Subject: US Benzene Fin Option - Please review and Approve
From: [email-masked]
To: legal <[email-masked]>
Cc: [email-masked], [email-masked], [email-masked]
Date: Fri, 21 Sep 2001 07:50:10 -0700 (PDT)

Mark,

Please review the attached language for the Benzene options.  Please let me know if you have any questions.  I am not too sure about the language which is bolded.  If you don't mind giving me a hand.

Thanks,
Melba Lozano
713-345-8986 
713-646-8511 Fax
713-698-4847 Pager

US Benzene Fin Opt  
A financial Option Transaction with Enron North America Corp., under which the Seller receives the Premium and the Buyer receives the Cash Settlement Amount. Each calendar month during the Term of the Transaction will be a Determination Period, provided that if the Term of the Transaction is less than one calendar month the Determination Period shall be the Term of the Transaction. The Notional Quantity per Determination Period shall be calculated from the volume submitted by Counterparty on the website in accordance with the unit of measure. The Premium shall equal the product of (i) the price submitted by Counterparty via the website, multiplied by (ii) the number of calendar days during the Term of the Transaction, multiplied by (iii) the volume submitted by Counterparty on the website. The Payment Date for the Premium shall be 2 business days after the Trade Date of the Transaction. The Payment Date(s) for the Cash Settlement Amount shall be 5 business days after the Cash Settlement Amount is determinable. Where this Transaction is a Call Option, the Cash Settlement Amount shall be the sum of the product of (a) the Notional Quantity per day during the Determination Period, multiplied by (b) the greater of (i) zero, or (ii) the Index minus the Strike Price. Where this Transaction is a Put Option, the Cash Settlement Amount shall be the sum of the product of (a) the Notional Quantity per day during the Determination Period, multiplied by (b) the greater of (i) zero, or (ii) the Strike Price minus the Index. Where this Transaction is a Straddle Option, the Cash Settlement Amount shall be the sum of the product of (a) the Notional Quantity per day during the Determination Period, multiplied by (b) the absolute difference between the Strike Price and the Index.

The Exercise Period(s) shall be the last Trading Day of the month. The Index for a month shall be the mean of the average of the high and low price in Cents/Gallon of Benzene published under the headings "Prices for Period Ending [DATE]: United States: Benzene)" under the caption "SPOT: Cents/Lb." in each issue of Chemical Market Associates, Inc.'s Aromatics Market Report (Weekly) that reports prices effective for such month.

The price is quoted in US Dollars per unit of volume, which will be the Contractual Currency. 

The unit of measure against which the price is quoted shall be gallons and the volume shown shall be in total number of Barrels (42 US Gallons) per month.