IN RE ENRON CORP., (Bankr.S.D.N.Y. 2003)

ARTHUR GONZALEZ, Bankruptcy Judge

Enron Corp. ("ENE"), for and on behalf of itself and its affiliated debtor entities, as debtors and debtors in possession, the Official Committee of Unsecured Creditors appointed in these chapter 11 cases (the "Creditors' Committee") and National City Bank ("NCB"), as indenture trustee and property trustee, by and through their respective counsel, do hereby stipulate and agree as follows:

RECITALS

General Background

A. On December 2, 2001 (the "Petition Date"), ENE and thirteen (13) of its affiliated entities, including Enron Transportation Services Company ("ETS"), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court').

B. Since the Petition Date, one hundred sixty-four (164) of ENE's affiliated entities have filed voluntary petitions for relief pursuant to chapter 11 of the Bankruptcy Code.

C. As of the date hereof, each of ENE and its affiliated debtor entities (collectively, the "Debtors") continues to operate its businesses and manage its properties as a debtor in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code.

D. On December 12, 2001, the Office of the United States Trustee appointed the Creditors' Committee. The Creditors' Committee has been reconstituted from time to time.

Enron Capital Trust I

E. Enron Capital Trust I ("ECT I") is a statutory business trust created on or about October 25, 1996 under the Delaware Business Trust Act and is governed by the terms of that certain Declaration of Trust, dated as of October 25, 1996, as amended by that certain Amended and Restated Declaration of Trust of Enron Capital Trust I, dated as of November 18, 1996 (the "ECT I Trust Declarations").

F. Pursuant to the ECT I Trust Declarations, ENE is the sponsor of ECT I.

G. Pursuant to that certain Instrument of Resignation, Appointment and Acceptance, dated as of December 19, 2001, by and among ENE, Enron North America Corp. ("ENA"), ETS, J.P. Morgan Chase Bank ("JPMCB") and NCB, NCB became the successor Property Trustee under the ECT I Trust Declarations.

H. Pursuant to Section 8.1 of the ECT I Trust Declarations, ECT I issued 8,000,000 8.30% Trust Originated Preferred Securities (the "ECT I TOPRS"), having an aggregate liquidation amount with respect to the assets of ECT I of Two Hundred Million Dollars ($200,000,000.00), or Twenty-Five Dollars ($25.00) per each ECT I TOPRS.

Enron Preferred Funding L.P.

I. Enron Preferred Funding L.P. ("EPF I") is a Delaware limited partnership governed by that certain Agreement of Limited Partnership, dated as of October 25, 1996, as amended by that certain Amended and Restated Agreement of Limited Partnership of Enron Preferred Funding, L.P. (the "EPF I Partnership Agreement"), dated as of November 21, 1996.

J. Pursuant to Article VI of the EPF I Partnership Agreement, EPF I issued to ECT I 8,247,440 8.30% Partnership Preferred Securities (the "8.30% PPS"), constituting the limited partnership interests in EPF I and having a stated liquidation preference of Twenty-Five Dollars ($25.00) per Partnership Preferred Security.

K. ENE is the general partner of EPF I.

L. As of the date hereof, the assets of EPF I consist of (i) $181,926,000.00 principal amount of 7.75% Subordinated Debentures, due 2016 (the "Enron 1996 Subordinated TOPRS Debentures"), issued by ENE pursuant to that certain Indenture, dated as of November 21, 1996 (the "Enron 1996 Subordinated Indenture"), between ENE, as Issuer, and The Chase Manhattan Bank ("CMB"), as Indenture Trustee, (ii) $29,108,000.00 principal amount of 7.75% Debentures, due 2016 (the "ETS 1996 Debentures"), issued by Enron Pipeline Company (now known as ETS) pursuant to that certain Indenture, dated as of November 21, 1996, between ETS, as Issuer, ENE, as Guarantor, and CMB, as Indenture Trustee, (iii) $29,108,000.00 principal amount of 7.75% Debentures, due 2016 (the "ENA 1996 Debentures'), issued by Enron Capital and Trade Resources Corp., now known as ENA, pursuant to that certain Indenture, dated as of November 21, 1996, between ENA, as Issuer, ENE, as guarantor, and CMB, as Indenture Trustee, and (iv) approximately $2,500,000.00 in short-term, investment grade debt securities issued by third parties not affiliated with the Debtors (the "EPF I Eligible Debt Securities'). Enron Capital Trust II

The Enron 1996 Subordinated TOPRS Debentures, the ETS 1996 Debentures and the ENA 1996 Debentures are sometimes hereinafter collectively referred to as the "1996 Debentures".

M. Enron Capital Trust II ("ECT II") is a statutory business trust created on or about December 23, 1996 under the Delaware Business Trust Act and is governed by the terms of that certain Declaration of Trust, dated as of December 23, 1996, as amended by that certain Amended and Restated Declaration of Trust of Enron Capital Trust II, dated as of January 13, 1997 (the "ECT II Trust Declarations").

N. Pursuant to the ECT II Trust Declarations, ENE is the sponsor of ECT II.

O. Pursuant to that certain Instrument of Resignation, Appointment and Acceptance, dated as of December 19, 2001, by and among ENE, ENA, ETS, JPMCB and NCB, NCB became the successor Property Trustee under the ECT II Trust Declarations.

P. Pursuant to Section 8.1 of the ECT II Trust Declarations, ECT II issued 6,000,000 8.125% Trust Originated Preferred Securities (the "ECT II TOPRS"), having an aggregate liquidation amount with respect to the assets of ECT II of One Hundred Fifty Million Dollars ($150,000,000.00), or Twenty-Five Dollars ($25.00) per each ECT II TOPRS.

The ECT I TOPRS and the ECT II TOPRS are sometimes hereinafter collectively referred to as the "TOPRS".

Enron Preferred Funding II, LP

Q. Enron Preferred Funding II, L.P. ("EPF II") is a Delaware limited partnership governed by that certain Agreement of Limited Partnership, dated as of December 23, 1996, as amended by that certain Amended and Restated Agreement of Limited Partnership of Enron Preferred Funding II, L.P. (the "EPF II Partnership Agreement"), dated as of January 16, 1997.

R. Pursuant to Article VI of the EPF II Partnership Agreement, EPF II issued to ECT II 6,186,000 8.125% Partnership Preferred Securities (the "8.125% PPS"), constituting the limited partnership interests in EPF II and having a stated liquidation preference of Twenty-Five Dollars ($25.00) per Partnership Preferred Security.

S. ENE is the general partner of EPF II.

T. As of the date hereof, the assets of EPF II consist of (i) $136,450,000.00 principal amount of 7.75% Subordinated Debentures, due 2016, Series II (the "Enron 1997 Subordinated TOPRS Debentures"), issued by ENE pursuant to that certain Indenture, dated as of January 16, 1997 (the "Enron 1997 Subordinated Indenture"), between ENE, as Issuer, and CMB, as Indenture Trustee, (ii) $21,836,000.00 principal amount of 7.75% Debentures, due 2016, Series II (the "ETS 1997 Debentures"), issued by ETS pursuant to that certain Indenture, dated as of January 16, 1997, between ETS, as Issuer, ENE, as Guarantor, and CMB, as Indenture Trustee, (hi) $21,836,000.00 principal amount of 7.75% Debentures, due 2016, Series II (the "ENA 1997 Debentures'), issued by ENA pursuant to that certain Indenture, dated as of January 16, 1997, between ENA, as Issuer, ENE, as Guarantor, and CMB, as Indenture Trustee, and (iv) approximately $1,900,000.00 in short-term, investment grade debt securities issued by third parties not affiliated with the Debtors (the "EPF II Eligible Debt Securities').

The Enron 1996 Subordinated TOPRS Debentures and the Enron 1997 Subordinated TOPRS Debentures are sometimes hereinafter collectively referred to as the "Enron TOPRS Debentures".

The Enron 1996 Subordinated Indenture and the Enron 1997 Subordinated Indenture are sometimes hereinafter collectively referred to as the "Enron TOPRS Indentures".

The ETS 1996 Debentures and the ETS 1997 Debentures are sometimes hereinafter collectively referred to as the "ETS Debentures".

The ENA 1996 Debentures and the ENA 1997 Debentures are sometimes hereinafter collectively referred to as the "ENA Debentures".

The EPI Eligible Debt Securities and the EPF II Eligible Debt Securities are sometimes hereinafter collectively referred to as the "Eligible Debt Securities".

U. The Debtors and the Creditors' Committee assert that, pursuant to the EPF I Partnership Agreement and the EPF II Partnership Agreement, including, without limitation, Section 7.2 thereof, ENE, as general partner of EPF I and EPF II, is not required to make any distributions to holders of 8.30% PPS and 8.125% PPS, respectively, with regard to distributions ENE may receive on account of the Enron TOPRS Debentures, the ETS Debentures, the ENA Debentures, the EPF I Eligible Debt Securities or the EPF II Eligible Debt Securities.

The Plan Process

V. On July 11, 2003, the Debtors filed that certain Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated July 11, 2003 (the "Plan"), together with a related disclosure statement. On September 18, 2003, the Debtors amended the Plan and the related disclosure statement through their filing of that certain Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated September 18, 2003 (the "Amended Plan") and a related disclosure statement.

Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Amended Plan.

W. NCB believes it has various meritorious objections to the confirmation of the Amended Plan and to the proposed treatment under the Amended Plan of the claims filed by NCB in the Debtors' chapter 11 cases against ENE, ENA and ETS.

X. The Debtors and the Creditors' Committee believe they have various meritorious claims and challenges which they can assert with respect to the TOPRS, EPF I, EPF II, the Enron TOPRS Debentures, the ETS Debentures and the ENA Debentures, including, without limitation, whether the TOPRS constitute equity, rather than indebtedness, and whether the assets and liabilities of ETS should be substantively consolidated with those of ENE and its related Debtors.

Y. The Debtors and the Creditors' Committee dispute the merit of the objections which NCB believes it has to confirmation of the Amended Plan, and NCB disputes the merit of the claims and challenges which the Debtors and the Creditors' Committee believe they have with respect to the TOPRS, EPF I, EPF II, the Enron TOPRS Debentures, the ETS Debentures and the ENA Debentures and the likelihood of substantive consolidation of ETS.

Jurisdiction and Venue

Z. The Bankruptcy Court has jurisdiction to approve this Stipulation and Order pursuant to 28 U.S.C. § 157 and 1334. This a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (O).

AA. Venue is proper in the Bankruptcy Court pursuant to 28 U.S.C. § 1409.

BB. The Debtors, the Creditors' Committee and NCB wish to resolve the disputes among them addressed by this Stipulation and Order on the terms and conditions set forth herein

NOW THEREFORE, the Debtors, the Creditors' Committee and NCB, by and through their respective counsel, hereby agree as follows:

AGREEMENT

1. As soon as practicable following execution hereof, but in no event later than two (2) business days prior to the commencement of a hearing to consider the adequacy of the Disclosure Statement, the Debtors shall file an amendment to the Amended Plan incorporating, among other things, the terms and conditions of this Stipulation and Order (the "Second Amended Plan").

2. Except as provided in decretal paragraph 18 hereof, upon approval of this Stipulation and Order by the Bankruptcy Court, the provisions set forth herein shall be binding upon the Debtors, the Creditors' Committee, NCB and, to the extent applicable, each of the Debtors' creditors.

3. Securities. The distributions on the terms set forth herein with respect to the ENA Debentures, the ETS Debentures and, subject to the applicable subordination provisions of the Enron TOPRS Indentures, the Enron TOPRS Debentures shall be made pursuant to the Second Amended Plan

4. Allowance of Claims. For purposes of calculating distributions to be made pursuant to the Second Amended Plan, on the Effective Date, the aggregate amount of each of the ENA Debenture Claims, ETS Debenture Claims and Enron TOPRS Debenture Claims (not including, in each case, the fees and expenses of NCB (including the fees and disbursements of its counsel and other professionals and indemnification claims)), as indenture trustee for the ENA Debentures, the ETS Debentures and the Enron TOPRS Debentures, and as Property Trustee of ECT I and ECT II, which amounts are presently unliquidated, shall be allowed as follows:

a. ENE TOPRS Debenture Claims: An amount equal to the sum of (a) the outstanding principal amount of Enron TOPRS Debentures, Three Hundred Eighteen Million Three Hundred Seventy-Six Thousand Dollars ($318,376,000.00), and (b) unpaid interest with respect to such debentures which accrued during the period prior to the Petition Date, Four Million One Hundred Eighty Thousand Eight Hundred Ninety-Six Dollars ($4,180,896.00).

b. ENA Debenture Claims: An amount equal to the sum of (a) the outstanding principal amount of ENA Debentures, Fifty Million Nine Hundred Forty-Four Thousand Dollars ($50,944,000.00), and (b) unpaid interest with respect to such debentures which accrued during the period prior to the Petition Date, Six Hundred Sixty-Eight Thousand Nine Hundred Ninety-Four Dollars ($668,994.00).

c. ETS Debenture Claims: An amount equal to the sum of (a) the outstanding principal amount of the ETS Debentures, Fifty Million Nine Hundred Forty-Four Thousand Dollars ($50,944,000.00), (b) unpaid interest (including Additional Interest) which accrued on such debentures during the period prior to the Petition Date, Six Hundred Sixty-Eight Thousand Nine Hundred Ninety-Four Dollars ($668,994.00) and (c) one hundred percent (100%) of the interest (including Additional Interest) accrued on such debentures during the period from the Petition Date up to and including the Effective Date, Nine Million Three Hundred Twenty-Five Thousand Nine Hundred Eleven Dollars ($9,325,911.00), assuming an Effective Date of January 31, 2004.

5. Plan Distributions. The Second Amended Plan shall provided that, commencing on the Effective Date, and in accordance with Bankruptcy Rule 3021, the Disbursing Agent shall make, and NCB, as indenture trustee, shall receive, distributions of Plan Currency, Litigation Trust Interests, Special Litigation Trust Interests and any other money or property to be distributed in accordance with the Second Amended Plan on account of Allowed ENA Debenture Claims and Allowed ETS Debenture Claims in accordance with the terms and conditions of the Amended Plan (as modified to take account of the provisions of this Stipulation and Order), including, without limitation, the compromise and settlement set forth in Article II of the Amended Plan or on such other terms as the Debtors, the Creditors' Committee and NCB may agree. Except as provided in decretal paragraph 11 hereof, all distributions made pursuant to the Second Amended Plan with respect to the ETS Debentures and the ENA Debentures shall be made to NCB, as indenture trustee, and shall be immediately distributable to holders of the TOPRS notwithstanding any failure of ENE, as general partner of EPF I or EPF II, to declare a distribution. The Second Amended Plan shall provide further that all distributions which otherwise would be made to holders of Allowed Enron TOPRS Debenture Claims shall be made, subject to (i) the lien or priority rights of the Enron TOPRS Indenture Trustee and (ii) the applicable subordination provisions of the Enron TOPRS Indentures, to holders of Allowed Claims that constitute "Senior Indebtedness", as defined in the Enron TOPRS Indentures. All distributions to holders of the TOPRS shall be made by NCB as distribution agent pursuant to a distribution agency agreement to be entered into by the Debtors and NCB.

6. ETS Plan Recoveries. Subject to the provisions of decretal paragraph 16 hereof, the Second Amended Plan shall provide that holders of Allowed ETS Debenture Claims will receive distributions in an amount equal to (a) seventy cents ($.70) per dollar of Allowed ETS Debenture Claims as if ETS is not substantively consolidated with the other Debtors' chapter 11 estatesplus (b) thirty percent (30%) of such percentage per dollar of Allowed ETS Debenture Claims as if ETS were substantively consolidated with the other Debtors' chapter 11 estates.

7. Waiver of Reinvestment Rights. The Second Amended Plan shall provide that, on the Effective Date, ENE, as general partner of EPF I and EPF II, shall waive any right EPF I and EPF II may have to reinvest distributions made pursuant to the Second Amended Plan and such distributions, together with the proceeds of the Eligible Debt Securities, shall be distributed to ECTI and ECT II for the benefit of holders of the TOPRS issued by ECT I and ECT II, respectively.

8. Liquidation of Securities. On or as soon as practicable following the Effective Date, the Eligible Debt Securities owned by EPF I and EPF II shall be reduced to cash by ENE, as general partner of EPF I and EPF II, and distributed to ECT I and ECT II for distribution to the holders of the TOPRS.

9. Dissolution of Partnerships. As soon as practicable following the final distribution to be made pursuant to the Second Amended Plan, EPF I and EPF II shall dissolve as partnerships and commence the winding up of their respective affairs.

10. Exculpation Solely for purposes of Section 39.6 of the Amended Plan, NCB shall be considered an indenture trustee responsible for making distributions under the Amended Plan

11. Cash Option Notwithstanding the distribution provisions set forth above, the Second Amended Plan shall provide that the holders of the TOPRS shall have the option, by instructing NCB, to elect to receive Cash in lieu of distributions of Crosscountry Common Stock, PGE Common Stock and Prisma Common Stock that will otherwise be made on account of Allowed ETS Debenture Claims. In connection with the solicitation of acceptances and rejections to the Second Amended Plan, the ETS Indenture Trustee shall reflect on the Ballot to be submitted by the ETS Indenture Trustee with respect to the ETS Debentures which of the holders of the TOPRS have elected on their respective Ballots with respect to ETS Debenture Claims to receive Cash in lieu of distributions of Crosscountry Common Stock, PGE Common Stock and Prisma Common Stock that will otherwise be made on account of ETS Debenture Claims. The Second Amended Plan shall provide that, to the extent so elected, ENE shall purchase from EPF I and EPF II the shares of Crosscountry Common Stock, PGE Common Stock and Prisma Common Stock so distributed at a price equal to the per share value determined by the Bankruptcy Court at the Confirmation Hearing. The Cash tendered by ENE with respect to this Cash Option (together with the requisite Litigation Trust Interests and Special Litigation Trust Interests) shall be distributed by EPF I and EPF II to NCB, as indenture trustee and property trustee, for distribution (subject to NCB's lien or priority rights as indenture trustee), to the holders of the TOPRS who directed the ETS Indenture Trustee to exercise such option. Notwithstanding the foregoing, the "Cash Option" shall only become effective in the event that (i) the holders of the TOPRS vote their ETS Debenture Claims such that, if such ETS Debenture Claims were deemed to be a separate class of claims, such class would be deemed to have accepted the Second Amended Plan and (ii) the Confirmation Order is entered by the Bankruptcy Court and becomes a Final Order.

12. Indenture Trustee's Fees. The fees and expenses incurred by NCB, as ENA Indenture Trustee, ETS Indenture Trustee, Enron TOPRS Indenture Trustee and Property Trustee for ECT I and ECT II, including, without limitation, the fees and disbursements of its counsel and other professionals (collectively, the "Fees and Expenses"), during the period up to and including the Effective Date, to the extent determined by the Debtors and the Creditors' Committee, in their joint and absolute discretion, to be reasonable shall be paid in Cash by the Reorganized Debtors as soon as practicable following the Effective Date, without the need for NCB to file an application for allowance thereof by the Bankruptcy Court. In the event that either the Debtors or the Creditors' Committee disagree with NCB as to the reasonableness of all or a portion of Fees and Expenses requested, NCB may, at its sole discretion, request that the Bankruptcy Court (i) determine the reasonableness of such contested amount and (ii) direct the Reorganized Debtors to pay such additional amount determined to be reasonable, if any, and the Debtors, the Creditors' Committee and any other creditor or party in interest may object thereto. To the extent that the Reorganized Debtors do not pay any of the Fees and Expenses, whether as a result of the Creditors' Committee's or the Debtors' objection as to reasonableness, the Bankruptcy Court's determination as to reasonableness or NCB's determination not to request payment therefor, NCB shall have the right to assert its lien and priority rights pursuant to the applicable indenture for payment of any unpaid amount upon any payment or other distribution to be made in accordance with the Second Amended Plan and this Stipulation and Order.

13. Structure Challenge. Upon approval of this Stipulation and Order by the Bankruptcy Court, and subject to the condition that the Confirmation Order is entered by the Bankruptcy Court and becomes a Final Order, (A) all claims, causes of action, or other challenges of any kind or nature which could be asserted by the Debtors, the Creditors' Committee, any trustee appointed in the Debtors' bankruptcy cases, any creditor or party in interest in the Debtors' bankruptcy cases, or any of them, against or with respect to NCB, as indenture trustee and property trustee, ECT I, ECTII, the TOPRS, EPF I, EPF II, the limited partnership interests issued by either of them, the ETS Debentures, the ENA Debentures or the Enron TOPRS Debentures, including, without limitation, substantive consolidation, piercing of the corporate veil, recharacterization of the TOPRS or the limited partnership interests in EPF I or EPF II as preferred stock or any other equity interest of ENE or any of its affiliates, preference, fraudulent conveyance and other avoidance actions shall be deemed forever waived and released, and (B) none of the Debtors, the Committee, any trustee or any creditor or party in interest in the Debtors' bankruptcy cases, or any of them, shall, without NCB's prior written consent, which may be withheld in its sole and absolute discretion, (i) seek to change, remove or substitute any of the Enron TOPRS Debentures, the ETS Debentures, the ENA Debentures, the Eligible Securities or any other interest of any of ECT I, ECT II, EPF I or EPF II in any property (collectively, the "TOPRS Structure"), or (ii) otherwise seek to merge or consolidate any or all of ECT I, ECT II, EPF I, EPF II, ENE, ENA or ETS or in any manner change or otherwise affect the economic or other interests of NCB, as indenture trustee and property trustee (except as provided in decretal paragraph 12 hereof), the holders of the TOPRS, ECT I, ECT II, EPF I or EPF II, or any of them, except as provided in this Stipulation and Order.

14. Non-Assertion of Actions/Tolling. During the period from approval of this Stipulation and Order by the Bankruptcy Court up to and including thirty (30) days following (i) the date the Confirmation Order becomes a Final Order or (ii) this Stipulation and Order is deemed null and void in accordance with the provisions of decretal paragraph 18 hereof, (A) none of the Debtors, the Creditors' Committee, any trustee appointed in the Chapter 11 Cases or any creditor or party in interest in the Debtors' bankruptcy cases, or any of them, shall assert any claims, causes of action, objections to the claims to be allowed in accordance with decretal paragraph 4 hereof, or other challenges of any kind or nature which could be asserted by any of them against or with respect to NCB, as indenture trustee and property trustee, ECT I, ECT II, the TOPRS, EPF I, EPF II, the limited partnership interests issued by either of them, the ETS Debentures, the ENA Debentures or the Enron TOPRS Debentures, including, without limitation, substantive consolidation, piercing of the corporate veil, recharacterization of the TOPRS or the limited partnership interests in EPF I or EPF II as preferred stock or any other equity interest of ENE or any of its affiliates, preference, fraudulent conveyance or other avoidance actions, (B) none of the Debtors, the Creditors' Committee, any trustee or any creditor or party in interest in the Debtors' bankruptcy cases, or any of them, shall, without NCB's prior written consent, which may be withheld in its sole and absolute discretion, (i) seek to change, remove or substitute any of the Enron TOPRS Debentures, the ETS Debentures, the ENA Debentures, the Eligible Securities or any other interest of any of ECT I, ECT II, EPF I or EPF II in any property, or (ii) otherwise seek to merge or consolidate any or all of ECT I, ECT II, EPF I, EPF II, ENE, ENA or ETS or in any manner change or otherwise affect the economic or other interests of NCB, as indenture trustee and property trustee (except as provided in decretal paragraph 12 hereof), the holders of the TOPRS, ECT I, ECT II, EPF I or EPF II, or any of them, except as provided in this Stipulation and Order, and (C) the statute of limitations with respect to all claims and causes of action which the Debtors or their chapter 11 estates may assert with respect to the TOPRS Structure shall be tolled.

15. Voting of Claims/Support of Plan NCB shall serve as Special Representative and shall vote the ENA Debenture Claims, the ETS Debenture Claims and the Enron TOPRS Debenture Claims on master Ballots as directed by the holders of the TOPRS of each of ECT I and ECT II, voting separately by trust and by debenture issue. Provided that the Second Amended Plan contains the compromise and settlement set forth herein, and, provided that the Amended Plan is not hereafter amended to include any provisions which (i) materially adversely affect the interests of NCB, as indenture trustee and property trustee, or the holders of the TOPRS, or (ii) materially benefit any other similarly situated creditors or parties in interest not including NCB or the holders of the TOPRS, NCB shall not object to the Second Amended Plan and, by letter, shall formally recommend that holders of the TOPRS vote in favor of the Second Amended Plan.

16. Most Favored Nation Status. In the event the Debtors agree to pay, or pay, to any class of unsecured nonpriority claims of any Debtor (including ENE Guaranty Claims as a separate class, but not including Portland General Holdings, Inc. and Portland Transition Company, Inc.) a higher percentage recovery than the holders of Allowed ETS Debenture Claims are to receive under the Second Amended Plan pursuant to this Stipulation and Order, the percentage recovery paid to the holders of Allowed ETS Debenture Claims shall automatically increase to the same percentage recovery, but in no event shall the recovery increase to more than par plus accrued pre- and post-petition interest (including Additional Interest) as calculated in accordance with the respective indentures pursuant to which the ETS Debentures were issued.

17. Court Approval. This Stipulation and Order shall be promptly submitted, but in no event later than September 23, 2003, by the Debtors to the Bankruptcy Court by motion on appropriate notice for approval.

18. Null and Void. In the event that, notwithstanding the approval of this Stipulation and Order by the Bankruptcy Court, (a) either (i) the Second Amended Plan, which plan shall contain provisions consistent with those set forth herein, is not accepted in accordance with the provisions of section 1126 of the Bankruptcy Code by the holder(s) of Allowed ETS Debenture Claims or (ii) the Bankruptcy Court declines to enter an order confirming the Second Amended Plan, as the same may be amended, containing provisions consistent with those set forth herein, and (b) the Debtors file a plan with the Bankruptcy Court which contains treatments for Allowed ETS Debenture Claims inconsistent with the material economic terms contained herein, including, without limitation, the provisions contained in decretal paragraph 6 hereof, this Stipulation and Order shall be deemed null and void on the tenth (10th) Business Day following the filing of such plan with the Bankruptcy Court.

19. Non-Binding Nature. Except for the provisions of decretal paragraph 17 hereof, the provisions of this Stipulation and Order shall not be binding on any party hereto until the approval of the Bankruptcy Court with respect hereto has been obtained.

20. Future Claims. Nothing contained in this Stipulation and Order shall affect any claims or causes of action against any party arising from or relating to the period from and after the date of approval of the Stipulation and Order.

SO ORDERED