As soon as I get a redline, I'll get it to Accounting and we can go forward 
quickly.   I will also process the Virgil and Joan Ledford deal at the same 
time.   I just had a meeting cancel for tomorrow, which will help. 

Kay




Rusty Stevens
09/18/2000 04:29 PM
To: Kay Mann/Corp/Enron@Enron
cc:  

Subject: Re: Fehr Option Agreement  

Kay,

We are in agreement on the x months date certain that the document needs to 
end.   I have suggested that we propose one year.   If we dont extend the deal 
for a second 18 month term, this actually ends the deal before the 3 year 
overall contemplated date.   

As to running it back through Accounting, I had hoped that we could avoid 
that since its still not an obligation that we have except as a result of our 
actions to begin construction of a facility, so as I see it there's no change 
from the previous structure - its not a put - its an automatic call.   

If I haven't talked you into it yet, and you feel it does need to go past 
accounting again, please ask them to hurry since we have an incentive to get 
it done quickly. 

I dont recall what the paragraph 5 changes were, but we are in fact spending 
a lot of time with Karen at this time to get the zoning approved at Pontiac.   
This is why we are in a hurry.   We have to go for our zoning hearing on 
October 5th and we know we are going to be asked about the two nearby houses 
- Fehr and Ledford - and we want to be able to stand up and say that we too 
were concerned about the impact on those residents and that we have 
negotiated for the purchase of those homes so disturbance will be minimized. 

I also don't want Mr. Ledford - who just got back from vacation - to go talk 
to the Fehr's in the next day or so and make them re-think the deal we've 
gotten done with them. 

I know you're getting pulled in a lot of directions, and I appreciate the 
help. 



   
	Enron North America Corp.
	
	From:  Kay Mann                           09/18/2000 03:50 PM
	

To: Rusty Stevens/Corp/Enron@ENRON
cc: karen.way@piperrudnick.com, Fred Mitro/HOU/ECT@ECT 

Subject: Re: Fehr Option Agreement  

Here are my observations:

I agree with Rusty re: the put option complicating things for us.   Second, 
there has to be an absolute end to this agreement at some point.  If we want 
to have an automatic extension by commencing construction, there still needs 
to be a date certain after which we can go forward without them no matter 
what.   In other words, if we want to add the language Rusty suggested, it 
should be limited to x months after the expiration of the option agreement.   
We'll need to run this back through Accounting. 

I really don't like the inclusion of the language in paragraph 5.  If we add 
the language requested in paragraph 5, we need to run this agreement back 
through Accounting, and we may need to add some other additional language.   

I don't know if Rusty and Fred think we may need a zoning change for this 
parcel. 

Kay

  



Rusty Stevens
09/14/2000 04:45 PM
To: karen.way@piperrudnick.com, Kay Mann/Corp/Enron@Enron
cc: Fred Mitro/HOU/ECT@ECT 

Subject: Fehr Option Agreement

I am in receipt of the Fehr's comments to our option agreement.   In reviewing 
them, I have the following comments:

The paragraph (2) change that says they can compel us to buy their land upon 
a Triggering Event occurring is not going to work, because this is a put 
option on their part which hurts our hard cost avoidance issues.   We 
carefully reworded previous put option language to avoid this.     Also, how 
can we be bound to a deal when the agreement has expired ?   I think we would 
need to say that "if we decide to build the plant after the option period 
expires, then that would serve to extend the term of this agreement, however, 
if the option agreement expires unexercised for a one year period then we 
won't be bound to the deal.   

If the provisions of his comment (5) are indeed parallel to another similar 
paragraph in the document I don't have a problem with it, but "specific 
performance" scares me in general.   Your (collective) call. 


Lets wrap this one up fast.   I want to resolve it soon so I can use it as 
leverage with Ledford and not have him influence them.   He picked a good to 
go on vacation, but is back in on Monday.   I also told the Fehr's that if we 
could do this before the 15th I would go for $185,000 vs. $175,000.   Since we 
were about five days longer than promised, I can justify the delay to end of 
next week, but I don't want them to think I was just blowing smoke on the 
extra $10,000. 


Fred :  Refresh my memory on who I need to go to for the option payment check 
?