MAC as an Additional Event of Default

---------------------- Forwarded by Tana Jones/HOU/ECT on 09/20/99 01:50 PM=
=20
---------------------------

Shari Stack
09/20/99 01:36 PM
To: John Suttle/HOU/ECT@ECT
cc: Tana Jones/HOU/ECT@ECT, Marie Heard/HOU/ECT@ECT, Susan=20
Bailey/HOU/ECT@ECT, Susan Flynn/HOU/ECT@ECT, Mark - ECT Legal=20
Taylor/HOU/ECT@ECT=20
Subject: MAC as an Additional Event of Default

John: Thanks for taking the time to read the email. I have not had many=20
responses!

There are two reasons why I drafted the clause in this way.=20

1) It tracks the "cure" modification clause for Credit Event Upon Merger (a=
nd=20
I think the cures for both clauses need to be consistent).

2) The wording is useful because it describes what the written demand is=20
asking for - i.e. "performance assurance".=20

Maybe there is a more elegant way of expressing #2 - maybe we just use "for=
"=20
rather than "therefor". I was not the original drafter of the CEUM provisio=
n=20
so I don't know why it was written this way but in any event, the concept o=
f=20
#2 needs to remain in clause in some fashion.=20

I will be out of the office from 9/22 to 10/3. Mark Taylor will be handling=
=20
matters in my absence so I will forward this onto him to decide.

Thanks,
=20
Shari
=20
---------------------- Forwarded by Shari Stack/HOU/ECT on 09/20/99 01:23 P=
M=20
---------------------------
=20
=09Enron North America Corp.
=09
=09From: John Suttle 09/20/99 11:07 AM
=09

To: Shari Stack/HOU/ECT@ECT, Marie Heard/HOU/ECT@ECT, Tana Jones/HOU/ECT@EC=
T,=20
Susan Flynn/HOU/ECT@ECT, Susan Bailey/HOU/ECT@ECT
cc: =20
Subject: MAC as an Addtional Event of Default

I just got around to reading the e-mail Shari sent us last week regarding t=
he=20
new MAC language, and had a quick point on the MAC paragraph. The last=20
sentence doesn't seem to read quite right. I copied the paragraph below,=
=20
highlighted the area and thought you might want to take a look at it before=
=20
it goes into any contracts. Does "therefor" belong in there?

(ix) The occurrence of a Material Adverse Change (as hereinafter defined)=
=20
with respect to Party A or Party B. "Material Adverse Change" means, (a)=
=20
with respect to Party A, its Credit Support Provider=01,s Credit Rating is =
rated=20
below "BBB" by S&P; or (b) with respect to Party B, [insert as appropriate]=
,=20
provided, however, that the foregoing occurrence shall not constitute an=20
Event of Default so long as in connection with or after such action or even=
t,=20
the party experiencing the Material Adverse Change (=01&X=018) provides (or=
causes=20
to be provided) to the other party (=01&Y=018) within two Local Business Da=
ys of=20
Y's written demand therefor performance assurance in an amount satisfactory=
=20
to Y in its sole discretion.

Regards,

John Suttle
Non-Lawyer