Escrow Agreement for Bulk Sales
Pursuant to the terms and provisions of that certain agreement for the sale of the business of _______________ (hereinafter called the "Agreement") between ___________________ (hereinafter called "Seller") and _________________(hereinafter called "Buyer"), a copy of which Agreement is attached hereto and hereby made a part hereof, there is deposited with you the following:
(hereinafter called the "Fund"). The Fund is to be held and administered by you, subject to the following terms and conditions:
1. The Fund shall be invested from time to time in an interest bearing account.
2. If, prior to the termination time (as hereinafter defined), Buyer shall notify you in writing of any breach of warranty with respect to the indebtedness of Seller to its creditors under the terms and provisions of the Agreement and such notice shall specify the amount which Buyer shall claim is due and owing to Buyer by
virtue of such breach or claim of breach, you shall, within ____ days from and after the receipt of such notice from Buyer, notify Seller in writing of such claim by sending written notice thereof by registered mail, return receipt requested, to Buyer at the following address:
___________________, and if Seller shall not have delivered to you, prior to the close of business on the 15th day from and after the date on which you shall have notified Seller of the claim of Buyer, sufficient funds from Seller's own sources other than the Fund to pay and discharge the amount of the claim asserted
by Buyer in consequence of a breach, or alleged breach, of warranty by Seller under the Agreement with respect to the indebtedness of Seller to its creditors under the Agreement, you shall, out of the assets and monies held by you in the Fund, pay to Buyer the amount claimed by Buyer in the notice which it shall have
first sent to you under the terms and provisions of this paragraph.
3. In lieu of delivering to you, from its own sources other than the Fund, sufficient monies to pay and discharge any claim asserted by Buyer in the manner provided in Paragraph No. 2 hereof, Seller may furnish to you, prior to the close of business on the 15th day following the day on which you shall have mailed notice to
Seller of a claim asserted by Buyer under Paragraph No. 2 hereof, a written acknowledgment signed by Buyer that the asserted claim has been discharged to the satisfaction of Buyer.
4. Not later than thirty days from and after the close of business on the ___________ day of __________, 20__ (which date is referred to herein as the "termination time"), you shall distribute to Buyer any and all monies and other assets then remaining in the Fund. Prior to such time you shall, however, out of the Fund, deduct all of your reasonable fees and expenses in administering the Fund.
5. You may resign by mailing written notice thereof to Buyer at _____________ and to Seller at _________________. In the event of any such resignation, Buyer may appoint (by written notice delivered to Seller at the above specified address) a successor escrow which shall be a national bank doing business in ___________________. Any successor or successors shall have all of the rights, obligations and immunities granted to you by the terms and provisions hereof.
6. Nothing herein contained shall constitute a limitation of any obligations of either Buyer or Seller under the Agreement otherwise.
7. This instrument and all of the terms, provisions and covenants herein set forth shall be binding upon Buyer and Seller and their respective heirs, executors, administrators, successors and assigns and shall inure to your benefit and to the benefit of your successors and assigns. No assignment by Seller of any rights hereunder or of any rights in and to the Fund shall be effective for any purpose and, notwithstanding any purported assignment by Seller, you shall be fully entitled to disregard any such purported assignment in administering the Fund and your responsibilities hereunder.
DATED this _____ day of ________, 20 __.
We hereby acknowledge receipt of the following:
___________________________ referred to in the above and foregoing letter and agree to hold, administer and distribute the same in accordance with all of the terms and provisions thereof.