Mark, 
FYI - as requested by Vicki. I hope you had (or have) as smooth a trip back as possible under the circumstances.

Regards,
Ed
---------------------- Forwarded by Edwin Essandoh/HOU/EES on 09/16/2001 12:04 AM ---------------------------


Edwin Essandoh
09/16/2001 12:03 AM
To:	Brent Hendry/Enron@EnronXGate, Elsa Piekielniak/ENRON@enronXgate, Ted Noble/ENRON@enronXgate, Timothy M Norton/ENRON@enronXgate
cc:	Denise Furey/ENRON@enronXgate, Ken Gustafson/HOU/EES@EES, Shelly Stubbs/Enron@EnronXGate, Beth Apke/HOU/EES@EES, Sean A Holmes/HOU/EES@EES, Brenda F Herod/Enron@EnronXGate 
Subject:	RE: Derivatives Contract

I have revised and attached clean and blacklined drafts of the Confirmation and the Terms and Conditions distributed on Friday (attached to Brent's message below), but have some questions about paragraph (d) of the Fallback Methodology section of the Confirmation as written in the prior draft:

	(1) The section titled "Premium Payment Details"  (page 1) calls for payment of the Premium (presumably, by Counterparty or the buyer of the option) two 	Business Days following execution of the confirmation.  Is this in lieu of or in addition to the Premium payment called for in paragraph (d)?  I think it works 	only if the Premium payment made two days following execution of the Confirmation was made by Counterparty to EES (the Floating Amount Payor) and 	the payment in (d) is intended to be a refund of the Premium back to Counterparty by EES. 

	(2) Paragraph (d) makes reference to the higher of "two Cash Settlement Amount Calculations."   There appears to be only one Cash Settlement Amount 	calculation (an option versus eg. a swap).  Is "Cash Settlement Amount" intended to include the Premium?

	(3) I think the proviso at the end of paragraph (b) applies to paragraph (d) as well (and to the entire Confirmation) and perhaps should come after (d).  

The comments in the Fallback Methodolody section reflect my suggestions as well as my understanding of the mechanics  of that section.   Also, to make the document easier to review, and because it is the most likely scenario, the revised draft assumes EES is the seller of the option (i.e. the Floating Amount Payer), and our Customer the buyer of the option (Fixed Amount Payer).   Please let me have your comments ASAP. 

We will have a final draft product for general distribution after we incorporate any revisions (including any comments from the addressees) into the attached drafts.


Thanks,
Ed

X58939 


   


  

 
---------------------- Forwarded by Edwin Essandoh/HOU/EES on 09/15/2001 06:52 PM ---------------------------
From:	Brent Hendry/ENRON@enronXgate on 09/14/2001 05:23 PM
To:	Edwin Essandoh/HOU/EES@EES, Elsa Piekielniak/ENRON@enronXgate, Ted Noble/ENRON@enronXgate, Timothy M Norton/ENRON@enronXgate, Denise Furey/ENRON@enronXgate
cc:	 
Subject:	RE: Derivatives Contract


Here is the revised blacklined draft of the confirmation.  Please read the Determination of Missing Data section very carefully.  I have incorporated the last two subsections into (b) and (d) for simplification.  I am also attaching the Terms and Conditions that Ed finalized yesterday.  Please forward to anyone else who needs to review this document and let me know if you have any questions or comments.
Ed, can you fill in the missing numbers in the letterhead?  

Thanks, 
Brent