Investor Security Plan

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Who should use it, and how does it work?

The Investor Security Plan is used where a financial backer of software development requires collateral security in addition to company stock or debt instruments. That security is ownership of the software product if a major default occurs under the main lending agreement.

STEP 1 – Signing the Escrow Agreement

Request a copy of our Investor Security Plan standard contract for review by you or your attorney.

When both the Investor and Developer(s) have agreed on the form, they sign and send it to us for signature.

The trigger events that release software from escrow into the Investor's hands should reflect the major defaults described in the main lending agreement.

STEP 2 – Depositing Source Code

Upon receipt of a signed agreement we deliver a supply of special containers to the Developer that are used to make deposits on a regular basis during product development. The Developer seals each deposit into a container, certifies as to the contents and couriers it to us. We immediately confirm receipt to the Developer and Investor.

The Investor or his agent might wish to be present when the software is being sealed into the containers, and in that way the authenticity and completeness of the contents are verified.

STEP 3 – Adding Updates Later

When a new release is ready for escrow we send another container into which a consolidated set of the new software is placed under seal following the same procedures as above, and returned to us. As always, confirm receipt to both parties. We do not open the old containers and replace materials. The old containers are retained until we are directed to return them, which may be automatically after receiving new releases, or only after receiving written instructions from the parties. The parties also decide how often new releases must be deposited under escrow.

THE NEXT STEP

If you wish to know more about Lincoln-Parry SoftEscrow or to contact a representative contact us.