Sara and Jeff:

Attached is the term sheet for the slightly different Mahonia structure.

Question for Sara:  With this structure, do we have any CFTC issues if we're 
buying gas from Chase?  

We may have tax or accounting issues if we buy from Chase, so we may buy from 
Stoneville (also a Jersey Is. co.) instead.  Jeff:  Do you know that entity?  
Joe said we did several of the old deals purchasing from them under a GISB 
PSA.   We should know in the next day or so.  I'll let you know.  Will you be 
working on this?

Teresa    




Teresa G. Bushman
Enron North America Corp.
1400 Smith Street, EB 3835A
Houston, TX  77002
(713) 853-7895
fax (713) 646-3393
teresa.g.bushman@enron.com


----- Forwarded by Teresa G Bushman/HOU/ECT on 12/11/2000 06:52 PM -----

	Joseph Deffner
	12/07/2000 01:28 PM
		 
		 To: Teresa G Bushman/HOU/ECT@ECT
		 cc: 
		 Subject: Enron/Mahonia

Can you take a look at the term sheet below. This was the concept of 
"participation" in a gas contract as envisioned by Milbank. We may be moving 
away from this concept towards what I suggested last night and perhaps a bit 
further than that as well but wanted to get a legal view on this 
participation concept.
---------------------- Forwarded by Joseph Deffner/HOU/ECT on 12/07/2000 
01:27 PM ---------------------------


<Jeffrey.W.Dellapina@chase.com> on 12/05/2000 05:07:46 PM
To: joseph.deffner@enron.com
cc:  
Subject: Enron/Mahonia


---------------------- Forwarded by Jeffrey W. Dellapina/CHASE on
12/05/2000 06:14 PM ---------------------------


<MWilson@milbank.com> on 12/05/2000 05:06:17 PM



To:   philip.levy@chase.com, stuart.d.fishman@chase.com,
      jeffrey.w.dellapina@chase.com
cc:   RWight@milbank.com, TDavis@milbank.com, MWilson@milbank.com
Subject:  Enron/Mahonia


Attached please find a preliminary draft term sheet for the Mahonia
transaction based on the original Chase term sheet and our subsequent
structuring conversations, along with a revised transaction diagram in
powerpoint.

Kind regards,

Melanie Wilson
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY  10005
ph.: 212-530-5098
fax: 212-530-5219
email:  mwilson@milbank.com

 <<Term Sheet Enron-Mahonia.doc>>  <<Annex 1 -Transaction Diagram.ppt>>


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(See attached file: Term Sheet Enron-Mahonia.doc)
(See attached file: Annex 1 -Transaction Diagram.ppt)

 - Term Sheet Enron-Mahonia.doc
 - Annex 1 -Transaction Diagram.ppt