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Escrow Agreement for Stock Certificates FREE & HIGH QUALITY

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Escrow Agreement for Stock Certificates FREE & HIGH QUALITY Powered By Docstoc
					                 Escrow Agreement for Stock Certificates
1. Names

   _____________ (Seller), ____________ (Buyer), and ___________ (Escrow Agent)
   agree to the following escrow arrangements.

2. Delivery of Stock Certificates

   Seller will deliver to Escrow Agent the following stock certificates for
   _____________, a(n) ____________ corporation, endorsed in blank for transfer:

   Certificate Number          Name of Transferor

   ___________________         __________________________________________

   ___________________         __________________________________________

3. Establishment of Escrow

   Escrow Agent will accept and hold the stock certificates according to the terms of this
   agreement.

4. Delivery of Stock Certificates by Escrow Agent as Directed by Buyer and Seller,
   or by Court Order

   Seller and Buyer agree that Buyer will be entitled to receive the stock certificates
   when all payments have been made to Seller under the promissory note that Buyer
   signed today in connection with purchase of the business. If Buyer defaults on that
   note, Seller will be entitled to a return of the stock certificates.

   Escrow Agent, however, will not deliver the stock certificates to either Seller or
   Buyer except as directed by a distribution letter from both, or by a final arbitration
   award or court order as described below.

   If Buyer and Seller furnish a signed distribution letter to Escrow Agent, Escrow
   Agent will deliver the stock certificates as the letter directs.

   Similarly, Escrow Agent will deliver the stock certificates as directed by a final
   arbitration award or court order that is no longer subject to appeal or stay.
   After delivery of the stock certificates to the Seller or Buyer, the party not receiving
   the stock certificates will have no further rights to them.

5. Rights When Buyer Is Not in Default

   While the stock certificates are on deposit with Escrow Agent and as long as Buyer is
   not in default under the promissory note and security agreement signed by Buyer
   today, Buyer will have the full right to operate the business of the company but may
   not sell it or encumber its assets.

6. No Judgment to Be Exercised by Escrow Agent

   The Escrow Agent will make no independent judgment about whether or not Buyer is
   in default.

7. Restrictions on Buyer

   As long as any of Buyer's obligations stated in the promissory note or security
   agreement remain unsatisfied, the Buyer will not permit the corporation to participate
   in a merger or consolidation, or to issue any additional shares of stock or grant any
   stock option.

8. Termination of Escrow

   The escrow will end when Escrow Agent no longer holds the stock certificates and
   the parties have paid Escrow Agent all amounts for which they are responsible. The
   parties will share equally Escrow Agent's fees.

9. Conduct of Escrow Agent

   Escrow Agent will:

   A. Not be liable for any action taken by Escrow Agent in good faith and without
       negligence.

   B. Be able to refrain from any action under this agreement if Escrow Agent knows of
       a disagreement between the parties regarding any material facts or the happening
       of any event contemplated by this agreement.

10. Additional Documents
   The parties will, at the request of any other party, sign any agreements or documents
   consistent with this agreement that are necessary to consummate the transactions
   contemplated in this agreement.

11. Notices

   Any required or permitted notice will be deemed given to a party if sent by first-class
   mail to the party at the address following the party's signature.

12. Successors and Assignees

   This agreement binds and benefits the heirs, successors, and assignees of the parties.

13. Governing Law

   This agreement will be governed by and construed in accordance with the laws of the
   State of _________________.

14. Modification

   This agreement may be modified only by a writing signed by all parties.

15. Waiver

   If any party waives any provision of this agreement at any time, that waiver will only
   be effective for the specific instance and purpose for which that waiver was given. If
   any party fails to exercise or delays exercising any of its rights or remedies under this
   agreement, that party retains the right to enforce that term or provision at a later time.

16. Severability

   If a court determines that any provision of this agreement is invalid or unenforceable,
   any invalidity or unenforceability will affect only that provision. Such provision may
   be modified, amended, or limited only to the extent necessary to make it valid and
   enforceable.



SELLER



____________________________________
Printed name: __________________

Address:   __________________
           __________________

Dated: _____________



BUYER



____________________________________

Printed name: __________________

Address:   ___________________________
           ___________________________

Dated: _____________



ESCROW AGENT



____________________________________

Printed name: __________________

Address:   ___________________________
           ___________________________

Dated: _____________