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Source Code Escrow Agreement

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Introduction
Description
Use
Table of Contents

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Introduction

When a business purchases software from a creator-owner, it is often worried about the latter’s ability to support such software. This concern reflects the strong dependence on the creator-owner which may result from the implementation of its software within the business. Said concern is exacerbated when the acquisition of software is a major investment. If possible, the business should, prior to such implementation, protect itself against adverse events which may prevent the use and evolution of the latter.

To solve this problem, the software industry has developed a solution, called escrow, in which a copy of the source code, which is the master version of the software, as well as a copy of the system documentation relating to such software, are placed in the hands of a third party for safekeeping and to allow the customer access to such in the event that an occurrence endangers the software. This escrow of the source code of the software through intermediaries allows the user access to the software in a timely manner, without causing the prejudicial disclosure, for the creator-owner, of the content of the software. This document establishes the main components of the legal framework of such an operation.

Description

The Software Source Code Escrow Agreement is the legal instrument by which a person who has designed and developed software, called the OWNER, gives a copy of the software source code and the documentation related to such software to a third party designated as the DEPOSITARY for the benefit of one or more users of this software, called LICENSEE(s), who want to ensure the accessibility of such documents in the event that the OWNER can not perform, for whatever reason, the maintenance and enhancement required for this software.

Use

We recommend the use of this document to govern the tripartite relationship between the creator-owner of a software, one or more users of the latter and the person who intervenes to protect the interests of both parties relating to such software. Such interests are, first, the desire of the owner of the software to protect the confidentiality of its product and, second, the desire of the user(s) to ensure access to it regardless of circumstances.

The neutral person hired acts as custodian of a copy of the software source code and its documentation. This agreement is generally an ancillary contract to the principal contract (see the documents I02.200 and I03.200 of the Business Precedents), of which it can ensure compliance by preserving the software for the benefit of its users i.e. the licensee(s), or as appropriate, the client.

Table of Contents

0.00 INTERPRETATION
0.01 Definition
0.01.01 Activities
0.01.02 Agreement
0.01.03 Authorized Location
0.01.04 Breach
0.01.05 Change in Control
0.01.06 Confidential Information
0.01.07 Deposit
0.01.08 Encumber or Encumbrance
0.01.09 Escrowed Goods
0.01.10 Event of Default
0.01.11 Force Majeure
0.01.12 Fundamental Provisions
0.01.13 Improvements
0.01.14 Intellectual Property
0.01.15 Legal Representatives
0.01.16 License
0.01.17 Notice Delay
0.01.18 PARTY
0.01.19 Person
0.01.20 Principal Agreement
0.01.21 Related Person
0.01.22 Software
0.01.23 Source Code
0.01.24 System Documentation
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-compliance
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 Time and Dates
0.04.03 Financial References
0.04.04 References within Agreement
0.04.05 Gender and Number
0.04.06 Headings
0.04.07 Presumptions
0.04.08 Knowledge
0.04.09 Approval
0.04.10 GAAP
1.00 PURPOSE
1.01 License
1.02 Escrow
1.02.01 Nomination
1.02.02 Removal
1.02.03 Replacement
1.02.04 Remittance
1.03 Proxy
2.00 CONSIDERATION
2.01 License
2.02 Adjustment
2.03 Deposit
2.03.01 Undertaking
2.03.02 Lump Fee
2.03.03 Hourly Fees
3.00 TERMS OF PAYMENT
3.01 Payment
3.02 Interest
4.00 SECURITY
4.01 Solidarity
4.02 Retention
4.03 Performance Bond
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Commission
5.06 Insurance
5.07 Nominee
5.08 Fundamental Provisions
5.09 Disclosure
6.00 REPRESENTATIONS AND WARRANTIES OF THE OWNER
6.01 Status
6.02 Authority
6.03 Binding Agreement
6.04 Insurance
6.05 Nominee
6.06 Fundamental Provisions
6.07 Disclosure
6.08 Identical Copy
6.09 Sufficiency
6.10 Functional Defects
6.11 Encumbrance
6.12 Contravention
6.13 Solvability
6.14 Continuous Effect
7.00 REPRESENTATIONS AND WARRANTIES OF THE LICENSEE
7.01 Status
7.02 Authority
7.03 Binding Agreement
7.04 Insurance
7.05 Nominee
7.06 Fundamental Provisions
7.07 Disclosure
8.00 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITARY
8.01 Status
8.02 Authority
8.03 Binding Agreement
8.04 Insurance
8.05 Nominee
8.06 Fundamental Provisions
8.07 Disclosure
9.00 MUTUAL DUTIES AND OBLIGATIONS
9.01 Confidential Information
9.01.01 Undertaking
9.01.02 End of Agreement
9.02 Insurance
9.02.01 Insured Risks
9.02.02 Amount of Coverage
9.02.03 Issuer
9.02.04 Co-insured
9.02.05 No Limitation
9.03 Indemnification
9.03.01 “Loss”
9.03.02 Scope
9.03.03 Procedure
9.03.04 Deductible
9.03.05 Limitation on Claims
9.04 Disclosure of Agreement
10.00 DUTIES AND OBLIGATIONS OF THE OWNER
10.01 Deposit
10.01.01 Initial Deposit
10.01.02 Improvements
10.01.03 Additional Deposit
10.02 Verification
10.02.01 Comparison
10.02.02 Register
10.03 Correction
10.03.01 Undertaking
10.03.02 Reimbursement
10.04 Assignment of the Software
10.05 Indemnification
10.05.01 By OWNER and LICENSEE
10.05.02 By OWNER
10.06 Event of Default
10.07 Waiver
10.08 Registration
10.09 Loss of the Escrowed Goods
11.00 DUTIES AND OBLIGATIONS OF THE LICENSEE
11.01 Acknowledgement
11.02 Verification
11.02.01 Notice
11.02.02 Delivery
11.02.03 Completion
11.02.04 No Retainment
11.02.05 Reimbursement
11.03 Event of Default
11.04 Restriction
11.04.01 Use
11.04.02 Copy
11.04.03 Sale of Business
11.05 Indemnification
11.05.01 By LICENSEE and OWNER
11.05.02 By LICENSEE
11.06 Ownership
12.00 DUTIES AND OBLIGATIONS OF THE DEPOSITARY
12.01 General Functions
12.02 Update
12.03 Special Functions
12.03.01 Event of Default
12.03.02 Contest
12.03.03 Delivery to LICENSEE
12.04 Liability
12.04.01 Scope
12.04.02 Exclusion
12.04.03 Limitation
12.05 Return to the Owner
12.06 Confidentiality
12.06.01 Acknowledgement
12.06.02 Disclosure
12.06.03 Return of Confidential Information
12.06.04 Security
12.07 Resignation
12.08 Transfer to a Successor
12.09 Copies
12.10 Litigation
12.11 Acknowledgement
12.12 Anti-money Laundering or Anti-terrorist Legislation
13.00 SPECIAL PROVISIONS
13.01 Assignment
13.01.01 Prohibition
13.01.02 Effect of Breach
13.01.03 Exception
13.02 Force Majeure
13.02.01 No Default
13.02.02 Duty
13.02.03 Rights of Other PARTY
13.03 Relationship
13.03.01 Independent Contractors
13.03.02 No Control over Performance
13.03.03 No Authority to Bind
13.04 Further Assurances
13.05 Other Remedies
13.05.01 Choices
13.05.02 No Limitations
13.06 Prescription
13.07 Intellectual Property
14.00 GENERAL PROVISIONS
14.01 Notice
14.02 Dispute Resolution
14.02.01 Good Faith Negotiations
14.02.02 Mediation
14.02.03 Arbitration
14.03 Election
14.04 Counterparts
14.05 Amendment
14.06 Waiver of Rights
14.07 Electronic Transmission
14.08 Language
15.00 TERMINATION
15.01 Mutual Consent
15.02 Resiliation
15.02.01 Without Notice
15.02.02 With Prior Notice from DEPOSITARY
15.03 Change in Control
16.00 EFFECTIVE DATE
16.01 Retroactivity
16.02 Execution
16.03 Deferral
17.00 DURATION
17.01 Initial Term
17.02 Extended Term
18.00 SCOPE


SCHEDULE A – EXCERPT FROM A RESOLUTION OF THE OWNER
SCHEDULE B – EXCERPT FROM A RESOLUTION OF THE LICENSEE
SCHEDULE C – EXCERPT FROM A RESOLUTION OF THE DEPOSITARY
SCHEDULE 0.01.16 - LICENSE
SCHEDULE 0.01.22 – SOFTWARE DESCRIPTION
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Civil Law Version
Updated 14-02-2009
Québec
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