Newsletter-21

11 COMMERCIAL LAW Thus, one part of the escrow agreement is the parties to the merger and/ or acquisition agreement, while the other part thereto is a third person not being a party to the underlying agreement ( escrow agent ). Escrow agreements are preferred as a security mechanism also in case of asset and business transactions. What characterizes the escrow agreement in this instance is that the right of disposition over the assets being the subject matter of the escrow agreement is assigned to the escrow agent until the certain terms and conditions of the underlying agreement are fulfilled. The underlying agreement may explicitly set forth that an escrow agreement shall be executed, or even incorporate full text or principal terms and conditions of such an escrow agreement. Accordingly, it is essential for the escrow agreement to be ex- ecuted by and between the escrow agent and the parties to the merger and/or acquisition agreement to include the following particulars 2 : - Information on the transaction being the basis for the escrow relationship, - Detailed information on the assets entrusted with the escrow agent (for instance, if the assigned asset is a share, the num- ber, type, distinctive features of the sale shares; and if the assigned asset is the purchase price, then the amount and type of the consideration), - Relevant obligations of the escrow agent, - Detailed information under which conditions the assigned asset (i.e. share or consideration) shall be returned to the par- ties to the underlying agreement, and about the procedure to be followed upon occurrence of such conditions (for in- stance, joint instruction to be sent by the purchaser and seller to the escrow agent, or a unilateral statement of will to be sent by either the purchaser or seller to the escrow agent), 2 Kırca Ismail , Banka ve Ticaret Hukuku Dergisi, Vol. XIX, Issue 1, Ankara 1997: p 46-47.