Sorry for the delay......this has gotten kicked back several times
now.......Hopefully, this one will go through.

PK

.....................................................................................................................................................................................................................................................................................................................

Andy and Dave -

Attached below is the working deal sheet with Enron and Accenture's most
recent iterations and comments.

If you all could review our feedback and let us know your thoughts, that
would be great. Also, Dave, please let me know if you want to move forward
with the counsel discussion on Monday.

Informally and respectfully, I would like to comment on Enron's sentiment
that we have had six weeks to think about some of these things and as a
result, the ambiguity should already be gone. I appreciate this
point-of-view, but also want to share my perspective with you all:
This is a nonstandard deal in terms of the traditional 'buyer seeks
seller with needed asset'. This traditional approach likely has the
buyer in the market for that asset already. All of the analysis to
determine the value of that asset has most likely been completed. As
a result, the buyer probably has a strong sense of the value of that
asset to their business and is ready to pull the trigger if the price
is right. Since Enron approached us with the service concept and the
asset to be sold, this typical preexisting condition was not present.
This is a big investment. It is not just the $5M, but an additional
$15M in marketing, selling, designing, building, maintaining, and
operating costs. Further, any delta between the $5M and the 30% TSH
take due to Enron is additional investment for Accenture. So, we are
really evaluating a $20+M investment, not a $5M investment.
There is not good historical evidence that transaction based
businesses, on a stand alone basis, are sustainable over any long term
horizon (just look at the dot.bomb bust).
Pricing determination for a transaction based business is difficult
and highly volatile. Our market review has proven this yet again.

I highlight these dynamics to explain, not excuse, our need to approach
things the way that we have. That being said, I will reiterate that we
would not even be performing this analysis (itself costly) if we did not
have the highest regards for Enron, our collective ability to do well in
the marketplace together, and a general bullishness for the value of this
offering.

I look forward to hearing from you all on Monday. Thanks,

Peggy

(See attached file: Enron - Accenture - Dealpoints v4.doc)

----- Forwarded by Peggy A. Kostial on 04/22/2001 11:37 AM -----

"Zipper,
Andy" To: Peggy A.
Kostial@Accenture, Kenny W. Baldwin@Accenture
<Andy.Zipper@ cc: "Samuels, Dave"
<Dave.Samuels@enron.com<, "Bridges, Michael"
enron.com< <Michael.Bridges@enron.com<
Subject: TSH proposal
04/19/2001
12:34 PM

Kenny and Peggy,

I have the following comments on the proposed deal sheet dated
4/17/01:

-The keep whole commitment must be developed, but we are okay
with the concept of contributing the revenue of any direct distribute
deals minus our costs to the TSH.

-We will provide Accenture with as much information as is
commercially reasonable that describes the nature of the EnronOnline
deal flow as it is occurring, for the purpose of aiding in marketing of
the service. We cannot send the entire transaction stream containing
non-subscribing entities for obvious privacy reasons.

-The EnronOnline technology asset piece I have revised as
follows:

o EnronOnline technology asset is a part of the
deal
* EnronOnline retains Intellectual
Property Rights (IPR) to 'Transaction Data Feed' software
* Enron grants Accenture a fully
paid-up, royalty-free, non-exclusive, perpetual, worldwide,
non-assignable license to 'Smart Client' software. Accenture is free to
develop the 'Smart Client' code and reuse it for any purpose related to
the operation of an Energy Transaction Support Hub, but Enron retains
IPR to all code provided by Enron within the context of this
arrangement.
* EnronOnline provides interface
descriptions, design documentation and the actual code for the 'Smart
Client' software.

I think this gets us to where we all need to be.

-The "Validate we are not off base..." dependency is
irrelevant. Accenture has had six weeks to validate that. The 3 customer
hurdle presumably does that. Our firm understanding of Accenture's
position, stated by Kenny, is that if Accenture gets 3 customers to
verbally commit, then we are done. We would strongly prefer that
Accenture scrap the 3 customer litmus test, and move forward with the
transaction based on the recognized value of the offering and the many
other value factors for Accenture that have been previously discussed.

Having said all this, we are friendly to the whole idea if it
actually gets to the stage where it is a firm proposal.

Regards,
Andy Zipper

(See attached file: Enron - Accenture - Dealpoints v4.doc)
- Enron - Accenture - Dealpoints v4.doc