From: mark.haedicke@enron.com
To: peter.keohane@enron.com
Date: 2001-05-09 12:45:00+00:00
Subject: Re: NGX Final Settlement

It looks a good deal to me.  Mark



	Peter Keohane
	05/09/2001 09:56 AM
		 
		 To: John J Lavorato/Enron@EnronXGate, Mark E Haedicke/HOU/ECT@ECT
		 cc: Rob Milnthorp/CAL/ECT@ECT, Sharon Crawford/CAL/ECT@ECT
		 Subject: NGX Final Settlement

SOLICITOR/CLIENT PRIVILEGED COMMUNICATION

John and Mark, we have finalized our negotiations with NGX and have received 
from them final executed paper for our execution.  All of them (NGX, OM, 
Enerdata and Zarzeczny) have agreed (with the exception of Westcoast, who is 
not really relevant and who sold out their position in NGX to OM after 
commencement of the litigation).  
By its terms, we have until Friday to confirm our agreement.  The key terms 
are:
1. EOL third-party transaction data will be included in the index on a 
real-time basis;
2. Other electronic trading systems may have their data included in the index 
if they meet the criteria for inclusion (similar product, audit rights) (i.e. 
we deleted the "most favour nations" requirement for inclusion of other 
systems not being on more favourable terms);
3. Enron pays a one-time C$25,000 set-up fee;
4. Enron pays an index management fee of C$5,000 per month, unless Enron 
trades at least 50,000 TJ,s per month on NGX;
6. Enron pays normal NGX trading fees;
7. Enron pays no audit fees or other fees or costs;
8. Lawsuit is released with everybody bearing their own costs;
9. Enron agrees to confidential audit rights to independent auditor ) but no 
customer information is provided to NGX;
10. No non-compete.  Enron is expressly allowed to:
 (a) develop, establish, publish or promote any alternative or competing 
index: 
 (b) post, settle against, or use in any transaction, any alternative or 
competing index;
 (c) provide information to Gas Daily and Inside FERC, etc;
 (d) display any transactional information on EOL; 
11. Term is 3 years, commencing after information transfer systems are in 
place, but not later than Dec. 31 (failing which lawsuit is revived, but 
against NGX only);
12. Enron can terminate at any time on 60 days notice (but lawsuit is 
released);
13. Enron can terminate at any time for NGX breach (lawsuit is revived, but 
against NGX only);
14. NGX can change its products and Enron has the option to change and be 
included or not to change;
15. The method for calculating and compiling the index cannot be changed in 
the future without our approval, and the agreements between NGX and Enerdata 
which give NGX the rights to the index cannot be amended or terminated 
without our consent;
16. Deal is subject to ENA senior management approval by Friday; and
17. The above has been approved and executed by NGX, OM, Enerdata and 
Zarzeczny.
This has been a tremendous amount of work with little involvement by outside 
counsel.  Both Rob and I believe it is an excellent deal for Enron given the 
fact that pursuing the lawsuit will be extremely costly (both in terms of 
expenses and the time and effort of dedicating resources to the litigation) 
and difficult to litigate.  The deal really amounts to an option to Enron to 
have its EOL data included in the index for C$25,000 and releasing the 
lawsuit.  Please let me know by Friday if we want to execute.

Regards, Peter.