Escrow Agreement


Summary

This form is an Escrow Agreement among a purchaser, seller, and escrow agent relating to an asset purchase transaction. With some revision, this form can also work in either a stock purchase or merger. This form includes practical guidance, drafting notes, alternate clauses, and optional clauses.The parties to an M&A transaction may set aside a portion of the consideration in escrow for some period after closing. An escrow arrangement in an M&A transaction ensures that funds are available to support indemnification obligations and other post-closing payments to either party (such as purchase price adjustments and earn-outs). See Indemnification Provisions in Private Acquisition Agreements and Purchase Price Adjustment Provisions in M&A Transaction Documents.Escrow arrangements are most commonly used in transactions involving the acquisition of private companies. In public company acquisitions, escrow amounts held back for indemnification purposes are uncommon because representations ...