"financial options" (derivatives) and the Trade Option Exemption ,
 Please see the attachment for a specific definition of ELIGIBLE SWAP 
PARTICIPANT and the TRADE OPTION EXEMPTION.

From a legal perspective and to avoid scrutiny and regulation by the 
Commodity Futures Trading Commission, ENA must always comply with the Trade 
Option Exemption when entering into options (as buyer or seller) with a third 
party.  Some of ENA's trading parties cannot satisfy this exemption from 
regulation because they are not a producer/merchant handling the underlying 
commodity (such as banks, hedge funds, etc) even though they may be entering 
into the transaction for business purposes.  If that situation occurs, ENA 
MUST ALWAYS BE THE OFFEREE OF THE OPTION (as buyer or seller) and ENA cannot 
solicit the party to enter into the transaction.

If ENA's trading partner fails to satisfy the Trade Option Exemption, our 
confirmation will EXPLICITLY state that ENA was offered the option to buy or 
sell by the counterparty.

Please call me if you have any questions.  Thanks.  Sara [ENA legal]
mark.smith@enron.com, mike.maggi@enron.com, larry.may@enron.com