Source Code Escrow. Pursuant to 62 O.S. § 34.31, if customized computer software is developed or modified exclusively for a State agency, the Supplier has a continuing obligation to comply with such law and place the source code for such software and any modifications thereto into escrow with an independent third party escrow agent. Supplier shall pay all fees charged by the escrow agent and enter into an escrow agreement, the terms of which are subject to the prior written approval of the State, including terms that provide the State receives ownership of all escrowed source code upon the occurrence of any of the following:

Source Code Escrow. If either the Product manufacturer/developer or the Contractor offer source code or source code escrow to any other commercial customer, or if either entity seeks bankruptcy protection, then the Contractor shall either (1) provide licensee with source code for the Product, (2) place the source code in a third-party escrow arrangement with a designated escrow agent, which shall be identified to the Department, and which shall be directed to release the deposited source code in accordance with a standard escrow agreement acceptable to the Department, or (3) certify to the Department that the Product manufacturer/developer has named the State, acting by and through the Department, and the licensee, as named beneficiaries of an established escrow arrangement with its designated escrow agent, which shall be identified to the Department and licensee, and which shall be directed to release the deposited source code in accordance with the terms of escrow. Source code, as well as any corrections or enhancements, shall be updated for each new release of the Product in the same manner as provided above and such updated shall be certified in writing to the Department. The Contractor shall identify the escrow agent upon commencement of the Contract term and shall certify annually that the escrow remains in effect in compliance with the terms of this paragraph. The State may release the source code to licensees under the Contract which have licensed Product or obtained services, and which may use the copy of the source code to maintain the Product.

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Source Code Escrow. 1. For all computer software furnished to the District with the rights specified in section B.2, the Contractor shall furnish to the District, a copy of the source code with such rights of the scope as specified in section B.2 of this clause. For all computer software furnished to the District with the restricted rights specified in section B.1 of this clause, the District, if the Contractor either directly or through a successor or affiliate shall cease to provide the maintenance or warranty services provided the District under the contract or any paid-up maintenance agreement, or if the Contractor should be declared insolvent by a court of competent jurisdiction, shall have the right to obtain, for its own and sole use only, a single copy of the current version of the source code supplied under the contract, and a single copy of the documentation associated therewith, upon payment to the person in control of the source code the reasonable cost of making each copy.

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See more samples of Source Code Escrow

Source Code Escrow: Everything you need to know

Source code escrow places software code, data, and documentation in a secure escrow account from a third party in order to mitigate risk during software license negotiations. For example if the software vendor goes out of business, a buyer of the software may request a source code escrow to access the code and other critical materials used to maintain the software.
An organization always ensures that it takes all the required steps that protect the company from any risk exposure that it may face. Source code escrow provides safekeeping against one of such risks. Escrow is an essential concept for companies who deal with or are dependent on a customized software or personalized technological service.
Escrow as a concept is used in various forms, from domain name escrow to trade escrow. The term escrow essentially means safeguarding. One can keep the software, data, a service, or SaaS, etc., in escrow.
An escrow includes an escrow agent who will act whenever there is a dispute between both the parties that are involved in the agreement. These parties include a software vendor, the one who has created the source code and is not selling it to the second party, the software licensee, or the buyer. The vendor must ensure that they deposit the source code while the licensee has the right to release the source code.
A source code escrow helps avoid disputes in the future by enabling the presence of a neutral and independent escrow agent. The agent must ensure that throughout the agreement. The copyright and assets of the vendor are protected and respected while also providing the licensee with the required protection.

How does a Source Code Escrow Work?
Understanding Source Code Escrow Better
Do You Need a Source Code Escrow?

How does a Source Code Escrow Work?

A source code escrow agreement is signed in the same way the other escrows work. Once the terms and conditions of the escrow are agreed upon by both parties, they choose an agent. Here are the responsibilities of each party involved in the agreement that ensures smooth execution of the escrow.

Vendor:

The vendor will make the initial deposit of the material over which the escrow is being signed.
They also need to ensure that they will provide updates whenever necessary for the material that is provided.
They also need to provide market representations and guarantee regarding the material provided.

Buyer:

During the tenure of the agreement, it is the buyer who overlooks the compliance between the vendor and the escrow agent.
They also have the right to request any additional verification services pertaining to the material provided when needed.

Escrow Agent:

It is the agent who receives the final material that the escrow is concerned with and provides the receipt to the buyer.
They offer additional verification services whenever requested by the buyer.
Until the conditions of the release of the material are fulfilled, the buyer will hold on to and control the material provided under the agreement.

Understanding Source Code Escrow Better

Here is the short vocabulary that will help you understand source code escrow, and it's working better.

Type of Escrow Agreement

Various kinds of escrows can be managed and overlooked by an agent. Most of these are related to technology and work the same way on the ground. There exists technology escrow that is concerned with certain kinds of technologies such as prototypes or an encryption key.

Other escrows include SaaS escrow that is related to the technology and software related to SaaS, such as data, virtual machines, code, etc., and domain name escrow that holds the domain name of the website. This page dives deeper into the types of escrows.

Deposit Material Description

An escrow must contain sufficient details of the deposited material over which the agreement is being reached. The provided material should match the details that are provided in the escrow as well.

The description should include the type of technology that is involved in the product, the source code language, and maintenance documents. It should also include all other information that can help a programmer or a software engineer to work with, modify, maintain, and enhance the source code without any help from the vendor.

Designation of Paying Party

The paying party can either be the buyer, the vendor, or both. This individual has to cover the expenses, including the setup fee and an annual fee, to maintain the agreement.

Single Buyer or Multiple Buyer

The agreement includes three parties. Out of these, the buyer can include a singular entity, or there can be multiple beneficiaries included in the agreement that receive the concerning source code or technology. It can become a little complicated to manage the relationship and rights of both parties in such an agreement.

Release Conditions

These conditions should be as detailed as possible in the agreement. They may vary from one transaction to another based on the financial condition of the vendor. If the vendor enters bankruptcy, the conditions should detail the procedure of release of the source code to be followed in such a situation.

Another form of the condition that should be included is the possibility of occurrence of a future event such as the vendor falling to operate or function as per the course detailed in the agreement. The buyer must provide a notice period to decide whether the Release Conditions are true or not.

Verification Services

Verification services are fulfilled by the agent that ensures the functionality, usability, and accessibility of the material that is deposited by the vendor. There can be various tests included in the verification services, depending upon the nature of the product. These tests are necessary to ensure that the material provided can be executed and used by the buyer in a favorable working environment.

Do You Need a Source Code Escrow?

Now that you have understood the concept and primary function of escrow, the next step is to analyze whether you need it or not. Your need for a source code escrow will depend upon the following factors. To get a detailed analysis, you can refer to this page.

Operational Dependency: Consider you and your organization's dependency on the software. Tally how many employees will be affected if there is a malfunction or irregularity in the forward. Also, estimate the revenue that will be affected because of its unavailability. Higher the numbers, the more the probability that you should get an escrow. Also, consider the time it will take to get a new vendor on board if the current one faces some financial issue.

Vendor Assessment: A new vendor needs to be assessed and analyzed. You will need to ensure that they have a solid track record and product offering. Consider what will happen if the vendor is bankrupt or acquired in the middle of the process.

An escrow is an essential tool that makes sure that the software or technology that your company is dependent on is kept safe from any risk in the future. It is effective and unavoidable with the constant changes in technology.

More Samples of Source Code Escrow

Source Code Escrow. (a) At DIR’s request, Successful Respondent shall deposit in escrow with an escrow agent selected by DIR the source code and related documentation for Successful Respondent Owned Materials consisting of Software in any of the following circumstances:

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Source Code Escrow. At DIR's request, Service Provider shall deposit in escrow with an escrow agent selected by DIR the source code and related documentation for Service Provider Owned Materials consisting of Software in any of the following circumstances:

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Source Code Escrow. (a) Prior to the Effective Date, Service Provider shall have deposited a current version of the source code (to the extent such source code is owned by Service Provider) for the GHX Exchange Software and the Client Software and any other software required to provide the Services and any associated documentation that exists, other than software relating to the Novation Marketplace as it exists immediately before the Effective Time (the “Current Version”) with Iron Mountain, Inc. or another escrow agent reasonably agreed by the Parties (the “Escrow Agent”) pursuant to an escrow agreement executed by each of the Parties and the Escrow Agent, in form and substance satisfactory to each of the Parties (“Escrow Agreement”). The Escrow Agreement shall be based on the Escrow Agent’s standard three-party master escrow agreement form, with release conditions conforming to the Activation Events and such other changes as are approved by the Parties. None of the Parties shall unreasonably withhold or delay its approval of the Escrow Agreement. Service Provider further agrees to deposit copies of the source code of any Updates or other modifications to the GHX Exchange Software or the Client Software (together with the Current Version, the “Source Code”), to the extent there are Updates or other modifications delivered to Novation, VHA, UHC and HPPI, each six (6) months during the Term of this Agreement. Promptly after the Effective Date and from to time to time hereafter, Service Provider shall deposit, or cause to be deposited all source code relating to NPS in the escrow arrangements contemplated by the Escrow Agreement.

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Source Code Escrow. Schedule 4.22(c) contains a list of all ------------------ agreements under which Company has delivered source code for any Company Software Product to be held in escrow and released upon the occurrence of certain events or conditions. Company has made available to Digital Angel copies of all such source code escrow agreements.

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Source Code Escrow. Neither the Company nor any of its Subsidiaries has disclosed, licensed, made available or delivered to any escrow agent or other Person any of the source code for any Company Software (except such a Person that is a third-party service provider or other agent obligated in writing to (i) maintain the confidentiality of, and not disclose, such source code and (ii) use such source code only in the provision of services to the Company or any of its Subsidiaries), and, as of the date of this Agreement, no event has occurred that would legally or contractually require the Company or any of its Subsidiaries to do any of the foregoing. Neither this Agreement nor the consummation of the Merger will result in the disclosure, license, or making available or delivery to a third party of any source code included in the Company Software (including any release from escrow of any such source code).

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Source Code Escrow. 11.1 To secure the performance of Licensor's various obligations hereunder and under the Maintenance Agreement, concurrent with the execution of this Agreement, Licensor and Licensee shall execute and deliver a Source Code Escrow Agreement in substantially the form attached hereto as Exhibit A.

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Source Code Escrow. As of the Effective Time, with respect to all Source Code owned or controlled by Service Provider immediately before the Effective Date, Service Provider has taken all actions required to be taken on or before the Effective Date pursuant to Section 6.4.5.

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