Distributions for Indemnification. (a) At any time prior to the earlier of (x) the date on which Cardinal's audited financial statements for the first fiscal year ending after the Effective Time are issued and (y) the first anniversary of the Effective Time (the "Escrow Date"), Cardinal may deliver to the Escrow Agent (with a copy to the ALP Stockholders Representative) a certificate (a "Notice of Claim") (i) stating that Cardinal believes that it may be entitled to indemnification pursuant to Article VIII of the Merger Agreement (an "Indemnification Obligation"), (ii) stating the aggregate amount (the "Claim Amount") of such Indemnification Obligation (or, in the case of an unliquidated or uncertain Indemnification Obligation, a good faith and reasonable estimate thereof), and (iii) specifying in reasonable detail the nature of such Indemnification Obligation. Any Notice of Claim delivered pursuant to this Section 3.1 with respect to any unliquidated Indemnification Obligation may be supplemented by a later Notice of Claim specifying in greater detail the applicable Claim Amount or any other items set forth therein. Upon delivery of any such Notice of Claim, the Escrow Agent shall, within three business days of receipt thereof, deliver a written notice together with a copy of such Notice of Claim to the ALP Stockholders Representative. (b) If the ALP Stockholders Representative shall object on behalf of the ALP Stockholders to the Indemnification Obligation or the Claim Amount specified in such Notice of Claim, the ALP Stockholders Representative shall, within twenty business days after delivery of the written notice containing a copy of any such Notice of Claim, deliver to the Escrow Agent a certificate (a "Reply Certificate") (x) specifying each such objection, and (y) specifying in reasonable detail the nature and basis for such objection. Within three business days after delivery to the Escrow Agent of a Reply Certificate, the Escrow Agent shall deliver a copy of such Reply Certificate to Cardinal. Cardinal and the ALP Stockholders Representative shall negotiate in good faith for a period of 30 business days after delivery of such Reply Certificate to Cardinal to reach a written resolution of any objections raised in a Reply Certificate. (c) If no Reply Certificate is delivered with respect to any Notice of Claim, then the ALP Stockholders Representative shall be deemed to have delivered a Payment Authorization (as defined below) acknowledging Cardinal's right to receive the Claim Amount specified in such Notice of Claim with respect to the applicable Indemnification Obligation and the Escrow Agent shall transfer to Cardinal a portion of the Escrowed Amount in an amount equal to such Claim Amount, all in accordance with the procedures set forth in Section 3.1(e). (d) If the Escrow Agent receives a Reply Certificate in a timely manner with respect to any Notice of Claim, the Claim Amount referred to in such Notice of Claim shall be held by the Escrow Agent and shall not be released to Cardinal except upon Cardinal's delivery to the Escrow Agent of either (i) joint written instructions signed by an authorized officer of Cardinal and by the ALP Stockholders Representative directing the Escrow Agent to release the Claim Amount (or any other amount mutually agreed upon by such parties) or (ii) a final, non-appealable judgment of the arbitrators in the arbitration proceeding referred to in Section 8.5 of the Merger Agreement relating to the Indemnification Obligation referred to in such Notice of Claim demonstrating that Cardinal is entitled to indemnification for such Claim Amount from the ALP Stockholders pursuant to the Merger Agreement (either of (i) or (ii) being a "Payment Authorization"), at which date the portion of the amount due to Cardinal determined pursuant to (i) or (ii) above shall promptly be paid to Cardinal in accordance with the procedures set forth herein. (e) As soon as practicable following receipt by the Escrow Agent of a Payment Authorization, the Escrow Agent shall pay from the Escrowed Amount to Cardinal as follows, in the following order of priority, to the extent required to make such payment: First, the Escrow Agent shall transfer, deliver and assign to Cardinal such number of Escrowed Shares (excluding cash constituting Escrowed Shares pursuant to Section 2.2(b)) (rounded up or down to the nearest whole share in the case of the Escrowed Shares that are not cash) as shall have a value equal to the amount required to make or complete such payment, it being understood and agreed that such non-cash Escrowed Shares shall be valued for such purpose as set forth in Section 8.7 of the Merger Agreement, together with the Additional Property related thereto; Second, to the extent of any insufficiency, the Escrow Agent shall utilize any cash not part of the Escrowed Shares included in the Escrowed Amount then held in the Escrow Deposit; and Third, to the extent of any insufficiency, the Escrow Agent shall sell securities or investments included in the Escrowed Amount, other than the Escrowed Shares, then held in the Escrow Deposit for cash and utilize such cash to make up such insufficiency. To the extent the Escrowed Shares allocable to any ALP Stockholder consist of Cardinal Common Shares and cash pursuant to Section 2.2(b), any delivery of Escrowed Shares pursuant to this Section 3.1(e) shall consist first of Cardinal Common Shares and then, if necessary, cash valued as provided in Section 2.2(b). To the extent the Escrow Agent is required to transfer, deliver and assign to Cardinal any Escrowed Shares included in the Escrowed Amount, Cardinal shall assist and cooperate in a reasonable manner with the Escrow Agent to facilitate such transfer, delivery and assignment. In the event the Escrowed Amount shall be insufficient to pay the amount expressly set forth in such Payment Authorization, the Escrow Agent shall deliver to Cardinal the entire remaining Escrowed Amount and then deliver to Cardinal and to the ALP Stockholders Representative a written notification setting forth the amount by which such Payment Authorization exceeds the amount of the Escrowed Amount so paid. (f) To the extent that any payment pursuant to Section 3.1(e) hereof shall be made in cash, the Escrow Agent shall pay all such amount to Cardinal by wire transfer to the bank account or accounts designated by Cardinal to the Escrow Agent in writing not less than one business day prior to the date of such payment. (g) Notwithstanding anything to the contrary in this Agreement, in no event shall Cardinal be entitled to receive any amounts from the Escrow Deposit in excess of the amount of the Escrowed Amount.
Appears in 1 contract
Distributions for Indemnification. (a) At any time prior to the earlier of (x) the date on which Cardinal's audited financial statements for the first fiscal year ending after the Effective Time are issued and (y) the first anniversary of the Effective Time January 15, 1998, (the "Escrow Date"), Cardinal the Parent may deliver to the Escrow Agent (with a copy to the ALP Stockholders Representative) a certificate (a "Notice of Claim") (i) stating that Cardinal believes the Parent is of the opinion that it may be entitled to indemnification pursuant to Article VIII paragraph 6 of the Merger Agreement Amendment (an "Indemnification Indemnified Obligation"), (ii) stating the aggregate amount (the "Claim Amount") of such Indemnification Obligation (or, in the case of an unliquidated or uncertain Indemnification Indemnified Obligation, a good faith and reasonable estimate thereof), and (iii) specifying in reasonable detail the nature of such Indemnification Indemnified Obligation. Any Notice of Claim delivered pursuant to this Section 3.1 with respect to any unliquidated Indemnification Obligation may be supplemented by a later Notice of Claim specifying in greater detail the applicable Claim Amount or any other items set forth therein. Upon delivery of any such Notice of Claim, the Escrow Agent shall, within three business five (5) days of receipt thereof, deliver a written notice together with a copy of such Notice of Claim to the ALP Stockholders Slick 50 Stockholders' Representative.
(b) If the ALP Stockholders Slick 50 Stockholders' Representative shall object on behalf of the ALP Applicable Slick 50 Stockholders to the Indemnification Obligation or the Claim Amount specified in such Notice of Claim, the ALP Stockholders Slick 50 Stockholders' Representative shall, within twenty (20) business days after delivery of the written notice containing a copy of any such Notice of Claim, deliver to the Escrow Agent a certificate (a "Reply Certificate") (x) specifying each such objection, and (y) specifying in reasonable detail the nature and basis for such objection. Within three five (5) business days after delivery to the Escrow Agent of a Reply Certificate, the Escrow Agent shall deliver a copy of such Reply Certificate to Cardinalthe Parent. Cardinal The Parent and the ALP Stockholders Slick 50 Stockholders' Representative shall negotiate in good faith for a period of 30 business forty-five (45) days after delivery of such Reply Certificate to Cardinal the Parent to reach a written resolution of any objections raised in a Reply Certificate.
(c) If no Reply Certificate is delivered with respect to any Notice of Claim, then the ALP Stockholders Slick 50 Stockholders' Representative shall be deemed to have delivered a Payment Authorization (as defined below) acknowledging Cardinalthe Parent's right to receive the Claim Amount specified in such Notice of Claim with respect to the applicable Indemnification Obligation and the Escrow Agent shall transfer to Cardinal the Parent a portion of the Escrowed Amount Escrow Deposit in an amount equal to such Claim Amount, all in accordance with the procedures set forth in Section 3.1(e4.2(e).
(d) If the Escrow Agent receives a Reply Certificate in a timely manner with respect to any Notice of Claim, the Claim Amount referred to in such Notice of Claim shall be held by the Escrow Agent and shall not be released to Cardinal the Parent except upon Cardinalthe Parent's delivery to the Escrow Agent of either (i) joint written instructions signed by each of an authorized officer of Cardinal the Parent and by the ALP Stockholders Slick 50 Stockholders' Representative directing the Escrow Agent to release the Claim Amount (or any other amount mutually agreed upon by such parties) or (ii) a final, non-appealable order, judgment or decree of a court or other body having jurisdiction over the arbitrators in the arbitration proceeding referred to in Section 8.5 of the Merger Agreement matters relating to the Indemnification Obligation referred to in such Notice of Claim demonstrating that Cardinal the Parent is entitled to indemnification for such Claim Amount from the ALP Applicable Slick 50 Stockholders pursuant to the Merger Agreement Amendment (either of (i) or (ii) being ), a "Payment Authorization"), at which date the portion of the amount due to Cardinal such Parent determined pursuant to (i) or (ii) above shall promptly be paid to Cardinal the Parent in accordance with the procedures set forth herein.
(e) As soon as practicable following receipt by the Escrow Agent of a Payment Authorization, the Escrow Agent shall pay from the Escrowed Amount Escrow Deposit to Cardinal the Parent, on behalf of the Indemnitee, the amount expressly set forth in such Payment Authorization. In making such payment, the Escrow Agent shall utilize the Escrow Deposit as directed in writing by the Slick 50 Stockholders' Representative on or prior to the date that the Escrow Agent receives a Payment Authorization, or if not so directed on such date, then as follows, in the following order of priority, to the extent required to make such payment: First, the Escrow Agent shall transfer, deliver and assign to Cardinal such number of Escrowed Shares (excluding cash constituting Escrowed Shares pursuant to Section 2.2(b)) (rounded up or down to the nearest whole share in the case of the Escrowed Shares that are not cash) as shall have a value equal to the amount required to make or complete such payment, it being understood and agreed that such non-cash Escrowed Shares shall be valued for such purpose as set forth in Section 8.7 of the Merger Agreement, together with the Additional Property related thereto; Second, to the extent of any insufficiency, the Escrow Agent shall utilize any cash not part of the Escrowed Shares included in the Escrowed Amount then held in the Escrow Deposit; and Third, to the extent of any insufficiency, the Escrow Agent shall sell securities or investments included in the Escrowed Amount, other than the Escrowed Shares, then held in the Escrow Deposit for cash and utilize such cash to make up such insufficiency. To the extent the Escrowed Shares allocable to any ALP Stockholder consist of Cardinal Common Shares and cash pursuant to Section 2.2(b), any delivery of Escrowed Shares pursuant to this Section 3.1(e) shall consist first of Cardinal Common Shares and then, if necessary, cash valued as provided in Section 2.2(b). To the extent the Escrow Agent is required to transfer, deliver and assign to Cardinal any Escrowed Shares included in the Escrowed Amount, Cardinal shall assist and cooperate in a reasonable manner with the Escrow Agent to facilitate such transfer, delivery and assignment. In the event the Escrowed Amount shall be insufficient to pay the amount expressly set forth in such Payment Authorization, the Escrow Agent shall deliver to Cardinal the entire remaining Escrowed Amount and then deliver to Cardinal and to the ALP Stockholders Representative a written notification setting forth the amount by which such Payment Authorization exceeds the amount of the Escrowed Amount so paid.
(f) To the extent that any payment pursuant to Section 3.1(e) hereof shall be made in cash, the Escrow Agent shall pay all such amount to Cardinal by wire transfer to the bank account or accounts designated by Cardinal to the Escrow Agent in writing not less than one business day prior to the date of such payment.
(g) Notwithstanding anything to the contrary in this Agreement, in no event shall Cardinal be entitled to receive any amounts from the Escrow Deposit in excess of the amount of the Escrowed Amount.:
Appears in 1 contract
Samples: Escrow Agreement (Quaker State Corp)
Distributions for Indemnification. (a) At any time prior to the earlier of (xi) the date on which Cardinal's audited financial statements for the first fiscal year ending after the Effective Time are issued and (yii) the first anniversary of the Effective Time (the "Escrow Date"), Cardinal may deliver to the Escrow Agent (with a copy to the ALP MediQual Stockholders Representative) a certificate (a "Notice of Claim") (i) stating that Cardinal believes is of the opinion that it may be entitled to indemnification pursuant to Article VIII of the Merger Agreement (an "Indemnification Obligation"), (ii) stating the aggregate amount (the "Claim Amount") of such Indemnification Obligation (or, in the case of an unliquidated or uncertain Indemnification Obligation, a good faith and reasonable estimate thereof), and (iii) specifying in reasonable detail the nature of such Indemnification Obligation. Any Notice of Claim delivered pursuant to this Section 3.1 with respect to any unliquidated Indemnification Obligation may be supplemented by a later Notice of Claim specifying in greater detail the applicable Claim Amount or any other items set forth therein. Upon delivery of any such Notice of Claim, the Escrow Agent shall, within three business days of receipt thereof, deliver a written notice together with a copy of such Notice of Claim to the ALP MediQual Stockholders Representative.
(b) If the ALP MediQual Stockholders Representative shall object on behalf of the ALP MediQual Stockholders to the Indemnification Obligation or the Claim Amount specified in such Notice of Claim, the ALP MediQual Stockholders Representative shall, within twenty ten business days after delivery of the written notice containing a copy of any such Notice of Claim, deliver to the Escrow Agent a certificate (a "Reply Certificate") (x) specifying each such objection, and (y) specifying in reasonable detail the nature and basis for such objection. Within three business days after delivery to the Escrow Agent of a Reply Certificate, the Escrow Agent shall deliver a copy of such Reply Certificate to Cardinal. Cardinal and the ALP MediQual Stockholders Representative shall negotiate in good faith for a period of 30 business 20 days after delivery of such Reply Certificate to Cardinal to reach a written resolution of any objections raised in a Reply Certificate.
(c) If no Reply Certificate is delivered with respect to any Notice of Claim, then the ALP MediQual Stockholders Representative shall be deemed to have delivered a Payment Authorization (as defined below) acknowledging Cardinal's right to receive the Claim Amount specified in such Notice of Claim with respect to the applicable Indemnification Obligation and the Escrow Agent shall transfer to Cardinal a portion of the First Escrowed Amount in an amount equal to such Claim Amount, all in accordance with the procedures set forth in Section 3.1(e).
(d) If the Escrow Agent receives a Reply Certificate in a timely manner with respect to any Notice of Claim, the Claim Amount referred to in such Notice of Claim shall be held by the Escrow Agent and shall not be released to Cardinal except upon Cardinal's delivery to the Escrow Agent of either (i) joint written instructions signed by an authorized officer of Cardinal and by the ALP MediQual Stockholders Representative directing the Escrow Agent to release the Claim Amount (or any other amount mutually agreed upon by such parties) or (ii) a final, non-appealable judgment of the arbitrators in the arbitration proceeding referred to in Section 8.5 of the Merger Agreement relating to the Indemnification Obligation referred to in such Notice of Claim demonstrating that Cardinal is entitled to indemnification for such Claim Amount from the ALP MediQual Stockholders pursuant to the Merger Agreement (either of (i) or (ii) being ), a "Payment Authorization"), at which date the portion of the amount due to Cardinal determined pursuant to (i) or (ii) above shall promptly be paid to Cardinal in accordance with the procedures set forth herein.
(e) As soon as practicable following receipt by the Escrow Agent of a Payment Authorization, the Escrow Agent shall pay from the First Escrowed Amount to Cardinal as follows, in the following order of priority, to the extent required to make such payment: FirstFIRST, the Escrow Agent shall transfer, deliver and assign to Cardinal such number of Escrowed Shares (excluding cash constituting Escrowed Shares pursuant to Section 2.2(b)) (rounded up or down to the nearest whole share in the case of the Escrowed Escrow Shares that are not cash) included in the First Escrowed Amount held in the Escrow Account as shall have a value equal to the amount required to make or complete such payment, it being understood and agreed that such non-cash Escrowed Shares shall be valued for such purpose as set forth in Section 8.7 of the Merger Agreement, together with the Additional Property related thereto; SecondSECOND, to the extent of any insufficiency, the Escrow Agent shall utilize any cash not part of the Escrowed Shares included in the First Escrowed Amount then held in the Escrow Deposit; and ThirdTHIRD, to the extent of any insufficiency, the Escrow Agent shall sell securities or investments included in the First Escrowed Amount, other than the Escrowed Shares, then held in the Escrow Deposit for cash and utilize such cash to make up such insufficiency. To the extent the Escrowed Shares allocable to any ALP Stockholder consist of Cardinal Common Shares and cash pursuant to Section 2.2(b), any delivery of Escrowed Shares pursuant to this Section 3.1(e) shall consist first of Cardinal Common Shares and then, if necessary, cash valued as provided in Section 2.2(b). To the extent the Escrow Agent is required to transfer, deliver and assign to Cardinal any Escrowed Shares included in the First Escrowed Amount, Cardinal shall assist and cooperate in a reasonable manner with the Escrow Agent to facilitate such transfer, delivery and assignment. In the event the First Escrowed Amount shall be insufficient to pay the amount expressly set forth in such Payment Authorization, the Escrow Agent shall deliver to Cardinal the entire remaining First Escrowed Amount and then deliver to Cardinal and to the ALP MediQual Stockholders Representative a written notification setting forth the amount by which such Payment Authorization exceeds the amount of the First Escrowed Amount so paid.
(f) To the extent that any payment pursuant to Section 3.1(e) hereof shall be made in cash, the Escrow Agent shall pay all such amount to Cardinal by wire transfer to the bank account or accounts designated by Cardinal to the Escrow Agent in writing not less than one business day prior to the date of such payment.
(g) Notwithstanding anything to the contrary in this Agreement, in no event shall Cardinal be entitled to receive any amounts from the Escrow Deposit in excess of the amount of the First Escrowed Amount.
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Distributions for Indemnification. (a) At any time prior to the earlier of (x) the date on which Cardinal's audited financial statements for the first fiscal year ending after the Effective Time are issued and (y) the first anniversary of the Effective Time (the "Escrow Date"), Cardinal HFC may deliver to the Escrow Agent (with a copy to the ALP Stockholders Representative) a certificate (a "Notice of Claim") )
(i) stating that Cardinal believes HFC is of the opinion that it may be entitled to indemnification from Peter A. Egan and John F. Ellis (the "Principal Shareholders") pxxxxxxx xx Xxction 00.0 xx xxx Purchase Agreement or from any or all of the other shareholders (the "Option Shareholders") pursuant to Article VIII Section 11.3 of the Merger Purchase Agreement (each, an "Indemnification Obligation"), (ii) stating the aggregate amount (the "Claim Amount") of such Indemnification Obligation (or, in the case of an unliquidated or uncertain Indemnification Obligation, a good faith and reasonable estimate thereof), and (iii) specifying in reasonable detail the nature of such Indemnification Obligation, the basis of the Claim Amount, and the name or names of the Indemnified Shareholders. Any Notice of Claim delivered pursuant to this Section 3.1 3.1(a) with respect to any unliquidated Indemnification Obligation may be supplemented by a later Notice of Claim specifying in greater detail the applicable Claim Amount or any other items set forth therein. Upon delivery of any such HFC shall deliver to the Shareholder or Shareholders who are subject to the Indemnification Obligation set forth in the Notice of Claim, Claim (the Escrow Agent shall, within three business days of receipt thereof, deliver a written notice together with "Indemnifying Shareholder") a copy of such Notice of Claim concurrently with the delivery of such Notice of Claim to the ALP Stockholders RepresentativeEscrow Agent. HFC shall have the right to submit a Notice of Claim in respect of any Indemnification Obligation at any time on or prior to June 30, 2007 (the "Final Escrow Date").
(b) If the ALP Stockholders Representative Indemnifying Shareholder shall object on behalf of the ALP Stockholders to the Indemnification Obligation or the Claim Amount specified in such original or later delivered Notice of Claim, the ALP Stockholders Representative Indemnifying Shareholder shall, within twenty 20 business days after delivery receipt of the written notice containing a copy of any such Notice of Claim, deliver to the Escrow Agent a certificate (a "Reply Certificate") (x) specifying in reasonable detail each such objection, including, without limitation, the portion of the Claim Amount that the Indemnifying Shareholder does not want the Escrow Agent to release to HFC (the "Disputed Amount"), and (y) specifying in reasonable detail the nature and basis for such objection. Within three business days after delivery to the Escrow Agent of a Reply Certificate, the Escrow Agent The Indemnifying Shareholder shall deliver to HFC a copy of any Reply Certificate hereunder concurrently with the delivery of such Reply Certificate to Cardinalthe Escrow Agent. Cardinal HFC and the ALP Stockholders Representative Indemnifying Shareholder shall negotiate in good faith for a period of 30 20 business days after the delivery to HFC of such the Reply Certificate to Cardinal to reach a written resolution of any objections raised in a Reply Certificate.
(c) If no Reply Certificate is delivered with respect to the Escrow Agent within 20 business days after receipt by the Escrow Agent of any Notice of Claim, then the ALP Stockholders Representative Indemnifying Shareholder shall be deemed to have delivered a Payment Authorization (as defined below) acknowledging CardinalHFC's right to receive the Claim Amount specified in such Notice of Claim with respect to the applicable Indemnification Obligation Obligation, and the Escrow Agent shall transfer to Cardinal HFC a portion of the Escrowed Amount Escrow Deposit in an amount equal to the lesser of (x) such Claim AmountAmount and (y) the Escrow Deposit, all in accordance with the procedures set forth in Section 3.1(e3.1(f).
(d) If a Reply Certificate is delivered that identifies a Disputed Amount that is less than the Claim Amount (the amount by which any Claim Amount exceeds any given Disputed Amount, the "Undisputed Amount"), then the Indemnifying Shareholder shall be deemed to have delivered a Payment Authorization acknowledging HFC's right to receive the Undisputed Amount specified in such Reply Certificate with respect to the applicable Indemnification Obligation, and the Escrow Agent shall transfer to HFC a portion of the Escrow Deposit in an amount equal to the lesser of (x) such Undisputed Amount and (y) the Escrow Deposit, in accordance with the procedures set forth in Section 3.1(f).
(e) If the Escrow Agent receives a Reply Certificate in a timely manner with respect to any Notice of Claim, the Claim Disputed Amount referred to in such Notice of Claim Reply Certificate shall be held by the Escrow Agent and shall not be released to Cardinal HFC except upon CardinalHFC's delivery to the Escrow Agent of either (i) joint written instructions signed by an authorized officer each of Cardinal HFC and by the ALP Stockholders Representative Indemnifying Shareholder directing the Escrow Agent to release the Claim Disputed Amount (or any other amount mutually agreed upon by such parties) or (ii) a final, non-appealable judgment of the arbitrators in the arbitration proceeding referred to in Section 8.5 of the Merger Agreement relating to the Indemnification Obligation referred to in such Notice of Claim demonstrating that Cardinal is entitled to indemnification for such Claim Amount from the ALP Stockholders pursuant to the Merger Agreement (either of (i) or (ii) being parties a "Payment Authorization"), at which date the portion of whereupon the amount due to Cardinal HFC as determined pursuant to (i) or (ii) above shall promptly be paid to Cardinal HFC in accordance with the procedures set forth hereinin Section 3.1(f).
(ef) As soon as practicable following receipt by the Escrow Agent of a Payment AuthorizationAuthorization (or following the deemed receipt of a Payment Authorization pursuant to Section 3.1(d)), the Escrow Agent shall pay from the Escrowed Amount Escrow Account to Cardinal as follows, in the following order of priority, to the extent required to make such payment: First, the Escrow Agent shall transfer, deliver and assign to Cardinal such number of Escrowed Shares (excluding cash constituting Escrowed Shares pursuant to Section 2.2(b)) (rounded up or down to the nearest whole share in the case of the Escrowed Shares that are not cash) as shall have a value equal to HFC the amount required to make or complete such payment, it being understood and agreed that such non-cash Escrowed Shares shall be valued for such purpose as set forth in Section 8.7 of such Payment Authorization. If the Merger Agreement, together with the Additional Property related thereto; Second, to the extent of any insufficiency, the Escrow Agent shall utilize any cash not part of the Escrowed Shares included in the Escrowed Amount then held amount remaining in the Escrow Deposit; Account, after converting any and Thirdall Permitted Investments to cash (such amount, to the extent as of any insufficiencygiven date, the "Remaining Escrow Agent shall sell securities or investments included in the Escrowed Amount, other than the Escrowed Shares, then held in the Escrow Deposit for cash and utilize such cash to make up such insufficiency. To the extent the Escrowed Shares allocable to any ALP Stockholder consist of Cardinal Common Shares and cash pursuant to Section 2.2(bBalance"), any delivery of Escrowed Shares pursuant to this Section 3.1(e) shall consist first of Cardinal Common Shares and then, if necessary, cash valued as provided in Section 2.2(b). To the extent the Escrow Agent is required to transfer, deliver and assign to Cardinal any Escrowed Shares included in the Escrowed Amount, Cardinal shall assist and cooperate in a reasonable manner with the Escrow Agent to facilitate such transfer, delivery and assignment. In the event the Escrowed Amount shall be insufficient to pay the amount expressly set forth in such Payment Authorization, the Escrow Agent shall pay to HFC the portion of the Remaining Escrow Balance related to the Indemnifying Shareholder's Indemnification Obligation in accordance with this Section 3.1(f) and shall deliver to Cardinal the entire remaining Escrowed Amount and then deliver to Cardinal HFC and to the ALP Stockholders Representative Indemnifying Shareholder a written notification setting forth the amount by which such Payment Authorization exceeds the amount portion of the Escrowed Amount Remaining Escrow Balance so paid.
(f) To the extent that any payment pursuant to Section 3.1(e) hereof shall be made in cash, the Escrow Agent shall pay all such amount to Cardinal by wire transfer to the bank account or accounts designated by Cardinal to the Escrow Agent in writing not less than one business day prior to the date of such payment.
(g) Notwithstanding anything to the contrary in this Agreement, in no event shall Cardinal be entitled to receive any amounts from the Escrow Deposit in excess of the amount of the Escrowed Amount.
Appears in 1 contract
Distributions for Indemnification. (a) At any time prior to the earlier of (x) the date on which Cardinal's audited financial statements for the first fiscal year ending after the Effective Time are issued and (y) the first anniversary of the Effective Time (the "Escrow Date"), Cardinal Parent may deliver to the Escrow Agent (with a copy to the ALP Stockholders Representative) a certificate (a "Notice of Claim") (i) stating that Cardinal believes Parent is of the opinion that it may be he entitled to indemnification pursuant to Article VIII Section 7.2(a)(i) or Section 7.2(a)(ii) of the Merger Agreement (each, an "Indemnification Obligation"), (ii) stating the aggregate amount (the "Claim Amount") of such Indemnification Obligation (or, in the case of an unliquidated or uncertain Indemnification Obligation, a good faith and reasonable estimate thereof), and (iii) specifying in reasonable detail the nature of such Indemnification Obligation. Any Notice of Claim delivered pursuant to this Section 3.1 with respect to any unliquidated Indemnification Obligation may be supplemented by a later Notice of Claim specifying in greater detail the applicable Claim Amount or any other items set forth therein. Upon delivery Parent shall deliver to the Shareholders' Representative a copy of any such Notice of Claim, Claim hereunder concurrently with the Escrow Agent shall, within three business days of receipt thereof, deliver a written notice together with a copy delivery of such Notice of Claim to the ALP Stockholders RepresentativeEscrow Agent. Parent shall have the right to submit (x) a Notice of Claim in respect of any Indemnification Obligation under Section 7.2(a)(ii) at any time prior to the first anniversary of the Effective Time (the "First Escrow Date") and (y) a Notice of Claim in respect of any Indemnification Obligation under Section 7.2(a)(i) at any time on or prior to March 31, 2000 (the "Final Escrow Date").
(b) If the ALP Stockholders Shareholders' Representative shall object on behalf of the ALP Stockholders to the Indemnification Obligation or the Claim Amount specified in such original or later delivered Notice of Claim, the ALP Stockholders Shareholders' Representative shall, within twenty business days after delivery of the written notice containing a copy of any such Notice of Claim, deliver to the Escrow Agent a certificate (a "Reply Certificate") (x) specifying in reasonable detail each such objection, including, without limitation, the portion of the Claim Amount that the Shareholders' Representative does not want the Escrow Agent to release to Parent (the "Disputed Amount"), and (y) specifying in reasonable detail the nature and basis for such objection. Within three business days after delivery to the Escrow Agent of a Reply Certificate, the Escrow Agent The Shareholders' Representative shall deliver to Parent a copy of any Reply Certificate hereunder concurrently with the delivery of such Reply Certificate to Cardinalthe Escrow Agent. Cardinal Parent and the ALP Stockholders Shareholders' Representative shall negotiate in good faith for a period of 30 20 business days after delivery of such Reply Certificate to Cardinal Parent to reach a written resolution of any objections raised in a Reply Certificate.
(ci) If no Reply Certificate is delivered with respect to any Notice of Claim, then the ALP Stockholders Shareholders' Representative shall be deemed to have delivered a Payment Authorization (as defined below) acknowledging CardinalParent's right to receive the Claim Amount specified in such Notice of Claim with respect to the applicable Indemnification Obligation and the Escrow Agent shall transfer to Cardinal Parent a portion of the Escrowed Amount Indemnification Escrow Deposit in the case of an Indemnification Obligation under Section 7.2(a)(i) or the Retention Payment Escrow Deposit in the case of an Indemnification Obligation under Section 7.2(a)(ii), in each case in an amount equal to the lesser of (x) such Claim Amount and (y) the Indemnification Escrow Deposit or the Retention Payment Escrow Deposit, as the case may be, all in accordance with the procedures set forth in Section 3.1(e).
(ii) If a Reply Certificate is delivered that identifies a Disputed Amount that is less than the Claim Amount (the amount by which any Claim Amount exceeds any given Disputed Amount, the "Undisputed Amount"), then the Shareholders' Representative shall he deemed to have delivered a Payment Authorization acknowledging Parent's right to receive the Undisputed Amount specified in such Reply Certificate with respect to the applicable Indemnification Obligation and the Escrow Agent shall transfer to Parent a portion of the Indemnification Escrow Deposit in the case of an Indemnification Obligation under Section 7.2(a)(i) or the Retention Payment Escrow Deposit in the case of an Indemnification Obligation under Section 7.2(a)(ii), in each case in an amount equal to the lesser of (x) such Undisputed Amount and (y) the Indemnification Escrow Deposit or the Retention Payment Escrow Deposit, as the case may be, all in accordance with the procedures set forth in Section 3.1(e).
(d) If the Escrow Agent receives a Reply Certificate in a timely manner with respect to any Notice of Claim, the Claim Disputed Amount referred to in such Notice of Claim Reply Certificate shall be held by the Escrow Agent and shall not be released to Cardinal Parent except upon CardinalParent's delivery to the Escrow Agent of either (i) joint written instructions signed by an authorized officer each of Cardinal Parent and by the ALP Stockholders Shareholders' Representative directing the Escrow Agent to release the Claim Disputed Amount (or any other amount mutually agreed upon by such parties) or (ii) a final, non-appealable judgment of the arbitrators in the arbitration proceeding referred to in Section 8.5 of the Merger Agreement relating to the Indemnification Obligation referred to in such Notice of Claim demonstrating that Cardinal is entitled to indemnification for such Claim Amount from the ALP Stockholders pursuant to the Merger Agreement (either of (i) or (ii) being parties a "Payment Authorization"), at which date the portion of whereupon the amount due to Cardinal Parent as determined pursuant to (i) or (ii) above shall promptly be paid to Cardinal Parent in accordance with the procedures set forth hereinin Section 3.1(e).
(e) As soon as practicable following receipt by the Escrow Agent of a Payment AuthorizationAuthorization (or following the deemed receipt of a Payment Authorization pursuant to Section 3.1(c)), the Escrow Agent shall pay from the Escrowed Amount Escrow Account to Cardinal as follows, in the following order of priority, to the extent required to make such payment: First, the Escrow Agent shall transfer, deliver and assign to Cardinal such number of Escrowed Shares (excluding cash constituting Escrowed Shares pursuant to Section 2.2(b)) (rounded up or down to the nearest whole share in the case of the Escrowed Shares that are not cash) as shall have a value equal to Parent the amount required to make or complete such payment, it being understood and agreed that such non-cash Escrowed Shares shall be valued for such purpose as set forth in Section 8.7 of the Merger Agreement, together with the Additional Property related thereto; Second, to the extent of any insufficiency, the Escrow Agent shall utilize any cash not part of the Escrowed Shares included in the Escrowed Amount then held in the Escrow Deposit; and Third, to the extent of any insufficiency, the Escrow Agent shall sell securities or investments included in the Escrowed Amount, other than the Escrowed Shares, then held in the Escrow Deposit for cash and utilize such cash to make up such insufficiency. To the extent the Escrowed Shares allocable to any ALP Stockholder consist of Cardinal Common Shares and cash pursuant to Section 2.2(b), any delivery of Escrowed Shares pursuant to this Section 3.1(e) shall consist first of Cardinal Common Shares and then, if necessary, cash valued as provided in Section 2.2(b). To the extent the Escrow Agent is required to transfer, deliver and assign to Cardinal any Escrowed Shares included in the Escrowed Amount, Cardinal shall assist and cooperate in a reasonable manner with the Escrow Agent to facilitate such transfer, delivery and assignmentPayment Authorization. In the event the Escrowed Amount amount remaining in the Escrow Account, after converting any and all Permitted Investments to cash (such amount, as of any given date, the "Remaining Escrow Balance"), shall be insufficient to pay the amount expressly set forth in such Payment Authorization, the Escrow Agent shall pay the entire Remaining Escrow Balance to Parent in accordance with this Section 3.1(e) and shall deliver to Cardinal the entire remaining Escrowed Amount and then deliver to Cardinal Parent and to the ALP Stockholders Shareholders' Representative a written notification setting forth the amount by which such Payment Authorization exceeds the amount of the Escrowed Amount Remaining Escrow Balance so paid.
(f) To Notwithstanding anything to the extent that any payment contrary contained herein or in the Merger Agreement, Parent may submit Notices of Claim for portions of the 5 Indemnification Escrow Deposit solely in respect of the Indemnification Obligations under Section 7.2(a)(i) and submit Notices of Claim for portions of the Retention Payment Escrow Deposit solely in respect of the Indemnification Obligations under Section 7.2(a)(ii).
(g) The Escrow Agent shall pay all amounts pursuant to Section 3.1(e) hereof shall be made in cash, the Escrow Agent shall pay all such amount to Cardinal Parent by wire transfer to the bank account or accounts designated by Cardinal Parent to the Escrow Agent in writing not less than one business day Business Day prior to the date of such payment.
(g) Notwithstanding anything to the contrary in this Agreement, in no event shall Cardinal be entitled to receive any amounts from the Escrow Deposit in excess of the amount of the Escrowed Amount.
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