GUIDANCE NOTEEASY GUIDE TO USING ESCROW SERVICES
An escrow agreement is commonly used where a developer (licensor) licenses software to a third party(licensee). There will (or should) be a main software licence agreement in place between the licensor and thelicensee. Under this software licence agreement, there will often be a provision specifying that the source code
for the software is to be held in escrow so that if certain specified events occur (e.g. the licensor’s bankruptcy),
the licensee will be able to have access to the source code and continue to maintain and support the software hehas been licensed (and paid for).The escrow agreement will be between the licensor, licensee and an independent escrow agent such as NCC.This arrangement prot
ects the licensee’s investment in the software and ensures he will be able to continue to
use it no matter what happens to the licensor. It also offers the licensor protection in that he does not have togive the source code to the licensee and risk unlicensed use of the same by the licensee.The following guidance is based on the example of escrow services offered by NCC in order to give you an ideaas to how to enter into an escrow agreement. There are other companies which offer escrow services.
Decide whether you require a single licensee agreement or a multi licensee agreement.a.
= for bespoke software which has been developed for / commissioned by oneclient (e.g. websites).b.
= for generic software which is being licensed to more than one licensee (e.g.Microsoft Office).2.
Decide whether amendments need to be made to the standard template (whether single or multi-licensee).a.
= complete order form and send to NCC. NCC will then send agreementsto parties for signature.b.
template = complete order form and send with requested amendments to NCC.
NCC’s legal team will amend the agreements accordingly and send to parties for agreement and
One-off fee to be paid when sending in order form:
Annual fee, 1
instalment invoiced when agreements have been signed:
If amendments are required to the standard template agreement:
One-off fee of
(based on 2 hours’ work by NCC’s legal team