ENA Metals Group Metals B2B JV Business Model Confidential Enron North America

Objectives Create the leading full service metals B2B Exchange Marketplace Offer extensive line of metals Offer extensive line of financial instruments including forward markets Partner with industry leaders to share knowledge and create liquidity and transparency Provide value-added services including credit facilitation, mid and back office, accounting, and logistics Add value-added services as demanded by the customer Create a stand alone business which can be spun-off Confidential Enron North America

Further market data is in the process of being compiled. Primary Aluminum $31 billion worldwide market Copper (Cathode) $27 billion worldwide market Other Products (to be defined) Further market data is in the process of being compiled. Confidential Enron North America

Enron Benefits Develop industry credibility and expertise by partnering with industry leaders Create equity value through development of viable intermediary Build books in existing physical products (spot & future) Build books in financial products Create opportunities to cross-sell Enron products to these industry leaders Commodity risk management Energy outsourcing Capital Investments Others Confidential Enron North America

Participant Benefits Consumer: Producer: Lower search costs Perfect information Lower prices Operating efficiencies Enforceable contracts Producer: Lower process costs Perfect Information Access to new customers Equity benefits for equity participants Confidential Enron North America

Sources of Revenue Transaction fees Advertising revenues Main component of site profitability Advertising revenues Strong source of revenue (market leader and liquidity driven) Trading margins Metals related products Financial products, intermediation Fees from value added services Logistics Credit Physical swapping Confidential Enron North America

Contributions Capital Dedicated personnel Capital for joint venture Pooled risk capital for market making Dedicated personnel Contractual services to joint venture Multiple services performed by best fulfilling party Functional responsibilities to other partners Information sharing, risk and profit sharing for trading books Confidential Enron North America

Principal Responsibilities Confidential Enron North America

Equity Structure (Conceptual) Confidential Enron North America

Legal Structure Create distance from original parties Incorporate joint venture Create professional service agreements for services to be performed Maintain flexibility to bring additional parties to, spin-off JV Formalize relationship between original partners Create SPV for capital pooling and risk sharing Isolate certain business risks from the joint venture Partners locked up for set period of time (non-compete) Clarify ownership of particular cash flow streams Equal cash flow and risk sharing by equity members? Confidential Enron North America

Structure Open Exchange Joint Venture Confidential Enron North America SPV Risk Capital Risk Mgmt Svcs ENE PD AA Corps Service Agreements to Provide: PR, Marketing Back Office, Mid-BO Settlement Logistics (+ Capital for Equity) Financial Partner Industry Part. “A” Open Exchange Joint Venture Cash + Services for Equity Cash + Volume for Equity Industry Part. “B” Technology Partner Cash + Volume for Equity Cash + Services for Equity Confidential Enron North America

Risks/Exposure Competition Adoption/Acceptance Counterparty risks No dominant presence in non-steel metals online Threat of another player achieving first mover advantage Adoption/Acceptance Adequate liquidity not achieved Aversion to change Counterparty risks Credit, performance, product Anti-trust concerns Leading participants controlling the market medium Trading Risk Manage book and trading risk across new product lines Confidentiality / Proprietary Risk Disclosure of Enron proprietary trading / market expertise Confidential Enron North America

Expansion Opportunities Add products as market liquidity improves Physical and financial products in copper and aluminum Physical and financial products in other metals Zinc, nickel, lead, tin, iron ore Sell equity to other key industry players Create incentive to direct volumes through JV Create adoption “spark” for remainder of market Create additional liquidity Create additional market credibility Offer additional value-added services Offer additional value-added services as demanded by customer Confidential Enron North America

Timeline Identify initial principals and structure TBD Established entity TBD Formalize business strategy TBD Make public relations announcement(s) TBD Deploy site TBD Solicit additional partners TBD Iterative developments TBD Confidential Enron North America

Issues for Discussion Structure Commitments & contributions Legal (SPV) Business unit ownership delineation Trading businesses (physical & financial) Base business (transaction fee business) Other value added businesses (credit, etc) Ownership (%) Commitments & contributions Capital Physical product Expertise Personnel (senior management) Logistics Mid / Back office Confidential Enron North America

Issues for Discussion Legitimacy, Confidentiality & Neutrality Confidentiality and neutrality issue Strategy Rollout Strategy Public announcement timing and content disclosure Liquidity strategy Initial product (financial) offering Business Strategy Subsequent roll out timeline & strategy Additional liquidity creation Strategic investors (& contributions) Confidential Enron North America