Elizabeth and Mark,  it may also be useful to look at this suggested alternative.  Again, we do not have any agenda in terms of which is the "right" method, but we are just trying to figure out what works in the bandwidth context.  All thoughts gratefully received.

 -----Original Message-----
From: 	Traung, Peter  
Sent:	12 July 2001 19:12
To:	Harkness, Cynthia
Cc:	Browning, Mary Nell
Subject:	Section 5.4 of the new draft MSA

Cynthia, subject to further amendment this is what we're planning to use instead of the structure in the June 22 draft:

(i)	If an Early Termination Date is designated, the Defaulting Party shall compensate the Non-Defaulting Party for the Loss, if any, caused the Non-Defaulting Party with respect to each Terminated Product.  The amount of a Loss shall be determined by reference to (i) the prices available within [thirty (30)] Business Days after the Early Termination Date in an arm's length transaction for a replacement product, or (ii) the price agreed in a cover transaction effected within [thirty (30)] Business Days after the Early Termination Date.  No actual purchase or sale shall be required in order to determine a Loss.  Any cover transaction shall be effected in a reasonable manner and on the best available terms.  In no event shall the Non-Defaulting Party be required to use its own market position in order to effect a cover transaction.         
(ii)	If the Non-Defaulting Party has suffered Loss, the sum of such Loss shall be payable to the Non-Defaulting Party by the Defaulting Party on the date specified in Section 5.5.  The amount payable by a Party pursuant to this Section 5.4(ii) shall be the "Termination Payment".

"Loss" means an amount equal to the difference between the present value of the Contract Price for the remaining Term and the present value of the cost for a replacement product.  With respect to the Buyer, a Loss shall have occurred if such replacement cost is higher than the Contract Price for the remaining Term.  With respect to the Seller, a Loss shall have occurred if such replacement cost is lower than the Contract Price for the remaining Term.  
This takes the place of the present 5.4(i)-(ii), and the definition of Gain is deleted.

Peter Traung
Senior Legal Counsel
Enron Europe Limited
DD +44-20-7783 2443
Fax +44-20-7783 1434