Ben,
Thanks for your email.  I have highlighted the pertinent Sections 2.2 and 2.3 
of the Project Development Agreement to the bottom of this email for your 
review .  So long as we extend the May 1, 2001 date to August 1, 2001 
regarding Purchaser's obligations, I think many of your concerns are 
adequately covered by these Sections.  This was a big concern of Healy's when 
we did the deal initially and we tried to make it clear that, despite a sale 
of the Interests to AES prior to the deadline for meeting the Development 
Milestones, Developer (ENA) would remain the exclusive developer of the 
Property as long as the PDA was in effect.

Regarding indemnities, in Section 6.11, Purchaser agrees to indemnify 
Developer and Developer's related parties from all damages caused by 
Purchaser's nonfulfillment of any agreement or covenant under the PDA.  Thus, 
if they breach the obligations listed below, they are liable to us for 
damages related to such breach.

Please call me at your convenience to discuss this issue at your 
convenience.  Best regards.

SECTION 2.2 Obligations of Purchaser.
Purchaser shall have the following obligations under this Project Development 
Agreement:
(a) Purchaser shall use commercially reasonable efforts to cooperate with 
Developer in achieving the Development Milestones on or before [May 1, 2001];
(b) Purchaser shall pay to Developer all payments owing by Purchaser to 
Developer in accordance with Article III below, as and when such payments are 
due;
(c) Purchaser agrees to provide on or before fifteen (15) days after the 
Effective Date the Base Configuration Information;
(d) following Purchaser's submission to Developer of the Base Configuration 
Information, Purchaser hereby agrees not to change any of the information 
contained in the Base Configuration Information in any manner that could, in 
Developer's reasonable judgment, adversely affect Developer's ability to 
achieve the Development Milestones;
(e) Purchaser agrees (i) not to take any action that is reasonably likely to 
hinder, impede or delay Developer's achievement of the Development Milestones 
or that could make Developer's achievement of such Development Milestones 
more costly and (ii) to use commercially reasonable efforts to promptly 
supply to Developer follow-up information that is consistent with the Base 
Configuration Information which is reasonably requested by Developer (or any 
Governmental Authority) in connection with Developer's pursuit of the 
Development Milestones;
(f) Purchaser recognizes that, except as otherwise provided in Section 3.7, 
Developer is the exclusive developer of the Project; provided, that Developer 
agrees to include representatives of Purchaser in all material meetings and 
discussions with third parties related to the development of the Project, 
including all material discussions and meetings with respect to the TVA 
Interconnection Agreement and related matters.
(g) in the event Purchaser purchases the Interests prior to the termination 
of this Project Development Agreement, all of Purchaser's obligations 
pursuant to this Project Development Agreement (including 2.2(f)) shall 
continue in full force and effect and Purchaser agrees to cause the Company 
(and any subsequent purchasers and assignees of the Company) to comply with 
all restrictions set forth in this Section 2.2(e)-(f) as if the Company 
(including any subsequent purchaser or assignee) and the Purchaser were the 
same entity.

SECTION 2.3 Miscellaneous.
(a) Notwithstanding Section 2.2(f) above but specifically subject to Section 
2.2(e), (i) following Purchaser's purchase of the Interests, Purchaser may 
hold itself out as the "owner" of the Interests so long as Purchaser does so 
in a manner that does not adversely affect Developer's ability to achieve the 
Development Milestones and (ii) prior to Purchaser's purchasing of the 
Interests, Purchaser may have direct contact with Purchaser Contact Parties 
as reasonably necessary in connection with the Project so long as (x) prior 
to any such contact each Purchaser Contact Party has executed a 
confidentiality agreement in a form reasonably approved by Developer and (y) 
all such contacts and any agreements with any Purchaser Contact Party are 
made by Purchaser only on behalf of Purchaser (and specifically not the 
Company or Developer).
(b) Notwithstanding anything stated herein to the contrary, Purchaser agrees 
not to enter into any agreement with any third party on behalf of the Company 
or otherwise bind the Company without the prior written consent of Developer 
which may be granted or withheld by Developer in its sole discretion. 
Purchaser agrees to defend and indemnify Developer and the Company against 
any Damages suffered by Developer or the Company related to any agreement or 
alleged agreement entered into between the Company and any third party in 
violation of this Section 2.3(b). The indemnification described in the 
previous sentence shall expressly survive the termination of this Project 
Development Agreement.
(c) Purchaser agrees that all information it provides to Developer or any 
third party in connection with the Haywood Site, the Project, or the Company 
(i.e. information provided to regulatory authorities regarding air permit 
related matters) will be factually correct in all material respects.



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

CONFIDENTIALITY STATEMENT:
This information is intended only for the use of the individual or
entity to which it is addressed and may contain information that is
privileged, confidential, and/or exempt from disclosure under applicable
law.  If you are not the intended recipient, you are hereby notified
that any dissemination of this information is strictly prohibited.  If
you have received this information in error, please notify us
immediately by telephone at (713) 221-1117 or by fax at (713) 221-2184,
and confirm that you have destroyed this information and any copies.
Thank you.

>>> <Ben.F.Jacoby@enron.com> 05/01/01 07:24PM >>>

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)

CONFIDENTIALITY STATEMENT:
This information is intended only for the use of the individual or
entity to which it is addressed and may contain information that is
privileged, confidential, and/or exempt from disclosure under applicable
law.  If you are not the intended recipient, you are hereby notified
that any dissemination of this information is strictly prohibited.  If
you have received this information in error, please notify us
immediately by telephone at (713) 221-1117 or by fax at (713) 221-2184,
and confirm that you have destroyed this information and any copies.
Thank you.
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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


(See attached file: #1283523 v5 - AMENDMENT NO 2 TO SPA.doc)
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