FW: Contract comments

Me again.

Please see the second paragraph regarding the authority of the Cities and
MDEA to enter into contracts. Your opinion would be most appreciated.

Thanks,

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 04/24/2001 01:35
PM ---------------------------
From: Edward Sacks/ENRON@enronXgate on 04/24/2001 12:22 PM
To: Kay Mann/Corp/Enron@Enron, Reagan Rorschach/ENRON@enronXgate
cc:

Subject: FW: Contract comments

Definition of Event of Default - References Section 17. I believe this
should be Section 14. This same reference to 17 is also made in other areas
of the contract, such as in Section 15 "Termination". Also, please note that
under Section 15, some of the Event of Default Sections numbers do not exist
(ie. 11 and 12). Please look into these sections in their entirety. With
respect to this section, I would like to change the cure period from 30 days
to 3 days and of course in instances of bankruptcy, misrepresenation in the
Reps & Warr, etc., there should not a cure period.

With respect to credit. In reading the contract it seems that the
counterparty is going to be a consortium of entities (MDEA, Yazoo &
Clarksdale). Are each of the counterparties jointly and severally liable?
Answers to the this relationship structure will be necessary prior to
proposing credit terms for both the Master Gas and Master Power agmts. If
this is the structure, we should probably look into getting legal opinions
regarding the cities' authority to enter into such obligations. In addition,
do the city's have authority to enter into agreements for greater than 1 yr.
In my experience with other munis, they generally are, but only at the
Enterprise Fund level (Public Utility). Perhaps we should confirm this. To
the extent that MDEA (stand alone) is not 100% supported by the cities, we
will need financial statements on MDEA.

Reagan - Please forward projected load schedule when completed.

Ed Sacks
x5-7712

-----Original Message-----
From: Rorschach, Reagan
Sent: Tuesday, April 24, 2001 8:31 AM
To: McNamara, Ron; Roan, Michael; Bentley, Corry; Comeaux, Keith; Coulter,
Kayne; Cross, Edith; Fairley, David; Herndon, Rogers; Homco, Jim; Kumar,
Madhup; Mann, Kay; May, Tom; Miller, Jeffrey; Morse, Brad; Nicolay, Christi;
Pagan, Ozzie; Podurgiel, Laura; Reeves, Leslie; Sacks, Edward; Serio, Erik;
White, Stacey; Will, Lloyd
Subject: Contract comments

Contract comments are due to Kay Mann. If you have not sent them to her,
please do so ASAP. She is working to incorporate all comments this morning.
MDEA will be in town tommorrow and Thursday to discuss.

Thanks,

Reagan
5.3363