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Disputed Software Licenses

It may seem odd – but we frequently see problems with software licenses when selling middle market aerospace and defense companies.

Simply stated, most middle-market aerospace and defense companies do not pay a lot of attention to contracts administration for their software licenses, including but not limited to: ERP and CRM Systems , CNC controllers, design software, databases, firmware, and desktop applications. However, in post-LOI due diligence, it is almost always on the buyer’s checklist – to confirm that all software license agreements are properly documented, evidence the appropriate revisions, and are paid to date.

Many of these disputes are small problems that require little time or money to resolve. Unfortunately, far too often we have had deals delayed by more than 30 days and have incurred substantial legal costs, because there are meaningful deficiencies in significant software license agreements.

As we often say in our Deal Notes® :   preparation is the key. In this case, it is key to preventing software license disputes. Long before you start talking with buyers, make sure that you complete a thorough contracts compliance review of all your software license agreements.

Have a great day everyone,

Bill Alderman
President