Source Code Escrow Service Agreement

The software licensor securely files the application source code with the fiduciary agent. In the event that a vendor fails to comply with the software license agreement or declares bankruptcy, the source code may be disclosed by the fiduciary agent to the licensee. This flexibility allows experienced clients to use trust services to meet a wide range of requirements. While some clients view a source trust service as an insurance policy to protect themselves in the event of a low probability of an exit event, source code escrows often do not offer adequate protection, as the source code at the time of publication is often outdated, defective, or does not meet the customer`s needs. According to Iron Mountain, 97.4% of all trust deposits analyzed were deemed incomplete and 74% of additional entries required by developers to be compiled (www.ironmountain.com/resources/escrow/IMD_DS_TechVerification.pdf). Take, for example, what happened to Radisson Hotels Worldwide. A few years ago, Radisson commissioned an external software company to maintain its critical reservation system. The software provider has agreed to double the Radisson software code. The code was eventually released as a result of the software vendor`s exterior. But after its release, Radisson found that the fiduciary service source code could not even fulfill the fundamental and critical mission of booking guests at Radissons hotels. The shared code lacked many components and the trust account did not contain documentation developed after the software`s first fiduciary service (www.bankruptcy.rutgers.edu/source_code_escrow.pdf). This unfortunate discovery is not atypical for source code trust agreements, especially when the client has not been vigilant in constantly monitoring and verifying what is stored in the trust company.

In addition, modern Escrow software companies will offer escrow synchronization or automated scripts that completely automate the submission process. Software Escrows reduce the risk associated with software licenses for both parties by storing source code and other critical materials with a neutral 3rd party escrow agent. . . .

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