Dear Carol

Under Bermuda law, there is no real concept of "perfecting" security since it 
is not necessary to ensure the enforceability in Bermuda that a charge be 
registered in Bermuda.  However, although it is not necessary for a security 
interest to be registered in order for it to be valid, the charge document 
itself can be registered in Bermuda in the Register of Charges in accordance 
with Section 55 of the Companies Act 1981 in order to ensure the priority in 
Bermuda of the charge.  On registration, any charge evidenced in the charging 
document will have priority over any unregistered competing charge or any 
subsequently registered competing charge in respect of the assets which are 
the subject of the charge (i.e. the cash).

If the agreement will be governed by either Texas or New York law, it will be 
a matter of the laws of either Texas or New York as to the actual nature of 
the security interest which is created by the charge.

If you would like us to effect the registration of the charge, we would need 
an original (or a certified true copy) of the executed document which creates 
the security interest.  There is no time limit on such registration.  
However, please note that, in addition to our professional fees, there is a 
filing fee of $446 which is payable in respect of the registration.

I trust that the above is of some assistance.  If you have any questions 
please do not hesitate to contact me.

Kind regards.

Chris Garrod


Christopher Garrod
Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton HM 11, Bermuda
Direct dial  441 299 4923
Fax:  441 292 4720
email  cggarrod@cdp.bm

>>> <Carol.St.Clair@enron.com> 04/17/01 06:54PM >>>
Christopher:
We have done a trade with a Bermuda hedge fund and have negotiated
collateral provisions that may require them to post csah to us.  The
agreement will be governed by either Texas or New York law.  We need your
advice on how to perfect our interest in any cash posted to us that we
would hold in an account in the United States.  Could you please call
either me or Sara Shackelton (713)853-5620 if possible tomorrow or you can
send me an e-mail if that is easier.  I'm hoping that our possession of the
cash is enough.  Sorry for the short fuse on this.  If you need any
additional information, please contact me or Sara.  I will be unavailable
from 9-11 and 2-3 tomorrow Houston time.

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