Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com
----- Forwarded by Sara Shackleton/HOU/ECT on 01/17/2001 09:27 AM -----

	Clint Freeland@ENRON
	01/16/2001 02:23 PM
		
		 To: "Barbour, David" <davidbarbour@akllp.com>, "Sullivan, Danny" 
<dannysullivan@akllp.com>
		 cc: annmarie.tiller@enron.com, bill.bowes@enron.com, 
brenda.l.funk@enron.com, brent.vasconcellos@enron.com, 
clint.walden@enron.com, gareth.bahlmann@enron.com, tara.rafter@enron.com, 
Sara Shackleton/HOU/ECT@ECT
		 Subject: Re: Enron/Project Cerberus

All -
Just wanted to let you know that Rabobank got their final approval today to 
become the swap counterparty in the Cerberus financing.  We are moving 
forward on the documentation with a target close of early next week (probably 
Tuesday).  

Issues that I am aware of that remain are:
1) For the tax folks, we need to assign EAH's interest in both Aeneas and 
Psyche to either EES or EBS (an Enron operating subsidiary), then have that 
entity contribute the Aeneas 0.01% economic interest to Psyche.  As I 
understand it, this will provide the sale for tax purposes that Tammy needs 
in order to spring the desired gain.  I am working with Mark Lindsay to 
arrange for one of the Enron operating entities to take the A shares.  Danny 
and David, please start putting the necessary assignment documents together 
to facilitate this.  I'll give you the name of the Enron entity when I get it.

2) Due to certain things going on in the default swap market (which Rabo is 
using as one of the factors in its pricing formula), we have agreed to pay 
RBC an additional 10bp upfront and raise the spread on the deal to L + 85bp 
from L + 75bp.  David and Danny, please make the necessary adjustments.

3) Rabo has requested that a couple of business points be changed.  Those are 
that they would like to have an assignment over the A share of Aeneas, and 
they would like the Sales Agency Agreement to be triggered upon and Enron 
bankruptcy (if it occurs before maturity).  David, I agree with you that we 
should not agree to these requests.  We must maintain control of the A share 
in Aeneas since that is where the EOG stock is housed, and an Enron 
bankruptcy should not trigger the SAA because Aeneas is a bankruptcy-remote 
entity which should survive a bankruptcy of Enron.  Besides, requiring them 
to wait until maturity of the deal to trigger the SAA was the business deal 
we agreed to a long time ago.   

If there are other issues that I have left out, please let me know.  I am in 
Austin all week, but will be checking in periodically so send me either an 
e:mail or a voicemail if you need me.  Talk to you soon.
CF