Draft of EJC/ENA Service Agreement

---------------------- Forwarded by Sheila Glover/HOU/ECT on 02/13/2001 05:51
PM ---------------------------

Susan Musch@ENRON_DEVELOPMENT
01/21/2001 10:11 AM
To: Sheila Glover@ECT, Darren Delage@Enron
cc: Heidi Mason/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jane McBride@Enron
Subject: Draft of EJC/ENA Service Agreement

Attached is a revised draft of the EJC/ENA Service Agreement. Please note
the following:

(1) I have left section 4 as was in the EAFPL/ENA Service Agreement because I
think the language, as drafted, supports the position that ENA does not have
a permanent establishment in Japan.
(2) I have sent a copy of the draft agreement to PWC-Tokyo for their
comments. I have done this to meet the verbage set forth in section 5 of the
agreement, and also to get their view on several things, such as quarterly
versus monthly billings, and whether the instructions referenced in section 5
can be incorporated in Schedule 1 or whether they should be set forth in a
separate document/memo.
(3) With respect to Schedule 1, I have basically left the original language
in there because I want the document to be user friendly, e.g., I don't want
it so specific that we have to amend it every couple of months. I would like
your thoughts on this - whether this meets your needs or not.
(4) Also, in re-reading Schedule 1, I think the language is broad enough to
encompass what Sheila and I were talking about this past week. That is, that
Darren is engaged in hedging what's been transacted each day by other
business units. I think this language works because in the agreement,
Principal not only includes ENA but it also includes any affiliate of ENA.
Section 6 of Schedule 1 lists "providing a Principal with such administrative
assistance as it may reasonably require and request for the transactions
described in 1. above." Section 10 of the Schedule expands upon this.
Again, I would appreciate your thoughts on this. (Query how does Darren deal
with Principals now, e.g., does he get requests in writing from them now, as
is set forth in section 10 of the Schedule?)

Please let me know if you have any revisions, questions or comments.

Best regards,
Susan