Hi Pete,

Wanted to recap our conversation yesterday, update you on our timing and get you my contact information.

Regarding a possible settlement, it appears to me that this is a concept that you have considered and are willing to pursue.  We will have a valuation of the contract for you Monday.  It is my suggestion that you review the proposal, make sure that you agree with the outstanding transactions and complete your own valuation.  Once we have agreed on the universe of transactions, you and I will discuss and finalize a settlement amount that we are comfortable will be approved by the creditor committee and bankruptcy judge.

From this point, Enron will begin the process of filing a motion for settlement and schedule an appropriate hearing date for the judge to rule.  Please seek bankruptcy council to determine if it will be necessary for a representative from your company to attend and, as well, to be comfortable with the process.

Finally, we will provide you a sample Release Letter for your review.  We will seek your comments, if any, prior to the hearing date.  After the settlement motion is filed, we would ask that there are no more document or value negotiations in order to expedite closure.

All of that said, concurrently, in case you and I are not able to reach agreement on a settlement amount, we are going to take the first step in an auction process.  This means that I am going to send you a procedural Notice of an anticipated auction to sell your contract as we discussed yesterday.  It is our desire to settle this prior to an auction taking place.  The settlement process is our preferred route of resolution.  Please call me if you have any questions regarding this.

Please, call me with any questions and let's work hard at keeping an open dialog so that we can resolve this to both of our mutual benefits.  I have included my contact information at the end of this email-- if you could return this email with your mailing address, I would appreciate it.  Also, I look forward to working with you through this process, and finally, thank you for your time and attention to this matter.

Sincerely,

Mike Bridges



Mike Bridges
phone:  713-345-4079
fax:	713-646-3037
email:	michael.bridges@enron.com

1400 Smith Street
ECN 0602d
Houston, TX 77002