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In any software licensing agreement, delivery of the source code can become one of the key issues because of its great value to both the vendor and the user. This sample source code agreement favors the user by providing the user with access to the complete source code from the vendor. *** SAMPLE AGREEMENT *** This Escrow Agreement is entered into and effective as of the _____ day of ________ by and among Licensee having its principal place of business in New York and Licensor, having its principal place of business in California and ___________, (“Escrow Agent”), having its principal place of business in _____________. WHEREAS, Licensor has granted a license to Licensee to use certain computer software pursuant to the terms and conditions of a Computer Software License Agreement (the “License Agreement”), annexed hereto as Exhibit A; and WHEREAS, the uninterrupted availability of all forms of such computer software is critical to Licensee in the conduct of its business; and WHEREAS, Licensor has agreed to deposit in escrow a copy of the source code form of the computer program (the “Software”) included in the Software System covered by the License Agreement, as well as any corrections or enhancements to such source code, to be held by Escrow Agent in accordance with the terms and conditions of this Escrow Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree as follows: 1. Deposit Licensor has concurrently herewith deposited with Escrow Agent a copy of the source code form of the Software (the “Source Code”), including all relevant commentary, explanations, and other documentation of the Source Code (collectively, “Commentary”). Licensor also agrees to deposit with Escrow Agent, at such times as they are made, a copy of all revisions to the Source Code or Commentary encompassing all corrections or enhancements made to the Software by Licensor pursuant to the License Agreement or any Software Maintenance Contract between the parties. Promptly after any such revision is deposited with Escrow Agent, both Licensor and Escrow Agent shall give written notice thereof to Licensee. 2. Term This Escrow Agreement shall remain in effect during the term of the License Agreement and any Software Maintenance Contract between Licensee and Licensor. Termination hereof is automatic upon delivery of the deposited Source Code and Commentary to Licensee in accordance with the provisions hereof. 3. Default A default by Licensor shall be deemed to have occurred under this Escrow Agreement upon the occurrence of any of the following: (a) if Licensor has availed itself of, or been subjected to by any third party, a proceeding in bankruptcy in which Licensor is the named debtor, an assignment by Licensor for the benefit of its creditors, the appointment of a receiver for Licensor, or any other proceeding involving insolvency or the protection of, or from, creditors, and same has not been discharged or terminated without any prejudice to Licensee’s rights or interests under the License Agreement within thirty (30) days; or (b) if Licensor has ceased its on-going business operations, or sale, licensing, maintenance or other support of the Software; or (c) if Licensor fails to pay the annual fee due to Escrow Agent hereunder; or (d) if any other event or circumstance occurs which demonstrates with reasonable certainty the inability or unwillingness of Licensor to fulfill its obligations to Licensee under the License Agreement, this Escrow Agreement or any Software Maintenance Contract between the parties, including, without limitation, the correction of defects in the Software. 4. Notice of Default Licensee shall give written notice to Escrow Agent and Licensor of the occurrence of a default hereunder, except that Escrow Agent shall give notice of the default to Licensee and Licensor if same is based on the failure of Licensor to pay Escrow Agent’s annual fee. Unless within seven (7) days thereafter Licensor files with the Escrow Agent its affidavit executed by a responsible executive officer stating that no such default has occurred or that the default has been cured, then the Escrow Agent shall upon the eighth (8th) day deliver to Licensee in accordance with Licensee’s instructions the entire Source Code and Commentary with respect to the Software then being held by Escrow Agent. 5. Compensation As compensation for the services to be performed by Escrow Agent hereunder, Licensor shall pay to Escrow Agent an initial fee of $__________, payable at the time of execution of this Agreement, and an annual fee in the amount of $__________, to be paid to Escrow Agent in advance on each anniversary date hereafter during the term of this Agreement. 6. Liability Escrow Agent shall not, by reason of its execution of its Agreement, assume any responsibility or liability for any transaction between Licensor and Licensee, other than the performance of its obligations, as Escrow Agent, with respect to the Source Code and Commentary held by it in accordance with this Agreement. 7. Tests Upon written notice to Licensor and Escrow Agent, Licensee shall have the right to conduct tests of the Source Code held in escrow, under the supervision of Licensor, to confirm that it is the current Source Code for the Software running on the Hardware specified in the License Agreement. 8. Confidentiality Except as provided in this Agreement, Escrow Agent agrees that it shall not divulge or disclose or otherwise make available to any third person whatsoever, or make any use whatsoever, of the Source Code or Commentary, without the express prior written consent of Licensor. 9. Address All notices or other communications required or contemplated herein shall be in writing, sent by certified mail, return receipt requested, addressed to another party at the address indicated below or as same may be changed from time to time by notice similarly given: If to Licensor: ____________________ Attention: __________ If to Licensee: ____________________ Attention: __________ If to Escrow Agent: ____________________ Attention: __________ 10. Assignment Neither this Escrow Agreement, nor any rights, liabilities or obligations hereunder may be assigned by Escrow Agent without the prior written consent of Licensee and Licensor. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first set forth above. ESCROW AGENT By:__________ LICENSEE By:__________ LICENSOR By:__________ Richard Raysman and Peter Brown are partners with the law firm of Brown Raysman Millstein Felder & Steiner (www.brownraysman.com)in New York. The authors are also computer law columnists for theNew York Law Journal , an affiliate of law.com. For information on purchasing the book, “Computer Law: Drafting and Negotiating Forms and Agreements,” please click here.

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