Re: Credit Ring Sorry Geoff, I was out of the office Friday. Who is the third potential counterparty? JB "Storey, Geoff"  on 11/01/2001 04:00:30 PM To:   Jerry Burt/BIZSRV/TXU@TXUE cc: Subject:  Credit Ring Jerry, Here would be the prosed trade: For example: Counterparty buys from Enron  jan02-dec02 nymex swap 350 contracts/mo @ current market + $2 Enron buys from TXU           jan02-dec02 nymex swap 350contracts/mo @ current market + $2 TXU buys from Counterparty    jan02-dec02 nymex swap 350 contracts/mo @ current market + $2 There will be no net position change for anyone. It lowers TXU's and the Counterparty's open positions and VAR with Enron. It will also replace the Counterparty's Enron credit exposure with TXU. Enron releases TXU margin and TXU posts margin with the Counterparty based on their contractual obligations. All the trades would fall within our existing ISDAs. Our lawyers have added some language for the confirms that would tie the trades together. That language is included below. If you have any legal questions feel free to call our lawyer Mark Taylor at 713-853-7459. If you have any questions feel free to call me at 713-853-7058. I'll ring you latter this afternoon to go over the details and talk about possible counterparties. Thanks for your time. Geof Storey "Each of the parties to this Agreement recognizes and acknowledges that the parties are acting and agreeing to perform their obligations hereunder in reliance upon (i) the timely execution and delivery by [legal name of other counterparty] ("Third Party") and Party A of a transaction in substantially the form attached hereto as Exhibit A ("Third Party Transaction A") and would not otherwise agree to execute, deliver and perform under this Agreement if Third Party and Party A were not contemporaneously executing and delivering Third Party Transaction A and (ii) the timely execution and delivery by Third Party and Party B of a transaction in substantially the form attached hereto as Exhibit B ("Third party Transaction B") and would not otherwise agree to execute, deliver and perform under this Agreement if Third Party and Party B were not contemporaneously executing and delivering Third party Transaction B. The effectiveness of this Agreement shall be subject to the condition that contemporaneously with the execution and delivery of this Agreement Party A and Third Party execute and deliver Third Party Transaction A and Party B and Third Party execute and deliver Third Party Transaction B." ********************************************************************** This e-mail is the property of Enron Corp. and/or its relevant affiliate and may contain confidential and privileged material for the sole use of the intended recipient (s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender or reply to Enron Corp. at enron.messaging.administration@enron.com and delete all copies of the message. This e-mail (and any attachments hereto) are not intended to be an offer (or an acceptance) and do not create or evidence a binding and enforceable contract between Enron Corp. (or any of its affiliates) and the intended recipient or any other party, and may not be relied on by anyone as the basis of a contract by estoppel or otherwise. Thank you. **********************************************************************