Message-ID: <2344447.1075840359397.JavaMail.evans@thyme> Date: Fri, 4 Jan 2002 14:58:35 -0800 (PST) From: greg.piper@enron.com To: tim.detmering@enron.com, c..koehler@enron.com Subject: Licenses, services and NetCo Deal Cc: jeffrey.mcmahon@enron.com, sally.beck@enron.com, beth.perlman@enron.com, jenny.rub@enron.com, raymond.bowen@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: jeffrey.mcmahon@enron.com, sally.beck@enron.com, beth.perlman@enron.com, jenny.rub@enron.com, raymond.bowen@enron.com X-From: Piper, Greg X-To: Detmering, Tim , Koehler, Anne C. X-cc: McMahon, Jeffrey , Beck, Sally , Perlman, Beth , Rub, Jenny , Bowen Jr., Raymond X-bcc: X-Folder: \sbeck\Inbox X-Origin: BECK-S X-FileName: sally beck 1-28-02.pst Want to clarify if the Estate has the right to do a services deal with a 3r= d party with our copy of the licenses after the NetCo deal is done. =20 =20 Here is the issue (as per an old draft of the Assignment and License Agreem= ent). =20 In the current deal, Enron assigns, sells, transfers and conveys to NetCo a= ll of the rights, title and interest in and to the software and intellectua= l property rights. In other words, NetCo will be the owner of the Enron de= veloped applications or software including EOL, TAGG, ERMS, DCAF, Sitara, U= nify, EnPower, etc. Enron or the estate gets back a worldwide, perpetual, = irrevocable, nonexclusive, fully paid-up, royalty free license of all of th= em for any purpose. I am not sure why the original deal was done this way = as opposed to Enron continuing to own all the software and just granting a = perpetual, royalty free license to all the applications to NetCo, but I rea= lize we are in the 11th hour. =20 What it also says is that Enron shall not have the right to grant any subli= cense to any third party for use within the field of "wholesale trading of = natural gas and electricity within North America." It also says that NetCo= can't, as long as Enron owns 20% of NetCo, assign or license the software = to any third party or use the software for any of the prohibited commoditie= s. =20 Is trading the act of buying and selling of the commodities? Once a NetCo = deal is completed, we want to have NetCo and the estate agree that trading = is buying and selling, not service or fulfillment. I would like the Estate= to maintain the right and ability to sub-license all the applications asso= ciated with logistics and settlement (not EOL or those systems associated w= ith buying and selling and order capture) to a third party that would have = the opportunity to build a mid and back office processing and service busin= ess around those sub-licenses in all commodities, including gas and power i= n North America. The Estate may even outsource to this 3rd party and take = back a service agreement from this 3rd party as well as some of the future = profit it generates from this service company. This would allow the estate= to get value for the applications and associated employees on a service de= al. NetCo should not be concerned about fulfillment as being defined as co= mpetition. Also, the estate is keeping CommodityLogic and it is much more = valuable as a tool within a complete services entity. =20 I have not heard whether the final purchase and sale agreement has a non-co= mpete or not. If there is not one, then doing the above should be no issue. =20 Need an answer quick on if we need to change anything or if you think that = we have this right as written or if you think NetCo has an issue. =20 Also, I assume that we can use our licenses within the estate and its affil= iates and subs any way we want in all commodities. =20 Thanks.=20 Greg Piper=20 =20 =20 _____ =20