Subject: Alberta PPA Financing - URGENT -Reply
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
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Date: Tue, 19 Sep 2000 04:37:00 -0700 (PDT)

I just spoke to Rick Borden (Royal's counsel).  We went through some of the 
documentation status and his view on how his documents will look.

He will be providing us today with an Acknowledgement Agreement to be 
executed by Enron.  This will acknowledge the assignment of the BF Equity 
documents as security for its credit obligations and will include the 
increased costs indemnity.  His initial draft will use fairly standard 
increased costs language which we can mark-up as required to make more 
palatable for the accountants.

We discussed generally the acceleration on illegality under the BF Equity 
credit agreement.  Still waiting for direction from the business people on 
this.

He also indicated that he would be drafting the Interest Rate Swap.  The 
non-standard features of this will be the adjustment mechanism which they 
propose will apply on Sched II's coming into the syndicate, and on a 
mandatory rollover from BAs' to prime which would occur if there is no market 
for BAs', if it becomes illegal to issue BAs' or if there is a default in the 
credit agreement where such default emanated from Enron (eg. non-payment).  I 
don't think this has been discussed previously and needs to be considered 
from both the business and accounting side.

Other documents:
His form of opinion will be coming today.
The Bank is doing the fee letter and will be distributing today.
Blakes will distribute our forms of opinions today.

If any of the above is problematic we should follow up with the Bank and/or 
its counsel this morning.

Warren Nishimura
Blake, Cassels & Graydon LLP
#3500, East Tower, Bankers Hall
855 - 2nd St. S.W.
Calgary, AB T2P 4J8
Tel: 403.260.9664
Fax: 403.260.9700
E-mail: [email-masked]
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