Summer Purchase Agreement

----- Forwarded by Lance Schuler-Legal/HOU/ECT on 07/31/2000 08:17 AM -----

"Joor, William E., III" <wjoor@velaw.com<
07/30/2000 06:58 PM

To: "'Klepper, Marty'" <mklepper@skadden.com<, "'Tindell, Jeff'"
<jtindell@skadden.com<, "'Brasher, Lance'" <lbrasher@skadden.com<, "'Saba,
Peter'" <psaba@skadden.com<, "'Cohen, Arthur'" <arcohen@skadden.com<, "'Haug,
David'" <dhaug@enron.com<, "'Sutton, Joseph'" <jsutton@enron.com<, "'Brennan,
James'" <james.brennan@ubsw.com<, "'Saddi, Joe'" <saddi_joe@bah.com<,
"'Walter, Jerry'" <jerry.walter@simmons-simmons.com<, "'Baxter, Cliff'"
<cliff.baxter@enron.com<, "Metts, Mark (Enron)" <mmetts@enron.com<, "Taylor,
Mitchell (Enron)" <mitchell.taylor@enron.com<, "'Welch, Jamie'"
<jamie.welch@csfb.com<, "'Faldyn, Rodney'" <rfaldyn@azurix.com<, "Schuler,
Lance (Enron)" <lance.schuler-Legal@enron.com<, "Dilg, Joe"
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cc:
Subject: Summer Purchase Agreement

Attached please find clean and marked copies of a revised Purchase and Sale
Agreement. There are attached copies in WordPerfect 8.0 and in PDF.

Two matters require special mention:

First, we have been advised that the parties discussed a threshhold with
respect to the TGS stamp tax issue of $16 million. Accordingly, we have
amended the definition of the Excluded Liability to limit it to the excess
of any TGS liability that would yield that amount proportionately to the
Company's ownership interest.

Second, we have noted that the bifurcation of the materiality standard
between materiality as a condition to close and materiality as a condition
to indemnification yields an inappropriate result in the case of the
representation in Section 5.14 dealing with material adverse changes. It is
our intention to condition the Acquiror's obligation to close on an adverse
matter that is material to a Strategic Business Unit. It was to indemnify
the Acquiror with respect to an undisclosed adverse matter that is material
to a Strategic Business Unit. I was not our intention to indemnify the
Acquiror with respect to each $4 million change in each Business not covered
by the other representations. Accordingly, we have, in the case of Section
5.14, limited the definition of Material Adverse Change to clause (i) of
that definition. <<Houston_284555_1.WPD<< <<Houston_284243_1.WPD<<

William E. Joor III
Vinson & Elkins L.L.P.
3600 First City Tower
1001 Fannin
Houston, Texas 77002-6760
Tel: 713-758-2582
Fax: 713-615-5201
wjoor@velaw.com

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<<PSA.7.30.00.CMP.PDF<< <<PSA.7.30.00.PDF<<

- Houston_284555_1.WPD
- Houston_284243_1.WPD
- PSA.7.30.00.CMP.PDF
- PSA.7.30.00.PDF