Equitable Credit Issues ,
 Russell:
Based on my review of the 6/23 draft of ISDA Schedule here are my credit 
questions:

1. There is no Credit Support Provider for Equitable.  Should there be?

2. What should the cross default thresholds be and who should they apply to?

3. Are you satisfied with the Additional Termination Event?    I'm assuming 
that in clause (i) of the definition of Debt Coverage Amount, it makes sense 
to take "future" revenues from the preceding year and subtract from it asset 
sales made during the current year?  How will we know what assets sales are 
made?  Will the future net revenue calculation be shown on the reserve report 
that we receive annually?  When will this calculation be done?  Are you 
satisfied with their definition of Internal and External debt?

4. In Part 3(a), looks like we would only receive an annual reserve report.  
Is that sufficient?  When should we get it?  Alos, whose financials do you 
want to receive?

5. In Part 5(c) - Setoff, I'll just note that this only applies to amounts 
due and owing between the parties and does not include "affiliates".  

6. In Part 5(f)- Assignment,  we need to decide what conditions precedent we 
want to apply to the limited partnership entity that they assign it to given 
the fact that once assigned, we will have no recourse to the partners, even 
the GP.  For example, should the LP have a minimum asset value at the time of 
the transfer?  It is not clear to me what assets this LP would own at the 
time of the transfer and I'm assuming that we would want it to meet some 
minimum credit criteria prior to such transfer.  In addition, are you 
satisfied with the debt and asset sale limitations?  On asset sales, I think 
that they need an annual limit as it is not clear to me how the $2,000,000 
limit currently works.  Alos, I think that all of these limitations in 
Section (f) should either be additional Events of Default or Additional 
termination Events.

Please call when ready to discuss.

Carol
russell.diamond@enron.com