Common use of Disbursements from Escrow Account Clause in Contracts

Disbursements from Escrow Account. a. For purposes of disbursements from the Escrow Account, “Eligible Expenses” consist of any of the following expenses relating to environmental activities arising on or after December 1, 2018, at the Xxxxxx Site, all as set forth in Section III(D) of the Settlement Agreement: the current Remedial Investigation/Feasibility Study (“RI/FS”), EPA oversight, RCRA Carve Out Cleanup (which term references certain Xxxxxx Site areas, including ditches and the sanitary lagoon, and related remedial activities that are subject to the Resource Conservation and Recovery Act (“RCRA”), and which EPA and the Renco Parties (as defined in the Settlement Agreement) have agreed to address under RCRA), the Salt Cap Study (defined in the Settlement Agreement as the study to test US Mag’s proposed salt cap closure plan outside the proposed barrier wall but within the footprint of the existing waste pond) under the terms of the current or revised RI/FS administrative order, engineering and construction of the barrier wall, and closure of the Retrofitted Pond. Notwithstanding the forgoing, Eligible Expenses do not include the following: interest on late payments to EPA reimbursing response costs; penalties; costs related to litigation, settlement, or development of potential contribution claims; internal costs of US Mag, including but not limited to, salaries, travel, or in-kind services, except for those costs that represent the work of employees of US Mag directly performing response actions under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”); and any costs incurred by US Mag in connection with dispute resolution under the administrative order or settlement agreement pursuant to which the activities are performed or under this Escrow Agreement. b. As of the Effective Date of this Escrow Agreement, US Mag may seek reimbursement from the Escrow Account, up to a total of 50% of the amount initially deposited therein, for any Eligible Expenses in accordance with the procedure in Section 3.d. c. After the Effective Date and upon the lodging of the consent decree being negotiated to resolve the action entitled United States v. Magnesium Corporation of America, Inc., et al., case number 2:01 CV 040, in the United States District Court for the District of Utah (“Utah Consent Decree”), US Mag may seek reimbursement from the Escrow Account, up to the total amount therein, for any Eligible Expenses in accordance with the procedure in Section 3.d. d. To seek reimbursement from the Escrow Account, US Mag shall give written notice to the Escrow Agent and EPA of the amount and the specific activity or activities for which reimbursement of Eligible Expenses is requested, including a description of such activity(ies), the amount incurred for such activity(ies), and copies of invoices or proof of payment for such activity(ies). e. EPA will have the opportunity to review and object to any request by US Mag for reimbursement from the Escrow Account. Any such objection by EPA must be raised in writing to US Mag and the Escrow Agent within 30 days of EPA’s receipt of a copy of US Mag’s request and must be based on the ground that the requested funds do not constitute Eligible Expenses as defined in Section 3.a. f. If the Escrow Agent does not receive written notice of an objection from EPA within 30 days of receipt of US Mag’s notice requesting reimbursement, the Escrow Agent shall pay the requested amount to US Mag, to the extent that funds are available and subject to the 50% ceiling specified in Section 3.b prior to the lodging of the Utah Consent Decree. g. If EPA provides written notice of an objection to all or part of US Mag’s request for reimbursement within the time specified in Section 3.e, the Escrow Agent shall not pay the amount objected to until the objection is resolved in accordance with Section 3.h, but shall pay to US Mag any amount to which EPA did not object. h. In the event that EPA provides written notice of an objection to all or part of US Mag’s request for reimbursement, EPA and US Mag shall attempt, in the first instance, to resolve the objection informally through negotiation for 21 days or such longer period as EPA and US Mag may agree. If the objection is so resolved, EPA and US Mag shall so notify the Escrow Agent and instruct the Escrow Agent of the amount, if any, to pay to US Mag. If EPA and US Mag are unable to resolve any objection informally within the prescribed time period, EPA may present the dispute to the United States Bankruptcy Court for the Southern District of New York (or, upon withdrawal of that Court’s reference, the United States District Court for the Southern District of New York), which has retained jurisdiction and venue under Section XV of the Settlement Agreement (the “New York Court”), for resolution by filing with the New York Court a motion to disallow reimbursement of the contested expenses, with a supporting rationale. Any such motion must be filed within 30 days after the end of the informal negotiation period. If EPA does not do so within that time period, the Escrow Agent shall pay the amount requested by US Mag. If EPA files such a motion, US Mag may file a response within 30 days, EPA may file a reply within 14 days, and the New York Court will then resolve the dispute. Following resolution of any such dispute, EPA and US Mag shall notify the Escrow Agent of the resolution and instruct the Escrow Agent of the amount, if any, to pay to US Mag, and the Escrow Agent shall pay that amount to US Mag.