Subject: Re: Margin Calls - Financial
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Fri, 1 Jun 2001 13:55:00 -0700 (PDT)

Peter -

We have thought about this from time to time.  Our primary concern has not been the strict adherence to the contractual notice requirements (because of the lack of substantive concern you mention) but the fear of possible waiver of rights that might take place if the requests are not consistent or handled carefully.  These are all issues that apply to trading margin calls generally.  Most recently Carol St. Clair, who Mark H. has asked to be the point lawyer for Credit and credit issues, has been working on this problem.  

Mark

	Peter Keohane 05/31/2001 11:54 AM 	   To: Mark Taylor/HOU/ECT@ECT  cc: William S Bradford/Enron@EnronXGate, Russell Diamond/Enron@EnronXGate  Subject: Margin Calls - Financial	

Mark, I recently was dealing with Russell in Credit on a margin call letter for IMC Canada and it seemed to me that the letter in substance met Credit's requirements but did not comply with the ISDA in terms of formalities (i.e. use of defined terms, currency specification, notice and delivery timing, notice addresses, etc.).  It seemed to me that the form they are using may have been drafted some time ago and needs to be updated so that it is not a drafting exercise on a case by case basis.  Practically, to the extent that the counterparty will not object to delivery, there really is no substantive concern.  However, as credit is becoming a significant issue in commodity markets, if the counterparty wants to object, particularly in circumstances where their credit is getting "tight", I can see the lack of contractual compliance perhaps being problematic.  Can somebody in your group develop a template (perhaps a few will be required) that could be used under the Enron form, the "industrial" form, the ISDA form and for Canada.  Please call Russell, Bill or me to discuss.  Peter.