RE: Enron's Proposed Modifications for Parental Guarantee

Patrice,
Please see the below comments from my attorney. Let me know if we can work
with this.
Thanks

I suggest revising that sentence as follows to avoid any potential conflict
within the terms of the Guaranty itself and to accommodate Enron's
reasonable request for a specific number of days:

" . . . and shall be deemed sufficient notice that, subject to
Paragraph 9 of this Guaranty, Guarantor agrees to pay the Obligations
within 7 business days after receiving the Payment Demand."

Rob Smith
Retail/Alliance Credit Manager
1000 Louisiana Street Suite 5800
Houston, TX 77002
Phone 713.767.6090
Fax 713.767.8772

Patrice.L.Mims
@enron.com To: IMCEANOTES-Rob+2ESmith+40dynegy+2Ecom+40ENRON@enron.com
cc:
09/25/01 08:44 Subject: RE: Enron's Proposed Modifications for Parental Guarantee
AM

Hey Rob,

We have one more comment for you to consider:

We must have a definitive number of days in case, "Enron makes a demand on
this guaranty". We cannot leave the contract silent on that issue. How
about making it 7 days instead of 5 days. Our lawyers say that we must
have a definitive number of days.

Your turn!

-----Original Message-----
From: Rob.Smith@dynegy.com@ENRON

[mailto:IMCEANOTES-Rob+2ESmith+40dynegy+2Ecom+40ENRON@ENRON.com]

Sent: Monday, September 24, 2001 1:56 PM
To: Mims, Patrice L.
Subject: Re: Enron's Proposed Modifications for Parental Guarantee

Patrice,
Please let me know this is workable and I will get this issued ASAP.
Thanks
Rob Smith
Retail/Alliance Credit Manager
1000 Louisiana Street Suite 5800
Houston, TX 77002
Phone 713.767.6090
Fax 713.767.8772

----- Forwarded by Rob Smith/HOU/Dynegy on 09/24/01 01:54 PM -----

Ernie Kohnke
To: Rob
Smith/HOU/Dynegy@Dynegy
09/24/01 01:53 cc:
PM Subject: Re: Enron's
Proposed Modifications for Parental Guarantee(Document
link: Rob Smith)

Rob,

I have made a few changes and one correction. I deleted the reference
to
"must pay within 5 business days" added to paragraph 3. If Enron does
make
a demand under this guaranty, there is no way we can make payment within
those 5 days (especially since we will need to rely on an outside party
to
provide data to us). As you know, however, when we receive a demand
under
a guaranty, we move quickly to verify the request and make payments
where
appropriate.

I completed the information in paragraph 4(a).

I deleted the second copy of the reps and warranties of corporate
authority.

Finally, I reinserted "excluding choice of law provisions . . . "
language
to try to keep the case under Texas law, assuming a dispute ever arises.

All told, most of the changes look fine.

Thanks.

Ernie

(See attached file: Dyn to Enron 1.doc)

Rob Smith
To: Ernie
Kohnke/HOU/Dynegy@Dynegy
09/24/01 cc: Thomas
White/HOU/Dynegy@Dynegy
11:15 AM Subject: Enron's Proposed
Modifications for Parental Guarantee

----- Forwarded by Rob Smith/HOU/Dynegy on 09/24/01 11:14 AM -----

"Mims, Patrice
L." To:
<rob.smith@dynegy.com<
<Patrice.L.Mims@ cc:
enron.com< Subject: Enron's
Proposed Modifications for Parental Guarantee

09/24/01 11:11
AM

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(See attached file: Dynegy HOldings Parent Guaranty)

- Dyn to Enron 1.doc << File: Dyn to Enron 1.doc <<
- Dynegy HOldings Parent Guaranty << File: Dynegy HOldings Parent
Guaranty <<