---------------------- Forwarded by Kay Mann/Corp/Enron on 03/23/2001 01:16 
PM ---------------------------


Kay Mann
03/23/2001 12:59 PM
To: Jeffrey T Hodge/HOU/ECT@ECT, jkeffer@kslaw.com, Ben Jacoby/HOU/ECT@ECT, 
Chris Booth/NA/Enron@Enron
cc:  

Subject: NW my comments in blue

March 23, 2001


 
Enron North America Corp.
1400 Smith Street 
Houston, TX  77002-7361
Attention:  Benjamin F. Jacoby
                 Executive Director

Re:  Acquisition of General Electric 7EA Turbines

Ladies and Gentlemen:

Pursuant to our discussions last week, the following summarizes the main 
commercial terms agreed to by NorthWestern Corporation (&NorthWestern8) and 
Enron North America Corp. ("ENA") regarding NorthWestern,s purchase through 
the LLC referred to below or as otherwise accomplished without violation of 
the Turbine Contract referred to below (the &Purchase8) of two (2) General 
Electric (&GE8) 7EA combustion turbines (the &Turbines8), the first of which 
is presently located at a GE storage facility, and the second of which is 
scheduled to be available for delivery in February, 2002, and both of which 
are subject to purchase from GE under an agreement with GE dated as of May 
31, 2000 (the &Turbine Contract8) with respect to which ENA has the right to 
cause a joint venture limited liability company in which, prior to commercial 
operation of the Turbines, ENA holds a 20% equity interest and a wholly-owned 
NorthWestern subsidiary (the &NorthWestern Subsidiary8) holds an 80% equity 
interest (the &LLC8) to become the purchaser:

1.  Purchase Price:  NorthWestern will pay ENA $48.0 million for the Turbines 
(subject to adjustment as described below). [Adjusted how?  Need specific 
reference. Is the statement that the payment is for the turbines consistent 
with the structure?  Definitely sounds like a UCC deal,  for what that,s 
worth.]
2.  Closing Date of Purchase:  The Purchase will close on a date on or prior 
to September 1, 2001, as selected by NorthWestern by not less than 30 days, 
written notice to ENA,(provided that such notice may not be given less than 
30 days after the signing of a definitive agreement relating to the 
Purchase).  [What happens at closing?  Payment of the balance?  In the 
interim are we going to be obligated to perform under the GE contract in a 
certain manner?  Are we taking on implied obligations to NW?]
3.  Cash Down Payment:  NorthWestern will pay ENA an $8.0 million down 
payment for the Turbines.  The first installment ($3.0 million) of the $8.0 
million down payment will be due upon the signing of a definitive agreement 
with ENA providing for the Purchase.  The second installment ($5.0 million) 
of the $8.0 million down payment will be due at the earlier of (i) closing of 
the Purchase, or (ii) July 15, 2001. [The remaining $40m due at closing, as 
well as any other amounts due to changes, etc?]
4.  Liquidated Damages:   If, prior to the assignment of the Turbine Contract 
[is proper reference to closing?], the purchaser under the Turbine Contract 
receives any liquidated damages under the Turbine Contract, then ENA will 
give notice thereof to NorthWestern as promptly as possible. [Then what?]
5.  Carry Period:  ENA will provide an interest-free carry on the unpaid 
purchase price of the Turbines until July 15, 2001. If the closing of the 
Purchase occurs after July 15, 2001, then the unpaid purchase price of the 
Turbines will be increased by interest at the rate of 7.5% per annum on the 
unpaid purchase price of the Turbines ($40.0 million) for each day from, and 
including, July 15, 2001 to, but excluding, the closing date.
6.  Dual Fuel Conversion on Unit 2:  ENA will not proceed with this change 
order to effect the conversion.  Instead, it will be the responsibility of 
NorthWestern to effect the change order with GE.  [does this mean they will 
be negotiating a change order while E Next is still the purchaser? Are we 
committing to pay for the increase?  Does the purchase price increase?  Is 
there a limit?]
7.  Unpaid Price of Second Turbine:  At the time of closing, one or more 
installments of the purchase price of the second Turbine will be payable to 
GE under the Turbine Contract (the &Unpaid Installments8).  ENA will be 
obligated to pay the Unpaid Installments to GE as they become due under the 
Turbine Contract. 
8.  Guarantees:   There will be no guarantee by Enron Corporation of any of 
the representations, warranties, covenants, indemnities or other obligations 
of ENA in connection with the Purchase.  All obligations of the LLC under the 
Turbine Contract, as well as all obligations of the NorthWestern Subsidiary 
to ENA in connection with the transaction, will be guaranteed by NorthWestern 
Corporation.

[governing law? Limit on remedies/damages for this letter? Dispute resolution?

NorthWestern and ENA have acknowledged that, subject to review and approval 
of the structure of the Purchase and the negotiation of final documentation 
relating to the Purchase (which documentation will incorporate the commercial 
terms set forth above), the above commercial terms have received all 
necessary NorthWestern and ENA internal approvals. [Is this true for Enron?]  
In light of this acknowledgement, NorthWestern and ENA (by signing this 
letter in the space provided below and returning the same to NorthWestern) 
agree to negotiate, in good faith, to agree upon such structure and such 
documentation, with a view to executing and delivering a mutually acceptable 
definitive agreement relating to the Purchase as promptly as practicable. For 
the avoidance of any doubt, it is expressly stated, acknowledged and agreed 
that each of NorthWestern and ENA must be satisfied with such structure and 
such documentation in its own discretion.

[I question whether there is enough wiggle to keep this from being a binding 
obligation to sell]

By agreeing to the commercial terms set forth in this letter (by signing this 
letter in the space provided below and returning the same to NorthWestern), 
ENA grants NorthWestern, and NorthWestern grants ENA, an exclusive &no shop8 
period through the close of business on Friday, April 13, 2001; and ENA 
agrees that, during such &no shop8 period, ENA will not discuss or negotiate, 
directly or indirectly, with any person or entity other than NorthWestern for 
or in respect of the purchase or other acquisition by such person or entity 
of the Turbines; and NorthWestern agrees that, during such &no shop8 period, 
NorthWestern will not discuss or negotiate, directly or indirectly, with any 
person or entity other than ENA for or in respect of the purchase or other 
acquisition by NorthWestern of turbines from such person or entity..  As 
consideration for ENA agreeing to such &no shop8 period, NorthWestern will 
pay to ENA, via wire transfer on the date of receipt by NorthWestern of ENA,s 
signed agreement, $1.0 million (the & No Shop Payment8).  The No Shop Payment 
will not be subject to refund by ENA for any reason or upon any circumstance 
(including, without limitation, failure of NorthWestern and ENA to agree upon 
the structure of, and enter into a definitive agreement relating to, the 
Purchase).  

If ENA is in agreement with the foregoing, then please so indicate by signing 
this letter in the space provided below and returning the same to 
NorthWestern (by facsimile at 605/978-2840 and to the attention of the 
undersigned).


       Very truly yours,


       NORTHWESTERN CORPORATION




       _____________________________
       By: Michael J. Young
       Title: Senior Corporate Counsel




AGREED AS AFORESAID AS OF THIS 23rd  DAY OF MARCH 2001:


ENRON NORTH AMERICA CORP.

________________________________
By: Benjamin F. Jacoby
Title: Executive Director


[Need a different Enron signatory]