QUESTION: Mike, I am sending you a message regarding a potential candidate. Please, take a look at him and see if he fits better our group or Mark Tawney's group. Vince =20
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ANS: Recruiting for weather risk management group

QUESTION: Rick, As follow-up to our discussion of today, we would like to explain our concerns. EEL entities are under control of an administrator - Price Waterhouse - who represents the interest of the creditors of those entities. All decisions regarding those entities are being made by the administrator. Michael Brown, Fernley Dyson, John Sherriff are not in the building and to the best of my knowledge have resigned all directorships. Most of the remaining employees (300) are working for the administrator. There are, however, interests of Enron Corp which are housed in Enron House may not be getting the attention they deserve or , potentially more concerning, are being used or eyed by the locals for their benefit. Examples are : 1) the contractual assets in ECTRIC which include financial trades, weather derivatives, nordic energy, some crude and products trading. 2) large in the money pumped storage trade which is in a US-based LLC - in the money by a net $50MM 3) Enron Direct is being offered for sale (JV with EES) 4) The TXU VPS contracts (currently under termination dispute) is being negotiated solely by administrators and their employees Transactions are being terminated by counterparties, deals are being cut between the administrators and commercial for the dispostion of assets, and value is being eroded because no support staff will work without a reasonable expectation of being paid. Finally, the administrators have been here for several weeks and seem woefully prepared to take on the task at hand. We suggest that the Houston-based 'investor' (whether that is current managment or a trustee) ought to reconstitute some form of governance over its activities in Europe so that it can be assured of receiving maximum value for its assets here. Currently, we have little capability to cause the local staff to provide us with the information and access to make informed decisions. Please give us a call so we can discuss a course of action, if any, you would like us to take. Ted
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ANS: US Interests in Europe

QUESTION: 1. Be sure to verify that the underlying contracts do not allow cherry picking under any default scenario. If it does, amend the express language. 2. We have made 2 changes to the netting agreement forms on the basis of further review by Leslie Hansen of some provisions in our trading forms. The first change is in paragraph 2(a) to clarify the definition of Default. The second change is in paragraph 14(b) to delete the day limitation on claims of Force Majeure. We feel this should not be included in any physical contract that will be included in a master netting agreement, especially because of the current international situation and security concerns. See attached reline version to read the changes. 3. No changes have been made to the Collateral Annex. 4. Attached below are the new forms. Rather than continue with forms with and without the user notes, I put the user notes in a separate document. They are not at the back of the forms. Simpler. The attached forms are Master Netting & Security Agmnt 10 h a v1 (to use without collateral annex) and Master Netting & Security Agmnt 10 h v1 (to use with collateral annex).
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ANS:
FORM CHANGES: READ