Dan,

I realize that the collateral language has been in the contract throughout 
our negotiations.  However, our VP of credit only recently reviewed the 
contract.

His concern is that, with a collateral limit of only $1.5 million, Ormet 
would be exposed to having to post a LOC every month with natural gas prices 
where they are currently.

I suggested to Craig that we make it $10 million, consistent with Enron's 
collateral limit.  I realize that Enron's credit group ultimately needs to 
decide on an amount.  $10 million my be a bit too high, but $1.5 million is 
too low.

Let me know if you have any further questions.

Thanks,
Mike

>>> <Dan.J.Hyvl@enron.com> 12/08/00 04:08PM >>>

Mike,
     I have reviewed the requested changes to Exhibit D, I am okay with the
proposed changes so long as the same changes are made to Exhibit C.  The
change to Suspension of performance on Appendix 1 is okay.  The collateral
requirement language has been in the contract for some time so I am
concerned with bringing up changes at this late date; however, please let
me know your concern so that we can resolve the issue with the Enron Credit
group.



                    "Mike
                    Cesario"             To:     <Craig.Breslau@enron.com>,
                    <MCesario@orm        <Dan.J.Hyvl@enron.com>
                    et.com>              cc:
                                         Subject:     Firm Purchase/Sale 
Agreement
                    12/08/2000
                    10:16 AM






Attached is a copy of Ormet's mark-up to the Firm Purchase/Sale Agreement
post V.P. of Finance review.  The changes are primarily to Exhibit D.
Additionally, there is one chage under Suspension of Performance on
Appendix 1 page "1"-3.  Finally, we need to address the collateral
requirment/termination payment threshhold in section 4.3.
Thanks,
Mike

(See attached file: Enron_Agreement.doc)