No problem.  Your sense that the commercial folks going to be OK with this approach?

 -----Original Message-----
From: 	Smith, Mike  
Sent:	Thursday, September 27, 2001 12:55 PM
To:	Dasovich, Jeff
Subject:	RE: Extensions of CA Deals

It's worth a hell of a lot.  Thanks.


From:	Jeff Dasovich/ENRON@enronXgate on 09/27/2001 12:05 PM
To:	Mike D Smith/HOU/EES@EES, Susan J Mara/ENRON@enronXgate, James D Steffes/ENRON@enronXgate, mday@gmssr.com@SMTP@enronXgate, Robert C Williams/ENRON@enronXgate
cc:	Vicki Sharp/HOU/EES@EES, Kelly Higgason/HOU/EES@EES, Michelle Maynard/HOU/EES@EES 
Subject:	RE: Extensions of CA Deals

For what it's worth, I concur with Mike.  Option 3 is the most prudent, and preferable, path.

Best,
Jeff

 -----Original Message-----
From: 	Smith, Mike  
Sent:	Thursday, September 27, 2001 10:50 AM
To:	Dasovich, Jeff; Mara, Susan; Steffes, James D.; mday@gmssr.com; Williams, Robert C.
Cc:	Sharp, Vicki; Higgason, Kelly; Maynard, Michelle
Subject:	Extensions of CA Deals

CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION

I'd like to get some thoughts on this issue and hopefully build a consensus pretty quickly.

We are in the process of extending the term of some of our existing CA deals that we executed on the Master in June.  Understanding that "new" deals struck after 9/20 are, and extensions of existing deals may be, at risk, it seems to me we have three basic options in order to effect this extension, and I want to make sure we evaluate and choose the one that minimizes the risk that the extension is invalidated.  Note that DASR's have been submitted for the subject accounts under the original Transactions.  

The 3 choices I see are:

1.  .Amend and Restate the existing Transaction Confirmation to add the extension and new price for the extension.  In this case, the extension would be wrapped up on one document that is signed after 9/20 but effective in June.
2.  Simply amend the existing Transaction to add extended term and price.  This would be a separate document.
3.  Execute a whole new Transaction for the extended term, which would be effective when signed but the services and price under which would not start until after the expiration of the existing Transaction.  The existing Transaction would stay in tact as written.

It seems to me that choice number 3 is the safest overall.  The amended and restated route has appeal because the whole transaction is dated back to June.  However, if a regulator were to peel it back, the conclusion could be that the deal was struck after Sept 20 and therefore the whole transaction was invalid, including the original structure.  I think that choice 2, though creating a separate document for the extension, could fall into the same trap.  In that sense, choice 3 seems safest because arguably the original transaction is not at risk.  If the extension is invalidated, that determination would likely not claw back to the original deal.

The commercial teams want to close these extensions in Q3 so they are moving fast.  Please let me know your thoughts asap.  If we need to have a quick call, I can set something up.  Thanks.  MDS