---------------------- Forwarded by Carol St Clair/HOU/ECT on 03/10/2000 
12:22 PM ---------------------------


"Rick Antonoff" <rantonof@cwt.com> on 03/10/2000 11:52:38 AM
To: Carol St Clair/HOU/ECT@ECT
cc:  
Subject: Master Netting Agreement





Attached below is our preliminary draft master netting agreement. As we
discussed last week, the draft is designed to be relatively simple and "user
friendly," accommodating a single Enron entity and a single counterparty 
entity
engaged in cash settled and physically settled transactions under separate,
pre-existing, respective financial and physical master agreements similar to
those which you have provided to us as examples.

We note a few points about the attached draft:

1.   The terms "master netting agreement" and "master netting agreement
participants" in Section 6 refer to proposed definitions that would be added 
to
the Bankruptcy Code upon enactment of the pending legislation. If an agreement
is executed with a counterparty prior to enactment (or if the legislation is 
not
enacted), we would amend this provision to incorporate instead the existing 
safe
harbor provisions to the extent possible.

2.  We designated Texas law as the governing law (in brackets) based on the
provisions of the ISDA schedule you provided to us.

3.  Notwithstanding that the draft contemplates a single Enron entity, we
included references to Enron affiliates in certain provisions to provide
flexibility in the event that obligations from other Enron entities to the
counterparty should arise in any other context. We think that all such
obligations should be available for setoff against Enron's claims against the
counterparty.

Please call us when you have had an opportunity to review the draft.

(See attached file: #109563 v2 - master netting agreement.doc)



|------------------------------------------------------------------|
|NOTE:  The information in this email is confidential and may be   |
|legally privileged.  If you are not the intended recipient, you   |
|must not read, use or disseminate the information.  Although this |
|email and any attachments are believed to be free of any virus or |
|other defect that might affect any computer system into which it  |
|is received and opened, it is the responsibility of the recipient |
|to ensure that it is virus free and no responsibility is accepted |
|by Cadwalader, Wickersham & Taft for any loss or damage arising in|
|any way from its use.                                             |
|------------------------------------------------------------------|



 - #109563 v2 - master netting agreement.doc