FYI
----- Forwarded by Robbi Rossi/Enron Communications on 07/07/00 08:54 AM -----

	Michelle Hicks
	07/07/00 08:38 AM
		 
		 To: Robbi Rossi/Enron Communications@Enron Communications
		 cc: 
		 Subject: Re: Master BWT Agreement

fyi
----- Forwarded by Michelle Hicks/Enron Communications on 07/07/00 08:45 AM 
-----

	JNatori@tokyo.whitecase.com
	07/07/00 02:49 AM
		 
		 To: Michelle Hicks/Enron Communications@Enron Communications
		 cc: Cynthia Harkness/Enron Communications@Enron Communications, 
MSuzuki@tokyo.whitecase.com
		 Subject: Re: Master BWT Agreement



Michelle,

I discussed the corporate authorization issue with Mika Suzuki, a Japanese 
lawyer in our office.

1.  Basically, we believe that Japanese corporations can enter into the 
Master Bandwidth Purchase and Sale Agreement.

     A.  There is no specific internal authorization required in Japanese 
corporate law and practice, unless the transaction is considered 
"important."  Obviously, the question of what is "important" is relative.

     B.  Generally, larger companies have internal directors' rules that 
specify a monetary amount above which transactions must be subject to board 
approval.  Outsiders are usually not privy to that information and, having no 
notice thereof, are not prejudiced by failure of the company to follow its 
own internal approval procedures.  There is case law to support that notion 
with regard to the claims of innocent contract counter parties.

     C.  However, if the counter party has notice that board approval is 
required, but has not been obtained, or the counter party is "negligent" 
(like a constructive notice type of situation) the counter party will not 
have the benefit of any lack of authority argument or defense.

     D.  We note that the draft Master Agreement provides a representation 
and warranty regarding due authorization in Section 10.(a)(iv).  Although not 
determinative, this provision should be considered by a Japanese court.

     E.  As the execution of the Master Agreement does not involve a specific 
transaction and transaction amount, it is unlikely that it would fall into 
this "important" matter category requiring board approval.  However, the 
transactions will have to be judged on a case-by-case basis.

2.  A.  In the BWT context, if the bandwidth purchaser is not going to use 
the bandwidth itself (i.e., the purchaser plans to re-sell the bandwidth), 
the purchaser will have to be licensed as a telecommunications carrier under 
the Telecommunications Business Law of Japan (the "TBL").

     B.  In order to be licensed as a telecommunications carrier, the general 
rule is that the registered business purpose of the corporation must specify 
that its business purpose is to carry on telecommunications business.  
(Please see the corporate register of the Applications YK and Network YK for 
examples of this.)  We note that the draft Master Agreement provides a 
representation and warranty regarding licensing in Section 10.(a)(iii).

     C.  Basically, a violation of the licensing requirement should not 
affect the validity of the contract, but simply result in the bandwidth 
trader becoming subject to the penal provisions of the TBL.  However, one 
should keep in mind that the intention of the TBL is to protect the public 
good and, to the extent that disregard of its licensing requirements in 
connection with BWT might be considered a threat to or undermining of the 
integrity of the telecommunications system, broader regulatory action may be 
a possibility.  In that regard, an action for specific performance of a 
bandwidth delivery obligation by the unlicensed trader may be problematic.


We hope this answers your initial question.

Best regards.

Jeff

>>> <Michelle_Hicks@enron.net> 06/27/00 05:28AM >>>


Jeff,  Here is the latest version of the Master Agreement.  The scope of the
review at this time is limited to whether Japanese companies are authorized to
enter into such an agreement.  I will let you know when or if the traders are
interested in having the form reviewed from a Japanese law perspective.  
Please
let me or Cynthia know if you have any questions or comments.  Best regards,
Michelle
----- Forwarded by Michelle Hicks/Enron Communications on 06/26/00 03:34 
PM
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  |      To:     Michelle Hicks/Enron Communications@Enron 
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  |      Subject:     Re: Master BWT Agreement(Document link not 
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                         (See attached file: samplembpsa.pdf)
 - TEXT.htm