Brant:
Is this what was agreed to?  When we last spoke, it appeared as if you had 
not agreed to a collateral threshold of $50M and a cap of $55M.  Please 
advise.
Carol
----- Forwarded by Carol St Clair/HOU/ECT on 05/18/2000 08:41 AM -----

	"Shuttee, John" <ShutteeJ@EPEnergy.com>
	05/18/2000 08:30 AM
		 
		 To: "'Carol.St.Clair@enron.com'" <Carol.St.Clair@enron.com>
		 cc: "Shuttee, John" <ShutteeJ@EPEnergy.com>
		 Subject: RE: Credit Response


By cap, I assume you mean the Guaranty amount or limit - $55MM was agreed
upon.

John

> -----Original Message-----
> From: Carol.St.Clair@enron.com [SMTP:Carol.St.Clair@enron.com]
> Sent: Wednesday, May 17, 2000 6:00 PM
> To: Shuttee, John
> Subject: RE: Credit Response
>
>
> John:
> I will send you my remaining comments shortly.  Here is a draft of the
> Enron Guaranty.  What have the credit people decided on with respect to a
> cap?
> (See attached file: El Paso Enron Guaranty 5-17.doc)
>
>
> Carol St. Clair
> EB 3892
> 713-853-3989 (Phone)
> 713-646-3393 (Fax)
>
>
>
>
>                     "Shuttee,
>
>                     John"                To:     "'Carol St Clair'"
> <Carol.St.Clair@enron.com>
>                     <ShutteeJ@EPE        cc:
>
>                     nergy.com>           Subject:     RE: Credit Response
>
>
>
>                     05/17/2000
>
>                     03:05 PM
>
>
>
>
>
>
>
>
>
> Dear Carol -
>
> Enclosed are drafts of (i) the ISDA schedule, (ii) Paragraph 13 to the
> Credit Support Annex, and (iii) our standard guarantee.   Also included is
> a
> draft what should be in the L/C and Schedule 1 of a Stby L/C.
>
> Please note that I have accepted most of the previous changes so the
> current
> issues would more easily be seen in the draft.
>
> Comments concerning the schedule and para 13 are below:  Note - our legal
> council is out this week but I thought I would send this draft to you now,
> and we can make further adjustments, if any, based on our legal department
> review next week.
>
> 1.  Part 1 (e):  After Charles Hofer spoke with your Credit Manager, Brant
> Reves, they decided to make the cross default threshold at $100MM for each
> credit support provider.
> 2.  1(h):  Made change per our phone conversation that Market Quotation
> will
> apply for 3 years or less; Loss for over 3 years.
> 3.  5(g):  I am confused by this change.  I added back in the word
> "obligations" in para B, 5th line and added back in the phrase concerning
> affiliates.  I'm not sure my predecessor deleted them (it is not deleted
> on
> my 3/20/00 draft) but I can't imagine who else would.  Two comments (i) do
> you think this is best way to word this, and (2) my legal council (who is
> out most of this week) will have to review your final wording before we
> can
> execute.
> 4.  5(l):  Changed the telephone recording paragraph by (a) not limiting
> it
> to just trading staff and (b) adding "to the extent permitted by
> applicable
> law".
> 5.  5(n-q):  All new paragraphs that are not part of our standard
> agreement.
> However, these were not discussed in Susan's last memo to you (except the
> adding back in of paragraph q) so I am leaving them as is.
> 6.  Part 6:  After reviewing your changes vs. our standard paragraphs, I
> have no objections to your changes
> 7.  13(b)(i)(C) Accepted your definition of Credit Support Amount even
> though we don't normally use Independent Amounts.
> 8.  13(b)(iii)(A)  Letters of Credit - changes days to 20 from 10, per
> your
> request.  After re-reading, I don't understand how it improves the
> position
> of the secured party.  If the L/C has an expiration date and the secured
> party attempts to execute (i.e.: cash in) this L/C, then if the L/C is
> within 20 days of its expiration, the value can drop to zero.  Before, the
> L/C maintained 100% of its value until 10 days prior to expiration.  Since
> Enron looks at these contracts from the secured party perspective, how
> does
> your position improve based on this change?
> 8.  13(b)(iii)(B and C) Threshold for both of us has been increased to
> $50MM
> and Minimum Transfer Amount has been reduced to zero ($0).
>
> For questions, please call at 713-420-3548 or email me.
>
> Thanks!
>
> John
> .
>  <<Enron Schedule -Draft 5-16.doc>>  <<Enron CSA - Draft 5-16.doc>>
>
>
>
>
> > -----Original Message-----
> > From:   Carol St Clair [SMTP:Carol.St.Clair@enron.com]
> > Sent:   Friday, May 12, 2000 5:07 PM
> > To:     Shuttee, John
> > Subject:     Credit Response
> >
> >
> >
> > Carol St. Clair
> > EB 3892
> > 713-853-3989 (Phone)
> > 713-646-3393 (Fax)
> > ----- Forwarded by Carol St Clair/HOU/ECT on 05/12/2000 05:07 PM -----
> > |--------+----------------------->
> > |        |          Carol St     |
> > |        |          Clair        |
> > |        |                       |
> > |        |          05/12/2000   |
> > |        |          05:02 PM     |
> > |        |                       |
> > |--------+----------------------->
> >
> > >
> -------------------------------------------------------------------------
> > ---|
> >   |
> > |
> >   |       To:     shuttej@epenergy.com
> > |
> >   |       cc:     Brant Reves/HOU/ECT@ECT
> > |
> >   |       Subject:     Credit Response
> > |
> >
> > >
> -------------------------------------------------------------------------
> > ---|
> >
> >
> >
> > John:
> > Our credit person has agreed to the 3% equity test for cross-default.
> > With
> > respect to setoff, given our relationships with El Paso, this is an
> > important
> > credit point for us and one that I guess the credit people will need to
> > discuss
> > since it is important for us to have the Affiliate language.  Our credit
> > person
> > is Brant Reves (713-853-9897).
> > Carol St. Clair
> > EB 3892
> > 713-853-3989 (Phone)
> > 713-646-3393 (Fax)
> >
>
>
> ******************************************************************
> This email and any files transmitted with it from El Paso
> Energy Corporation are confidential and intended solely
> for the use of the individual or entity to whom they are
> addressed. If you have received this email in error
> please notify the sender.
> ******************************************************************
>
> (See attached file: Enron Schedule -Draft 5-16.doc)
> (See attached file: Enron CSA - Draft 5-16.doc)
>  << File: El Paso Enron Guaranty 5-17.doc >>  << File: Enron Schedule
> -Draft 5-16.doc >>  << File: Enron CSA - Draft 5-16.doc >>