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
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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


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