Carol St. Clair
EB 3892
713-853-3989 (Phone)
713-646-3393 (Fax)
----- Forwarded by Carol St Clair/HOU/ECT on 05/25/2000 05:41 PM -----

	steven.kessler@db.com
	05/25/2000 05:10 PM
		 
		 To: Carol.St.Clair@enron.com
		 cc: 
		 Subject: ISDA Schedule




Hi Carol:

Enclosed is redlined version of ISDA Schedule and CSA, marked against the
July 7, 1999 version (please note that open items I left as is unless
otherwise indicated).

Also note that the Indemnifiable Tax clause is a head office policy
issue--DB's position is that, in cross-border transactions, the Payee may
not be in a position to learn of a Tax imposed due to a Change in Tax Law
in the Payor's jurisdiction which is based upon the Payee's connection with
the Payor's jurisdiction, no matter how tenuous that connection.  In such a
situation, the Tax would not be an IndemnifiableTax and therefore would not
be grossed-up.  Further, although such a change would be a Tax Event and
therefore the Payee could terminate the Agreement upon learning of the Tax,
the Payee, because of its inability to learn of the tax law change might
not be able to terminate in a  timely manner and would be precluded from
choosing not to enter into the Transaction. The worse-case scenario would
be a Transaction entered into shortly prior to the Change in Tax Law, in
which case the Tax would not be grossed-up because it is not an
Indemnifiable Tax, and the Payee could not terminate the Transaction
because a Tax Event is triggered off of a Change in Tax Law occurring on or
after the Transaction has been entered into.  We think this risk is
reciprocal in cross-border transactions. The Indemnifiable Tax revision
simply shifts this incremental risk from the Payee to Payor.  I can also
provide alternative language whereby we maintain the same gross-up
provisions as in the standard ISDA Master, but extend the "notice" period
to sixty days prior to the date a Transaction is entered into (rather than
on the date in which a Transaction is entered into), thus providing a
window for learning of legislation in other jurisdictions.

On other open issues, I believe you are to check on (i) CEUM, (ii) the
Event of Default, (iii)  Payment Netting, (iv) Securities Act Reps (v)
Transfer language, and (vi) Arbitration. I need to review your comments on
(i) the Guarantee and (ii) your new L/C Agreement.

I look forward to hearing from you soon.

Regards,

Steve

(See attached file: enron schedule.doc)(See attached file: ENRON PARAGRAPH
13.doc)

 - enron schedule.doc
 - ENRON PARAGRAPH 13.doc