Footnote 8

wrongful self-dealing facilitated by these entities, and (3) the wrongful manipulation andmisstatement of Enron’s financial statements caused by or through transactions with these entities.1529. With respect to transactions between Enron and Chewco, LJM1 or LJM2, the Insidersknowingly caused to be included in Enron’s internal and publicly disseminated financial statementsmisleading information about the company’s cash flow from operating and financing activities,income and net income, debt and price risk management liabilities, interest expense, and otherinformation, as well as the financial measures, ratios and other calculations which are derived fromor are based upon these figures.1530. At the time the aforementioned misrepresentations and/or omissions were made, theInsiders either knew that they were false, or they made them recklessly without knowledge of theirtruth. The Insiders either knew that the accounting for each structured finance transaction wasinconsistent with GAAP or that the description of each of those transactions was otherwisemisleading, or recklessly did not determine whether the accounting for those transactions wasconsistent with GAAP or that the descriptions of those transactions were not otherwise misleading.1531. The Insiders made these misrepresentations and omissions with the intent and theexpectation that Enron and its Board of Directors would rely and act upon them. Enron and/or itsBoard of Directors actually and justifiably relied upon these misrepresentations and omissions.Enron and/or its Board of Directors were entitled to and did believe that the Insiders were acting inthe best interest of the company and were not employing structured finance transactions (1) whoseaccounting did not comply with GAAP or otherwise were described in a misleading manner, or(2) for the purpose of manipulating and misstating Enron’s financial statements. Enron and itsBoard of Directors were entitled to and did believe that the Insiders were acting in the best interestof the company and were not (1) secretly profiting from transactions with the company, (2) sharingprofits from transactions with the company with the company’s lenders or their executives, or604041v1/007457-468-