Source code escrow

What source code escrow protects.

The software your business runs on is usually built, hosted, and maintained by someone else. While the vendor is healthy, that dependency is invisible. It surfaces the day the vendor is acquired, sunsets the product, or files for bankruptcy: updates stop, support goes quiet, and the code that keeps your operation running sits with a company that no longer answers.

Source code escrow closes that gap. A neutral third party holds the vendor's source code and the materials needed to rebuild the software, and releases them to the licensee only if a condition agreed in advance actually occurs.

For the licensee, it is a recovery path: the code your team needs to keep the software running, instead of a forced replacement mid-operation. For the vendor, it is assurance without exposure. Ownership never transfers, and the code is deposited with EscrowTech, not shared with the customer.

Why a license isn't enough.

A common assumption is that a software license protects you if the vendor goes bankrupt. Often it does not. Under Section 365(n) of the U.S. Bankruptcy Code, a trustee can reject the contract, and your rights to the underlying intellectual property depend on specific elections and on having the materials in hand.

Escrow is the practical mechanism that puts those materials within reach. The license gives you the right to use the software; the escrow deposit gives you the means to keep it running.

How the arrangement is set up.

1. The agreement. The parties agree the release conditions, and EscrowTech drafts the escrow agreement around them. It does not draft or negotiate the underlying software contract. See escrow agreements.
2. The deposit. The vendor deposits the source code, build instructions, dependencies, and documentation with EscrowTech as a neutral third party.
3. Verification, if you choose it. You decide how far to confirm the deposit would rebuild, from a file listing to a full build. It is matched to risk, not automatic on every account.
4. The release. If an agreed condition occurs, the materials are released, and your team can rebuild, run, and maintain the software.

When source code is released.

Release is never automatic, and never at the licensee's discretion alone. It happens only when a condition defined in the agreement occurs. The common ones:

• The vendor ceases business or files for bankruptcy
• The vendor stops supporting or maintaining the software
• The vendor breaches a maintenance obligation written into the agreement

When a release is requested, EscrowTech administers it on the agreed terms. It confirms the stated condition is met under the agreement and does not decide the underlying commercial dispute. That neutrality is what makes escrow acceptable to both sides.

What a usable deposit includes.

Source code is the start, not the whole picture. A deposit a new team can actually rebuild usually holds the source, build instructions and toolchain, dependencies, configuration and environment details, and documentation or runbooks.

For hosted applications, code alone will not bring the service back; the running environment is the job of SaaS escrow. Firmware, data, and AI models fall under technology escrow. What belongs in a deposit is always scoped to what recovery would require.

Will the deposit actually work?

The question most buyers forget to ask: if the code were released tomorrow, could your team rebuild and run it? An unexamined deposit is a promise, not a guarantee, and an incomplete one is usually discovered at the worst possible moment.

EscrowTech offers verification as a menu, from confirming what is in the deposit to a full build and test, matched to the risk the deal carries. The depth is your decision. See verification options.