Software Escrow Agreement (Page 2 of 8) in pdf

THE FIRST PARTY,

- and -

SOFTWARE DEVELOPMENT LTD. (“Developer”)

a corporation incorporated under the laws of the Province of X,

THE SECOND PARTY,

-and -

ESCROW AGENCY LTD. (“Escrow Agent”)

a corporation incorporated under the laws of the Province of X,

THE THIRD PARTY

WHEREAS Developer has entered into a license agreement dated ______ (the “License”) with

Licensee wherein Developer has licensed the use of certain materials and proprietary software

(the “Materials”) in connection with the development and production of an interactive web-based

new media project tentatively entitled “Stranger than Fiction Interactive” (the “Web Project”); and

WHEREAS Developer wishes to protect the confidentiality of its Materials while providing

Licensee with access to the Materials in the event that certain circumstances described in this

Agreement occur; and

WHEREAS Developer wishes to deposit such Materials in escrow to be held by Escrow Agent

in accordance with the terms and conditions of this Agreement.

DISCUSSION:

The “Whereas” clauses are known as “recitals” and are not considered

technically part of the terms and conditions of the contract, unless expressly made so within the

contract terms. The role of recitals is to provide some background and context to assist in

explaining of the identity of parties and the objectives of the agreement. They are often used to

include definitions of key terms that are defined and identified by capitalization. The question of

whether recitals should be made part of the terms of the agreement will depend on their

contents and drafting. For example, some recitals may include language that is overly broad,

vague or too optimistic in describing the objectives of the parties to be prudent to include as

terms of the agreement. In this case, the recitals were expressly incorporated as part of the

agreement pursuant to section 14 below.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises,

mutual covenants and agreements herein and other good and valuable consideration, the

sufficiency of which is hereby acknowledged, the parties agree as follows:

DISCUSSION: The inclusion of this standard language is prudent, because it makes express

mention of the fact that the Parties, by executing the contract, agree that some form of “valuable

consideration” is passing between them and they acknowledge that it is sufficient to bind each

of them to the terms of the agreement. “Valuable consideration” may consist of some right,

Software Escrow Agreement Page 2