ChemConnect w/ Attachment

---------------------- Forwarded by David Forster/LON/ECT on 02/18/2000 04:55
PM ---------------------------

Enron Capital & Trade Resources Corp.

From: Brandon Luna 02/18/2000 02:51 PM

To: David Forster/LON/ECT@ECT
cc: Ellen Fowler/HOU/ECT@ECT, John L Nowlan/HOU/ECT@ECT, Douglas S
Friedman/HOU/ECT@ECT, Louise Kitchen/LON/ECT@ECT, Bob Shults/HOU/ECT@ECT,
Drew Ries/HOU/ECT@ECT, Stephen R Horn/HOU/ECT@ECT, James A
Ajello/HOU/ECT@ECT, Greg F Piper/HOU/ECT@ECT, Jay Fitzgerald/Corp/Enron@ENRON

Subject: ChemConnect w/ Attachment

We are aware of the potential market perception issues of EnronOnline and
this investment, and I believe we have addressed these concerns. John
Nowlan, Jim Ajello, and I revised the language in the agreement. The
document now states that Enron North America acknowledges ChemConnect as a
leading internet-based third party exchange for purchases and sales of
chemicals and plastics raw materials. I want to emphasize that this
agreement in no way limits Enron's ability to trade on any other exchange
(EOL , or a third party exchange). In addition Enron is under no obligation
to buy or sell any products on the ChemConnect exchange. The purpose of the
agreement is to say Enron and ChemConnect will work together in the future to
discuss future business opportunities.
The only real obligation Enron is making in this agreement is to work with
ChemConnect to explore future business opportunities. In return, Enron will
be able to participate in their "e-Commerce Roundtable" with major chemical
companies.

Also, market perception issues can be managed in the press release, which
will be approved by public relations and investor relations. The Strategic
Alliance Agreement is not public , and it specifically states Enron has the
right to approve any announcement ChemConnect makes using Enron's name or
logo. We are not proposing Enron make any announcement endorsing ChemConnect
as our preferred exchange. (We have made it clear with ChemConnect that we
will continue to use EOL, and/or any other exchange.) In summary, we will be
able to control the publicity issues by controlling any announcements with
Enron's name.

The full agreement is attached for your review. I hope this addresses your
concerns.

Regards,
Ellen Fowler

David Forster
02/17/2000 06:44 PM
To: Brandon Luna/HOU/ECT@ECT, Ellen Fowler/HOU/ECT@ECT
cc: John L Nowlan/HOU/ECT@ECT, Douglas S Friedman/HOU/ECT@ECT, Louise
Kitchen/LON/ECT@ECT, Bob Shults/HOU/ECT@ECT, Drew Ries/HOU/ECT@ECT, Stephen R
Horn/HOU/ECT@ECT
Subject: Fw: ChemConnect

I am concerned about elements in this deal which appear to conflict with the
development strategy of EnronOnline.

Please do not proceed until such time as we have resolved any potential areas
of conflict.

Thank you

Dave

---------------------- Forwarded by David Forster/LON/ECT on 02/18/2000 12:32
AM ---------------------------

---------------------- Forwarded by Louise Kitchen/LON/ECT on 16/02/2000
15:42 ---------------------------

Enron Capital & Trade Resources Corp.

From: "Douglas Friedman" <DFRIEDMAN@houston.rr.com<
15/02/2000 23:08

To: <brandon.luna@enron.com<, <ellen.fowler@enron.com<
cc: <john.nowlan@enron.com<, <louise.kitchen@enron.com<

Subject: Fw: ChemConnect

Brandon, Ellen:

I find the current wording about ChemConnect being our Preferred Third Party
Exchange still unexceptable. It also is simply not true, since the market
for all NGL's (read as: "chemical and plastics raw materials") is already
standardized on Chalkboard. I realize this is only the second draft (with a
third one pending) and has been watered down some - but not enough in my
opinion. Section 4 gives us the right to somewhat control releases and
publications. But, I am afraid all the market will ultimately hear is that
they are our "Preferred Exchange" - reference their release today about
BASF. Ultimately they'll totally confuse the market about our direct
efforts with EnronOnline.

I still very much like the idea of using them as a portal to drive traffic
to EnronOnline. Additionally, as previously mentioned, the right of first
refusal to be "the market maker" if they ever do go forward on their
exchange ideas has great value.

Will read the other sections on the plane this evening and comment further.

By copy, John & Louise, what are your thoughts?

Doug

----- Original Message -----
From: Brandon Luna <Brandon.Luna@enron.com<
To: <dfriedman@houston.rr.com<
Cc: Ellen Fowler <Ellen.Fowler@enron.com<
Sent: Tuesday, February 15, 2000 2:59 PM
Subject: ChemConnect

<
<
< Doug
<
< Attached is the agreement; we specifically want your comments/approval on
the
< Sections 1 - 3. The potential changes are in Sections 9.1 and 9.3 (typos
and
< other).
<
< Please let us know your thoughts.
<
< Brandon 713 853-0531
< Ellen 713 853-5741
< Drew 713 345-6075
< ---------------------- Forwarded by Brandon Luna/HOU/ECT on 02/15/2000
02:55 PM
< ---------------------------
<

<