IN RE ENRON CORP

ARTHUR GONZALEZ, Bankruptcy Judge

Southern California Gas Company ("The Gas Company"), and Enron North America Corp. ("ENA", and together with The Gas Company, the "Parties"), by and through their respective undersigned counsel, hereby agree and stipulate as follows:

WHEREAS, prior to December 2, 2001, the Parties entered into a number of physical gas and financial transactions pursuant to certain physical and financial master agreements and general terms and conditions for gas sales, as more particularly set forth on Exhibit "A" hereto (the "Agreements"); and

WHEREAS, commencing on December 2, 2001, and periodically thereafter, Enron Corp. and certain of its direct and indirect subsidiaries, including ENA (collectively, the "Debtors"), each filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Cases"); and

WHEREAS, on or before October 15, 2002, The Gas Company timely filed a proof of claim against ENA (Claim No. 17301) in the amount of $1,570,956, for amounts allegedly due under the Agreements which were allegedly secured by "claims held by claimant against Debtor" (the "Proof of Claim"); and

WHEREAS, ENA disputes the amounts claimed in the Proof of Claim and contends it is owed certain sums under the Agreements; and

WHEREAS, on May 1, 2003 and May 5, 2003, The Gas Company paid ENA an aggregate amount of $10,811,172.04 under the Agreements (collectively, the "Payment").

NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES, BY AND THROUGH THEIR RESPECTIVE COUNSEL, AS FOLLOWS:

1. Satisfaction of Claims. On the Effective Date (as defined below) the Parties agree that the Payment represents full and complete payment and satisfaction of all amounts due and owing by The Gas Company to ENA under the Agreements.

2. Disallowance of Proof of Claim. On the Effective Date, Proof of Claim No. 17301 shall be disallowed and expunged in its entirety.

3. Entire Understanding/Limited Effect. The Gas Company and ENA agree that this Stipulation and Order is the entire understanding of the Parties and is intended to be the complete and exclusive statement of the terms thereof and may not be modified or amended except by a writing signed by all the Parties hereto, which shall be so ordered by the Court. Nothing in this Stipulation and Order is intended to be, nor shall it be construed to be (a) an allowance of any proof of claim filed by The Gas Company in the Bankruptcy Cases, or (b) a waiver by any of the Debtors or any other parties in interest of any right to object on any grounds to any proofs of claim filed or to be filed by The Gas Company, other than as to Proof of Claim No. 17301, which claim is resolved as set forth herein.

4. Bankruptcy Court Approval. This Stipulation and Order is expressly subject to and contingent upon its approval by the Bankruptcy Court. If this Stipulation and Order, or any portion hereof, is not approved by the Bankruptcy Court or if it is overturned or modified on appeal, this Stipulation and Order shall be of no further force and effect, and, in such event, neither this Stipulation and Order nor any negotiations and writings in connection with this Stipulation and Order shall in any way be construed as or deemed to be evidence of or an admission on behalf of any Party hereto regarding any claim or right that such Party may have against any other Party hereto, or otherwise.

5. Effective Date. This Stipulation and Order may be executed in one or more counterparts and by facsimile, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to all Parties, and the Bankruptcy Court has entered the Stipulation and Order on the docket of the Bankruptcy Court (the date on which all of such conditions have been satisfied being the " Effective Date").

SO ORDERED.

1. Pro Forma Master Services Contract Schedule E Auction Storage Service Agreement dated February 6, 1995 by and between Southern California Gas Company and Enron Capital Trade Resources Corp. (n/k/a Enron North America Corp.) (Enron Contract No. 96006135) that expired on April 1, 1996

2. Master Service User Agreement No. 940021 dated April 1, 1995 by and between Southern California Gas Company, Hub Services, Inc. and Enron Capital Trade Resources Corp. (n/k/a Enron North America Corp.) (Enron Contract No. 96009158)

3. GISB Base Contract for Short-Term Sale and Purchase of Natural Gas entered into as of November 1, 1997 between Southern California Gas Company and Enron Capital Trade Resources Corp. (n/k/a Enron North America Corp.) (Enron Contract No. 96013277) — Terminated November 30, 2001

4. Master Netting Agreement entered into as of November 1, 2000 between Enron North America Corp. and Southern California Gas Company (Enron Contract No. 96052351)

5. All confirmations for physical and financial transactions between Southern California Gas Company and Enron North America Corp.

6. Guarantee effective as of June 15, 2001 issued by Enron Corp. in favor of Southern California Gas Company and covering all obligations, liabilities and indebtedness of any kind whatsoever owing by Enron Administrative Corp., Enron Energy Services, Inc., Enron Energy Marketing Corp. and Enron North America Corp. (collectively, the "Enron Entities") to Southern California Gas Company in respect of or pursuant to any existing or future agreement or contract, and any amendments, modifications or extensions thereof, including, without limiting the generality of the foregoing, all obligations, liabilities and indebtedness of any kind whatsoever (a) for any and all gas delivery, gas storage, gas transportation, imbalance and other charges and liabilities arising in connection with or under any agreement or otherwise including, but without limiting the generality of the foregoing, not limited to any Marketer/Core Aggregator/Use or Pay Aggregator Agreement, Aggregation/Transportation Service Agreement for Core Aggregation Service, or any other agreement which designates one of the Enron Entities as a marketer of gas or as an aggregator of gas or relating to one of the Enron Entities' activities as a gas marketer or as an aggregator of gas; (b) arising in connection with or under any Consolidated Billing Agreement or any other agreement pursuant to which the Southern California Gas Company bills any of the customers of the Enron Entities for gas provided or sold by Applicant to such customers; (c) arising in connection with any Hub Services provided by Southern California Gas Company including, but without limiting the generality of the foregoing, no limited to any Hub Transactions, Parking, Loaning and Wheeling Transactions, all as defined in the tariff, rules and regulations filed with the California Public Utilities Commission and applicable to Southern California Gas Company; (d) arising in connection with the extension by the Company of credit to the Enron Entities in connection with the Enron Entities' activities as a gas energy service provider; (e) arising in connection with the purchase, sale, or exchange of natural gas; (f) arising in connection with the trading of financial derivatives including, without limitation, price swaps, puts and calls; and (g) arising in connection with or under any security agreement or other agreement between Southern California Gas Company and the Enron Entities.