The Deposit Process

1. The Parties sign the Escrow Agreement

2. The Owner provides Chattan Escrow with the Escrow Package comprising the source code of the relevant software as well as any documentation.

3. Chattan Escrow deposits the Escrow Package into its Bank Vault.

4. If any updates or modifications are made to the Software, the Owner provides Chattan Escrow with the updated source code, which is treated the same as the original deposit. In this regard it is prudent for the Beneficiary to notify Chattan Escrow when updates have occurred so that Chattan Escrow can follow up with the Owner to submit the new code.

The Release Process

1. The role players:
   a. The Escrow Agent - Chattan Escrow (Pty) Ltd
   b. The owner / developer of the Software (owner)
   c. the user of the software (beneficiary)

2. The rationale

   1. the source code enables the beneficiary to manipulate the program to undertake necessary bug fixes or developments of the software where the owner is not in a position to do so. This is typically where the owner:

      1. goes insolvent, 

      2. ceases to do business;

      3. refuses / fails to support the software (i.e. breaches the maintenance and support agreement).

   2. These are known as TRIGGER EVENTS and when an agreed trigger event occurs, the beneficiary is entitled to release of the source code. The parties agree upfront what the relevant Trigger Events will be.

3. The Process:

   1. The occurrence of a Trigger Event may be easily determinable, or may be subject to dispute.

   2. Where independent proof exists of the occurrence of a trigger event, we term this SUFFICIENT PROOF. This would include court orders confirming liquidation, certification from the Registrar of Companies that deregistration has occurred. If the Beneficiary submits Sufficient Proof, the Escrow Package will be released to it.

   3. If Sufficient Proof does not exist, then the Beneficiary submits a sworn declaration (affidavit) that a Trigger Event has occurred.

   4. On receipt of the affidavit, Chattan Escrow has 7 days to (i) notify the Owner that the Beneficiary believes a Trigger Event has occurred and (ii) submit the affidavit to the Owner.

   5. The Owner then has a further 7 days to show cause why the Escrow Package should not be released, and its version must also be set out in an affidavit.

   6. If the Owner 

      1. agrees or fails to respond within the 7 days, the Escrow Package may be released by Chattan Escrow to the Beneficiary;

      2. disputes that a Trigger Event has occurred, Chattan Escrow notifies the Beneficiary that a dispute exists and the parties must then endeavour to resolve the matter within 7 (seven) days, failing which the issue is referred to arbitration.

   7. Chattan Escrow will abide by any decision of the arbitrator.