Escrow and Security Agreement between On Site Media, Inc., Site-Based Media, Inc., and Citibank, N.A.
Description
Definition and meaning
An escrow and security agreement is a legal contract that outlines the terms under which one party holds assets on behalf of another. In this case, the Escrow and Security Agreement between On Site Media, Inc., Site-Based Media, Inc., and Citibank, N.A. establishes a framework for holding shares of common stock as collateral to secure indemnification obligations. This agreement ensures that proper protections are in place for the involved parties, minimizing potential disputes related to the shares being held in escrow.
Key components of the form
This agreement consists of several essential components that delineate the responsibilities and rights of each party involved:
- Delivery of Shares: Details on how many shares will be delivered to the Escrowee and the acknowledgment process.
- Security Interests: Specifies the nature of the security interest granted over the assets held in escrow.
- Default Conditions: Outlines what constitutes a default and the remedies available to On Site in such a scenario.
- Duties of the Escrowee: Defines the responsibilities of Citibank, the Escrowee, in managing and disbursing the collateral.
- Termination Clauses: Conditions under which the agreement comes to an end.
Who should use this form
This Escrow and Security Agreement is primarily for use by parties involved in corporate transactions, particularly those requiring indemnification provisions due to stock transactions. It is particularly relevant for:
- Corporate shareholders who require assurances on indemnity.
- Legal and financial advisors engaged in structuring security interests.
- Companies entering transactions where assets need to be held as collateral.
Legal use and context
This form is relevant in various legal situations where one party needs to secure obligations against potential breaches. For example, shareholders might require protection against future liabilities when shares are issued. The use of escrow agreements is common in mergers, acquisitions, and other financial transactions to ensure that assets are safeguarded during the course of contractual obligations.
Common mistakes to avoid when using this form
When filling out or executing the Escrow and Security Agreement, parties should be cautious of the following common mistakes:
- Failing to provide complete and accurate information about the parties involved and the assets.
- Omitting critical provisions related to the default process and remedies.
- Not clearly defining the roles and responsibilities of the Escrowee.
- Neglecting to include timelines or conditions for termination of the agreement.
What documents you may need alongside this one
Supporting documents that complement the Escrow and Security Agreement may include:
- The Subscription Agreement outlining the terms of the stock purchase.
- The Stockholders' Agreement, which details the relationships and obligations among shareholders.
- Any court orders or judgments related to liabilities that may affect the collateral.
How to fill out Escrow And Security Agreement Between On Site Media, Inc., Site-Based Media, Inc., And Citibank, N.A.?
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