IN: This is an email
Eric, This is to update you on the current situation with the OSTRIP function in Exotica. After some lengthy analysis of the function, its inputs and the documentation associated with it, it was brought to our attention in the Research Group that the OSTRIP function was being utilized in different manners by different people within Enron. In order to remedy this situation, the documentation of Exotica was revised and more details were added, so as to make explicitly clear the distinctions between the fixed price options and forward start options. (You will find attached a copy of the most recent version of the Exotica documentation.) In addition to discussions with Santiago Garcia in structuring, it was seen to be important to ensure that those responsible for booking the options in ERMS (specifically, Jeremy Wong) be updated on the changes. By pure coincidence, the two ways that inputs were made for fixed price options gave the same values for the premiums. However, one methodology is really incorrect as far as the documentation is concerned, and the attempt has been made to rectify this. The forward start option pricing has not changed in any way. I would like to arrange a meeting tomorrow afternoon (Thursday) between all those parties concerned to ensure uniformity of pricing across the board. If you are available, I would appreciate it if we could meet at around 4:00 PM. Regards,

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OUT: OSTRIP Function in Exotica

IN: This is an email
Mark: Thanks so much for your explanation earlier today. Just one more question, please: is arbitration or litigation the preferance under English law? How often do you negotiate to the contrary? Thanks. Sara

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OUT: ISDA Agreements governed by English law

IN: This is an email
In order to bring better legal coordination and standardization to Enron's Risk Assessment and Control (RAC) group, we have formed a new legal group, which will initially include Lisa Mellencamp (Finance), Marcus Nettelton (Power Trading), Carol St. Clair (Broadband/Power Trading), Mary Cook (Financial Swaps), Peter Keohane (Canada), Ed Essandoh (Retail), Paul Darmitzel (Retail) and Elizabeth Sager (Power Trading) (Team Leader). This group will focus on, among other things, managing Enron's exposures with bankrupt counterparties, working out credit solutions with distressed counterparties and standardizing our overall credit practices. The initial members in this group have been drawn from Enron's numerous legal groups in order to gain a broader perspective. Each of these members will provide support to this new group in addition to their current responsibilities. Within RAC, Michael Tribolet will focus on distressed counterparties, in conjunction with Bill Bradford, who continues to manage the Credit Risk Management group. Please join us in supporting the efforts of this new group.

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OUT:
New Legal Team to Assist RAC