Subject: FW: FW: Pole attachment contract
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Fri, 30 Jun 2000 07:23:00 -0700 (PDT)

Jose,

Below is correspondence between our outside counsel in London (concerning the 
fiber build) and in-house counsel for EBS in Houston.  I hope it will provide 
you with a better idea of the current status of this project.  However, I 
will need to fill in some blanks.  I understand that this has been a crazy 
week for you, but I really do need to speak with you as soon as possible 
about this deal.  The commercial folks are moving forward rapidly (as you can 
see from the correspondence) and I need to ensure that the deal is ok from a 
regulatory perspective.  I will be in the office on Wednesday (late morning 
or early afternoon) if you are available to speak then -- or feel free to 
call me on my cell phone at 713-851-7770 if you are still in the office.  
Thank you.

Lara
---------------------- Forwarded by Lara Leibman/HOU/EES on 06/30/2000 02:19 
PM ---------------------------

"Patterson, Robert (London)" <[email-masked]> on 06/30/2000 01:25:44 PM
To: "[email-masked]'" <[email-masked]>
cc: "Bradford, Brian (Enron)" <[email-masked]>, 
"[email-masked]'" <[email-masked]> 
Subject: FW: FW: Pole attachment contract

Michelle,

Attached is the latest draft of the pole attachment agreement which Debora
Klinger at Elektro sent over yesterday.  It will probably not mean much to
you, given that it is in Portuguese.  Unfortunately, Debora has not marked
all the changes, nor has she taken into account amendments suggested by
local counsel (Mundie e Advogados), which does not help the review process.

I have discussed with Brian the most efficient way of finalising the
contract.  My suggestion (from a cost, as well as a speed, perspective) is
that it be handled 'on the ground' by Eduardo Zobaran at Mundie.  He has
reviewed and commented upon an earlier draft of the contract and is
obviously better equipped than I am on the drafting front.  I will let him
have the latest draft (as well as details of the new commercial issues) and
ask him to liaise directly with Brian, as well as keeping me in the loop.  I
will also ask him to resolve outstanding issues directly with Debora
Klinger.  Brian agreed that this was probably the best way to proceed.

As I mentioned in my voicemail message to you earlier, I will put together a
bullet point summary of the contract (on a clause by clause basis) and you
will have this by Monday morning your time.  I will base it on the latest
draft provided by Debora Klinger and it will obviously be subject to change
once the final points are resolved.  I will also be asking Eduardo to sign
off on it.

Regards
Rob

-----Original Message-----
From: Debora Klinger [mailto:[email-masked]]
Sent: 28 June 2000 23:16
To: [email-masked]
Cc: [email-masked]; [email-masked];
[email-masked]; [email-masked]
Subject: Re: FW: Pole attachment contract

Rob,

As agreed, please find attached hereto the current version of the PAC duly
marked with changes not under discussion below. Please notice that that we
maintained the requirement for ANEEL's prior approval since we are talking
about an affiliated company.

Best Regards,

D,bora

Rob,

I apologize for not getting back to you earlier. Just today I had the
opportunity to review the attached draft and to discuss it with Alexandre
Inneco. It seems that we are pretty close to come to a document acceptable
for both parties. Please find below our comments on the proposed changes:

(i) Clause 1 and Paragraph 2 - As establish under item ix of article 20 of
Joint Resolution 01/99 (Resolution), Elektro shall have the right to forbid
any sublease of the infrastructure or use of same for purposes other than
those provided for in the Pole Attachment Contract (PAC) without Elektro's
prior consent. Such requirement is being included in all PAC drafts in order
to allow Elektro to exercise the necessary control over the agents and/or
the use of the infrastructure, mainly for security purposes. Please keep in
mind that Elektro may not oppose any reasonable request, except for the
reasons set forth in the Resolution. Although we are aware that the
Resolution won't apply in this case, we don't see any justification that
would allow us to make an exception on Enron's case. Be as it may, our
suggestion is to have this clause re-drafted (and also Clause 11) so as to
establish that Enron may sublease or sell any or all fibers to third parties
as long as Enron's remain liable before Elektro for all the obligations
assumed under the PAC. Do you think this would meet your expectations?

(ii) Paragraph 7 of Clause 1 - As we see it, this clause would allow Enron
to negotiate the use of its cables among the agents. We included this clause
in all PAC drafts based on the principle set forth in article 12 of the
Resolution. Do you think this could be construed as an abusive condition?

(iii) Sole Paragraph of Clause 2 - We deem it convenient  to explain that in
addition to the penalty set forth, Enron shall be liable for all the costs
related to the removal of the cables and equipments that may have being
attached in the infrastructure during the 120 days period;

(iv) Paragraph 4 of Clause 3 -  All PAC drafts establish that payment will
be due within 5 days counted from the presentation of relevant invoice. We
don't see any grounds that would justify an exception in Enron's case;

(v) Clause 7 and Paragraphs - This clause has being discussed from the very
beginning and it seems that we have not being unable to reach an agreement
on it, as of yet. Please explain the reason why you want to modify it in the
proposed draft;

(vi) Paragraph 4 of Clause 9 - We don't agree with the concept of this
clause. It seems to us that in such case Elektro shall have no liability on
the losses suffered by Enron. Thus, Enron should turn to ANEEL to claim
proper indemnification;

(vii) Clause 10 - We are re-drafting this clause in order to add that any
dispute arising from this agreement shall be solved by ICC, in accordance
with Enron's policy;

(viii) Clause 12 -  As mentioned above, we may re-draft this clause so as to
establish that Enron may sublease any or all fibers to third parties as long
as Enron's remain liable before Elektro for all the obligations assumed
under the PAC. This will not apply for any transfer of the agreement, in
case of which Elektro's prior consent will be required.

I'll be finishing to re-draft the PAC duly incorporated with the changes
above and hope to send it to you until tomorrow, together with some minor
changes of technical nature we had to add to the original version. Please
feel free to call me if you want to discuss this matter.

Best regards,

D,bora

>>> "Patterson, Robert (London)" <[email-masked]> 06/19 7:19 am >>>
Debora,

Please find attached a copy of Elektro's draft pole attachment contract, as
amended by Eduardo Zobaran at Mundie e Advogados.  I also attach a copy of
his memo to me which explains the changes.  The changes have been made on
the basis that the Enron company which enters into the contract will not be
the holder of an ANATEL licence and most of the suggested changes reflect
the fact that the Joint Resolution will therefore not apply.  Very few of
the comments are commercial in nature and so I hope we can finalise the
agreement as soon as possible.  We may need some further technical review,
however.  Could you review the document and let me know whether the changes
are acceptable.

With regard to ANEEL approval, the advice we have received is that approval
under the Joint Resolution is not needed (since the Joint Resolution does
not apply).  However, approval under the terms of ANEEL's concession will be
required.  Once we have agreed the terms of the contract, is it possible to
obtain approval in advance (ie before signature) on the basis that the
contract will be entered into on the terms submitted to ANEEL?  If so, I
suggest that we follow this approach.  That way, we can begin the approval
process whilst Enron finalises details of its contracts with Horizon, etc.

Thanks
Rob
Rob Patterson
Vinson & Elkins
London
Tel: (44) 20 7618 6020
Fax: (44) 20 7618 6001
email: [email-masked]

 - Compartilham-Infra-Estrut7-Enron.doc