RE: Contract Settlement - Required Approvals

This should not be a problem under the Merger Agreement so long as discontinuing the business unit/operation is "prudent in Enron's good-faith business judgment". While that seems self-evident, we may want to document that language somewhere (in resolutions, a DASH, etc.) just to protect ourselves. As to the payment, it is fine--and we don't need to track it--if the contract being terminated is not material. Sounds like it isn't.

-----Original Message-----
From: Schuler, Lance (Legal)
Sent: Friday, November 16, 2001 11:07 AM
To: Del vecchio, Peter; Henry, Joseph
Subject: FW: Contract Settlement - Required Approvals

Should be okay; we need to check getting out of businesses though - as Joe and I discussed earlier. Would you please answer his question, and cc me and Mark. Thanks.

W. Lance Schuler
Enron North America Corp.
1400 Smith Street
Houston, Texas 77002
Phone: 713/853-5419
Fax: 281/664-4890
Email: lance.schuler-legal@enron.com

-----Original Message-----
From: Greenberg, Mark
Sent: Friday, November 16, 2001 9:42 AM
To: Schuler, Lance (Legal)
Cc: Haedicke, Mark E.; Taylor, Mark E (Legal)
Subject: Contract Settlement - Required Approvals

Lance -

It is my understanding that Enron Credit is currently closing down operations. In light of this, EC has a contractual obligation to a company called Risk Metrics Group. The obligation arises out of the development and hosting by RMG of a website devoted to the use of EC's credit risk data - the site being mainly focused toward subscribers to other RMG products. Since we are terminating the development and hosting agreement - in essence shutting down the site - we will owe RMG approximately $96,000.

While I realize this is a small sum, I wanted to make sure (1) there are no approvals under the merger agreement that are required for a settlement of this nature and (2) if we are tracking this type of liability for merger purposes, that I provide the necessary information to the appropriate personnel.

Please let me know if either of the above are necessary.

Thanks.

Mark