Form of ECT Legal Opinion

Do you have time to compare this opinion to our current form? Justin tells
me he started from a form that was a year or more old.
---------------------- Forwarded by Mark Taylor/HOU/ECT on 11/08/99 02:25 PM
---------------------------

Justin Boyd
11/05/99 08:10 AM
To: Mark Taylor/HOU/ECT@ECT
cc:
Subject: Form of ECT Legal Opinion

Mark,

I attach a draft form of internal ECT legal opinion that we are proposing to
offer SWD, a counterparty with whom we are seeking to enter into a Master
Swap Agreement.

The impasse to date had been SWD's unwillingness to agree on the content of
the external (V&E) legal opinion we were offering. After considerable
debate, SWD instead agreed to obtain their own form of external opinion (from
Linklaters).

In terms of the ECT legal opinion, the changes shown represent deviations
from our standard form of opinion (as of August last year). Would be
grateful for your views at to whether these would be acceptable from Mark
Haedicke's point of view, and also taking into account any changes that may
have occurred in the meantime. John Thompson (who heads up the Frankfurt
office) would execute the Master, and I have already arranged for the
appropriate corporate authorisation from Enron Europe Finance & Trading
Limited.

One sticking point has been SWD's demand that the opinion given under
paragraph 4 ("No authorizations, consents, etc.....") should also apply to
SWD; this would seem unacceptable to me.

[Please note that we intend that Jim Derrick would give a legal opinion
relating to the Guaranty.]

Regards and thanks

Justin