Hi Sara,

I have completed a preliminary legal review of the Account Agreements with 
Goldman Sachs and Morgan Stanley.  

I read the draft language you sent re: limitation of liability that you 
suggested we add to these and the Bear Stearns agreements for Enron Credit, 
Inc.   Because these agreements have arbitration clauses, this provision as 
drafted might be unenforceable under the NASD rules.  I am going to 
doublecheck the law on this point today or over the weekend.  If this is in 
fact correct, the firms will probably reject the provision on this ground 
especailly if including it would subject them to NASD fines.   In any case, 
we can wait to see what there response is but in the meantime we should set 
aside time to discuss the law on this point.

Cheryl Nelson
Senior Counsel
EB3880D
(713) 345-4693