All,

Looks like we have a final structure that works for all parties, and should 
be relatively simple to execute. To confirm where we are:

The transaction has essentially the same terms & cashflows as prior 
structures, however we will transact the pre-pay with a bank as principal, 
and have the commodity risk hedged by us via another bank ( see diagram)



Swap 1: Enron Canada enters into a financial gas swap pre-pay with Royal Bank 
of Canada/Toronto Dominion
 Royal Bank of Canada & TD pre-pay C$150mm each
 Enron Canada pays monthly interest (fixed GJ) referenced to AECO March 02 
index

Swap 2: Royal Bank of Canada/TD enters into a financial gas swap with Chase 
Manhattan Bank (identical volumes & prices as Swap 1)
 Chase Manhattan Bank pays fixed volumes of gas @ fixed price
 Royal Bank of Canada/TD pay monthly interest (fixed GJ) referenced to AECO 
March 02 index
 
Swap 3:  Chase Manhattan Bank enters into a financial gas swap with Enron 
North America (identical volumes & prices as Swap 1)
 Enron North America pays fixed volumes of gas @ fixed price
 Chase Manhattan Bank pays monthly interest (fixed GJ) referenced to AECO 
March 02 index

Internal: internal back to back of Swap 3 to Enron Canada

Swap 4: Enron Canada enters into interest rate swap with Royal Bank of 
Canada/TD
 Enron Canada pays floating rate monthly
 Royal Bank of Canada/TD pay  fixed interest rate monthly 

Please note that we may either do one C$300mm pre-pay with RBC or split the 
deal into 2 tranches, C$150mm with Royal Bank of Canada, C$150mm with Toronto 
Dominion, with Chase Manhattan Bank as the sleeve on both deals. Will be 
confirmed Tuesday am.

Documentation
Sara, Morris, I assume there are no issues around using Chase Manhattan Corp 
to sleeve, rather than Chase Canada as long as the legal jurisdiction remains 
as Canada. Please confirm.  Current status of docs.

Swap 1: Contracting parties Enron Canada & Royal Bank of Canada
  The ISDA has already been drafted , with RBC replacing Bow River Trust
  One schedule, one confirm for  swap 1 (financial commodity swap), 
  One Schedule, one confirm for swap 4 (interest rate swap)
  
  Verify Enron Canada has ISDA in place with TD 

Swap 2: Contracting parties Royal Bank of Canada/TD & Chase Manhattan Bank
  No docs required on Enron' s part

Swap 3: Contracting parties Chase Manhattan Bank & Enron North America
  ENA already has an ISDA in place with Chase Corp, 
  One schedule, one confirm for  swap 1 (financial commodity swap), 

Swap 4: Contracting parties Enron Canada & Royal Bank of Canada/TD
  See swap 1 docs

We'll set up a conference call Tuesday am.

Regards,

Soma