Sharon:

I'm on my way out of the office for an appointment but will be back around 4 
or 4:30 Houston time.  I'd like a quick chat this evening or tomorrow morning 
(before 11 am Houston, if possible).  I understand that the dynamics of this 
deal were discussed by Russ and Jeff Kinneman/Sheila Glover.  The Enron party 
is Enron North America Corp. ("ENA", formerly named "ECT") and the $25million 
Enron Corp. guaranty is for the purpose of securing payment of the 20%plus 
margin requirement for  illiquid securities held by ENA in its Bear account 
("stock loan account").  I'm not sure if other agreements are necessary and I 
was hoping that we could discuss.

Feel free to email or call.  Thanks for your help.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com



	"Chernick, Sharon Confidential Memo-Counsel (Exchange)" <schernick@bear.com>
	02/07/2001 01:17 PM
		 
		 To: "'sara.shackleton@enron.com'" <sara.shackleton@enron.com>
		 cc: "Talento, Scott (Exchange)" <STALENTO@bear.com>, "Miron, Russel 
(Exchange)" <rmiron@bear.com>
		 Subject: enhanced stock loan


Sara:

I have made some inquiry and verified that the Bear Stearns Stock Loan
enhanced leveraged product is indeed what is under consideration.

As promised, I have a brief step-by-step  explanation of such a stock loan
transaction, which is appended to this message.  There are actually two
possible scenarios: one where cash collateral is used for the stock loan,
the other where actual securities are used as collateral.  We understand
that, at least initially, you will be using bonds as collateral.

The Stock Loan Agreement is used in connection with our current form of
Institutional Account Agreement which ECT may not have signed.  I therefore
also append that agreement to this message.

I expect you waill wnat to review these attachments before we speak again.
Again, as a reminder, I will be on vacation from Friday the 16th through the
following week.  If you would like to speak before hand, or if you have any
questions regarding any of the documents, please let me know.

Regards,

Sharon

 <<Enhanced Stock Loan-explained.doc>>

 <<IAA_ 9-8-00rev_clean.doc>>

 - Enhanced Stock Loan-explained.doc
 - IAA_ 9-8-00rev_clean.doc
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