Source Code and Hardware Design Escrow Clause Samples

The Source Code and Hardware Design Escrow clause requires that critical software source code and hardware design documentation be deposited with a neutral third-party escrow agent. This arrangement typically applies when a licensee depends on proprietary technology from a vendor, ensuring that if the vendor fails to support or maintain the product—such as due to bankruptcy or breach—the licensee can access the necessary materials to continue operation or maintenance. The core function of this clause is to protect the licensee from business disruption by providing a safety net in situations where the vendor can no longer fulfill its obligations.