Footnote 8

commodity to JP Morgan Chase) under the prepaid forward contracts. The transaction, whenviewed as an integrated whole, was effectively circular with respect to the commodity, therebyeliminating the risk of price fluctuation over time in the commodity.375. The three steps described above in paragraph 374 were designed to function as anintegrated whole to produce what was, in substance, a term loan by JP Morgan Chase to ENGM orENA.375A. Upon information and belief, JPMC sold one-half of the gas it received fromMahonia as part of the Chase VII Mahonia transaction back to ENGM, ENA and Enron.375B. For the Chase VIII-X Mahonia transactions, JPMC sold all of the oil and gas itreceived back to ENGM, ENA and Enron.376. Chase XI did not include the agreement between ENA and JPMC described inparagraph 374(c). Rather, JPMC sold the commodities obtained from ENA to JPMC’s SPEStoneville, which in turn sold the commodities back to ENA at a fixed price. Similar to thepayments by ENA to JPMC under the agreement described in paragraph 374(c), the funds paid byENA to Stoneville – funds that were transferred by JPMC’s SPE Stoneville to JPMC – wereintended to be sufficient to repay the Chase XI loan with interest.377. Chase was not the only lender for the Chase XI prepay. Fleet was a co-lender, in anamount equal to 50% of the $330 million prepay loan. In its capacity as co-lender, Fleet haddetailed and intimate knowledge of the transaction structure and knew both of Mahonia NGL’sinvolvement and of the fact that Chase created Mahonia and Mahonia NGL. As part of thetransaction, Fleet and JPMC entered into a gas off-take agreement whereby gas that Mahonia NGLwas to deliver to Fleet instead was to be delivered to JPMC. Fleet understood that the substance ofthe transaction was a loan. Fleet also understood how Enron accounted for the prepay transaction,i.e., as a price risk management liability rather than as debt. On information and belief, Fleet did604041v1/007457-125-