Carol I'm having trouble with a few counterparties who, like Enron require an 
exclusion of "consequential" losses. Currently under our ETA  the exclusion 
for  liability consequential losses/damage only applies to Enron. There is 
however, a mutual exclusion of limitation of libility in the GTCs and our 
ISDAs. The major issue  I see is to ensure that we are covered for trades 
that are performed by persons with a password obtained through the 
counterparty. If we cover that point have we some scope to exclude the 
indemnity we require  from applying to  loss of profits?    




"Creek, Peggy" <pcreek@ue.com.au> on 06/05/2000 04:56:36 PM
To: "David Minns (E-mail)" <david.minns@enron.com>
cc:  

Subject: FW: Enron Agreement


David

Further to the Electronic Trading Agreement, hopefully the following can
move us closer to a resolution.

To summarise the position:
* I agree that we need to replace the deemed ISDA Agreement.  Please
forward a copy of the Schedule for our review.
* UE agrees to acknowledge a letter from Enron stating that the Deemed
ISDA Agreement is a master agreement for the purposes of the ETA.
* You have stated that counterparties can control their access to
Enron products, UE agrees to control the access to EnronOnLine so that at
this stage, UE only trades with Enron Australia Finance for Australian power
traders.  Prior to trading in other products, UE will ensure that a master
agreement is in place with the relevant Enron entity.
* With respect to Section 4(b) of the ETA, UE cannot agree to include
consequential losses.  As we have indicated before, we do not believe that
this is a risk which should be borne by UE, rather it is a risk that is
better dealt with by Enron in their insurances covering business disasters
etc.  Would it assist if further definition was included for consequential
loss to tighten this definition?  This would be along the lines of excluding
loss of profits etc.


Unfortunately this consequential loss clause appears to be holding trading
up.  If Enron is unable to agree to this amendment we may need to seek an
alternative method of trading.  For example, is it possible for UE to view
the EnronOnline site without any access rights - this may facilitate trading
albeit trading via the telephone?

Regards
Peggy