LJM2 APPROVAL SHEET
Tb'~ Approval Sheet snould oe used to aoprO'.e Enrons participation ifl 3flY tt2flsactiotis involving UM Cavman. L.P rLJMU't cx
      Co-Investment. L.P. ("UMY~. UM I and UM       will collectively be referred to as UM. This Approval Sheet is tn addition
to ~not in Lieu of) any ocher Enron approvals that ma~ be required.

 GENERAL
 Deal name: Campaign :K

 Date Aoproval Sheet completed. Dec:rnber S.  000

 Enron person completing this form: Nicole Alvino

 Expected closing date: December    000
 Business Unit: Enron Corp.
 Business Unit Originator: Dan Bovie
 This transaction relates to OUM I and/or  9UM2.
 This cransaction is ~ a sale by Enron Da purchase by Enron Da co-sale with Enron Da co-purchase with Enron and/cr
 0other:  monetization structure

 Person(s) negotiating for Enron: Dan Boyle
 Person~s) negotiating for UM: Kathy Lynn

 Legal counsel for Enron: Vinson & Elkins
 Leeal counsel for UM: Kirklan'i & Ellis
DEAL DESCRIPTION
Enron monetized is aaset position in Cacalytica and Avici in two identical FASI3 125 deals. UM provked a tt:tai of 5.9MMequit~
and Barclays provided 592.5MM debt. lEnrun received cash and funds fitiw fiorn ihe transaciicn.


TRANSACTION SUMMARY                                                                             ______________
 Catalytica Transaction Steps (The steps are identical for the Avici structure)

 Purchase 100% of the equity in LAB Trust, the special purpose vehicle in the FASB 125 structured monetization of Enro&s interest
 in Citalytica Energy Services Inc. ("CESrD. Enron owns appzo~imately 17% of CESI and values it at 560 milltoti. The FASB 125
 structure is as follows:
      *   The Catalytica stake is trsnsf'trred to JSE AS5CL LLC ("Asset LLC')
      *   Asset LLC issues an economic interest in itself to KGB. LLC ("Transferor LLC')
      *   Asset LLC issues a voting interest (controlling disposition. voting. etc. bf the Catalytica Stake) back to EV2. LLC (a
	  wholly-owned Enron entity)
      *   Transferor LLC issues the economic 'nterest in As.sec LLC to LAB Tiust in exclianie for cash (funded 97% debt. 3%
	  equitY)
      *   LAB Trust enters into a total return swap w'th ENA (guaranteed by Enroni to cover principal and interest en the LAB
	  Trust debt
      *   At macuntv. an auction is held to dispose of the economic interest in Asset LLC. Proceeds from the auction are tLted to
	  repay the trust debt and equity
      *   The auction proceeds are distributed to the debt (with the total return swap .upplemenung any shortfalls it1 interest or
	  arincipal re~aymenc) and then any remainder to the equity (until the equity has received its 15~ dividends)
      *   Enron retains the right to repurchase the eoui(y (at par plus accrued dividenos) and therefore retains upside beyond .i
	  return to the equity


												AF100239

												 "FOIA CONFIDENTIAL
								  * GOVERNMENT                  rREATMENT REQUESTED
									EXHIBIT                  BY ANDREW FASTOW"
								  *      7626
								       CrimNo H-04-0025





 LJM APPROVAL SHEET
 Page 2

H C~n.u' Fu,artJMCa,nu. ZKUMA.pun. in

 AM 00240

 "FOIA CONFIDENTIAL
TREATMENT REQUESTED
 BY ANDREW FASTOW"





LJM APPROVAL SHEET
Page 3

	 ____        TaS    ____
						       EHL
	    ENA                ENE   -Hoidines Ud
						  -*         EB[C


					    EB lC-Apacne~
						 Dci LLC

		 ~etwg,
		 S.~p

ECONOMICS
The Trust in the FA~SB 125 su-ucrure issued Nntes at L+75bps and Certificates at an annualized rate ot~ 15% which mature on June 11.
2002. ENA provided a ToM Return Swap on the Notes. Interest will be paid and Libor will be reset monthly to allow maximum
flexibility to the business units to unwind the inonetizations as the assets are sold to other 3~ parties.


										A.F100241


-~ ~*fl ~ ~


									      "FOIA CONFIDENTIAL
									     TREATMENT REQUESTED
									      BY ANDREW FASTOW





																      I

LJM APPROVAL SHEET

ISSUES CHECKLIST
       Sale Options
       a. If this transaction is a sale of an asset by Enron. which of the following options were considered and resected.

	  8Condor   ~JEDI IT        ~Third Party       ~Direct Sale. Please explain: No ocher transaction        ould be clcsed in
	  a timely enouzn manner to meet the targeted corporate obiectives.
       b  Will this transaction be the most beneficial alternative to Enron?   0Yes    '~o. it no. please exolain:______________

       c. Were any other bidsioffers received in connection with thiS traflsactiO&   ~'Ze5  0No.          Please  explain: Time

	  contszraint oreciuded ENE form actively seeking other bids
2.     Pnor Obli2ations
       a. Does this transaction involve a Qualified investment (as defined in the lED! II partnership agreementt~' DYes 0No. It
	  yes. please explain how mis issue was resolved: _______________________________________________________________


       b. Was this transaction required to be offered to any other Enron affiliate or other party pursuant to a contractual or other
	  obligation? DYes   ~No. If yes, please explain:

       Terms of Transaction
       a. What are the benefits (financial and otherwise) ti Enron in this transaction? ~Cash flow        DE:irnings
	  0Other: Funds Flow

       b  Was this transaction done strictly on an arms-length basis? 0Yes DNo. If no. please explain:
       c. Was Enrc,n advised by any th:rd party that this transaction was not fair, from a financial perspective. to Enron'
	  DYes 0No.    If yes. please explain:                                                                   ____________
       d. Are all LAM etpcnses and out-of-pocket ccsts (including legiti fees) being paid by LAM?         DYes   8No.   If no. is
	  this market standard cr has the economic impact of paying any exoen~es and o.it-of-pocket cc,sc~ been considered when
	  responding to items lb. and 3.b. above?      0Yes ONo.

       Compliance
       a. Will this ir~insaction require disclosute as a Certain Transaction in Enron's proxy statement?  EYes   DNui.
       b. Will ihi~ transaction result in any compensation (as defined by the proxy rules) being paid to any Enrun eii'ployee?
	  DYe~i     0No.
       c. Have all Enron employees' involvement in this transaction on behalf of LJM been waived by Enrons Office of the
	  Chairman in accordance with Enrons Conduct of Business Affairs Policy? EYes       DNa.           If no. please explain:

       d. Was this transaction reviewed and approved by Enrons Chief Accounting Officer?    0Yes DNo.

       e. Was this transaction reviewed and approved by Enron's Chief Risk Officer?         0Yes DNo.

       f. Has the Audit Committee of the Enron Corp. Board of Directors reviewed all EnronILJM transactions within the pasi
	  :welve months?     DYes  ~No. (The Audit Committee has not held a meeting since LJM2's formationi Ha.e all
	  recommendations of the Audit Committee relating to Enron/LJM transactions been taken into account in this
	  tran~action? DYes DNa.


													       xEiOQ24


													       FOIA CONFIDENTIAL
													     TREATMENT REQUESTED
													      BY ANDREW FASTOW'





	       LJM APPROVAL SHEET
	       Page 5

 'PROVALS
L.~.iSIflCSS Unit


Business Unai Lezal

Eriron Corp Legal

Global Finance Lezal

RAC

Ac:ounting

Executive

Ben Glisan


Rex Roze?s

Jorain Mintz

Rick Buy

Rick Czusev

let? Skillin~

      Signature


	       ~~~~1


	      /4/
		    -


w-rv~
	 A

    Daic


 AFLQO24~

 "FOIA CONF~OENTIAL
TREATMENT REOUESTE~
 BY ANDREW FASTO~"