Claw Back Escrow Sample Clauses
A Claw Back Escrow clause establishes a mechanism where a portion of the purchase price or other funds is held in escrow and may be reclaimed by the buyer under certain conditions, such as the discovery of breaches of representations or warranties after closing. Typically, this clause specifies the amount to be held, the duration of the escrow period, and the circumstances under which funds can be released to either party. Its core practical function is to protect the buyer from unforeseen liabilities or misrepresentations by ensuring that funds are available to cover potential claims, thereby allocating risk between the parties and promoting trust in the transaction.
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Claw Back Escrow. The Claw Back Escrow shall be released to the Seller Stockholders, in accordance with the allocation set forth in Exhibit 2.6(d), if the Earnout Base Revenues during the Earnout Period equal or exceed $10,000,000 (the “Claw Back Release Threshold”). If the Earnout Base Revenues during the Earnout Period do not equal or exceed the Claw Back Release Threshold, then the Claw Back Escrow shall be forever cancelled in its entirety on the stock Records of Buyer and the Seller Stockholders shall have no claim whatsoever thereto. Calculation of the Earnout Base Revenues for the purpose of this Section 2.3(h) shall be performed in accordance with Sections 2.3(d) and (f) above.