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From:susan.scott@enron.com
To:lorraine.lindberg@enron.com, michelle.lokay@enron.com
Subject:PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
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Date:Thu, 17 Aug 2000 08:44:00 -0700 (PDT)

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I've looked into whether we can terminate our Val Verde interconnect
agreement with Burlington, and have determined we may do so only if we take
the following steps:

1. Terminate the OBA by giving 30 days notice to Burlington. Paragraph 13
of the 6/1/94 OBA with Burlington (as successor in interest to Meridian)
provides that either party may terminate the OBA "at the end of the primary
term, or thereafter by providing thirty (30) days prior written notice" to
Burlington. (The one-month primary term ended June 30, 1994 and has since
gone month-to-month.)

2. On the effective termination date of the OBA, terminate the interconnect
agreement by giving 30 days notice to Burlington. The 12/31/92
Interconnect Point Operating Agreement, Paragraph 6, provides that either
party may terminate on 180 prior notice after expiration of the primary
term. This is of limited use to us since the primary term does not expire
until 12/31/02. However, the paragraph also provides that the agreement "may
be terminated by either party upon thirty (30) days prior written notice in
the event the OBA between the parties is terminated."

As we've already discussed, termination of the agreement is an extreme
measure from a customer relations standpoint and we probably need to weigh
our other options first. Let me know if you have further questions.