Re: GE payments

I like your letter.

From: Ben F Jacoby @ ECT 05/18/2001 04:15 PM

Sent by: Ben Jacoby@ECT
To: Chris Booth/NA/Enron@ENRON
cc: Kay Mann/Corp/Enron@Enron

Subject: Re: GE payments

Chris:

My comments are as follows, and I'd like you to send a letter rather than an
e-mail:

Dear Jeff,

As a follow up to your letter dated May 9, 2001, upon the posting of an LC
in the amount of $965,855 representing 5% of the price of unit 1, we are
prepared to pay GE the $1,501,885 deducted from our last payment. With
respect to liquidated damages on delivery of the air filter, we reserve our
rights under the contract to exercise our offset rights at a later date.

Please let me know when you will be able to have the LC in place, and we will
make appropriate payment arrangements.

Regards,

Chris Booth
Manager

Enron North America Corp.

From: Chris Booth @ ENRON 05/18/2001 02:39 PM

To: Ben Jacoby/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron
cc:
Subject: GE payments

Kay and Ben,

I would like to send the following to Jeff Darst at GE via e-mail.

Dear Jeff,

Pursuant to you letter dated May 9, 2001 we are prepared to pay the deduct
for liquidated damages ($536,000) and retention deduct ($965,885) withheld
from the April 25, 2001 invoice. Payment of the deduct for the liquidated
damages claim does not constitute a withdrawal of the claim, hence, we are
not waiving our rights afforded under the contract. As stated in our letter
dated May 3, 2001, we are prepared to pay the final 5% payment for Unit 1
upon receipt of the Letter of Credit for $965,855 (5% of the price for Unit
1) and a lien release.

Regards,

Chris