Your clause is not as finely tuned as it could be, but it is difficult to 
give you exactly the precise wording to make it more finely tuned because it 
exists in a context of a number of related provisions in the Master 
Agreement.  Here is how I would ultimately like to see the clause work:

After calculation of a Termination Payment in accordance with Section ___, if 
the Defaulting Party would be owed the Termination Payment, the 
Non-Defaulting Party shall be entitled, at its option and in its discretion, 
to (i) set off against such Termination Payment any amounts due and owing by 
the Defaulting Party or any of its Affiliates to the Non-Defaulting Party or 
any of its Affiliates under any other natural gas, energy or other commodity 
or financial agreements, instruments or undertakings  between the Defaulting 
Party or any of its Affiliates and the Non-Defaulting Party or any of its 
Affiliates and/or (ii) to the extent the Transactions are not yet liquidated 
in accordance with Section ___, withhold payment of the Termination Payment 
to the Defaulting Party.   

If you could get whoever is helping you with your deal to work these concepts 
into the gas agreement you would be much better protected by the clause than 
you are with the one you just sent me. ---cgy




To: Christian Yoder/HOU/ECT@ECT
cc:  
Subject: Setoff Language

The following provisions are proposed to be added into the Confirms for the 
Firm GTC.  Please review and revise as appropriate.



If a Triggering Event occurs, the Notifying Party may (at its election) set 
off any or all amounts which the Affected Party owes to the Notifying Party 
or it Affiliates (under this Agreement or otherwise) against any or all 
amounts which the Notifying Party owes to the Affected Party (either under 
this Agreement or otherwise).


"Affiliate8 means, with respect to any person, any other person (other than 
an individual) that, directly or indirectly, through one or more 
intermediaries, controls, or is controlled by, or is under common control 
with, such person.  For this purpose, "control" means the direct or indirect 
ownership of fifty percent (50%) or more of the outstanding capital stock or 
other equity interests having ordinary voting power.  [Probably want to name 
EPMI specifically]