Software Escrow agreements are typically three-party arrangements under which the licensor deposits a copy of software source code with an escrow agent who agrees to release the code to a licensee in certain events. These agreements typically involve three major issues for negotiations. The first concern is the code to be deposited and whether continual updates are required, thereby requiring validation of operability. The second issue is the circumstances under which the code is released to the licensee and the potential for dispute between licensor and licensee concerning whether such release event has, in fact, occurred. Finally, the terms of use of the source code, once released, deserves intense focus. Releasing the source code, under the terms of the original object code license, is usually ill-advised for both parties simply because object code licenses are typically not drafted to address issues unique to the source code license arrangement.

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