Enron Mail

From:brent.hendry@enron.com
To:legal <.taylor@enron.com<
Subject:FW: Chiricahua Assignments
Cc:
Bcc:
Date:Wed, 21 Nov 2001 07:10:53 -0800 (PST)

Do you have a problem with the recharacterization as a purchase?

-----Original Message-----
From: =09Wells, Bret =20
Sent:=09Wednesday, November 21, 2001 8:34 AM
To:=09Hendry, Brent
Cc:=09Douglas, Stephen H.
Subject:=09FW: Chiricahua Assignments

Brent,

Please review the attached suggested changes to the assignment agreement. =
I have made changes to only one of the agreements, but I assume that any ch=
anges designated below will be made to both agreements. Broadly speaking, =
my changes are designed to accomplish the following:

1.=09We want to characterize the Chricicahua LLCs as "Purchasers" to the ex=
tent possible and not an assignor. Much of the redefined terms seek to acc=
omplish that objective.
2.=09The stated intent of Chircahua is to "invest" in the Transactions. Th=
is language tries to bolster our argument that Chiricahua is wanting to inv=
est in the weather derivatives market but in so doing it is not acting as a=
market maker with customers in these instruments.

I have no changes to the Master Agreement and expect that we want to minimi=
ze any changes to the extent possible. I am happy, however, that we are tr=
ying to execute separate masters and not simply amend ENA's existing master=
.

Bret Wells
-----Original Message-----
From: =09Hendry, Brent =20
Sent:=09Tuesday, November 20, 2001 6:43 PM
To:=09Douglas, Stephen H.; Wells, Bret; 'jlynch@velaw.com'; Rohauer, Tanya;=
Del vecchio, Peter; Korkmas, Deb; Bell, Rebecca; Abrams, Clement; Tawney, =
Mark
Cc:=09St. Clair, Carol; 'bhendry@houston.rr.com'; Taylor, Mark E (Legal)
Subject:=09Chiricahua Assignments

I was informed by Steve Douglas this morning that for tax reasons we need t=
o assign a number of weather transactions ENA entered into with XL Trading =
Partners Ltd. from ENA to Chiricahua III LLC and Chiricahua V LLC. These t=
wo entities are ultimately wholly owned subsidiaries of ENA. It is intende=
d that these entities will also enter into a few weather transactions direc=
tly with XL Trading Partners Ltd. All of these transactions must have a te=
rm that ends no later than midnight December 31 2001. My understanding is t=
hat some time after these transactions are assigned or entered into the Chi=
ricahua entities will be liquidated sometime during the month of December a=
nd the weather transactions will be transferred to the parent entity which =
will subsequently be liquidated and moved to its parent and so on until the=
transactions end up at ENA. I would ask Bret or Steve to clarify the proc=
ess to the extent that I have left anything out or misstated the proposal i=
n broad terms. If anyone needs a detailed explanation of the process pleas=
e call Bret at ext. 54390.

I would ask that everyone review the attached documentation in light of the=
proposal above to give their views from a credit, Dynegy merger agreement,=
legal, operational, commercial, corporate governance, and guarantor perspe=
ctive.

I am proposing the following draft documents for the assignment of the ENA =
trades to Chiricahua III and V entities. =20

=20

I am proposing the following blacklined draft master agreements to be enter=
ed into between Chiricahua III and V and XL Trading Partners Inc. These ar=
e based on the executed ENA/XL Trading master. Please note that Chiricahua=
and XL Trading would be providing parent guaranties in the form previously=
agreed upon by ENA and XL Trading. Deb, please note the documents to be d=
elivered section for the Chiricahua entities. Will we need some new resolu=
tions passed?



I am attaching final drafts of the confirmations that were entered into bet=
ween the parties. The first six will be assigned to Chiricahua III and the=
second six will be assigned to Chiricahua V. Rebecca, please note that I =
will need copies of the executed confirmations for these transactions or th=
e document that we sent to XL Trading if they have not yet signed the docum=
ent by tomorrow midday if at all possible so I can attach them as exhibits.

Chiricahua III


Chiricahua V


Please let me know if you have any questions or comments on the documentati=
on. If you have any comments or questions relating to the tax purpose or p=
rocess of this series of transactions please call Bret Well at ext. 54390.

Regards,
Brent