We could agree to non exclusive jurisdiction in Tenn., but not exclusive 
jurisdiction.  As for the arbitration forum, my preference would be a major 
regional metro area--Atlanta comes to mind.



	Janice R Moore
	07/25/2000 01:13 PM
		 
		 To: Richard B Sanders/HOU/ECT@ECT
		 cc: 
		 Subject: TEPAC Distributors Agreement

This is the note I just mentioned.  The question to you is in the last 
paragraph.
Regards,
Janice

EB3861
Assistant General Counsel, Enron North America Corp.
713-853-1794 (Fax:  713-646-4842)
----- Forwarded by Janice R Moore/HOU/ECT on 07/25/2000 01:12 PM -----

	Janice R Moore
	07/20/2000 06:41 PM
		 
		 To: Jason R Wiesepape/HOU/ECT@ECT, Phil DeMoes/Corp/Enron@ENRON, Elizabeth 
Sager/HOU/ECT@ECT
		 cc: Richard B Sanders/HOU/ECT@ECT
		 Subject: TEPAC Distributors Agreement

Recapping our call w/ Keith Simmons (TEPAC's outside counsel) this afternoon, 
we still have the following issues to resolve (the first three are the most 
important to TEPAC).
(1)  Subrogation against TVA -- Keith doubts that TEPAC would ever agree to 
Section 4.5, despite our expressed need to be able to challenge TVA directly 
on its cut of energy we attempt to deliver or its calculation of Replacement 
Costs.  Keith suggested that Jason and Phil speak directly to Larry Hamilton 
about this subject, and they will attempt to do that soon.  
(2)  Mitigation Duty --  They are not comfortable w/ a duty to mitigate 
Replacement Cost damages that are calculated by TVA b/c they cannot foresee 
circumstances where any action or failure to act could have any impact on 
those damages.  We explained that we wanted the Distributors to have every 
incentive to cooperate w/ us in keeping those damages minimized.  They might 
be willing to concede on this point if we can work out everything else.  
(3)  EPMI's Cover Damages --  They are not very comfortable agreeing to the 
concept that a Distributor would have to pay damages to EPMI b/c they cannot 
imagine how they could be responsible for failing to receive an "into" 
product such as this.  We both agreed to reconsider this.
(4)  Criteria for Enron's rejection of Distributor -- Our right to approve 
Distributors is ok, but they want to add language to prevent EPMI from being 
arbitrary about those approvals.  We agreed.
(5)  Notice of changes to underlying agreements -- Their duty to notify us it 
ok, but they want to add language that is in line w/ their Distributor 
agreements, which don't absolutely require Distributors to tell TEPAC 
everything.  We agreed.
(6)  Request for offers --  They would prefer that EPMI call them every day 
w/ quotes (which is how Williams does it now), rather than having to initiate 
the process.  We described this as our normal way of doing business and they 
agreed.
(7)  Indemnity clause -- We struck a sentence about each party indemnifying 
the other while they have title to the power, which had been included in our 
earlier draft.  I agreed to look into this.  
(8)  Governing Law and Arbitration -- TEPAC is ok w/ NY law, but would prefer 
including a clause requiring EPMI to sue TEPAC or any distributor in 
Tennessee (even tho Keith thinks that would be the legal result anyway).   
They would also prefer to have the arbitration situs in Tennessee.  We both 
agreed to reconsider this.  Richard:  What do you think about that?

Any comments are welcome.

Regards,
Janice

EB3861
Assistant General Counsel, Enron North America Corp.
713-853-1794 (Fax:  713-646-4842)