Clem:

Per my voice mail,  please respond to the remaining issues raised by ConEd's 
lawyer:

(1)  "Guarantor agrees that its obligations are unconditional and will not be 
discharged except by complete payment of the amounts payable under the 
Contract, [without setoff of the amount payable under the Contract] 
irrespective of any claims as to the Contract's validity, regularity or 
enforceability or the lack of authority of Enron to execute or deliver the 
Contract, or any change or amendment to the Contract (whether or not approved 
by or known to Guarantor).'

Response:  the bracketed language is unacceptable.  What about the bolded 
language?

(2)  "This Guaranty shall continue to be effective if the Guarantor merges or 
consolidates with or into another entity, loses its separate legal identity 
or ceases to exist."

Response:  not sure if this will remain effective if a merger occurs and 
therefore not binding (e.g., merger without assumption)

(3)  What are you looking for when requiring an "explanation of why such 
payment is due" in the demand section (paragraph 2)?  Is it to identify the 
type of default suffered by ENA?

Thanks for your response and I'll let you know if this particular guaranty is 
still a rush.  SS



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