Industry Canada

Please call me once you have had a chance to read through the attached memo.
Obviously, this is a highly sensitive issue and is only being discussed on a
need to know basis to minimize the chances of this becoming known outside of
Enron. Therefore, I would prefer not to discuss this issue in your staff
meeting. Let me know if that's a problem.

---------------------- Forwarded by Peggy Hedstrom/CAL/ECT on 05/29/2000
04:01 PM ---------------------------

Enron North America Corp.

From: Enron Canada General Announcement 05/29/2000
03:26 PM

To: Everyone_in_ECT_Calgary, Everyone_In_ECT_Toronto
cc: Mark E Haedicke/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron,
mhb@blakes.ca, dpef@blakes.ca
Subject: Industry Canada

PRIVILEGED AND CONFIDENTIAL/SOLICITOR-CLIENT COMMUNICATION

This E:mail is to confirm the all employee staff meeting this morning.

As discussed, various representatives of Industry Canada will be in our
offices over the next number of days to investigate certain matters under the
authority of an Order granted in the Federal Court of Canada.

Industry Canada is pursuing an application with respect to certain
allegations involving Enron Canada Corp. and which we obviously believe to be
unsubstantiated, as will be ultimately proven in the normal course of
proceedings.

This memo is to confirm the following:

1. Each of the individuals from Industry Canada may enter into conversations
with you, ask you questions about our business or your business, ask you to
provide information, documentation, etc. In this regard, Enron Canada
Corp.'s interests are represented by the law firm of Blake, Cassels &
Graydon. Each member of Industry Canada has assigned to it a representative
of the firm of Blake, Cassels & Graydon, under the supervision of Dalton
McGrath, who is a partner with his firm. You are not speak to or provide any
such information to any of the representatives of Industry Canada except
under the authority and direction of a representative of Blake, Cassels &
Graydon. In other words, you are to advise the representatives of Industry
Canada that you need to seek the advice and instructions of counsel before
speaking with them or providing any information.

2. Although it is business as usual, as is the case whenever we have any
outside visitors in the office, it is important to maintain the
confidentiality of your business and your information. In other words, the
representatives of Industry Canada are here for a specified purpose and they
should be treated no differently than any other third parties when you are
discussing, negotiating or documenting transactions that do not concern them.

3. It is Enron Canada Corp.'s intention to be cooperative and
non-obstructive. At the same time, it is both appropriate and customary that
we do not assist the representatives of Industry Canada in doing their jobs.
In other words, they know what they are looking for, and it is appropriate
and customary for us not to point them in any particular direction, which may
be the right or wrong direction. Again, documentation and information
requests are to be handled directly through Blake, Cassels & Graydon under
the supervision of Dalton McGrath.

4. If the representatives of Industry Canada take any information (whether in
physical, electronic or other form) it is imperative that through a
representative of Blake, Cassels & Graydon that information is inventoried,
and please ensure that this is the case. All such information will be
subject to a legal privilege and therefore it is important to specifically
identify any information requested or acquired.

5. Although this matter may come out in the public domain, either
intentionally or unintentionally, it is imperative that this matter not
become in the public domain through any act or omission of an Enron Canada
Corp. employee. It is a duty of your employment, consistent with any other
matter affecting your employment, that this matter be kept strictly
confidential and within the confines of Enron Canada Corp. (i.e. not to be
discussed with your counterparts in Houston) on a need to know basis. This
includes, particularly with representatives of Industry Canada in the office,
that this matter is not the subject of gossip or "coffee talk".

6. If you receive a request to discuss this matter through the media or other
such outlet, you are not to respond to that request, and all matters should
be referred to Rob Milnthorp, who will deal with them appropriately. If the
requests come from customers, competitors, acquaintances, family,
counterparts in Houston, and the like, you are simply to advise that you are
unable to discuss the matter.

7. All matters are to be handled through the following people:

Rob Milnthorp, for all commercial matters;
Peter Keohane, for all legal matters; and
Dalton McGrath or one of his designated representatives of Blake, Cassels &
Graydon.

I want to emphasize that Enron Canada Corp. is doing all of the appropriate
things to ensure that our rights and interests are protected, while being as
cooperative as possible. I want to emphasize the Enron Canada Corp. believes
any claim made by or through Industry Canada is without merit, and the steps
we have taken should only be viewed as prudent and not as any indication of
any liability by Enron Canada Corp.

Regards, Peter