Janet,
 I have reviewed the attached contract and it gives me a lot of concern.  
First brush, it is one sided in their favor and offers us no breakage 
protection.  Specifically, 
 Section 4.4 --- HPL should be the confirming party.
 Section 4.5 --- HPl also needs to have the right to call for security.  
Clause should be balanced.
 Section 5.5a -- "its best efforts" should be changed to "commercially 
reasonable efforts".
 Sections 5.8 & 5.9 --  Need clauses addressing "undertakes by Buyer" and 
"overtakes by Buyer".  
 Section 6.3b --  20 days should be changed to 15 days in each location in 
this section.
 Section 6.4 ---  Needs a lot of explanation.  Why is it here?  Why would we 
agree to such?
 Article 10 - Force Majeure -  Need to add Enron language as to items which 
are not force majeure.
 Article 11 - Default -  Need to add additional Triggering Events, Early 
Termination, and Termination Damage provisions.
 Also, need to add provisions for limitation of liability and waiver of 
consequential damages.

 Let me know how you would like to proceed.  I do not think that they will 
agree to make any of the changes we would need to do the deal.  Would they be 
willing to contract using the GISB form of agreement?



	Janet H Wallis
	01/04/2001 11:20 AM
		 
		 To: Dan J Hyvl/HOU/ECT@ECT
		 cc: 
		 Subject: Austin Energy Gas Supply Agreement

See attached contract below.  Ignore 4.1 and 4.2, those will have to be 
changed.  Also, keep an eye
out in 4.4 - the default language for confirmations; 10.2 - the Force Majeure 
language; 18.2 - 3 rd party beneficiary; and 10.4 - transportion is not (?) 
subject
to force Majeure?

Thanks,
J
---------------------- Forwarded by Janet H Wallis/HOU/ECT on 01/04/2001 
11:07 AM ---------------------------


"Sweeney, Pat" <Pat.Sweeney@austinenergy.com> on 01/04/2001 10:33:27 AM
To: "'Janet Wallis - Enron'" <janet.h.wallis@enron.com>
cc: "Hadley, Donna" <Donna.Hadley@austinenergy.com> 
Subject: Austin Energy Gas Supply Agreement


 <<Contract Template 040500.doc>>

Janet,

Attached is our "standard" gas enabling agreement that we plan to use with
Enron.  It is the same agreement we put in place last year when Enron did
not submit a bid.

If you will provide proper corporate / address information for Enron we will
generate an original contract.

Please let me know if you have any questions.

Pat Sweeney
Austin Energy

 - Contract Template 040500.doc