Distributor Escrow

If you are a distributor, reseller, OEM supplier, value added reseller or system integrator you can use escrow in the following situations:

As escrow beneficiary should developer cease to provide support

You are dependent on your software supplier (developer). When this party can no longer meet its obligations your customers will contact you. With an escrow arrangement as part of the distributor agreement you can continue to provide support to your clients even when developer is no longer available. As beneficiary of the escrow arrangement you are legally entitled to use the escrow deposit for your obligations to your end users.

As “escrow supplier” to your end users

Software users want to secure their operational IT risks through an escrow arrangement - who the owner/developer of the application is, is not relevant to a user where continuity is concerned. When a distributor wants to set up an escrow arrangement for its end users the developer (owner) authorises distributor to provide escrow by signing an appendix in the escrow contract. Often developer also requests that it is allowed to pick up the maintenance obligations should distributor no longer be able to meet its obligations. This is why it is important that the escrow contract transparently describes the exact roles and escrow responsibilities of all parties.

In practice a combination of above 2 methods is often used - distributor plays a double role in the escrow arrangement:

• As beneficiary to secure its own continuity
• As “escrow supplier” to secure the continuity of its customers.

This way the escrow arrangement has added value for all parties: developer; distributor and end user.

Downloads

• Company brochure PDF