From: dan.lyons@enron.com
To: richard.sanders@enron.com, carl.tricoli@enron.com, abaskins@llgm.com, tmoore@llgm.com, garrick.hill@enron.com
Cc: brian.kerrigan@enron.com
Date: 2000-10-27 15:21:00+00:00
Subject: Enron/Ponderosa: Proposed Langauge

PRIVILEGED AND CONFIDENTIAL  ATTORNEY CLIENT COMMUNICATION


KBC is apparently having trouble syndicating the Cornhusker deal and one of 
the potential syndicees, Deutsche Bank, didn't like the way our deal was 
structured thinking it wasn't as good a deal for the banks as a different 
Enron deal they were in.  I think at least some of us have talked about this 
before and I am reluctant, given the posture of Brazos at the current moment 
to do even de minimis or seemingly non- controversial or harmless changes to 
the documents because I don't know how it might be construed or twisted 
against us in  a litigation scenario..having said that, I think this one does 
two things..it gives DB a right to step in and act onits own behalf if Enron 
doesn't pay...this seems to me to be a clear change from a hardly maintained 
position that we wanted to deal with one entity, not a dozen and in my view 
is a change in the deal, but I guess is your call..the second change (I 
think) adds some ability on the part of the banks to involve ponderosa in 
remedial actions if there is non-payment...this seems to me to have the 
advantage of reinforcing Ponderosa's status as an owner, but may not reflect 
our deal with Ponderosa and to some extent is inconsistent with the Mantra we 
have consistently had of Enron's credit being the credit which was being 
bought...I note that I have made these observations from my memory of what 
the docs say and request Lebouef to confirm my analysis or correct it...at 
any rate if my analysis is correct I vote no, but I think we probably need a 
group discussion early next week as they want to finalize the assignments on 
Tuesday...Lebouef will be sending a separate memo about some other issues 
that have been raised by the proposed assignments...it seems to me that our 
original deal is being steadily chipped away and I really worry about it in 
light of the strained relations with Brazos 
----- Forwarded by Dan Lyons/HOU/ECT on 10/27/2000 03:01 PM -----

	marcus.tarkington@db.com
	10/27/2000 01:55 PM
		 
		 To: brian.kerrigan@enron.com, Sarah.Heineman@enron.com, dan.lyons@enron.com
		 cc: 
		 Subject: Enron/Ponderosa: Proposed Langauge




Brian, as we discussed attached is the proposed language
to be added to the Assignment Agreement to address the DB policy issue.
Also, the language will facilitate the loan saleability and therefore 
included in the Assignment
Agreement when we sell the loan.  As indicated in the note our counsel is 
reviewing the
Assignment Agreement which we just recently received from Mayer, Brown.

After  you and your counsel have reviewed the language below please give me a 
call.
212 250-7684
Thanks
---------------------- Forwarded by Marcus Tarkington on 10/27/2000 02:45 PM 
---------------------------


Margaret M Ross@DBNA
10/27/2000 03:17 PM

To:   Marcus Tarkington@Bankers_Trust
cc:
Subject:  Enron/Ponderosa: Proposed Langauge

Set forth below for your consideration is proposed language relating to the 
right of independent action that we have been discussing.  This language 
would appear at the end of the draft Assignment Agreement as a final 
provision to the Miscellaneous section.  Please note that I have not had the 
opportunity to review the assignment and, as a result, the language set forth 
below remains subject to our review of this proposed agreement:

          (n)  Notwithstanding anything else provided herein or in any Loan 
Document or the Swap Agreement, the parties hereto acknoledge and agree 
that:  (i) the term "Party B" (as such term is used in Section 13(b) of the 
Swap Agreement) shall mean and be a reference to (A) the Agent, and/or (B) in 
the case of any controversy, dispute or claim arising out of or relating to 
any failure by Enron Corp. to make, when due, any payment specified under 
Section 5(a)(i) of the Swap Agreement in accordance with the terms thereof, 
any Lender; and (ii) the term "party" or "parties" (as such term is used in 
Section 13(b) of the Swap Agreement), in the case of any Dispute referred to 
in clause (i)(B) above, shall include any such Lender.

                                                                       
Margaret Ross