Hilary E. Ackermann
Goldman Sachs
Credit Risk Management & Advisory
Phone: 212-902-3724
Fax:  212-428-1181
E-Mail:  hilary.ackermann@gs.com
Dear Mr. Lavorato:

Following up on your and Ken Lay's conversation with Gary Cohn, I would like
to forward the following proposal, acting for each of Goldman Sachs Capital
Markets and J.Aron.
> In order to provide Enron North America with additional liquidity, J. Aron
> and GSCM have discussed entering into the following series of transactions
> on terms to be agreed between each of the relevant parties:
>
> 1.  Enron Corp./J. Aron - FX Option sold by Enron Corp. to J. Aron with a
> settlement date of Dec 11, 01 would be settled on Nov 21, 01.
>
> 2.  Enron NA/GSCM - Interest Rate Swap Portfolio - At Enron NA's option,
> we would either (a) close out and portfolio on Nov 21, 01, resulting in a
> payment from GSCM to Enron NA or (b) bilaterally reduce applicable margin
> trigger from $10mm to zero, which based on current MTM would result in
> $10mm of additional margin being paid by GSCM to Enron NA.
>
> Weather Derivative Transaction - Applicable margin trigger would be
> reduced from $50mm to $5mm, which based on current MTM would result in
> ~$18mm of margin being paid by GSCM to Enron NA.
>
> 3.  Enron NA/J. Aron - Financial Derivative Portfolio - At Enron NA's
> option, we would either (a) close out and portfolio on Nov 21, 01,
> resulting in a payment from J. Aron to Enron NA or (b) bilaterally reduce
> applicable margin trigger from $10mm to zero, which based on current MTM
> would result in $10mm of additional margin being paid by J. Aron to Enron
> NA.
>
> Physical Natural Gas Receivable - In consideration of the foregoing, Enron
> NA would settle $10.5mm physical natural gas receivable for value Nov 21,
> 01.
>
Please call me at the number below at your soonest convenience to discuss
further.  Thank you.


Hilary E. Ackermann
Goldman Sachs
Credit Risk Management & Advisory
Phone: 212-902-3724
Fax:  212-428-1181
E-Mail:  hilary.ackermann@gs.com