Business Transaction Protection is language in the agreement that provides some much needed flexibility in the event of a business transaction that significantly alters the value of the Oracle software deployment
Why is it Important?
These business transactions are often the source of many audit demands, and the standard Oracle language is vague and limited on what rights a customer has with regard to these types of transactions.
We suggest clients include language in the agreement that gives added protections and flexibility for business transactions like mergers, acquisitions, divestitures, carve-outs, etc. Transition Service Agreements (TSAs) should be constructed to allow the divesting entity to serve as a service bureau for a reasonable period of time during a transition, but then the divested entity should be able to acquire its license capacity from the divesting entity (and pick up the pro-rata portion of the support cost) and the divesting entity should experience a reduction in its entitlements, but it should also get a pro-rata reduction of its annual maintenance service and support costs.
Oracle agreements do not currently offer this protection, and a divested entity has no ability to buy from its divesting entity and a divesting entity has no ability to reduce ongoing support costs once a divestiture is complete.
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