Transfer of Polar software licenses

What happens to my license if my company is bought?

Clause 2 of the Polar software license agreement states that software is licensed to an individual or entity, is non-transferable, and may not be loaned or distributed by the licensee. Clause 3 states the conditions in change of ownership which are deemed to be assignments.

Situations such as company mergers or takeovers raise significant issues regarding licenses held by the original entity:

• The license terms grant a license to the original licensee ONLY – if the original licensee ceases to exist, then so does the license. The original licensee ceases to exist if it is absorbed within another organisation (e.g. in a takeover) or its company registration number changes (e.g. in a re-formation after entering administration.)
• In cases where the original licensee continues to exist, the product may NOT be shared or distributed with other persons, departments or organisations outside the original licensee organisation.
• The license may not be assigned to another party and conditions which the licensee deems as assignment are expanded below.

Novation

If it is desired to share or transfer the license outside the original licensee organisation this will necessitate a change to the license ("novation").

Novation refers to a change of the terms of the license, and therefore requires the consent of the licensor (Polar Instruments Ltd.)

Changes to the terms of the license will be made at Polar Instruments’ discretion and the company reserves the right to charge for that service.

Novation may be granted provided ALL the following are met:

• When all three parties are in agreement to novate i.e. old entity / new entity / Polar Instruments Ltd
• Polarcare is reinstated up to the present date.
• After novation Polarcare is compulsory - i.e. no licenses if Polarcare lapses, therefore novation is conditional on ongoing Polarcare.
• At the time of novation all waivers and concessions are removed or renegotiated (for example, if a small company has a waiver on nodes we may choose to revoke this if the acquiring business is a much larger company)

Transfers and Assignments

For the purposes of this section a transfer or assignment of an entity’s license rights will be deemed to have occurred:

• if there is a change in the entity’s unique identification number issued in its country of registration; or
• if a third party acquires beneficial ownership of fifty percent (50%) or more of the entity’s (or its parent’s) assets; or
• in the event of a merger, consolidation or other business combination between the entity (or its parent) and one or more third parties if its beneficial owners prior to the transaction own less than fifty percent (50%) of the assets of the surviving entity after the transaction.

Polar may grant an assignment subject to certain conditions being met. Please contact Polarcare in this situation.

Examples

Company A holds a license for a Polar software product. If company B purchases company A and then closes or absorbs it (i.e. so that company A ceases to exist) then the license is terminated.

Company A holds a license for a Polar software product. If company B purchases company A but company A continues to operate as an identifiable entity then the license for company A to use the software continues. However the license is valid for company A only. Company A cannot transfer it to another company in the group (or its parent) as the license is "non-transferable ". Neither can company A allow other companies in the group (or its parent) to use the software ("...You may not loan or distribute the Software...").