ENFOLIO MASTER FIRM PURCHASE/SALE AGREEMENT
GUARANTY AGREEMENT
SAMPLE  FOR DISCUSSION PURPOSES ONLY
 This Guaranty Agreement (this "Guaranty"), dated as of ________, is made and 
entered into between ________________, a ___________ corporation ("Guarantor
"), and ______________________, a _____________ ___________ ("Contract 
Party").

 WHEREAS, (i) Contract Party and ____________________, a wholly owned 
subsidiary of Guarantor ("Obligor"), are contemplating entering into an 
ENFOLIO Master Firm Purchase/Sale Agreement of even date here-with and herein 
incorporated for all purposes (said Agreement, as the same may be from time 
to time extended, amended and supplemented, particularly including, without 
limitation, all Transactions thereunder, the "Gas Contract"), (ii) Guarantor 
will directly or indirectly benefit from the Gas Contract and (iii) as a 
condition precedent to the consummation of the Gas Contract, Contract Party 
has required that Guarantor unconditionally guarantee to Contract Party all 
payment obligations of Obligor under the Gas Contract.

 NOW THEREFORE, to induce Contract Party to enter into the Gas Contract, 
Guarantor agrees as follows: 
 
1.  PAYMENT GUARANTY.  Guarantor absolutely, irrevocably and unconditionally 
guarantees to Contract Party all payment obligations of Obligor set forth in 
the Gas Contract and interest thereon accrued as provided in the Gas Contract 
(the "Obligations"); provided, the applicable rate of interest shall never 
exceed the maximum lawful rate permitted by law.  This guaranty of payment is 
a continuing guaranty effective during the term of the Gas Contract and until 
complete performance by Obligor of its obligations under the Gas Contract and 
payment in full of all Obligations; provided, in all instances this Guaranty 
shall continue for a period of six months after the termination of the Gas 
Contract for the purpose of guaranteeing indemnity Obligations which survive 
the termination of the Gas Contract as set forth in Section 8.4 of the Gas 
Contract (the "Indemnity Period").  With respect to any Claims threatened or 
filed as of the close of the Indemnity Period, the Obligations resulting from 
any such Claims shall be guaranteed hereunder.  No notice of the Obligations 
or any Transaction need be given in any form to Guarantor at any time and 
Guarantor WAIVES any such notice and the right to consent to the Obligations 
or any Transaction.  Guarantor WAIVES any right to require as a condition to 
its obligations hereunder that (i) collateral be applied to the Obligations, 
(ii) presentment or demand be made upon Obligor or (iii) action be brought 
against Obligor or any other person or entity except Guarantor, should 
Contract Party seek to enforce the obligations of Guarantor.  Specifically, 
without limitation, Guarantor WAIVES any right to require, substantively or 
procedurally, that (i) a judgment previously be rendered against Obligor or 
any other person or entity except Guarantor, (ii) Obligor or any other person 
or entity be joined in any action against Guarantor or (iii) an action 
separate from one against Guarantor be brought against Obligor or any other 
person or entity.  The obligations of Guarantor are several from those of 
Obligor or any other person or entity, including, without limitation, any 
other surety for Obligor, and are primary payment obligations concerning 
which Guarantor is the principal obligor.  To the extent Obligor shall fail 
to timely make payment of any Obligations, Guarantor shall satisfy its 
obligations hereunder regardless of whether Contract Party or any other 
person or entity shall have taken any steps to enforce its rights against 
Obligor or any other person or entity except Guarantor.  The obligations of 
Guarantor hereunder shall in no way be affected or impaired by reason, and 
Guarantor WAIVES its right to prior notice, of the happening from time to 
time of any of the following:  (i) extensions (whether or not material) of 
the time for payment of all or any portion of the Obligations, (ii) the 
modification or amendment in any manner (whether or not material) of the Gas 
Contract or the Obligations, (iii) except for applicable statutes of 
limitations, any failure, delay or lack of diligence on the part of Contract 
Party, or any other person or entity to enforce, assert or exercise any 
right, privilege, power or remedy conferred on Contract Party or any other 
person or entity in the Gas Contract or at law, or any action on the part of 
Contract Party or such other person or entity granting indulgence or 
extension of any kind, (iv) the settlement or compromise of any Obligations, 
(v) the status, composition, structure or name of Obligor change, including, 
without limitation, by reason of merger, dissolution, consolidation or 
reorganization, (vi) except for releases or waivers resulting from the rights 
or defenses of Obligor that Guarantor has reserved in Section 3, the release 
or waiver, by operation of law or otherwise, of the performance or observance 
by Obligor of any express or implied covenant, term or condition in the Gas 
Contract, (vii) the release or waiver, by operation of law or otherwise, of 
the performance or observance by any co-guarantor, surety, endorser or other 
obligor of any express or implied covenant, term or condition to be performed 
or observed by it under the Gas Contract or related document and (viii) the 
failure to acquire, perfect or maintain perfection of any lien on, or 
security interest in, any collateral provided by Obligor to Contract Party or 
the release of any such collateral or the release, modification or waiver of, 
or failure to enforce, any pledge, security device, guaranty, surety or other 
indemnity agreement in respect of such collateral.  Notwithstanding the 
foregoing, the liability of Guarantor hereunder shall be limited to direct, 
actual damages and, unless expressly provided in the Gas Contract, Guarantor 
shall not be liable for consequential, incidental, punitive, exemplary or 
indirect damages, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, in 
tort, contract or otherwise, or any penalties or charges assessed by any 
person or entity for the unauthorized receipt of gas.  Upon 30 Days written 
notice and with the prior written consent of Contract Party, which consent 
shall not be unreasonably withheld, this Guaranty may be replaced by (i) a 
guaranty in identical form made by a guarantor of equal or better 
creditworthiness, including credit ratings by nationally recognized credit 
rating agencies, taking into consideration all relevant information 
concerning corporate structure, all relevant financial information, both 
current and projected, and all effects on the enforceability of the 
replacement guaranty, or (ii) a letter of credit in favor of Contract Party 
in the amount of the Maximum Limit (below defined), issued by a bank and in a 
form, each of which shall be reasonably satisfactory to Contract Party, 
taking into consideration all effects on the enforceability of the 
replacement letter of credit; provided, this Guaranty shall continue to apply 
to all Transactions in effect at the time this Guaranty is replaced until all 
such Transactions are completed and the replacement guaranty or letter of 
credit shall apply to only those Transactions formed after its execution and 
delivery.
2.  MAXIMUM LIMIT.  The amount covered by this Guaranty for all Obligations 
in respect of the aggregate of all Transactions under the Gas Contract that 
ever shall be required to be paid by Guarantor shall not exceed 
$_____________ (the "Maximum Limit"); provided, this Guaranty shall cover and 
Guarantor shall pay, in addition to the Maximum Limit, all reasonable 
expenses, including, without limitation, attorneys' fees, court costs and 
similar costs, of Contract Party in the event of judgment, settlement or 
other enforcement against Guarantor.  The Maximum Limit shall not be affected 
by the number or type of outstanding Transactions or the holding or 
application of any collateral by Contract Party.
3.  DEFENSES.  Other than as expressly waived in this Guaranty, Guarantor 
retains its own defenses and rights hereunder.  Guarantor WAIVES all rights, 
setoffs, counterclaims and other defenses of Obligor relating to the 
Obligations, including, without limitation, all rights, setoffs, 
counterclaims and other defenses arising out of the bankruptcy, insolvency, 
dissolution or liquidation of Obligor.      
4.  DEFAULT.  If Obligor fails or refuses to pay timely any Obligations, 
Contract Party may at its option exercise any or all of its rights, powers 
and remedies afforded hereunder and under all documents, if any, securing 
this Guaranty and may declare the unpaid amounts of all Obligations then 
owing under the Gas Contract to be immediately due and payable, and thereupon 
such amounts shall be immediately due and payable without presentation and 
demand for payment, protest, notice of protest or dishonor, notice of 
default, notice of intent to accelerate or notice of acceleration to 
Guarantor or any other person or entity, all of which Guarantor hereby 
WAIVES.  
5.  REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants that:  
(i) it is a corporation duly organized and validly existing under the laws of 
the State of its incorporation and has the power and authority to execute, 
deliver and carry out the terms and provisions of this Guaranty, (ii) no 
authorization, approval, consent or order of, or registration or filing with, 
any court or other governmental body having jurisdiction over Guarantor is 
required on the part of Guarantor for the execution and delivery of this 
Guaranty and (iii) assuming due authorization, execution and delivery hereof 
by Contract Party, this Guaranty constitutes a legal, valid and binding 
agree-ment of Guarantor enforceable in accordance with its terms, except as 
the enforceability thereof may be limited by the effect of any applicable 
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting 
creditors' rights generally and by general principles of equity.
6.  FINANCIAL INFORMATION.  At the written request of Contract Party, 
Guarantor shall provide Contract Party with the financial information 
described in Appendix "1" of the Gas Contract under Financial Information in 
accordance therewith.
7.  NOTICE.  All notices and communications made pursuant to this Guaranty 
shall be in writing and delivered personally or mailed by certified mail, 
postage prepaid and return receipt requested, or sent by facsimile, as 
follows:
To Guarantor: 
________________
________________
________________
Facsimile:  _______
To Contract Party:
________________
________________
________________
Facsimile:  _______
Notice given by personal delivery or mail shall be effective upon actual 
receipt.  Notice given by facsimile shall be effective upon actual receipt if 
received during recipient's normal business hours or at the beginning of 
recipient's next business day after receipt if not received during 
recipient's normal business hours.  Any party may change its address to which 
notice is to be given hereunder by providing notice of same in accordance 
with this Section 7.
8.  LAW, WAIVERS, MISCELLANEOUS.  THIS GUARANTY SHALL IN ALL RESPECTS BE 
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF 
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  Guarantor WAIVES 
all right to require marshaling of assets and liabilities, sale in inverse 
order of alienation, notice of disposition of collateral and notice of 
acceptance of this Guaranty.  The Transaction Procedures set forth in the Gas 
Contract are acknowledged and agreed to by Guarantor and Guarantor agrees not 
to contest the validity or enforceability of any Transaction entered into in 
accordance with the Transaction Procedures under applicable law relating to 
whether certain agreements are to be in writing or signed by the Party to be 
thereby bound.  No term or provision of this Guaranty shall be amended, 
modified, altered, waived, supple-mented or terminated except in a writing 
signed by the parties hereto.  All capitalized terms used in this Guaranty 
and not herein defined shall have the meanings attributed to them in the Gas 
Contract.  This Guaranty shall be binding upon and inure to the benefit of 
and be enforceable by the respective successors and assigns of Guarantor and 
Contract Party.  This Guaranty embodies the entire agreement and 
under-standing between Guarantor and Contract Party and supersedes all prior 
agreements and understandings relating to the subject matter hereof.  The 
headings in this Guaranty are for purposes of reference only, and shall not 
affect the meaning hereof.  This Guaranty may be executed in any number of 
counterparts, each of which shall be an original, but all of which together 
shall con-stitute one document.   

 The parties hereto have caused this Guaranty to be executed as of the day 
and year first above written.

[GUARANTOR]          [CONTRACT PARTY]

____________________________   _____________________________
By _________________________   By __________________________
Title _______________________    Title ________________________



Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490