David,

I believe that the ownership percentage in Section 2.11 should be 100%, not 
50%. If we were to sell off any meaningful portion of either subsidiary, we 
would likely want that entity to stand on its own credit; at a minimum, Enron 
Corp. would be due compensation for the guaranty it is providing from the 
minority shareholder(s).  Please call me to discuss if there are objections.

Paul

 -----Original Message-----
From:  Portz, David  
Sent: Monday, April 09, 2001 2:51 PM
To: Curry, Mike
Cc: Radous, Paul; Sager, Elizabeth
Subject: Re: EES QSE - Credit provision

Mike --Per your request, modifying the redlined document you sent to EES this 
morning.  Please review Section 2.11.  I have also changed exhibit references 
to take into account the elimination of Exhibit B.  --David

 << File: EES QSE LSE Agr (4-9-01 new 2.11).doc >> 





	Mike Curry/ENRON@enronXgate 04/09/2001 12:54 PM 	   To: David 
Portz/HOU/ECT@ECT  cc: Paul Radous/ENRON@enronXgate  Subject: EES QSE - 
Credit provision


David, could you please insert a material adverse change clause in our QSE 
agreement with EES.  This is to cover EPMI in the event EES is sold partially 
or wholly to a third  party.  If this occurs, the third party would have to 
negotiate acceptable credit terms with EPMI.  In my meeting with Paul he said 
that this is standard in our other agreements with EES.  This is all we need 
for credit for EES QSE.

Thanks for your assistance, - Mike