In re Enron Petrochemicals Claim Against Underwriters;

Steve and Jim,

This will confirm our meeting today about pushing forward on the above-referenced claim, especially in light of the pending statute of limitations for a direct tort action against Baytank, which expires on or about November 4.

1. Becky will finalize the statement of claim per the suggestions made at the meeting and then send a final version to Ted Rosen of Wortham's, Jim, and Steve.

2. Jim authorized Ted Rosen to go forward with contacting Sharron West and getting that claim resolved without Jim being present, given that Jim has out-of-the office business committments for until early November.

3. Ted will both present our insurance claim to Underwriters and do his best to discourage any action against Baytank (given that Enron has a very low probability of getting anything out a subrogation action) and Philchem (who Underwriters shouldn't be able to recover against anyway, given the implied waiver of subrogation in the Enron/Philchem contract).

4. Solely in order to protect ourselves against a claim from Underwriters that our recovery against them should be reduced because we did not protect the applicable statute of limitations against potential third-party claimaints, I am today attempting to contact Baytank's general counsel to see if I can get a three-month extension of time from them for a third-party against Baytank. Given that we are not sure exactly when the product contamination that was discovered on or about November 4, 1999 occurred, but only that it occurred after October 28 (per my notes of an earlier conversation with Steve), I think we need to file a third-party lawsuit against Baytank no later than Friday, October 26 (since October 28 is on a Sunday) and then promptly serve it. Parenthetically, our action againt Philchem shouldn't be time-barred for four years (we have a breach of contract action against them), so we shouldn't have to get an extension of time from them.

5. Attached is the proposed third-party action against Baytank if we can't get an agreed extension of time for filing it from Baytank. I need Steve to closely review for factual accuracy. I have tried to leave it as general as possible. We don't need to provide a dollar amount of our damages at this time.

Britt

P.S. to Richard: Do you want me to do the GC memo on this if I don't get an agreed extension of time from Baytank ?