Re: "Financial Power Purchase Term Sheet"

RECAP: This is Project Moosehead. After the meeting, we determined that the
transaction should be structured as a cap and not a swaption. The Fixed
Price is the premium. The Strike is the Cap Price (remember, strikes are for
options and strikes are cap/floor in those deals). We'll need to revise
today to send in the morning. CP is "Merrill Lynch Capital Services, Inc.".
Enron party normally is ENA but we may change to EPMI and create a new ISDA
Master for the deal. There must be a zero floor (ie, no negative payments in
the other direction). Don't worry about weekend quotes yet because we may
eliminate weekends and extend the term of the deal.

Could you begin revising? Also, do the calculations work? Please feel free
to call me as I'm buried in my office today and things change as the day goes
on. SS
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 12/16/99 12:53
PM ---------------------------

From: Larry Joe Hunter 12/16/99 11:08 AM

To: Sara Shackleton/HOU/ECT@ECT
cc: David Dupre/HOU/ECT@ECT
Subject: Re: "Financial Power Purchase Term Sheet" - 12/13/99

Sara,

If it's a Cap, is the Fixed Price then the Strike Price? I think the format
looks good. I would prefer a "Notice of Exercise" provision, but it's not
necessary.

Thanks,
Joe

Sara Shackleton
12/16/99 09:35 AM
To: David P Dupre/HOU/ECT@ECT, Larry Joe Hunter/HOU/ECT@ECT
cc:
Subject: "Financial Power Purchase Term Sheet" - 12/13/99

I think that this transaction is called "Project Moosehead". I have a
meeting on it this morning. Please comment to the draft I sent to you
yesterday. I don't know if the structure works. I couldn't decide upon the
format; it also looks like a cap. Thanks. SS