Escrow agreement for use where executed documents are to be held in an escrow arrangement for a period of time (typically until the completion of the acquisition) by a third-party (the escrow agent). The terms are drafted in favour of the Seller.
The Seller and Buyer entered into an agreement (the Sale and Purchase Agreement) providing for the sale of a Company from the Seller to the Buyer for the consideration and subject to the terms and conditions set out in the Sale and Purchase Agreement.
Under the Sale and Purchase Agreement, the Seller and the Buyer are required to be a party to, and to deliver on completion of the sale and purchase of the Company, certain other documents, deeds and agreements which are listed in the Schedule (the "Documents").
The Documents have been signed but have not been delivered by any of the parties to them to the relevant counterparties, and are to be held by the Escrow Agent on the terms and subject to the conditions set out in this Agreement.
The Escrow Agent shall hold the Documents on the terms of this Agreement pending their delivery by each of the parties on Completion (the Escrow).
None of the Documents may be amended, modified or supplemented after deposit with the Escrow Agent unless the Document, as amended, modified or supplemented, is in an agreed form and is fully executed by the parties to the document, in which case the Document, as so amended, modified or supplemented, will become one of the Documents.
This document should be carefully read by the Seller, the Buyer and the Escrow Agent.
Both parties should sign and return a copy, and once signed, both parties should get a copy. To avoid future disputes, all parties may wish to have their signature witnessed.
Terms and Conditions and rights and liabilities should all be clearly stated in the Escrow Agreement.
If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.
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Please get all the parties to review the document carefully and make any final modifications to ensure that the details are correct before signing the document. Each party should have a copy of the executed document.