Subject: "Checking in...".

Body: Mike & Cheryl - We heard yesterday about Cheryl's illness. You guys have been such special friends to us, we both wanted to know if there was anything we could do to help. If Cheryl is going to be going down to MD Anderson for treatment, either on an outpatient or inpatient basis, consider this: our house is less than a ten-minute walk from MD Anderson. We have a spare bedroom and free parking. If it works out that Mike drops Cheryl off and needs a place to stay, either overnight or periodically during the day, we'll leave a key at the front desk of the Spires and one (or both) of you can base out of our place. And if you need someone to take care of the menagerie up north, I'm sure we can figure out how to get that done while you're staying down south. Remember that I make the reverse commute up there every day, and you both have a lot of friends and co-workers that can pitch in to help out. We think the world of you guys and want to help. Let us know how we can. Kim & John

Subject: "Project Update".

Body: Hello Tracy, I wanted to share some conversations that I've had with both Demetrics and Hoang this week related to the project. On of the biggest issue seems to be with resources. I know that you guys have been quite busy with your planning process but it has been very difficult to get the required information or time from the resources that are committed to the project. This is due to the fact that they currently have a heavy workload and cannot dedicate the time necessary for the project. It is having an impact on the timeline. The home office model could be a lot further along if some of the required information was delivered as requested. Also, I am also getting a sense that there is a lack of ownership with regards to the Adaytum application. It is important that the users have a comfort level with the application otherwise it will become very difficult to transition it when the project is over. We need to think about who will administer the system once it is in full production. This individual should be identified and running the administration duties as soon as possible. My fear is that without proper ownership of the application and a dedicated administrator (at least in the short run), it will be very difficult to transition the roles. We've had some technical issues with the production and development environment. Although these issues have been resolved, it has had an impact on the timeline. There are times that the definition for the model is not clearly articulated and it has resulted in the redesign of the model. Much time has been spent on gathering business process information from various people which has caused a delay in the model development. I hope that we can constructively talk through these issues tomorrow and produce solutions that will rectify the situation, mitigate the risks, and result in a successful implementation. Our call is scheduled for 1:30 tomorrow but I can be available earlier if you would like to discuss this.

Subject: "Sempra v. Enron".

Body: In September I sent you all a summary of the facts at issue in the above-referenced lawsuit. Since that time, several developments have occurred. First, the trial date was moved from October 11, 2001 to November 13, 2001. We have no reason to believe that we will not go to trial on the 13th. We expect the trial to last from 10 days to 2 weeks. Judge Ira Gammerman will try the case. There is no jury. The second development deals with the proposed summary judgment motions mentioned in my last e-mail. Summary judgments on liability and damages have been filed and the plaintiffs have responded. We have filed replies to their opposition papers. In addition, the plaintiffs filed a cross-motion for summary judgment as to liability. We filed opposition papers to this motion. New York practice differs somewhat from Texas practice to the extent that we have no firm date for a hearing on these motions. Although we are attempting to get a hearing before the trial date, the judge has complete discretion as to whether to hear the parties' motions for summary judgment before the start of trial. The third development relates to the plaintiffs' theory of the case. It seems clear from the papers filed in response to our motions for summary judgment that the plaintiffs are fine-tuning their case to focus on the contracts' size distribution requirement arguing that the type of coal supplied by Enron, whether crushed or not, could never meet the contracts' size distribution requirement. The plaintiffs make this argument in simple terms and, when argued as such, it has some appeal. However, it is Enron's position that the contracts' language is ambiguous and the better (and much more complicated) approach advanced by the defendants is that the subject coal could and would have met the size distribution requirements. Issues of whether the contracts are installment contracts also play heavily in this analysis. Fourth, since the last e-mail on this matter, we have learned that the plaintiffs are seeking $71 million in damages from Enron. This is approximately half of the amount of the contracts' damage cap. Lastly, we finally received a response from the plaintiffs to the settlement proposal we made in June. The plaintiffs have offered to resolve this matter for a cash payment by Enron of $45 million. In the alternative, the plaintiffs have proposed a business alternative which is currently being investigated. Additionally, there is some discussion of mediation in the limited time remaining before trial. Should you have any questions about this case or should you need any further information, please call me.

Subject: "Revised slide".

Body:
Please replace page 6 in the NBP Plan Presentation with the attached slide. Please call if you have any questions. I can be reached at (402) 398-7257.