Message-ID: <26005811.1075845025979.JavaMail.evans@thyme>
Date: Wed, 9 May 2001 05:45:00 -0700 (PDT)
From: mark.haedicke@enron.com
To: peter.keohane@enron.com
Subject: Re: NGX Final Settlement
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X-From: Mark E Haedicke
X-To: Peter Keohane
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It looks a good deal to me.  Mark



=09Peter Keohane
=0905/09/2001 09:56 AM
=09=09=20
=09=09 To: John J Lavorato/Enron@EnronXGate, Mark E Haedicke/HOU/ECT@ECT
=09=09 cc: Rob Milnthorp/CAL/ECT@ECT, Sharon Crawford/CAL/ECT@ECT
=09=09 Subject: NGX Final Settlement

SOLICITOR/CLIENT PRIVILEGED COMMUNICATION

John and Mark, we have finalized our negotiations with NGX and have receive=
d=20
from them final executed paper for our execution.  All of them (NGX, OM,=20
Enerdata and Zarzeczny) have agreed (with the exception of Westcoast, who i=
s=20
not really relevant and who sold out their position in NGX to OM after=20
commencement of the litigation). =20
By its terms, we have until Friday to confirm our agreement.  The key terms=
=20
are:
1. EOL third-party transaction data will be included in the index on a=20
real-time basis;
2. Other electronic trading systems may have their data included in the ind=
ex=20
if they meet the criteria for inclusion (similar product, audit rights) (i.=
e.=20
we deleted the "most favour nations" requirement for inclusion of other=20
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=20
trades at least 50,000 TJ=01,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 =01) bu=
t no=20
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=20
index:=20
 (b) post, settle against, or use in any transaction, any alternative or=20
competing index;
 (c) provide information to Gas Daily and Inside FERC, etc;
 (d) display any transactional information on EOL;=20
11. Term is 3 years, commencing after information transfer systems are in=
=20
place, but not later than Dec. 31 (failing which lawsuit is revived, but=20
against NGX only);
12. Enron can terminate at any time on 60 days notice (but lawsuit is=20
released);
13. Enron can terminate at any time for NGX breach (lawsuit is revived, but=
=20
against NGX only);
14. NGX can change its products and Enron has the option to change and be=
=20
included or not to change;
15. The method for calculating and compiling the index cannot be changed in=
=20
the future without our approval, and the agreements between NGX and Enerdat=
a=20
which give NGX the rights to the index cannot be amended or terminated=20
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=20
Zarzeczny.
This has been a tremendous amount of work with little involvement by outsid=
e=20
counsel.  Both Rob and I believe it is an excellent deal for Enron given th=
e=20
fact that pursuing the lawsuit will be extremely costly (both in terms of=
=20
expenses and the time and effort of dedicating resources to the litigation)=
=20
and difficult to litigate.  The deal really amounts to an option to Enron t=
o=20
have its EOL data included in the index for C$25,000 and releasing the=20
lawsuit.  Please let me know by Friday if we want to execute.

Regards, Peter.