RE: B of A setoff provisions ,
 Julia and Liz:
I reviewed the ISDA agreements with B of A, one with Enron Corp. and one with ENA.  The one with Enron Corp. does not have a ratings trigger and as we discussed, there is no financial statement rep.  The one with ENA does have a ratings trigger (below BBB- by S&P and below Baa3 by Moody's).  The ratings trigger is both an Event of Default (curable by posting collateral) and an event that lowers the collateral threshold to zero.  Setoff rights are triggerrred upon the designation of an early termination date and only extend to agreements between ENA and B of A.


Carol St. Clair
EB 4539
713-853-3989 (phone)
713-646-8537 (fax)
281-382-1943 (cell phone)
8774545506 (pager)
281-890-8862 (home fax)
carol.st.clair@enron.com

 -----Original Message-----
From: 	Murray, Julia  
Sent:	Monday, November  26, 2001 12:51 PM
To:	St. Clair, Carol; Sager, Elizabeth
Subject:	FW: B of A setoff provisions

   fyi                        [Murray, Julia]  




 Original Message-----
From: 	Ephross, Joel  
Sent:	Monday, November  26, 2001 12:43 PM
To:	Murray, Julia
Cc:	Mintz, Jordan
Subject:	B of A setoff provisions

According to Mary, we do not have a written agreement with B of A. Notwithstanding that, from time to time B of A sends out standard Ts and Cs regarding corporate accounts. The last one available, effective October 2001, contains a setoff provision. This purports to allow the bank a right of setoff, either before or after an event of default, and to apply both to the bank, and its affiliates. [It does not purport to apply to the debtor or any of its affiliates, except in circumstances not applicable here -- such as sole proprietor, or partnership situations.]
julia.murray@enron.com, elizabeth.sager@enron.com