ISDA language.  Thanks for your help.

----- Forwarded by Elizabeth Sager/HOU/ECT on 04/25/2001 12:09 PM -----

	Carol St Clair
	04/17/2001 11:33 AM
		 
		 To: Elizabeth Sager/HOU/ECT@ECT
		 cc: 
		 Subject: Setoff Language



Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com

Power  contract language (sometimes we also include affiliates on all legs as 
well)
"After calculation of a Termination Payment in accordance with Section 5.3, 
if the Defaulting Party would be owed the Termination Payment, the 
Non-Defaulting Party shall be entitled, at its option and in its discretion, 
to (i) set off against such Termination Payment any amounts due and owing by 
the Defaulting Party to the Non-Defaulting Party under any other agreements, 
instruments or undertakings between the Defaulting Party and the 
Non-Defaulting Party (which agreements shall include any natural gas purchase 
and sale agreements between EPMI,s Affiliates and Party B.).  Notwithstanding 
anything to the contrary in this Agreement, any right of setoff to which any 
Party may otherwise be entitled (whether by operation of law, contract or 
otherwise) shall not apply with respect to any amounts owed under any other 
agreements between the parties that are based on the International Swaps and 
Derivatives Association Master Agreement, and/or (ii) to the extent the 
Transactions are not yet liquidated in accordance with Section 5.2, withhold 
payment of the Termination Payment to the Defaulting Party.  The remedy 
provided for in this Section shall be without prejudice and in addition to 
any right of setoff, combination of accounts, lien or other right to which 
any Party is at any time otherwise entitled (whether by operation of law, 
contract or otherwise). (Emphasis added). 
 [Section 5.6]
Notwithstanding any provision to the contrary contained in this Agreement, 
the Non-Defaulting Party shall not be required to pay to the Defaulting Party 
any amount under Article 5 until the Non-Defaulting 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 Defaulting Party to make any payments to the Non-Defaulting 
Party under this Agreement or any  physical natural gas purchase or sale 
agreement(s) between Party B and Party A or Party A,s Affiliates which are 
due and payable as of the Early Termination Date (including for these 
purposes amounts payable pursuant to Excluded Transactions) have been fully 
and finally performed. [Section 5.4]" (Emphasis added.)