I think your idea is a good one and should work fine.  I don't think the 
joint & several issue should be a problem; there is not a lot of liability 
under the ETA (mostly disclaimers and Enron exculpatory clauses) so the key 
issue is making sure we can hold the right entity liable for transactions.  
That shouldn't be a problem under the side letter, which could make the point 
clear.  The only other issue I can think of is making sure that the necessary 
reps re physical trading (trade option, capacity, energy-related issues) are 
obtained from the right entity, but presumably this can also be covered under 
the side letter.  Please call if you want to discuss.

Best regards.

>> <mtaylo1@ect.enron.com> 12/16 9:11 PM >>>

I would like to consider some counterparty-specific agreement to solve this
problem.  What do you think of a side agreement among both KN entities and 
Enron
which specifies that a user ID and password have been issued to both of KN's
legal entities jointly and severally and that transactions for certain 
products
(e.g. all financial products) entered into under that user ID and password 
will
be deemed executed by KN Trading (their financial trading entity) and all 
others
will be deemed executed by KN Marketing (their physical entity)?  Do you see 
any
problems here?  Issues re: joint & several liability under the ETA but not the
Transactions?

Let me know if you need further clarification of the problem.

I haven't run this by Louise yet - she may raise system or commercial
objections.

Mark
---------------------- Forwarded by Mark Taylor/HOU/ECT on 12/16/99 07:58 PM
---------------------------

                                                       
(Embedded                                             image 
moved                                           to file:      From:  Bob 
Shults                       pic14181.pcx) 12/16/99 10:28 AM









To:   Mark Taylor/HOU/ECT@ECT, David Forster, Louise Kitchen
cc:   Debbie R Brackett/HOU/ECT@ECT Subject:  Assignment Issue

We continue to struggle with the issue of counterparties trading under the 
wrong
name.

KN Trading typically does financial trades, KN Marketing typically does 
physical
trading.  We issued seperate ID's to accomadate this however they have traded
physical this am with KN Trading.  I discussed this with KN (Shawn Magovern) 
and
he expressed great frustration with the idea of running seperate machines or 
web
sessions.  Shawn asked us to consider what options might be available
downstream.  His comment was that they will just have to turn the system off 
and
that brokers understand their business and apply the company name 
appropriately.
I explained to Shawn that he can control the access of his traders and avoid
issues in the future however it does require them to transact under the
appropriate ID.

Can we develop some form of agreement that would allow us to "automatically"
assign transaction according to some strict guidelines (I know this is like a
Power of Attorney)?  Can we look at systematic enhancements in the future 
which
would allow for contractual arrangements based on the product?

I would like to get back with Shawn if we can suggest any other options.



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