Aaron:

It is highly likely that AES would exercise their early purchase option in 
May. As such, I want to make sure we are thinking about the duties, 
obligations, and indemnities among the parties under the circumstance that 
AES owns the member interests in Haywood, and ENA is continuing its efforts 
to achieve the milestone of the interconnection agreement through August 1. I 
also want to make sure we have adequate indemnities from AES regarding 
actions we will undertake to achieve the interconnection milestone. At the 
end of the day, ENA will be focused on two things: (i) causing TVA to lower 
its Network Upgrade estimate from the current level of $4.8 million, and (ii) 
causing TVA to produce an interconnection agreement in substantially the same 
form as the Gleason interconnect agreement. Obviously, with AES owning the 
Haywood member interests and being in the driver's seat, they will play a key 
role in whether these two items are achieved. I want to make sure that the 
same standards which applied to us prior to them exercising their early 
option (i.e. we were on the hook to use reasonable commercial efforts to 
achieve the milestones) now applies to them during the period that we are 
still trying to achieve the milestones.

With Stuart's concurrence, I'd like you to further review the documents and 
make a recommendation as to what other changes, if any, we should make, to 
protect our upside under the circumstance described above.

Thanks,

Ben




"Aaron Roffwarg" <aroffwarg@bracepatt.com> on 05/01/2001 06:49:19 PM
To: <ben.jacoby@enron.com>, <stuart.zisman@enron.com>
cc: <Chris.Booth@enron.com>, <Kay.Mann@enron.com> 
Subject: Greystone/Haywood - Extension of Dates


Ben and Stuart,

Attached is Amendment #2 to the SPA reflecting the business terms Ben and I 
discussed this afternoon.  As you will see this structure (with the 
promissory note) is different from the structure described by Steve Hase in 
the attached email.  Please let me know if the deal has evolved since our 
latest discussions.  Please note that this is being sent to ENA only.  Please 
call me with your comments at your earliest convenience.  Best regards.


Aaron P. Roffwarg
Bracewell & Patterson, LLP
South Tower Pennzoil Place
711 Louisiana St.
Houston, Texas 77002
(713) 221-1117 (Ph)
(713) 221-2184 (Fax)

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Date: Tue, 01 May 2001 16:32:21 -0400
Subject: Re: Greystone/Haywood - Extension of Dates
To: ALouison@hunton.com
Cc: ben.jacoby@enron.com, stuart.zisman@enron.com, aroffwarg@bracepatt.com, 
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Audrey,

Ben and I have reached an agreement which will be documented as follows:

1)  Extension of Dates -- May  11 becomes May 9 (Wed)

2)  Ben will edit the latest version of the Amendment #2 so that

a) on Aug 1, we pay the greater of the $1.5MM ($2.5 less $1 paid at
exercise) and the Additional Compensation (less the $1 MM)

b)  a separate agreement whereby Corp guarantees the payment on Aug 1.

The intention is to sign the Amendment #3 before 5/9.

Thanks everyone for making this happen.

Steve Hase


 - #1283523 v5 - AMENDMENT NO 2 TO SPA.doc