mark:
Any thoughts on whether we should give in with respect to the consequential 
damages issue?
Carol
---------------------- Forwarded by Carol St Clair/HOU/ECT on 04/17/2000 
06:16 PM ---------------------------


David Minns@ENRON_DEVELOPMENT
04/17/2000 01:38 AM
To: Carol St Clair@ECT
cc: Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Paul 
Smith/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject: Re: EnronOnline

Carol, 

we have one remaining issue outstanding with United Energy on the ETA. They 
are still insisting on a exclusion of "consequential losses" from the 
indemnity given clause 4(a) of the ETA. Two questions 
Do we have a position on agreeing to exclude consquential losses from this 
clause? My own view is in this instance it is going to be somewhat "hit and 
miss" as what would be a consequential loss and what is not. That being said 
the general Enron position is to exclude consequential losses. In fact such a 
provision is already in the GTCs in respect of any Transaction.  Hence if 
there was a Transaction consequentiallossess would then presumably be 
excluded in respect of a related breach of the ETA.  
Utilicorp is a substantial equity holder in United Energy. I understand they 
are trading through EnronOnline. Do we know what they have agreed?  
---------------------- Forwarded by David Minns/ENRON_DEVELOPMENT on 
04/17/2000 05:15 PM ---------------------------


David Minns
04/12/2000 06:12 PM
To: "Creek, Peggy" <pcreek@ue.com.au> @ ENRON
cc: Paul Smith/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Connell 
Burke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: EnronOnline  

Peggy further my previous email. Two additional points;

I believe it is best for us  to move to replace the Deemed ISDA Agreement. 
This will provide a cleaner contractual basis for EnronOnline trades. We 
should be able to settle a  ISDA  Master Agreement quite swiftly  using the 
existing commmercial terms in the Deemed ISDA. If you are concur with this 
course of action we will forward to you tomorrow  a Schedule  for  review.  
In respect of Section 4(b) of the ETA we would be agreeable to add the 
following at its end:  "unless such access, entry, omission or action arises 
from acts or omissions of Enron and its directors, officers, employees, 
agents or contractors.''      



David Minns
04/11/2000 03:01 PM
To: "Creek, Peggy" <pcreek@ue.com.au> @ ENRON
cc: Paul Smith/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: EnronOnline  

Peggy my apologies for not replying sooner but I was overseas.  Let me 
respond to the points you raised.

Deemed ISDA Agreement- We would be most happy to provide a letter that you 
could aknowledge that the Deemed ISDA Agreement is a master agreement for the 
purposes of the ETA. I would prefer not to make a formal amendment as this 
may exclude a subsequent Master Agreement from applying.
Enron Australia Finance Pty Ltd. is the Enron counterparty for all Australian 
power trades. If that is your preference then access can be limited to only 
those products. You could write to us stating this is your position. However, 
we have found that counterparties have not found this necessary. Your 
EnronOnline Master User will set access levels for your individual traders. 
Many counterparties appoint a person from their Controls group (not a Trader) 
as their Master User.   This gives them the flexibility to broaden/ reduce 
access themselves.
Excluding "consequential loss" in this circumstance is quite broad but if we 
could work through some scenarios hopefully we could find some words to 
accomodate your concerns.
When we last spoke you mentioned the concern here was the possibility that  
the password may be disclosed from other than a UE source ie Enron. I have 
talked this issue through with our systems people as to the nature of this 
exposure. What happens is that the password which is issued to a user is 
immediately changed after it is received from Enron. Hence the source of the 
password must be the relevant counterparty. Whether improper use is a result 
of the counterparty's negilence or some other cause such as an unauthorised 
use or disclosure by one of its personnel is not relevant. What is of concern 
that the loss would have resulted from or arose out of a Counterparty's 
"access to or utilisation of the Website".    

Perhaps you would give me a call so we may discuss any outstanding points.


David Minns
Senior Legal Counsel
Phone 612 9229 2310
Fax  612 9229 2350               



"Creek, Peggy" <pcreek@ue.com.au> on 03/31/2000 12:45:47 PM
To: "'david.minns@enron.com'" <david.minns@enron.com>
cc:  

Subject: EnronOnline


David

Further to our conversation this week regarding our outstanding issues in
the Electronic Trading Agreement, UE suggests the following way foreward.

Enron sends a letter to UE to be countersigned.  This letter covers the
following:

* it is a variation to the ETA;
* all Transactions entered through EnronOnline will be covered by the
Deemed ISDA Master Agreement signed between UE and Enron Australia Finance
and dated 8th Feb 1999;
* Transactions at this stage will only be between UE and Enron
Australia Finance;
* amend clause 4(b) to exclude indemnification against consequential
loss;
* amend clause 4(b)(ii) of the ETA to remove the wording "whether or
not Counterparty has authorized such access" and provide appropriate
replacement wording that ensures UE is only liable where access is obtained
through UE's negligence.

Please let me know if Enron would agree to this.

Regards
Peggy