Re: Agency Agreement

Hi guys,

Here are some quick thoughts:

2.10 Suggest we delete "specific" from second line.
3.3 (i)To protect cash flow neutral status we need to get the money a couple
of business days before date due.
6.2 We need to discuss changes which could materially impact the value of
the agreement to MEH, not just the risks/responsibilities.

I'd bracket the concept of what the Admin Service Fee is supposed to cover.
Can we recover any additional costs, such as the cost of preparing/filing
docs on their behalf (2.2) and collection (3.1)? I think we probably need to
limit our role to "short of litigation" type stuff. Maybe "reasonable
efforts, short of litigation", something like that?

That's all for the first quick read.

Kay

"David Tucker" <dtucker@bracepatt.com< on 06/21/2000 07:06:57 PM
To: <kay.mann@enron.com<, <bjspringer@jonesday.com<
cc: <cdade@bracepatt.com<

Subject: Agency Agreement

As we discussed, in an effort to forward our internal discussions and
memorialize the results of our discussions in Chicago last week, Boyd and I
have produced a new draft of the Agency Agreement. The changes can be
inspected by launching the attachment in Word and then going to Tools ---
Track Changes --- Highlight Changes to display and print the changes in the
document.

A number of questions must be addressed. They include, in no particular
order:

Can we delete the confidentiality article?

Is it commercially important to restore the langauge on displacement
deliveries?

What will the compensation arrangements be?

Are we willing to deduct the administrative fee from the net cumulative
revenues? [Doing so "loses" us $10,000 a month.]

Will we collect accounts receivable directly or have payments made to a
deposit account in which we will retain a security interest?

How should Section 2.9(ii) be recast to allay Boyd's regulatory approval
concern?

Is the new Section 2.10 acceptable?

How must the agreement change to reflect the "two county" concern?

I look forward to discussing this with you at your convenience. DT

- #1127382 v9 - NEW AGENCY AGREEMENT.doc