============= Page 1 of 3 ============= LJM APPROVAL SHEET This Approval Sheet should be used to approve Enron's participation in any transactions involving LIM Cayman, L.P. ("LIM1"') or LJM2 Co-investment. L.P. ("LJM2"). LJM I and LJM2 will collectively be referred to as "LJM". This Approval Sheet is in addition to (not in lieu at) any other Enron approvals that may be required. GENERAL Deal name: EEX Dare Approval Sheet completed: December 28, 1999 Enron person completing this form: Chris Loehr Expected closing date: December 29, 1999 Business Unit: Enron North America Business Unit Originator: Joe Doffner, Tim Proffitt This transaction relates to DLJM I and/or ®LJM2. This transaction is 8 a sale by Enron CJa purchase by Eaton Caa co-sale with Enron C7a co-purchase with Enron and/or Cother: Person(s) negotiating for Enron: Joe Deffner, Tim Proffitt Person(s) negotiating for LJM: Michael Kopper, Greg Caudell Legal counsel for Enron! Andrews & Kurth (Wes Dorman) Lc al counsel for LJM: Kirkland & Ellis (Rob Marks) DEAL DESCRIPTION LJM2 will purchase from Enron North America a 90% equity interest in Bob West Treasure, L.L.C. for S2,953,125. Bob West Treasure is a special purpose vehicle created to be the counterparty for a prepay with EEX involving $105 million for up to 63 Bcfe of natural gas. ECONOMICS LJM2 will purchase the equity with the expectation of receiving a 25% IRR on its investment. LJM2 and ENA will enter into a marketing agreement under which ENA agrees to use its best efforts to sell the equity on LJM2's behalf and under which ENA receives 90% of any gains exceeding a 25% return to LJM2. DASH Attached. Eftn 0 %G EA4EEMEnDASH L5M doe 1-00691 GOVERNMENT EXHIBIT ============= Page 2 of 3 ============= I JM APPROVAL SHEET Page 2 ISSUES CHECKLIST I. Sale Options a. If this transaction is a sale of an asset by Enron, which of the following options were considered and rejected: ZCondor DIEDI II DThird Party DDirect Sale. Please explain: A sale to Condor would achieve deconsolidation of the debt but would not allow Enron to book earnings. h. Will this transaction be the most beneficial alternative to Enron? Yes ONo. If no, please explain: c. Were any other bids/offers received in connection with this transaction? EYes DNo, Please explain: The debt and equity were marketed to several banks including Chase, Deutsche and Paribas. 2. Prior Obligations a. Does this transaction involve a Qualified Investment (as defined in the JEDI Ii partnership agreement)? DYes ©No. If yes, please explain how this 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 O No. If yes, please explain: 3. Terms of Transaction a. What are the benefits (financial and otherwise) to Enron in this transaction? OCash flow @Earnings 0Other: Funds flow of approximately $105 million. b. Was this transaction done strictly on an arm's-length basis? Yes DNo. If no, please explain: c. Was Enron advised by any third party that this transaction was not fair, from a financial perspective, to Enron? DYes ®No, If yes, please explain: _- __ d. Are all LJM expenses and out-of-pocket costs (including legal fees) being paid by LJM? DYes ONo. If no, is this market standard or has the economic impact of paying any expenses and out-of-pocket costs been considered when responding to items 1.b. and 3.b. above? Yes ONo. 4. Compliance a. Will this transaction require disclosure as a Certain Transaction in Enron's proxy statement? ElYes c No. b. Will this transaction result in any compensation (as defined by the proxy rules) being paid to any Enron employee? DYes ONo. c. Have all Enron employees' involvement in this transaction on behalf of LJM been waived by Enron's Office of the Chairman in accordance with Enron's Conduct of Business Affairs Policy? Yes ONo. if no, please explain: d. Was this transaction reviewed and approved by Enron's Chief Accounting Officer? ®Yes ONo. e. Was this transaction reviewed and approved by Enron's Chief Risk Officer? DYes ONo. f. Has the Audit Committee of the Enron Corp. Board of Directors reviewed all EnroniLJM transactions within the past twelve months? DYes O No. Have all recommendations of the Audit Committee relating to Enron/LJM transactions been taken into account in this transaction? DYes ONo. o'G M'as.\^e 'GASH-L,M 4oi CS74an 003%8 EXH 021-00692 ============= Page 3 of 3 ============= UM APPROVAL SHEET Page 3 APPROVALS Business Unit Business Unit Legal Enron Corp. Legal Global Finance Legal RAC Accounting Executive 0,GEM'EEX\E DASH_LJMdx ,, 2 Plam_ e 12 Yea f c-Rr, vrs t ~.. Q-tf ttl~ Scott Sefton Rick Buy Rick Causey Jeff Skilling Date ti3 133~~ al~al9 iz xa EC5074980100389 EXH021-00693 Signature