Re: Schaffer Option Agreement

I spoke with Don Shindler this afternoon. He is making the changes to the
Schaffer agreement and called me to clarify a couple of points. He said the
document will be ready to by sent out by the end of the day today. I told
Don that tomorrow morning delivery should be fine. I called Kevin Schaffer
and left a message on their answering machine letting them know that the
revised agreement was going to be delivered tomorrow morning. I asked Kevin
to call me back today if delivery tomorrow represented some form of problem.

Don will send an email copy of this revised version to myself, Rusty, and Kay
Mann.

Don: Please include Kathleen Carnahan in this email distribution.

Fred

Rusty Stevens@ENRON
11/17/2000 04:00 PM
To: "Shindler, Donald A. - CHI" <Donald.Shindler@piperrudnick.com<
cc: Fred Mitro/HOU/ECT@ECT
Subject: Re: Schaffer Option Agreement

Thanks Don for jumping on this. I should have thought to send it to you as
well earlier. I will be out Monday/Tuesday on business in Florida next week,
and on holiday for the balance. In the interim, please call either Fred
713-853-5406 or my cell phone 713-562-0936 if you have any questions. I dont
have the Schaeffer's lawyers number (or cant find it right now), but either I
or Fred can call Kevin and get it if necessary. Their lawyer has probably
already attempted to call Karen by now. Hope all is well with you, and that
you have a peaceful Thanksgiving.

Fred : Kevin's number is 815-844-6493.

"Shindler, Donald A. - CHI" <Donald.Shindler@piperrudnick.com< on 11/17/2000
02:59:16 PM
To: "'Rusty.Stevens@enron.com'" <Rusty.Stevens@enron.com<
cc: "Gershon, Mark A. - CHI" <Mark.Gershon@piperrudnick.com<, "Way, Karen S.
- CHI" <karen.way@piperrudnick.com<, "Fred J. Mitro (E-mail)"
<fmitro@ect.enron.com<

Subject: Schaffer Option Agreement

Rusty--

Since both Mark and Karen are out for a week's Thanksgiving vacation, I will
be revising and completing the Schaffer Option. Pls feel free to call me
with any questions.

--Don
_____________________________________
Donald A. Shindler
Piper Marbury Rudnick & Wolfe
203 North La Salle Street
Suite 1500
Chicago, Illinois 60601
direct phone: 312/368-2175
direct fax: 312/630-5344
e-mail: donald.shindler@piperrudnick.com
www.piperrudnick.com

NOTE NEW E-MAIL ADDRESS, FIRM NAME AND WEB SITE!

< -----Original Message-----
< From: Gershon, Mark A. - CHI
< Sent: Friday, November 17, 2000 2:47 PM
< To: Shindler, Donald A. - CHI
< Cc: Townsend, Christopher J. - CHI; Way, Karen S. - CHI
< Subject: FW: Schaeffer Option Agreement
<
< Don, can you handle in both Karen's and my absence?
< Mark
<
< -----Original Message-----
< From: Rusty.Stevens@enron.com [SMTP:Rusty.Stevens@enron.com]
< Sent: Friday, November 17, 2000 2:35 PM
< To: mark.gershon@piperrudnick.com
< Subject: Schaeffer Option Agreement
<
< Mark,
<
< Long time no speak. I've been working on my tan down Florida way. Can't
< say the zoning process is going as well as it would under your's and
< Karen's skillful care. I wanted to forward this note to you so you could
< coordinate with Karen in her absence to get this document turned. Thanks
< again. - Rusty
< ---------------------- Forwarded by Rusty Stevens/Corp/Enron on 11/17/2000
< 01:29 PM ---------------------------
<
<
< Rusty Stevens
< 11/17/2000 01:31 PM
<
< To: karen.way@piperrudnick.com
< cc: Kathleen Carnahan/NA/Enron@Enron, Fred Mitro/HOU/ECT@ECT, Kay
< Mann/Corp/Enron@Enron (bcc: Rusty Stevens/Corp/Enron)
<
< Subject: Schaeffer Option Agreement
<
< I spoke to Kevin Schaeffer and agreed to the following items in exchange
< for finalizing this option. This is the final real estate option that we
< will need to perfect this site (with the exception of gas pipeline
< easements).
<
< Exercise of option. I agreed that we would not exercise the option
< until after March 15th, 2001. I told him that since his parcel was not
< for the location of the actual plant that we could delay exercising
< until then. He is buying another tract and wanted to use it as offset
< for capital gains, which led to the next point.
< Like-Kind Exchange Provision. I agreed that we would incorporate the
< ability for him to attempt to purchase another parcel in order for him
< to be able to avoid capital gains taxes on the property. Basically the
< same language we used on the nearby Ledford tract is what I'm talking
< about. Should be very similar since its a small town and they will
< undoubtedly talk about this eventually so we need to be consistent.
< Farm Usage. He seemed to think that the document was not entirely
< clear
< that he would have the right to farm this parcel once we exercised our
< purchase option. I told him that was not true, and that our intention
< was to let him have the right to responsibly farm the property any time
< we were not using it for our own purposes. I let him know that we
< could
< not have any restrictions on moving onto the property and would pay for
< any damages, but once we ceased use (for 120 days I think it was) then
< he could request to re-commence farming operations and we would not
< unreasonably decline his request. However, I let him know that we
< would
< reserve to once again begin use of the property for our purposes and
< our
< only obligation would be to compensate him for crop damages. I let him
< know our motive was to keep as much open land in agricultural use for
< PR
< purposes, and to get an Ag exemption. If we weren't using it he could
< farm it, and we had no intention of removing him and replacing him with
< another tenant farmer (negligence on his part being an exception).
<
< Please feel free to work with his attorney and get these changes
< implemented promptly. As you know, we have had solicitations from 3rd
< parties to buy this site, and having this tract secured is vital to the
< sites perfection.
<
<
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____________________________________________________________________________