M&A Escrow
     
  Advantages of M&A Escrow
 
Safe and segregated management of a large amount of acquisition funds by money trust
Settlement terms and conditions can be set in flexible manner in accordance with the situation of individual transaction.
  Safeguarding of defect warranty retainage
  Separate safeguarding of retirement benefit funds
  Release of funds after confirming performance of the post-closing clause
  Confirmation of fund raising at the time of application for registration of corporate separation, settlement on the day of registration completion
Important agreement documents, etc., are kept as a neutral third party.
     
 
  ( M&A Escrow )*In case of safeguarding of retirement benefits
 
Conclusion of M&A agreement
Trust agreement is concluded among the seller, buyer, scheduled retirement benefit recipient, and Yamada Escrow and Trust.
The buyer entrust full amount of sales proceeds.
The buyer instructs to pay the first beneficiary right.
The trust company makes payment.
Supplementary documents are delivered to the buyer.
The buyer instructs to pay the second beneficiary right.
The trust company makes payment.
The buyer instructs to pay the third beneficiary right.
The trust company makes payment to the scheduled retirement benefit recipient.
(Note) First beneficiary right 90% of sales proceeds
  Second beneficiary right 10% of the beneficiary’s (seller’s) sales proceeds
(Retainage to be settled later)
  Third beneficiary right Retainage for the scheduled retirement benefit recipient
 
 
  ( Escrow of Guarantee against M&A Defects )
Conclusion of M&A agreement
Trust agreement is concluded among the seller, buyer, and Yamada Escrow and Trust.
On settlement date, the seller entrusts the defect warranty retainage amount out of the stock sales proceeds received.
The buyer presents the content and amount of the defect warranty to the seller and both parties discuss.
When the both parties agree, payment is requested to the trust company under their joint names.
The trust company pays the required amount to the buyer and remaining amount to the seller (return).
  (Note) In this scheme, the seller is the settler. A scheme is available in which the buyer is the settler.

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  Tips on Use of Escrow in M&A Transactions
 
You wish to retain a part of acquisition funds after funds settlement.
  You wish to secure defect warranty money for the violation of expressed warranty.
  You wish to secure specific tax liability damages, etc., which may occur arising from tax investigation.
You wish to release the funds after confirmation of fulfillment of the post-closing terms and conditions (fulfillment of obligation clause after a transaction is closed).
You wish to secure funds for retirement benefits and retirement benefits for directors associated with M&A transaction separately.
You wish to use it when there is a gap in timing of settlement in a sale of business that entails transfer of various assets.
You wish to use it to secure transaction of transfer of operations by corporate separation.
You wish to use it for business succession.