Thank y'all so much for your help on this.  We are trying to improve the language relating to the termination payment (Section 5.4) in the bandwidth trading master.  The old version had a very complicated and repetitive formula that tried to reflect replacement costs but in practice did not do so (I will not go into why here).  Based on some ISDA materials sent to me by Elizabeth Sager, as well as the benefit of the trading forms in some of our other businesses, we have come up with the  attached.  I would be so grateful if you could give me some feedback on this 5.4 as soon as you can because we are a bit strapped in producing agreements.  

As I mentioned to Mark on the phone today, I am also trying to work out how critical is the provision allowing for payment by the non-defaulting party to the defaulting party.  As we know, most of the time a non-defaulting party would not elect to terminate if they thought they were going to have to make a payment, but given our strictly physical, not overly liquid market at the moment, this provision has the old time telecoms companies with their eyeballs swivelling around in their sockets (of course the agreement as a whole is a bit of a shock to them, but this seems to be the provision they cannot get their brains around).  Although I am not necessarily suggesting we take this feature out of the form, I would just like your thoghts on whether we have any flexibility to delete it where necessary.

Finally, I note that our form does not have any provision to suspend delivery if the buyer is not paying.  Again, given the physical delivery character of this market, I would recommend we add such a feature.

I will anxiously await your feedback...And again, many thanks.  

 -----Original Message-----
From: 	Wilson, Pauline  
Sent:	09 August 2001 10:32
To:	Vickerman, James
Cc:	Browning, Mary Nell
Subject:	Master Agreement - Form

James, 

Here is the Master Agreement - Form.  The font is all the same size & style.

 

Cheers, 
Pauline