For your review.
---------------------- Forwarded by Kay Mann/Corp/Enron on 06/08/2000 05:04 
PM ---------------------------


Jeff Blumenthal@ECT
06/06/2000 06:44 PM
To: Kay Mann/Corp/Enron@ENRON, Brian D 
Barto/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Peggy Banczak/HOU/ECT@ECT, Steve Irvin/HOU/ECT@ECT, Marc 
Sabine/NA/Enron@ENRON 

Subject: RE: language for Withholding (Section 5.2.2)  

Kay and Brian,

In reply to Tim Lederach's e-mail below to Jeff Smith on June 6th, I have the 
following comments:

1.  Regarding Tim's addition of the second and third sentences to my original 
suggested language, it appears that there may be a misunderstanding.  Under 
Mexican tax law, EEIM would be obligated to withhold tax on any payments it 
makes to GE that are subject to Mexican withholding tax.  EEIM would submit 
such amounts directly to the Mexican tax authorities and, in exchange, would 
receive an official receipt (Official Form 37-A) that it could then forward 
to GE.  It appears that Tim wants to ensure that GE obtains a copy of the 
official receipt so that GE can claim a foreign tax credit on its U.S. income 
tax return for any withholding tax to which payments it receives are subject 
under Mexican tax law.  Tim's suggested additional language therefore needs 
to modified to reflect that EEIM would pay the tax and could then provide GE 
with the receipt.  I'd be glad to visit with Tim to discuss this matter.

2.  The language that I have proposed should be inserted in both the onshore 
agreement and the offshore agreement.  Tim is proposing that it be inserted 
(with his additional suggestions) only in the onshore agreement.

Please contact me at ext. 35777 if you have any questions.

Best regards,

Jeff


   
	
	
	From:  Kay Mann @ ENRON                           06/06/2000 06:09 PM
	

To: Jeff Blumenthal/HOU/ECT@ECT, Peggy Banczak/HOU/ECT@ECT
cc:  
Subject: RE: language for Withholding (Section 5.2.2)


---------------------- Forwarded by Kay Mann/Corp/Enron on 06/06/2000 06:08 
PM ---------------------------


jeffreye.smith@ps.ge.com on 06/06/2000 06:08:59 PM
To: Kay.Mann@enron.com
cc: Brian.D.Barto@enron.com, tim.lederach@ps.ge.com, 
john.schroeder@ps.ge.com, karl.siverling@ps.ge.com 

Subject: RE: language for Withholding (Section 5.2.2)

Kay,
See the proposed wording, below.  This is the only contract text issue I am
aware of.
Other than the items mentioned in my e-mail of June 1st/2nd (on the
consolidation agreement) and finalization of the "letter agreement" (you got
my fax), we are there.
Implied in the above, is that at this point I think the split agreement
approach would get us to closure faster.
Regards,
Jeff Smith

-----Original Message-----
From:   Lederach, Timothy P (PS, Finance) 
Sent:   Tuesday, June 06, 2000 4:12 PM
To:   Smith, Jeffrey E (PS, CommOps)
Subject:   RE: language for Withholding (Section 5.2.2)

I have no problem with their proposed addition as it applies to the onshore
contract.  However, I would recommend modifying it as follows:

      If Purchaser is obligated to make any payment to Seller that
is subject to any withholding tax, then Purchaser shall remit the
appropriate withholding tax to the proper governmental authorities, and
Purchaser shall then remit the net amount of the payment (i.e., the gross
payment minus the applicable withholding tax) to Seller.  Seller agrees to
provide Purchaser with an original tax receipt, in Seller's name, indicating
remittance by the Purchaser of the amounts withheld.  Failure to provide
this receipt within a reasonable period of time will result in the amount
withheld becoming payable to the Seller.
Regards

Tim Lederach
GEPS Taxes


      -----Original Message-----
      From:   Smith, Jeffrey E (PS, CommOps) 
      Sent:   Tuesday, June 06, 2000 2:43 PM
      To:   Lederach, Timothy P (PS, Finance)
      Subject:   FW: language for Withholding (Section 5.2.2)
      Importance:   High

      Tim,
      Enron wants to add this to the end of Clause 5.2.2.
Attached is the latest version of the On-Shore Contract for reference.
      Please let me know your opinion.
      We can talk to Enron about this if appropriate.
      Thanks,
      Jeff Smith
          << File: VITRO5-on-r1b.wpd >>   

      -----Original Message-----
      From:   Brian D Barto [mailto:Brian.D.Barto@enron.com]
<mailto:[mailto:Brian.D.Barto@enron.com]>
      Sent:   Tuesday, June 06, 2000 2:23 PM
      To:   jeffreye.smith@ps.ge.com
      Subject:   language for Withholding (Section 5.2.2)




      If Purchaser is obligated to make any payment to Seller that
is subject to any withholding tax, then Purchaser shall remit the
appropriate withholding tax to the proper governmental authorities, and
Purchaser shall then remit the net amount of the payment (i.e., the gross
payment minus the applicable withholding tax) to Seller.