Limitations on Rights to Holdback Amount Sample Clauses
The 'Limitations on Rights to Holdback Amount' clause defines the specific conditions under which parties may access or claim funds that have been set aside as a holdback in a transaction. Typically, this clause outlines restrictions on when and how the holdback amount can be used, such as only permitting release upon satisfaction of certain obligations or after a defined period. For example, it may prevent either party from accessing the holdback except in cases of proven breach or until all contractual milestones are met. The core function of this clause is to protect the interests of both parties by ensuring the holdback is only used for its intended purpose, thereby reducing disputes and clarifying the process for release or forfeiture of the funds.
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Limitations on Rights to Holdback Amount. The Vendors will not have any right, title or interest in or to, or possession of, the Holdback Amount and will not have the ability to pledge, convey, hypothecate or grant as security all or any portion of the Holdback Amount unless and until the Holdback Amount has been released pursuant to subsection (d) of this section. Accordingly, no creditor of the Vendors will have any right to have or to hold or otherwise attach or seize all or any portion of the Holdback Amount as collateral for any obligation and will not be able to obtain a security interest in the Holdback Amount unless and until the Indemnification Holdback Amount has been released pursuant to subsection (d) of this section.