Winning the Technology Escrow Solution: the Switch to the Master ree Party Agreement by Nadine Dias

You are most likely reading this blog because you are either already a customer looking to figure out if the agreement you have in place is the right one or because you heard about technology escrow, but have no idea about which type of agreement you would need if you were to set up an account. Either way- welcome!- we are glad to have you here.

Mainly, you have two options when setting up an escrow account with three parties. You can either have Three Party Agreement or a Master Three Party Agreement. How do you know which one is for you? I'll help you

The Differences Between a Three Party and a Master Three Party Agreement:

Three Party Agreement

As stated in the title, there are three parties to the agreement, the software developer (referred to as the Depositor in the agreement), the licensee (the Beneficiary in the agreement), and the escrow agent (Iron Mountain).

This type of agreement is a one-time agreement put in place in conjunction with a specific license agreement. When you have a need for a second escrow agreement you must start from a new agreement template and negotiate the terms all over again. Meaning, if you are a software developer and want to set up an escrow account for multiple licensees, then you must establish a Three Party Agreement for each of those licensees. In addition, a setup fee is charged each time a new agreement is created.

Master Three Party Agreement

The Master Three Party Agreement can be created by either a Developer or a Licensee and is typically used when a company would like to establish a standard escrow policy. In the case of a software developer they would use a Master Agreement as a standard to offer all of its customers. A licensee can use a Master Agreement as a standard they can require of all of their software vendors. The master agreement is word for word identical in terms to the Three Party Agreement. The difference is in how the agreement is structured.

The Master Agreement can be used over and over, and each time it is used a distinct and separate Three Party Agreement is created. One enrollment has no effect on the others. At the same time, the Master Agreement maintains the flexibility to change the terms you have standardized when necessary. This is easily accomplished by using the enrollment form to reference and amend certain parts of the Master Agreement specifically for that transaction (e.g release conditions or state law). The terms of all other enrollments are not affected by these changes. And maybe the best part, a setup fee is only charged once when the Master Agreement is established. There is no setup fee charged when the third party is enrolled. Over time this results in savings of thousands of dollars.

In summary, we feel a Master Escrow Agreement is a win-win-win for all parties involved:

It is cheaper in the long run than setting up a bunch of Three Party Agreements with different developers/licensees

You will already have a master agreement in place so negotiations will be kept to a minimum which will save you time

Don't worry, you can still make amendments for a specific party in the enrollment form

Since 2006, our Master Three Party Agreements have been closing on average 18 days faster than Three Party Agreements

For more detailed information about the 2 types of agreements, check out my Q&A session with John Trotti, our contracts manager. If you have any further questions feel free to comment below or email me at escrow@ironmountain.com.

LINK:	http://blogs.ironmountain.com/2015/service-lines/technology-escrow/win...
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