Footnote 8

of 12%.” In essence, CSFB’s “equity” stake in the Sphinx Trust was guaranteed by promises thatCSFB would be repaid, with interest.585D. Enron and its affiliates retained all or substantially all of the benefits of anyappreciation in the Nile Asset just as if it had not purportedly sold the Nile Asset. NotwithstandingEES Service Holdings’ purported “sale” of the ServiceCo stock to Pyramid I, (a) Enron continuedto enjoy the benefits flowing from that stock ownership, in the form of any value derived from it inexcess of amounts necessary to repay the Nile CSFB Note and to repay to CSFB the Nile Certificate,with 12% interest, and (b) Enron assumed the risk that the ServiceCo stock would not generate asufficient return to repay the Nile Note and to repay the Nile Certificate with interest.585E. Furthermore, as the Class A member of Pyramid I, Enron and its affiliates had theright to prevent the Nile Asset from being sold to a third party, so long as the Nile Note was beingrepaid, and CSFB had the right to require Enron to buy back the Nile Asset if the Nile Note was notbeing repaid.585F. CSFB made the loan to the Sphinx Trust based on its underwriting of the unsecuredEnron credit risk, not the value of the Nile Asset. Neither Enron nor CSFB intended the NileTransaction to be a genuine sale of the Nile Asset, and neither party intended that CSFB would bearthe risks or enjoy the benefits of ownership of the Nile Asset. Both Enron and CSFB expected thatEnron would repay CSFB in full with interest, without regard to whether, or for how much, the NileAsset could be sold.586. Nile was in substance a loan from CSFB. Nevertheless, the Insiders caused Enronto report $22.2 million of the loan proceeds as cash flow from operating activities, $2.8 million ascash flow from investing activities, and $18.9 million as a gain. See e.g. Exam. IV, App. F at 76.CSFB knew that the Insiders would report the transaction improperly under GAAP because CSFB’s604041v1/007457-198-