Message-ID: <15368383.1075844814044.JavaMail.evans@thyme>
Date: Thu, 15 Mar 2001 02:07:00 -0800 (PST)
From: becky.spencer@enron.com
To: carol.clair@enron.com, sara.shackleton@enron.com
Subject: Draft Response to Catequil Comments
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Per Brent's instructions, I am forwarding this e-mail to you'all.-Becky

----- Forwarded by Becky Spencer/HOU/ECT on 03/15/2001 10:07 AM -----

	Brent Hendry
	03/13/2001 03:29 PM
		 
		 To: Paul Radous/Corp/Enron
		 cc: William S Bradford/Enron@EnronXGate, Tanya Rohauer/Enron@EnronXGate, 
Caroline Abramo/Corp/Enron@Enron
		 Subject: Draft Response to Catequil Comments

Here is a rough draft of the Credit and Legal comments to Catequil Partners 
L.P. markup of the ISDA Master.  This is for internal discussion only and is 
not to be sent to the counterparty.  The highlighted issues need further 
discussion between credit and legal or otherwise need some research.  Based 
on the sheer number of comments the counterparty has made I would recommend 
that after we have discussed and/or researched our open issues that I prepare 
a blackline with those changes we can accept and send it back to the 
counterparty for their further review.  After they have had a chance to 
determine what they want to continue pursuing we can then get on the phone to 
discuss a more narrowed list of open issues.  Let me know if this is how you 
want to proceed.

1.  Rider A-- to be discussed between credit and legal.
2.  Counterparty has agreed to leave definition of "Threshold Amount" as 
originally written.
3.  Rider B and Rider C and the deletion of the phrase "resulting, surviving, 
or transferee entity" is agreed.
4.  Rider D-- to be discussed between credit and legal.
5.  Counterparty has agreed to leave in the Additional Events of Default.  
Paul as agreed to reduce the Net Asset Valuation amount to $35,000,000.  Paul 
insists that we retain the full definition of Part 1(h)(e).  Paul has also 
agreed to specify an additional Event of Default for Enron--If the credit 
rating of Enron Corp. falls below BBB-.
6.  Rider D-a--to be discussed between credit and legal.
7.  Rider E, Rider F and Rider G need to be approved by Tax. 
8.  The deletion of "Master" in the documents to be delivered is correct.
9.  The changes to the last documents to be delivered section on page 3 
should be OK if the documents mentioned are for the correct counterparty.
10.  We will require an opinion of counsel so we cannot delete the 
requirement.
11.  We can delete the requirement of a "Letter from Manager" unless credit 
has something they want to include in such letter.
12.  Counterparty agrees to retain the definition of the Monthly Account 
Statements set out in the last document to be delivered on page 5 pending 
their deliver for credit approval of a different form provided by the 
counterparty.
13.  Rider H-- to be discussed between credit and legal.
14.  Rider I and other comments to Governing Law are accepted.
15.  We prefer to keep our arbitration clause.
16.  We prefer to keep Part 5(a).  This is to the benefit of a party that 
only buys options or only has an option on its books at the time of an Event 
of Default.
17.  Rather than amend Part 5(b)(g) this provision can be removed.
18.  We will include a representation that both parties qualify as eligible 
contract participants and eligible commercial entities in lieu of Part 
5(b)(h).
19.  We will not agree to modify Part 5(b)(i).
20.  Rider K is acceptable.
21.  Rider L is acceptable in lieu of Part 5(c)(ii).
22.  The deletion of Part 5(d) needs to be discussed between credit and 
legal.
23.  We have new language we can propose in lieu of Part 5(e).
24.  We do not agree to remove the last part of Part 5(f).  This language 
provides certainty regarding what terms govern a particular transaction.  It 
is also in line with the New York Statutes of Fraud.
25.  We prefer to not change Part 5(g) and Rider P is under review.
26.  The deletion of "or deemed designation" in Part 5(h) is acceptable.  
Rider Q and Rider R need to be discussed between credit and legal.  The 
capitalization of "setoff" is acceptable.
27.  Rider S is under review.
28.  All changes to Part 5(j) are acceptable.
29.  Rider U-- to be discussed between credit and legal.
30.  We do not agree to delete Part 5(l).
31.   We do not agree to delete Part 5(n).
32.  We agree to the change to Part 5(o).
33.  We agree to add Rider V to the agreement.
34.  Counterparty has agreed to keep Part 5(p)(a) and (b).  The changes to 
Part 5(p)(c) appear to be OK.  The first section of Rider W is accepted.  The 
deletion of Part 5(p)(d) needs to be discussed between credit and legal.  
Credit wants to ensure that the definition of "Manager" is tied to 
individuals not just a management company.
35.  The second section of Rider W is not necessary since it is covered in 
Part 5(f).  The third section of Rider W is not needed since the issue is 
covered under Part 5(m).  The fourth section of Rider W is a credit call.  
The fifth section of Rider W is not relevant since we require arbitration.  
The sixth section of Rider W is under review.
36.  All of the changes the counterparty requests to Part 6 need to be 
reviewed in light of Enron's new changes to Part 6 references.  Credit wants 
to discuss the counterparty changes on "Relevant Price".
37.   The counterparty wants an explanation of the last paragraph of the 
schedule.  We will attempt to draft one.


Comments to the Credit Support Annex.

1.  Counterparty agrees to retain our definition of "Credit Support Amount".
2.  Credit is OK with accepting treasuries with a maturity of not more than 
one year with a 100% valuation percentage.
3.  The definitions of Independent Amount, Threshold, Minimum Transfer Amount 
and rounding are still under discussion and review by credit.
4.  Rider AA-- to be discussed between credit and legal.
5.  Credit and Counterparty have agreed to an 11 A.M. Notification Time.
6.  Credit and Legal need to discuss the ramifications of the changes to 
Specified Condition.
7.  Credit and Legal need to discuss the changes to the Dispute Resolution 
section.
8.  Credit has agreed to modify Paragraph 13(g)(i)(1) relating to Party A to 
reflect the change to the Additional Event of Default.
9.  Credit has agreed to modify Paragraph 13(g)(i)(1) relating to Party B to 
reflect the change to the Additional Event of Default.
10.  Credit and Legal need to review the changes to Paragraph 13(g)(ii).
11.  Counterparty agrees to remove its Rider BB.