Coral

Hi Carolyn,

Here are my intial comments on the letter agreement and LLC:

1. Will there be a second set of documents for the LLC getting the
transformer as well as the turbine?

2. Tax liability - I think we should broaden the tax section to offload
responsibility for taxes related to the transfer and ownership of the
equipment, not just the sale. I believe this should be a TEH responsibility.

3. Terminology - Breakout contract should be Facility Agreement, and
commercial operations should be as defined in the Facility Agreement (a
reference is fine).

4. Confidentiality - any reason not to have them agree to be bound by the
confidentiality provisions in the facility agreement? If fact, please review
the confidentiality provisions in the GE agreement so that we can discuss
same.

5. Creditworthiness - looks like we may have an issue here. We should
specifiy that the note should be from a credit worthy entity, or guaranteed
by a credit worthy entity.

6. Timing of delivery of contract and funding - in discussing this matter
with our commercial lead, Ben Jacoby, he indicated that he believed that the
obligation to fund would be contemporaneous with the delivery of the facility
agreement, or stated another way, a condition precedent to the obligation to
fund as opposed to existing (as a signed document) as of the time of signing.

7. Reps - as we discussed, Enron should rep that it has the ability to
convey the equipment, or other such language, as opposed to getting into the
nitty gritty of our financing structure.

I'm still reviewing and collecting comments, but this gives you an idea of
where we are headed.

Thanks,

Kay