
Date: Mon, 30 Apr 2001 05:13:00 -0700 (PDT)
From: elizabeth.sager@enron.com
To: lcw4@pge.com
Subject: Re: PG&E and Enron Stand-Still Agreement
Cc: byoung@llgm.com, djst@pge.com, elizabeth.sager@enron.com,
fong.wan@pge-corp.com, jklauber@llgm.com, jlopes@hrice.com,
jrfc@pge.com, jxb7@pge.com, kkp2@pge.com, kmh5@pge.com, rmk4@pge.com,
william.bradford@enron.com, michael.tribolet@enron.com,
lisa.mellencamp@enron.com
Bcc: byoung@llgm.com, djst@pge.com, elizabeth.sager@enron.com,
fong.wan@pge-corp.com, jklauber@llgm.com, jlopes@hrice.com,
jrfc@pge.com, jxb7@pge.com, kkp2@pge.com, kmh5@pge.com, rmk4@pge.com,
william.bradford@enron.com, michael.tribolet@enron.com,
lisa.mellencamp@enron.com

Larry:  In accordance with our conversation late last week, I am enclosing =
a=20
revised draft of the proposed standstill agreement that was discussed on=20
Wednesday.  My comments primarily involve the following:

(1) As you and I discussed last week,  I thought it made sense to specify a=
=20
reasonable date by which Enron and PG&E shall have reached closure on a=20
settlement agreement on the contract termination and related claims.  I =20
proposed a one month period to do that.  If the parties can=01,t come to an=
=20
agreement in that time period, then the =01&mechanics=018 in the MPA for re=
solving=20
a dispute dealing with the calculation of the termination payment would be=
=20
=01&reactivated.=018  Obviously, if we are making progress, the parties can=
always=20
extend the date.  I felt it was appropriate to specify the window period to=
=20
make sure that everyone is focused on attempting to get a prompt resolution=
. =20
Assuming a final settlement agreement is agreed upon, the conditions of the=
=20
extension of the =01&stay=018 would be embodied in the settlement agreement=
itself =20
(as opposed to this letter).

(2) Enron agreed at the meeting that it would keep the LCs in place while t=
he=20
parties were working to see if a settlement agreement could be reached, and=
=20
that requirement is reflected in our revisions to the letter.  Thus, the=20
revised letter provides that Enron will do this for the =01&Initial Extensi=
on=20
Period=018 (i.e., to May 25, 2001).  Your draft had provided that Enron wou=
ld be=20
required to keep the LCs in place even if no settlement agreement were to b=
e=20
reached.  My view is that any requirement to maintain the LCs beyond the=20
Initial Extension Period and any conditions with respect thereto, if agreed=
=20
to by Enron, should be part of the final settlement agreement executed by t=
he=20
parties, rather than as part of this letter.  Also, we note that, as a=20
contractual matter, the MPA does not require the non-defaulting party to ke=
ep=20
in place any security in favor of the defaulting party when, as a result of=
a=20
termination, the non-defaulting party owes a payment to the defaulting part=
y.=20
See Sec. 5.5.

(3) Your draft of the letter provided that Enron =01&agrees=018 to enter in=
to new=20
master gas agreements and consummate term transactions on =01&commercially=
=20
reasonable terms.=018  The revised letter specifies that Enron agrees to=20
negotiate with PG&E in these respects simultaneously with the negotiations=
=20
towards a settlement agreement, but any commitment on Enron=01,s part to ef=
fect=20
a contract or transaction with PG&E will only arise as a result of the=20
parties=01, execution of the definitive transaction documents (as opposed t=
o=20
this letter), the execution of which shall be in the sole discretion of eac=
h=20
of the parties.


Please call me at your convenience to discuss any questions on the foregoin=
g=20
or on the revised letter.  Thanks in advance for your help in moving this=
=20
forward.


Elizabeth Sager
713 853 6349







=09"Witalis, Lawrence (Law)" <LCW4@pge.com>
=0904/25/2001 07:23 PM
=09=09=20
=09=09 To: "'elizabeth.sager@enron.com'" <elizabeth.sager@enron.com>
=09=09 cc: "'jklauber@llgm.com'" <jklauber@llgm.com>, "'byoung@llgm.com'"=
=20
<byoung@llgm.com>, "'jlopes@hrice.com'" <jlopes@hrice.com>, "Kuga, Roy"=20
<RMK4@pge.com>, "Wan, Fong (Corp)" <Fong.Wan@pge-corp.com>, "Sena, David"=
=20
<DJSt@pge.com>, "Foley, Jack" <JRFc@pge.com>, "Pearce, Karola (Law)"=20
<KKP2@pge.com>, "Harvey, Kent" <KMH5@pge.com>, "Bar-Lev, Joshua (Law)"=20
<JXB7@pge.com>
=09=09 Subject: Stand-Still Agreement


Ms. Sager:

Attached is my draft of an agreement memorializing the parties' respective
commitments as we negotiate the amount of the Termination Payment and of
other claims Enron may have against PG&E in Bankruptcy Court.  I do not hav=
e
your mailing address; yet, PG&E would like to receive assurance soon that
Enron agrees with the terms of this proposed letter agreement.  After
reviewing the draft, please indicate Enron's agreement by return e-mail to
me.  Or, please call me (415-973-3817) to discuss.

Thanks.

Larry Witalis

<<enron.doc.rtf>>

