Hi Louise / Jay

If you can help shed any light on your vendor relationship with Legato
and Rational, and whether you believe there is scope for reviewing
these licenses with a view to changing the relevant license agreements,
that would be extremely helpful.  We understand that both these
products would be critical components to running the Netco systems.

Thx
Ursula

-----Original Message-----
From: Roger.Ross
Sent: 05 January 2002 18:07
To: bwells
Cc: Roger.Ross; stephen.kahn; Mills, Ursula
Subject: RE: Service Bureau Prohibitions



Thanks Bert.  As promised, I am following up with E Company on the
various
assigned agreements that prohibit providing service to a third party.
Feel
free to have Ursula pursue the question simultaneously.  I am also
looking
into what services the parties intend Fire to provide for transition as
this is not a part of the transaction that I have been following
closely to
date.

Roger






"Wells, Bert" <bwells@cov.com> on 01/05/2002 01:46:31 PM
cc:   "'ursula.mills@ubsw.com'" <ursula.mills@ubsw.com>
Subject:  RE: Service Bureau Prohibitions




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> intended recipient, please immediately advise the sender by
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>
> Steve and Roger,
>
> We are reviewing a sampling of third party software licenses E
> Company entered and seem to have found two licenses not
> previously noted by E Company as containing an express
> prohibition on use as part of a service bureau.  As I discussed
> with Roger briefly yesterday, this we assume is as much an issue
> for you as it would be for us because operation of the IT on a
> service bureau basis initially is a key mutual expectation.
> Both licenses are listed on your draft Schedule 2.1(f)(i) to the
> Contribution Agreement so I'm guessing they are material to the
> Business and the relevant software would have to be operated for
> U Company's benefit.  U Company hasn't spoken to any E Company
> IT personnel to learn the significance of the affected software,
> but Ursula Mills is planning to raise the question with Jay Webb
> or another appropriate person.
>
     The two licenses are:

     1.  Enterprise Software License Agreement between Legato
Systems, Inc. and [E] Corp, dated as of Sept. 27, 2001, respecting
numerous software products generally branded with the names
NetWorker, GEMS, Celestra, Octopus and others.  Section 2.2
provides:  "Restrictions on Use.  Licensee shall not, and shall
not aid, abet or permit any third party to: . . . (iii) . . . use
for timesharing or service bureau purposes or otherwise use . . .
the Software . . . for the benefit of third parties . . . ."

     2.  Products License Agreement #3185 Modified for [E]
Corp, issued by Ration Software Corp., dated as of Feb. 17, 1998,
respecting various software products branded Clearcase, Rational,
Purify, and Quantify and others.  Section 1.1 provides:  "General
Grant of License. . . . You may not rent, lease or use the Product
in a service bureau capacity. . . . ."

     We continue to review the agreements for the Service
Bureau issue as it is the most pressing from a time perspective.
We have already found several ambiguous licenses and will bring
those to your attention as a group later.

     If other express provisions such as the above turn up, I
will let you know on a case by case basis as this issue is one our
IT personnel are taking seriously.

     Bert


> ....................................................
> Bert Wells
> Covington & Burling
> 1330 Avenue of the Americas
> New York, New York 10019
> (212) 841-1074 (voice)
> (212) 841-1010 (fax)
> bwells@cov.com
> ....................................................
>







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