Escrow Agreement for Share Options

The Escrow Agreement for Share Options is a legal document that outlines the terms and conditions for the escrow of a certain amount of money between the buyer, seller, and escrow agent. The document begins by highlighting the importance of the agreement, which is to ensure that the buyer and seller fulfill their obligations under the Share Option Agreement. It provides a detailed introduction to the entire document, explaining that it is entered into by the buyer, seller, and escrow agent, and that it is necessary for the execution of the Share Option Agreement.

 

The document is divided into several sections, each of which is introduced and explained in detail. The first section is the interpretation section, which defines key terms used throughout the agreement. It explains that certain terms have the same meaning as defined in the Share Option Agreement, and provides definitions for other terms used in the agreement. The section also clarifies that the interpretation section applies to the entire agreement.

 

The second section of the document deals with the deposit of the escrow amount. It states that the escrow agent confirms that it is holding the escrow amount on behalf of the buyer and seller, and explains that the buyer is required to deposit the escrow amount in the escrow account. The section also specifies the currency and amount of the deposit, and states that the deposit shall be paid by the buyer to the seller or its nominees from the date of the agreement.

 

The third section of the document outlines the authority and duties of the escrow agent. It explains that the escrow agent is responsible for keeping and releasing the escrow amount in accordance with the instructions provided by the buyer and seller. It states that if the escrow agent receives a release notice and a call option notice from the buyer by the long stop date, it shall release the escrow amount to the seller on completion. If the escrow agent does not receive the required notices by the long stop date, it shall release the escrow amount to the buyer. The section also clarifies that the escrow agent is not required to verify the identity or rights of the parties or the authenticity or validity of the documents.

 

The fourth section of the document contains a disclaimer of the escrow agent's liabilities. It states that the escrow agent shall not be liable for any action taken or omitted by it in accordance with the terms of the agreement and at the direction of the buyer or seller. It also states that the buyer and seller shall indemnify the escrow agent against all expenses, liabilities, claims, and demands arising from or in connection with the agreement, except for liability arising from gross negligence, fraud, or willful misconduct.

 

The fifth section of the document addresses anti-money laundering laws. It requires each party to confirm that it is not a restricted person and that it has conducted its business in compliance with applicable anti-money laundering and anti-corruption laws. It also requires each party to confirm that it is not subject to any claim, proceeding, or investigation with respect to sanctions.

 

The sixth section of the document deals with costs and expenses. It states that all costs and expenses incurred by the escrow agent in the performance of its obligations under the agreement shall be borne by the buyer. It also states that the buyer and seller shall bear their own costs and expenses in connection with the preparation of the agreement.

 

The seventh section of the document contains an indemnity clause. It states that each party waives all rights to enforce any claims against the escrow agent and undertakes to indemnify and hold the escrow agent harmless against all claims, actions, proceedings, liabilities, losses, damages, costs, and expenses incurred in respect of the agreement, unless such liability arises from gross negligence, fraud, or willful misconduct.

 

The eighth section of the document addresses assignment. It states that none of the parties shall assign, transfer, charge, or otherwise deal with their rights under the agreement without the prior written consent of the other parties.

 

The ninth section of the document deals with counterparts. It states that the agreement may be executed in any number of counterparts, each of which is an original but all of which together constitute one and the same instrument.

 

The tenth section of the document contains general provisions. It includes provisions for further assurance, entire agreement, remedies cumulative, waivers, severability, variation, assignment, counterparts, legal relationship, punctual performance, and waiver of immunity.

 

The document concludes with a jurisdiction clause, which states that the agreement is governed by the laws of the jurisdiction and any disputes arising out of or in connection with the agreement shall be subject to the exclusive jurisdiction of the courts of that jurisdiction. It also includes a provision stating that no rights under the agreement can be enforced by third parties.

 

In summary, the Escrow Agreement for Share Options is a detailed legal document that outlines the terms and conditions for the escrow of a certain amount of money between the buyer, seller, and escrow agent. It provides a clear and comprehensive framework for the parties to fulfill their obligations under the Share Option Agreement and ensures that the escrow agent carries out its duties in accordance with the agreement.

How to use this document?

To use the Escrow Agreement for Share Options, follow these steps:

1. Deposit the escrow amount: The buyer is responsible for depositing the escrow amount in the escrow account. Ensure that the deposit is made in the specified currency and amount.

2. Provide release notice and call option notice: If the buyer wishes to exercise the call option, they must send a release notice to the escrow agent, accompanied by a call option notice duly executed by the buyer. Make sure to include all necessary details and ensure that the notices are sent before the long stop date.

3. Release of escrow amount: If the escrow agent receives the required notices from the buyer by the long stop date, they will release the escrow amount to the seller on completion. If the notices are not received by the long stop date, the escrow agent will release the escrow amount to the buyer.

4. Understand the escrow agent's duties: The escrow agent is responsible for keeping and releasing the escrow amount in accordance with the instructions provided by the buyer and seller. They are not required to verify the identity or rights of the parties or the authenticity or validity of the documents.

5. Be aware of the escrow agent's disclaimer of liabilities: The escrow agent shall not be liable for any action taken or omitted by them in accordance with the terms of the agreement and at the direction of the buyer or seller. The buyer and seller are responsible for indemnifying the escrow agent against any expenses, liabilities, claims, and demands arising from or in connection with the agreement, except for liability arising from gross negligence, fraud, or willful misconduct.

6. Comply with anti-money laundering laws: Each party must confirm that they are not a restricted person and have conducted their business in compliance with applicable anti-money laundering and anti-corruption laws.

7. Understand the costs and expenses: The buyer is responsible for bearing all costs and expenses incurred by the escrow agent in the performance of their obligations under the agreement. The buyer and seller are responsible for bearing their own costs and expenses in connection with the preparation of the agreement.

8. Be aware of the indemnity clause: Each party waives their rights to enforce any claims against the escrow agent and undertakes to indemnify and hold the escrow agent harmless against any claims, actions, proceedings, liabilities, losses, damages, costs, and expenses incurred in respect of the agreement, unless such liability arises from gross negligence, fraud, or willful misconduct.

9. Understand the general provisions: Familiarize yourself with the provisions for further assurance, entire agreement, remedies cumulative, waivers, severability, variation, assignment, counterparts, legal relationship, punctual performance, and waiver of immunity.

10. Comply with the jurisdiction clause: The agreement is governed by the laws of the jurisdiction and any disputes arising out of or in connection with the agreement shall be subject to the exclusive jurisdiction of the courts of that jurisdiction. Note that no rights under the agreement can be enforced by third parties.

By following these steps, you can effectively use the Escrow Agreement for Share Options and ensure that the escrow of the specified amount of money is carried out in accordance with the terms and conditions of the agreement.