Re: Revised Australian Services Agreement

Sara,

When I sent you the following message on April 12th, I thought it was clear
that Enron Australia Finance Pty Limited should not act as principal for
entering into the non-power futures agreement with ABN AMRO. Sorry for the
confusion. Rather, ABN AMRO should enter into the agreement with ENA.
(Shane should only enter into trades under the futures agreement acting
pursuant to the services agreement. Of course, based on David's e-mail
messages, it appears that the services agreement needs to be executed
following resolution of the questions regarding the mark-up.)

Note further that as stated in my September 9, 1999 memo that I sent you in
the April 12th e-mail (and that is re-attached below), our Australian tax
advisor advised that if a master contract must be executed in Australia, it
should be executed by an independent agent (such as a lawyer) having a power
of attorney from ENA.

Hope this helps. Please feel free to contact me if you have any further
questions.

Best regards,
Susan

Susan Musch
04/12/2000 08:27 AM
To: Sara Shackleton@ECT
cc: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Australian Financial Trader Tax Issues - Revised Memo

Sara,

As we discussed, attached is the memo that I wrote last September on the tax
implications of having a financial trader in Sydney. As you will note, we
followed a service fee approach to reimburse the Sydney office on a cost-plus
basis for the costs incurred by the financial trader (including his
remuneration). Important in this arrangement is that the Sydney financial
trader is not the principal in the trades but is only acting in a preparatory
or auxiliary manner for the ENA financial trades.

As we discussed yesterday, I will forward the latest draft of the service
agreement to you by e-mail. David, could you send Sara and me conforming
copies of the executed agreement?

Also, we should probably also discuss the status of the documentation
relating to these trades.

I will be happy to discuss this memo with you in more detail at your
convenience.

Best regards,
Susan

---------------------- Forwarded by Susan Musch/ENRON_DEVELOPMENT on
04/12/2000 08:21 AM ---------------------------

Susan Musch
09/15/99 05:02 PM
To: Colin Jackson@ECT, Alan Aronowitz/HOU/ECT@ECT, Susan
Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Gary Hickerson/HOU/ECT@ECT, Harry
Arora/HOU/ECT@ECT, Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shari Stack@ENRON_DEVELOPMENT
cc: (bcc: Susan Musch/ENRON_DEVELOPMENT)

Subject: Australian Financial Trader Tax Issues - Revised Memo

Attached is the revised memo on the Australian Financial Trader Tax Issues.
(Note you will find the changes in the background section of the memo.)
Please let me know if you have any questions or need any additional
information.

Best regards,
Susan

Sara Shackleton@ECT
04/18/2000 03:55 PM
To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: David Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Re: Revised Australian Services Agreement

Susan: You were going to verify whether the ABN AMRO futures agreement
should be executed by Enron Australia Finance Pty. Ltd. (or ENA with Shane
acting pursuant to the Services Agreement). Please let me know so that
either David or I can move forward on the futures agreement. Thanks. Sara
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 04/18/2000
04:46 PM ---------------------------

Shari Stack
04/18/2000 09:11 AM
To: Sara Shackleton/HOU/ECT@ECT
cc:
Subject: Re: Revised Australian Services Agreement

FYI .. . . .
---------------------- Forwarded by Shari Stack/HOU/ECT on 04/18/2000 10:08
AM ---------------------------

David Minns@ENRON_DEVELOPMENT
04/18/2000 12:22 AM
To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Heidi Mason/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shari Stack@ECT
Subject: Re: Revised Australian Services Agreement

I've checked my notes and spoken to Heidi and it appears the delay was
settling the mark up (107.5%) in the Agreement. Heidi believes that this
figure can be reduced to 100% (which is current practice). If everyone is
agreeable I will arrange execution.

David Minns
04/18/2000 02:35 PM
To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Heidi Mason/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Re: Revised Australian Services Agreement

Susan this is the latest version of the Services re ENA/EAPL. There is a note
on my file that the percentage uplift.

Shari Stack@ECT
09/18/99 06:32 AM
To: Susan Musch/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Alan Aronowitz@ECT, Gary Hickerson@ECT, Harry Arora@ECT, Colin
Jackson@ECT, Paul Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Heidi
Mason/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Barbara Lewis/HOU/ECT@ECT

Subject: Revised Australian Services Agreement

Attached please find my mark-up of the Australian Services Agreement. I have
attached a blacklined version for ease of reference.

Apart from changing the name from ECT to ENA, I have modified clause 1 in
Schedule 1 to more accurately reflect the intended products.

Please call me if any questions.

Many thanks,

Shari

---------------------- Forwarded by Shari Stack/HOU/ECT on 09/17/99 02:25 PM
---------------------------

Susan Musch@ENRON_DEVELOPMENT
09/15/99 07:30 PM
To: Shari Stack@ENRON_DEVELOPMENT, Alan Aronowitz@ECT, Gary Hickerson@ECT,
Harry Arora@ECT, Colin Jackson@ECT, Paul
Quilkey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David
Minns/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Heidi
Mason/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:
Subject: Draft of Australian Services Agreement

Attached is a draft of the services agreement for the financial trading
services to be provided by the Australian trading office for ECT-Houston.
Please review the agreement and let me know if you have any questions,
comments or revisions.

Best regards,
Susan