Please review contracts. This deal is closing fast. 
Thanks, 
Rachel
---------------------- Forwarded by Rachel Bryant/HOU/EES on 05/09/2001 04:34 
PM ---------------------------
   
	Enron Energy Services
	
	From:  Richard L Zdunkewicz                           05/09/2001 04:14 PM
	

To: Don Black/HOU/EES@EES
cc:  
Subject: Sysco

Don, here it is.

RZ

---------------------- Forwarded by Richard L Zdunkewicz/HOU/EES on 
05/09/2001 04:14 PM ---------------------------


Deborah Asmus
05/08/2001 08:23 PM
To: Hector Gutierrez/HOU/EES@EES, Chuck Randall/HOU/EES@EES, Richard L 
Zdunkewicz/HOU/EES@EES, James M Wood/HOU/EES@EES, Sean A Holmes/HOU/EES@EES, 
Michael Moore/HOU/EES@EES, Gayle W Muench/HOU/EES@EES, Christopher 
Riley/HOU/EES@EES
cc: Michael Mann/HOU/EES@EES, Mike D Smith/HOU/EES@EES, Deborah 
Culver/HOU/EES@EES 
Subject: Sysco

Attached below is the Sysco contract revised as discussed together with a 
redlined version marked to show the changes from the version sent to Sysco.  
The revisions reflect the points negotiated with Sysco and "lessons learned" 
from the current situation in California.   Sysco has not yet seen these 
revisions.

The following list summarizes the significant issues for presentation to the 
organization (including Don Black and Sean Holmes) and/or reflect differences 
from the standard form.

Section 3.4  has been revised to make it bilateral except for subsection (d) 
which remains applicable only to EESI.  The standard form permitted only EESI 
to exercise a right of termination.  Accordingly, subsection (a) has been 
revised to delete the phase addressing the tariff risks which is now 
addressed in the revised definitions for Distribution Charges, Transition 
Charges and Special Utility Charges.  
Revised Section 3.4 provides that a change in "Utility rates or Taxes is not 
a change that allows a party to invoke the provision.  
Revised Section 3.4 provides the parties with a right to terminate the 
contract for convenience after the 36th month.  An Early Termination payment 
based on the "cost to cover" is applicable.  
Sysco is permitted to close a facility under new Section 3.5 and pay the 
Early Termination Payment applicable to the closed facility based on the 
"cost to cover."
Sysco is permitted to substitute facilities under new Section 3.6 and 
transfer the consumption volumes applicable to a facility that is Closed, 
Disposed, or Non-Controlled as long as the substituted facility has, in 
EESI's reasonable opinion, substantially similar load profile and consumption 
of, and demand charges for power as the facility for which it is being 
substituted, and is served by the same utility.
Consistent with the form, Sysco's consumption outside of the 90%-110% 
Anticipated Usage band would result in Sysco's paying the additional costs 
resulting from the difference between the contract price and the market 
price.  However, under the revised contract (Sections 2.2.1 and 2.2.2), if 
the price difference results in cost savings, a credit will be issued to 
Sysco.  We should confirm that we have the capability to make these 
calculations.  Also under the revised contract, the 90%-110% band is 
calculated for groups of facilities served by the same utility (the Facility 
Group).
Section 4.5 has been revised to obligate Sysco to post a letter of credit (at 
EESI's request) if Sysco Corporation's credit rating falls below investment 
grade.  The letter of credit would be in an amount equal to (i) the amount 
equivalent to the Early Termination Payment as of the date of the requested 
letter of credit; plus (ii) three months receivables.

Please do not hesitate to contact either Mike Smith or me with questions.  dwa