SOURCE CODE ESCROW AGREEMENT

State of New Jersey

Governed by the Laws of the State of New Jersey

Agreement Number: [________________________________]

Effective Date: [__/__/____]

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Deposit Materials
4. Deposit and Update Procedures
5. Verification and Testing
6. Release Conditions
7. Release Procedures
8. Post-Release License Rights
9. Fees and Payment
10. Confidentiality and Security
11. Trade Secret Protections
12. Intellectual Property
13. Warranties and Disclaimers
14. Indemnification
15. Limitation of Liability
16. Term and Termination
17. Governing Law and Dispute Resolution
18. New Jersey-Specific Provisions
19. Miscellaneous
20. Signatures
21. Schedules

1. PARTIES AND RECITALS

THIS SOURCE CODE ESCROW AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and among:

LICENSOR:
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
State of Organization: [________________________________]
Entity Type: ☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor ☐ Other: [____]
Authorized Representative: [________________________________]
Title: [________________________________]
Email: [________________________________]
Phone: [________________________________]

BENEFICIARY:
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
State of Organization: [________________________________]
Entity Type: ☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor ☐ Other: [____]
Authorized Representative: [________________________________]
Title: [________________________________]
Email: [________________________________]
Phone: [________________________________]

ESCROW AGENT:
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Authorized Representative: [________________________________]
Title: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Each individually a "Party" and collectively the "Parties."

RECITALS

WHEREAS, Licensor is the owner or authorized licensor of certain proprietary software known as [________________________________] (the "Software Product") and the associated source code, build environments, documentation, and related materials;

WHEREAS, Beneficiary has entered into or contemporaneously herewith enters into a software license agreement, software-as-a-service agreement, or other technology agreement dated [__/__/____] (the "Underlying Agreement") with Licensor pursuant to which Beneficiary has obtained the right to use the Software Product;

WHEREAS, Beneficiary desires to ensure continuity of access to, maintenance of, and support for the Software Product in the event of certain triggering events that would otherwise deprive Beneficiary of the benefits of the Underlying Agreement;

WHEREAS, Licensor agrees to deposit certain source code and related materials with Escrow Agent for the benefit of Beneficiary, subject to the terms and conditions set forth herein;

WHEREAS, Escrow Agent is in the business of providing technology escrow services and agrees to accept, hold, and release the deposited materials in accordance with the terms and conditions of this Agreement;

WHEREAS, the Parties intend this Agreement to be governed by and construed in accordance with the laws of the State of New Jersey; and

WHEREAS, the Parties acknowledge that the Deposit Materials (as defined below) may constitute trade secrets under the New Jersey Trade Secrets Act (N.J. Stat. Ann. §§ 56:15-1 to 56:15-9) and the federal Defend Trade Secrets Act (18 U.S.C. §§ 1836-1839).

NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

2.1 "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party, where "control" means ownership of more than fifty percent (50%) of the voting securities or equivalent ownership interest.

2.2 "Bankruptcy Event" means the filing by or against Licensor of a voluntary or involuntary petition for relief under Title 11 of the United States Code (the "Bankruptcy Code") or any state insolvency law, the appointment of a receiver or trustee for Licensor's assets, or the making by Licensor of a general assignment for the benefit of creditors.

2.3 "Build Environment" means the hardware specifications, operating system requirements, compiler versions, integrated development environment configurations, libraries, frameworks, and all other tools and configurations necessary to compile, build, and deploy the Software Product from the Source Code.

2.4 "Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of New Jersey are authorized or required by law to close.

2.5 "Confidential Information" means any and all non-public information disclosed by one Party to another in connection with this Agreement, including the Deposit Materials, financial information, business plans, technical data, trade secrets, know-how, and any other information designated as confidential or that reasonably should be understood to be confidential.

2.6 "Deposit Materials" means the Source Code, Build Environment specifications, Documentation, Third-Party Components, and all other materials deposited by Licensor with Escrow Agent pursuant to this Agreement.

2.7 "Documentation" means all technical documentation, user manuals, system administration guides, API documentation, database schemas, architecture diagrams, installation procedures, deployment guides, and other written materials relating to the Software Product.

2.8 "Force Majeure Event" means any event beyond the reasonable control of a Party, including acts of God, fire, flood, earthquake, epidemic, pandemic, war, terrorism, government action, labor strikes, power failures, or internet outages, but excluding financial difficulties or market conditions.

2.9 "Intellectual Property Rights" means all worldwide intellectual property rights, including patents, copyrights, trademarks, trade secrets, know-how, moral rights, and all other proprietary rights.

2.10 "Major Release" means any new version of the Software Product designated with a new whole number version or introducing substantial new features or architectural changes.

2.11 "Minor Release" means any new version designated with a new decimal version number introducing incremental improvements, bug fixes, or enhancements.

2.12 "NJDPA" means the New Jersey Data Privacy Act (SB 332), signed into law on January 16, 2024, effective January 15, 2025, which establishes comprehensive data privacy requirements for controllers and processors of personal data of New Jersey residents.

2.13 "Personal Information" means personal information as defined under applicable New Jersey law, including the NJDPA and breach notification statutes.

2.14 "Release Conditions" means the conditions set forth in Section 6 under which Beneficiary becomes entitled to receive the Deposit Materials.

2.15 "Source Code" means the human-readable programming code for the Software Product, including all modules, subroutines, scripts, comments, and related programming materials.

2.16 "Third-Party Components" means any software libraries, frameworks, modules, or other components developed by parties other than Licensor incorporated into or required for the Software Product.

2.17 "Underlying Agreement" means the software license, SaaS, or technology agreement between Licensor and Beneficiary identified in the Recitals.

3. DEPOSIT MATERIALS

3.1 Scope of Deposit Materials. Licensor shall deposit with Escrow Agent the following materials:

(a) The complete Source Code for the Software Product, including all modules, libraries, scripts, and programming files necessary to compile, build, and operate the Software Product in its current production version and the two (2) immediately preceding production versions;

(b) All Build Environment specifications, including hardware requirements, operating system requirements, compiler and interpreter requirements with version numbers, required libraries, frameworks, and dependencies, build scripts, makefiles, and deployment scripts;

(c) Complete Documentation as defined in Section 2.7;

(d) All Third-Party Components incorporated into or required for the Software Product, together with copies of all applicable licenses, or where licenses prohibit deposit, a complete list identifying each component, its version, license type, and instructions for obtaining it;

(e) Database schemas, data models, stored procedures, and scripts necessary to create, populate, or migrate database structures;

(f) All configuration files, environment variables, and parameter settings necessary for production deployment;

(g) A complete inventory of all deposited files, including file names, sizes, hash values (SHA-256), directory structures, and descriptions; and

(h) Such additional materials as identified in Schedule B.

3.2 Format Requirements. All Deposit Materials shall be in industry-standard, machine-readable formats. Licensor shall provide materials in at least two (2) formats: secure electronic transmission or encrypted removable media. All files shall be organized with a top-level README file.

3.3 Completeness Obligation. Licensor warrants that the Deposit Materials shall be sufficiently complete to enable reasonably skilled software developers to compile, build, deploy, operate, maintain, and modify the Software Product without reference to materials not included in the deposit.

4. DEPOSIT AND UPDATE PROCEDURES

4.1 Initial Deposit. Licensor shall deliver the Initial Deposit to Escrow Agent within [____] calendar days after the Effective Date. The Initial Deposit shall include all Deposit Materials corresponding to the then-current production version.

4.2 Update Deposits. Licensor shall deliver Update Deposits to Escrow Agent:

(a) Within [____] calendar days following each Major Release;

(b) Within [____] calendar days following each Minor Release;

(c) No less frequently than once every [____] calendar months; and

(d) Within [____] calendar days following any material change to the Build Environment, Third-Party Components, or database schemas.

4.3 Deposit Confirmation. Upon receipt of each deposit, Escrow Agent shall: (a) acknowledge receipt in writing to Licensor and Beneficiary within five (5) Business Days; (b) verify physical integrity and readability; (c) record and maintain a deposit log; (d) assign a unique deposit identification number; and (e) store materials in accordance with Section 10.

4.4 Rejected Deposits. If Escrow Agent determines a deposit is unreadable, corrupted, or incomplete, Escrow Agent shall notify both Parties within five (5) Business Days, and Licensor shall submit a replacement within ten (10) Business Days.

4.5 Supplemental Deposits. Beneficiary may request additional materials reasonably necessary for completeness, and Licensor shall comply within thirty (30) calendar days.

5. VERIFICATION AND TESTING

5.1 Verification Levels. Beneficiary may request Verification at the following levels:

Tier 1 — Inventory Verification: Confirmation of file counts, hash values, readability, and directory structure.

Tier 2 — Technical Review and Compilation: All Tier 1 verifications plus compilation attempts, dependency verification, documentation completeness review, and database schema testing.

Tier 3 — Full Build and Functional Verification: All Tier 1 and Tier 2 verifications plus complete build in clean environment, automated test execution, functional verification against documentation, deployment testing, and detailed report preparation.

5.2 Verification Requests. Beneficiary may request Verification no more than [____] times per calendar year at each level. Escrow Agent shall commence Verification within fifteen (15) Business Days of receiving the request and applicable fees.

5.3 Verification Reports. Escrow Agent shall deliver a written verification report to both Parties within ten (10) Business Days of completion, detailing scope, results, deficiencies, and remediation recommendations.

5.4 Deficiency Remediation. Licensor shall cure deficiencies within [____] calendar days of receiving the verification report. Escrow Agent shall perform a follow-up verification at no additional cost to Beneficiary for the first follow-up per deficiency report.

5.5 Verification Costs. Costs shall be borne as follows: ☐ Beneficiary; ☐ Licensor; ☐ Shared equally; ☐ Per Schedule A. If Verification reveals material deficiencies, Licensor shall reimburse Beneficiary for such Verification and follow-up costs.

6. RELEASE CONDITIONS

6.1 Release Events. Beneficiary shall be entitled to receive the Deposit Materials upon occurrence of any of the following:

(a) Bankruptcy Event. Occurrence of a Bankruptcy Event with respect to Licensor, provided that Licensor or its successor has failed to continue obligations under the Underlying Agreement for [____] consecutive Business Days. Rights subject to 11 U.S.C. § 365(n);

(b) Cessation of Business. Licensor ceases business operations generally or with respect to the Software Product, and fails to designate a qualified successor within [____] calendar days;

(c) Material Breach of Maintenance and Support. Licensor commits a material breach of maintenance, support, or update obligations, uncured for [____] calendar days after written notice;

(d) Extended Service Unavailability. The Software Product is unavailable for [____] consecutive calendar days or [____] cumulative days within any [____]-month period, not caused by Force Majeure or Beneficiary;

(e) Failure to Deposit or Update. Licensor fails to make deposits as required and such failure continues for [____] calendar days after written notice;

(f) Assignment Without Consent. Licensor assigns the Underlying Agreement or Software Product without Beneficiary's consent, and the assignee fails to assume obligations;

(g) Dissolution or Liquidation. Licensor files articles of dissolution or is ordered dissolved by a court;

(h) Regulatory Action. A governmental authority prohibits Licensor from providing the Software Product for [____] consecutive calendar days;

(i) Failure to Cure Verification Deficiencies. Licensor fails to cure material deficiencies per Section 5.4; and

(j) Additional Triggers. As specified in Schedule D or agreed in writing by all Parties.

6.2 Exclusions. Mergers, acquisitions, or changes of control where the successor assumes obligations shall not constitute Release Conditions.

6.3 Bankruptcy Protections. Beneficiary's rights shall be consistent with 11 U.S.C. § 365(n). Licensor acknowledges Source Code constitutes "intellectual property" under 11 U.S.C. § 101(35A).

7. RELEASE PROCEDURES

7.1 Release Request. Beneficiary shall submit a written Release Request to Escrow Agent with a copy to Licensor, including: (a) identification of Release Conditions; (b) factual description with supporting evidence; (c) sworn statement by an authorized officer; and (d) confirmation that Licensor has been notified.

7.2 Notice to Licensor. Escrow Agent shall transmit the Release Request to Licensor within two (2) Business Days.

7.3 Licensor Objection. Licensor may object within [____] Business Days by delivering an Objection Notice with grounds, evidence, and a sworn statement.

7.4 Release Without Objection. If no valid Objection Notice is received, Escrow Agent shall release the Deposit Materials within five (5) Business Days after expiration of the objection period.

7.5 Disputed Release. If Licensor objects: (a) Escrow Agent shall hold materials pending resolution; (b) Parties shall negotiate in good faith for fifteen (15) Business Days; (c) if negotiation fails, either Party may submit to expedited arbitration or court proceedings per Section 17.

7.6 Emergency Interim Access. For catastrophic outages of [____] or more consecutive Business Days, Beneficiary may request emergency read-only access within twenty-four (24) hours, subject to confidentiality requirements.

7.7 Partial Release. Upon agreement of Licensor and Beneficiary, Escrow Agent may release a subset of Deposit Materials.

8. POST-RELEASE LICENSE RIGHTS

8.1 License Grant. Upon valid release, Beneficiary receives a non-exclusive, non-transferable (except per Section 8.3), irrevocable, perpetual, royalty-free license to use, copy, compile, modify, maintain, and create derivative works of the Deposit Materials solely to: (a) continue operating the Software Product; (b) fix bugs and security vulnerabilities; (c) make necessary modifications and updates; (d) compile and build from Source Code; and (e) create backup and archival copies.

8.2 Restrictions. Beneficiary shall NOT: (a) use Deposit Materials beyond permitted purposes; (b) distribute, sublicense, or sell the Source Code; (c) create competing products; (d) remove proprietary markings; or (e) reverse engineer other products using the Deposit Materials.

8.3 Permitted Third-Party Access. Beneficiary may share Deposit Materials with employees, Affiliates, and third-party contractors under written confidentiality agreements no less restrictive than Section 10.

8.4 Third-Party Component Licenses. Beneficiary shall comply with all applicable Third-Party Component license terms and independently obtain required licenses.

8.5 Duration. The post-release license continues in perpetuity unless a court determines the release was improper or Beneficiary materially breaches Section 8 without cure within thirty (30) calendar days.

9. FEES AND PAYMENT

9.1 Fee Schedule. Fees shall be as set forth in Schedule A, including setup, maintenance, deposit processing, verification, release, and emergency access fees.

9.2 Fee Responsibility. ☐ All fees paid by Beneficiary; ☐ All fees paid by Licensor; ☐ Split equally; ☐ Per Schedule A.

9.3 Payment Terms. Fees are due within [____] calendar days of invoice in United States dollars.

9.4 Late Payment. Unpaid amounts shall bear interest at the lesser of: (a) one and one-half percent (1.5%) per month (eighteen percent (18%) per annum); or (b) the maximum rate permitted under New Jersey law. Pursuant to N.J. Stat. Ann. § 31:1-1, the default legal rate of interest is six percent (6%) per annum; written contracts may specify up to sixteen percent (16%) per annum. Charging interest exceeding thirty percent (30%) per annum from an individual or fifty percent (50%) per annum from a corporation, LLC, or LLP constitutes criminal usury under N.J. Stat. Ann. § 2C:21-19. If the rate specified herein exceeds the maximum permitted rate, it shall automatically be reduced to the maximum rate permitted.

9.5 Fee Adjustments. Escrow Agent may adjust fees once per twelve (12)-month period with sixty (60) calendar days' notice. Increases shall not exceed the greater of five percent (5%) or the CPI-U increase for the New York-Newark-Jersey City area.

9.6 Taxes. All fees exclude applicable taxes. The paying Party bears responsibility for sales, use, or similar taxes.

10. CONFIDENTIALITY AND SECURITY

10.1 Confidentiality Obligations. Each Receiving Party shall hold Confidential Information in strict confidence, not disclose it except as permitted, use it only for purposes of this Agreement, and protect it with at least the same care used for its own confidential information.

10.2 Escrow Agent Security Obligations. Escrow Agent shall implement:

(a) Physical Security. Secure, access-controlled facilities with locked storage, surveillance, and restricted access;

(b) Electronic Security. AES-256 encryption at rest and in transit, multi-factor authentication;

(c) Access Controls. Logged access limited to authorized personnel with documented business need;

(d) Backup and Redundancy. At least one geographically separate backup meeting the same security standards;

(e) Disaster Recovery. Plan ensuring availability within [____] Business Days of a disaster; and

(f) Security Audits. Annual security audits with summary results available to Parties.

10.3 Data Breach Notification. In the event of a security breach affecting Deposit Materials or personal information:

(a) Escrow Agent shall notify Licensor and Beneficiary without unreasonable delay;

(b) Escrow Agent shall comply with New Jersey breach notification requirements, including notification to affected New Jersey residents and the New Jersey Division of State Police;

(c) Escrow Agent shall comply with the NJDPA (effective January 15, 2025) to the extent it acts as a processor of personal data, including assisting controllers with breach notification obligations;

(d) Escrow Agent shall provide a detailed written report describing the breach, affected information, containment measures, and preventive steps; and

(e) All Parties shall cooperate in investigating and mitigating the breach.

10.4 Exceptions. Confidentiality obligations shall not apply to information that: (a) is publicly available through no fault of the Receiving Party; (b) was rightfully in the Receiving Party's prior possession; (c) is independently developed; (d) is obtained from a third party without restriction; or (e) is required by law, with prompt notice and cooperation in seeking protective orders.

10.5 Return or Destruction. Upon termination or request, the Receiving Party shall return or destroy all Confidential Information, subject to legal retention requirements.

11. TRADE SECRET PROTECTIONS

11.1 New Jersey Trade Secrets Act. The Deposit Materials may constitute trade secrets under the New Jersey Trade Secrets Act (N.J. Stat. Ann. §§ 56:15-1 to 56:15-9). Under N.J. Stat. Ann. § 56:15-2, a "trade secret" means information, held by one or more persons, without regard to form, including a formula, pattern, business data compilation, program, device, method, technique, design, diagram, drawing, invention, plan, procedure, prototype or process, that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. All Parties agree to maintain the confidentiality of the Deposit Materials and take reasonable measures to protect their trade secret status.

11.2 Injunctive Relief Under NJTSA. Pursuant to N.J. Stat. Ann. § 56:15-3, actual or threatened misappropriation of the Deposit Materials may be enjoined. The Parties acknowledge that monetary damages may be inadequate to remedy misappropriation and that injunctive relief, including temporary restraining orders and preliminary injunctions, may be sought in any court of competent jurisdiction in New Jersey without the necessity of posting a bond, to the extent permitted.

11.3 Damages for Misappropriation. Pursuant to N.J. Stat. Ann. § 56:15-4, damages for misappropriation may include both actual loss and unjust enrichment. If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice any award of damages. The court may also award reasonable attorneys' fees to the prevailing Party if willful and malicious misappropriation exists or a claim of misappropriation is made in bad faith.

11.4 Federal Trade Secret Protections — DTSA. The Deposit Materials may also be protected under the Defend Trade Secrets Act (18 U.S.C. §§ 1836-1839), providing federal remedies including injunctive relief, damages, ex parte seizure in extraordinary circumstances, and exemplary damages for willful misappropriation.

11.5 Reasonable Measures. Each Party shall implement reasonable measures to protect trade secret status, including limiting access, requiring written acknowledgments of confidentiality, maintaining security measures, marking materials, and promptly notifying Licensor of any unauthorized disclosure.

11.6 Whistleblower Immunity Notice. Pursuant to 18 U.S.C. § 1833(b), an individual shall not be held criminally or civilly liable under any federal or state trade secret law for disclosure of a trade secret made in confidence to a government official or attorney solely for reporting or investigating a suspected violation of law.

11.7 Statute of Limitations. Under the NJTSA, an action for misappropriation must be brought within three (3) years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered, pursuant to N.J. Stat. Ann. § 56:15-6.

11.8 Preservation of Secrecy. Escrow Agent shall implement commercially reasonable security measures to preserve the trade secret status of the Deposit Materials, including encryption, access controls, secure storage, and logging of all access.

12. INTELLECTUAL PROPERTY

12.1 Ownership. Licensor retains all right, title, and interest in the Deposit Materials, including all Intellectual Property Rights, subject to the post-release license in Section 8. Nothing herein constitutes an assignment or transfer of Intellectual Property Rights.

12.2 Escrow Agent's Role. Escrow Agent acquires no rights in the Deposit Materials and holds them solely as custodian.

12.3 No Implied Licenses. No license or right to Intellectual Property Rights is granted or implied except as expressly set forth herein.

13. WARRANTIES AND DISCLAIMERS

13.1 Licensor Warranties. Licensor represents and warrants that: (a) it has full authority to deposit the materials and grant the rights herein; (b) the materials do not infringe third-party Intellectual Property Rights to its knowledge; (c) no malware has been intentionally included; (d) the materials correspond to the current production version; (e) execution does not conflict with other agreements; and (f) all information provided is true and accurate.

13.2 Beneficiary Warranties. Beneficiary warrants that: (a) it has authority to enter this Agreement; and (b) it shall use released materials solely per this Agreement.

13.3 Escrow Agent Warranties. Escrow Agent warrants that: (a) it has authority and capability to perform escrow services; (b) it shall perform in a professional manner consistent with industry standards; and (c) it shall comply with applicable laws.

13.4 Disclaimers. EXCEPT AS EXPRESSLY SET FORTH HEREIN, DEPOSIT MATERIALS ARE PROVIDED "AS IS" UPON RELEASE. LICENSOR MAKES NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. ESCROW AGENT MAKES NO REPRESENTATIONS REGARDING THE ACCURACY OR FUNCTIONALITY OF DEPOSIT MATERIALS.

14. INDEMNIFICATION

14.1 Licensor Indemnification. Licensor shall indemnify and hold harmless Beneficiary and Escrow Agent from Losses arising from: (a) breach of Licensor's warranties or obligations; (b) IP infringement claims; (c) malware in the Deposit Materials; and (d) Licensor's breach of confidentiality.

14.2 Beneficiary Indemnification. Beneficiary shall indemnify and hold harmless Licensor and Escrow Agent from Losses arising from: (a) breach of Beneficiary's obligations; (b) use beyond licensed scope; (c) Beneficiary's modifications; and (d) Beneficiary's breach of confidentiality.

14.3 Escrow Agent Indemnification. Escrow Agent shall indemnify Licensor and Beneficiary from Losses arising from Escrow Agent's gross negligence or willful misconduct.

14.4 Procedures. The indemnified Party shall provide prompt notice, grant the indemnifying Party control of defense and settlement, and cooperate at the indemnifying Party's expense. No settlement imposing obligations on the indemnified Party without consent.

15. LIMITATION OF LIABILITY

15.1 Exclusion of Consequential Damages. TO THE MAXIMUM EXTENT PERMITTED BY NEW JERSEY LAW, NO PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, INCLUDING LOST PROFITS OR LOST DATA, REGARDLESS OF THE THEORY OF LIABILITY.

15.2 Aggregate Cap. (a) Escrow Agent's liability shall not exceed fees paid to Escrow Agent during the twelve (12) months preceding the claim; (b) Licensor's and Beneficiary's liability shall not exceed the greater of fees under the Underlying Agreement during the preceding twelve (12) months or $[________________________________].

15.3 Carve-Outs. Limitations shall NOT apply to: (a) indemnification obligations; (b) gross negligence or willful misconduct; (c) breach of confidentiality or trade secret provisions; (d) use beyond licensed scope; (e) IP warranty breach; and (f) personal injury.

16. TERM AND TERMINATION

16.1 Term. This Agreement commences on the Effective Date and continues until the earliest of: (a) termination of the Underlying Agreement; (b) mutual written agreement; or (c) termination under this Section.

16.2 Termination for Cause. Any Party may terminate upon thirty (30) calendar days' written notice if another Party materially breaches and fails to cure within such period.

16.3 Termination by Escrow Agent. Upon ninety (90) calendar days' notice if fees remain unpaid for sixty (60) days or continued performance would violate law.

16.4 Effect of Termination. Upon termination: (a) unreleased Deposit Materials shall be returned, destroyed, or transferred per Licensor's direction; (b) unpaid fees become due; (c) Sections 10, 11, 12, 14, and 15 survive; and (d) accrued rights, including post-release licenses, survive.

16.5 Transition Assistance. Escrow Agent shall provide reasonable transition assistance for up to sixty (60) calendar days.

17. GOVERNING LAW AND DISPUTE RESOLUTION

17.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to its conflicts of laws principles.

17.2 Exclusive Jurisdiction and Venue. The Parties consent to exclusive jurisdiction and venue in the state and federal courts located in [________________________________] County, New Jersey (including the Superior Court of New Jersey, [________________________________] County, and the United States District Court for the District of New Jersey) for any action arising out of this Agreement.

17.3 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY NEW JERSEY LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS MADE KNOWINGLY, VOLUNTARILY, AND WITH FULL UNDERSTANDING OF ITS LEGAL CONSEQUENCES.

17.4 Injunctive Relief. Any Party may seek injunctive or equitable relief in any New Jersey court to protect Intellectual Property Rights, trade secrets, or Confidential Information without posting a bond or proving actual damages, to the extent permitted.

17.5 Arbitration (Optional).

☐ Arbitration Elected. Disputes not resolved through thirty (30) calendar days of good faith negotiation shall be settled by binding arbitration administered by [________________________________] in New Jersey under its Commercial Arbitration Rules. The tribunal shall consist of [one (1) / three (3)] arbitrator(s). The award shall be final and enforceable in any court.

☐ Arbitration Not Elected. Disputes shall be resolved through litigation per Section 17.2.

17.6 Attorneys' Fees. The prevailing Party in any enforcement action shall recover reasonable attorneys' fees and costs, to the extent permitted by New Jersey law.

18. NEW JERSEY-SPECIFIC PROVISIONS

18.1 Electronic Signatures — UETA. This Agreement may be executed electronically in accordance with the New Jersey Uniform Electronic Transactions Act (N.J. Stat. Ann. §§ 12A:12-1 to 12A:12-26). Electronic signatures shall have the same legal effect as original signatures. A record or signature shall not be denied legal effect or enforceability solely because it is in electronic form.

18.2 Consumer Fraud Act. Nothing in this Agreement limits any rights a Party may have under the New Jersey Consumer Fraud Act (N.J. Stat. Ann. §§ 56:8-1 et seq.), which provides broad protections against unconscionable commercial practices, deception, fraud, and misrepresentation. The Consumer Fraud Act provides for treble damages, attorneys' fees, and costs to prevailing plaintiffs. The Parties acknowledge that this Act may apply to transactions involving software and technology services in New Jersey.

18.3 New Jersey Data Privacy Act (NJDPA). The Parties acknowledge that the New Jersey Data Privacy Act (SB 332), effective January 15, 2025, imposes comprehensive data privacy requirements on controllers and processors of personal data of New Jersey residents. To the extent that any Party acts as a controller or processor of personal data in connection with this Agreement:

(a) Each Party shall comply with all applicable NJDPA requirements, including data minimization, purpose limitation, and security obligations;

(b) The NJDPA prohibits the sale of sensitive personal data without exception. If Deposit Materials contain or provide access to sensitive personal data, the Parties shall ensure compliance with this prohibition;

(c) Processors shall follow controller instructions and assist with security, breach notification, and data protection assessments;

(d) The NJDPA is enforced exclusively by the New Jersey Attorney General, with a thirty (30)-day cure period; and

(e) The Parties shall cooperate in responding to consumer rights requests under the NJDPA, including requests for access, correction, deletion, and portability.

18.4 Usury Compliance. All interest rates and financial terms comply with New Jersey usury limitations. The default legal rate under N.J. Stat. Ann. § 31:1-1 is six percent (6%) per annum. Written contracts may specify up to sixteen percent (16%) per annum. Charging interest exceeding thirty percent (30%) per annum from an individual or fifty percent (50%) per annum from a corporation, LLC, or LLP constitutes criminal usury under N.J. Stat. Ann. § 2C:21-19. If any provision exceeds the maximum permitted rate, it shall be automatically reformed.

18.5 Statute of Limitations. Actions for breach of contract under New Jersey law must be commenced within six (6) years from the date the cause of action accrues, pursuant to N.J. Stat. Ann. § 2A:14-1. The cause of action accrues at the time of breach.

18.6 Bankruptcy Code Section 365(n). In the event Licensor becomes a debtor under the Bankruptcy Code, Beneficiary may elect to retain its rights under 11 U.S.C. § 365(n)(1)(B), including rights to the Deposit Materials. Licensor acknowledges the Source Code constitutes "intellectual property" under 11 U.S.C. § 101(35A).

18.7 Assignment Under New Jersey Law. Unless otherwise agreed, contractual rights and obligations under New Jersey law are generally assignable, subject to limitations in this Agreement. Any assignment shall comply with the requirements of Section 19.5.

18.8 Commercial Reasonableness. The Parties acknowledge this Agreement was negotiated at arm's length between sophisticated parties with the opportunity for independent counsel.

19. MISCELLANEOUS

19.1 Notices. All notices shall be in writing and deemed given when: (a) personally delivered; (b) one (1) Business Day after overnight courier deposit; (c) five (5) Business Days after certified mail deposit; or (d) when sent by email with confirmation copy by overnight courier. Notices shall be sent to the addresses in Section 1.

19.2 Entire Agreement. This Agreement with its Schedules and the Underlying Agreement constitutes the entire agreement and supersedes all prior agreements on this subject matter.

19.3 Amendments. This Agreement may only be amended by written instrument signed by all three Parties.

19.4 Waiver. No waiver is effective unless written and signed. No failure or delay in exercising rights shall operate as a waiver.

19.5 Assignment. No Party may assign without prior written consent, except: (a) Beneficiary may assign to an Affiliate or successor by merger, acquisition, or asset sale; and (b) Licensor may assign to a successor. Assignees must assume all obligations. Unauthorized assignments are void.

19.6 Severability. Invalid provisions shall be modified to the minimum extent necessary; remaining provisions remain in full force.

19.7 Force Majeure. No Party is liable for failure or delay caused by Force Majeure Events, with prompt notice, mitigation, and resumption. If Force Majeure continues ninety (90) days, any Party may terminate with thirty (30) days' notice.

19.8 Counterparts. This Agreement may be executed in counterparts, each an original. Electronic execution is valid under UETA.

19.9 Headings. Headings are for convenience only.

19.10 Relationship of the Parties. The Parties are independent contractors. No partnership, joint venture, or agency is created.

19.11 Third-Party Beneficiaries. Except for indemnitees under Section 14, no third-party rights are intended.

19.12 Order of Precedence. This Agreement controls for escrow matters; the Underlying Agreement controls otherwise.

19.13 Construction. No presumption against the drafter. "Including" means "including without limitation."

19.14 Cumulative Remedies. Remedies are cumulative and not exclusive.

20. SIGNATURES

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

LICENSOR

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

BENEFICIARY

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

ESCROW AGENT

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

21. SCHEDULES

SCHEDULE A — FEE SCHEDULE

Payment Terms: Net [____] days.
Late Payment Interest Rate: [____]% per annum (not to exceed 16% per N.J.S.A. § 31:1-1).

SCHEDULE B — DEPOSIT MATERIALS INVENTORY

(Attach additional pages as necessary.)

Software Product Version: [________________________________]
Date of Deposit: [__/__/____]
Total Files: [____] | Total Size: [____] GB/MB

Licensor Certification: I certify the above inventory is complete and accurate.

Signature: [________________________________] Date: [__/__/____]

SCHEDULE C — VERIFICATION LEVELS AND PROCEDURES

Tier 1 — Inventory Verification: File count, hash verification, readability, directory structure, README presence. Estimated: [____] Business Days.

Tier 2 — Technical Review: Tier 1 plus compilation attempts, dependency check, documentation review, database schema test. Estimated: [____] Business Days.

Tier 3 — Full Build: Tier 1 and 2 plus complete build, test execution, functional verification, deployment test, detailed report. Estimated: [____] Business Days.

Deficiency Classification: Critical (prevents build) | Major (impairs functionality) | Minor (does not materially affect).

Remediation Deadlines: Critical: [____] Business Days | Major: [____] Business Days | Minor: [____] Business Days.

SCHEDULE D — RELEASE REQUEST AND OBJECTION FORMS

RELEASE REQUEST FORM

To: Escrow Agent — [________________________________]
From: Beneficiary — [________________________________]
Date: [__/__/____]
Agreement Number: [________________________________]

Release Condition(s) Asserted:

☐ Section 6.1(a) — Bankruptcy Event
☐ Section 6.1(b) — Cessation of Business
☐ Section 6.1(c) — Material Breach of Maintenance/Support
☐ Section 6.1(d) — Extended Service Unavailability
☐ Section 6.1(e) — Failure to Deposit/Update
☐ Section 6.1(f) — Assignment Without Consent
☐ Section 6.1(g) — Dissolution/Liquidation
☐ Section 6.1(h) — Regulatory Action
☐ Section 6.1(i) — Verification Deficiency Failure
☐ Section 6.1(j) — Additional Trigger: [________________________________]

Factual Description:
[________________________________]

Supporting Evidence: ☐ Attached ([____] exhibits) ☐ To follow within [____] Business Days

Sworn Statement: I declare under penalty of perjury under the laws of the State of New Jersey that the foregoing is true and correct.

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

OBJECTION NOTICE FORM

To: Escrow Agent | Cc: Beneficiary | From: Licensor
Date: [__/__/____]

Grounds for Objection: [________________________________]

Supporting Evidence: ☐ Attached ([____] exhibits)

Sworn Statement: I declare under penalty of perjury under the laws of the State of New Jersey that the foregoing is true and correct.

Signature: [________________________________]
Title: [________________________________]
Date: [__/__/____]

This template is for informational purposes only and does not constitute legal advice. Consult a qualified New Jersey attorney before use. Verify all statutory citations as laws may change.

Prepared for use on the ezel.ai platform.

Sources and References

• N.J. Stat. Ann. §§ 56:15-1 to 56:15-9 (NJ Trade Secrets Act)
• N.J. Stat. Ann. §§ 12A:12-1 to 12A:12-26 (NJ UETA)
• N.J. Stat. Ann. §§ 56:8-1 et seq. (Consumer Fraud Act)
• N.J. Stat. Ann. § 31:1-1 (Interest and Usury)
• N.J. Stat. Ann. § 2C:21-19 (Criminal Usury)
• N.J. Stat. Ann. § 2A:14-1 (Statute of Limitations)
• New Jersey Data Privacy Act (SB 332, eff. Jan. 15, 2025)
• 18 U.S.C. §§ 1833, 1836-1839 (Defend Trade Secrets Act)
• 11 U.S.C. §§ 101(35A), 365(n) (Bankruptcy Code)