Common use of Purchase Price Holdback Clause in Contracts

Purchase Price Holdback. (a) The Buyer shall withhold the Holdback Amount as collateral to secure the Shareholders' obligations described in Section 3(b) below, during the period commencing on the Closing Date and terminating on the date that is one (1) year from the Closing Date. On the date that is one (1) year from the Closing Date (or if such date is not a business day, on the next business day thereafter), the Holdback Amount, less the amount of any reductions thereto, as provided in Section 3(b) below, if a positive amount, shall be distributed to the Shareholders, without interest, in accordance with such Shareholder's Prorata Share. The Buyer shall not be required to segregate or set aside the Holdback Amount. The Buyer may, without obligation, file a UCC-1 or other appropriate instruments with the California Secretary of State evidencing Buyer's security interest in the Holdback Amount, and the Shareholder Representative is authorized to execute and deliver such UCC-1 or other appropriate instruments, and each Shareholder shall be fully bound thereby. (b) The Holdback Amount is subject to reduction and retention by Buyer as follows: (i) In the event that there is a Purchase Price reduction pursuant to the terms of Section 2.3 above; and (ii) In satisfaction of any claim for Damages by the Buyer against the Shareholders pursuant to the provisions of Section 14, below. (c) Without limiting the foregoing, in the event that reductions to the Holdback Amount made by the Buyer pursuant to this Section 3 exceed the amount of the Holdback Amount, then, in addition to any other remedies available to the Buyer, the Buyer shall be able to recover any excess amounts directly from the Shareholders, on a joint and several basis. (d) Under no circumstances will the Shareholders, without the prior written consent of the Buyer, assign, transfer or grant any security interest in the Holdback Amount to any party other than (i) the Buyer pursuant to Section 3(a) above, or (ii) an existing Shareholder who shall accept such assignment, transfer or security interest subject to the prior rights of the Buyer hereunder.

Purchase Price Holdback. (ai) The Buyer Purchaser shall withhold from the Purchase Price an amount equal to $350,000 (the "Holdback Amount Amount") as collateral to secure the Shareholders' Company's obligations described in Section 3(bVII(a) below, during the period commencing on the Closing Date and terminating on the date that is one eighteen (118) year months from the Closing Date. On the date that is one eighteen (118) year months from the Closing Date (or if such date is not a business day, on the next business day thereafter), the Holdback Amount, less the amount of any reductions thereto, as provided in Section 3(bI(d)(ii) below, if a positive amount, shall be distributed to the ShareholdersCompany, without interest, in accordance with such Shareholder's Prorata Share. The Buyer Purchaser shall not be required to segregate or set aside the Holdback Amount. The Buyer Purchaser may, without obligation, file a UCC-1 or other appropriate instruments with the California Secretary and New Jersey Secretaries of State evidencing BuyerPurchaser's security interest in the Holdback Amount, and the Shareholder Representative is authorized to execute and deliver such UCC-1 or other appropriate instruments, and each Shareholder shall be fully bound thereby. (bii) The Holdback Amount is subject to reduction and retention by Buyer Purchaser as follows: (iA) In the event that there is a Purchase Price reduction pursuant to the terms of Section 2.3 I(c) above, provided that immediately after any reduction is made pursuant to Section I(c) ("Inventory Reduction"), Purchaser shall promptly pay to the Company from the Holdback Amount the difference between $100,000 and the Inventory Reduction. If the Inventory Reduction is greater than $100,000, then Purchaser shall withhold any additional monies from the Holdback Amount; and (iiB) In satisfaction of any claim for Damages by the Buyer Purchaser against the Shareholders Company pursuant to the provisions of Section 14, VII(a) below. (ciii) Without limiting the foregoing, in the event that reductions to the Holdback Amount made by the Buyer Purchaser pursuant to this Section 3 I(d) exceed the amount of the Holdback Amount, then, in addition to any other remedies available to the BuyerPurchaser, the Buyer Purchaser shall be able to recover any excess amounts directly from the Shareholders, on a joint and several basisCompany. (div) Under no circumstances will the ShareholdersCompany, without the prior written consent of the BuyerPurchaser, assign, transfer or grant any security interest in the Holdback Amount to any party other than (i) the Buyer Purchaser pursuant to Section 3(aI(d)(i) above, or (ii) an existing Shareholder who shall accept such assignment, transfer or security interest subject to the prior rights of the Buyer hereunder.

Purchase Price Holdback. (ai) The Buyer Purchaser shall withhold from the Purchase Price an amount equal to $350,000 (the "Holdback Amount Amount") as collateral to secure the Shareholders' Company's obligations described in Section 3(bVII(a) below, during the period commencing on the Closing Date and terminating on the date that is one eighteen (118) year months from the Closing Date. On the date that is one eighteen (118) year months from the Closing Date (or if such date is not a business day, on the next business day thereafter), the Holdback Amount, less the amount of any reductions thereto, as provided in Section 3(bI(d)(ii) below, if a positive amount, amount shall be distributed to the Shareholders, Company without interest, in accordance with such Shareholder's Prorata Share. The Buyer Purchaser shall not be required to segregate or set aside the Holdback Amount. The Buyer Purchaser may, without obligation, file a UCC-1 or other appropriate instruments with the California Secretary and New Jersey Secretaries of State evidencing BuyerPurchaser's security interest in the Holdback Amount, and the Shareholder Representative is authorized to execute and deliver such UCC-1 or other appropriate instruments, and each Shareholder shall be fully bound thereby. (bii) The Holdback Amount is subject to reduction and retention by Buyer Purchaser as follows: (iA) In the event that there is a Purchase Price reduction pursuant to the terms of Section 2.3 I(c) above, provided that immediately after any reduction is made pursuant to Section I(c) ("Inventory Reduction"), Purchaser shall promptly pay to the Company from the Holdback Amount the difference between $100,000 and the Inventory Reduction. If the Inventory Reduction is greater than $100,000, then Purchaser shall withhold any additional monies from the Holdback Amount; and (iiB) In satisfaction of any claim for Damages by the Buyer Purchaser against the Shareholders Company pursuant to the provisions of Section 14, VII(a) below. (ciii) Without limiting the foregoing, in the event that reductions to the Holdback Amount made by the Buyer Purchaser pursuant to this Section 3 I(d) exceed the amount of the Holdback Amount, then, Amount then in addition to any other remedies available to the BuyerPurchaser, the Buyer Purchaser shall be able to recover any excess amounts directly from the Shareholders, on a joint and several basis. Company. (di.v) Under no circumstances will the ShareholdersCompany, without the prior written consent of the BuyerPurchaser, assign, transfer or grant any security interest in the Holdback Amount to any party other than (i) the Buyer Purchaser pursuant to Section 3(aI(d)(i) above, or (ii) an existing Shareholder who shall accept such assignment, transfer or security interest subject to the prior rights of the Buyer hereunder.