RE: June 16th draft of swap assignment

Jeff:
While I don't quite follow how terminating the Fixed taints the Floating
since we have separated the 2, I am okay with this if this is how our
commercial people understand how it works.
Carol

"Eldredge, Jeff" <jeldredge@velaw.com<
06/18/2000 04:05 AM

To: "St. Clair, Carol (Enron)" <carol.st.clair@enron.com<
cc:
Subject: RE: June 16th draft of swap assignment

Thanks for your comments. A new draft should be out shortly that addresses
your comments. Re the deleted language in 3.4, it is considered essential
that nothing can happen to terminate the Fixed Payment side of the Swap
since this could arguably taint the Floating Payment obligations. The
investors are very sensative to this concern and I'm not sure we care. Let
me know if you disagree.
-----Original Message-----
From: Carol St Clair
To: jeldredge@velaw.com
Cc: acurry@velaw.com; Nora Dobin
Sent: 16/06/00 17:42
Subject: June 16th draft of swap assignment

Jeff:
Just a few comments:

1. In the definition of termination Event, I think that the words "due
to"
need to be put after the word "means" in the first line.

2. In Section 3.4(a), I noticed that the bracketed langugae "as it
relates to
the Assigned Interest" has now been deleted. Pursuant to my earlier
comment on
this, what this maens to me is that with respect to the Fixed Payment
piece of
this, we can never terminate the swap based on something that happens to
Pelican
. Is that the way it is supposed to work? If so, plaese explain why.

3. With respect to the lnagugae in Section 3.6(a), instead of saying
in the
first sentence of such Section "the amount determined..." shouldn't it
say "the
fair market value of Party A's remaining payment obligations under the
Transaction". Section 2(x) of the confirm just refers to Disputed
Matters and
it is not claer to me what is in dispute when an Event of Default or
Termination
Event occurs and what amount Party A has to pay when these events occur.
What
is the priocedure for coming up with this amount? Does each party
calculate it
and then send it to the experts or do the experts just determine it?

Carol St. Clair
EB 3892
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com