Amita,

Credit Risk - I am of a mind for Enron to accept the credit risk of metals 
transactions done through EnronOnline, bearing in mind that it will be Enron 
credit  criteria which is applied, the short timeline and the fact that this 
sleeving agreement is intended to be a temporary arrangement until conclusion 
of the final purchase agreement. If it can be set up so they take the risk, 
then fine - but don't allow this to delay the process.

Confidentiality - I assume we are covered by the current C.A. Please confirm 
with Eric Gadd.

Performance - Enron's obligation is to the customer and MG's obligation is to 
us.

Invoices - Probably  prepared by MG and sent on Enron letterhead. We can 
download EnronOnline Transaction info. to MG if required. Please check with 
backoffice on this.

Position - Assumed by MG

Data Feeds - as normal for EnronOnline, with the addition of the financial 
product price and volume info. which we have discussed.

Compensation for credit risk - See above note

Dave






Amita Gosalia@ECT
06/12/2000 03:53 PM
To: Edmund Cooper/LON/ECT@ECT, Justin Boyd/LON/ECT@ECT, Mark 
Taylor/HOU/ECT@ECT
cc: Janine Juggins/LON/ECT@ECT, Lara Fields/HOU/ECT@ECT, David 
Forster/Corp/Enron@Enron, Bruce Garner/Corp/Enron@ENRON 

Subject: 'Sleeving Agreement' main concerns

Hi Guys

Please see below (and in Lara's email) some of the issues we thought needed 
to be addressed in the "back to back" agreement between Enron and MG.

Possibility of indemnity from MG re counterparty credit risk being held by 
Enron (in the event that no compensation is payable)?

Please notify Edmund if there are any other issues which need to be covered 
in this document.

Regards

Amita
---------------------- Forwarded by Amita Gosalia/LON/ECT on 12/06/2000 21:32 
---------------------------
From: Lara Fields on 09/06/2000 17:51
To: Janine Juggins/LON/ECT@ECT
cc: Amita Gosalia/LON/ECT@ECT 

Subject: 'Sleeving Agreement' main concerns

Hi Janine,

As discussed here is our list of topics we feel the 'Sleeving' Agreement 
should cover.  We think that it should remain as broad as possible to avoid a 
delay in Legal negotiations over the finer details.

Please let us know your thoughts and we will send these up to Justin.  If you 
could please review this as soon as possible, we would appreciate it as 
Justin is out of the office next week.

Confidentiality - covering all EnronOnline applications and trading strategies
Performance of obligation to deliver / receive product
Invoices and Confirmations - confirmations for EOL deals should be processed 
by MG staff and sent out with proper Enron entity, also send confirms to Enron
Assumption of underlying position by MG - Enron fully transfers positions to 
MG
Provision of data feeds - i.e. information to the Credit Aggregation System 
and/or to the RAC value at risk system
Information provision- for Management Reporting purposes
Compensation for Credit risk taken? -  please advise if you feel this is 
necessary.

Thank you!
Lara