MAC as an Addtional Event of Default

---------------------- Forwarded by Tana Jones/HOU/ECT on 09/20/99 11:15 AM=
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=09Enron North America Corp.
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=09From: John Suttle 09/20/99 11:07 AM
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To: Shari Stack/HOU/ECT@ECT, Marie Heard/HOU/ECT@ECT, Tana Jones/HOU/ECT@EC=
T,=20
Susan Flynn/HOU/ECT@ECT, Susan Bailey/HOU/ECT@ECT
cc: =20
Subject: MAC as an Addtional Event of Default

I just got around to reading the e-mail Shari sent us last week regarding t=
he=20
new MAC language, and had a quick point on the MAC paragraph. The last=20
sentence doesn't seem to read quite right. I copied the paragraph below,=
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highlighted the area and thought you might want to take a look at it before=
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it goes into any contracts. Does "therefor" belong in there?

(ix) The occurrence of a Material Adverse Change (as hereinafter defined)=
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with respect to Party A or Party B. "Material Adverse Change" means, (a)=
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with respect to Party A, its Credit Support Provider=01,s Credit Rating is =
rated=20
below "BBB" by S&P; or (b) with respect to Party B, [insert as appropriate]=
,=20
provided, however, that the foregoing occurrence shall not constitute an=20
Event of Default so long as in connection with or after such action or even=
t,=20
the party experiencing the Material Adverse Change (=01&X=018) provides (or=
causes=20
to be provided) to the other party (=01&Y=018) within two Local Business Da=
ys of=20
Y's written demand therefor performance assurance in an amount satisfactory=
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to Y in its sole discretion.

Regards,

John Suttle
Non-Lawyer