Unless the first option expires (and the original premium is expensed), you 
add the original payment to the renewal premium to determine the percentage.  
If we can't beat the percentage game, we can have the land on the balance 
sheet and that won't put the entire project on it.  Don't ask me to splain 
that, because I can't.  If the land is going to be on the balance sheet, you 
would think that it would be better to have $1.3 on than $4.2.  However, one 
thing I don't know (haven't asked) is what the environmental restrictions are 
with our financing vehicle.  I don't know if the land has to be clean before 
it can go into the vehicle.  I can ask.  If it is required to be clean, then 
you may be back to the $4.2 anyway.  

Kay

PS.  Feel like Alice in Wonderland  yet?




From: Greg Krause/ENRON@enronXgate on 05/23/2001 07:14 PM
To: Kay Mann/Corp/Enron@Enron
cc: Kathleen Carnahan/ENRON@enronXgate 

Subject: RE: AEW's backup

Yes we do want to renew the option through September of next year and we will 
need to persuade them to lower the option premium.  Her is a thought:  the 
land fill closure cost is approximately $2.9 million.  Could we create a new 
option agreement that states that the strike price is $4.2 million ($1.3 the 
original strike price plus the cost of land fill closure cost) so we could 
pay an option premium of up to $210,000 (5% of $4.2 million).  At closing, we 
reduce the purchase price by the costs yet to be incurred in the closing the 
land fill.  Since Certosa Holdings will not start the closure until they are 
assured that we will exercise the option if even then, the net cost to us 
would drop back to  the original strike price.  Could we get this past the 
accountants?

Only the memorandum of option was recorded.



 -----Original Message-----
From:  Mann, Kay  
Sent: Wednesday, May 23, 2001 4:40 PM
To: Krause, Greg
Cc: Carnahan, Kathleen
Subject: RE: AEW's backup

I've skimmed it.  I see that the option expires August 9th.  Are we planning 
to renew it?  If so maybe we can renew early and fix what we can to preserve 
some optionality (no pun intended) and cover the fee issue.  Might take too 
long to address the immediate issue.

I don't see anyway we can get around the balance sheet issue unless we let 
the option expire and then reoption, but in that case the option payment 
would have to be smaller (acct says an option of 5% creates a problem as it 
would be considered a down payment).  Just fyi.

Kathleen, was the option recorded, or just a memo of option, or neither?  I'm 
just wondering what is public info.

Herman is out of the office today, but I can discuss the fee issue to get his 
vote.  

More to come...

ckm




From: Greg Krause/ENRON@enronXgate on 05/23/2001 02:19 PM
To: Kay Mann/Corp/Enron@Enron
cc:  

Subject: RE: AEW's backup

I think the invoice was for between $20,000 and $30,000, but I can't 
remember.  AEW has the invoice.  This probably will not be the final as we 
will need to work with them in discussions with DERM on delaying the landfill 
closure and in moving jurisdiction of the project from CZAB to the County 
Commissioners.   I think Shutts & Bowen (who may get stiffed by their client 
if this deal blows up) and Certosa Holdings would be open to any suggestions 
and we need to renegotiate the option anyway.  Shall I call and suggest this 
this flat fee for retooling the option agreement to them or shall we do it 
together?  I,m not sure I could explain to them acequately the idiosyncrasies 
of our accounting requirements.

 -----Original Message-----
From:  Mann, Kay  
Sent: Wednesday, May 23, 2001 2:00 PM
To: Krause, Greg
Subject: RE: AEW's backup

How much is it and should this be the final amount?  One thought I have is 
that maybe we can retool the option agreement so that we pay them a flat fee, 
which is enough to cover the expenditures.  Don't know if this works, but it 
is one thought.  What do you think?

Kay


From: Greg Krause/ENRON@enronXgate on 05/23/2001 01:50 PM
To: Kay Mann/Corp/Enron@Enron
cc:  

Subject: RE: AEW's backup

One more thing on the SDEC project:  According to the option agreement we 
executed last October, we agreed to reimburse Certosa Holdings for actual 
third party costs that they incurred in support of our necessary 
applications, submittals and in seeking local approval.  Several weeks ago, 
we recieved an invoice from Shutts & Bowen, attorney for Certosa Holdings 
requesting reimbursement pursuant to the contract.  I forwarded this invoice 
on th Ann Elizabeth not necessarily to pay for but to review considering this 
whole soft cost hard cost discussion.  I recieved another call this morning 
from Shutts & Bowen asking about the invoice.  What should I do? 
 -----Original Message-----
From:  Mann, Kay  
Sent: Wednesday, May 23, 2001 11:03 AM
To: Krause, Greg
Subject: RE: AEW's backup

Greg,

You can call me on whatever you have, including Midway, SDEC and Medley 
Dunn.  If I have a problem getting to something, I'll find help.

Kay




From: Greg Krause/ENRON@enronXgate on 05/23/2001 10:50 AM
To: Kay Mann/Corp/Enron@Enron
cc:  

Subject: RE: AEW's backup


Kay,

Ann Elizabeth did not provide a designated hitter for the South Dade Energy 
Center (Dade Development Company LLC is Optionee, Certosa Holdings is 
Optionor) nor did she provide one for tne Medley Dunn project.  I have been 
told that the Dunns are considering backing off their ultimatums that they 
gave Ann Elizabeth and I regarding taxes to the town and assumption of 
enviromental liability.  Who do I talk to about the Dunn contract while Ann 
Elizabeth is out?  
 -----Original Message-----
From:  White, Ann Elizabeth  
Sent: Tuesday, May 22, 2001 10:33 PM
To: gkrause@enron.com; Krimsky, Steven; Ben Jacoby/HOU/ECT@ENRON; Carnahan, 
Kathleen
Cc: Milligan, Taffy
Subject: AEW's backup

Kay Mann is the designated hitter for the Pompano and Deerfied projects while 
I'm on vacation.  I've given her a down load of the status of Greg and 
Steve's projects.  Chris Boehler at A&K will be the designated hitter for 
Midway.  I'm not going to check my voice mail while I'm gone but, if 
necessary, here are the contact numbers while I'm gone.

Walter and Marlena Schilling  011-49-8218-89351 schilling.jun@freenet.de

Monika and Bernhard Steinacher 011-49-8232-8932 m.steinacher@schwabmuenchen.de

If you call, Walter and Bernhard and Bernhard's daughter, Susanne, speak very 
good English.  Monika's isn't bad.  Marlena may get flustered and hang up on 
you.

Best of luck at Deerfield and hope to see Pompano on track when I get back in 
the office on June 11th.  Kay is planning on going to Florida on June 12 for 
the moratorium hearing and the rezoning hearing.