The events in the Underlying Master Agreements that should be excluded from the definition of an event of default that would trigger an Underlying Master Agreements Close-Out are as follows:

(i) the unexcused failure of a party to deliver a specified quantity of a commodity;

(ii)  a change in the extent to which a party is regulated; and 

(iii) events described in Section 3(f) ("Default under Relevant Transaction") and 3(g) ("Material Adverse Change") of the GT&C for the sale and purchase for Flat UK Beach Trades.

In addition, all third party debt cross default thresholds in the UMAs should be revised to be $100,000,000.

Also, please incorporate the language regarding the Commodity Exchange Act provided in the e-mail attached below.

Please forward a copy of the draft to me, Lech, and all of the addresses cc'd above.

Thanks,

Harlan E. Murphy
Enron Wholesale Services - Legal
1400 Smith Street, EB 3811
Houston, Texas 77002
Tel: 713.345.2679
Fax: 713.646.3490
E-mail: Harlan.Murphy@Enron.com

 -----Original Message-----
From: 	"Lech Kalembka" <Lech.Kalembka@cwt.com>@ENRON  
Sent:	Tuesday, November 27, 2001 2:24 PM
To:	Cook, Mary; Murphy, Harlan
Cc:	David Mitchell
Subject:	BNP

Regarding the commodity law issue, we suggest the following language:

"The rights of the Parties under Sections 3, 4 and 7 of this Agreement are
subject to, and qualified by, the applicable provisions of the Commodity
Exchange Act, 7 U.S.C. Sec. 1 et seq., and the rules and regulations
thereunder."

This could be new section or, perhaps, folded into existing boilerplate.

Please let me know if you have any questions or comments.

Lech Kalembka
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY  10038
Tel.: (212) 504-6918
Fax: (212) 504-6666
E-mail: lech.kalembka@cwt.com


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