Fee Agreement and BETA

Tana -

FYI - See the below in relation to Prebon.

In light of the work that Prebon is indicating they will be doing, I am not
sure there is anything for us to do. I will double check this and let you
know.

Mark
Senior Counsel, ENA
Phone: 713-345-8897
Facsimile: 713-646-3940
E-Mail: Mark.Greenberg@enron.com
----- Forwarded by Mark Greenberg/NA/Enron on 02/20/2001 12:58 PM -----

Michael Bridges
02/16/2001 04:11 PM

To: Mark Greenberg/NA/Enron@ENRON
cc: Bob.shults@enron.com
Subject: Fee Agreement and BETA

Mark,

This might assist you in making the changes for the Prebon broker client
Contract. Thanks for your help. I told Prebon we would have a contract to
them early next week.

Call with any questions.

Thank you,

Mike Bridges

---------------------- Forwarded by Michael Bridges/NA/Enron on 02/16/2001
04:10 PM ---------------------------

"Lee C. Taylor (NJ)" <LCTaylor@prebon.com< on 02/16/2001 03:48:31 PM
To: "Mike Bridges (E-mail)" <Michael.Bridges@enron.com<, "Bob Shults
(E-mail)" <Bob.Shults@Enron.com<
cc:

Subject: Fee Agreement and BETA

I thought it would accelerate the process somewhat if I explained my
confusion with the recently received Fee Agreement and Broker Electronic
Transaction Agreement. After working for several weeks on the language of
the Letter of Intent, it was discouraging to receive the BETA and the Fee
Agreement. The following comments below highlight what I see as the primary
commercial areas of difference between the LOI and the draft documentation:

* No commitment by EOL that prices on EOL and the broker website will
be the same.
* No reference to the fact that credit will be checked simultaneously
with Prebon's clicks to trade.
* No mention that Prebon Energy has no obligation to transact on the
website.
* No commitment by EOL to provide access to the website, even if
Prebon is restricted from executing transactions on a voice basis. (In
fact, the BETA expressly states that access can be denied.)
* No commitment by EOL to provide prices continuously during normal
business hours.
* No mention that Prebon will not have any liability for settlement of
a transaction once confirmed by Prebon's customer.
* No mention of our ability to provide credit support in another form
acceptable to Enron such as a parent guarantee.
* No mention of the breakdown in the fee schedule - $250k for US gas
and electricity and $200K for UK/Electricity and no mention of the
additional products.
* The LOI limited free brokerage to trades executed via the website.

These are some, but not all, of the business concepts that we discussed and
agreed to for the Letter of Intent, that were excluded from the Fee
Agreement and BETA.

I would appreciate if you could discuss some of the points I described
above. I will be in Houston from Feb 19 until Feb 21 and be back in the
office on the 22nd. We could set up a conference call for Feb 22 to discuss
these points. I have also spoken with Nanette Crist, and she has agreed to
redraft the Fee Agreement and BETA to reflect the Letter of Intent signed
between Enron Online and Prebon Energy once we have confirmed our
understanding of these points. Nanette will be on vacation next week;
however, she feels that she will be able to send you the revision by
February 27, 2001. I look forward to speaking with you next week. If you
have any questions or comments in the meantime, you can reach me on my cell
phone (908) 209-7618. Thank you.

Lee C. Taylor
Prebon Energy
(201)557-5829