Comments on above agreement:

Has Herman Manis or an ENA transaction support person read this agreement and 
signed off? 

1.B. - Realistically, ESA will not be ready to execute their ESA Option by 
November 12th.   We are negotiating w/ WestLB to extend our facility until 
Dec. 31, 2000. 

1.C. - The ESA Option Consideration does not read like an "option payment" 
nor do the amounts look like option premiums.   This section needs to be 
vetted with ENA and ESA transaction support to insure that there are no 
problems.   Our normal option requirements with vendors may not be required 
here since internal and all assets already off balance sheet. 

1.C. - As the WestLB facility is currently drafted, ESA would have to provide 
us their "purchase option election" by tomorrow, Oct. 12th.   I am having that 
extended in the current Nov. 12 maturity deal until 5 - 10 days before Nov 
12th.   WestLb has not agreed to this yet.   The purchase date can be 5 days 
after we provide notice of purchase under the WestLB facility, but no later 
than Nov.12 currently.   In any case, ESA must give ENA notice no later than 
our required notice date and doesn't have to, at this point, provide money 
and purchase the equipment 5 days thereafter.   Just explaining the deal so 
you know what leeway there is for negotiating the purchase date. 

1.D. - Conflicts with language in 7.   I thought the arrangement was that as 
soon as ESA purchased the equipment from ENA, new purchase contracts drafted 
to take ENA out of the agent loop for those assets.   In ESA's deal, they will 
be the Agent of the equipment on behalf  of the SPV/Owner. 

2.A & B. - The GE Change Order and ABB Change Order as defined don't describe 
the actual turbines and transformers, do they?   I thought the Change Orders 
were for ancillary equipment. 

3.A.2. -  To clarify, add "paid to ABB" after "option premiums". 

3.B.3. -  Insert a "."  at end of section. 

4. -  Delete.   This is not an option for ESA any longer. 

7. -  See 1.D. above. 

Regards, Lisa


   
	
	
	From:  Ben F Jacoby @ ECT                           10/11/2000 09:43 AM
	

Sent by: Ben Jacoby@ECT
To: Lisa Bills/Corp/Enron@ENRON
cc:  

Subject: ESA Option Agreement

Lisa:

Please review the attached draft at your earliest convenience.  Thanks. 

Ben