David and Bob,

We look forward to working with you to strengthen the Compaq and EBS 
relationship.   EBS has identified potential server business opportunities 
(storage, streaming media) where our two organizations can work together.  
After our meeting on Dec 14th, EBS now understands to utilize David Spurlin 
as the point person for these communications.  EBS had prior direction from 
Compaq to direct our discussions to Derrick Deakins, Rob Senders, Keith 
McAuliffe or Kent Major.  Tracy Prater and myself look forward to spending 
additional time with David to ensure that he is aware of the EBS business 
opportunities and issues.  

EBS had invested significant dollars, time and energy with Compaq to develop 
the streaming media server solutions.  We discussed during the Dec 14th 
meeting that there are decisions to be made regarding the existing Product 
and Server Supply Agreement that are contingent on those streaming media 
solutions.  EBS and Compaq have both acted in good faith to achieve the 
intent of the Product and Server Supply Agreement in pursuing these 
solutions.  To that end, EBS has had internal discussions regarding the 
appropriate next steps to further our relationship.  

The January 2000 Product and Service Supply Agreement is the legal framework 
for our relationship until both parties mutually agree to change.  Until 
those changes are made:
1) 2000 Compaq Annual Purchase of ECI Services:  Per the Agreement, Compaq 
was invoiced for the 2000 Minimum Annual Purchase of ECI Services on November 
7, 2000 as per Sections 3.1, 3.2 and 3.3.  Compaq had agreed  to the invoice 
amount.  EBS expects payment for the total invoice as outlined in Section 3.0 
on or before December 31,2000.   
2) Potential for Agreement Termination:  Prior to the Dec 14th meeting, 
Compaq (Keith and Rob) have discussed this with EBS (Jim Crowder, myself).   
The understanding between both Parties was that EBS would need a written 
notice and payment by Compaq of $2,500,000.  The concept to start over with a 
new contractual agreement was again discussed during the Dec 14th meeting.  
EBS strongly believes in the value of the Compaq and EBS relationship, if 
Compaq believes that to start over with a new agreement is necessary then we 
look forward to working with Compaq to achieve that goal.  

Again, we look forward to working with yourselves to identify and create 
strategic business opportunities for both EBS and Compaq.   

Kim Godfrey
Director, Enterprise Services
Enron Broadband Services
phone : 713 345 8813
cell :      713 501 8105
fax:        713 853 7354