Below please find the opinion of ENA Legal related to the idea of adding additional language to the Transaction Agreement/(Confirm) to make it look more like a loan.  If you have any questions related thereto, please contact Stacy, Jeff Hodge &/or Travis McCullough.

If there are any other outstanding issues, especially related to the cost of funds, please contact me immediately at x37657.

Regards,
Ed          



---------------------- Forwarded by Ed McMichael/HOU/ECT on 03/30/2001 12:30 PM ---------------------------
From:	Stacy E Dickson on 03/30/2001 12:19 PM
To:	Ed McMichael/HOU/ECT@ECT, Mark Breese/HOU/ECT@ECT
cc:	Jeffrey T Hodge/HOU/ECT@ECT, Travis McCullough/HOU/ECT@ECT 
Subject:	NUI Deal Documentation

Ed and Mark, 

As we discussed, I spoke to Jeff Hodge and Travis McCullough about the best way to document this deal.  We all agreed that it is better to document the deal as a deferred payment on the sale of natural gas rather than as a loan.  Documenting the deal as a loan does not add any protection for Enron and in fact, may be detrimental because of the various laws concerning loans and lenders.  The protections  and remedies afforded by the Master track those that Enron would have under a loan document.  Enron would be in no better position to collect from NUI in the event of bankruptcy under a loan document than under the Master Firm Purchase/Sale Agreement.  Additionally, I assume that NUI, being a regulated utility, will not want to or be able to document this deal as a loan.

Please let me know if you need additional information on this topic.

Stacy