Jan slides

Software Compliance Risks in M&A Transactions

Presented by Robert J. ScottManaging Partner Scott & Scott, LLP

www.ScottandScottllp.com


Types of Transactionsο Stock Transactionsο Asset Purchase Agreementsο Reverse Triangular Mergersο Statutory Mergers

Copyright © 2013 – Scott & Scott, LLP


Important License Provisions ο Definition of Licenseeο Scope of Confidentiality Provisionο Provisions related to Third-Party Accessο Outsourcing & Third Party Maintainer Provisionsο Transferability Provisions ο Definitions of Affiliate ο Anti-Reverse Engineering Provisions ο Indemnity and Holdback Provisions



Cincom vs. Novelis ο No Right To Transfer Unless Specifically Granted In

The License Agreement ο Reverse Triangular Merger Constitutes A Prohibited

Transfer Under The Terms Of The License ο Acquiring Company Required To Relicense Software

Previous Licensed



ACS vs. Cincomο Cincom Claimed That Xerox Transaction Constitutes

A Prohibited Transfer Citing Cincom vs. Novelis ο ACS Filed Declaratory Judgment Action In Northern

District Of Texas Seeking A Declaration That No Additional License Fee Was Owed

ο Matter Was Settled Out Of Courtο Cincom Vs. Novelis 6th Circuit Opinion Remains

Prevailing Law



Deal-Specific Issuesο Stock Transactions – Look For Change In Control

Language Usually Greater Than 50%ο Asset Purchase – Look For Assignment Rights,

Silence Is A Problem ο Joint Ventures – Look For Definition Of Affiliates And

Third-party Access And Confidentiality Provisions ο Mergers – Review Statutory Merger Statutes



Assessing the Risk sο Review the Value of the Software in Questionο Determine Whether Publisher Typically Allows

Transfer if Askedο Review Language in License Agreement to

Determine Definition of Affiliateο Research Publisher’s Position Regarding Other

Companies’ License Transfersο Identify Transfer Fees Outlined in License

Agreement, If Any



Risk Mitigation Strategyο Pre-Deal Software License Reviewο Adding Software Asset Schedules to Deal Docsο Post-Deal Notice and Permissionsο Negotiating New License Terms


Contact Information

Robert J. Scott, Esq.Managing PartnerScott & Scott, LLP.1256 Main Street, Suite 200Southlake, TX 76092

Phone: (214) 999-2902Fax: (214) 999-0333

E-Mail: [email protected]



Jan slides

Technology

Transcript of Jan slides