Neutral Third Party

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To be a truly neutral third party the escrow agent must not have a conflict of interest, either actual or perceived. But many do.

This is because many escrow agents also provide other services such as logistics, data storage, disaster recovery, consulting or litigation support to one of the other parties. This creates a strong commercial incentive for the escrow agent to favor the customers buying those other services, which are often big ticket items compared to the escrow. Under those circumstances how can you be confident that such an escrow agent will be truly neutral when the chips are down?

At Lincoln-Parry there is no danger of this happening because we do not, nor have we ever, provided any service except that of software escrow. Even though conventional wisdom might say that such a limited product focus is fatal over the long run, we believe it is mandatory for a software escrow agent, and we have successfully followed that policy for almost 50 years.

The language below appears in our standard agreement form, and we are able to put our signature to it because we know it to be true.

The Escrow Agent represents and warrants that with the exception of escrow services it has not at any time and will not during the term of this Agreement either directly or through a non arm's length entity sell or provide to any of the other parties or their related entities any goods or services including but not limited to legal or litigation support, accounting, logistics, data storage, disaster recovery or consulting services.

We put our signature on that language but most other software escrow agents cannot truthfully do the same. Instead, they make general statements in their promotional material about the need for a trusted neutral party, (allowing you to presume that they fill that bill) but stop short of actually warranting that they have no conflict.

If your escrow agent is unwilling to sign such a covenant then you are correct in questioning whether he will indeed be a truly neutral third party when a release event occurs.

At Lincoln-Parry we have no conflict of interest because software escrow is all we do – full stop.