Common use of Holdback Amount Clause in Contracts

Holdback Amount. Sellers shall present a calculation of the Pre-Opening Reduction Amount (as defined in Section 2.5(c) below), together with such supporting documentation as Buyer may reasonably request, at least two business days prior to Closing, and the Closing shall not take place until the parties have mutually agreed on such calculations, subject to Section 2.5(d). Notwithstanding the foregoing, at least three business days prior to Closing, Sellers will deliver the Audited Financials (including the Audited Six Month Income Statement) to Buyer, together in each case with a calculation of EBITDA based thereon, adjusted (solely in the case of the Audited Financials) as follows: (i) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, (ii) plus (minus) increase (decrease) in deferred lease obligations from December 31, 1998 through June 30, 1999, and (iii) plus corporate cost allocations. If such EBITDA is less than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be reduced at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference), and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer shall have the right to terminate this Agreement upon prompt notice to the other parties to this Agreement; provided further that Seller shall not have the right to terminate in the case of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt of the Audited Financials if the shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement pursuant to the last sentence of the first paragraph of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%) or (y) 300% of the shortfall (expressed as a positive number) between EBITDA based on the Audited Six Month Income Statement and EBITDA based on the Interim Financial Statements.

Holdback Amount. Sellers For any Loss for which the Seller Parties are obligated to indemnify the Buyer Indemnitees, the Buyer Indemnitees shall present a calculation of seek reimbursement for such Loss from the Pre-Opening Reduction Holdback Amount (as defined in Section 2.5(c) below), together with such supporting documentation as Buyer may reasonably request, at least two business days prior to Closingfirst, and once the Closing shall not take place until Holdback Amount is exhausted, then the parties have mutually agreed on Buyer Indemnitees may proceed to collect the unreimbursed amount of such calculations, subject to Section 2.5(d). Notwithstanding the foregoing, at least three business days prior to Closing, Sellers will deliver the Audited Financials Loss: (including the Audited Six Month Income Statementa) to Buyer, together in each case with a calculation of EBITDA based thereon, adjusted (solely in the case of the Audited Financialsany indemnification claim pursuant to Section 10.1(a) as follows: or (ib), from any offset against any Year 1 Earnout and/or Year 2 Earnout, or (b) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, (ii) plus (minus) increase (decrease) in deferred lease obligations from December 31, 1998 through June 30, 1999, and (iii) plus corporate cost allocations. If such EBITDA is less than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be reduced at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference), and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer shall have the right to terminate this Agreement upon prompt notice to the other parties to this Agreement; provided further that Seller shall not have the right to terminate in the case of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt of the Audited Financials if the shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement indemnification claim pursuant to the last sentence of the first paragraph of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%10.1(a) or (yb), the Seller Parties jointly and severally, subject to the limitations set forth in this Agreement, which may be satisfied by payment (to be made within fifteen (15) 300% days after the final determination of such Losses) of such amount of such Losses owed by the Seller Parties in immediately available funds to an account designated in writing by Buyer Indemnitees. The foregoing restrictions shall be in addition to, and not in limitation of, any further limitation of liability that might otherwise apply (whether by reason of a Buyer Indemnitee’s waiver, relinquishment or release of any applicable rights or otherwise). Buyer may not hold any portion of the shortfall Holdback Amount more than twelve (expressed as a positive number12) between EBITDA based months after the Closing Date, unless mutually agreed upon by the parties, and on the Audited Six Month Income Statement and EBITDA based on first annual anniversary of this Agreement Buyer shall pay the Interim Financial Statementsremaining Holdback Amount, less any pending claims to the Sellers. Once any pending claims are resolved in accordance with this Agreement, the then remaining Holdback Amount shall be paid to Sellers.

Holdback Amount. Sellers Any payment that the Shareholders are obligated to make to any Buyer Indemnitees pursuant to this Article IX shall, first, to the extent that the Holdback Amount is greater than the indemnity payment, be paid to the Buyer Indemnitiees by an offset of such amount against the Holdback Amount otherwise due to the Shareholders and accordingly will reduce the Holdback Amount and, secondly, to the extent that any additional sums are due after the offset against the Holdback Amount, the Shaerholders (as Indemnifying Party) shall present a calculation pay all of such additional sums to the Buyer Indemnitees by wire transfer of immediately available funds within five (5) business days after demand by the Buyer Indemnitees. On the Release Date, Buyer shall pay the remaining Holdback Amount (to the extent not offset for indemnity payments due from any of the Pre-Opening Reduction Amount (as defined in Section 2.5(c) below), together with such supporting documentation as Buyer may reasonably request, at least two business days prior to Closing, and the Closing shall not take place until the parties have mutually agreed on such calculations, subject to Section 2.5(d). Notwithstanding the foregoing, at least three business days prior to Closing, Sellers will deliver the Audited Financials (including the Audited Six Month Income StatementShareholders) to Buyerthe Shareholders by wire transfer of immediately available funds; provided, together in each case with a calculation of EBITDA based thereonhowever, adjusted (solely in the case of the Audited Financials) as follows: (i) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, (ii) plus (minus) increase (decrease) in deferred lease obligations from December 31, 1998 through June 30, 1999, and (iii) plus corporate cost allocations. If such EBITDA is less than EBITDA shown on the Interim Financial Statements, then the Purchase Price Buyer shall be reduced at Closing by retain an amount equal to fourteen times such difference (in the case amount of Manhattan Beach, seven times such difference), and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer shall have the right to terminate claims for indemnification under this Agreement upon prompt notice Article IX asserted prior to the other parties to this Agreement; provided further that Seller shall Release Date but not have yet resolved (“Unresolved Claims”). Buyer will pay the right to terminate in the case of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt portion of the Audited Financials if the shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement pursuant Holdback Amount retained for Unresolved Claims to the last sentence Shareholders, to the extent the portion of the first paragraph Holdback Amount is not utilized as payment for such claims resolved in favor of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included any Buyer Indemnitee, upon their resolution in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%) or (y) 300% of the shortfall (expressed as a positive number) between EBITDA based on the Audited Six Month Income Statement and EBITDA based on the Interim Financial Statementsaccordance with this Article IX.

Holdback Amount. Sellers (a) The Buyer hereby agrees that it shall present first seek a calculation remedy against the Holdback Amount, to the extent of the Pre-Opening Reduction Amount (as defined in Section 2.5(c) below), together with such supporting documentation as Buyer may reasonably request, at least two business days prior to Closing, and the Closing shall not take place until the parties have mutually agreed on such calculations, subject to Section 2.5(d). Notwithstanding the foregoing, at least three business days prior to Closing, Sellers will deliver the Audited Financials (including the Audited Six Month Income Statement) to Buyer, together in each case with a calculation of EBITDA based thereon, adjusted (solely amount then remaining in the case Holdback Amount, with respect to any indemnification claim asserted hereunder before seeking to recover any Losses directly from the Seller. (b) As soon as reasonably practicable (and no later than ten (10) Business Days) following the earlier of the Audited Financials) as follows: (i) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net the first anniversary of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, the Closing Date or (ii) plus (minus) increase (decrease) in deferred lease obligations from December March 31, 1998 through June 302014 (the “Release Date”), 1999the Buyer shall deliver the Holdback Amount by wire transfer of immediately available funds to a bank account of Seller designated by Seller in writing at least ten (10) Business Days prior to such date, to the extent not previously used to satisfy an Overpayment pursuant to Section 2.3(g) or indemnification claims against the Seller pursuant to this Article VIII, less the amount of any pending indemnification claims pursuant to this Article VIII as of such date. As promptly as practicable (and no later than ten (iii10) plus corporate cost allocations. If such EBITDA is less than EBITDA shown on Business Days) following the Interim Financial Statementsresolution of all pending indemnification claims which were outstanding as of the Release Date, then the Purchase Price Buyer shall be reduced at Closing by deliver to the Seller an amount equal to fourteen times such difference (in the case of Manhattan Beachexcess, seven times such difference)if any, and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer shall have the right to terminate this Agreement upon prompt notice to the other parties to this Agreement; provided further that Seller shall not have the right to terminate in the case of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt of the Audited Financials if the shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement pursuant to the last sentence of the first paragraph of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%) or the amount so withheld with respect to such pending indemnification claims as of the Release Date, over (y) 300% the amount used to satisfy the indemnification obligations of the shortfall (expressed as a positive number) between EBITDA based on the Audited Six Month Income Statement and EBITDA based on the Interim Financial StatementsSeller pursuant to this Article VIII with respect to such pending indemnification claims.

Holdback Amount. Sellers (a) The Purchaser shall present use the Holdback Amount as security in respect of any finally determined claim of a calculation Purchaser Indemnified Party against the Vendors pursuant to this Section 2.6. (b) As soon as practicable after December 31, 2015, the Purchaser shall instruct the Actuary to promptly prepare and deliver the Final Actuarial Report to the Purchaser and the Representative for the purposes of determining any changes between Estimated Closing Insurance Contract Liabilities and Final Insurance Contract Liabilities. Subject to the Purchaser’s right of set-off pursuant to Section 10.8, as promptly as practicable (but in no event later than five (5) Business Days) after the date of the Pre-Opening Reduction Final Actuarial Report: (i) If the sum of Final Insurance Contract Liabilities plus Measurement Period Losses (the "Aggregate Liabilities Amount") is less than Target Insurance Contract Liabilities, the Purchaser shall pay the Holdback Amount (as defined to the Vendors, pro rata in Section 2.5(c) below), together accordance with such supporting documentation as Buyer may reasonably request, at least two business days prior to Closingtheir respective Percentage Interest in accordance with the instructions set forth in the Funds Flow Agreement, and the Closing Cash Consideration shall not take place until be deemed to be increased by the parties have mutually agreed on amount of such calculations, subject to Section 2.5(d). Notwithstanding the foregoing, at least three business days prior to Closing, Sellers will deliver the Audited Financials (including the Audited Six Month Income Statement) to Buyer, together in each case with a calculation of EBITDA based thereon, adjusted (solely in the case of the Audited Financials) as follows: (i) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, payment. (ii) plus If the Aggregate Liabilities Amount is greater than Target Insurance Contract Liabilities, the Purchaser shall retain from the Holdback Amount the full amount by which the Aggregate Liabilities Amount exceeds Estimated Closing Insurance Contract Liabilities (minus) increase (decrease) in deferred lease obligations from December 31, 1998 through June 30, 1999the "Deficiency"), and (iii) plus corporate cost allocationsany portion of the Holdback Amount which remains following satisfaction of the Deficiency shall be paid by the Purchaser to the Vendors, pro rata in accordance with their respective Percentage Interest in accordance with the instructions set forth in the Funds Flow Agreement, and the Cash Consideration shall be deemed to be increased by the amount of such payment. If such EBITDA For greater certainty, if the Holdback Amount is less than EBITDA shown on the Interim Financial StatementsDeficiency, then the Purchase Price shall be reduced at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference), and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer Vendors shall have the right to terminate this Agreement upon prompt notice to the other parties to this Agreement; provided further that Seller shall not have the right to terminate in the case of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt of the Audited Financials if the no liability for any shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement pursuant to the last sentence of the first paragraph of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%) or (y) 300% of the shortfall (expressed as a positive number) between EBITDA based on the Audited Six Month Income Statement and EBITDA based on the Interim Financial Statementsamount.

Holdback Amount. Sellers No later than the third Business Day after the date that is (a) six months after the Closing Date, the Purchaser shall present a calculation pay to the Seller by bank or wire transfer of immediately available funds to the Pre-Opening Reduction Amount (as defined account designated in Section 2.5(c) below), together with such supporting documentation as Buyer may reasonably request, writing by the Seller at least two business days one Business Day prior to Closingsuch date, and an amount in cash equal to the then remaining Holdback Amount less $1,000,000 less the aggregate amount of all unresolved claims for indemnification brought by the Purchaser Indemnified Parties in accordance with this ARTICLE IX, (b) 12 months after the Closing Date, the Purchaser shall not take place until pay to the parties have mutually agreed on such calculations, subject Seller by bank or wire transfer of immediately available funds to Section 2.5(d). Notwithstanding the foregoing, account designated in writing by the Seller at least three business days one Business Day prior to Closingsuch date, Sellers will deliver an amount in cash equal to the Audited Financials (including then remaining Holdback Amount less $500,000 less the Audited Six Month Income Statement) to Buyer, together aggregate amount of all unresolved claims for indemnification brought by the Purchaser Indemnified Parties in each case accordance with a calculation of EBITDA based thereon, adjusted (solely in the case of the Audited Financials) as follows: (i) plus (minus) increase (decrease) in deferred revenue liabilities (including initiation fees (net of associated deferred costs) and prepaid dues) from December 31, 1998 through June 30, 1999, (ii) plus (minus) increase (decrease) in deferred lease obligations from December 31, 1998 through June 30, 1999this ARTICLE IX, and (iiic) plus corporate cost allocations18 months after the Closing Date, the Purchaser shall pay to the Seller by bank or wire transfer of immediately available funds to the account designated in writing by the Seller at least one Business Day prior to such date, an amount in cash equal to the then remaining Holdback Amount less the aggregate amount of all unresolved claims for indemnification brought by the Purchaser Indemnified Parties in accordance with this ARTICLE IX. If No later than the third Business Day following the final resolution of any unresolved claim for which funds were so withheld by the Purchaser, any such EBITDA is less than EBITDA shown on funds not paid to Purchaser as a result of the Interim Financial Statements, then the Purchase Price resolution of such claims shall be reduced at Closing paid by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference), and if EBITDA based on the Audited Six Month Income Statement is more than EBITDA shown on the Interim Financial Statements, then the Purchase Price shall be increased at Closing by an amount equal to fourteen times such difference (in the case of Manhattan Beach, seven times such difference); provided that if any such increase or decrease would increase or decrease the Purchase Price by more than $4,000,000, either Seller or Buyer shall have the right to terminate this Agreement upon prompt notice Purchaser to the other parties to this Agreement; provided further that Seller shall not have the right to terminate in the case by bank or wire transfer of a decrease if Buyer agrees to limit the decrease in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater decrease; and provided further that Buyer shall not have the right to terminate in the case of an increase if Seller agrees to limit the increase in Purchase Price to $4,000,000 notwithstanding that the EBITDA adjustment would have resulted in a greater increase. In addition, Buyer shall have the right to terminate this Agreement within three business days following receipt of the Audited Financials if the shortfall (expressed as a positive number) between (i) EBITDA based on the 1998 Audited Income Statement (and adjusted in the same manner as the Audited Six Month Income Statement pursuant immediately available funds to the last sentence of account designated in writing by the first paragraph of Section 2.4(b)) and (ii) EBITDA based on the 1998 income statement included in the unaudited Year-End Financial Statements (using the same methodology) is more than the greater of (x) five percent (5%) or (y) 300% of the shortfall (expressed as a positive number) between EBITDA based on the Audited Six Month Income Statement and EBITDA based on the Interim Financial StatementsSeller at least one Business Day prior to such date.