Hi Rusty, 

Since Carlos is working on the Pontiac and Plano sale, I'm going to forward 
this to him for his handling.  That way things will stay better organized.

Thanks,

Kay




Rusty Stevens
02/26/2001 10:45 AM
To: Kathleen Carnahan/NA/Enron@Enron, Kay Mann/Corp/Enron@Enron
cc: Fred Mitro/HOU/ECT@ECT, Ben Jacoby/HOU/ECT@ECT 

Subject: Pontiac Land Option

Our current land option on the Pontiac site goes to June 11th, with a 6 month 
extension for $5000.  In order to enhance and maintain the value of the site 
(we're trying to sell it now) I have gotten Ben's authorization to secure an 
additional 12 month extension on the deal for $10,000.

I spoke to the landowner - Dick Greene - and he indicated that they would 
consider it, although he has never been in favor of an option structure 
since  he is 80 years old and just wants the money from the sale.  The 
concept I pitched today was that we would pay them for the 6 month extension, 
and give them an additional $5000 now in exchange for adding another 12 month 
extension on the back.  At the time we exercise that 12 month extension we 
would pay them another $5000.  He said he would have to hear what his lawyer 
said in this regard, but I think its close to a deal.  Perhaps we could 
arrange a conference call with Karen Way at Piper-Rudnick as she has dealt 
extensively with their lawyer Ed Legner.  Its good timing to hit him now, 
since he does a lot of tax work so he will want to wrap us up quickly.

As regards accounting issues, the total exercise price is 117 acres * $4500 / 
ac. = $526,500, and 5% = $26,325.  Total option premiums (including this 
extension I am proposing) will be $20,000.  I believe we may also need to 
amend the original option language to make it clear that the option fee is 
not part of the price.