Joel --

I've taken a quick look at these and think that they are really more in the physical trading line than derivatives.  I'm trying to figure out who the physical metals trading lawyer is to take a look at them for you.

-----Original Message-----
From: Ephross, Joel 
Sent: Wednesday, July 25, 2001 10:25 AM
To: Boyd, Justin; Taylor, Mark E (Legal)
Subject: FW: Enron/Barclays Global Markets Inventory Financing


I am forwarding initial documents concerning an inventory finance transaction. 

Mark, I am distributing to your attention since the structure involves the buying/selling of inventory in a trading arrangement, and the documents are in some respects derived from an ISDA format. While this is a "financing" with a bank, and hence my involvement, there are trading aspects here as well. [Mike Robison is reviewing from the EWS business unit perspective.]If someone in your group should review, please advise.

Justin, I am distributing to your attention, since the choice of law is English, and you were involved in the prior Metals transaction that this is derived from. If someone else in London should review, please advise.

-----Original Message-----
From: Sitlani, Deepak [mailto:deepak.sitlani@linklaters.com]
Sent: Friday, July 20, 2001 10:20 AM
To: Ghosh, Soma; Ephross, Joel; Liu, Ying; Brian Smith (E-mail); Richard
Firth (E-mail); 'Martin.Woodhams@barclayscapital.com'
Cc: Firth, Simon N; Lee, Gareth
Subject: Enron/Barclays Global Markets Inventory Financing


Please find attached first drafts of:

1 the Master Agreement;
2 the Forward Sale Agreement; and
3 the Agency Agreement.

 <<00300601_EnronCorp_DES.doc>>  <<010702_Forward_Sale_Agreemnt_DES.doc>>  
<<010702_DES_EnronAgencyAgreement.doc>> 


For ease of review, I also attach:

1 the Master Agreement marked up to show changes against the physical metal
Master Agreement (as last amended on 21 May 2001);

 <<00300601_EnronCorp_DES.doc>> 

2 the Forward Sale Agreement marked up to show changes against the physical
metal Master Agreement (as last amended on 21 May 2001); and

 <<REVISED3.DOC>> 

3 the Agency Agreement marked up to show changes against the physical metal
Master Agreement (as last amended on 21 May 2001);

 <<PhysMstrvAgency.doc>> 


Please note the following:

1. General

- I have drafted the agency and forward sale aspects previously contained in
the physical metal Master Agreement in separate agreements. In order to
ensure that these agreements are as distinct as possible, certain elements
of the physical metal Master Agreement (for example, conditionality of
Transactions/Call Options on hedging) may have to be included in a separate
side letter. 
- To the extent that I have insufficient details in relation to this
transaction, I have retained the structure of the physical metal Master
Agreement.
- These drafts have not been reviewed by Enron and therefore remain subject
to their comments.

2. Master Agreement

- As the Commodities will not be exchange traded, I have introduced the
concepts of "Reference Price" and "Pricing Date", which are similar to those
contained in the 1993 ISDA Commodity Derivatives Definitions.
- Enron would like to be able to enter into Transactions/exercise Call
Options on non-Business Days.
- I have, where possible, avoided referring to the Agency Agreement and the
Forward Sale Agreement. However, one aspect of the Agency Agreement that
does remain in the Master Agreement is that of "Agency Costs", which is, in
some instances, an intrinsic element of pricing. This will need to be
discussed.
- I have removed the concept of "Minimum Value", which I understand will not
form part of this transaction.
- I understand that, due to the nature of the Commodities, there may be an
imbalance in the quantity sold and that delivered. Although the consequences
of this need to be discussed, I have introduced provisions to cater for this
(see Clauses 4.3 and 5.5.5).

3. Forward Sale Agreement

- I have attempted to make this agreement as distinct as possible from the
Agency and the Master Agreements.
- The pricing of the forwards needs to be discussed.
- I have removed "Credit Support Default" as an Event of Default.

4. Agency Agreement

- As with the Master and Forward Sale Agreements, I have attempted to make
this agreement as distinct as possible.


I look forward to discussing your comments and working with you on this
transaction.

Kind regards
Deepak

Deepak Sitlani
Linklaters, London
A member firm of Linklaters & Alliance
Tel: (44-20) 7456 2612
Fax: (44-20) 7456 2222

> http://www.linklaters.com
> http://www.linklaters-alliance.com
> 
> 


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