Subject: FW: Enron-BNPP Master Netting, Setoff and Security Agreement
From: [email-masked]
To: [email-masked]
Date: Tue, 20 Nov 2001 06:15:09 -0800 (PST)

Harlan E. Murphy
Enron Wholesale Services - Legal
1400 Smith Street, EB 3811
Houston, Texas 77002
Tel: 713.345.2679
Fax: 713.646.3490
E-mail: [email-masked]

 -----Original Message-----
From: 	"David C Rosen" <[email-masked]>@ENRON  
Sent:	Monday, November 19, 2001 3:26 PM
To:	Murphy, Harlan
Cc:	[email-masked]; [email-masked]; [email-masked]; Seth GROSSHANDLER
Subject:	Enron-BNPP Master Netting, Setoff and Security Agreement

Dear Harlan:

The comments below are in addition to, and should be read with, the hand
mark-up we faxed to you on Friday.   Notwithstanding that these comments
remain subject to the resolution of the business issues, we hope to close
out as many outstanding items as possible to expedite the final execution
of the agreement.  Please feel free to call me at (212) 572-5398 if you
have any questions.

Yours truly,

David Rosen
Not yet admitted to the bar

Temporary Location Information:
Cleary Gottlieb Steen & Hamilton
153 E. 53rd Street (Citigroup Center)
38th Floor
New York, NY 10022

Phone: (212) 572-5398
Voicemail: (212) 572-5202 x2532
Mobile: (646) 479-3283
Fax: (212) 572-5399
Email: [email-masked]; [email-masked]

1.   Replace Paragraph 1 with:

     This Master Netting, Setoff, and Security Agreement (this "Agreement")
     is made and entered into effective as of November [   ], 2001 by and
     among BNP Paribas (including all branches and agencies thereof,
     "BNPP"), BNP Paribas Commodity Futures Inc. ("PFI") and BNP Paribas
     Commodity Futures Limited ("BNPPCML"), and Enron Corp. ("Enron"),
     Enron North America Corp. ("ENA"), Enron Power Marketing, Inc.
     ("EPMI"), Enron Risk Management and Trading International Corp.
     ("ERMTIC"), Enron Capital & Trade Resources International Corp.
     ("ECTRIC"), Enron Credit Limited ("ECL"), Enron Metals Limited ("EML")
     and Enron Capital & Trade Resources Limited ("ECTD").

2.   Change definition of BNPP Party to "means each of BNPP, PFI and
BNPPCML."

3.   Change definition of Enron Party to " means each of Enron, ENA, EPMI,
ECTRIC, ERMTIC, ECL, EML and ECTD."

4.   In the definition of Transaction, insert before the word "between"
"(i)" and add at the end the following:

     or (ii) held at a contract market, exchange, board of trade or
     clearing organization by any Party on behalf of a member of the other
     Group pursuant to an Underlying Master Agreement.

5.   In Section 2(b), in (i), replace the phrase "all Transactions under
one or more Underlying Master Agreements" with "each Transaction".

6.   In Section 2(b), at the end of (ii) and (v) before the semi-colon,
insert the following:

     , under any other agreement or under applicable law or equity, whether
     in respect of the Transactions thereunder, or otherwise

7.   In Section 2(b), at the end of (iii), after "applicable law", insert
"or equity"

8.   In Section 4, in the third sentence, after the words "from whom such
payment is due" insert the following:

     to such Party or Parties as the Non-defaulting Group determines are
     entitled to such payment

9.   In Section 7(b), in each of the forth and the twelfth lines between
the words "hereby" and "grants", insert "except as provided in the next
sentence" and in each of the ninth and the sixteenth lines replace the text
beginning "Obligations, " until the end of each sentence with:

     Obligations.  Without limiting the rights referred to in Section 5,
     the security interest granted in the immediately preceding sentence
     shall not apply to the Final Settlement Amount.

10.   At the beginning of Sections 7(c) and 7(e), insert the words "Subject
to Section 3,".

11.   In Section 15(b), following the words "on the basis of a payment
owed", insert the words "(including margin)".

12.   With respect to Section 17, our client has indicated that it would
not be useful or efficient to have the issue of arbitration (which is
clearly not central to the risk reducing purposes of the arrangements)
mixed up with the proposed agreement, which has arisen from the
circumstances of Enron that have developed over the last few months.  BNP
Paribas' primary reason for not wanting to include an arbitration clause
(even with the suggested language changes) is that, although the concept of
arbitration is being considered generally, BNP Paribas has, of yet, not
made any definitive decisions as to the implicit or necessary value of
arbitration clauses and such a decision would require significant internal
review and discussion.  Over the next few months, further consideration can
be given as to including arbitration in this agreement.

13.  Please note that BNP Paribas contemplates at least one long-form
confirmation as an Underlying Master Agreement.

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