, again, the c/p will have to verbally agree to Loss instead of market quotation, to the special margining provisions with respect to this particular long term trade, etc. Let's discuss how this will work, since it is different from what I proposed on the phone. Sara, after you have had a chance to look at these, give me a call so we can discuss. Thanks. Paul