Draft EEI Credit Annex

I attach a draft dated 5/10/01 of a Two Way Cash and Letter of Credit Form of
Credit Support Annex to be used with EEI Masters. Because the Draft Annex is
based on the form used by the Swap Group, I have also attached a version
marked to show changes from the Swap Group's form.

While preparing this I also reviewed the Credit Annex draft prepared by
Morgan Stanley and Shari Stack's comments on it. Unlike the MS draft, mine
doesn't contemplate any kinds of collateral other than cash and letters of
credit (which is what EAS wanted, I believe.) In addition, Shari had posed
the question of whether any defaults under the Credit Annex itself should be
made Events of Default under the Master Agreement. Although my initial
reaction is that we should not add any such additional defaults under the
Credit Annex as Events of Default, please think about this question as you
review the draft.

I look forward to your comments.
Janet