Subject: Re: Deemed ISDA for AIG
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Tue, 17 Apr 2001 01:53:00 -0700 (PDT)

Paul:
Will any of the Termination Events have a cure through the posting of 
collateral?  I'm not sure I understand your first statement given that there 
is no collateral threshold.  How do the financial covenants fit in?  Are they 
an Event of default or Termination Event?  Is there a cure?  Please clarify.  
Thanks.

Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
[email-masked]

	Paul Radous/ENRON@enronXgate
	04/16/2001 05:50 PM
		 
		 To: Carol St Clair/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT, Brent 
Hendry/NA/Enron@Enron
		 cc: 
		 Subject: Deemed ISDA for AIG

Whichever one of you has the great good fortune to work on the subject, 
please note the following:

All 5 additional events of default should also be Material Adverse Changes 
with respect to the ability to hold collateral.

In addition to the financial triggers indicated in my earlier-emailed credit 
worksheets (FYI==> ), the following should be added as additional termination 
events:

1  The Manager ceases to be either Joseph Kleinman or Simon Glover and an 
alternate Manager acceptable to Party A has not assumed the responsibilities 
of Manager.

2  In the event there exists one Manager, if the Manager resigns, is 
terminated, or is otherwise incapacitated for a period exceeding one month.  
In the event there exists more than one Manager, if for a coincident period 
of one month, all of the Managers have resigned, been terminated, or have 
otherwise been incapacitated.

Add the following definition:
 "Manager" means any person(s) with ultimate authority to direct the 
investments of Party B, currently Joseph Kleinman and Simon Glover.

Replace Independent Amount definition with our new hedge fund standard.  It 
is extracted from Union Spring as follows (But change the Independent Amount 
to be each of the two counterparty's pro rata share of $50,000; The pro rata 
distribution should be based on the allocation of the trade volumes):

(A)  &Independent Amount8 means with respect to Party A, the amount specified 
as such for Party A in each Confirmation, or if no amount is specified, zero 
and means with respect to Party B the amount specified as such for Party B 
which may be either increased or decreased from time to time in a 
Confirmation, which amount as modified shall be the Independent Amount 
applicable for all outstanding Transactions, provided, however, that in no 
event shall Party B,s Independent Amount be less than $100,000 if there are 
any outstanding Transactions.

Add as an additional termination event and Material Adverse Change for Enron 
the following:

(ii) The following will constitute an Additional Termination Event with 
respect to Party A:

Party A,s Credit Support Provider,s credit rating is below BBB- by S&P, or if 
it has no credit rating from S&P, Party A,s Credit Support Provider,s credit 
rating is below Baa3 by Moody,s, or Party A,s Credit Support Provider fails 
to have a rating from either S&P or Moody,s.