Annex to Master Agreements for Prepaid/Embedded Debt Financing

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Mark and Jordan,

I have attached an Annex intended to become part of the master agreement for
prepaid transactions and other embedded financings (e.g, tilted swaps) in
commodity transactions. This Annex, which is a variant of an Annex developed
for Enron's CommodityLogic B2B site, is intended to be a requirement for
using an expedited E-DASH process for these sorts of transactions. This
annex is intended to afford Enron the same sorts of protections as a holder
of the counterparty's public debt, but be less onerous to the counterparty
than a typical bank or private placement agreement, presumably making it
relatively easy to accept for the counterparty while facilitating syndication
of these exposures by EGF. I would appreciate your reviewing this Annex and
providing me with any general or specific comments you may have.

Thanks.

Dave