4.5. Termination Offset.  Upon the designation or deemed designation of an Early Termination Date, the Notifying Party may, at its option and in its discretion, setoff, against any amounts Owed to the Affected Party by the Notifying Party or any Affiliate of the Notifying Party under this Agreement or under any other agreement(s), instrument(s) or undertaking(s), any amounts Owed by the Affected Party to the Notifying Party or any of the Notifying Party's Affiliates under this Agreement or under any other agreement(s), instrument(s) or undertaking(s).  The obligations of the Affected Party and the Notifying Party under this Agreement in respect of such amounts shall be deemed satisfied and discharged to the extent of any such setoff exercised by the Notifying Party and/or the Notifying Party's Affiliates.  The Notifying Party will give the Affected Party notice of any setoff effected under this section as soon as practicable after the setoff is effected provided that failure to give such notice shall not affect the validity of the setoff.  For purposes of this Section 4.5, "Owed" shall mean any amounts owed or otherwise accrued and payable (regardless of whether such amounts have been or could be invoiced) as of the Early Termination Date.  Amounts subject to the setoff permitted in this Section 4.5 may be converted by the Notifying Party into any currency in which any obligation Owed is denominated at the rate of exchange at which the Notifying Party, acting in a reasonable manner and in good faith, would be able to purchase the relevant amount of the currency being converted.  If an obligation is unascertained, the Notifying Party may in good faith estimate that obligation and setoff in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.  Nothing in this Section 4.5 shall be effective to create a charge or other security interest except as may be provided under applicable law.  This setoff provision shall be without prejudice and in addition to any right of setoff, netting, off-set, combination of accounts, counterclaim, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).  Each of the parties represent and acknowledge that the rights set forth in this Section 4.5 are an integral part of the agreement between the parties and that without such rights the parties would not be willing to enter into Transactions.  The parties further acknowledge that each is executing this Agreement on behalf of itself as principal and, with respect to this Section 4.5, as agent on behalf of its Affiliates, which Affiliates shall receive the benefits of this Section 4.5 and otherwise be bound as if such Affiliates had entered into this Agreement as its relates to Section 4.5.  Notwithstanding any provision to the contrary contained in this Agreement, the Notifying Party shall not be required to pay to the Affected Party any amount under Section 4.5 until the Notifying Party receives confirmation satisfactory to it in its reasonable discretion (which may include an opinion of its counsel) that all other obligations of any kind whatsoever of the Affected Party to make any payments to the Notifying Party or any of its Affiliates under this Agreement or under any other agreement(s), instrument(s) or undertaking(s), which are Owed as of the Early Termination Date have been fully and finally satisfied.


Debra Perlingiere
Enron North America Legal
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron
713-853-7658
713-646-3490 Fax