Transfer and Assumption Agreement ("Agreement")

Kate:
A few points about the last draft of the Agreement:

(1) Par. 1(a): the transfer and assumption is effective as of March 16,
2001 and not as of the Collateral Return

(2) Par. 1(d): the parties have already agreed to use one set of
spreadsheets

(3) Par. 3: the ML&Co. guaranties are not being released because there are
existing deals in place. The guaranties will only be released as to the
transferred Transactions

(4) Par. 6: conform language to side letters

(5) Par. 8: Please delete the last two sentences. Enron will agree to be
silent as to court actions, costs and attorneys fees.

Please call at 713-853-5620 (Sara) or 713-853-1794 (Janice). Regards.