March 23, 2001   =20 Enron North America Corp. 1400 Smith Street=20 Houston, TX  77002-7361 Attention:  Benjamin F. Jacoby                  Executive Director  Re:  Acquisition of General Electric 7EA Turbines  Ladies and Gentlemen:  Pursuant to our discussions last week, the following summarizes the main=20 commercial terms agreed to by NorthWestern Corporation (=01&NorthWestern=01= 8) and=20 Enron North America Corp. ("ENA") regarding NorthWestern=01,s purchase thro= ugh=20 the LLC referred to below or as otherwise accomplished without violation of= =20 the Turbine Contract referred to below (the =01&Purchase=018) of two (2) Ge= neral=20 Electric (=01&GE=018) 7EA combustion turbines (the =01&Turbines=018), the f= irst of which=20 is presently located at a GE storage facility, and the second of which is= =20 scheduled to be available for delivery in February, 2002, and both of which= =20 are subject to purchase from GE under an agreement with GE dated as of May= =20 31, 2000 (the =01&Turbine Contract=018) with respect to which ENA has the r= ight to=20 cause a joint venture limited liability company in which, prior to commerci= al=20 operation of the Turbines, ENA holds a 20% equity interest and a wholly-own= ed=20 NorthWestern subsidiary (the =01&NorthWestern Subsidiary=018) holds an 80% = equity=20 interest (the =01&LLC=018) to become the purchaser:  1.
Purchase Price:  NorthWestern will pay ENA $48.0 million for the Turbin= es=20 (subject to adjustment as described below).
[Adjusted how?
Need specific= =20 reference.
Is the statement that the payment is for the turbines consistent= =20 with the structure?
Definitely sounds like a UCC deal,  for what that=01,s= =20 worth.]
2.
Closing Date of Purchase:  The Purchase will close on a date on or prio= r=20 to September 1, 2001, as selected by NorthWestern by not less than 30 days= =01,=20 written notice to ENA,(provided that such notice may not be given less than= =20 30 days after the signing of a definitive agreement relating to the=20 Purchase).
[What happens at closing?
Payment of the balance?
In the=20 interim are we going to be obligated to perform under the GE contract in a= =20 certain manner?
Are we taking on implied obligations to NW?]
3.
Cash Down Payment:  NorthWestern will pay ENA an $8.0 million down=20 payment for the Turbines.
The first installment ($3.0 million) of the $8.0= =20 million down payment will be due upon the signing of a definitive agreement= =20 with ENA providing for the Purchase.
The second installment ($5.0 million)= =20 of the $8.0 million down payment will be due at the earlier of (i) closing = of=20 the Purchase, or (ii) July 15, 2001.
[The remaining $40m due at closing, as= =20 well as any other amounts due to changes, etc?]
4.
Liquidated Damages:   If, prior to the assignment of the Turbine Contra= ct=20 [is proper reference to closing?
], the purchaser under the Turbine Contract= =20 receives any liquidated damages under the Turbine Contract, then ENA will= =20 give notice thereof to NorthWestern as promptly as possible.
[Then what?]
5.
Carry Period:  ENA will provide an interest-free carry on the unpaid=20 purchase price of the Turbines until July 15, 2001.
If the closing of the= =20 Purchase occurs after July 15, 2001, then the unpaid purchase price of the= =20 Turbines will be increased by interest at the rate of 7.5% per annum on the= =20 unpaid purchase price of the Turbines ($40.0 million) for each day from, an= d=20 including, July 15, 2001 to, but excluding, the closing date.
6.
Dual Fuel Conversion on Unit 2:  ENA will not proceed with this change= =20 order to effect the conversion.
Instead, it will be the responsibility of= =20 NorthWestern to effect the change order with GE.
[does this mean they will= =20 be negotiating a change order while E Next is still the purchaser?
Are we= =20 committing to pay for the increase?
Does the purchase price increase?
Is= =20 there a limit?]
7.
Unpaid Price of Second Turbine:  At the time of closing, one or more=20 installments of the purchase price of the second Turbine will be payable to= =20 GE under the Turbine Contract (the =01&Unpaid Installments=018).
ENA will = be=20 obligated to pay the Unpaid Installments to GE as they become due under the= =20 Turbine Contract.=20 8.
Guarantees:   There will be no guarantee by Enron Corporation of any of= =20 the representations, warranties, covenants, indemnities or other obligation= s=20 of ENA in connection with the Purchase.
All obligations of the LLC under t= he=20 Turbine Contract, as well as all obligations of the NorthWestern Subsidiary= =20 to ENA in connection with the transaction, will be guaranteed by NorthWeste= rn=20 Corporation.
[governing law?
Limit on remedies/damages for this letter?
Dispute resoluti= on?
NorthWestern and ENA have acknowledged that, subject to review and approval= =20 of the structure of the Purchase and the negotiation of final documentation= =20 relating to the Purchase (which documentation will incorporate the commerci= al=20 terms set forth above), the above commercial terms have received all=20 necessary NorthWestern and ENA internal approvals.
[Is this true for Enron?= ] =20 In light of this acknowledgement, NorthWestern and ENA (by signing this=20 letter in the space provided below and returning the same to NorthWestern)= =20 agree to negotiate, in good faith, to agree upon such structure and such=20 documentation, with a view to executing and delivering a mutually acceptabl= e=20 definitive agreement relating to the Purchase as promptly as practicable.
F= or=20 the avoidance of any doubt, it is expressly stated, acknowledged and agreed= =20 that each of NorthWestern and ENA must be satisfied with such structure and= =20 such documentation in its own discretion.
[I question whether there is enough wiggle to keep this from being a bindin= g=20 obligation to sell]  By agreeing to the commercial terms set forth in this letter (by signing th= is=20 letter in the space provided below and returning the same to NorthWestern),= =20 ENA grants NorthWestern, and NorthWestern grants ENA, an exclusive =01&no s= hop=018=20 period through the close of business on Friday, April 13, 2001; and ENA=20 agrees that, during such =01&no shop=018 period, ENA will not discuss or ne= gotiate,=20 directly or indirectly, with any person or entity other than NorthWestern f= or=20 or in respect of the purchase or other acquisition by such person or entity= =20 of the Turbines; and NorthWestern agrees that, during such =01&no shop=018 = period,=20 NorthWestern will not discuss or negotiate, directly or indirectly, with an= y=20 person or entity other than ENA for or in respect of the purchase or other= =20 acquisition by NorthWestern of turbines from such person or entity..  As=20 consideration for ENA agreeing to such =01&no shop=018 period, NorthWestern=  will=20 pay to ENA, via wire transfer on the date of receipt by NorthWestern of ENA= =01,s=20 signed agreement, $1.0 million (the =01& No Shop Payment=018).
The No Shop=  Payment=20 will not be subject to refund by ENA for any reason or upon any circumstanc= e=20 (including, without limitation, failure of NorthWestern and ENA to agree up= on=20 the structure of, and enter into a definitive agreement relating to, the=20 Purchase).
=20  If ENA is in agreement with the foregoing, then please so indicate by signi= ng=20 this letter in the space provided below and returning the same to=20 NorthWestern (by facsimile at 605/978-2840 and to the attention of the=20 undersigned).
Very truly yours,          NORTHWESTERN CORPORATION

NW my comments in blue
March <NUMBER>, <NUMBER> =<NUMBER> <COMPANY> North America Corp. <NUMBER> Smith Street=<NUMBER> Houston, <STATE> <NUMBER>-<NUMBER> Attention: Benjamin F. Jacoby Executive Director Re: Acquisition of General Electric 0EA Turbines Ladies and Gentlemen: Pursuant to our discussions last week, the following summarizes the main=<NUMBER> commercial terms agreed to by NorthWestern Corporation (=<NUMBER>&NorthWestern=<NUMBER>= <NUMBER>) and=<NUMBER> <COMPANY> North America Corp. ("<COMPANY>") regarding NorthWestern=<NUMBER>,s purchase thro= ugh=<NUMBER> the LLC referred to below or as otherwise accomplished without violation of= =<NUMBER> the Turbine Contract referred to below (the =<NUMBER>&Purchase=<NUMBER>) of two (<NUMBER>) Ge= neral=<NUMBER> Electric (=<NUMBER>&GE=<NUMBER>) 0EA combustion turbines (the =<NUMBER>&Turbines=<NUMBER>), the f= irst of which=<NUMBER> is presently located at a GE storage facility, and the second of which is= =<NUMBER> scheduled to be available for delivery in February, <NUMBER>, and both of which= =<NUMBER> are subject to purchase from GE under an agreement with GE dated as of May= =<NUMBER> <NUMBER>, <NUMBER> (the =<NUMBER>&Turbine Contract=<NUMBER>) with respect to which <COMPANY> has the r= ight to=<NUMBER> cause a joint venture limited liability company in which, prior to commerci= al=<NUMBER> operation of the Turbines, <COMPANY> holds a <NUMBER>% equity interest and a wholly-own= ed=<NUMBER> NorthWestern subsidiary (the =<NUMBER>&NorthWestern Subsidiary=<NUMBER>) holds an <NUMBER>% = equity=<NUMBER> interest (the =<NUMBER>&LLC=<NUMBER>) to become the purchaser: <NUMBER>.
Purchase Price: NorthWestern will pay <COMPANY> <CUR><NUMBER> million for the Turbin= es=<NUMBER> (subject to adjustment as described below).
[Adjusted how?
Need specific= =<NUMBER> reference.
Is the statement that the payment is for the turbines consistent= =<NUMBER> with the structure?
Definitely sounds like a UCC deal, for what that=<NUMBER>,s= =<NUMBER> worth.]
<NUMBER>.
Closing Date of Purchase: The Purchase will close on a date on or prio= r=<NUMBER> to September <NUMBER>, <NUMBER>, as selected by NorthWestern by not less than <NUMBER> days= =<NUMBER>,=<NUMBER> written notice to <COMPANY>,(provided that such notice may not be given less than= =<NUMBER> <NUMBER> days after the signing of a definitive agreement relating to the=<NUMBER> Purchase).
[What happens at closing?
Payment of the balance?
In the=<NUMBER> interim are we going to be obligated to perform under the GE contract in a= =<NUMBER> certain manner?
Are we taking on implied obligations to NW?]
<NUMBER>.
Cash Down Payment: NorthWestern will pay <COMPANY> an <CUR><NUMBER> million down=<NUMBER> payment for the Turbines.
The first installment (<CUR><NUMBER> million) of the <CUR><NUMBER>= =<NUMBER> million down payment will be due upon the signing of a definitive agreement= =<NUMBER> with <COMPANY> providing for the Purchase.
The second installment (<CUR><NUMBER> million)= =<NUMBER> of the <CUR><NUMBER> million down payment will be due at the earlier of (i) closing = of=<NUMBER> the Purchase, or (ii) July <NUMBER>, <NUMBER>.
[The remaining <CUR>00m due at closing, as= =<NUMBER> well as any other amounts due to changes, etc?]
<NUMBER>.
Liquidated Damages: If, prior to the assignment of the Turbine Contra= ct=<NUMBER> [is proper reference to closing?
], the purchaser under the Turbine Contract= =<NUMBER> receives any liquidated damages under the Turbine Contract, then <COMPANY> will= =<NUMBER> give notice thereof to NorthWestern as promptly as possible.
[Then what?]
<NUMBER>.
Carry Period: <COMPANY> will provide an interest-free carry on the unpaid=<NUMBER> purchase price of the Turbines until July <NUMBER>, <NUMBER>.
If the closing of the= =<NUMBER> Purchase occurs after July <NUMBER>, <NUMBER>, then the unpaid purchase price of the= =<NUMBER> Turbines will be increased by interest at the rate of <NUMBER>% per annum on the= =<NUMBER> unpaid purchase price of the Turbines (<CUR><NUMBER> million) for each day from, an= d=<NUMBER> including, July <NUMBER>, <NUMBER> to, but excluding, the closing date.
<NUMBER>.
Dual Fuel Conversion on Unit <NUMBER>: <COMPANY> will not proceed with this change= =<NUMBER> order to effect the conversion.
Instead, it will be the responsibility of= =<NUMBER> NorthWestern to effect the change order with GE.
[does this mean they will= =<NUMBER> be negotiating a change order while E Next is still the purchaser?
Are we= =<NUMBER> committing to pay for the increase?
Does the purchase price increase?
Is= =<NUMBER> there a limit?]
<NUMBER>.
Unpaid Price of Second Turbine: At the time of closing, one or more=<NUMBER> installments of the purchase price of the second Turbine will be payable to= =<NUMBER> GE under the Turbine Contract (the =<NUMBER>&Unpaid Installments=<NUMBER>).
<COMPANY> will = be=<NUMBER> obligated to pay the Unpaid Installments to GE as they become due under the= =<NUMBER> Turbine Contract.=<NUMBER> <NUMBER>.
Guarantees: There will be no guarantee by <COMPANY> Corporation of any of= =<NUMBER> the representations, warranties, covenants, indemnities or other obligation= s=<NUMBER> of <COMPANY> in connection with the Purchase.
All obligations of the LLC under t= he=<NUMBER> Turbine Contract, as well as all obligations of the NorthWestern Subsidiary= =<NUMBER> to <COMPANY> in connection with the transaction, will be guaranteed by NorthWeste= rn=<NUMBER> Corporation.
[governing law?
Limit on remedies/damages for this letter?
Dispute resoluti= on?
NorthWestern and <COMPANY> have acknowledged that, subject to review and approval= =<NUMBER> of the structure of the Purchase and the negotiation of final documentation= =<NUMBER> relating to the Purchase (which documentation will incorporate the commerci= al=<NUMBER> terms set forth above), the above commercial terms have received all=<NUMBER> necessary NorthWestern and <COMPANY> internal approvals.
[Is this true for <COMPANY>?= ] =<NUMBER> In light of this acknowledgement, NorthWestern and <COMPANY> (by signing this=<NUMBER> letter in the space provided below and returning the same to NorthWestern)= =<NUMBER> agree to negotiate, in good faith, to agree upon such structure and such=<NUMBER> documentation, with a view to executing and delivering a mutually acceptabl= e=<NUMBER> definitive agreement relating to the Purchase as promptly as practicable.
F= or=<NUMBER> the avoidance of any doubt, it is expressly stated, acknowledged and agreed= =<NUMBER> that each of NorthWestern and <COMPANY> must be satisfied with such structure and= =<NUMBER> such documentation in its own discretion.
[I question whether there is enough wiggle to keep this from being a bindin= g=<NUMBER> obligation to sell] By agreeing to the commercial terms set forth in this letter (by signing th= is=<NUMBER> letter in the space provided below and returning the same to NorthWestern),= =<NUMBER> <COMPANY> grants NorthWestern, and NorthWestern grants <COMPANY>, an exclusive =<NUMBER>&no s= hop=<NUMBER>=<NUMBER> period through the close of business on Friday, April <NUMBER>, <NUMBER>; and <COMPANY>=<NUMBER> agrees that, during such =<NUMBER>&no shop=<NUMBER> period, <COMPANY> will not discuss or ne= gotiate,=<NUMBER> directly or indirectly, with any person or entity other than NorthWestern f= or=<NUMBER> or in respect of the purchase or other acquisition by such person or entity= =<NUMBER> of the Turbines; and NorthWestern agrees that, during such =<NUMBER>&no shop=<NUMBER> = period,=<NUMBER> NorthWestern will not discuss or negotiate, directly or indirectly, with an= y=<NUMBER> person or entity other than <COMPANY> for or in respect of the purchase or other= =<NUMBER> acquisition by NorthWestern of turbines from such person or entity.. As=<NUMBER> consideration for <COMPANY> agreeing to such =<NUMBER>&no shop=<NUMBER> period, NorthWestern= will=<NUMBER> pay to <COMPANY>, via wire transfer on the date of receipt by NorthWestern of <COMPANY>= =<NUMBER>,s=<NUMBER> signed agreement, <CUR><NUMBER> million (the =<NUMBER>& No Shop Payment=<NUMBER>).
The No Shop= Payment=<NUMBER> will not be subject to refund by <COMPANY> for any reason or upon any circumstanc= e=<NUMBER> (including, without limitation, failure of NorthWestern and <COMPANY> to agree up= on=<NUMBER> the structure of, and enter into a definitive agreement relating to, the=<NUMBER> Purchase).
=<NUMBER> If <COMPANY> is in agreement with the foregoing, then please so indicate by signi= ng=<NUMBER> this letter in the space provided below and returning the same to=<NUMBER> NorthWestern (by facsimile at <PHONE> and to the attention of the=<NUMBER> undersigned).
Very truly yours, NORTHWESTERN CORPORATION
street number houston acquisition northwestern turbines reason circumstanc forth commercial terms proper reference closing definitely sounds jacoby executive director electric 0ea payment balance ge does mean