FYI
---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on 
07/22/99 03:29 PM ---------------------------


Mark Evans
07/22/99 02:27 PM
To: Mark - ECT Legal Taylor/HOU/ECT@ECT
cc: Robina Barker-Bennett/LON/ECT@ECT, Harry Arora/HOU/ECT@ECT, 
paul.coleman@slaughterandmay.com 
Subject: ETOL SWAP


Mark,

further to our recent conversation, I attach the senior debt intercreditor 
agreement which ECTRL and all the other parties will be required to resign as 
part of the sub-debt / equity deal.



However the resigning is necessary purely in ECTRC's capacity as party to the 
Financial Hedge Swap (a contract which ECTRC signed at new year 1998), and is 
nothing to do with the current draft currency swap. 

Concerning your comments on swap itsself, the ability of the Delaware Trust 
to perform under the swap is purely a function of Enron (in this case ETOL) 
performing its obligations under the subdebt agreement. Milbanks (acting for 
the investors and the draftsmen of the swap docs) have no doubt provided that 
whilst ECTRL need only pay $ when it receives o, ECTRL may not terminate the 
swap or cash out if the Delaware Trust does not perform because ETOL has not 
performed. This is probably the optionality to which you referred when we 
spoke.

Robina is aware of this. She is awaiting pricing from Harry. Both you and 
Harry should feel free to contact Robina (on 171 316 7438) to discuss any 
terms of the swap which are not clear to you. (I am now on holiday until 2nd 
August).

In case you don't already have it, I also attach the deal structure chart 
which may be of some assistance.



Our timetable is to CLOSE on August 12th. We would like to have all docs in 
agreed form by the end of July.

Thanks for your help.


       Mark


  
PS: Paul Coleman is from Slaughter and May and is representing Enron on the 
deal.