Bankruptcy, insolvency, change of ownership, maintenance or support issues, discontinuation of a specific software, these are just a few circumstances leading to supplier failure. Known as ‘release conditions’, these events are agreed to in advance and formalized in the escrow agreement. If a release condition occurs, the software client will be granted access to the deposited source code, allowing them to continue using the software.
In practice, once the release conditions are defined, agreed upon and the contract is signed, the technology supplier will deposit the source code and other related documentation (e.g. database, black book, user guide, technical documentation, passwords, etc.) with the escrow agent. At Vaultinum, these elements are immediately encrypted to ensure confidentiality and then deposited on our secure servers located in Europe.
Upon the occurrence of a release condition, the client is entitled to ask the escrow agent for access to a copy of the deposited elements. At Vaultinum, we enforce a strict verification and release procedure to securely transfer the deposited elements to the client. The client is then able to continue using the software and ensure their business operations.
DIFFERENT TYPES OF SOFTWARE ESCROW:
At Vaultinum, a software escrow agreement is possible no matter the delivery method of the software, whether it is installed on client machines, SaaS or cloud based.
Vaultinum offers 3 types of software escrows depending on the needs of the supplier and client.
The simplest version of an escrow agreement is the access clause which is a contractual provision that is included in the main commercial contract between the technology supplier and client. It defines the conditions under which the source code will be released and names the escrow agent. For this clause to be effective, the technology supplier must deposit their source code and other relevant elements with the named escrow agent. With a Vaultinum Access Clause, the technology supplier is the only one to have access to the online dashboard to manage the contract.
A bipartite escrow agreement is an independent contract between two parties: the technology supplier and the client. Once the contract is signed, the technology supplier will deposit their source code and other relevant elements with the escrow agent. With a Vaultinum bipartite escrow agreement, both the technology supplier and the client have access to the online dashboard to manage the contract.
A tripartite escrow agreement is an independent three-party software escrow contract between the technology supplier, client, and escrow agent. Once the contract is signed by all three parties, the technology supplier will deposit their source code and other relevant elements with the escrow agent. With a Vaultinum tripartite escrow agreement both the technology supplier and client have access to the online dashboard to manage the contract, with Vaultinum ensuring that the terms of the contract are respected (e.g. frequency of updates, payment of fees, etc.).
Our IT and legal experts are available to guide you throughout the process.
Before you start,
⇨ you will need to make sure you have prepared the following elements:
- Files containing the materials to escrow (source code, documentation, database, etc.).
- Defined the release conditions (bankruptcy, insolvency, change of ownership, maintenance or support issues, discontinuation of a specific software, etc.).
⇨ And made a few decisions:
- Frequency of updates,
- Type of Deposit,
- Term of the escrow (number of years),
- The level of verification, if applicable,
- The length and limitations on use of the accessed escrow (rights of use, ownership, time limitation, etc.),
- Payment of escrow agent fees (this can be shared),
You are now ready to go. Thank you for choosing Vaultinum!