FW: isda comments

Here are XTO's comments. Please respond to those that are credit related, which appear to be most of them. Lucky you!

Thanks!

Marie
-----Original Message-----
From: Adam_Auten@xtoenergy.com@ENRON [mailto:IMCEANOTES-Adam+5FAuten+40xtoenergy+2Ecom+40ENRON@ENRON.com]
Sent: Friday, August 10, 2001 4:55 PM
To: Heard, Marie
Cc: Frank_McDonald@xtoenergy.com
Subject: isda comments

Ms. Heard,

As we discussed, the following are our comments to the ISDA Master Agreement
that you sent to Terry Schultz on May 30, 2001:

General:
1. Our name has changed from Cross Timbers Oil Company to XTO Energy Inc. (a
Delaware corporation)

Schedule to the Master Agreement
1. Part 3. We would incorporate the same language for Party B as applies to
Party A with regard to the delivery of financial statements. Our website
address is www.xtoenergy.com. Propose that for both parties, strike the time
requirement for sending financials in the event not available online (i.e. "in
no event later than X days after the end of the X days following X period..."
2. Part 5(g). We like to strike "or otherwise" from line 4 and line 6

Credit Support Annex
1. "Threshold" needs to be updated for Party B to $60 million. This is
consistent with the threshold levels indicated in a letter from Jason Williams
dated January 5, 2001.
2. "Material Adverse Change" for Party B we would suggest that the definition
be rewritten so that if our credit rating with S&P falls below B+ that would be
a MAC (a two notch downgrade, and consistent with the change for Party A).
In connection with this change we would propose striking the financial covenant
tests (i) & (ii). This would also apply under the "Eligibility to Hold Posted
Collateral" section. As a matter of form, this would permit us to strike the
definitions of "EBITDA" and "EBITDA Coverage Ratio".
3. We'd like to remove Schedule 1 showing the form of letter of credit. This
is not consistent with our currently issued letter of credit, the terms of which
have been accepted by Enron.
4. We'd like to propose that the limit on the Enron guaranty to XTO Energy be
increased from $25 mm to $50 mm to give us a little more flexibility for future
deals.

Questions/Clarifications:
1. Could you comment as to why under Part 1 (e) of the Schedule to the Master
Lease you have selected to use the "Loss" as opposed to the "Market
Quotation" method? We have no other ISDAs with this calculation method.
2. Under the Schedule to the Master Lease, what is the rationale for Part 4
(f) Netting of Payments? We found this a little murky.

Please call me at 817-885-2260 if you have any questions about this comments.

Thanks very much.

Regards,
Adam Auten
Assistant Treasurer
XTO Energy Inc.