Software Escrow Agreement

Software Escrow Agreement

This Software Escrow Agreement is made on [EFFECTIVE DATE] (the "Effective Date") between [LICENSOR NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [LICENSOR ADDRESS] (the "Licensor") and [LICENSEE NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [LICENSEE ADDRESS] (the "Licensee") and [ESCROW AGENT], a [CORPORATE JURISDICTION] corporation with its principal place of business at [ESCROW AGENT ADDRESS] (the "Escrow Agent").

The parties agree as follows (the capitalized terms used in this agreement, in addition to those above, being defined in section 19 (Definitions)):

1. Appointment of Escrow Agent. The Vendor and the Purchaser hereby jointly appoint the Escrow Agent to act as escrow agent on their behalf in accordance with the terms of this agreement. The Escrow Agent accepts this appointment in accordance with the terms of this agreement.

2. Deposit of Escrow Material. The Licensor shall deposit the Escrow Material with the Escrow Agent within [DEPOSIT PERIOD NUMBER OF DAYS] days of the Effective Date.

3. Modification of Escrow Material. Upon the Licensor's delivery to the Licensee of a new version of the Licensed Software under the License Agreement, the Licensor shall, within [MODIFICATION DEPOSIT NUMBER OF DAYS] days after delivery, provide the Escrow Agent with an updated version of the Escrow Material.

4. Escrow Agent's Duties

4.1. Environment. The Escrow Agent shall retain the Escrow Material in a safe and secure environment.

4.2. Technical Verification. The Escrow Agent is not obligated to determine the existence, relevance, completeness, or accuracy of the Escrow Material.

5. Limited License. The Licensee may make copies, modify, and create derivative works of the Escrow Material as may be necessary to ensure continued usage of the Licensed Software.

6. Intellectual Property Rights

6.1. No Assignment to Licensee. The release of the Escrow Material to the Licensee will not act as an assignment to the Licensee of any Intellectual Property Rights in the Escrow Material

6.2. Title to Media. Upon deposit of the Escrow Material, the title to the Media is transferred to Escrow Agent. Upon delivery of the Escrow Material back to Licensor, the title to the Media will transfer back to the Licensor. If the Escrow Material are released to the Licensee, the title to the Media will transfer to the Licensee.

7. Release of Escrow Material

7.1. Occurrence of Release Event. The Licensee will be entitled to the release and delivery of the Escrow Material upon the occurrence of a Release Event.

7.2. Notice of Release Event. The Licensee shall give Notice to the Licensor and the Escrow Agent of the occurrence of a Release Event, giving details, and shall instruct the Escrow Agent to release the Escrow Material.

7.3. Delivery of Escrow Material. The Escrow Agent shall deliver the Escrow Material to the Licensee within [RELEASE PERIOD] days of the Licensee's Notice of the Release Event unless, before the release, the Licensor disputes the occurrence of the Release Event.

8. Payment Obligations

8.1. Escrow Fees. The Licensee shall pay the Escrow Agent the fees listed in Schedule A (Escrow Fees).

8.2. Payment Net of Taxes. All payments owed to the Escrow Agent are exclusive of taxes. The Licensee shall pay, and the Escrow Agent shall collect and remit, any taxes payable.

9. Term. This agreement will begin on the Effective Date and continue until terminated in accordance with its terms.

10. Escrow Agent's Representations

10.1. No Conflicts. The Escrow Agent is under no restriction or obligation that may affect the performance of its obligations under this agreement.

11. Acknowledgements. The parties acknowledge to each other as follows:

11.1. No Trust Created. The Licensor and the Licensee have appointed the Escrow Agent solely as a custodian, bailee, and agent. No trust is intended to be, is, or will be created by this agreement.

11.2. No Other Obligations. The Escrow Agent has no obligations other than those detailed this agreement.

11.3. Not Party to Other Agreements. The Escrow Agent will not be considered to be a party to, aware of the contents of, or bound by any agreement between the Licensor and the Licensee other than this agreement.

12. Confidentiality

12.1. Confidentiality Obligations. The Escrow Agent shall hold all Escrow Material in confidence in accordance with the terms of this agreement, solely for the purpose of carrying out its obligations under this agreement.

12.2. Permitted Disclosure. The Escrow Agent may disclose Escrow Material to its representatives but only

(a) to the extent necessary to carry out its obligations under this agreement,

(b) if the Escrow Agent first informs them of, and directs them to maintain, its confidential nature in accordance with the terms of this agreement[, and

(c) upon the Licensor's request, if they each first enter into separate written agreements to that effect[ in a form acceptable to the Licensor].

12.3. Required Disclosure. The Escrow Agent may disclose Escrow Material to a third party if it is required to do so by Law but only if, before that disclosure, the Escrow Agent, to the extent permitted by Law,

(a) gives the Licensor Notice to allow it a reasonable opportunity to either seek a protective order or other appropriate remedy or waive the Escrow Agent's compliance with this section 12 (Confidentiality),

(b) reasonably cooperates with the Licensor[, at the Licensor's expense,] in its reasonable efforts to obtain a protective order or other appropriate remedy,

(c) discloses only that portion of the Escrow Material that[, having consulted with its counsel,] it is legally required to disclose, and

(d) uses reasonable efforts to obtain reliable written assurance from the third party that the Escrow Material will be kept confidential.

12.4. Value and Nature of Escrow Material. The Escrow Agent acknowledges that the Escrow Material is proprietary to and has competitive value for the Licensor. Accordingly, any disclosure to the Licensor's competitors or to the public would be detrimental to the best interests of the Licensor, which may incur losses, costs, and damages as a result.

12.5. Burden of Proof. The Escrow Agent will have the burden of proof relating to all exceptions to the definition of Escrow Material.[ The Escrow Agent may rely on its own written records in support of its position.]

13. Safety of Escrow Material. It shall use reasonable efforts to keep the Escrow Material safe.

14. Compliance with Laws. In carrying out its obligations under this agreement, the Escrow Agent shall comply with all applicable Laws.

15. Termination

15.1. Termination upon Notice. The Licensor and Licensee may terminate this agreement for any reason upon [TERMINATION FOR CONVENIENCE NOTICE] business days' Notice, signed jointly, to the Escrow Agent.

15.2. Termination upon Release of Escrow Material. This agreement will automatically terminate upon release of the Escrow Material to the Licensee in accordance with section 7.3 (Delivery of Escrow Material).

15.3. Termination upon Escrow Agent's Insolvency Event. This agreement will terminate immediately upon the occurrence of an Insolvency Event in connection with the Escrow Agent.

15.4. Termination of License Agreement. Either the Licensee or the Licensee (the "Requesting Party") may give Notice to the Escrow Agent, with a copy to the other party (the "Receiving Party"), that the License Agreement has expired or been lawfully terminated and that this agreement will therefore terminate. Unless, within [30] days of the Requesting Party's Notice, the Escrow Agent receives a counter-Notice from the Receiving Party disputing the termination of the License Agreement, this agreement shall immediately terminate.

15.5. Termination upon Breach

(a) Failure to Pay. If the Licensee fail to pay when due any amount owing under this agreement and that failure continues for [15] business days, the Escrow Agent may terminate this agreement, with immediate effect, by giving Notice to the Licensee, with a copy to the Licensor.

(b) Any Other Breach. If the Escrow Agent

(i) commits any material breach or material default in the performance of any obligation under this agreement, and

(ii) the breach or default continues for a period of [CURE PERIOD] business days after one of the other parties delivers Notice to it reasonably detailing the breach or default,

then the party that gave the Notice of breach or default may terminate this agreement, with immediate effect, by giving Notice to the Escrow Agent, with a copy to the other party.

16. Effect of Termination

16.1. Payment of Outstanding Amounts. The Licensee shall immediately pay to the Licensor all amounts outstanding as of the date of, and any amounts outstanding as a result of, termination.

(a) Delivery of Escrow Material to Third Party. Upon termination of this agreement in accordance with sections 15.1 (Termination upon Notice) or 15.3 (Termination upon Escrow Agent's Insolvency Event) or paragraph (b) of section 15.5 (Termination upon Breach), the Escrow Agent shall, within [five] days of receipt of the Notice of termination, deliver the Escrow Material to a third party jointly appointed, in writing, by the Licensor and Licensee.

16.2. Delivery of Escrow Material to Licensor. Upon termination of this agreement in accordance with paragraph (a) of section 15.5 (Termination upon Breach), the Escrow Agent shall, within [five] days of the date of termination, deliver the Escrow Material to the Licensor.

16.3. Destruction of Escrow Material. Upon termination of this agreement in accordance with section 15.4 (Termination of License Agreement), the Escrow Agent shall destroy the Escrow Material.

17. Liability for Damages

17.1. Foreseeability. No party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen on entering into this agreement.

17.2. Limitation of Liability. In the absence of gross negligence or willful misconduct, the Escrow Agent will not be liable for any actions or omissions by it or any of its representatives in carrying out its obligations under this agreement.

17.3. Reliance on Documents. The Escrow Agent may accept and rely upon any document presented to it by one of the other parties in accordance with this agreement as sufficient evidence of the facts stated in that document and will be protected in acting upon such a document.

18. Indemnification

18.1. Indemnity of Escrow Agent. The Licensor and the Licensee shall indemnify the Escrow Agent[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, and expenses (including legal fees)

(a) arising from any claim by any third party for alleged or actual infringement of intellectual property rights arising in connection with its carrying out its obligations under this agreement, or

(b) as a result of being brought into or otherwise becoming involved in any form of dispute resolution proceedings or litigation between the Licensor and the Licensee in connection with this agreement.

18.2. Mutual Indemnity. Each party shall indemnify each other party[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, and expenses (including legal fees) arising from any third party claim or proceeding brought against one party that alleges any [grossly] negligent act or omission or willful conduct of the other party[ or its directors, officers, employees, shareholders, partners, agents, or affiliates].

18.3. Notice of Claim. A party shall give prompt Notice to the other party of any claim or potential claim for indemnification under this section.

18.4. Exclusive Remedies. The rights granted under this section 18 (Indemnification) are the exclusive remedies available under this agreement in connection with the claims and losses that this section addresses.

19. Definitions. In addition to the terms at the top of the first page of this agreement, the following definitions apply:

19.1. "Documentation" has the meaning given to that term in the License Agreement.

19.2. "Escrow Material" means the Source Code and the Documentation.

19.3. "Insolvency Event" means, in connection with any party, any of the following:

(a) Insolvency. The party admits in writing that it is insolvent or unable to pay its debts, or fails generally to pay its debts as they become due.

(b) Bankruptcy. The party files a voluntary petition, or one or more of its creditors file a petition, seeking its rehabilitation, liquidation, or reorganization under any Law relating to bankruptcy, insolvency, or other relief of debtors and the petition is not removed within [90] days of filing.

(c) Receivership. A receiver or other custodian is appointed to take possession of substantially all of the party's assets.

(d) Dissolution. The party takes any action toward the dissolution or winding up of its affairs or the cessation or suspension of its activities.

(e) Liquidation. A court of competent jurisdiction enters a decree or order directing the winding up or liquidation of the party or of all or substantially all of its assets.

(f) General Assignment. The party makes a general assignment for the benefit of its creditors.

(g) Attachment. Any attachment, execution, or other judicial seizure is levied against all or substantially all of the party's assets.

19.4. "Law" means

(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and

(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.

19.5. "License Agreement" means the [SPECIFIED LICENSE AGREEMENT].

19.6. "Licensed Software" has the meaning given to that term in the License Agreement.

19.7. "Media" means the media upon which the Escrow Material is deposited with the Escrow Agent.

19.8. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this agreement.

19.9. "Receiving Party" is defined in section 14.4 (Termination of License Agreement).

19.10. "Release Event" means any of the following events:

(a) the Licensor and the Licensee provide joint written instructions to the Escrow Agent for release of the Escrow Material,

(b) the Licensor fails to correct any material flaw in the Licensed Software within [CORRECTION PERIOD] days of the Licensee giving it Notice of the flaw,

(c) the Licensor breaches any material obligation under the License Agreement, or

(d) an Insolvency Event occurs in connection with the Licensor.

(e) "Requesting Party" is defined in section 15.4 (Termination of License Agreement).

19.11. "Source Code" means the computer programming code of the Licensed Software in human-readable [OR machine-readable] form.

20. General

20.1. Entire Agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.

20.2. Amendment. This agreement may only be amended by a written document signed by all the parties.

20.3. Assignment. No party may assign this agreement or any of their rights or obligations under this agreement without the prior written consent of the other parties.

20.4. No Partnership. Nothing contained in this agreement creates a partnership, joint venture, principal-and-agent, or any similar relationship between the parties.

20.5. Third Party Beneficiaries. No person other than the parties themselves has any rights or remedies under this agreement.

20.6. Payment of Expenses. Each party is responsible for all costs (including legal fees) and other expenses that it incurs in connection with the negotiation and preparation of this agreement.

20.7. Notices

(a) Form of Notice. All notices and other communications between the parties must be in writing.

(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party's address specified in this agreement, or to the address that a party has notified to be that party's address for the purposes of this section.

(c) Receipt of Notice. A Notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth business day following mailing.

20.8. Remedies Cumulative. Except as provided in section 18.4 (Exclusive Remedies), the rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.

20.9. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

20.10. Waiver. A party's failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.

20.11. Equitable Relief. The Escrow Agent acknowledges that its breach or threatened breach of any its obligations under section 12 (Confidentiality) would not be susceptible to adequate relief by way of monetary damages only. Accordingly, the Licensor may, in that case, apply to court for any applicable equitable remedies (including injunctive relief), without the need to post any security.

20.12. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.

20.13. Dispute Resolution

(a) Arbitration. Any dispute or controversy arising under or in connection with this Agreement will be settled exclusively by arbitration in [STATE], in accordance with the rules of the American Arbitration Association then in effect by [NUMBER OF ARBITRATORS] arbitrator(s).

(b) Damages. The arbitrator(s) will not have the power to award punitive damages.

(c) Judgment. The successful party may enter the arbitral judgment in any court having jurisdiction. The arbitrator will not have the power to award punitive damages.

20.14. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.

20.15. Attorney Fees. If any party brings legal action to enforce its rights under this agreement, the prevailing party will be entitled to recover its expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.

20.16. Interpretation

(a) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa; words importing gender include all genders.

(b) Headings. The headings used in this agreement and its division into sections, schedules, and other subdivisions do not affect its interpretation.

(c) Internal References. References in this agreement to sections, schedules, and other subdivisions are to those parts of this agreement.

(d) Construction of Terms. The parties have each participated in settling the terms of this agreement. Any rule of legal interpretation to the effect that any ambiguity is to be resolved against the drafting party will not apply in interpreting this agreement.

20.17. Schedules. The following are attached to and form part of this agreement:

(a) Schedule A: Escrow Fees

20.18. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.

20.19. Effectiveness of Agreement. This agreement is effective as of the date shown at the top of the first page, even if any signatures are made after that date.

This agreement has been signed by the parties.

[LICENSOR NAME]

By:___________________________________

Name:

Title:

Date:

[LICENSEE NAME]

By:___________________________________

Name:

[Title:]

Date:

[ESCROW AGENT NAME]

By:___________________________________

Name:

[Title:]

Date:

Schedule A

Escrow Fees