Rights of Initial Shareholders in Escrow Shares Clause Samples

The 'Rights of Initial Shareholders in Escrow Shares' clause defines the entitlements and limitations of original shareholders regarding shares that are held in escrow, typically following a transaction or as part of a lock-up arrangement. This clause outlines what rights, such as voting or dividend rights, the initial shareholders retain or forfeit while the shares are in escrow, and may specify conditions under which the shares are released or forfeited. Its core function is to clarify the status and permissible actions of shareholders with respect to escrowed shares, thereby preventing disputes and ensuring all parties understand their rights during the escrow period.