Bulk Sales
Escrow Agreement
Date: ____________________
To: ______________________
Under the terms and
conditions of a contract between ____________, referred to as SELLER, and
______________, referred as BUYER, for the bulk sale of a certain business
known as ________________ __________, the parties herewith agree to the
following escrow instructions:
A total of $ _____
(____________________ &___/100 dollars) will be deposited.
The Fund shall be
invested from time to time in an interest bearing account with a national bank
that is insured by the F.D.I.C.; provided, however, that in the event that the
deposit at any time exceeds $100,000, the deposit shall be made with a bank
with capital and surplus of at least $100,000,000.
If, prior to
termination of the escrow, BUYER, notifies of any breach of warranty with
respect to the indebtedness of Seller to its creditors under the terms and
provisions of the bulk sale and such notice shall specify the amount which
Buyer shall claim is due and owing to Buyer by virtue of such breach of claim
of breach, you shall, within ten 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:
In the event that such
notice is received you shall withhold the sum claimed, unless the SELLER
delivers a sworn acquaintance of such debt from the claimant, or, a written
statement from the BUYER withdrawing the objection.
On or about
____________ you shall distribute the remaining sum other than the sums
directed to be withheld, as follows:
First priority—Expenses
of the ESCROW AGENT;
Second priority—Such
sums, if any, required to be withheld under the terms and conditions state
herein;
Third priority--
_____________.
You may resign by
mailing written notice thereof to Buyer and to Seller at the addresses stated
above. 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. Any successor or successors shall have all of
the rights, obligations and immunities granted to you by the terms and
provisions hereof.
Nothing herein
contained shall constitute a limitation of any obligations of either Buyer or
Seller under the Agreement otherwise.
This is the entire
agreement between the parties and this agreement may only be amended by a
written agreement between the parties.
In the event that any
controversy arises as to the distribution of the escrow, the ESCROW agent may
interplead the sums in any court with jurisdiction and all costs of fees
thereof reasonably incurred by escrow agent shall be payable from the fund.
Dated:
____________________
________________________________________
SELLER
________________________________________
BUYER
Accepted:
_________________________________________
ESCROW AGENT
Bulk Sales Escrow
Agreement
Review List
This review list is provided to inform you about this
document in question and assist you in its preparation. A bulk sales escrow agreement is often an
important vehicle to effect such a transaction.
It is especially useful for the buyer to protect against potential
seller creditor claims; sellers can use this approach to quiet the concerns of
a buyer about undertaking the transaction to start with.
1. Make multiple copies. Give one to each related party. Keep a copy in the related file.
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