An escrow agreement gives you access to the deposited material, usually software source code, in case a pre-defined, contractually agreed-upon event occurs.

The material is intended

• to enable you to continue using the underlying software
• to make changes to it
• and to continue the maintenance and support work independently or to outsource it to a third party.

In general, an escrow agreement is established to protect your software investment and ensure your business continuity plan.​

In order to be able to take on maintenance and support without the licensor’s help, you need the

• complete,
• error-free and
• correct source code of the application.

In addition, you must have access to

• documentation that includes details of the source code,
• the required third party components, configurations,
• build instructions, and
• hardware requirements.

During the verification we verify that all items are part of the deposit:

• documentation of the entire build process,
• material deposit,
• application execution testing and
• ensuring the material deposit under the escrow agreement.

In addition, GE ensures that documentation is available and can be used to restore the software without the help of the licensor.

Only if you carry out a full verification on the deposited material, you have the certainty that the material is appropriate to fulfil your business continuity plan in case of a release event. 

Without verification, the deposited material is a “black box” and it cannot be guaranteed that it is complete and serves its purpose.

Thus, GE strongly recommends that you verify each deposit to ensure it is in line with your escrow agreement.

Only verified material guarantees you a viable solution in case the counterparty files bankruptcy or fails to fulfil its obligations in any other way.

LEVEL 1: Basic Verification

• GE as the independent third party confirms that all required material is provided by witnessing the build of the application

• GE as the independent third party confirms that the build can be achieved with the provided material​​ and stores all required material and documentation 

This is the minimum requirement to ensure a viable disaster recovery strategy and contingency plan.

LEVEL 2:  Verification in an independent environment by an escrow agent​

• establish a build at a secure location​, outside the developers’ environment

• implementation and testing of the build application by the licensee

• recommended when a viable 3rd party is to take over maintenance in case of a release​

LEVEL 3: Verification within the Licensees and Licensors environment

• a complete build is created at licensor’s site​

• the release process is simulated by re-building the application within the licensee’s environment

• the escrow agent familiarizes the licensee’s development team with the process and requirements of the build within its environment

• all documentation and knowledge to recover the build process in case of a release is provided to the licensee​

If any of the above verification procedures do not fit your requirements please contact us to provide a custom solution.

We have implemented specified security standards, sites and certification protocols for larger projects with ISO certification. 

The appropriate verification level depends on your business continuity strategy. Every deposit shall be verified on a basic level at least.

Typically, this takes place at the licensor’s site and the build process is accompanied and documented independently by GE.

All the materials required to create the software are

• verified,
• collected and
• deposited

under an existing escrow agreement with GE.

The entire build process is documented including all settings and hardware components. The software build process is documented step-by-step. 

With the first verification level, the deposit is classified as «secured» since the successful build process was witnessed by GE as an independent 3rd party in the developer’s environment.

If you want to have the software serviced by a third party in the event of a release event occurs, you need independent verification. In this case, GE will build the software independently of the developer’s environment using the documentation and material provided by the licensor.

This is how it works:

• The verification takes place at one of our GE sites, without the help of the licensor
• The independent verification ensures that the material can be compiled outside of the development environment of the licensor into the running software application and that all the necessary tools are available under the escrow agreement
• Moreover, you get an exact estimate on required resources (hardware and software components) and the amount of time required when a third party is commissioned to maintain the software

Should you wish to maintain the software on your own with an in-house IT team, in case of a release, GE recommends a release simulation verification.

This includes

• a basic verification during which the material is collected and verified from the licensor and
• is supplemented by a second stage release simulation at the licensees IT environment.

German Escrow will carry out the build of the software in the IT environment of the licensee and ask the licensee to install the created software application.

The release simulation verification ensures that all resources and know-how are available within the licensees IT environment in order to rebuild the software independently. The licensee gains insight into the software’s build requirements and can make arrangements which must be adhered to in case the material is released.

Should you have any further questions, please contact us.