TO:

FROM:     Sherrie Gibson

DATE:     July 22, 1998

RE:       Available Credit

Due to the significant increase in the stock market, in particular Enron Corp. stock, I
requested updated collateral valuations (which I have reviewed and concurred with) to
determine your current borrowing power. A summary is as follows:

~QM~ASiBAN1~
Your $10,000,000 line is credit is fully collateralized, and the remaining available
credit is approximately $2,275,000.

£HASE
Your $5,000,000 line of credit is not totally collateralized; therefore, the remaining
available credit of approximately $275,000 is limited by the amount of collateral.

I~Afl~NSBANK
Your $35,000,000 line of credit is fully funded; however, due to excess collateral the
bank is increasing the line of credit by $2,500,000 to a total of $37,500,000. The
documents are being prepared and will be completed by next week. Sally will forward
them to you and Linda for your signatures.

In addition, I've been searching for other means of increasing your lines of credit
without having to exercise your stock options. Howard Williams is investigating the
possibility of pledging your Enron stock options (NationsBank has accepted Compaq
stock options from the company's executives). Due to the nature of stock options, the
loan to value ratio would be around 50%; however, the interest rate on the line o/
credit would be UBOR + .9%. If this is possible, are you interested? ~                -
										/v~'$. Pkd$~
										     VS44..
The cheapest money to borrow is still from Enron. The interest rate for July is 5.68%
decreasing to ~ in August. Due to the increased collateral's values, the current
available credit from Compass and Chase total $2,550,000. With the additional       7/~~// ~
$2,500,000 line of credit from NationsBank, your borrowing power from these three
institutions will be $5,050,000. (This amount will decrease if the pledged stock's
prices decline beyond a certain level).


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