Kay,

I like the changes to the Option Agreement, but do not really like the form 
of Memorandum of Option as it is not consistent with the form of Memorandum 
we have used in the past and in my opinion is deficient for recording 
purposes.  Please check out the one attached, which is the form we have 
typically used for our prior Options (subject to minor changes according to 
each state's recording requirements):






Kay Mann
05/18/2001 05:30 PM
To: Herman Manis/Enron@EnronXGate, Lisa Bills/Enron@EnronXGate, Roseann 
Engeldorf/Enron@EnronXGate, Carlos Sole/NA/Enron@Enron, Ann Elizabeth 
White/HOU/ECT@ECT, Ben Jacoby/HOU/ECT@ECT, Kathleen Carnahan/NA/Enron@Enron, 
Greg Krause/Corp/Enron@Enron
cc:  

Subject: Rev option form

I have revised the option form consistent (except where noted) with comments 
sent by Herman and Lisa, and have attached a redline version.  Herman, I 
dealt with your comment regarding the defn of Optionee by tinkering a little 
with the 1st paragraph.  I also construed your comment regarding Enron's 
right to terminate the option to NOT preclude termination if our counterparty 
is in default.  Please confirm that this is acceptable.

Lisa, I did not change the notice info since the first entity will the the 
project co, with ENA Legal receiving a copy.



Please advise if you have any comments.

Kay