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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 ----- |--------+------------------------< | | Marie Heard | | | | | | 06/26/00 03:17| | | PM | | | | |--------+------------------------< <----------------------------------------------------------------------------| | | | To: Michelle Hicks/Enron Communications@Enron Communications | | cc: | | Subject: Re: Master BWT Agreement(Document link not converted) | <----------------------------------------------------------------------------| (See attached file: samplembpsa.pdf) - TEXT.htm
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