Common use of Retained Amounts Clause in Contracts

Retained Amounts. 2.1 The Buyer may, in accordance with paragraphs 2.2 to 2.6 below and subject to such notifications being given prior to the Release Date, notify the Sellers’ Representative and the Institutional Sellers’ Representative of its reasonable estimation of the amount of any liability in respect of (a) any bona fide Relevant Claim or (b) any right to recover any sum from a third party (other than the underwriter of the W&I Policy) in respect of a matter which could give rise to a Warranty Claim which the Buyer is pursuing against that third party in accordance with paragraph 7.1 of Schedule 5 of the Deed of Warranty, and, subject to paragraphs 2.2 to 2.6 below, require that such amount is retained in the Retention Account notwithstanding the Release Date, pending such Relevant Claim becoming a Substantiated Claim or agreement or determination that the Relevant Claim will not be or become a Substantiated Claim (a “Retained Amount”). 2.2 No withholding of a Retained Amount shall be permitted by the Buyer unless the Buyer has provided written notice thereof to the Institutional Sellers’ Representative and the Sellers’ Representative (a “Retained Amount Notice”). The Institutional Sellers’ Representative and the Sellers’ Representative shall be entitled (acting jointly) within 10 Business Days of the Buyer having served a Retained Amount Notice to give notice to the Buyer stating that it requires the exercise by the Buyer of its rights in respect of the Retained Amount in question pursuant to paragraph 2.1, to be referred for decision to a Queen’s Counsel in England and Wales (of at least 10 years standing and experience in commercial law) (“Queen’s Counsel”). 2.3 The Queen’s Counsel referred to in paragraph 2.2 above shall be nominated jointly by the Buyer and the Institutional Sellers’ Representative and the Sellers’ Representative (or in default of agreement by the Chairman for the time being of the Bar Council of England and Wales) and shall be instructed to act as expert and not as arbitrator and to opine on the merits and the quantum of the Relevant Claim in question and as to whether there is a reasonable prospect that such liability or Relevant Claim may be established by judgement in favour of the Buyer in relation to such liability or Relevant Claim. For the purposes of paragraph 2.3, a ‘reasonable prospect’ is one with greater than 50% likelihood of success and, for the avoidance of doubt, in the case of contingent liabilities, the Queen’s Counsel’s decision on the Retained Amount shall be made on the same basis and on the assumption that the contingent liability will become an actual liability. 2.4 The Queen’s Counsel shall be entitled to seek the opinion of an expert in relation to all financial, accounting and actuarial matters provided always that the Institutional Sellers’ Representative and the Sellers’ Representative and the Buyer shall be entitled to make representations to the Queen’s Counsel for the purposes of this paragraph 2.4 including as to the identity of the expert, and shall, to the extent within their control, on request by either the Buyer or the Institutional Sellers’ Representative and Sellers’ Representative, supply to each other or provide reasonable access to copies of supporting non-privileged documentation relating to the Relevant Claim and dispute in question to the extent available in support of such representations. 2.5 The decision of the Queen’s Counsel regarding the reasonableness of the Buyer’s estimation of the Relevant Claim underlying a Retained Amount shall be conclusive and shall bind the Sellers and the Buyer and the method of proceeding in reference to the Queen’s Counsel shall be determined by the Queen’s Counsel in his absolute discretion and the Buyer and the Institutional Sellers’ Representative and the Sellers’ Representative shall observe and perform any directions which the Queen’s Counsel may give and shall be bound by any decision which he may make consequent upon any failure to observe and perform any such directions. Costs shall be borne as the Queen’s Counsel directs. 2.6 To the extent that: 2.6.1 the Queen’s Counsel should decide that any part of the Retained Amount was in excess of a reasonable estimate of the amount of the liability in respect of such Relevant Claim or that there is no reasonable prospect of a judgement in favour of the Buyer in relation to such Relevant Claim; or 2.6.2 the Buyer and the Institutional Sellers’ Representative and the Sellers’ Representative agree that any part of the Retained Amount was in excess of a reasonable estimate of the amount of the liability in respect of such Relevant Claim, then such amount shall be dealt with in accordance with paragraph 3.1 below.

Retained Amounts. 2.1 6.1 The Buyer may, in accordance with paragraphs 2.2 6.2 to 2.6 6.6 below and subject to such notifications being given prior to the Release DateDate or the W&I Release Date (as applicable), notify the Sellers’ Representative and the Institutional Management Sellers’ and Precis Representative of its reasonable estimation of the amount of any liability in respect of (a) any bona fide Relevant Claim or (b) any right to recover any sum from a third party (other than the underwriter of the W&I Policy) in respect of a matter which could give rise to a Warranty Claim which the Buyer is pursuing against that third party in accordance with paragraph 7.1 6.1 of Schedule 5 of the Deed of Warranty9, and, subject to paragraphs 2.2 6.2 to 2.6 6.6 below, require that such amount is retained in the Retention Account notwithstanding the Release Date or the W&I Release Date, pending such Relevant Claim becoming a Substantiated Claim or agreement or determination that the Relevant Claim will not be or become a Substantiated Claim (a “Retained Amount”). 2.2 6.2 No withholding of a Retained Amount shall be permitted by the Buyer unless the Buyer has provided written notice thereof to the Institutional Sellers’ Representative and the Management Sellers’ and Precis Representative together with an explanation in reasonable detail and supporting information of the reasons and basis for the notice served pursuant to paragraph 6.1 above (a the “Retained Amount Notice”). The Institutional Sellers’ Representative and and/or the Management Sellers’ and Precis Representative shall be entitled (acting jointly) within 10 Business Days of the Buyer having served a Retained Amount Notice to give notice to the Buyer stating that it requires the exercise by the Buyer of its rights in respect of the Retained Amount in question pursuant to paragraph 2.16.1, to be referred for decision to a Queen’s Counsel in England and Wales (of at least 10 years standing and experience in commercial law) (“Queen’s Counsel”). 2.3 6.3 The Queen’s Counsel referred to in paragraph 2.2 6.2 above shall be nominated jointly by the Buyer and Buyer, the Institutional Management Sellers’ and Precis Representative and the Sellers’ Representative (or in default of agreement by the Chairman for the time being of the Bar Council of England and Wales) and shall be instructed to act as expert and not as arbitrator and to opine on the merits and the quantum of the Relevant Claim in question and as to whether there is a reasonable prospect that such liability or Relevant Claim may be established by judgement in favour of the Buyer in relation to such liability or Relevant Claim. For the purposes of paragraph 2.36, a ‘reasonable prospect’ is one with greater than 50% likelihood of success and, for the avoidance of doubt, in the case of contingent liabilities, the Queen’s Counsel’s decision on the Retained Amount shall be made on the same basis and on the assumption that the contingent liability will become an actual liability. 2.4 6.4 The Queen’s Counsel shall be entitled to seek the opinion of an expert in relation to all financial, accounting and actuarial matters provided always that the Institutional Sellers’ Representative and Representative, the Management Sellers’ and Precis Representative and the Buyer shall be entitled to make representations to the Queen’s Counsel for the purposes of this paragraph 2.4 6.4 including as to the identity of the expert, and shall, to the extent within their control, on request by either the Buyer or the Institutional Sellers’ Representative and or the Management Sellers’ and Precis Representative, supply to each other or provide reasonable access to copies of supporting non-privileged documentation relating to the Relevant Claim and dispute in question to the extent available in support of such representations. 2.5 6.5 The decision of the Queen’s Counsel regarding the reasonableness of the Buyer’s estimation of the Relevant Claim underlying a Retained Amount shall be conclusive and shall bind the Sellers, the Management Sellers and the Buyer and the method of proceeding in reference to the Queen’s Counsel shall be determined by the Queen’s Counsel in his absolute discretion and the Buyer and Buyer, the Institutional Management Sellers’ and Precis Representative and the Sellers’ Representative shall observe and perform any directions which the Queen’s Counsel may give and shall be bound by any decision which he may make consequent upon any failure to observe and perform any such directions. Costs shall be borne as the Queen’s Counsel directs. 2.6 6.6 To the extent that: 2.6.1 6.6.1 the Queen’s Counsel should decide that any part of the Retained Amount was in excess of a reasonable estimate of the amount of the liability in respect of such Relevant Claim or that there is no reasonable prospect of a judgement in favour of the Buyer in relation to such Relevant Claim; or 2.6.2 6.6.2 the Buyer and Buyer, the Institutional Management Sellers’ and Precis Representative and the Sellers’ Representative agree that any part of the Retained Amount was in excess of a reasonable estimate of the amount of the liability in respect of such Relevant Claim, then such amount shall be dealt with in accordance with paragraph 3.1 belowparagraphs 7.2 and 7.3.