Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed. (b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount. (c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”). (d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 4 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement, Asset Purchase Agreement (Ds Healthcare Group, Inc.)
Indemnification Claims. (a) In the event that order for any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order Person to seek indemnification under this Article VISection 10, the such Indemnified Parties Person shall give deliver, in good faith, a written notification demand (a an “Claim NoticeIndemnification Demand”) to the Indemnifying Parties Person and, in the case of the Cypress Indemnitees, to the Escrow Agent, which contains (i) a description and the amount (the “Claimed Asserted Damages Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesPerson, (ii) a statement that the Indemnified Parties Person is entitled to indemnification under this Article VI Section 10 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(cb) Within twenty (20) 20 days after delivery of a Claim Noticean Indemnification Demand, the Indemnifying Parties Person shall deliver to the Indemnified Parties Person a written response (the “Response”) in which the Indemnifying Parties Person shall: (i) agree that the Indemnified Parties Person is entitled to receive all of the Claimed Asserted Damages Amount, and, in the case of an Indemnification Demand made by a Cypress Indemnitee, the Indemnified Person and the Indemnifying Person shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to disburse the full Asserted Damages Amount to the extent of the remaining Escrow Funds to the Indemnified Person; (ii) agree that the Indemnified Parties Person is entitled to receive part, but not all, of the Claimed Asserted Damages Amount (such portion, the “Agreed AmountPortion”) ), and, in the case of an Indemnification Demand made by a Cypress Indemnitee, the Indemnified Person and the Indemnifying Person shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to disburse the Agreed Portion to the extent of the remaining Escrow Funds to the Indemnified Person; or (iii) dispute that the Indemnified Parties Person is entitled to receive any of the Claimed Asserted Damages Amount.
(c) In the event that the Indemnifying Person shall (i) dispute that the Indemnified Person is entitled to receive any of the Asserted Damages Amount, or (ii) agrees that the Indemnified Person is entitled to only the Agreed Portion of the Asserted Damages Amount, the Indemnified Person and the Indemnifying Person shall attempt in good faith to agree upon the rights of the respective parties with respect to each of the indemnification claims that comprise the Asserted Damages Amount (or the portion of the Asserted Damages Amount not comprising the Agreed Portion). If the Indemnified Person and the Indemnifying Parties Person should so agree, a memorandum setting forth such agreement shall be prepared and signed by both such parties and, in the Response disputes its liability for all case of an Indemnification Demand made by a Cypress Indemnitee, shall be furnished to the Escrow Agent. If no such agreement can be reached after good faith negotiation within 60 days after delivery of a Response, either the Indemnified Person or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures Person may demand arbitration of any matter set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)applicable Indemnification Demand.
(d) During the 60-day period following the delivery of a Response that reflects a DisputeIf no agreement is reached, the Indemnifying Parties matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to the Indemnified Person and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)Person. In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree within thirty days after submission of any dispute to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesarbitration, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions Person and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined Person cannot to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligationmutually agree on one arbitrator, then (i) the Buyer parties shall be entitled arrange for the American Arbitration Association to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make designate a claim for indemnification single arbitrator’ in accordance with the provisions rules of this Article VI, and (iii) the Buyer American Arbitration Association. Any such arbitration shall be reimbursedheld in San Diego County, California, under the rules and procedures then in accordance with effect of the provisions American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including the respective expenses of this Article VIeach party, the fees of the arbitrator and the administrative fee of the American Arbitration Association. The arbitrator shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the Indemnified Person and the Indemnifying Person an opportunity, adequate in the sole judgment of the arbitrator to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any indemnification claim in such Damages for which it is entitled to indemnification pursuant to this Article VI (Indemnification Demand shall be subject to the right limitations set forth in this Agreement and final, binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator. All payments required by the arbitrator shall be made within thirty days after the decision of the Indemnifying Selling Parties to dispute arbitrator is rendered. Judgment upon any award rendered by the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)arbitrator may be entered in any court having jurisdiction.
Appears in 4 contracts
Sources: Asset Purchase Agreement (Exagen Inc.), Asset Purchase Agreement (Exagen Inc.), Asset Purchase Agreement (Exagen Diagnostics Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification A party (the “Indemnified PartiesParty”) shall give written notification entitled to indemnification from another party under the other Party or Parties terms of this Agreement (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep provide the Non-Controlling Indemnifying Party advised with prompt written notice (an “Indemnity Notice”) of any third party claim which the status Indemnified Party believes gives rise to a claim for indemnity against the Indemnifying Party hereunder. Notwithstanding the foregoing, the failure of such suit or proceeding and the defense thereof and an Indemnified Party to promptly provide an Indemnity Notice shall consider in good faith recommendations made not constitute a waiver by the Non-Controlling Indemnified Party with respect theretoto any right to indemnification or otherwise relieve such Indemnifying Party from any liability hereunder unless and only to the extent that the Indemnifying Party is materially prejudiced as a result thereof. The Non-Controlling Indemnifying Party shall furnish be entitled, if it accepts financial responsibility for the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such third party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in to control the defense of or to settle any such suit or proceeding third party claim at the sole cost its own expense and expense by its own counsel; provided that, unless a settlement includes an unconditional release of an Indemnified Party, no settlement by the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall Party of such a claim will be considered “Damages” binding on such Indemnified Party for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding indemnification provisions hereof without the prior written consent of the such Indemnified PartiesParty to such settlement, which shall consent may not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree provide the Indemnifying Party with such information as the Indemnifying Party shall reasonably request to defend any settlement of, or such third party claim and shall otherwise cooperate with the entry Indemnifying Party in the defense of any such third party claim. Except as set forth in this Section 7.03, no settlement or other compromise or consent to a judgment arising from, any such suit or proceeding by the Indemnified Party with respect to a third party claim as to which the Indemnifying Party is asserted to have an indemnity obligation hereunder will be binding on the Indemnifying Party for purposes of the indemnification provisions hereof without the prior written consent of the such Indemnifying PartiesParty to such settlement, which shall consent may not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties it being agreed however that it shall give written notification (a “Claim Notice”) to be reasonable for the Indemnifying Parties which contains (i) a description Party to withhold or delay its consent if the Indemnifying Party reasonably asserts that the claim is not fully covered by the indemnity provided hereunder, and the amount (the “Claimed Amount”) entering into of any Damages incurred settlement or reasonably expected compromise or the consent to be incurred any judgment in violation of the foregoing shall constitute a waiver by the Indemnified Parties, (ii) a statement Party of its right to indemnity hereunder to the extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party shall be subrogated to the rights of the Indemnified Party to the extent that the Indemnified Parties is entitled to indemnification under this Article VI Indemnifying Party pays for such Damages and a reasonable explanation of the basis thereforany loss, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to damage or expense suffered by the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed AmountParty hereunder. If the Indemnifying Parties in Party does not accept financial responsibility for the Response disputes its liability for all third party claim or part fails to defend against the third party claim that is the subject of an Indemnity Notice within 30 days of receiving such notice (or sooner if the nature of the Claimed Amountthird party claim so requires), or otherwise contests its obligation to indemnify the Indemnified Party in connection therewith, then the Indemnified Party may, upon providing written notice to the Indemnifying Parties and Party, pay, compromise or defend such third party claim without the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission prior consent of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advanceotherwise) (the “ADR Procedure”)Indemnifying Party. In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partieslatter event, the Indemnified Parties Party, by proceeding to defend itself or settle the ADR Service shall be treated as confidential andmatter, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall does not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or waive any of their Subsidiaries is liable its rights hereunder to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent later seek reimbursement from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 3 contracts
Sources: Capacity Purchase Agreement (Republic Airways Holdings Inc.), Capacity Purchase Agreement (Mesa Air Group Inc), Capacity Purchase Agreement (Mesa Air Group Inc)
Indemnification Claims. (a) In the event that If any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Regency Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to asserts a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe payment from HEP in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation Section 11.2 of the basis thereforContribution Agreement (other than pursuant to Section 11.2(c)), and (iii) such Regency Party shall deliver a demand for payment (in the manner provided in paragraph (c) below) in the amount copy of the Claimed Amount.
written notice required under Section 11.3 of the Contribution Agreement to the Escrow Agent. HEP and such Regency Party shall resolve any disagreement relating to such indemnification claim in accordance with the terms of the Contribution Agreement. Within five (c5) Within twenty (20) business days after delivery resolution between HEP and such Regency Party of a Claim Noticesuch indemnification claim, the Indemnifying Parties whether by mutual agreement or by litigation, HEP and Regency shall deliver a joint written instruction to the Indemnified Parties a written response (Escrow Agent directing the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled Escrow Agent to receive all of the Claimed Amountliquidate, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions HEP and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VISection 5 below, and (iii) such number of Purchase Price Units comprising the Buyer Escrow Units as shall be reimbursednecessary (taking into account any cash or cash equivalent amounts then comprising the Escrow Amount) to satisfy the payment of such indemnification claim. Upon resolution of any disagreement relating to any such indemnification claim by litigation, if HEP does not timely provide such joint instruction, Regency may provide Escrow Agent a sole written instruction, which shall certify and attach a copy of the final, unappealable judgment of the relevant court, directing the Escrow Agent to liquidate, on behalf of HEP and in accordance with the provisions of this Section 5 below, such number of Purchase Price Units comprising the Escrow Units as shall be necessary (taking into account any cash or cash equivalent amounts then comprising the Escrow Amount) to satisfy the payment of such indemnification claim. Upon receipt of such joint or sole notice, Escrow Agent shall promptly liquidate the necessary number of Purchase Price Units in accordance with the provisions of Section 5 below and pay the full amount of such Damages to such Regency Party. Regency agrees that it will endeavor to make only one (1) aggregate claim for payment of any and all indemnification claims under Article VI11 of the Contribution Agreement (other than Section 11.2(c)), and in any event will make no more than three (3) such claims for payment (each of which claims for payment will be for any such Damages for which it is entitled to and all resolved indemnification pursuant to this Article VI (subject claims up to the right point of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIsuch payment).
Appears in 3 contracts
Sources: Contribution Agreement, Contribution Agreement (Regency Energy Partners LP), Escrow Agreement (Regency Energy Partners LP)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, A person entitled to indemnification under this Article VI, the Party or Parties seeking indemnification Section (the an “Indemnified PartiesParty”) shall give prompt written notification to the other Party or Parties person from whom indemnification is sought (the “Indemnifying PartiesParty”) of the commencement of any action, suit or proceeding relating to a third party Third Party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt sought or, if earlier, upon the assertion of any such claim by the Indemnified Parties of notice of such suit or proceeding, a Third Party (it being understood and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; providedagreed, however, that no delay on the part failure by an Indemnified Party to give notice of the Indemnified Parties a Third Party claim as provided in notifying the Indemnifying Parties this Section shall not relieve the Indemnifying Parties Party of any liability or its indemnification obligation hereunder under this Agreement except and only to the extent of any damage or liability caused by or arising out that such Indemnifying Party is actually prejudiced as a result of such failure. failure to give notice).
(b) Within 20 thirty (30) days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit action, suit, proceeding or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationclaim. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. .
(c) The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided provided, however, that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes concludes, based on advice from counsel, that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit action, suit, proceeding or proceedingclaim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Parties Party solely in connection therewith; provided, further, that in no event shall the Indemnifying Party be considered “Damages” responsible for purposes the fees and expenses of this Agreement. more than one counsel in any one jurisdiction for all Indemnified Parties.
(d) The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling other Party advised of the status of such suit action, suit, proceeding or proceeding claim and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling other Party with respect thereto. .
(e) The Non-Controlling Indemnified Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement ofof such action, suit, proceeding or claim without the entry prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, delayed, denied or conditioned. The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment arising from, in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any such suit liability or proceeding obligation on the Indemnified Party without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedParty.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 3 contracts
Sources: Supply, License and Commercialization Agreement (VIASPACE Green Energy Inc.), Supply, License and Commercialization Agreement (VIASPACE Green Energy Inc.), Supply and Commercialization Agreement (VIASPACE Inc.)
Indemnification Claims. (a) In the event that any of the Parties Parent or the Company Stockholder are entitled, or seek to assert rights, to indemnification under this Article VI, the Party Parent or Parties seeking indemnification the Company Stockholder (as the “Indemnified Parties”case may be) shall give written notification to the other Party Company Stockholder or Parties the Parent (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties indemnifying party under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the BuyerParent, the Company Surviving Corporation or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer Parent may be entitled to indemnification pursuant to this Article VI, and the Buyer Parent reasonably determines that the Company Surviving Corporation or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Parent shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesCompany Stockholder, (ii) the Buyer Parent may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer Parent shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Company Stockholder to dispute the BuyerParent’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) For purposes of this Section 6.3 and the last two sentences of Section 6.4, any references to the Company Stockholder or the Indemnifying Company Stockholder (except provisions relating to an obligation to make, or a right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative.
(f) The Indemnification Representative shall have full power and authority on behalf of each Stockholder or Company Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholder or Indemnifying Company Stockholder under this Article VI. The Indemnification Representative shall have no liability to any Party for any action taken or omitted on behalf of the Company Stockholder or the Parent pursuant to this Article VI.
Appears in 3 contracts
Sources: Agreement and Plan of Merger and Reorganization (Ds Healthcare Group, Inc.), Merger Agreement (Ds Healthcare Group, Inc.), Merger Agreement (Ds Healthcare Group, Inc.)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the An Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Party of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Parties Party in so notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Party shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall promptly furnish the Controlling Party with such information as it may have or receive with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Indemnified Party with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (x) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 5.3 or (y) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Third Party Action. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 3 contracts
Sources: Asset Transfer Agreement (Nanometrics Inc), Asset Transfer Agreement (Zygo Corp), Asset Transfer Agreement (Zygo Corp)
Indemnification Claims. (a) In the event that 8.3.1 If any of the Parties are entitled, or seek to assert rights, to indemnification under claim contemplated by this Article VI8 shall be asserted by a third party against BMO Indemnified Parties or against the Carrier Indemnified Parties (in either case, the Party or Parties seeking indemnification (the “Indemnified Parties”) ), or if any potential claim contemplated by this Article 8 shall give written notification come to the actual knowledge of a Party or any of the Indemnified Parties, the Party shall notify the other Party or Parties (the “Indemnifying PartiesParty”) as soon as possible as to the nature of such claim (provided that any failure to so notify shall not affect the commencement Indemnifying Party’s liability under this Section unless the Indemnified Party is materially prejudiced by such failure) and the Indemnifying Party shall, subject as hereinafter provided, be entitled (but not required) to assume the defence on behalf of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice any suit brought to enforce such claim; provided that the defence shall be through legal counsel acceptable to the Indemnified Parties acting reasonably and no settlement or admission of liability shall be made by the Indemnifying Party or an Indemnified Party without, in each case, the prior written consent of the Parties, such consent not to be unreasonably withheld. An Indemnified Party shall have the right to employ separate counsel in any such suit and participate in the defence thereof but the fees and expenses of such suit or proceeding, and counsel shall describe in reasonable detail (to be at the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part expense of the Indemnified Parties in notifying unless:
8.3.1.1 the Indemnifying Party fails to assume the defence of such suit on behalf of such Indemnified Parties shall relieve within ten Business Days of receiving notice of such suit;
8.3.1.2 the employment of such counsel has been authorized by the Indemnifying Party; or
8.3.1.3 the named parties to any such suit include both the Indemnified Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, and the Indemnifying Parties may, upon written notice thereof Party and the Indemnified Party shall have been advised by counsel (i) that there may be one or more legal defences available to the Indemnified Parties seeking indemnificationwhich are different from those available to the Indemnifying Party or (ii) a conflict of interest would exist for a counsel representing both parties, in either case the Indemnifying Party shall not have the right to assume control of the defense defence of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control on behalf of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification but shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect be liable to such suit or proceeding, pay the reasonable fees and expenses of counsel for the Indemnified Party.
8.3.2 The Indemnifying Party shall not be liable under this Section to pay (i) the fees and expenses of more than one law firm acting as counsel on behalf of the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made except as provided by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of8.3.1), or the entry of (ii) any judgment arising fromindirect, any such suit incidental, special or proceeding without the prior written consent consequential damages of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 3 contracts
Sources: Gold Carrier Agreement (Vaulted Gold Bullion Trust), Gold Carrier Agreement (Vaulted Gold Bullion Trust), Gold Carrier Agreement (Bank of Montreal /Can/)
Indemnification Claims. (a) In the event that any Subject to Section 7.5 below, if an Indemnified Party is of the Parties are entitledopinion that it has or may have a right to indemnification, compensation or seek to assert rights, to indemnification reimbursement under this Article VIAgreement (an “Indemnification Claim”), such Indemnified Party shall so notify the Indemnifying Party or Parties seeking indemnification in a written notice (the a “Indemnified PartiesClaim Certificate”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days promptly after receipt by the Indemnified Parties of notice of any such suit or proceedingright, and shall describe but in reasonable detail (any event, prior to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount expiration of the claimed damagesapplicable Survival Period; provided, however, that no delay on the part of the Indemnified Parties in notifying failure to promptly notify the Indemnifying Parties shall Party thereof will not relieve the Indemnifying Parties of any Party from liability or obligation hereunder in connection therewith except and to the extent of any damage or liability caused by or arising out of (and only to the extent) that such failure. Within 20 days after delivery of such notification, failure has materially prejudiced the Indemnifying Parties mayParty (it being understood, upon written notice thereof however, that a failure to deliver a Claim Certificate prior to the Indemnified Parties seeking indemnification, assume control expiration of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that an applicable Survival Period will relieve the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal Party from liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationconnection therewith). If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification Each Claim Certificate shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of state that such Indemnified Party has suffered or incurred any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount Losses for which it is entitled to indemnification, compensation or reimbursement under this Agreement; (ii) contain a brief description in reasonable detail (to the extent available to such Indemnified Party) of the facts, circumstances or events giving rise to each item of Losses based on such Indemnified Party’s good faith belief thereof; and (iii) state the basis for indemnification, compensation or reimbursement under this Agreement to which such item of Losses is related.
(b) In the event that the Indemnifying Party seeks to contest any individual items of Losses set forth in a Claim Certificate, the Indemnifying Party shall so notify the Indemnified Party in writing (an “Objection Notice”) within 30 days after receipt of such Claim Certificate, which Objection Notice shall set forth a brief description in reasonable detail of the Indemnifying Party’s basis for objecting to each item of Loss. In the event that the Indemnifying Party fails to object to any items of Loss set forth in a Claim Certificate within the foregoing 30-day period, the Indemnifying Party shall be deemed to have irrevocably agreed and consented to indemnify, compensate and reimburse the Indemnified Party in respect of such items of Loss pursuant to the terms of this Article VI)Agreement.
Appears in 3 contracts
Sources: Asset Purchase Agreement (Synacor, Inc.), Asset Purchase Agreement (Synacor, Inc.), Asset Purchase Agreement (Synacor, Inc.)
Indemnification Claims. (a) In the event that any of the Parties Parent or the Company Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, the Party Parent or Parties seeking indemnification the Company Stockholders (as the “Indemnified Parties”case may be) shall give written notification to the other Party Company Stockholders or Parties the Parent (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the BuyerParent, the Company Surviving Corporation or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer Parent may be entitled to indemnification pursuant to this Article VI, and the Buyer Parent reasonably determines that the Company Surviving Corporation or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Parent shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesStockholders, (ii) the Buyer Parent may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer Parent shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Stockholders to dispute the BuyerParent’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) For purposes of this Section 6.3 and the last two sentences of Section 6.4, any references to the Company Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative.
(f) The Indemnification Representative shall have full power and authority on behalf of each Company Stockholder or Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders or Indemnifying Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Company Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of the Company Stockholders or Indemnifying Stockholders pursuant to this Article VI.
Appears in 3 contracts
Sources: Agreement and Plan of Merger and Reorganization (Akoustis Technologies, Inc.), Merger Agreement (Enumeral Biomedical Holdings, Inc.), Merger Agreement (Enumeral Biomedical Holdings, Inc.)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) The Buyer shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Representative of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Buyer of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent then known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no . No delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Representative shall relieve the Indemnifying Parties Equity Holders of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within 20 days after delivery of such notification, the Indemnifying Parties Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationBuyer; provided that (i) the Indemnifying Parties Representative may only assume control of such defense if (A) he, she or it acknowledges in writing to the Buyer that any damages, fines, costs or other liabilities that may be assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Article VI, (B) the ad damnum does not exceed 110% of the amount of Damages for which the Equity Holders are liable under this Article VI, and (C) an adverse resolution of the Third Party Action would not have a material adverse effect on the goodwill or reputation of the Buyer or the business, operations or future conduct of the Buyer and (ii) the Representative may not assume control of the defense of a suit or proceeding Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer and may not assume control of any Tax Proceeding to the extent such Tax Proceeding involves consolidated or combined Tax Returns of the Buyer for any Tax period (or portion thereof) after the Closing Date or a potential Tax liability which may exceed 110% of the amount for which the Equity Holders may be liable under this Article VI after taking into account the amount of all other liabilities for which claims have been made by the Buyer. If the Indemnifying Parties do Representative does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 6.2(a) or (ii) the Representative assumes control of such defense and the Buyer reasonably concludes that the Representative and the Buyer have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Representative shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesBuyer, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Buyer shall not be required if the Indemnifying Parties Representative agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Buyer from further liability and has no other materially adverse effect on the Indemnified PartiesBuyer. The Indemnified Parties Except as provided in Section 6.2(f) below, the Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesRepresentative, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties Buyer shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountRepresentative.
(c) Within twenty (20) 30 days after delivery of a Claim Notice, the Indemnifying Parties Representative shall deliver to the Indemnified Parties Buyer a written response (the “Response”) , in which the Indemnifying Parties Representative, on behalf of the Equity Holders, shall: (i) agree that the Indemnified Parties Buyer is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a letter instructing the Escrow Agent to disburse to the Buyer from the Indemnification Escrow Shares a number of shares that if multiplied by a value of $12.50 per share will equal the Claimed Amount), (ii) agree that the Indemnified Parties Buyer is entitled to receive part, but not all, of the Claimed Agreed Amount (in which case the “Response shall be accompanied by a letter instructing the Escrow Agent to disburse to the Buyer from the Indemnification Escrow Shares a number of shares that if multiplied by a value of $12.50 per share will equal the Agreed Amount”) or (iii) dispute that the Indemnified Parties Buyer is entitled to receive any of the Claimed Amount. If The Equity Holders may contest the Indemnifying Parties in the Response disputes its liability for payment of all or part a portion of the Claimed AmountAmount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Buyer is entitled to indemnification under this Article VI. If no Response is delivered by the Equity Holders within such 30-day period, the Indemnifying Parties and Equity Holders shall be deemed to have agreed that all of the Indemnified Parties Claimed Amount is owed to the Buyer. Acceptance by the Buyer of partial payment of any Claimed Amount shall follow be without prejudice to the procedures set forth in Section 6.3(d) for Buyer's right to claim the resolution balance of any such dispute (a “Dispute”)Claimed Amount.
(d) During the 6030-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Equity Holders and the Indemnified Parties Buyer shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 6030-day period, the Indemnifying Parties Equity Holders and the Indemnified Parties Buyer shall discuss in good faith the submission of submit the Dispute to binding arbitration and such Dispute shall be resolved in accordance with Section 6.2(e).
(e) Any arbitration shall be conducted in San Francisco, California, in the case of a mutually acceptable alternative dispute resolution procedure claim made by the Buyer, or in Boston, Massachusetts, in the case of a claim made by the Representative, by a single arbitrator (which may the "Arbitrator") in accordance with the Commercial Rules in effect from time to time and the following provisions:
(i) In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be non-binding controlling;
(ii) Either party shall commence the arbitration by filing a written submission with the office of the AAA in the appropriate city and state as provided by this Section 6.2(e) in accordance with Commercial Rule 5 (or any successor provision);
(iii) All depositions or other discovery shall be conducted pursuant to the applicable U.S. federal rules relating to discovery;
(iv) Not later than 30 days after the conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the parties a writing setting forth the arbitral award and the Arbitrator's reasons therefor. Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties, as they agree and judgment thereon may be entered and enforced in advanceany court of competent jurisdiction (subject to Section 12.11);
(v) The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (x) modify or disregard any provision of this Agreement, including the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d6.2(e), or (y) address or resolve any issue not submitted by the parties; and
(vi) In connection with any arbitration proceeding pursuant to this Agreement, each party shall not obligate bear its own costs and expenses, except that the Indemnifying Parties fees and costs of the AAA and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesArbitrator, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees costs and expenses of any ADR Service used obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the Indemnifying Parties parties (which shall not include any party's attorneys' fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the Buyer and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Equity Holders.
(f) Notwithstanding the other provisions of this Section 6.36.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries Buyer is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesRepresentative or the Equity Holders, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Equity Holders to dispute the Buyer’s 's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(g) The Representative shall have full power and authority on behalf of each Equity Holder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equity Holders under this Article VI. The Representative shall have no liability to any Equity Holder for any action taken or omitted on behalf of the Equity Holders pursuant to this Article VI.
Appears in 2 contracts
Sources: Merger Agreement (Akamai Technologies Inc), Merger Agreement (Akamai Technologies Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties An Indemnitee seeking indemnification (the “Indemnified Parties”) hereunder shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim make claims for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon giving written notice thereof to the Indemnified Parties seeking indemnificationRepresentative promptly on discovery and in any event within the period in which indemnification claims can be made hereunder. If indemnification is sought for a claim or liability asserted by a third party, assume control the Indemnitee shall also give written notice thereof to the Representative promptly after it receives notice of the defense of such suit claim or proceeding with counsel reasonably satisfactory liability being asserted, but the failure to do so shall not relieve the Indemnifying Stockholders from any liability except to the Indemnified Party seeking indemnification; provided extent that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief it is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made prejudiced by the Non-Controlling Party with respect theretofailure or delay in giving such notice. The Non-Controlling Party Such notice shall furnish summarize the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party basis for the claim for indemnification and any written claim, demand, invoice, billing claim or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementliability being asserted by a third party. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, receiving such notice the Indemnifying Parties Representative shall deliver give written notice to the Indemnified Parties a written response (Indemnitee stating whether it disputes the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) claim for indemnification and whether it will defend against any third party claim or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountliability at its own cost and expense. If the Indemnifying Parties in Representative fails to give notice that it disputes an indemnification claim within twenty (20) days after receipt of notice thereof, it shall be deemed to have accepted and agreed to the Response disputes its claim, which shall become immediately due and payable. The Representative shall be entitled to direct the defense against a third party claim or liability for all or part with counsel selected by it (subject to the consent of the Claimed AmountIndemnitee, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures consent shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to unreasonably withheld) as long as the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that Representative is otherwise discoverable or admissible)conducting a good faith and diligent defense. The fees and expenses Indemnitee shall at all times have the right to fully participate at its own expense in the defense of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damagesa third party claim or liability, directly or through counsel; provided, however, that if the Indemnifying Parties are determined not named parties to the Legal Proceeding include both the Representative and the Indemnitee and the Indemnitee is advised that representation of both parties by the same counsel would be liable for Damages in connection with such Disputeinappropriate under applicable standards of professional conduct, the Indemnified Parties shall pay all Indemnitee may engage separate counsel at its own expense. If no such fees notice of intent to dispute and expenses. Notwithstanding the other provisions of this Section 6.3, if defend a third party asserts (other than claim or liability is given by means of a lawsuit) that the BuyerRepresentative, or if such good faith and diligent defense is not being or ceases to be conducted by the Representative, the Company Indemnitee shall have the right, at the expense of the Representative, to undertake the defense of such claim or any liability (with counsel selected by the Representative), and to compromise or settle it, with consent of their Subsidiaries is liable to such the Representative, which consent shall not be unreasonably withheld. If the third party for a monetary claim or other obligation which may constitute or result in Damages for which liability is one that by its nature cannot be defended solely by the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligationRepresentative, then (i) the Buyer Indemnitee shall be entitled to satisfy make available such obligation, with prior notice to but without prior consent from information and assistance as the Indemnifying Selling Parties, (ii) the Buyer Representative may subsequently make a claim for indemnification in accordance reasonably request and shall cooperate with the provisions of this Article VIRepresentative in such defense, and (iii) at the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right expense of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Stockholders.
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (LRAD Corp)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges -43- 48 in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the -44- 49 Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the average of the last reported sale prices per share of the Buyer Common Stock on the Nasdaq National Market over the ten consecutive trading days ending on the third day immediately preceding the date of distribution of such Escrow Shares (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the beginning of such ten-day period), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith reasonable efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute (other than injunctive relief reasonably necessary to protect such party's interest in the Dispute) prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the -45- 50 Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 2 contracts
Sources: Merger Agreement (Unisphere Networks Inc), Merger Agreement (Unisphere Networks Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification A party (the “Indemnified PartiesParty”) shall give written notification entitled to indemnification from another party under the other Party or Parties terms of this Agreement (the “Indemnifying PartiesParty”) shall provide the Indemnifying Party with prompt written notice (an “Indemnity Notice”) of any third party claim or other claim which the commencement Indemnified Party believes gives rise to a claim for indemnity against the Indemnifying Party hereunder. Notwithstanding the foregoing, the failure of an Indemnified Party to promptly provide an Indemnity Notice shall not constitute a waiver by the Indemnified Party to any right to indemnification or otherwise relieve such Indemnifying Party from any liability hereunder unless and only to the extent that the Indemnifying Party is materially prejudiced as a result thereof, and in any event shall not relieve such Indemnifying Party from any liability which it may have otherwise than on account of this Article VII. With respect to third party claims, the Indemnifying Party shall be entitled, if it accepts financial responsibility for the third party claim, to control the defense of or to settle any such third party claim at its own expense and by its own counsel; provided that the Indemnified Party’s prior written consent (which may not be unreasonably withheld, conditioned or delayed) must be obtained prior to settling any such third party claim. The Indemnified Party shall provide the Indemnifying Party with such information as the Indemnifying Party shall reasonably request to defend any such third party claim and shall otherwise cooperate with the Indemnifying Party in the defense of any suit such third party claim. Except as set forth in this Section 7.3, the Indemnified Party shall not enter into any settlement or proceeding relating other compromise or consent to a judgment with respect to a third party claim for as to which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or Party has an indemnity obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, Party (which shall may not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI), the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) entering into of any Damages incurred settlement or reasonably expected compromise or the consent to be incurred any judgment in violation of the foregoing shall constitute a waiver by the Indemnified Parties, (ii) a statement Party of its right to indemnity hereunder to the extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party shall be subrogated to the rights of the Indemnified Party to the extent that the Indemnified Parties is entitled to indemnification under this Article VI Indemnifying Party pays for such Damages and a reasonable explanation of the basis thereforany loss, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to damage or expense suffered by the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed AmountParty hereunder. If the Indemnifying Parties in Party does not accept financial responsibility for the Response disputes its liability for all third party claim or part fails to defend against the third party claim that is the subject of an Indemnity Notice within thirty (30) days of receiving such notice (or sooner if the nature of the Claimed Amountthird party claim so requires), or otherwise contests its obligation to indemnify the Indemnified Party in connection therewith, the Indemnified Party may, upon providing written notice to the Indemnifying Party, pay, compromise or defend such third party claim without the prior consent of the (otherwise) Indemnifying Party. In the latter event, the Indemnified Party, by proceeding to defend itself or settle the matter, does not waive any of its rights hereunder to later seek reimbursement from the Indemnifying Party. With respect to all other claims, the Indemnifying Parties and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution promptly make payment of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery claim upon receipt of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within reasonably sufficient evidence supporting such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damagesclaim; provided, that if the Indemnifying Parties are determined not Party in good faith disputes all or part of its obligation to be liable for Damages in connection with such Dispute, indemnify the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, Party hereunder or the amount for which it involved, the senior management of each party shall meet to discuss and attempt to resolve such dispute between the parties and, if such dispute is entitled to indemnificationnot resolved within forty-five (45) days of such claim being made, under then the terms of this Article VI)parties may pursue other remedies.
Appears in 2 contracts
Sources: Capacity Purchase Agreement (Mesa Air Group Inc), Capacity Purchase Agreement (Mesa Air Group Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification A party (the “Indemnified PartiesParty”) shall give written notification that may be entitled to indemnification from another party under the other Party or Parties terms of this Agreement (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep provide the NonIndemnifying Party with prompt written notice (an “Indemnity Notice”) of any third-Controlling party claim which the Indemnified Party advised believes may give rise to a claim for indemnity against the Indemnifying Party hereunder. Notwithstanding the foregoing, the failure of the status of such suit or proceeding and the defense thereof and an Indemnified Party to promptly provide an Indemnity Notice shall consider in good faith recommendations made not constitute a waiver by the Non-Controlling Indemnified Party with respect thereto. The Non-Controlling of any right to indemnification or otherwise relieve such Indemnifying Party from any liability hereunder unless and only to the extent that the Indemnifying Party is materially prejudiced as a result thereof, and in any event shall furnish the Controlling not relieve such Indemnifying Party with such information as from any liability which it may have with respect to such suit or proceeding (including copies otherwise than on account of any summonsthis Article VII. The Indemnifying Party shall be entitled, complaint or other pleading which may have been served on such if it accepts financial responsibility for the third-party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in to control the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, settle any such suit or proceeding without third-party claim at its own expense and by its own counsel; provided, that the Indemnified Party’s prior written consent of the Indemnified Parties, (which shall may not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not ) must be required if the Indemnifying Parties agrees in writing obtained prior to pay settling any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Partiesthird-party claim. The Indemnified Parties Party shall promptly provide the Indemnifying Party with such information as the Indemnifying Party shall reasonably request to defend any such third-party claim and shall otherwise cooperate with the Indemnifying Party in the defense of any such third-party claim. Except as set forth in this Section 7.03, the Indemnified Party shall not agree to enter into any settlement of, or other compromise or consent to a judgment with respect to a third-party claim as to which the entry of any judgment arising from, any such suit or proceeding Indemnifying Party has an indemnity obligation hereunder without the prior written consent of the Indemnifying Parties, Party (which shall may not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI), the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) entering into of any Damages incurred settlement or reasonably expected compromise or the consent to be incurred any judgment in violation of the foregoing shall constitute a waiver by the Indemnified Parties, (ii) a statement Party of its right to indemnity hereunder to the extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party shall be subrogated to the rights of the Indemnified Party to the extent that the Indemnified Parties is entitled to indemnification under this Article VI Indemnifying Party pays for such Damages and a reasonable explanation of the basis thereforany loss, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to damage or expense suffered by the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed AmountParty hereunder. If the Indemnifying Parties in Party does not accept financial responsibility for the Response disputes its liability for all third-party claim or part fails to defend against the third-party claim that is the subject of an Indemnity Notice within 30 days of receiving such notice (or sooner if the nature of the Claimed Amountthird-party claim so requires), or otherwise contests its obligation to indemnify the Indemnified Party in connection therewith, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a DisputeParty may, upon providing written notice to the Indemnifying Parties and Party, pay, compromise or defend such third-party claim without the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission prior consent of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advanceotherwise) (the “ADR Procedure”)Indemnifying Party. In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partieslatter event, the Indemnified Parties Party, by proceeding to defend itself or settle the ADR Service shall be treated as confidential andmatter, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall does not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or waive any of their Subsidiaries is liable its rights hereunder to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent later seek reimbursement from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 2 contracts
Sources: Capacity Purchase Agreement (Skywest Inc), Capacity Purchase Agreement (Skywest Inc)
Indemnification Claims. (a) In the event that If any of the Parties are entitledIndemnitee has incurred or suffered or claims to have incurred or suffered, or seek believes that it may incur or suffer, Damages for which it is or may be entitled to assert rightsbe held harmless, to indemnification indemnified, compensated or reimbursed under this Article VI, such Indemnitee may deliver a notice to the Party Indemnitor (any such notice being referred to as a "Notice of Indemnification Claim," and the claim for indemnification, compensation and reimbursement described in such Notice of Indemnification Claim being referred to as an "Indemnification Claim"), which shall (i) state that such Indemnitee believes that that there is or Parties seeking indemnification has been a possible inaccuracy in or breach of a representation, warranty, covenant or obligation contained in this Agreement or that such Indemnitee is otherwise entitled to be held harmless, indemnified, compensated or reimbursed under this Article VI, (ii) contain a brief description of the circumstances supporting such Indemnitee's belief that there is or has been such a possible inaccuracy or breach or that such Indemnitee may otherwise be entitled to be held harmless, indemnified, compensated or reimbursed, and (iii) contain a good faith, non-binding, preliminary estimate of the aggregate dollar amount of actual and potential Damages that have arisen and may arise as a result of the inaccuracy, breach or other matter referred to in such notice (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) aggregate amount of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI such estimate, as it may be sought. Such notification shall be given within 20 Business Days after receipt modified by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider Indemnitee in good faith recommendations made by from time to time, being referred to as the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed"Claimed Amount").
(b) In order the event that the Indemnitee has delivered a Notice of Indemnification Claim to seek indemnification under the Indemnitor, the Indemnitor shall have ten (10) days to deliver a written objection to the Claimed Amount set forth in the Notice of Indemnification Claim. If the Indemnitor timely delivers such a written objection to the Indemnitee, the Indemnitee and the Indemnitor shall use commercially reasonable efforts to resolve any such objections, but if a final resolution is not obtained within thirty (30) days after the Indemnitor has submitted its objections, the Indemnitee and the Indemnitor shall submit the matter to non-binding mediation pursuant to Section 8.6 hereto. If the Indemnitor does not deliver a written objection within such time period, the Indemnitee shall be entitled at such time to any amounts due and payable pursuant to such Claimed Amount in accordance with this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 2 contracts
Sources: Asset Purchase Agreement (Clone Algo Inc.), Asset Purchase Agreement (Va Software Corp)
Indemnification Claims. (a) In the event that any of Acquiror or the Parties Acquiree Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, Acquiror or Acquiree Stockholders (as the Party or Parties seeking indemnification (the “Indemnified Parties”case may be) shall give written notification to the other Party Acquiree Stockholders or Parties Acquiror (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions .
(e) For purposes of this Section 6.36.3 and the last two sentences of Section 6.4, if any references to the Acquiree Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a third party asserts (other than by means right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative. The Indemnification Representative shall have full power and authority on behalf of a lawsuit) that the Buyereach Acquiree Stockholders or Indemnifying Stockholder to take any and all actions on behalf of, the Company execute any and all instruments on behalf of, and execute or waive any and all rights of, Acquiree Stockholders or Indemnifying Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Acquiree Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of their Subsidiaries is liable to such third party for a monetary Acquiree Stockholders or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Indemnifying Stockholders pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 2 contracts
Sources: Share Exchange Agreement (China Energy Technology Corp., Ltd.), Share Exchange Agreement (Symbid Corp.)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VISection 9.2 or Section 9.3, the Indemnified Parties Person shall give written notification deliver to the Escrow Agent, if applicable, and the Indemnifying Person, a certificate signed by any officer of Indemnified Person (a “Claim Notice”) (if the Escrow Participants are the Indemnifying Person, such notice shall be provided to the Securityholders’ Representative) promptly after the Indemnified Person has knowledge of a bona fide claim for indemnification pursuant to this Article IX; provided, that the Indemnified Person shall use commercially reasonable efforts to mitigate Damages prior to delivering a Claim Notice; provided, further, that any delay in providing such notice shall not result in the Indemnified Person losing its rights under this Article IX in the case of a Third Party Claim except to the extent the Indemnifying Parties which contains Person demonstrates that the defense of such Third Party Claim is materially prejudiced thereby:
(i) stating that the Indemnified Person has a description and claim for Damages;
(ii) stating the amount of such Damages that have been incurred, paid, reserved or accrued (the “Claimed Amount”); and
(iii) specifying in reasonable detail (based upon the information then possessed by Indemnified Person) the individual items of such Damages included in the amount so stated and the nature of the claim to which such Damages are related and the provision of the Agreement which gives rise to the claim.
(b) The Indemnifying Person may (if the Escrow Participants are the Indemnifying Person, the Securityholders’ Representative may), at any time on or before the thirtieth (30th) day following its and, if applicable, the Escrow Agent’s receipt of a Claim Notice (the “Objection Period”), object (a “Claim Objection”) to a claim made in such Claim Notice by delivering written notice to the Indemnified Person and, if applicable, the Escrow Agent. The Claim Objection shall set forth in reasonable detail the reasons for the objection to such claim and the portion of the Claimed Amount which is disputed. If the Indemnified Person and, if applicable, the Escrow Agent do not receive a Claim Objection in respect of any Damages incurred or reasonably expected to be incurred by Claim Notice within the Objection Period in accordance with this section, (x) in the case that an Acquiror Indemnified Person is the Indemnified PartiesPerson, the Escrow Agent shall, within two (ii2) a statement that Business Days following the end of the Objection Period, deliver to the Indemnified Parties is entitled Person, the full Claimed Amount from the Indemnity Escrow Amount to indemnification under this Article VI for such Damages and a reasonable explanation of the basis thereforIndemnified Person, and (iii) a demand for payment (in the manner provided in paragraph (c) belowy) in the case that Acquiror is the Indemnifying Person, remit payment of the full Claimed Amount to the Paying Agent (with corresponding notice to the Securityholders’ Representative) as set forth in Section 9.4(b). If the Indemnified Person and, if applicable, the Escrow Agent receive a Claim Objection in respect of any Claim Notice within the Objection Period in accordance with this section, the Escrow Agent or Acquiror, as applicable, shall within two (2) Business Days following the end of the Objection Period deliver to the Indemnified Person, an amount equal to the portion of the Claimed Amount not subject to dispute from the Indemnity Escrow Amount, or in the case of Acquiror, remit payment to the Paying Agent (with corresponding notice to the Securityholders’ Representative) as set forth in Section 9.4(b) (in either case, if any).
(c) Within During the twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a DisputeClaim Objection in accordance with Section 9.5(b), the Indemnifying Parties Person and the Indemnified Parties Person shall use attempt in good faith efforts to resolve the Disputesuch dispute. If the Dispute dispute is not resolved within such 60-twenty (20) day period, either the Indemnifying Parties and Person or the Indemnified Parties shall discuss Person may bring suit in good faith the submission Delaware Courts. Within two (2) Business Days of the Dispute to a mutually acceptable alternative resolution of the dispute resolution procedure (which may be whether by mutual agreement or by final, non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”appealable judicial decision). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Acquiror prevails in such dispute, a written notice executed by the Securityholders’ Representative and Acquiror (or a final, non-appealable judicial decision) shall be delivered to the Indemnified Parties agree Escrow Agent instructing the Escrow Agent as to pursue an ADR Procedurewhat (if any) payment is to be made to Acquiror from the Indemnity Escrow Amount (which notice shall be consistent with the terms of the resolution of the dispute), neither or if Securityholders’ Representative prevails in the Indemnifying Parties nor dispute, Acquiror shall remit payment to the Indemnified Parties Paying Agent (with corresponding notice to the Securityholders’ Representative) as set forth in Section 9.4(b), (if any). If the amount remaining in the Indemnity Escrow Account is insufficient to cover the full award amount from such final, non-appealable judicial decision, or the award amount from such final, non-appealable judicial decision (x) is in respect of indemnification obligations set forth in Section 9.2(b) through Section 9.2(e) and (y) Acquiror has advised to the Securityholders’ Representative that Acquiror is seeking recovery directly against the Escrow Participants, then each Escrow Participant will, within twenty (20) Business Days following the entry of such final judgment, or such shorter period of time as may commence litigation or seek other remedies be set forth in such final judgment, pay to Acquiror, each Escrow Participant’s Pro Rata Portion of the amount of such shortfall.
(d) To the extent the provisions of Section 9.6 conflict with Section 6.8(d), Section 6.8(d) shall govern with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Tax Claim.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to A claim for indemnification under this Article VISection 9 shall be made by Acquiror or an Acquiror Indemnified Person by delivering to the Securityholders’ Agent, on or before the end of the applicable survival period for a particular claim as set forth in Section 9 a certificate signed by any officer of Acquiror (an “Officer’s Certificate”) stating that Damages exist with respect to the indemnification obligations of the Effective Time Holders, and specifying in reasonable detail the individual items of such Damages included in the amount so stated, and the nature of the breach of representation, warranty, covenant or claim to which such item is related. The amount of the Damages claimed in the Officer’s Certificate shall not be issuable to the Effective Time Holders until resolved pursuant to the terms hereof. Acquiror and the Acquiror Indemnified Persons shall reasonably cooperate and assist the Securityholders’ Agent and the Effective Time Holders in determining the validity of any claim for Damages or indemnification by Acquiror or the Acquiror Indemnified Persons and in otherwise resolving such matters, such assistance and cooperation to include providing reasonable access to and copies of information, records and documents relating to such matters, furnishing employees to assist in the investigation, defense and resolution of such matters and providing legal and business assistance with respect to such matters.
(b) If the Securityholders’ Agent does not contest, by written notice to Acquiror, the Party or Parties seeking indemnification Damages claimed by Acquiror in any Officer’s Certificate within twenty (the “Indemnified Parties”20) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt any such Officer’s Certificate is received by the Securityholders’ Agent, then the Securityholders’ Agent will be conclusively deemed to have consented, on behalf of all Effective Time Holders, to the recovery by the Acquiror Indemnified Parties Persons of notice the full amount of Damages specified in the Officer’s Certificate, including the forfeiture of such suit or proceeding, and shall describe in reasonable detail amount from the Escrow Consideration (subject to the extent known by terms and conditions in this Section 9) having a value sufficient to satisfy such Damages and, without further notice, to have stipulated to the Indemnified Parties) entry of a final judgment for the facts constituting Damages against the basis Securityholders’ Agent for such suit amount in any court having jurisdiction over the matter where venue is proper.
(c) If the Securityholders’ Agent disputes any claim or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties claims made in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused Officer’s Certificate by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon providing written notice thereof to the Indemnified Parties seeking indemnification, assume control Acquiror specifying in reasonable detail the individual items in dispute and the nature of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defensedispute, the Indemnified Parties seeking indemnification Acquiror shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days Business Days to respond in a written statement to the objection of the Securityholders’ Agent. If after delivery of such twenty (20) Business Days period there remains a Claim Noticedispute as to any claims, the Indemnifying Parties Securityholders’ Agent and Acquiror shall deliver attempt in good faith for twenty (20) Business Days to agree upon the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all rights of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled respective parties with respect to receive part, but not all, each of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountsuch claims. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed AmountSecurityholders’ Agent and Acquiror should so agree, the Indemnifying Parties a memorandum setting forth such agreement shall be prepared and signed by Acquiror and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)Securityholders’ Agent.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Acquiror and the Indemnified Parties Securityholders’ Agent shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable simultaneously deliver to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in Escrow Agent a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses copy of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company Officer’s Certificate or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification written notice delivered pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 9.3.
Appears in 1 contract
Sources: Merger Agreement (INPHI Corp)
Indemnification Claims. (a) In To the event extent that any the provisions of Section 5 may conflict with the provisions of this Section 9.3 the provisions of Section 5 shall govern those aspects of the Parties are entitled, or seek claims pertaining to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) intellectual property. Each party shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement party prompt notice of any suit or proceeding relating to a third party claim for which indemnification pursuant to under this Article VI Section 9 is or may be soughtapplicable and will cooperate with the indemnifying party in the defense or settlement of such claim at the indemnifying party’s expense. Such notification The indemnifying party shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceedingrequired to provide at its sole expense, and shall describe in reasonable detail (be entitled to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; providedcontrol, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding any claim covered hereunder with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that other party, which may, at its own expense, participate in the Indemnifying Parties may not assume defense of any claim after the indemnifying party assumes control of the defense of a suit or proceeding involving criminal liability or thereof. The indemnification obligations in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do this Section 9 shall not so assume control apply to amounts paid in settlement of such defense, the Indemnified Parties seeking indemnification shall control claim if such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding is effected without the prior written consent of the Indemnified Partiesindemnifying party, which consent shall not be unreasonably withheld or delayed; provided . The indemnifying party shall have the right to settle any claim covered hereunder at its sole discretion, provided, however, that the indemnified party’s consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and is required if such settlement would require the indemnified party to be subject to an injunction or judgment includes to make a complete release monetary payment or would otherwise adversely affect the indemnified party’s rights under this Agreement. The failure of the Indemnified Parties from further liability and has no other materially adverse effect on indemnified party to deliver notice to the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or indemnifying party promptly after the entry commencement of any judgment arising fromsuch action, if and to the extent prejudicial to the indemnifying party’s ability to defend such action, shall relieve the indemnifying party of any such suit or proceeding without liability to the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification indemnified party under this Article VISection 9, but the Indemnified Parties shall give written notification (a “Claim Notice”) failure to promptly deliver notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) indemnifying party will not relieve it of any Damages incurred or reasonably expected liability that it may have to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification indemnified party other than under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountSection 9.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In the event that any action, suit, ---------------------- proceeding or demand is instituted against or made upon either party (the "Aggrieved") for which the Aggrieved may seek indemnification hereunder (an "Indemnifiable Claim") from a party hereto (the "Indemnitor"), the Indemnitor shall be entitled to assume the control of the Parties defense of such Indemnifiable Claim with counsel reasonably satisfactory to the Aggrieved by providing notice thereof to the Aggrieved, provided that, if the defendants in any action include -------- both the Aggrieved and the Indemnitor and the Aggrieved shall have reasonably concluded that there may be legal defenses available to it which are entitleddifferent from or additional to those available to the Indemnitor, or seek to assert rights, to indemnification under this Article VIif there is a conflict of interest which would prevent counsel for the Indemnitor from also representing the Aggrieved, the Party or Parties seeking indemnification (Aggrieved shall have the “Indemnified Parties”) shall give written notification right to select separate counsel to participate in the defense of such action on behalf of the Aggrieved. After notice from the Indemnitor to the Aggrieved of its election to assume the defense, the Indemnitor will not be liable to the Aggrieved for any legal or other Party or Parties expense subsequently incurred by the Aggrieved in connection with the defense thereof other than reasonable costs of investigation, unless (x) the “Indemnifying Parties”Aggrieved shall have employed counsel in accordance with the preceding sentence, (y) the Indemnitor shall not have employed counsel reasonably satisfactory to the Aggrieved to represent the Aggrieved within a reasonable time after the notice of the commencement of the action, or (z) the Indemnitor has authorized the employment of counsel for the Aggrieved at the expense of the Indemnitor. In any suit or proceeding relating to a third party claim for case in which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties Indemnitor assumes the control of notice the defense of such suit or proceedingIndemnifiable Claim, the Indemnitor shall give the Aggrieved not less than ten calendar days' notice prior to executing any settlement agreement, and the Aggrieved shall describe in reasonable detail (have the right to the extent known by the Indemnified Parties) the facts constituting the basis for such suit approve or proceeding and the amount of the claimed damagesreject any settlement; providedprovided -------- that, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties upon rejection of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notificationsettlement, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, Aggrieved shall assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to Indemnifiable Claim and the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control liability, if any, of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available Indemnitor with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Indemnifiable Claim shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect limited to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree an amount up to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver rejected settlement. Each party hereby agrees to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive use all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith reasonable efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for mitigate any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages Indemnifiable Claim for which it is entitled to may seek indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)hereunder.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification A party (the “Indemnified PartiesParty”) shall give written notification entitled to indemnification from the other Party or Parties party under the terms of this Agreement (the “Indemnifying Parties* Confidential Treatment Requested Party”) shall provide the Indemnifying Party with prompt written notice (an “Indemnity Notice”) of the commencement of any suit or proceeding relating to a third party claim which the Indemnified Party believes gives rise to a claim for which indemnification pursuant to this Article VI may be sought. Such notification indemnity against the Indemnifying Party hereunder, and the Indemnifying Party shall be given within 20 Business Days after receipt by entitled, if it accepts financial responsibility for the Indemnified Parties of notice of such suit or proceedingthird party claim, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of or to settle any such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationthird party claim at its own expense and by its own counsel; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the ’s prior written consent of the Indemnified Parties, (which shall may not be unreasonably withheld or delayed; provided ) must be obtained prior to settling any such third party claim. If the Indemnifying Party does not accept financial responsibility for the third party claim or fails to defend against the third party claim that is the consent subject of an Indemnity Notice within thirty (30) days of receiving such notice (or sooner if the nature of the third party claim so requires), or otherwise contests its obligation to indemnify the Indemnified Parties shall not be required if Party in connection therewith, the Indemnified Party may, upon providing written notice to the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to Party, pay, compromise or defend such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Partiesthird party claim. The Indemnified Parties Party shall provide the Indemnifying Party with such information as the Indemnifying Party shall reasonably request to defend any such third party claim and shall otherwise cooperate with the Indemnifying Party in the defense of any such third party claim. Except as set forth above in this Section 12(G), the Indemnified Party shall not agree to enter into any settlement of, or other compromise or consent to a judgment with respect to a third party claim as to which the entry of any judgment arising from, any such suit or proceeding Indemnifying Party has an indemnity obligation hereunder without the prior written consent of the Indemnifying Parties, Party (which shall may not be unreasonably withheld or delayed.
(b) In order ), and the entering into any settlement or compromise or the consent to seek indemnification under this Article VI, any judgment in violation of the foregoing shall constitute a waiver by the Indemnified Parties Party of its right to indemnity hereunder to the extent the Indemnifying Party was prejudiced thereby. Any Indemnifying Party shall give written notification (a “Claim Notice”be subrogated to the rights of the Indemnified Party to the extent that the Indemnifying Party pays for any Loss suffered by the Indemnified Party hereunder. Notwithstanding anything contained in this Section 12(G) to the Indemnifying Parties which contains (i) a description contrary, Operator, Parent and Delta will cooperate in the amount (the “Claimed Amount”) defense of any Damages incurred claim imposed jointly against them or reasonably expected to be incurred by as the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation result of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount conduct of the Claimed Amountother.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third third-party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party may be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI, provided, however, in each case that any assumption of control of a defense by the Indemnifying Party shall not, solely by such assumption of control, be an admission or concession of any liability under this Article VI on the part of the Indemnifying Party, and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. In the event it is reasonably determined by an Indemnifying Shareholder that the Indemnifying Shareholders require separate counsel because of conflicting interests or different defenses available with respect to a suit or proceeding, the Indemnifying Shareholders shall be entitled to have the reasonable legal fees and expenses of such counsel (not to exceed $1,000,000 in the aggregate) paid by Entrust, and Entrust shall be entitled to claim such fees and expenses as Damages under this Article VI. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, Amount (ii) agree that in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Parties Party and the Indemnified Parties Party shall follow deliver to the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period Escrow Agent, within three days following the delivery of the Response, a Response that reflects a Dispute, written notice executed by both parties instructing the Indemnifying Parties and the Indemnified Parties shall use good faith efforts Escrow Agent to resolve the Dispute. If the Dispute is not resolved within distribute to Entrust such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission number of the Dispute to a mutually acceptable alternative dispute resolution procedure Escrow Shares as have an aggregate Value (which may be non-binding or binding upon the parties, as they agree in advancedefined below) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable equal to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissibleClaimed Amount). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).,
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) The Buyer shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Company Equityholder Representative of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days twenty (20) days after receipt by the Indemnified Parties Buyer of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent then known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no . No delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Company Equityholder Representative shall relieve the Indemnifying Parties Company Equityholders of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within 20 twenty (20) days after delivery of such notification, the Indemnifying Parties Company Equityholder Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationBuyer; provided that (i) the Indemnifying Parties Company Equityholder Representative may only assume control of such defense if (A) it acknowledges in writing to the Buyer on behalf of all of the Company Equityholders that any damages, fines, costs or other liabilities that may be assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Article VIII, (B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the current balance of the Escrow Fund, and (C) an adverse resolution of the Third Party Action would not have a material adverse effect on the goodwill or reputation of the Buyer or the business, operations or future conduct of the Buyer and (ii) the Company Equityholder Representative may not assume control of the defense of a suit any Third Party Action involving Taxes, any Governmental Entity or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer or any of its subsidiaries. If the Indemnifying Parties do Company Equityholder Representative does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 8.2(a) or (ii) the Company Equityholder Representative assumes control of such defense and the Buyer reasonably concludes that the Company Equityholders and the Buyer have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Neither the Company Equityholders nor the Company Equityholder Representative shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesBuyer, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Buyer shall not be required if the Indemnifying Parties Company Equityholder Representative, on behalf of all of the Company Equityholders, agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Buyer from further liability and has no other materially adverse effect on the Indemnified PartiesBuyer. The Indemnified Parties Except as provided in Section 8.2(e), the Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesCompany Equityholder Representative, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VIVIII, the Indemnified Parties Buyer shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountCompany Equityholder Representative.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties Company Equityholder Representative shall deliver to the Indemnified Parties Buyer a written response (the “Response”) , in which the Indemnifying Parties Company Equityholder Representative, on behalf of all of the Company Equityholders, shall: (i) agree that the Indemnified Parties Buyer is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a letter from the Company Equityholder Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Claimed Amount), (ii) agree that the Indemnified Parties Buyer is entitled to receive part, but not all, a portion of the Claimed Amount, which amount shall be the Agreed Amount (in which case the “Response shall be accompanied by a letter from the Company Equityholder Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Agreed Amount”) or (iii) dispute that the Indemnified Parties Buyer is entitled to receive any of the Claimed Amount. If no Response is delivered by the Indemnifying Parties in Company Equityholder Representative within such 20-day period, the Response disputes its liability for Company Equityholders shall be deemed to have agreed that all of the Claimed Amount is owed to the Buyer. The Company Equityholder Representative may not contest the payment of all or part a portion of the Claimed Amount, except to the Indemnifying Parties and extent it believes in good faith that the Indemnified Parties Claimed Amount does not constitute Damages for which the Buyer is entitled to indemnification under this Article VIII. Acceptance by the Buyer of partial payment of any Claimed Amount shall follow be without prejudice to the procedures set forth in Section 6.3(d) for Buyer’s right to claim the resolution balance of any such dispute (a “Dispute”)Claimed Amount.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties Any Dispute shall use good faith efforts to resolve the Disputebe resolved in accordance with Section 11.10. If the Dispute Buyer seeks to enforce the claim that is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission subject of the Dispute pursuant to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the partiesEscrow Agreement, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties Company Equityholder Representative and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with Buyer shall deliver to the chosen dispute resolution service (the “ADR Service”)Escrow Agent, promptly agree upon a format and timetable for following the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions resolution of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed whether by mutual agreement, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses what (if any) portion of any ADR Service used by the Indemnifying Parties and the Indemnified Parties Escrow Fund shall be considered distributed to the Buyer (which notice shall be Damages; provided, that if consistent with the Indemnifying Parties are determined not to be liable for Damages in connection with such terms of the resolution of the Dispute, the Indemnified Parties shall pay all such fees and expenses. ).
(e) Notwithstanding the other provisions of this Section 6.38.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries Buyer Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the a Buyer Indemnified Party may be entitled to indemnification pursuant to this Article VIVIII, and the Buyer reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesCompany Equityholder Representative or the Company Equityholders, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VIVIII, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VIVIII, for any such Damages for which it is entitled to indemnification pursuant to this Article VI VIII (subject to the right of the Indemnifying Selling Parties Company Equityholder Representative, on behalf of the Company Equityholders, to dispute the Buyerapplicable Buyer Indemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIVIII).
(f) Without limitation of Section 2.4, the Company Equityholder Representative shall have full power and authority on behalf of each Company Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Equityholders under this Article VIII. The Company Equityholder Representative shall have no liability to any Company Equityholders for any action taken or omitted on behalf of the Company Equityholders pursuant to this Article VIII.
Appears in 1 contract
Sources: Merger Agreement (Demandware Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such amount of Escrow Cash and such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such amount of Escrow Cash and such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount, which notice shall also inform the Escrow Agent that the remaining amount due with respect to the Claimed Amount shall be the original Claimed Amount less the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the average of the last reported sale prices per share of the Buyer Common Stock on the Nasdaq National Market over the five consecutive trading days ending one business day before such delivery is to be made by the Escrow Agent, multiplied by the number of such Escrow Shares, subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock during such five consecutive trading days.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Skillsoft Corp)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification IX (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI IX may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control Party in such notice acknowledges that any Damage resulting therefrom is subject to the provisions of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationthis Article IX. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIIX, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI IX for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer, (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer, or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d9.2(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d9.2(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 1 contract
Sources: Merger Agreement (Cmgi Inc)
Indemnification Claims. (a) In the event that If any of the Parties are entitledPurchaser Indemnitee or Seller Indemnitee (each, or seek an “Indemnified Party”) seeks indemnification pursuant to assert rights, to indemnification under this Article VI10, the Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to provide the other Party or Parties from whom such indemnification is sought (the “Indemnifying PartiesParty”) with a written Notice of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceedingClaim setting forth, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceedingthen known, the reasonable fees details of its claim and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment all Losses arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedtherefrom.
(b) In order to seek the case of a claim for indemnification under this Article VInot based upon a Third Party Claim, the Indemnified Parties Indemnifying Party shall give written notification have thirty (30) days from its receipt of the Notice of Claim to (i) admit its obligation to provide indemnification, and, without limitation of any future Losses arising thereunder, pay all Losses set forth in the Notice of Claim or (ii) dispute the matters and claim for indemnification set forth in the Notice of Claim (a “Notice of Claim NoticeDispute”) to ). If the Indemnifying Parties which contains Party does not deliver a Notice of Claim Dispute within such thirty (i30) day period, the Indemnifying Party shall be conclusively deemed obligated to provide such indemnification hereunder and shall be deemed to waive its right to deliver a description and the amount (the “Claimed Amount”) Notice of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountClaim Dispute.
(c) Within twenty (20) days after The delivery of a Notice of Claim Noticeby an Indemnified Party, or a Notice of Claim Dispute by an Indemnifying Party, shall not restrict or preclude the Indemnified Party or Indemnifying Parties shall deliver Party, as the case may be, from thereafter asserting or alleging additional matters, including further Losses or defenses, from or in connection with the matters giving rise to the Notice of Claim or Notice of Claim Dispute, as applicable. An Indemnified Parties Party seeking indemnification for a written response (the “Response”Third Party Claim may also seek indemnification under any applicable clause(s) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) Section 10.1 or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Section 10.2 and the Indemnified Parties shall follow the procedures same may be set forth in Section 6.3(d) for the resolution one or more Notices of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and Claim as the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss determine in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)its sole discretion.
Appears in 1 contract
Indemnification Claims. The Buyer shall be entitled to make indemnification claims (the “Indemnification Claims”) against the Escrowed Funds for Losses incurred by the Buyer or the Buyer Indemnified Parties in accordance with the procedures set forth in Article IX of the Stock Purchase Agreement (subject to the limitations and requirements set forth in the Stock Purchase Agreement and this Section 4). Any Indemnification Claim by the Buyer against the Escrowed Funds shall be presented to the Escrow Agent and the Seller as follows:
(a) In Indemnification Claims against the event that Escrowed Funds may be made only by the Buyer, on its own behalf or on behalf of any other Buyer Indemnified Party. The Buyer shall provide the Escrow Agent and the Seller with a written notice, pursuant to Article IX of the Parties are entitledStock Purchase Agreement, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification setting forth: (the “Indemnified Parties”i) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by that the Indemnified Parties of notice of such suit or proceedingParty has actually incurred Losses in an aggregate stated amount; and (ii) a brief description, and shall describe in reasonable detail (to the extent known reasonably available to the Indemnified Party), of the facts, circumstances or events giving rise to the Losses actually incurred by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and Party, the amount of Losses actually incurred by the claimed damages; providedIndemnified Party, howeverthe date each such item was incurred, that no delay on and the part specific nature of the Indemnified Parties in notifying breach of the Indemnifying Parties Stock Purchase Agreement to which such item is related. In the case of a Third Party Claim, the Buyer shall relieve also provide the Indemnifying Parties identity and address of any liability or obligation hereunder except the third-party claimant (to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof reasonably available to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint formal demand or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedcomplaint.
(b) In order to seek indemnification under this Article VIThe Escrow Agent shall not release any amounts from the Escrowed Funds in respect of any Indemnification Claim unless and until the validity of such Indemnification Claim is finally resolved, either by mutual agreement of the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description Buyer and the amount (the “Claimed Amount”) of any Damages incurred Seller or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, and the Escrow Agent receives joint written notice of such resolution from the Buyer and the Seller stating the amount, if the Indemnifying Parties and the any, that any Indemnified Parties agree Party is entitled to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies receive with respect to such Indemnification Claim (a “Resolved Claim Notice”). Within five (5) Business Days after the Dispute prior receipt of a Resolved Claim Notice that provides for the payment of any amount to the completion of Buyer or any other Buyer Indemnified Party, the Escrow Agent shall deliver to such ADR Procedure. Any ADR Procedure undertaken by Person an amount equal to the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made amount set forth in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Resolved Claim Notice.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to All claims for indemnification made under this Article VIAgreement resulting from, the related to or arising out of a third-party claim against an Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”other than a claim for Taxes, which shall be governed by Section 5.9(e)) shall give written notification be made in accordance with the following procedures. An Indemnified Party shall promptly deliver an Expected Claim Notice to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any action, suit or proceeding relating to a third third-party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt sought or, if earlier, upon the assertion of any such claim by a third party, and if the Indemnified Parties Party is a Buyer Indemnified Party, the Buyer shall deliver a copy of notice of such suit or proceeding, and shall describe in reasonable detail (the Expected Claim Notice to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no Escrow Agent. No reasonable delay on the part of the Indemnified Parties Party in notifying the any Indemnifying Parties Party shall relieve the Indemnifying Parties of Party from any liability or obligation hereunder except unless (and then solely to the extent of any damage or liability caused by or arising out of such failureextent) the Indemnifying Party is thereby prejudiced. Within 20 calendar days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit action, suit, proceeding or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that claim if (a) the Indemnifying Parties may not assume control of Party accepts full responsibility for the matter, (b) the Indemnifying Party reasonably demonstrates it has the financial resources necessary to defend against the matter and fulfill its indemnification obligations and (c) the Indemnifying Party conducts the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationwith reasonable diligence. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that PROVIDED, THAT, if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes concludes, based on advice from counsel, that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit action, suit, proceeding or proceedingclaim, the reasonable fees and expenses of counsel to the Indemnified Parties Party solely in connection therewith shall be considered “"Damages” " for purposes of this Agreement; PROVIDED, HOWEVER, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling other Party advised of the status of such suit action, suit, proceeding or proceeding claim and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling other Party with respect thereto. The Non-Controlling Indemnified Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement ofof such action, suit, proceeding or claim, or admit any Liability with respect thereto, without the entry prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. The Indemnifying Party shall not agree to any judgment arising fromsettlement of such action, suit, proceeding or claim that does not include a complete release of the Indemnified Party from all Liability with respect thereto or that imposes any such suit or proceeding Liability on the Indemnified Party without the prior written consent of the Indemnified PartiesParty, which consent shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement ofwithheld, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld conditioned or delayed.
(b) In order to seek indemnification under this Article VIARTICLE VII, the an Indemnified Parties Party shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by Party. If the Indemnified PartiesParty is a Buyer Indemnified Party, (ii) the Buyer shall deliver a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation copy of the basis therefor, and (iii) a demand for payment (in Claim Notice to the manner provided in paragraph (c) below) in the amount of the Claimed AmountEscrow Agent.
(c) Within twenty (20) 20 calendar days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) , in which the Indemnifying Parties shallParty shall either: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer of immediately available funds; PROVIDED, THAT, if the Indemnified Party is a Buyer Indemnified Party, then to the extent the Escrow Cash has not theretofore been depleted or released pursuant to the terms of this Agreement and the Escrow Agreement, the Buyer shall deliver to the Escrow Agent, within three Business Days following the delivery of the Response, a written notice executed by the Indemnifying Party and the Buyer instructing the Escrow Agent to distribute to Buyer such amount of Escrow Cash as is equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount (the “Agreed Amount”, by check or by wire transfer of immediately available funds; PROVIDED, THAT, if the Indemnified Party is a Buyer Indemnified Party, then to the extent the Escrow Cash has not theretofore been depleted or released pursuant to the terms of this Agreement and the Escrow Agreement, the Buyer shall deliver to the Escrow Agent, within three Business Days following the delivery of the Response, a written notice executed by the Indemnifying Party and the Buyer instructing the Escrow Agent to distribute to Buyer such amount of Escrow Cash as is equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, . The Indemnifying Party (and its representatives) shall have reasonable access during the Indemnifying Parties foregoing 20-calendar day period and the Indemnified Parties shall follow the procedures set forth 30-calendar day period referred to in Section 6.3(d7.3(d) below to the books, records and other information in the possession or control of the Indemnified Party during regular business hours to the extent necessary to verify the claim for indemnification and the resolution Claimed Amount. Notwithstanding anything herein to the contrary, all distributions to the Buyer out of such dispute (a “Dispute”)the Escrow Cash shall not include any interest or income accrued or earned with respect to the Escrow Cash under the terms of the Escrow Agreement.
(d) During the 6030-calendar day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith commercially reasonable best efforts to resolve the Dispute. If the Dispute is not resolved within such 6030-calendar day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)arbitration. In the event absence of an agreement by the Indemnifying Parties Party and the Indemnified Parties agree upon an ADR ProcedureParty to arbitrate a Dispute, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) Dispute shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute be resolved in a Delaware state court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of U.S. federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made district court sitting in the course State of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursedDelaware, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 10.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, a Claim is made by a Parent Indemnified Person entitled to indemnification under this Article VIAgreement (an “Indemnified Person”), the Party such Indemnified Person (or Parties seeking indemnification a representative thereof) must give written notice (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) of such Claim to the Indemnifying Parties which contains Person. The Claim Notice shall (i) a description and the amount state that an indemnification Claim (the “Claimed Amount”or indemnification Claims) pursuant to Section 9.2(a) or any other provision of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesthis Agreement is being made, (ii) a statement that describe the Indemnified Parties is entitled to indemnification under this Article VI basis for such Damages and a Claim with reasonable explanation of the basis therefor, specificity and (iii) a demand for payment set forth in reasonable detail the Losses (in the manner provided in paragraph (c) belowor reasonably anticipated Losses) in respect of such Claim (provided that the amount Indemnified Person shall not be bound by any estimate of Losses contained in such Claim Notice); provided that the Claim Notice need only specify such information to the knowledge of such Indemnified Person (or such representative thereof) as of the Claimed Amount.
(c) Within twenty (20) days date thereof, shall not limit any of the rights or remedies of any Indemnified Person, and may be updated and amended from time to time by the Indemnified Person by delivering an updated or amended Claim Notice to the Indemnifying Person; provided further, no Indemnified Person’s rights or remedies shall be prejudiced as a result of limitations on disclosure in such Claim Notice, where such limitations are made in good faith to preserve the attorney-client privilege, the work product doctrine, or any other privileges. The Claim Notice shall be provided to the Indemnifying Person as soon as reasonably practicable after delivery of the Indemnified Person becomes aware that it has incurred or suffered a Loss. Notwithstanding the foregoing but subject to Section 9.1, any failure to provide the Indemnifying Person with a Claim Notice, or any failure to provide a Claim Notice in a timely manner as aforesaid (or to include in such Claim Notice the information required above), shall not relieve any Indemnifying Parties shall deliver Person from any liability that it may have to the Indemnified Parties a written response (Person under this Section 9.6 except to the “Response”) in which the Indemnifying Parties shall: (i) agree extent, if at all, that the Indemnified Parties ability of such Indemnifying Person to defend such Claim is entitled to receive all of the Claimed Amount, (ii) agree that materially prejudiced by the Indemnified Parties is entitled Person’s failure to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountgive such Claim Notice. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed AmountClaim Notice relates to a Third Party Claim, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)9.7 will be applicable.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In With respect to a claim for indemnification arising out of or involving an assertion by a third party of liability on the event that any part of an indemnified party, the indemnified party shall promptly notify the indemnifying party of the Parties are entitleddiscovery by it of, or seek to assert rightsthe assertion against it of, to any claim or potential liability for which indemnification under this Article VI, the Party is provided herein or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit action or proceeding relating to a third party claim for in respect of which indemnification pursuant to this Article VI indemnity may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damagessought hereunder; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties failure promptly to give such notice shall relieve the Indemnifying Parties of affect any liability or obligation indemnified party’s rights hereunder except only to the extent that such failure (i) actually materially and adversely affects any indemnifying party, its rights or its ability to defend such claim, or (ii) results in the indemnified party’s failure to give notice of any damage or liability caused by or arising out a claim for indemnification prior to the expiration of such failure. the Representations and Warranties Expiration Date to which the claim relates.
(b) Within 20 thirty (30) days after delivery of such notificationthe notification described in Section 8.3(a), the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties seeking indemnificationindemnified party, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that indemnified party.
(c) With respect to a claim for indemnification arising out of or involving an assertion by a third party of liability on the Indemnifying Parties part of an indemnified party, the indemnified party and the indemnifying party shall cooperate in the defense of such claim. The indemnified party shall have the right to retain its own counsel and to participate in the defense, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless the indemnifying party and indemnified party otherwise agree in writing.
(d) Notwithstanding the foregoing, the indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability of the indemnified party or in which equitable injunctive relief is sought against the Indemnified indemnified party, unless the indemnified party consents. In the absence of consent by the indemnified party in such case, each Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such its own defense. The Party not controlling In such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceedingcase, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling neither Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesother Party, which shall not be unreasonably withheld or delayed; provided that . In the event either Party withholds or delays its consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any such judgment arising fromand, any thereafter, the Loss incurred following resolution of such suit or proceeding without exceeds the prior written consent of Loss that would have been incurred had the Indemnifying Partiesindemnified party not withheld or delayed such consent, which the Claimed Amount indemnified pursuant to this Section 8.3 shall not be unreasonably withheld exceed the Loss that would have been incurred had the indemnified party given its consent to such settlement or delayedthe entry of such judgment.
(be) In order to seek indemnification under this Article VIVIII for a claim not arising out of or involving an assertion by a third party of liability on the part of an indemnified party, the Indemnified Parties an indemnified party shall give written notification (a “Claim Notice”) claim notice to the Indemnifying Parties indemnifying party prior to the Representations and Warranties Expiration Date which contains (i) a description and the amount, if capable of estimation, of the claimed amount (the “Claimed Amount”) of any Damages Losses incurred or reasonably expected to be incurred by the Indemnified Partiesindemnified party (the “Claimed Amount”), (ii) a statement that the Indemnified Parties indemnified party is entitled to indemnification under this Article VI VIII for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (cf) below) in the amount of the Claimed Amountsuch Losses (a “Claim Notice”).
(cf) Within twenty ten (2010) days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties indemnified party a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: :
(i1) agree that the Indemnified Parties indemnified party is entitled to receive all of the Claimed AmountAmount in which case the response shall be accompanied by a payment by the indemnifying party to the indemnified party of the Claimed Amount of Losses, by check or by wire transfer in exchange for a release of further liability by the Claim Notice;
(ii2) agree reach agreement with the indemnified party upon the amount of Losses that the Indemnified Parties indemnified party is entitled to receive, in which case the response shall be accompanied by a payment by the indemnifying party to the indemnified party of the agreed amount, by check or by wire transfer in exchange for a release of further liability for claims covered by the Claim Notice; or
(3) dispute that the indemnified party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountagreed amount. If the Indemnifying Parties indemnifying party in the Response response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties indemnified party shall use good faith efforts to resolve the Dispute. If dispute.
(g) The indemnifying party shall have the Dispute right to settle or compromise any claim or liability subject to indemnification under this Article VIII which is not resolved within susceptible to being settled or compromised; provided, however, that any such 60-day period, settlement shall require the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission consent of the Dispute to a mutually acceptable alternative dispute resolution procedure (indemnified party, which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures consent shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to unreasonably withheld; provided further however, that the Dispute (provided that this sentence consent of the indemnified party shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that required if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled terms of the settlement require only the payment of damages and payment of the full amount of the relevant indemnification obligation to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, indemnified party is assured and (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, indemnified party is not otherwise materially and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under adversely affected by the terms of this Article VI)the settlement.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for For purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice” relating to a particular Action (as defined below) or representation, warranty, covenant or other agreement shall be deemed to have been given if any Indemnified Party, acting in good faith, delivers to Seller or Buyer, as applicable (the “Indemnifier”) to the Indemnifying Parties which contains ), a written notice stating that such Indemnified Party believes that there is or has been a possible Action or breach of such representation, warranty, covenant or other agreement and containing (i) a brief description of the circumstances supporting such Indemnified Party’s belief that there is or has been such a possible Action or breach, and (ii) a non-binding, preliminary estimate of the aggregate dollar amount of the actual and potential Losses that may be a direct or indirect result of such possible Action or breach (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount).
(cb) Within twenty (20) days after During the 60-day period commencing upon the delivery to the Indemnifier of a Claim NoticeNotice (the “Dispute Period”), the Indemnifying Parties Indemnifier shall deliver to the Indemnified Parties Party who delivered the Claim Notice a written response (the “ResponseResponse Notice”) in which the Indemnifying Parties shall: Indemnifier (i) agree agrees that the Indemnifier owes the full Claimed Amount to the Indemnified Parties is entitled to receive all of the Claimed Amount, Party; (ii) agree agrees that the Indemnified Parties is entitled to receive part, Indemnifier owes part (but not all, ) of the Claimed Amount (the “Agreed Amount”) to the Indemnified Party; or (iii) dispute asserts that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or Indemnifier owes no part of the Claimed Amount, the Indemnifying Parties and Amount to the Indemnified Parties Party. Any part of the Claimed Amount that the Indemnifier does not agree the Indemnifier owes to the Indemnified Party pursuant to the Response Notice shall follow be referred to as the procedures set forth “Contested Amount.” If a Response Notice is not received by the Indemnified Party prior to the expiration of the Dispute Period, then the Indemnifier shall be conclusively deemed to have agreed that the Indemnifier owes the full Claimed Amount to the Indemnified Party.
(c) If (i) the Indemnifier delivers a Response Notice agreeing that the Indemnifier owes the full Claimed Amount to the Indemnified Party, or (ii) the Indemnifier does not deliver a Response Notice during the Dispute Period, then the Claimed Amount shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in Section 6.3(d) for the resolution of such dispute (a “Dispute”)immediately available funds.
(d) During If the 60Indemnified Party delivers a Response Notice agreeing that the Indemnifier owes less than the full Claimed Amount to the Indemnified Party, then the Agreed Amount shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in immediately available funds.
(e) If the Indemnifier delivers a Response Notice indicating that there is a Contested Amount, the Indemnifier and the Indemnified Party shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnifier and the Indemnified Party resolve such dispute as to all or a portion of the Contested Amount, then the Indemnifier and the Indemnified Party shall execute a written settlement agreement, and an amount equal to the amount specified in such settlement agreement shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in immediately available funds.
(f) If the Indemnifier and the Indemnified Party are unable to resolve any part of the dispute relating to any Contested Amount during the 30-day period following commencing upon the delivery of a the Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) Notice (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR ServiceInitial Resolution Period”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies then with respect to the Dispute prior remaining Contested Amount, either the Indemnified Party or the Indemnifier may submit the unresolved portion of the claim described in the Claim Notice to binding arbitration in accordance with the completion Commercial Arbitration Rules then in effect of such ADR Procedurethe American Arbitration Association (“AAA”). Any ADR Procedure undertaken The arbitration hearing will be administered by an arbitration service mutually agreed upon by the Indemnifying Parties Indemnifier and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible)Party. The fees and expenses of any ADR Service used arbitration hearing will be held in Morrisville, North Carolina. Arbitration will be conducted by one arbitrator, mutually selected by the Indemnifying Parties Indemnifier and the Indemnified Parties shall be considered to be DamagesParty; provided, however, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Indemnifier and the Indemnified Parties shall pay all such fees Party fail to mutually select an arbitrator within 5 business days following the expiration of the Initial Resolution Period, then arbitration will be conducted by three arbitrators: one selected by the Indemnifier; one selected by the Indemnified Party; and expensesthe third selected by the first 2 arbitrators. Notwithstanding If either the Indemnifier or the Indemnified Party fails to select an arbitrator within 10 business days following the expiration of the Initial Resolution Period, then the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy select the second arbitrator. The Indemnifier and the Indemnified Party agree to use commercially reasonable efforts to cause the arbitration hearing to be conducted within 75 days after the appointment of the mutually-selected arbitrator or the last of the three arbitrators, as the case may be. The arbitrator(s) shall issue a final decision within 15 days after the conclusion of the arbitration hearing. The parties shall be entitled to only limited discovery, at the discretion of the arbitrator(s), and agree that no discovery request shall be served later than 30 days prior to the commencement of the arbitration hearing and all discovery shall be completed at least 10 days prior to the commencement of the arbitration hearing. The final decision of the arbitrator(s) shall relate solely: (i) to whether the Indemnified Party is entitled to recover the Contested Amount (or a portion thereof), and the portion of such obligation, with prior notice Contested Amount the Indemnified Party is entitled to but without prior consent from the Indemnifying Selling Parties, recover; and (ii) to the Buyer may subsequently make determination of the non-prevailing party as provided below. The arbitrator(s) shall furnish the final decision to the Indemnifier and the Indemnified Party in writing and the final decision shall constitute a claim for indemnification conclusive determination of the issue(s) in accordance question, binding upon the Indemnifier and the Indemnified Party and shall not be contested by either of them. In the final decision, the arbitrator(s) shall determine whether the Indemnified Party or the Indemnifier is the non-prevailing party in the arbitration. The non-prevailing party shall pay the reasonable expenses (including attorneys’ fees) of the prevailing party, and the fees and expenses associated with the provisions of this Article VI, arbitration (including the arbitrators’ fees and (iii) expenses). The final decision shall specify the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right amount of the Indemnifying Selling Parties expenses and fees to dispute be paid by the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)non-prevailing party.
Appears in 1 contract
Indemnification Claims. (a) In Promptly after the event that incurrence of any of the Parties are entitled, or seek to assert rights, Losses by a party entitled to indemnification under this Article VIpursuant to Section 5.1 (an “Indemnitee”), including any claim by a third party described in subsection 5.2(b), which might give rise to indemnification, the Party or Parties seeking Indemnitee shall deliver to the party from which indemnification is sought (the “Indemnified PartiesIndemnitor”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe that specifies in a reasonable detail (to the extent known by the Indemnified Parties) the facts constituting each individual item of Loss, the basis for such suit or proceeding any anticipated liability and the amount nature of the claimed damages; providedmisrepresentation, howeverbreach of warranty, that no delay on breach of covenant or claim to which each such item is related and the part computation of the Indemnified Parties amount to which such Indemnitee claims to be entitled hereunder. Claims for Losses to which an Indemnitor shall not object in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 writing within thirty (30) days after delivery receipt of such notificationnotice, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit and claims for Losses which are contested and resolved by agreement or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit judicial determination or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate settled with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Indemnitor shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedpaid within ten (10) days.
(b) In order If a claim or demand is made against either party by any third party (a “Third Party Claim”) as to seek which the Indemnitor may be obligated to provide indemnification under pursuant to this Article VIAgreement, such Indemnitee, within a reasonable time after receipt of such claim or demand, shall notify the Indemnified Parties shall give written notification Indemnitor in writing, and in reasonable detail, of the Third Party Claim (a “Claim Notice”) ). The failure by any Indemnitee to deliver a Claim Notice to the Indemnifying Parties which contains (i) a description and Indemnitor shall not relieve the amount (Indemnitor from any liability that it may have to such Indemnitee under this Agreement, except to the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement extent that the Indemnified Parties is entitled to indemnification under this Article VI for Indemnitor shall have demonstrated that it has been actually prejudiced as a result of such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery failure. Upon receipt of a Claim Notice, the Indemnifying Parties Indemnitor shall deliver have the right, but not the obligation, to assume and control the Indemnified Parties a written response defense and settlement of the Third Party Claim for and on behalf of the Indemnitee. The Indemnitor shall have 5 (five) business days to notify the “Response”) Indemnitee in which writing of its decision in this regard. If the Indemnifying Parties shall: (i) agree that the Indemnified Parties Indemnitor is entitled to receive all and elects to exercise its right to assume and control the defense and settlement of the Claimed AmountThird Party Claim, then the Indemnitor shall diligently and continuously defend such Third Party Claim through counsel reasonably satisfactory to the Indemnitee, and the Indemnitee shall have the right to participate in the defense and settlement thereof at its own expense. The Indemnitee shall cooperate with the Indemnitor in the defense and settlement thereof (ii) agree that including preserving and sharing relevant documents and records, attending and testifying at hearings and proceedings, and the Indemnified Parties like), and the Indemnitor shall not, without the Indemnitee’s prior written consent, settle such Third Party Claim unless the sole relief provided in such settlement is entitled to receive part, but not all, of monetary in nature and shall be paid in full by the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed AmountIndemnitor. If the Indemnifying Parties in Indemnitor declines to assume and control the Response disputes its liability for all or part defense of the Claimed AmountThird Party Claim, then the Indemnifying Parties and Indemnitee may proceed to defend the Indemnified Parties shall follow Third Party Claim as it sees fit, with a full reservation of rights against the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)Indemnitor.
(dc) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) Sellers’ indemnification obligations shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure be affected by any investigation conducted or prevent either such Party from pursuing the Dispute in a court knowledge acquired (or capable of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oralbeing acquired) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesBuyer at any time, whether before or after the Indemnified Parties execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with any representation, warranty, covenant or agreement. Neither the ADR Service exercise of nor the failure to exercise the foregoing rights shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable constitute an election of remedies or admissible for any purposes limit in any litigation or other proceeding relating to manner the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses enforcement of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, other remedies that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)available.
Appears in 1 contract
Sources: Asset Purchase Agreement (United States Oil & Gas Corp)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) The Buyer shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Representative of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Buyer of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent then known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no . No delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Representative shall relieve the Indemnifying Parties Company Equityholders of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within 20 days after delivery of such notification, the Indemnifying Parties Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationBuyer; provided that (i) the Indemnifying Parties Representative may only assume control of such defense if (A) it acknowledges in writing to the Buyer on behalf of all of the Company Equityholders that any damages, fines, costs or other liabilities that may be assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Article VII, (B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the current balance of the Escrow Fund, and (C) an adverse resolution of the Third Party Action would not have a material adverse effect on the goodwill or reputation of the Buyer or the business, operations or future conduct of the Buyer and (ii) the Representative may not assume control of the defense of a suit any Third Party Action involving Taxes or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer or any of its subsidiaries. If the Indemnifying Parties do Representative does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 7.3(a) or (ii) the Representative assumes control of such defense and the Buyer reasonably concludes that the Company Equityholders and the Buyer have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Neither the Company Equityholders nor the Representative shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesBuyer, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Buyer shall not be required if the Indemnifying Parties Representative, on behalf of all of the Company Equityholders, agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Buyer from further liability and has no other materially adverse effect on the Indemnified PartiesBuyer. The Indemnified Parties Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesRepresentative, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VIVII, the Indemnified Parties Buyer shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Representative. Within twenty (20) 30 days after delivery of a Claim Notice, the Indemnifying Parties Representative shall deliver to the Indemnified Parties Buyer a written response (the “Response”) , in which the Indemnifying Parties Representative, on behalf of all of the Company Equityholders, shall: (i) agree that the Indemnified Parties Buyer is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a letter from the Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Claimed Amount), (ii) agree that the Indemnified Parties Buyer is entitled to receive part, but not all, of the Claimed Agreed Amount (in which case the “Response shall be accompanied by a letter from the Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Agreed Amount”) or (iii) dispute that the Indemnified Parties Buyer is entitled to receive any of the Claimed Amount. If no Response is delivered by the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved Representative within such 6030-day period, the Indemnifying Parties and the Indemnified Parties Company Equityholders shall discuss in good faith the submission be deemed to have agreed that all of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable Claimed Amount is owed to the ADR Procedure, and promptly undertake Buyer. Acceptance by the ADR Procedure. The provisions Buyer of this Section 6.3(dpartial payment of any Claimed Amount shall be without prejudice to the Buyer’s right to claim the balance of any such Claimed Amount.
(c) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute Any dispute raised in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service Response shall be treated as confidential and, where appropriate, as privileged work producta Contract Dispute and shall be resolved by binding arbitration in accordance with Section 11.11. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating If the Buyer is seeking to enforce the claim that is the subject of the Contract Dispute pursuant to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeEscrow Agreement, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, Representative and the Buyer reasonably determines that shall deliver to the Company Escrow Agent, promptly following the resolution of the Contract Dispute (whether by mutual agreement, arbitration, judicial decision or any otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of their Subsidiaries has a valid business reason the Escrow Fund shall be distributed to fulfill such obligation, then (i) the Buyer (which notice shall be entitled to satisfy such obligation, consistent with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIthe resolution of the Contract Dispute).
Appears in 1 contract
Sources: Share Purchase Agreement
Indemnification Claims. (a) In the event that any of the Parties are entitledIf an Indemnified Party has or is reasonably expected to have a right to indemnification, compensation or seek to assert rights, to indemnification reimbursement under this Article VIAgreement (an “Indemnification Claim”), the such Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying promptly so notify the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon Party in a written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim NoticeCertificate”) ), prior to the Indemnifying Parties which contains expiration of the applicable Survival Period (if applicable): (i) a description and the amount (the “Claimed Amount”) of stating that such Indemnified Party has directly or indirectly suffered or incurred any Damages incurred Losses, or reasonably expected to be incurred by the Indemnified Partiesanticipates that it will directly or indirectly suffer or incur any Losses, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, compensation or reimbursement under this Agreement; (ii) a brief description in reasonable detail (to the extent available to such Indemnified Party) of the facts, circumstances or events giving rise to each item of Losses based on such Indemnified Party’s good faith belief thereof; and (iii) the basis for indemnification, compensation or reimbursement under this Agreement to which such item of Losses is related.
(b) In the event that the Indemnifying Party shall seek to contest all or any individual items of Losses set forth in a Claim Certificate, the Indemnifying Party shall so notify the Indemnified Party in writing within thirty (30) days after receipt of such Claim Certificate, which notice shall set forth a brief description in reasonable detail of the Indemnifying Party’s basis for objecting to each item of Loss. In the event that the Indemnifying Party shall fail to object to any items of Loss set forth in a Claim Certificate within the foregoing thirty-day period, the Indemnifying Party shall be deemed to have irrevocably agreed and consented to indemnify, compensate and reimburse the Indemnified Party in respect of such items of Loss pursuant to the terms of this Article VI)Agreement.
Appears in 1 contract
Indemnification Claims. Each indemnified Party agrees to give the indemnifying Party prompt written notice of any matter upon which such indemnified Party intends to base a claim for indemnification (aan “Indemnity Claim”) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VISection 10, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no any delay on the part of the Indemnified Parties in notifying the Indemnifying Parties providing or failure to provide such notice shall not relieve the Indemnifying Parties indemnifying Party of any liability or obligation of its obligations hereunder except to the extent of any damage or liability caused that the indemnifying Party is materially prejudiced by or arising out of such failure. Within 20 days after delivery The indemnifying Party shall have the right to participate jointly with the indemnified Party in the indemnified Party’s defense, settlement or other disposition of any Indemnity Claim. With respect to any Indemnity Claim relating solely to the payment of money damages which could not result in the indemnified Party’s becoming subject to injunctive or other equitable relief or otherwise adversely affect the business of the indemnified Party in any manner, and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the indemnified Party hereunder, the indemnifying Party shall have the sole right to defend, settle or otherwise dispose of such notificationIndemnity Claim, on such terms as the Indemnifying Parties mayindemnifying Party, upon written notice thereof to the Indemnified Parties seeking indemnificationin its sole discretion, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationshall deem appropriate; provided that the Indemnifying Parties may not assume control indemnifying Party shall provide reasonable evidence of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense ability to pay any damages claimed and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to any such suit or proceeding, settlement shall have obtained the reasonable fees and expenses written release of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreementindemnified Party from the Indemnity Claim. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling indemnifying Party shall furnish obtain the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesindemnified Party, which shall not be unreasonably withheld withheld, prior to ceasing to defend, settling or delayed; provided that otherwise disposing of any Indemnity Claim if as a result thereof the consent indemnified Party would become subject to injunctive or other equitable relief or the business of the Indemnified Parties shall not indemnified Party would be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes adversely affected in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)manner.
Appears in 1 contract
Sources: Clinical Co Development Agreement (Phio Pharmaceuticals Corp.)
Indemnification Claims. (a) In the event that If any of the Parties are entitled, or seek Party seeks to assert rights, rights to indemnification under this Article VIVI (the "Indemnified Party"), the Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties from whom indemnification is sought (the “"Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third third-party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days twenty (20) business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 twenty (20) days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that the Indemnifying Parties Party may not only assume control of such defense if it acknowledges in writing to the defense of a suit Indemnified Party that any damages, fines, costs or proceeding involving criminal liability or in which equitable relief is sought other liabilities that may be assessed against the Indemnified Party seeking indemnificationin connection with such suit or proceeding constitute Damages for which the Indemnified Party may be indemnified pursuant to this Article VI and that any assumption of control of a defense by the Indemnifying Party shall not, solely by such assumption of control, be an admission or concession of any liability under this Article VI on the part of the Indemnifying Party. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, Party and (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case and subject to Section 6.3, the Buyer (if it is the Indemnified Party) ----------- shall be entitled to withhold a portion of the Purchase Price otherwise payable to the Seller equal to the Claimed Amount, ); (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case and subject to Section 6.3, the Buyer (if it is ----------- the Indemnified Party) shall be entitled to withhold a portion of the Purchase Price otherwise payable to Seller equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d------- 6.2
(d) for the resolution of such dispute (a “"Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”"). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).------ -17-
Appears in 1 contract
Sources: Purchase Agreement (Liveworld Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 8 (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI Section 8 may be sought. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Losses for which the Indemnified Party shall be indemnified pursuant to this Section 8 and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “Damages” "Losses" for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VISection 8, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages Losses incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 8 for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Losses.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer, (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer, or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d8.03(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d8.03(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Party.
(e) Notwithstanding the other provisions of this Section 6.38.03, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages Losses for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VISection 8, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VISection 8, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VISection 8, for any such Damages Losses for which it is entitled to indemnification pursuant to this Article VI Section 8 (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 8).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days 10 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall 35 otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”"). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for For purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim 36 shall be the average of the last reported sale prices per share of the Buyer shall be reimbursed, in accordance with Common Stock on the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI Nasdaq National Market over the five consecutive trading days ending on the Closing Date (subject to equitable adjustment in the right event of any stock split, stock dividend, reverse stock split or similar event affecting the Indemnifying Selling Parties to dispute Buyer Common Stock since the Buyer’s entitlement to indemnificationbeginning of such five-day period), or multiplied by the amount for which it is entitled to indemnification, under the terms number of this Article VI)such Escrow Shares.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) Purchaser shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement Seller of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Claim. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Purchaser of notice of such suit or proceedingThird Party Claim, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesPurchaser) the facts constituting the basis for such suit or proceeding Third Party Claim and the amount of the claimed damagesLosses; provided, however, that no delay or failure on the part of the Indemnified Parties Purchaser in so notifying the Indemnifying Parties Seller shall relieve the Indemnifying Parties Seller of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Seller may, upon written notice thereof to the Indemnified Parties seeking indemnificationPurchaser, assume control of the defense of such suit or proceeding Third Party Claim with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationPurchaser; provided that Seller may only assume control of such defense if it acknowledges in writing to Purchaser that any damages, fines, costs or other liabilities that may be assessed against Purchaser in connection with such Third Party Claim constitute Losses for which Purchaser shall be indemnified pursuant to this Article VIII. If Seller does not, or is not permitted under the Indemnifying Parties may not terms hereof to, so assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Third Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defenseClaim, the Indemnified Parties seeking indemnification Purchaser shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Claim and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Claim (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost Third Party Claim. The fees and expense expenses of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense counsel to Purchaser with respect to a Third Party Claim shall be considered “Damages” Losses for purposes of this AgreementAgreement only if Purchaser controls the defense of such Third Party Claim pursuant to the terms of this Section 8.2(a). The Indemnifying Parties Seller shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Claim without the prior written consent of the Indemnified PartiesPurchaser, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Purchaser shall not be required if the Indemnifying Parties Seller agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Purchaser from further liability and has no other materially adverse effect on the Indemnified Partieswith respect thereto. The Indemnified Parties Purchaser shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Claim without the prior written consent of the Indemnifying PartiesSeller, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VIVIII in respect of a Loss that does not involve a Third Party Claim, the Indemnified Parties Purchaser shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountSeller.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Seller shall deliver to the Indemnified Parties Purchaser a written response (the “Response”) , in which the Indemnifying Parties Seller shall: (i) agree that the Indemnified Parties Purchaser is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by Seller to Purchaser of the Claimed Amount, by check or by wire transfer), (ii) agree that the Indemnified Parties Purchaser is entitled to receive part, but not all, the Agreed Amount (in which case the Response shall be accompanied by a payment by Seller to Purchaser of the Claimed Amount (the “Agreed Amount”, by check or by wire transfer) or (iii) dispute that the Indemnified Parties Purchaser is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to All claims for indemnification made under this Article VIAgreement resulting from, related to or arising out of a third-party claim against an Indemnified Party shall be made in accordance with the following procedures. An Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification promptly deliver an Expected Claim Notice to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any action, suit or proceeding relating to a third third-party claim for which indemnification pursuant to this Article VI may be soughtsought or, if earlier, upon the assertion of any such claim by a third party. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in No reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the any Indemnifying Parties Party shall relieve the Indemnifying Parties of Party from any liability or obligation hereunder except unless (and then solely to the extent of any damage or liability caused by or arising out of such failureextent) the Indemnifying Party is thereby prejudiced. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit action, suit, proceeding or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that claim if (a) the Indemnifying Parties may not assume control of Party accepts full responsibility for the matter, (b) the Indemnifying Party demonstrates it has the financial resources necessary to defend against the matter and fulfill its indemnification obligations and (c) the Indemnifying Party conducts the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationwith reasonable diligence. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes concludes, based on advice from counsel, that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit action, suit, proceeding or proceedingclaim, the reasonable fees and expenses of counsel to the Indemnified Parties Party solely in connection therewith shall be considered “Damages” for purposes of this Agreement; provided, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling other Party advised of the status of such suit action, suit, proceeding or proceeding claim and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling other Party with respect thereto. The Non-Controlling Indemnified Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement ofof such action, suit, proceeding or claim, or admit any liability with respect thereto, without the entry prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall not agree to any judgment arising fromsettlement of such action, suit, proceeding or claim that does not include a complete release of the Indemnified Party from all liability with respect thereto or that imposes any such suit liability or proceeding obligation on the Indemnified Party without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIVII, the an Indemnified Parties Party shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by Party. If the Indemnified PartiesParty is the Buyer, (ii) the Indemnifying Party shall deliver a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation copy of the basis therefor, and (iii) a demand for payment (in Claim Notice to the manner provided in paragraph (c) below) in the amount of the Claimed AmountEscrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) , in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided, that, if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three Business Days following the delivery of the Response, a written notice executed by both Parties instructing the Escrow Agent to distribute to the Buyer such amount of Escrow Cash as is equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount (the “Agreed Amount”, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three (3) days following the delivery of the Response, a written notice executed by both Parties instructing the Escrow Agent to distribute to the Buyer such amount of Escrow Cash as is equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If The Indemnifying Party (and its representatives) shall have reasonable access during the Indemnifying Parties foregoing twenty (20) day period and the thirty (30) day period referred to in Section 7.3(d) below to the books, records and other information in the Response disputes its liability possession or control of the Indemnified Party during regular business hours to the extent necessary to verify the claim for all or part of indemnification and the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 6030-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 6030-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)arbitration. In the event absence of an agreement by the Indemnifying Parties Party and the Indemnified Parties agree upon an ADR ProcedureParty to arbitrate a Dispute, such parties shallDispute shall be resolved in a state or federal court sitting in Salt Lake City, Utah, in consultation accordance with Section 10.12. If the chosen dispute resolution service (Indemnified Party is the “ADR Service”)Buyer, promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect shall deliver to the Dispute prior to Escrow Agent, promptly following the completion resolution of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both Parties instructing the Escrow Agent as to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses what (if any) portion of any ADR Service used by the Indemnifying Parties and the Indemnified Parties Escrow Cash shall be considered distributed to the Buyer and/or the Selling Securityholders (which notice shall be Damages; provided, that if consistent with the Indemnifying Parties are determined not to be liable for Damages in connection with such terms of the resolution of the Dispute, the Indemnified Parties shall pay all such fees and expenses. ).
(e) Notwithstanding the other provisions of this Section 6.37.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VIVII, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligationobligation and that such Indemnified Party or such third party is likely to suffer irreparable harm if the Indemnified Party follows the procedures in this Section 7.3, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesParty (provided that such Indemnified Party shall provide such notice to the Indemnifying Party as is possible under the circumstances), (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VIVII, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VIVII, for any such Damages for which it is entitled to indemnification pursuant to this Article VI VII (subject to the right of the Indemnifying Selling Parties Party to dispute the BuyerIndemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIVII, including the application of Sections 7.4 or 7.5.).
(f) For purposes of this Section 7.3 and the fourth and fifth sentences of Section 7.4(a), (i) if the Selling Securityholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make any payments) shall be deemed to refer to the Securityholders’ Representative, and (ii) if the Selling Securityholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments) shall be deemed to refer to the Securityholders’ Representative. The Securityholders’ Representative shall have full power and authority on behalf of each Selling Securityholders to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Selling Securityholders under this Article VII.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.such
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.)
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer), or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation -34- 40 or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Party.
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In the event that any liability, claim (including any Third Party Claim), demand or cause of the Parties are entitledaction which is indemnified against by or under any term, provision, Section or seek to assert rights, to indemnification under paragraph of this Article VI, the Party or Parties seeking indemnification Agreement (the “Indemnified PartiesIndemnitee’s Claim”) shall give written notification to the other Party is made against or Parties received by any indemnified party (the hereinafter “Indemnifying PartiesIndemnitee”) hereunder, said Indemnitee shall notify the indemnifying party (hereinafter “Indemnitor”) in writing within twenty one (21) calendar days of the commencement Indemnitee’s receipt of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of written notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damagessaid ▇▇▇▇▇▇▇▇▇▇’s Claim; provided, however, that no Indemnitee’s failure to timely notify Indemnitor of Indemnitee’s receipt of an Indemnitee’s Claim shall not impair, void, vitiate or invalidate Indemnitor’s indemnity hereunder nor release Indemnitor from the same, which duty, obligation and indemnity shall remain valid, binding, enforceable and in full force and effect so long as Indemnitee’s delay on the part of in notifying Indemnitor does not, solely by itself, directly and materially prejudice Indemnitor’s right or ability to defend the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties Claim. Upon its receipt of any liability or obligation hereunder except to the extent of any damage all Indemnitee’s Claim(s), Indemnitor shall diligently and vigorously defend, compromise or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein settle said ▇▇▇▇▇▇▇▇▇▇’s Claim at its own expense; provided that if the Indemnifying Parties assumes control of such defense Indemnitor’s sole and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole exclusive cost and expense and shall promptly provide Indemnitee evidence thereof within twenty one (21) calendar days of the Indemnifying Parties under Section 6.1 or 6.2final, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the unappealable resolution of said Indemnitee’s Claim, provided such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute claim is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)for litigation only. In the event the Indemnifying Parties and the Indemnified Parties agree upon of an ADR ProcedureIndemnitee’s Claim unrelated to litigation (e.g., such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”Medicaid takeback), promptly agree upon Indemnitor shall be responsible for any damages, costs or expenses to Indemnitee, including, but not limited to, attorneys’ fees incurred as a format and timetable result of the indemnification event to be paid to Indemnitee within thirty (30) days of written demand for the ADR Proceduresame. Upon the receipt of the written request of Indemnitee, agree upon Indemnitor shall within fourteen (14) calendar days provide Indemnitee a true, correct, accurate and complete written status report regarding the rules applicable then- current status of said Indemnitee’s Claim. Indemnitee may not settle or compromise an Indemnitee’s Claim without Indemnitor’s prior written consent. Failure to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either obtain such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties consent shall be considered a compromise negotiation for purposes deemed forfeiture by Indemnitee of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to its indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)rights hereunder.
Appears in 1 contract
Sources: Asset Purchase Agreement
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek An Indemnified Party seeking to assert rights, rights to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) VI shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Stockholder Representatives of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such action, suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such action, suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Stockholder Representatives shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Stockholder Representatives may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such action, suit or proceeding with counsel reasonably satisfactory to the Indemnified Party, provided the Stockholder Representatives acknowledge in writing to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties any damages, fines, costs or other liabilities that may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought be assessed against the Indemnified Party seeking indemnificationin connection with such action, suit or proceeding constitute Damages for which the Indemnified Party shall, subject to the limitations set forth in Section 6.4, be indemnified pursuant to this Article VI. If the Indemnifying Parties Stockholder Representatives do not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “"Non-Controlling Party”") may participate therein at its their own expense; provided that if the Indemnifying Parties assumes Stockholder Representatives assume control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such action, suit or proceeding, the reasonable fees and expenses of one counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Party reasonably advised of the status of such action, suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such action, suit or proceeding (including copies of any summons, complaint or other pleading pleadings which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such action, suit or proceeding at and provide the sole cost Controlling Party and expense of its counsel access to (and the Indemnifying Parties under Section 6.1 or 6.2, which cost right to make copies of) the Surviving Corporation's books and expense shall be considered “Damages” for purposes of this Agreementrecords pertaining to such matter. The Indemnifying Parties Stockholder Representatives shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnifying PartiesStockholder Representatives, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that if the Stockholder Representatives do not assume the defense of such action, suit or proceeding pursuant to this Section 6.2(a), the Indemnified Party shall be entitled to agree to a settlement of, or the entry of any judgment arising from, such action, suit or proceeding, after giving notice of the same to the Stockholder Representatives, on such terms as the Indemnified Party in good faith may deem appropriate.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give a written notification (a “"Claim Notice”") to the Indemnifying Parties Stockholder Representatives and the Escrow Agent which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred as a result of any final, unappealable judgment, settlement or acknowledgment of the Stockholder Representatives or reasonably expected to be incurred by the Indemnified PartiesParty as a result of such claim, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Stockholder Representatives shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Stockholder Representatives shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a copy of instructions to the Escrow Agent to release to the Indemnified Party Escrow Shares having a Value (as defined in the Escrow Agreement) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a copy of instructions to the Escrow Agent to release to the Indemnified Party Escrow Shares having a Value (as defined on the Escrow Agreement) equal to the Agreed Amount or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).Claimed
Appears in 1 contract
Sources: Merger Agreement (Staples Inc)
Indemnification Claims. (a) In the event that any of the Parties Parent or the Company Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, the Party Parent or Parties seeking indemnification the Company Stockholders (as the “Indemnified Parties”case may be) shall give written notification to the other Party Company Stockholders or Parties the Parent (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the BuyerParent, the Company Surviving Corporation or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer Parent may be entitled to indemnification pursuant to this Article VI, and the Buyer Parent reasonably determines that the Company Surviving Corporation or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Parent shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesStockholders, (ii) the Buyer Parent may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer Parent shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Stockholders to dispute the BuyerParent’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) For purposes of this Section 6.3 and the last two sentences of Section 6.4, any references to the Company Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative.
(f) The Indemnification Representative shall have full power and authority on behalf of each Company Stockholder or Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders or Indemnifying Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Company Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of the Company Stockholders or Indemnifying Stockholders pursuant to this Article VI and shall not be responsible to any Company Stockholder or Indemnifying Stockholder for any losses or damages the Company Stockholders or Indemnifying Stockholders may suffer by the performance of his duties under this Agreement. The Parent and the Surviving Corporation shall fully indemnify and hold harmless the Indemnification Representative from and against any such losses or damages and any other losses or damages incurred by the Indemnification Representative related to or arising from the performance of his duties as Indemnification Representative, including any legal fees incurred in defense of actions or claims asserting such losses or damages, other than any such losses or damages arising from willful violation of the law or gross negligence in the performance of his duties as Indemnification Representative under this Agreement.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are An Indemnified Party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) VI shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Shareholder Representative of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days twenty (20) business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Shareholder Representative shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 twenty days after delivery of such notification, the Indemnifying Parties Shareholder Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Shareholder Representative may not only assume control of such defense if (A) it acknowledges in writing to the defense of a suit Indemnified Party that any damages, fines, costs or proceeding involving criminal liability or in which equitable relief is sought other liabilities that may be assessed against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available in connection with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Indemnified Party shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification indemnified pursuant to this Article VI and (subject B) the ad damnum is less than or equal to the right amount of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount Damages for which it indemnification is entitled to indemnification, available under the terms of this Article VI).VI and (ii) the Shareholder Representative may not assume control of
Appears in 1 contract
Sources: Merger Agreement (Engage Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification IX (the “Indemnified Parties”an "INDEMNIFIED PARTY") shall give written notification (a "NOTIFICATION OF SUIT") to the other Party or Parties party from whom indemnification is sought (the “Indemnifying Parties”an "INDEMNIFYING PARTY") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI IX may be sought. Such notification Notification of Suit shall be given within 20 Business Days 30 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 30 days after delivery of such notificationNotification of Suit, the Indemnifying Parties Party (through the Indemnification Representative in the event the Indemnified Party is a Parent Indemnified Party) may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory if, but only if, the Indemnifying Parties acknowledge in writing their obligation to indemnify the Indemnified Party seeking indemnificationParties hereunder against any Damages that such Indemnified Parties incur or have incurred in connection with such third party claim; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “Non"NON-Controlling Party”CONTROLLING PARTY") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”"CONTROLLING PARTY") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIIX, the an Indemnified Parties Party shall give written notification (a “Claim Notice”"CLAIM NOTICE") to the Indemnifying Parties Party which contains (i) a description and the amount (the “Claimed Amount”"CLAIMED AMOUNT") of any Damages incurred or reasonably 57 expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI IX for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”"RESPONSE") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, ; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) "AGREED AMOUNT"); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party agrees that the Indemnified Party is entitled to receive all of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Claimed Amount, by check or by wire transfer, or, if the Indemnified Party is a Parent Indemnified Party, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to the Parent such number of Escrow Shares as have an aggregate Escrow Value (as defined below) equal to the Claimed Amount. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Agreed Amount, by check or by wire transfer, or, if the Indemnified Party is a Parent Indemnified Party, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to the Parent such number of Escrow Shares as have an aggregate Escrow Value equal to the Agreed Amount. If the Indemnifying Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d9.3(d) for the resolution of such dispute (a “Dispute”"DISPUTE"). For purposes of this Article IX, the "ESCROW VALUE" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the average of the last reported sale prices per share of the Parent Common Stock on the AMEX over the ten consecutive trading days ending on the last trading day before the date of determination (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Parent Common Stock since the beginning of such ten-day period), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding nonbinding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”PROCEDURE"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”SERVICE"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d9.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Parent or the Company Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.39.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries a party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such party may be entitled to indemnification pursuant to this Article VIIX, and the Buyer such party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such party may subsequently make a claim for indemnification in accordance with and subject to the provisions of this Article VIIX, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VIIX, for any such Damages for which it is entitled to indemnification pursuant to this Article VI IX (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s such party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIIX).
Appears in 1 contract
Sources: Merger Agreement (Inverness Medical Technology Inc/De)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to Any claim for indemnification under this Article VI, ARTICLE VIII shall be brought and asserted by the applicable Indemnified Party or Parties seeking indemnification by delivering written notice of such claim to the Indemnifying Party (the “Indemnified PartiesClaim Notice”) on or before the Warranty Termination Date. The Claim Notice shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceedingset forth, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) detail, the facts constituting the basis for and circumstances giving rise to such suit or proceeding claim and the amount of the claimed damages; providedLosses actually incurred and, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notificationthe Losses have not yet been incurred, the Indemnifying Parties maya good faith, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control nonbinding estimate of the defense amount of such suit or proceeding with counsel Losses that are reasonably satisfactory expected to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementincurred. The Indemnifying Parties Party shall not agree to any settlement ofhave no liability for an indemnification claim under Section 8.1 or Section 8.2, or the entry of any judgment arising fromas applicable, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if unless the Indemnifying Parties agrees Party shall have received the Claim Notice with respect thereto on or before the Warranty Termination Date. For each claim for indemnification under this Agreement that is made prior to the Warranty Termination Date, such claim and associated right to indemnification, subject to the limitations set forth in writing to pay any amounts payable pursuant to this Agreement, will not terminate before final determination and satisfaction of such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedclaim.
(b) In order Upon the Claim Notice having been given to seek indemnification under this Article VIthe Indemnifying Party, the Indemnifying Party shall have thirty (30) days in which to notify the Indemnified Parties shall give written notification Party in writing (a the “Claim Indemnification Dispute Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in or the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery claim for indemnification is in dispute, setting forth in reasonable detail the basis of a Claim Notice, such dispute. In the Indemnifying Parties shall deliver event that an Indemnification Dispute Notice is not given to the Indemnified Parties a written response Party within the required thirty (the “Response”30) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and Party shall pay to the Indemnified Parties shall discuss Party the amount set forth in good faith the submission Claim Notice as promptly as practicable (but in no event later than ten (10) days after the end of the Dispute to a mutually acceptable alternative dispute resolution procedure such thirty (which may be non-binding or binding upon the parties, as they agree in advance30) (the “ADR Procedure”day period). In the event an Indemnification Dispute Notice is timely given to an Indemnified Party, the Indemnifying Parties and shall have thirty (30) days to resolve the Indemnified dispute. In the event the dispute is not resolved by the Parties agree upon an ADR Procedurewithin the required period, such parties shall, in consultation with the chosen dispute resolution service (Parties shall have the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties right to pursue an ADR Procedure or prevent either all available legal remedies to resolve such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)dispute.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VISection 8, the a Parent Indemnified Parties Person shall give deliver, in good faith, a written notification demand (a an “Claim NoticeIndemnification Demand”) to the Indemnifying Parties Company Stockholders’ Agent which contains (i) a description and the amount (the “Claimed Asserted Damages Amount”) of any Damages Losses incurred or reasonably expected to be incurred by the Parent Indemnified PartiesPerson, (ii) a statement that the Parent Indemnified Parties Person is entitled to indemnification under this Article VI Section 8 for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Losses. Parent shall also deliver a copy of the Claimed AmountIndemnification Demand to the Escrow Agent contemporaneously with its delivery to the Company Stockholders’ Agent. For all purposes of this Section 8.6(a), the Company Stockholders’ Agent shall be entitled to deliver Indemnification Demands to Parent on behalf of the Indemnifying Persons.
(cb) Within twenty (20) days after delivery of a Claim Noticean Indemnification Demand to the Company Stockholders’ Agent, the Indemnifying Parties Company Stockholders’ Agent shall deliver to the Parent Indemnified Parties Person a written response (the “Response”) in which the Indemnifying Parties party providing the Response shall: (i) agree that the Parent Indemnified Parties Person is entitled to receive all of the Claimed Asserted Damages Amount (in which case, the Company Stockholders’ Agent and Parent shall deliver to the Escrow Agent, within three (3) days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to distribute to Parent such number of shares of Parent Common Stock held in the Escrow Fund as have an aggregate Charter Value equal to the Asserted Damages Amount, ); (ii) agree that the Parent Indemnified Parties Person is entitled to receive part, but not all, of the Claimed Asserted Damages Amount (such portion, the “Agreed AmountPortion”) (in which case, the Company Stockholders’ Agent and Parent shall deliver to the Escrow Agent, within three (3) days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to distribute to Parent such number of shares of Parent Common Stock held in the Escrow Fund as have an aggregate Charter Value equal to the Amount of the Agreed Portion); or (iii) dispute that the Parent Indemnified Parties Person is entitled to receive any of the Claimed Asserted Damages Amount.
(c) In the event that the Company Stockholders’ Agent shall (i) dispute that the Parent Indemnified Person is entitled to receive any of the Asserted Damages Amount, or (ii) agree that the Parent Indemnified Person is entitled to only the Agreed Portion of the Asserted Damages Amount, the Company Stockholders’ Agent and Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of the indemnification claims that comprise the Asserted Damages Amount (or the portion of the Asserted Damages Amount not comprising the Agreed Portion). If the Indemnifying Parties Company Stockholders’ Agent and Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both such parties and, in the Response disputes its liability case of a demand for all recovery from the Escrow Fund, shall be furnished to the Escrow Agent. If no such agreement can be reached after good faith negotiation within sixty (60) days after delivery of a Response, either Parent or part the Company Stockholders’ Agent may demand arbitration of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures any matter set forth in Section 6.3(dthe applicable Indemnification Demand. The matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to Parent and the Company Stockholders’ Agent. In the event that, within thirty (30) days after submission of any dispute to arbitration, Parent and the Company Stockholders’ Agent cannot mutually agree on one arbitrator, then the parties shall arrange for the resolution American Arbitration Association to designate a single arbitrator in accordance with the rules of such dispute (a “Dispute”)the American Arbitration Association.
(d) During Any such arbitration shall be held in San Francisco, California, under the 60-day period following rules and procedures then in effect of the delivery American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including the respective expenses of a Response that reflects a Disputeeach party, the Indemnifying Parties fees of the arbitrator and the Indemnified Parties administrative fee of the American Arbitration Association. The arbitrator shall use good faith efforts set a limited time period and establish procedures designed to resolve reduce the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties cost and time for discovery while allowing Parent and the Indemnified Parties shall discuss Company Stockholders’ Agent an opportunity, adequate in good faith the submission sole judgment of the Dispute arbitrator to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a mutually acceptable alternative dispute resolution procedure (which may competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any indemnification claim in such Indemnification Demand shall be non-subject to the limitations set forth in this Agreement and final, binding or binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, as they agree judgment, decree or order awarded by the arbitrator. All payments required by the arbitrator shall be made within thirty (30) days after the decision of the arbitrator is rendered. Judgment upon any award rendered by the arbitrator may be entered in advance) (the “ADR Procedure”)any court having jurisdiction. In the event the Indemnifying Parties The reasonable fees, expenses and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation costs of Parent associated with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties arbitration process shall be considered a compromise negotiation “Losses” for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI Agreement (subject to the right of exceptions and the Indemnifying Selling Parties to dispute proviso in the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIdefinition thereof).
Appears in 1 contract
Sources: Merger Agreement (Vaxgen Inc)
Indemnification Claims. (a) In the event that any If an Indemnified Party is of the Parties are entitled, opinion that it has or seek to assert rights, may have a right to indemnification under this Article VIAgreement (an “Indemnification Claim”), such Indemnified Party shall promptly notify the Indemnifying Party or Parties seeking indemnification in a written notice (the a “Indemnified PartiesClaim Certificate”) shall give written notification ), prior to the other Party or Parties (the “Indemnifying Parties”) expiration of the commencement of applicable Survival Period (if applicable): (i) stating that such Indemnified Party has suffered or incurred any suit Losses, or proceeding relating to a third party claim reasonably anticipates that it will suffer or incur any Losses, for which it is entitled to indemnification pursuant to under this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe Agreement; (ii) a brief description in reasonable detail (to the extent known by available to such Indemnified Party) of the facts, circumstances or events giving rise to each item of Losses based on such Indemnified Parties) the facts constituting the basis for such suit or proceeding Party’s good faith belief thereof and the amount of all related Losses; and (iii) the claimed damages; provided, however, that no delay on the part basis for indemnification under this Agreement to which such item of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief Losses is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedrelated.
(b) In order If a Buyer becomes aware of a claim to seek indemnification be indemnified by Seller as a result of the breach of any representation and warranty made by Seller in Section 5.22(b) hereof, such Buyer shall notify Seller of such breach and, following Seller’s receipt of such notice, Seller (if it agrees that such breach has occurred) may elect to cure any such breach by undertaking to, or causing any of its Affiliates to, transfer additional assets to Buyer or its designated Affiliates, as applicable, grant perpetual, royalty-free licenses or sub-licenses to additional Intellectual Property to Buyer or its designated Affiliates under this Article VIan appropriate license, as applicable, or otherwise take other commercially reasonable actions to remedy such breach. Notwithstanding the foregoing, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d12.4(b) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure in no way prejudice or prevent either such Party from pursuing the Dispute in a court limit any of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation Buyers’ rights or seek other remedies with respect under this Article XII at any time (except to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken extent that a Loss is actually reduced or eliminated by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of Seller’s actions under this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI12.4(b)).
Appears in 1 contract
Sources: Asset Purchase Agreement (Greenbrier Companies Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to Any claim for indemnification under this Article VI, Agreement must be asserted in writing by the Seller Indemnified Party or Parties seeking indemnification (the “Buyer Indemnified Parties”) shall give written notification to Party, as the other Party or Parties (case may be, stating the “Indemnifying Parties”) nature of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, losses and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for the indemnification therefor within one (1) year from the Closing Date [(i.e., meaning that the Seller Indemnified Party or the Buyer Indemnified Party, as the case may be, must give a detailed notice to the indemnifying party hereunder of such suit claim on or proceeding and before the amount first to occur of (A) sixty (60) days after the Seller Indemnified Party or the Buyer Indemnified Party, as the case may be, first becomes aware of the claimed damagesmatter giving rise to such claim for indemnification, and (B) the four hundred twenty-fifth (425th) day following the Closing Date (being one year plus sixty (60) days) and if the indemnifying party hereunder disputes or fails to satisfy its indemnity obligation therefor, the Seller Indemnified Party or the Buyer Indemnified Party, as the case may be, must commence, and serve the indemnifying party hereunder in, a legal action on such claim no later than the five hundred forty-eighth (548th) day following the Closing Date]; provided, however, that no delay on the part foregoing shall not limit any survival period hereunder which expressly exceeds one (1) year.
(b) As soon as reasonably practicable after receipt by the party seeking indemnification of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties notice of any liability or obligation hereunder except to the extent of any damage or liability caused claim incurred by or arising out of asserted against such failure. Within 20 days after delivery of such notificationparty that is subject to indemnification under this Agreement, the Indemnifying Parties maySeller Indemnified Party or Buyer Indemnified Party, upon written as the case may be, shall give notice thereof to the applicable indemnifying party (i.e., Seller or Buyer, as the case may be), including liabilities or claims to be applied against the indemnification threshold established pursuant to this Section. The Seller Indemnified Parties seeking indemnificationParty or the Buyer Indemnified Party, as the case may be, may at its option demand indemnity under this Section as soon as a claim has been threatened by a third party, regardless of whether any actual losses have been suffered, so long as such indemnified party shall in good faith determine that such claim is not frivolous and that the indemnified party may be liable for, or otherwise incur, losses as a result thereof and shall give notice of such determination to the indemnifying party. The indemnified party shall permit the indemnifying party, at its option and expense, to assume control of the defense of any such suit or proceeding with claim by counsel selected by the indemnifying party and reasonably satisfactory to the Indemnified Party seeking indemnificationindemnified party, and to settle or otherwise dispose of the same; provided provided, however, that the Indemnifying Parties indemnified party may not assume control of at all times participate in such defense at its expense; and provided further, however, that the indemnifying party shall not, in defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of any such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate except with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesindemnified party in its sole and absolute discretion, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, or enter into any such suit settlement that does not include as an unconditional term thereof the giving by the claimant or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) plaintiff in question to the Indemnifying Parties indemnified party and its affiliates a release of all liabilities in respect of such claims, or that does not result only in the payment of money damages (which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to money damages shall thereafter be incurred paid by the Indemnified Parties, indemnifying party hereunder). If the indemnifying party shall fail to undertake such defense within thirty (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (2030) days after delivery of a Claim Noticesuch notice, or within such shorter time as may be reasonable under the Indemnifying Parties circumstances, then the indemnified party shall deliver have the right to undertake the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amountdefense, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) compromise or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution settlement of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding liability or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or claim on behalf of and for the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right account of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)indemnifying party.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate value equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Indemnification Claims. (ai) In the event that any of the Parties are A Party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 7 (the an “Indemnified PartiesParty”) shall give written notification (a “Notification of Suit”) to the other Party or Parties from whom indemnification is sought (the an “Indemnifying PartiesParty”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI Section 7 may be sought. Such notification Notification of Suit shall be given within 20 Business Days 30 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 If the Indemnifying Party is Seller, within 30 days after delivery of such notificationNotification of Suit, the Indemnifying Parties Party may, upon (A) the delivery of written notice thereof to the Indemnified Parties seeking indemnificationParty and (B) the delivery of evidence to the Indemnified Party reasonably demonstrating the ability of the Indemnifying Party (I) to defend vigorously against such suit or proceeding (including the ability to timely pay attorneys’ fees) and (II) to pay the amount of Damages that may reasonably be expected to be incurred as a result of such suit or proceeding, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory if, but only if, the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party seeking indemnificationhereunder against any Damages that such Indemnified Party incurs or has incurred in connection with such third party claim; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party is Buyer, within 30 days after delivery of such Notification of Suit, the Indemnifying Party may, upon the delivery of written notice thereof to the Indemnified Party, assume control of the defense of such suit or proceeding if, but only if, the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Damages that such Indemnified Party incurs or has incurred in connection with such third party claim; provided that the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party. If the Indemnifying Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “Non-Controlling controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(bii) In order to seek indemnification under this Article VISection 7, the an Indemnified Parties Party shall give written notification (a “Claim Notice”) to the Indemnifying Parties Party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 7 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (ciii) below) in the amount of the Claimed Amountsuch Damages.
(ciii) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, ; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) ); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party agrees that the Indemnified Party is entitled to receive all of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response a payment for the Claimed Amount, by check or by wire transfer. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response a payment for the Agreed Amount, by check or by wire transfer. If the Indemnifying Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d7(d)(iv) below for the resolution of such dispute (a “Dispute”).
(div) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss settle such Dispute by binding arbitration in good faith accordance with the submission Commercial Arbitration rules of the American Arbitration Association in effect as of the date of commencement of arbitration. After the expiration of the aforementioned 60-day period, either Party may demand that any Dispute be submitted to arbitration in writing. Such demand shall be served on the other Party in the manner prescribed in Section 10(g) below, and shall set forth a short statement of the factual basis for the claim, specifying the matter or matters to be arbitrated. The arbitration will be held in the City of New York unless the Parties mutually acceptable alternative dispute resolution procedure (which agree to have the arbitration held elsewhere, and judgment upon the award made therein may be non-binding entered by any court having jurisdiction thereof; provided that nothing contained in this Section 7(d)(iv) will be construed to limit or binding upon preclude a Party from bringing any action in any court of competent jurisdiction in the parties, as they agree in advance) United States for injunctive or other provisional relief to compel the other Party hereto to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings. The arbitration shall be conducted by three arbitrators (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR ServiceArbitration Board”), promptly agree upon a format and timetable for the ADR Procedureone of whom shall be selected by Buyer, agree upon the rules applicable to the ADR Procedureone of whom shall be selected by Seller, and promptly undertake one of whom shall be selected by the ADR Procedureother two arbitrators upon their mutual agreement. The Arbitration Board shall conduct such evidentiary or other hearings as it deems necessary or appropriate and thereafter shall make a final determination applying the internal laws of the State of New York as soon as practicable after the conclusion of the hearings. Any arbitration pursuant to this Section 7(d)(iv) shall be conducted by the Arbitration Board as the Parties may mutually agree or, if the Parties do not so agree, under the guidance of the Federal Rules of Civil Procedure and the Federal Rules of Evidence; provided that the Arbitration Board shall not be required to comply strictly with such rules in conducting any such arbitration. The Arbitration Board shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant, including, without limitation, specific performance of any obligation under this Agreement, the awarding of punitive damages, the issuance of an injunction or the imposition of sanctions for abuse or frustration of the arbitration process. The final and binding decision of the Arbitration Board shall be by a majority of the arbitrators on the Arbitration Board. Such decision and award of the Arbitration Board shall be in writing and counterpart copies thereof shall be delivered to each Party. In rendering such decision and award, the Arbitration Board shall not add to, subtract from or otherwise modify the provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Agreement. Either Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute arbitration may seek to have the ruling of the Arbitration Board entered in any court having jurisdiction thereof. Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by the Arbitration Board and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the Arbitration Board. Upon the entry of any order dismissing or staying any action or proceeding filed contrary to the preceding sentence, the Party which filed such action or proceeding shall promptly pay to the other Party the reasonable attorney’s fees, costs and expenses incurred by such other Party prior to the completion entry of such ADR Procedureorder. Any ADR Procedure undertaken by All aspects of the Indemnifying Parties and the Indemnified Parties arbitration shall be considered a compromise negotiation for purposes confidential and shall not be disseminated by any Party with the exception of federal the ability and state rules opportunity to prosecute its claim or assert its defense to any such claim. The Arbitration Board shall be required to issue prescriptive orders as may be required to enforce and maintain this covenant of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in confidentiality during the course of the ADR Procedure by or on behalf arbitration and after the conclusion of the Indemnifying Partiesarbitration so that the result and underlying data, information, materials and other evidence are forever withheld from public dissemination with the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes exception of its subpoena by a court of competence jurisdiction in any litigation or other an unrelated proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible)brought by a third party. The fees and expenses of any ADR Service used the Arbitration Board shall be shared equally by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Sources: Asset Purchase Agreement (Napro Biotherapeutics Inc)
Indemnification Claims. (a) No claim for Losses pursuant to Section 8.2(a) or 8.3(a) shall be brought against an indemnifying Party after the applicable Expiration Date.
(b) In the event a Purchaser Indemnified Party becomes aware of a claim by a Third Party (including any action or proceeding commenced or threatened to be commenced by any Third Party) that any such Purchaser Indemnified Party reasonably believes may result in a demand against Seller pursuant to Section 8.2, such Purchaser Indemnified Party shall promptly notify Seller in writing of such claim. Likewise, in the Parties are entitledevent a Seller Indemnified Party becomes aware of a claim by a Third Party that such Seller Indemnified Party reasonably believes may result in a demand against Purchaser for indemnification pursuant to Section 8.3, or seek to assert rights, to indemnification under such Seller Indemnified Party shall promptly notify Purchaser in writing of such claim. For purposes of this Article VISection 8.4, the Party or Parties seeking indemnification giving any such notice (the a “Indemnified PartiesClaim Notice”) shall give written notification be deemed to the other Party or Parties (be the “Indemnifying Parties”) of Notifying Party,” and the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification Party receiving the Claim Notice shall be given within 20 Business Days after receipt deemed to be the “Notified Party.” The Claim Notice shall be accompanied by reasonable supporting documentation submitted by the Indemnified Parties of notice of Third Party making such suit or proceeding, claim and shall describe in reasonable detail (to the extent known by the Indemnified PartiesNotifying Party) the facts constituting the basis for such suit or proceeding claim and the amount of the claimed damagesLosses; provided, however, that no delay or failure on the part of the Indemnified Parties Notifying Party in notifying the Indemnifying Parties delivering a Claim Notice shall relieve the Indemnifying Parties of Notified Party from any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within 20 twenty (20) days after delivery receipt of such notificationany Claim Notice, the Indemnifying Parties Notified Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationNotifying Party, assume control of the defense of such suit or proceeding the claim referred to therein at the Notified Party’s sole cost and expense with counsel reasonably satisfactory to the Indemnified Notifying Party. If the Notified Party seeking indemnification; provided that the Indemnifying Parties may does not so assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against such claim, the Indemnified Notifying Party seeking indemnification. If shall control the Indemnifying Parties do not so assume control defense of such defense, claim at the Indemnified Parties seeking indemnification shall control such defensesole cost and expense of the Notified Party. The Party not controlling the defense of such defense claim (the “Non-Controlling controlling Party”) may participate therein at its own expense; provided provided, however, that if the Indemnifying Parties Notified Party assumes control of the defense of such defense claim and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties Notified Party and the Indemnified Parties seeking indemnification Notifying Party have materially conflicting interests or different defenses available with respect to such suit or proceedingclaim which cause the Notifying Party to hire its own separate counsel with respect to such claim, the reasonable fees and expenses of counsel to the Indemnified Parties Notifying Party shall be considered “DamagesLosses” for purposes of this AgreementAgreement (subject to the proviso in the definition thereof). The Party or Parties controlling the defense of such defense claim (the “Controlling Party”) shall keep the Non-Controlling controlling Party reasonably advised of the status of such suit or proceeding claim and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding claim (including copies of any summons, complaint or other pleading which may have been served on such party Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at claim. Neither the sole cost and expense of Notified Party nor the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Notifying Party shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding claim without the prior written consent of the Indemnified Partiesother Party, which shall not be unreasonably withheld or delayed; provided provided, however, that the consent of the Indemnified Parties Notifying Party shall not be required with respect to any such settlement or judgment if the Indemnifying Parties Notified Party agrees in writing to pay any or cause to be paid all amounts payable pursuant to such settlement or judgment (subject to the other limitations in this Article 8), including all monetary obligations of the Notifying Party, and such settlement or judgment neither includes a complete release nor creates any non-monetary obligations of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedNotifying Party.
(bc) In Except as otherwise provided in Section 8.4(b) with respect to Third Party claims for which notice has previously been provided, in order to seek indemnification under this Article VI8, the a Person entitled to indemnification under Section 8.2 or Section 8.3 (an “Indemnified Parties Party”) shall give deliver a written notification demand (a an “Claim NoticeIndemnification Demand”) to Seller (in the Indemnifying Parties case of an Indemnification Demand from a Purchaser Indemnified Party) or Purchaser (in the case of an Indemnification Demand from a Seller Indemnified Party) which contains (i) a description and the amount (the “Claimed Asserted Damages Amount”) of any Damages Losses incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI 8 for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Losses.
(cd) Within twenty (20) days after delivery of a Claim Noticean Indemnification Demand to Seller or Purchaser (as the case may be), the Indemnifying Parties such Party shall deliver to the Indemnified Parties other Party a written response (the “Response”) in which the Indemnifying Parties Party providing the Response shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Asserted Damages Amount (in which case the Response shall be accompanied by a payment to the Indemnified Party of the full Asserted Damages Amount, by check or wire transfer; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Asserted Damages Amount (such portion, the “Agreed AmountPortion”) (in which case the Response shall be accompanied by a payment to the Indemnified Party of the Agreed Portion, by check or by wire transfer); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Asserted Damages Amount.
(e) In the event that the Party providing a Response pursuant to Section 8.4(d) shall (i) dispute that the Indemnified Party is entitled to receive any of the Asserted Damages Amount, or (ii) agree that the Indemnified Party is entitled to only the Agreed Portion of the Asserted Damages Amount, Purchaser and Seller shall attempt in good faith to agree upon the rights of the respective Party with respect to each of the indemnification claims that comprise the Asserted Damages Amount (or the portion of the Asserted Damages Amount not comprising the Agreed Portion). If the Indemnifying Parties in the Response disputes its liability for all Purchaser and Seller should so agree, a memorandum setting forth such agreement shall be prepared and signed by both Parties. If no such agreement can be reached after good faith negotiation within 60 days after delivery of a Response, either Purchaser or part Seller may demand arbitration of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures any matter set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties applicable Indemnification Demand. The matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to Purchaser and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)Seller. In the event that, within 30 days after submission of any dispute to arbitration, Purchaser and Seller cannot mutually agree on one arbitrator, then the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable shall arrange for the ADR Procedure, agree upon the rules applicable American Arbitration Association to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in designate a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification single arbitrator in accordance with the provisions rules of this Article VI, and the American Arbitration Association.
(iiif) the Buyer Any such arbitration shall be reimbursedheld in Los Angeles County, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnificationCalifornia, under the terms rules and procedures then in effect of this Article VI)the American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including the respective expenses of each Party, the fees of the arbitrator and the administrative fee of the American Arbitration Association. The arbitrator shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing Purchaser and Seller an opportunity, adequate in the sole judgment of the arbitrator, to discover relevant information from the opposing Party about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any indemnification claim in such Indemnification Demand shall be final, binding and conclusive upon the Parties. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator. All payments required by the arbitrator shall be made within 30 days after the decision of the arbitrator is rendered. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction.
Appears in 1 contract
Sources: Asset Purchase Agreement (Armata Pharmaceuticals, Inc.)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the An Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or legal proceeding relating to a third party claim for which indemnification against such Indemnified Party that such Indemnified Party reasonably believes will result in an Indemnifiable Loss pursuant to this Article VI may be sought9 (a “Third Party Action”). Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Party (which, in the case of Company Stockholders, shall mean the Stockholder Representative) of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no a delay or failure on the part of the Indemnified Parties Party in so notifying the Indemnifying Parties Party shall not relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery In the event Parent or any of such notificationits Affiliates is the Indemnified Party, Parent shall have the right to conduct and control, through counsel of its choosing, the defense, compromise or settlement of any Third Party Action, as to which indemnification will be sought by Parent hereunder. The Indemnifying Parties may, upon written notice thereof Party shall not be entitled to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified any Third Party seeking indemnification; provided that Action, unless the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal Party (i) admits its liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking for indemnification shall control such defensehereunder and (ii) demonstrates its ability to pay its indemnification obligation. The Controlling Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise reasonably cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Indemnified Party with respect to a Third Party Action shall be considered “Damages” Indemnifiable Losses for purposes of this AgreementAgreement if (i) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 9.3(a) or (ii) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI9, the an Indemnified Parties Party shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountParty.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) , in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case, (A) if the Indemnifying Party is the Company Stockholders, the Response shall be accompanied by an acknowledgement executed by the Stockholder Representative reflecting the appropriate set off first against the Escrow Shares, and then to the extent applicable, to any issuances which may become due under the CVR Agreement, (B) if the Indemnifying Party is the Parent, the Response shall be accompanied by a payment by the Parent to the Exchange Agent, by check or wire transfer for distribution to Company Stockholders of the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive partthe Agreed Amount (in which case the Response shall be accompanied by a payment or acknowledgement, but not allas the case may be, by the Indemnifying Party to the Indemnified Party of the Claimed Amount (the “Agreed Amount”, as set forth in clause (i) above), or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, If the Indemnifying Parties and Party disputes the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss Claim Notice as set forth in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advancec)(iii) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedureabove, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall will be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification resolved in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 10.12.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third third-party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “Nonthe"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).-58-
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for For purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice” relating to a particular Action (as defined below) or representation, warranty, covenant or other agreement shall be deemed to have been given if any Indemnified Party, acting in good faith, delivers to Seller or Buyer, as applicable (the “Indemnifier”) to the Indemnifying Parties which contains ), a written notice stating that such Indemnified Party reasonably believes that there is or has been a possible Action or breach of such representation, warranty, covenant or other agreement and containing (i) a brief description of the circumstances supporting such Indemnified Party’s belief that there is or has been such a possible Action or breach, and (ii) a non-binding, preliminary estimate of the aggregate dollar amount of the actual and potential Losses that may be a direct or indirect result of such possible Action or breach (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount).
(cb) Within twenty (20) days after During the 60-day period commencing upon the delivery to the Indemnifier of a Claim NoticeNotice (the “Dispute Period”), the Indemnifying Parties Indemnifier shall deliver to the Indemnified Parties Party who delivered the Claim Notice a written response (the “ResponseResponse Notice”) in which the Indemnifying Parties shall: Indemnifier (i) agree agrees that the Indemnifier owes the full Claimed Amount to the Indemnified Parties is entitled to receive all of the Claimed Amount, Party; (ii) agree agrees that the Indemnified Parties is entitled to receive part, Indemnifier owes part (but not all, ) of the Claimed Amount (the “Agreed Amount”) to the Indemnified Party; or (iii) dispute asserts that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or Indemnifier owes no part of the Claimed Amount, the Indemnifying Parties and Amount to the Indemnified Parties Party. Any part of the Claimed Amount that the Indemnifier does not agree the Indemnifier owes to the Indemnified Party pursuant to the Response Notice shall follow be referred to as the procedures set forth “Contested Amount.” If a Response Notice is not received by the Indemnified Party prior to the expiration of the Dispute Period, then the Indemnifier shall be conclusively deemed to have agreed that the Indemnifier owes the full Claimed Amount to the Indemnified Party.
(c) If (i) the Indemnifier delivers a Response Notice agreeing that the Indemnifier owes the full Claimed Amount to the Indemnified Party, or (ii) the Indemnifier does not deliver a Response Notice during the Dispute Period, then the Claimed Amount shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in Section 6.3(d) for the resolution of such dispute (a “Dispute”)immediately available funds.
(d) During If the 60Indemnified Party delivers a Response Notice agreeing that the Indemnifier owes less than the full Claimed Amount to the Indemnified Party, then the Agreed Amount shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in immediately available funds.
(e) If the Indemnifier delivers a Response Notice indicating that there is a Contested Amount, the Indemnifier and the Indemnified Party shall attempt in good faith to resolve the dispute related to the Contested Amount. If the Indemnifier and the Indemnified Party resolve such dispute as to all or a portion of the Contested Amount, then the Indemnifier and the Indemnified Party shall execute a written settlement agreement, and an amount equal to the amount specified in such settlement agreement shall immediately become due and owing from the Indemnifier to the Indemnified Party, and shall be promptly paid by the Indemnifier to the Indemnified Party in immediately available funds.
(f) If the Indemnifier and the Indemnified Party are unable to resolve any part of the dispute relating to any Contested Amount during the 30-day period following commencing upon the delivery of a the Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) Notice (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR ServiceInitial Resolution Period”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies then with respect to the Dispute prior remaining Contested Amount, either the Indemnified Party or the Indemnifier may submit the unresolved portion of the claim described in the Claim Notice to binding arbitration in accordance with the completion Commercial Arbitration Rules then in effect of such ADR Procedurethe American Arbitration Association (“AAA”). Any ADR Procedure undertaken The arbitration hearing will be administered by an arbitration service mutually agreed upon by the Indemnifying Parties Indemnifier and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible)Party. The fees and expenses of any ADR Service used arbitration hearing will be held in Morrisville, North Carolina. Arbitration will be conducted by one arbitrator, mutually selected by the Indemnifying Parties Indemnifier and the Indemnified Parties shall be considered to be DamagesParty; provided, however, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Indemnifier and the Indemnified Parties shall pay all such fees Party fail to mutually select an arbitrator within 5 business days following the expiration of the Initial Resolution Period, then arbitration will be conducted by three arbitrators: one selected by the Indemnifier; one selected by the Indemnified Party; and expensesthe third selected by the first 2 arbitrators. Notwithstanding If either the Indemnifier or the Indemnified Party fails to select an arbitrator within 10 Business Days following the expiration of the Initial Resolution Period, then the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy select the second arbitrator. The Indemnifier and the Indemnified Party agree to use commercially reasonable efforts to cause the arbitration hearing to be conducted within 75 days after the appointment of the mutually-selected arbitrator or the last of the three arbitrators, as the case may be. The arbitrator(s) shall issue a final decision within 15 days after the conclusion of the arbitration hearing. The parties shall be entitled to only limited discovery, at the discretion of the arbitrator(s), and agree that no discovery request shall be served later than 30 days prior to the commencement of the arbitration hearing and all discovery shall be completed at least 10 days prior to the commencement of the arbitration hearing. The final decision of the arbitrator(s) shall relate solely: (i) to whether the Indemnified Party is entitled to recover the Contested Amount (or a portion thereof), and the portion of such obligation, with prior notice Contested Amount the Indemnified Party is entitled to but without prior consent from the Indemnifying Selling Parties, recover; and (ii) to the Buyer may subsequently make determination of the non-prevailing party as provided below. The arbitrator(s) shall furnish the final decision to the Indemnifier and the Indemnified Party in writing and the final decision shall constitute a claim for indemnification conclusive determination of the issue(s) in accordance question, binding upon the Indemnifier and the Indemnified Party and shall not be contested by either of them. In the final decision, the arbitrator(s) shall determine whether the Indemnified Party or the Indemnifier is the non-prevailing party in the arbitration. The non-prevailing party shall pay the reasonable expenses (including attorneys’ fees) of the prevailing party, and the fees and expenses associated with the provisions of this Article VI, arbitration (including the arbitrators’ fees and (iii) expenses). The final decision shall specify the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right amount of the Indemnifying Selling Parties expenses and fees to dispute be paid by the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)non-prevailing party.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties Parent or the Company Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, the Party Parent or Parties seeking indemnification the Company Stockholders (as the “Indemnified Parties”case may be) shall give written notification to the other Party Company Stockholders or Parties the Parent (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 twenty (20) Business Days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 twenty (20) days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the sixty (60-) day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such sixty (60-) day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the BuyerParent, the Company Surviving Corporation or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer Parent may be entitled to indemnification pursuant to this Article VI, and the Buyer Parent reasonably determines that the Company Surviving Corporation or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Parent shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesStockholders, (ii) the Buyer Parent may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer Parent shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Stockholders to dispute the BuyerParent’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) For purposes of this Section 6.3 and the last two sentences of Section 6.4, any references to the Company Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the CCI Indemnification Representative.
(f) The CCI Indemnification Representative shall have full power and authority on behalf of each Company Stockholder or Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders or Indemnifying Stockholders under this Article VI. The CCI Indemnification Representative shall have no liability to any Company Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of the Company Stockholders or Indemnifying Stockholders pursuant to this Article VI and shall not be responsible to any Company Stockholder or Indemnifying Stockholder for any losses or damages the Company Stockholders or Indemnifying Stockholders may suffer by the performance of his duties under this Agreement. The Parent and the Surviving Corporation shall fully indemnify and hold harmless the CCI Indemnification Representative from and against any such losses or damages and any other losses or damages incurred by the CCI Indemnification Representative related to or arising from the performance of his duties as CCI Indemnification Representative, including any legal fees incurred in defense of actions or claims asserting such losses or damages, other than any such losses or damages arising from willful violation of the law or gross negligence in the performance of his duties as CCI Indemnification Representative under this Agreement.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs, or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint complaint, or other pleading which may have been served on such party and any written claim, demand, invoice, billing billing, or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount), or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Agreement, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim or in satisfaction of an obligation to pay the Merger Adjustment Amount shall be the greater of (x) $2.00 per share or (y) the average of the closing sales price of such shares on the principal market on which such shares are traded or quoted for the five consecutive days ending on the date both the Buyer and the Indemnification Representative deliver to the Escrow Agent a written instrument instructing the Escrow Agent as to the distribution of such shares, multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions opinions, and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party, or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions opinions, and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision, or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Company Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Company Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative, and (ii) if the Company Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative. The Indemnification Representative shall have full power and authority on behalf of each Company Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Company Stockholder for any action taken or omitted on behalf of the Company Stockholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Udate Com Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, A Person entitled to indemnification under this Article VI, the Party or Parties seeking indemnification VII (the an “Indemnified PartiesParty”) shall give reasonably prompt written notification to any other Person obligated to indemnify the other Indemnified Party or Parties (the an “Indemnifying PartiesParty”) of the commencement commencement, or threatened commencement, of any suit or proceeding relating to Third-Party Action that the Indemnified Party reasonably expects may result in a third party claim for which indemnification pursuant to this Article VI may be soughtVII. For purposes of notices and communications with respect to the Company Stockholders as potential indemnitees or indemnitors pursuant to this Article VII, “Indemnified Party” and “Indemnifying Party” shall mean the Company Stockholder Representative on behalf of the Company Stockholders. Such notification shall be given within 20 Business Days reasonably promptly after receipt by the Indemnified Parties Party of notice of such suit Third-Party Action or proceedingthreatened Action, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding Third-Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Parties Party in so notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery .
(b) The Indemnifying Party shall be entitled, at its own and sole expense, to participate in any defense of such notification, Third-Party Action. The Indemnified Party shall have the Indemnifying Parties may, upon written notice thereof right in its sole and absolute discretion to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified any Third-Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought Action against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that Party shall thereafter from time to time promptly provide to the Indemnifying Parties Party copies of all pleadings filed and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to all orders issued in such suit or proceedingThird-Party Action, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider consult in good faith recommendations made by with the Non-Controlling Indemnifying Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served at reasonable periodic intervals on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in matters regarding the defense and potential settlement of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified PartiesThird-Party Action. The Indemnified Parties Party shall not agree have the right to any settlement ofsettle, adjust or the entry of any judgment arising from, compromise any such suit or proceeding without Third-Party Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission. Action, subject to Indemnifying Party’s right to dispute its obligation to indemnify; provided, however, that except with the prior written consent of the Indemnifying Parties, Party (which consent shall not be unreasonably withheld withheld, delayed or delayedconditioned), no settlement of any such Third-Party Action with third-party claimants shall be determinative of any Losses relating to such matter.
(bc) In order to seek indemnification under this Article VIVII, the Indemnified Parties shall give written notification (Party shall, as promptly as reasonably practicable, deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountParty.
(cd) Within twenty (20) business days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the a “Response”) ), in which the Indemnifying Parties shallParty shall either: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (or the “Agreed Amount”) Amount or (iiiii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(de) During the 60twenty (20)-business-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60twenty (20)-business-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of either Party may submit the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon court of competent jurisdiction in accordance with the parties, as they agree in advance) (the “ADR Procedure”)terms of this Agreement. In the event of a violation of Section 7.1(a)(vii) or Section 7.1(b)(iii) by the Company or the Company Stockholders, which violation has been determined by a court or other competent judicial authority, in a final non-appealable order or decision, then the Indemnifying Parties and Party shall deliver to the Indemnified Parties agree upon an ADR ProcedureParty, such parties shallpromptly following the resolution of the Dispute (whether by mutual agreement, in consultation judicial decision or otherwise), payment of any amount required to be paid to the Indemnified Party consistent with the chosen dispute terms of the resolution service (of the “ADR Service”)Dispute, promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedureextent not satisfied via the forfeiture of the right to be issued Holdback Shares and, if applicable, the forfeiture and cancellation of Buyer Shares pursuant to Section 7.4.
(f) The Company Stockholder Representative shall have full power and authority on behalf of each Company Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and promptly undertake execute or waive any and all rights of, the ADR ProcedureCompany Stockholders under this Article VII. The provisions of this Section 6.3(d) Company Stockholder Representative shall not obligate the Indemnifying Parties and the Indemnified Parties have no liability to pursue an ADR Procedure any Company Stockholder for any action taken or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or omitted on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Stockholders pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)VII.
Appears in 1 contract
Sources: Agreement and Plan of Merger (MeiraGTx Holdings PLC)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to Upon receipt by a party from whom indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties is being sought (the “Indemnifying PartiesParty”) pursuant to Section 10.1 of a certificate signed by any officer of Purchaser (an “Officer’s Certificate”) stating that Damages exist with respect to the indemnification obligations of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceedingShareholders set forth in Section 10.1, and shall describe specifying in reasonable detail (the individual items of such Damages included in the amount so stated, the date each such item was paid, or properly accrued or arose, and the nature of the misrepresentation, breach of warranty, covenant or claim to which such item is related, Purchaser shall, subject to the extent known provisions of this Section 10, be entitled to receive (i) from the applicable Shareholders (as provided by the Indemnified PartiesSection 10.1(f)) the facts constituting the basis for such suit or proceeding and an amount equal to the amount of such Damages and (ii) in the claimed damages; provided, however, that no delay on the part case of the Indemnified Parties in notifying Environmental Indemnity, from the Indemnifying Parties Escrow Fund a portion of such Escrow Fund having a value equal to such Damages and such amount shall relieve the Indemnifying Parties of any liability or obligation hereunder except no longer be payable to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedKita Shareholders.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties The Indemnifying Party shall give written notification have a period of thirty (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (2030) days from and after delivery of a Claim Notice, the Indemnifying Parties shall any Officer’s Certificate to deliver to the Indemnified Parties Purchaser a written response (the “Response”) response, in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Purchaser is entitled to receive all of the Claimed Amountrequested Damages (in which case, if in relation to the Environmental Indemnity and the Escrow Fund, the response shall be accompanied by written notice executed by the Kita Shareholders instructing the Escrow Agent to disburse the requested Damages to Purchaser) or (ii) agree dispute that the Indemnified Parties Purchaser is entitled to receive part, but not all, of the Claimed Amount requested Damages.
(the “Agreed Amount”c) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party disputes any claim or claims made in any Officer’s Certificate, Purchaser shall have thirty (30) days to respond in a written statement to the Response disputes its liability for all or part objection of the Claimed AmountIndemnifying Party. If after such thirty (30) day period there remains a dispute as to any claims, the Indemnifying Parties Party and the Indemnified Parties Purchaser shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss attempt in good faith for thirty (30) days to agree upon the submission rights of the Dispute respective parties with respect to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)each of such claims. In the event case of the Indemnifying Parties Environmental Indemnity and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided thatEscrow Fund, if the Indemnifying Parties Kita Shareholders and Purchaser should so agree, a memorandum setting forth such agreement shall be prepared and signed by Purchaser and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect Kita Shareholders and shall be delivered to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible)Escrow Agent. The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Escrow Agent shall be entitled to satisfy rely on any such obligation, with prior notice memorandum for the release of any Escrow Amount to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification Purchaser in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)such memorandum and the Escrow Agreement.
Appears in 1 contract
Sources: Share Purchase Agreement (Cohu Inc)
Indemnification Claims. (a) In the event that order for any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order Parent Indemnitee to seek indemnification under this Article VISection 10, the Indemnified Parties Parent shall give deliver, in good faith, a written notification demand (a an “Claim NoticeIndemnification Demand”) to the Indemnifying Parties Stockholders’ Representative and the Escrow Agent which contains (i) a reasonably detailed description of the claims for which indemnification is sought and the amount (the “Claimed Asserted Damages Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParent Indemnitee, (ii) a statement that the Indemnified Parties Parent Indemnitee is entitled to indemnification under this Article VI Section 10 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(cb) Within twenty thirty (2030) days after delivery of a Claim Noticean Indemnification Demand to the Stockholders’ Representative, the Indemnifying Parties Stockholders’ Representative shall deliver to the Indemnified Parties Parent a written response (the “Response”) in which the Indemnifying Parties shallStockholders’ Representative shall either: (i) agree that the Indemnified Parties Parent Indemnitee is entitled to receive all of the Claimed Asserted Damages Amount, in which case the Stockholders’ Representative and Parent shall deliver to the Escrow Agent, within five days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to disburse the full Asserted Damages Amount to the extent of the remaining Escrow Funds to Parent; (ii) agree that the Indemnified Parties Parent Indemnitee is entitled to receive part, but not all, of the Claimed Asserted Damages Amount (such portion, the “Agreed AmountPortion”) ), in which case the Stockholders’ Representative and Parent shall deliver to the Escrow Agent, within five days following the delivery of the Response, a written notice executed by both such parties instructing the Escrow Agent to disburse the Agreed Portion to the extent of the remaining Escrow Funds to Parent; or (iii) dispute that the Indemnified Parties Parent Indemnitee is entitled to receive any of the Claimed Asserted Damages Amount.
(c) In the event that the Stockholders’ Representative shall (i) dispute that the Parent Indemnitee is entitled to receive any of the Asserted Damages Amount, or (ii) agree that the Parent Indemnitee is entitled to only the Agreed Portion of the Asserted Damages Amount, the Stockholders’ Representative and Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of the indemnification claims that comprise the Asserted Damages Amount (or the portion of the Asserted Damages Amount not comprising the Agreed Portion). If the Indemnifying Parties in Stockholders’ Representative and Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both such parties and shall be promptly furnished to the Response disputes its liability for all Escrow Agent. If no such agreement can be reached after good faith negotiation within sixty (60) days after delivery of a Response, either Parent or part the Stockholders’ Representative may demand arbitration of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures any matter set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)applicable Indemnification Demand.
(d) During the 60-day period following the delivery of a Response that reflects a DisputeIf no agreement is reached, the Indemnifying Parties matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to Parent and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”)Stockholders’ Representative. In the event the Indemnifying Parties that, within thirty (30) days after submission of any dispute to arbitration, Parent and the Indemnified Parties Stockholders’ Representative cannot mutually agree upon an ADR Procedureon one arbitrator, such then the parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable shall arrange for the ADR Procedure, agree upon the rules applicable American Arbitration Association to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in designate a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification single arbitrator in accordance with the provisions rules of this Article VI, and (iii) the Buyer American Arbitration Association. Any such arbitration shall be reimbursedheld in San Diego County, California, under the rules and procedures then in accordance with effect of the provisions American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including the respective expenses of this Article VIeach party, the fees of the arbitrator and the administrative fee of the American Arbitration Association. The arbitrator shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing Parent and the Stockholders’ Representative an opportunity, adequate in the sole judgment of the arbitrator to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any indemnification claim in such Damages for which it is entitled to indemnification pursuant to this Article VI (Indemnification Demand shall be subject to the right limitations set forth in this Agreement and final, binding and conclusive upon the parties. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator. All payments required by the arbitrator shall be made within 30 days after the decision of the Indemnifying Selling Parties arbitrator is rendered. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction.
(e) In no event shall the Indemnitors be responsible or liable for any Damages or other amounts that are purely speculative in nature.
(f) Notwithstanding anything to dispute the Buyer’s entitlement contrary in this Agreement (but subject to indemnificationSection 10.3), the Indemnitors under this Agreement shall be liable for only that portion of the aggregate Damages under this Section 10 (in each case, determined after disregarding all “material” or similar qualifications, thresholds or exceptions set forth therein, so that Damages thereunder shall be determined from dollar one) for which they would otherwise be liable which exceeds $170,000, except for Damages relating to the following, which shall be payable from dollar one without regard to the deductible and will not count against the deductible:
(i) any breaches of the representations and warranties set forth in Sections 3.1, 3.2, or the amount 3.3; and
(ii) any Damages, fees, costs or expenses for which it is entitled to indemnification, a Parent Indemnitee seeks indemnification under the terms Section 10.2(a)(iv) of this Article VI)Agreement in connection with or in relation to, the matters described in Schedule 10.2(a)(iv) attached hereto.
Appears in 1 contract
Sources: Merger Agreement (Volcano Corp)
Indemnification Claims. (a) In the event that any of the Parties are entitled, The Buyer or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) Parent shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Representatives of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Buyer or Parent of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent then known by the Indemnified PartiesBuyer or Parent) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no . No delay or failure on the part of the Indemnified Parties Buyer or Parent in so notifying the Indemnifying Parties Representatives shall relieve the Indemnifying Parties Company Shareholders of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within 20 days after delivery of such notification, the Indemnifying Parties Representatives may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer and Parent, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationBuyer and Parent; provided that (i) the Indemnifying Parties Representatives may only assume control of such defense if (A) they acknowledge in writing to the Buyer and Parent on behalf of all of the Company Shareholders that any damages, fines, costs or other liabilities that may be assessed against the Buyer or Parent in connection with such Third Party Action constitute Damages for which the Buyer or Parent shall be indemnified pursuant to this Article VI, (B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the current balance of the Escrow Fund, and (C) an adverse resolution of the Third Party Action would not have a material adverse effect on the goodwill or reputation of the Buyer or Parent or the business, operations or future conduct of the Buyer or Parent and (ii) the Representatives may not assume control of the defense of a suit any Third Party Action involving Taxes or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer or Parent or any of its subsidiaries. If the Indemnifying Parties Representatives do not, or are not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer and/or Parent shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost Buyer and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Parent with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) the Buyer or Parent controls the defense of such Third Party Action pursuant to the terms of this Section 6.2(a) or (ii) the Representatives assume control of such defense and the Buyer or Parent reasonably concludes that the Company Shareholders and the Buyer or Parent have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Neither the Company Shareholders nor the Representatives shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesBuyer and Parent, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties Buyer and Parent shall not be required if the Indemnifying Parties agrees Representatives, on behalf of all of the Company Shareholders, agree in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Buyer and Parent from further liability and has no other materially adverse effect on the Indemnified PartiesBuyer or Parent. The Indemnified Parties Except as provided in Section 6.2(e) below, the Buyer and Parent shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesRepresentatives, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties Buyer or Parent shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountRepresentatives.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Representatives shall deliver to the Indemnified Parties Buyer or Parent, as applicable, a written response (the “Response”) , in which the Indemnifying Parties Representatives, on behalf of all of the Company Shareholders, shall: (i) agree that the Indemnified Parties Buyer or Parent, as applicable, is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a letter from the Representatives instructing the Escrow Agent to disburse to the Buyer or Parent, as applicable, from the Escrow Fund an amount in cash equal to the Claimed Amount), (ii) agree that the Indemnified Parties Buyer or Parent, as applicable, is entitled to receive part, but not all, of the Claimed Agreed Amount (in which case the “Response shall be accompanied by a letter from the Representatives instructing the Escrow Agent to disburse to the Buyer or Parent, as applicable, from the Escrow Fund an amount in cash equal to the Agreed Amount”) or (iii) dispute that the Indemnified Parties Buyer or Parent, as applicable, is entitled to receive any of the Claimed Amount. If The Representatives may contest the Indemnifying Parties in the Response disputes its liability for payment of all or part a portion of the Claimed AmountAmount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Buyer or Parent, as applicable, is entitled to indemnification under this Article VI. If no Response is delivered by the Representatives within such 20-day period, the Indemnifying Parties and Company Shareholders shall be deemed to have agreed that all of the Indemnified Parties Claimed Amount is owed to the Buyer or Parent, as applicable. Acceptance by the Buyer or Parent, as applicable, of partial payment of any Claimed Amount shall follow be without prejudice to the procedures set forth in Section 6.3(d) for Buyer’s or Parent’s right to claim the resolution balance of any such dispute (a “Dispute”)Claimed Amount.
(d) During the 6030-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Representatives and the Indemnified Parties Buyer shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 6030-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute any party may commence an action to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, resolve such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided thatjurisdiction in the Province of Alberta in accordance with Section 9.11. If the Buyer is seeking to enforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, if the Indemnifying Parties Representatives and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect Buyer shall deliver to the Dispute prior to Escrow Agent, promptly following the completion resolution of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses what (if any) portion of any ADR Service used by the Indemnifying Parties and the Indemnified Parties Escrow Fund shall be considered distributed to the Buyer (which notice shall be Damages; provided, that if consistent with the Indemnifying Parties are determined not to be liable for Damages in connection with such terms of the resolution of the Dispute, the Indemnified Parties shall pay all such fees and expenses. ).
(e) Notwithstanding the other provisions of this Section 6.36.2, if a third party asserts (other than by means of a lawsuitlawsuit or a tax reassessment) that the Buyer, the Company or any of their Subsidiaries Buyer is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesRepresentatives, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Representatives, on behalf of the Company Shareholders, to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) The Representatives shall have full power and authority on behalf of each Company Shareholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Shareholders under this Article VI. The Representatives shall have no liability to any Company Shareholders for any action taken or omitted on behalf of the Company Shareholders pursuant to this Article VI.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent. The Claim Notice shall be delivered by the Indemnified Party as soon as practicable after the Indemnified Party has knowledge of the related Damages, provided however, that no delay on the part of the Indemnified Party in delivering such Claim Notice shall relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure.
(c) Within twenty (20) 20 days after delivery of a Claim NoticeNotice in the form required by Section 6.3(b), the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, then such payment shall not be made by check or wire transfer, and instead the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, then such payment shall not be made by check or wire transfer, and instead the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the average closing price for 5 trading days preceding the date of this Agreement (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the date hereof), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Shareholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnificationindemnification (including without limitation to the extent prejudiced by the actions taken by the Indemnified Party hereunder), under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Shareholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Shareholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Shareholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Shareholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Shareholder for any action taken or omitted on behalf of the Indemnifying Shareholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Be Free Inc)
Indemnification Claims. (a) In the event that any of the Parties Parent or the Company Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, the Party Parent or Parties seeking indemnification the Company Stockholders (as the “Indemnified Parties”case may be) shall give written notification to the other Party Company Stockholders or Parties the Parent (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions .
(e) For purposes of this Section 6.36.3 and the last two sentences of Section 6.4, if any references to the Company Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a third party asserts (other than by means right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative. The Indemnification Representative shall have full power and authority on behalf of a lawsuit) that the Buyereach Company Stockholders or Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders or Indemnifying Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Company Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of their Subsidiaries is liable to such third party for a monetary the Company Stockholders or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Indemnifying Stockholders pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Sources: Merger Agreement (Neurotrope, Inc.)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the an “Indemnified PartiesParty”) shall give written notification to the other Party or Parties party from whom indemnification is sought (the an “Indemnifying PartiesParty”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “Non-Controlling controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “Damages” Damages for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “Claim Notice”) to the Indemnifying Parties Party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, or such shorter period as may be necessitated by the nature and timing of the suit or proceeding, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to fifty percent (50%) of the Agreed Amount) of Escrow Shares or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”). For purposes of this Article VI, the “Value” of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the closing price per share of the Buyer Common Stock on the OTCBB on the Closing Date (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the Closing Date), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to the distribution of Escrow Shares equal to the Value of the Claim determined by in accordance with the resolution of the Dispute (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the BuyerIndemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Sources: Merger Agreement (GoFish Corp.)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification 8 (the “an "Indemnified Parties”Party") shall give written notification (a "Notification of Suit") to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI 8 may be sought. Such notification Notification of Suit shall be given within 20 Business Days 30 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; providedPROVIDED, howeverHOWEVER, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 30 days after delivery of such notificationNotification of Suit, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to if, but only if, either (i) the Indemnified Party seeking indemnificationhas notified the Indemnifying Party that it will not defend the suit or proceeding, or (ii) the Indemnified Party has failed to timely defend the suit or proceeding; provided PROVIDED, HOWEVER, that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do assume control of the defense pursuant to (i) or (ii) above, the Indemnifying Parties shall acknowledge in writing their obligation to indemnify the Indemnified Parties hereunder against any Damages that such Indemnified Parties incur or have incurred in connection with such third party claim. If the Indemnifying Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which consent shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI8, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI 8 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. The Indemnifying Party shall deliver a copy of the Claimed AmountClaim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, ; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”) "); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive all of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Claimed Amount, by check or by wire transfer, or, if the Indemnifying Parties are the Megan Stockholders, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to AVANT such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Agreed Amount, by check or by wire transfer, or, if the Indemnifying Parties are the Megan Stockholders, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to AVANT such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount. If the Indemnifying Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d8.4(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article 8, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall equal the number of such Escrow Shares, multiplied by the average of the last reported sale prices per share of the AVANT Common Stock on the Nasdaq National Market over the thirty (30) consecutive trading days ending on the last trading day before the date of determination (the "Determination Price").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the 44 Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding nonbinding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d8.4(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to AVANT and/or the Megan Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.38.4, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI8, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI8, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI8, for any such Damages for which it is entitled to indemnification pursuant to this Article VI 8 (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)8).
(f) For purposes of this Agreement, in the case where the Indemnifying Parties are the Megan Stockholders, references to the "Indemnifying Party" (except provisions 45 relating to an obligation to make or a right to receive any payments provided for in Section 8.4 or Section 8.6) shall be deemed to refer to the Stockholders' Representatives. The Stockholders' Representatives shall have full power and authority on behalf of each Megan Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Megan Stockholders under this Article 8. The Stockholders' Representatives shall have no liability to any Megan Stockholder for any action taken or omitted on behalf of the Megan Stockholders pursuant to this Article 8. Notices or communications to or from the Stockholders' Representatives shall constitute notice to or from each of the Megan Stockholders.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek An Indemnified Party seeking to assert rights, rights to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) VI shall give written notification to the other Party or Parties Jack ▇▇▇▇▇▇, ▇▇rv▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ Arno▇▇ ▇▇▇▇▇▇ (the “Indemnifying Parties”▇▇e "STOCKHOLDER REPRESENTATIVES") of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such action, suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such action, suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Stockholder Representatives shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Stockholder Representatives may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such action, suit or proceeding with counsel reasonably satisfactory to the Indemnified Party, provided the Stockholder Representatives acknowledge in writing to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties any damages, fines, costs or other liabilities that may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought be assessed against the Indemnified Party seeking indemnificationin connection with such action, suit or proceeding constitute Damages for which the Indemnified Party shall, subject to the limitations set forth in Section 6.4, be indemnified pursuant to this Article VI. If the Indemnifying Parties Stockholder Representatives do not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “Non"NON-Controlling Party”CONTROLLING PARTY") may participate therein at its their own expense; provided that if the Indemnifying Parties assumes Stockholder Representatives assume control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such action, suit or proceeding, the reasonable fees and expenses of one counsel to the Indemnified Parties Party shall be considered “Damages” "DAMAGES" for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”"CONTROLLING PARTY") shall keep the Non-Controlling Party reasonably advised of the status of such action, suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such action, suit or proceeding (including copies of any summons, complaint or other pleading pleadings which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such action, suit or proceeding at and provide the sole cost Controlling Party and expense of its counsel access to (and the Indemnifying Parties under Section 6.1 or 6.2, which cost right to make copies of) the Surviving Corporation's books and expense shall be considered “Damages” for purposes of this Agreementrecords pertaining to such matter. The Indemnifying Parties Stockholder Representatives shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnifying PartiesStockholder Representatives, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that if the Stockholder Representatives do not assume the defense of such action, suit or proceeding pursuant to this Section 6.2(a), the Indemnified Party shall be entitled to agree to a settlement of, or the entry of any judgment arising from, such action, suit or proceeding, after giving notice of the same to the Stockholder Representatives, on such terms as the Indemnified Party in good faith may deem appropriate.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give a written notification (a “Claim Notice”"CLAIM NOTICE") to the Indemnifying Parties Stockholder Representatives which contains (i) a description and the amount (the “Claimed Amount”"CLAIMED AMOUNT") of any Damages incurred as a result of any final, unappealable judgment, settlement or acknowledgment of the Stockholder Representatives or reasonably expected to be incurred by the Indemnified PartiesParty as a result of such claim, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Stockholder Representatives shall deliver to the Indemnified Parties Party a written response (the “Response”"RESPONSE") in which the Indemnifying Parties Stockholder Representatives shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a cash payment equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"AGREED AMOUNT") (in which case the Response shall be accompanied by a cash payment equal to the Agreed Amount”) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Stockholder Representatives in the Response disputes its liability for contest the payment of all or part of the Claimed Amount, the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d6.2(d) for the resolution of such dispute (a “Dispute”"DISPUTE").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-60- day period, the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) ), including without limitation one administered by the American Arbitration Association or the Center for Public Resources (the “"ADR Procedure”PROCEDURE"). In the event the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”SERVICE"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d6.2(d) shall not obligate the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Stockholder Representatives nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Stockholder Representatives and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesStockholder Representatives, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Stockholder Representatives and the Indemnified Party shall be shared equally by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts Party.
(other than by means of a lawsuite) Each Company Stockholder irrevocably agrees that the BuyerStockholder Representatives shall have full power and authority on behalf of each Company Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders under this Article VI, including, without limitation, the power and authority to agree to, negotiate, enter into settlements of and demand arbitration of any claim made under this Article VI. A written decision, act, consent or any instruction of their Subsidiaries is liable to a majority of the Stockholder Representatives shall constitute a decision of the Stockholder Representatives and all Company Stockholders and shall be final, binding and conclusive upon each such third party for a monetary or other obligation which may constitute or result in Damages for which Company Stockholder, and the Buyer may be entitled rely upon any written decision, act, consent or instruction of a majority of the Stockholder Representatives as being the decision, act, consent or instruction of the Stockholder Representatives and each and every such Company Stockholder. The Buyer is hereby relieved from any liability to indemnification any Company Stockholder for any acts done by them in accordance with such decision, act, consent or instruction of the Stockholder Representatives. The Stockholder Representatives shall have no liability to any Company Stockholder for any action taken or omitted on behalf of the Company Stockholders pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Sources: Merger Agreement (Staples Inc)
Indemnification Claims. (ai) In the event that any of the Parties are A Party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 7 (the “Indemnified Parties”an "INDEMNIFIED PARTY") shall give written notification (a "NOTIFICATION OF SUIT") to the other Party or Parties from whom indemnification is sought (the “Indemnifying Parties”an "INDEMNIFYING PARTY") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI Section 7 may be sought. Such notification Notification of Suit shall be given within 20 Business Days 30 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 30 days after delivery of such notificationNotification of Suit, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory if, but only if, the Indemnifying Parties acknowledge in writing their obligation to indemnify the Indemnified Party seeking indemnificationParties hereunder against any Damages that such Indemnified Parties incur or have incurred in connection with such third party claim; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “Non"NON-Controlling Party”CONTROLLING PARTY") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”"CONTROLLING PARTY") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(bii) In order to seek indemnification under this Article VISection 7, the an Indemnified Parties Party shall give written notification (a “Claim Notice”"CLAIM NOTICE") to the Indemnifying Parties Party which contains (i) a description and the amount (the “Claimed Amount”"CLAIMED AMOUNT") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 7 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(ciii) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”"RESPONSE") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, ; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) "AGREED AMOUNT"); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party agrees that the Indemnified Party is entitled to receive all of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response a payment for the Claimed Amount, by check or by wire transfer. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response a payment for the Agreed Amount, by check or by wire transfer. If the Indemnifying Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d7(d)(iv) for the resolution of such dispute (a “Dispute”"DISPUTE").
(div) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding nonbinding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”PROCEDURE"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”SERVICE"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d7(d)(iv) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 1 contract
Sources: Asset Purchase Agreement (Inverness Medical Innovations Inc)
Indemnification Claims. (a) In To recover Damages under the event that any indemnification obligations of the Parties are entitledPro Rata Holders set forth in Section 10.01, the Parent must deliver to the Equityholder Representative on or before the applicable Expiration Date a certificate signed by an officer of Parent (an “Officer’s Certificate”) stating that a Parent Indemnified Person has incurred or accrued or reserved, or seek to assert rightsin good faith believes that it may incur, to indemnification under this Article VIpay, the Party reserve or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim accrue, Damages and for which indemnification pursuant from the Pro Rata Holders is sought, as set forth in Section 10.01 (including an estimate of the maximum amount thereof, to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties extent reasonably ascertainable on the date of notice delivery of such suit or proceedingOfficer’s Certificate), and shall describe specifying in reasonable detail (to the extent known by individual items of such Damages included in the Indemnified Parties) the facts constituting the basis for such suit or proceeding amount so stated, and the amount nature of the claimed damages; providedmisrepresentation, howeverbreach of warranty, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability covenant or obligation hereunder except claim to the extent of any damage or liability caused by or arising out of which such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief item is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedrelated.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties The Equityholder Representative shall give written notification have a period of forty-five (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (2045) days from and after delivery of a Claim Notice, the Indemnifying Parties shall any Officer’s Certificate to deliver to the Indemnified Parties Parent a written response (the “Response”) response, in which the Indemnifying Parties Equityholder Representative shall: (i) agree that the Indemnified Parties Parent is entitled to receive all of the Claimed Amount, requested Damages (in which case the response shall be accompanied by written notice executed by the Equityholder Representative instructing the Escrow Agent to disburse the requested Damages to Parent) or (ii) agree dispute or object that the Indemnified Parties Parent is entitled to receive part, but the requested Damages.
(c) If the Equityholder Representative does not all, deliver a response before the expiration of the Claimed Amount forty-five (45) day period referred to in Section 10.02(b) disputing or objecting any claim or claims made in the “Agreed Amount”) or (iii) dispute that Officer’s Certificate, Parent shall, subject to the Indemnified Parties is provisions of this Article 10, be entitled to recover such Damages and, if the Escrow Account has not yet been released, receive any of from the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution Escrow Account a portion of such dispute (Escrow Account having a “Dispute”)value equal to such Damages and such amount shall no longer be payable to the Pro Rata Holders.
(d) During If the 60Equityholder Representative disputes or objects any claim or claims made in any Officer’s Certificate, Parent shall have forty-five (45) days to respond in a written statement to the objection of the Equityholder Representative. If after such forty-five (45) day period following the delivery of there remains a Response that reflects a Disputedispute as to any claims, the Indemnifying Parties Equityholder Representative and the Indemnified Parties Parent shall use attempt in good faith efforts for forty-five (45) days to resolve agree upon the Disputerights of the respective parties with respect to each of such claims (the “Claims Period”). If the Dispute is not resolved within Equityholder Representative and Parent should so agree, a memorandum setting forth such 60-day period, the Indemnifying Parties agreement shall be prepared and signed by Parent and the Indemnified Parties Equityholder Representative and shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable delivered to the ADR Procedure, and promptly undertake the ADR ProcedureEscrow Agent. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Escrow Agent shall be entitled to satisfy rely on any such obligation, with prior notice memorandum for the release of any portion of the Escrow Account to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification Parent in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)such memorandum and the Escrow Agreement.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) The Buyer shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Indemnity Participant of the commencement of any suit or proceeding relating to a third party claim for which Third Party Action it seeks indemnification pursuant to this Article VI may be soughtfor. Such notification shall be given as promptly as reasonably practicable, and in any event within 20 Business Days [**] after receipt by the Indemnified Parties Buyer of notice of such suit or proceeding, Third Party Action and shall describe in reasonable detail (to the extent then known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no . No delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Indemnity Participant shall relieve the Indemnifying Parties Indemnity Participant of any liability or obligation Liability hereunder except to the extent of any damage or liability Liability caused by or arising out of such failuredelay or failure or to the extent the Indemnity Participant is materially prejudiced thereby. Within 20 days [**] after delivery of such notification, the Indemnifying Parties Indemnity Participant may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Buyer (such consent not to be unreasonably withheld, conditioned, or delayed) and the Buyer shall reasonably cooperate with the Indemnity Participant in connection therewith (at the Indemnity Participant’s expense with respect to any reasonable, documented, out-of-pocket expenses incurred by the Buyer), subject to the following conditions:
(i) With respect to [**] Indemnity Matters, the defense shall be controlled by [**] so long as (x) the Indemnity Participant acknowledges in writing to the Buyer that any damages, fines, costs or other Liabilities that may be assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Article VIII; and (y) such Third Party Action does not assert material equitable or other non-monetary relief (other than preventing or rescinding the consummation of the transactions contemplated by this Agreement) against a Buyer Indemnified Party seeking indemnificationthat cannot be separated from the underlying Claim for Damages); and
(ii) With respect to indemnification claims that are not [**]Indemnity Matters, the Indemnity Participant may only assume control of such defense if:
(A) it acknowledges in writing to the Buyer that any damages, fines, costs or other Liabilities that may be assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Article VIII;
(B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof (as determined by the Indemnity Participant, acting reasonably) and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the then-current balance of the Indemnity Escrow Fund,
(C) the Third Party Action does not involve Intellectual Property, Taxes (except as provided in Section 6.11(d)), any Governmental Entity as a party or criminal liability;
(D) the Third Party Action does not involve a claim in which equitable or other non-monetary relief is sought against a Buyer Indemnified Party; or
(E) the Buyer does not determine, based on advice from outside counsel made available to the Indemnity Participant (unless subject to attorney-client privilege, in which case, outside counsel shall provide written confirmation to the Indemnity Participant that it has made such determination), that there are issues that raise actual or potential conflicts of interest between the Indemnifying Parties Company Participants (or the Indemnity Participant) and the Buyer Indemnified Party with respect to the defense of such Third-Party Claim, or the Buyer Indemnified Party has different or additional defenses available to it.
(iii) For the avoidance of doubt, notwithstanding the immediately preceding proviso, the Indemnity Participant may assume the defense of any such Third Party Action with the prior written consent of the Buyer in its sole discretion.
(iv) If the Indemnity Participant does not, or is not permitted under the terms hereof to, so assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Third Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defenseAction, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this Agreement. The Indemnifying Parties Agreement if the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 8.2(a).
(v) If the Indemnity Participant is the Controlling Party, the Indemnity Participant shall not agree to any settlement ofnot, or without the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, Buyer (which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not ), (x) agree to any settlement ofof any Third Party Action, unless such settlement: (I) involves only the payment of money damages born solely by the Indemnity Participant, and does not impose an injunction or other equitable relief on any Buyer Indemnified Party, (II) does not include any admission of wrongdoing or violation of Law on the part of any Buyer Indemnified Party and (III) includes a customary release (which may be a mutual release in the case of a [**] Indemnity Matter or, if reasonably acceptable to the Buyer, other indemnified matters) of the Buyer Indemnified Parties from all Liability with respect to the Third Party Action and customary confidentiality obligations (which may be mutual obligations, so long as any such obligations binding a Buyer Indemnified Party are subject to customary exceptions for disclosure required to comply with applicable Law (including stock exchange rules) and the requirements of any Legal Proceeding or other governmental inquiry) with respect to the substance of such settlement or (y) agree to the entry of any judgment arising fromfrom any Third Party Action.
(vi) Except as provided in Section 8.2(e), in the event that the Buyer is the Controlling Party and the Buyer determines to settle or resolve any such suit or proceeding without Third Party Action, the prior written Buyer shall seek the consent of the Indemnifying Parties, Indemnity Participant to such settlement (which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount). If the Indemnifying Parties in Indemnity Participant has consented to such settlement (which consent with respect to non-[**] Indemnity Matters shall be deemed to have been given unless the Response disputes its liability Indemnity Participant shall have objected within [**] after confirmed receipt of a written request for all or part of such consent by the Claimed Amount, Buyer expressly notifying the Indemnifying Parties Indemnity Participant and the Indemnified Parties shall follow the procedures recipients set forth in Section 6.3(don Schedule 8.2(c)) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Indemnity Participant does not respond to the request within [**], the Indemnity Participant will be deemed to have consented to the settlement), then the existence and amount of indemnifiable Damages, subject to the limitations set forth in this Article VIII applicable to the underlying matter, shall be determinative and binding upon the Indemnity Participant and the Indemnified Parties agree Indemnity Participant shall not have any power or authority to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect object to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure recovery by or on behalf of any Buyer Indemnified Party for any Damages claimed with respect to such settlement. If the Indemnifying PartiesIndemnity Participant has not consented to such settlement, then the Indemnified Parties or the ADR Service Buyer shall be treated as confidential andnot enter into such settlement unless, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures except with respect to [**] Indemnity Matters (which shall not be discoverable or admissible for any purposes entered into without the Indemnity Participant’s express written consent) the amount of such settlement exceeds the then remaining Indemnity Escrow Fund by at least $[**], in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which case the Buyer may be entitled to indemnification pursuant to this Article VI, enter such settlement without consent and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Indemnity Participant shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to have the right of the Indemnifying Selling Parties to dispute the Buyerapplicable Buyer Indemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIVIII. For the avoidance of doubt, the terms and provisions of Section 6.11(d) shall control in the case of any Tax Contest and not this Section 8.2(a).
(b) In order to seek indemnification under this Article VIII, the Buyer shall deliver a Claim Notice to the Indemnity Participant.
(c) Within [**] after delivery of a Claim Notice in accordance with Section 11.1 (provided that, for purposes of this Section 8.2(c), such notice must also be delivered via email to the recipients set forth on Schedule 8.2(c)), the Indemnity Participant shall deliver to the Buyer a Response, in which the Indemnity Participant shall either: (i) agree that the Buyer Indemnified Parties are entitled to receive all of the Claimed Amount (in which case within [**] following delivery of the Response the Indemnity Participant and the Buyer shall deliver a written notice executed by both parties instructing the Escrow Agent to disburse to the Buyer Indemnified Parties from the Indemnity Escrow Fund an amount in cash equal to the Claimed Amount), (ii) agree that the Buyer Indemnified Parties are entitled to receive the Agreed Amount (in which case within [**] following delivery of the Response the Indemnity Participant and the Buyer shall deliver a written notice executed by both parties instructing the Escrow Agent to disburse to the Buyer Indemnified Parties from the Indemnity Escrow Fund an amount in cash equal to the Agreed Amount) or (iii) dispute that the Buyer Indemnified Parties are entitled to receive any of the Claimed Amount. The Indemnity Participant may also make reasonable requests for additional documentation and supporting evidence of the Damages identified in the Claim Notice, to the extent such material is in the Buyer’s possession and not subject to any legal privilege or confidentiality restrictions under Contract or applicable Law. Absent an express agreement to the contrary, acceptance by the Buyer Indemnified Parties of partial payment of any Claimed Amount shall be without prejudice to the Buyer Indemnified Parties’ right to claim the balance of any such Claimed Amount.
(d) Subject to Sections 1.5(i) and 1.7(e), any Dispute shall be resolved in accordance with Section 11.13. If the Buyer seeks to enforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnity Participant and the Buyer shall deliver to the Escrow Agent, promptly (and in any event within [**]) following the resolution of the Dispute (whether by mutual agreement, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Indemnity Escrow Fund shall be distributed to the Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 8.2, if a customer or supplier asserts (other than by means of a lawsuit) that any Buyer Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which a Buyer Indemnified Party may be entitled to indemnification pursuant to this Article VIII, and the Buyer reasonably determines that the Buyer Indemnified Parties have a valid business reason to fulfill such obligation, then (i) the Buyer Indemnified Parties shall be entitled to satisfy such obligation, without prior notice to or consent from the Indemnity Participant, (ii) the Buyer Indemnified Parties may subsequently make a claim for indemnification in accordance with the provisions of this Article VIII, and (iii) the Buyer Indemnified Parties shall be reimbursed, in accordance with the provisions of this Article VIII, for any such Damages for which they are entitled to indemnification pursuant to this Article VIII (subject to the right of the Indemnity Participant, to dispute the applicable Buyer Indemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIII).
Appears in 1 contract
Sources: Stock Purchase Agreement (Telix Pharmaceuticals LTD)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek Upon receipt by a Party from whom indemnification is being sought pursuant to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 9.1 (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the an “Indemnifying PartiesPerson”) of a certificate signed by any officer (an “Officer’s Certificate”) of a Purchaser Indemnified Person or a Seller Indemnified Person (an “Indemnified Person”) stating that Damages exist with respect to the commencement indemnification obligations of any suit or proceeding relating to a third party claim for the Indemnifying Person set forth in Section 9.1, which indemnification pursuant to this Article VI may be sought. Such notification Officer’s Certificate shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (delivered to the extent known by the Indemnified PartiesIndemnifying Person within thirty (30) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part days after an officer of the Indemnified Parties in notifying Person becomes aware of the Indemnifying Parties relevant Damages or the occurrence of the event giving rise to such Damages (provided that any failure to timely deliver such notice shall relieve the Indemnifying Parties of any liability or obligation not affect an Indemnified Person’s rights hereunder except to the extent of any damage or liability caused the Indemnifying Person was prejudiced by or arising out such failure), and specifying in reasonable detail the individual items of such failure. Within 20 days after delivery of such notificationDamages included in the amount so stated, the Indemnifying Parties maydate each such item was paid, upon written notice thereof or properly accrued or arose, and the nature of the misrepresentation, breach of warranty, covenant or claim to which such item is related (specifying the Section(s) or subsection(s) of this Agreement so breached), (i) in the case of Damages suffered by a Purchaser Indemnified Person, Purchaser shall, subject to the Indemnified Parties seeking indemnificationprovisions of this Section 9 (including the set off rights in Section 9.1(h)), assume control be entitled to set off against the Holdback Amount or any Seller Participation Payment owed by Purchaser a portion of the defense Holdback Amount or such Seller Participation Payment having a value equal to such Damages, and such amount shall no longer be payable to Seller, and (ii) in the case of such suit or proceeding with counsel reasonably satisfactory Damages suffered by a Seller Indemnified Person, Seller shall, subject to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control provisions of the defense of a suit or proceeding involving criminal liability or this Section 9, be entitled to receive an amount in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect cash equal to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties The Indemnifying Person shall give written notification have a period of thirty (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (2030) days from and after delivery of a Claim Notice, the Indemnifying Parties shall any Officer’s Certificate to deliver to the Indemnified Parties Person a written response (the “Response”) response, in which the Indemnifying Parties Person shall: (i) agree that the Indemnified Parties Person is entitled to receive all of the Claimed Amount, requested Damages or (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties Person is entitled to receive any of the Claimed Amount. requested Damages.
(c) If the Indemnifying Parties Person disputes any claim or claims made in any Officer’s Certificate, the Response disputes its liability for all or part Indemnified Person shall have thirty (30) days to respond in a written statement to the objection of the Claimed AmountIndemnifying Person. If after such thirty (30) day period there remains a dispute as to any claims, the Indemnifying Parties Indemnified Person and the Indemnified Parties Indemnifying Person shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss attempt in good faith the submission of the Dispute for thirty (30) days to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to rights of the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying respective Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion each of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)claims.
Appears in 1 contract
Indemnification Claims. (a) In the event If a Buyer Indemnified Party believes that any of the Parties are entitledit has or may have a right to indemnification, compensation or seek to assert rights, to indemnification reimbursement under this Article VIAgreement (an “Indemnification Claim”), such Buyer Indemnified Party shall so notify the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding Representative and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Escrow Agent in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon a written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim NoticeCertificate”) ), prior to the Indemnifying Parties which contains expiration of the applicable Survival Period (if applicable): (i) a description and the amount (the “Claimed Amount”) of stating that such Buyer Indemnified Party has directly or indirectly suffered or incurred any Damages incurred Losses, or reasonably expected to be incurred by the Indemnified Partiesanticipates that it will directly or indirectly suffer or incur any Losses, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, compensation or reimbursement under this Agreement, (ii) a brief description in reasonable detail (to the extent available to such Buyer Indemnified Party) of the facts, circumstances or events giving rise to each item of Losses based on such Buyer Indemnified Party’s good faith belief thereof, and (iii) the basis for indemnification, compensation or reimbursement under this Agreement to which such item of Losses is related.
(b) In the event that the Representative shall seek to contest any individual items of Losses set forth in a Claim Certificate, the Representative shall so notify the Buyer Indemnified Party in writing within thirty (30) days after receipt of such Claim Certificate, which notice shall set forth a brief description in reasonable detail of the Representative’s basis for objecting to each item of Loss. In the event that the Representative shall fail to object to any items of Loss set forth in a Claim Certificate within the first twenty-five (25) days of the foregoing thirty-day period, the Buyer Indemnified Party may re-send the Claim Certificate (indicating that it is the second and final notice). In the event that the Representative shall fail to object to any items of Loss set forth in a Claim Certificate within the thirty (30) day period following the original receipt of the Claim Certificate, the Seller Indemnifying Party shall be deemed to have irrevocably agreed and consented to the indemnification, compensation and reimbursement of the Buyer Indemnified Party in respect of such items of Loss pursuant to the terms of this Article VI)Agreement.
(c) If a Seller Indemnified Party believes that it has or may have a right to a Indemnification Claim, such Seller Indemnified Party shall so notify the Buyer in a Claim Certificate, prior to the expiration of the applicable Survival Period (if applicable): (i) stating that such Seller Indemnified Party has directly or indirectly suffered or incurred any Losses, or reasonably anticipates that it will directly or indirectly suffer or incur any Losses, for which it is entitled to indemnification, compensation or reimbursement under this Agreement, (ii) a brief description in reasonable detail (to the extent available to such Seller Indemnified Party) of the facts, circumstances or events giving rise to each item of Losses based on such Seller Indemnified Party’s good faith belief thereof, and (iii) the basis for indemnification, compensation or reimbursement under this Agreement to which such item of Losses is related.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A. A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 5 (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI Section 5 may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) the Indemnifying Party acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Losses for which the Indemnified Party shall be indemnified pursuant to this Section 5 and (B) the Indemnifying Party shall post sufficient bond or security in order to secure in favor of the Indemnified Party the potential Losses for which the Indemnifying Party is or may be liable under this Section 5 and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its such party's own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “Damages” "Losses" for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) B. In order to seek indemnification under this Article VISection 5, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages Losses incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 5 for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountsuch Losses. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of Party is seeking to enforce any such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable claim hereunder pursuant to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesEscrow Agreement, the Indemnified Parties or Party shall also deliver a copy of the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating Claim Notice to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Escrow Agent.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification IX (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI IX may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control Party in such notice acknowledges that any Damage resulting therefrom is subject to the provisions of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationthis Article IX. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIIX, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI IX for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer, (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer, or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d9.2(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d9.2(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days the earlier of (i) the Claims Deadline (as defined below) or (ii) twenty (20) business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party prior to the Claims Deadline which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer an amount of the Escrow Fund, having an aggregate Value (as defined below) equal to the Claimed Amount (with the proportionate amount of cash and Escrow Shares equal to the ratio of cash and Initial Shares paid and issued to the Company Stockholders at the Closing)), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer funds and/or such number of Escrow Shares having an aggregate Value equal to the Agreed Amount (with the proportionate amount of cash and Escrow Shares equal to the ratio of cash and Initial Shares paid and issued to the Company Stockholders at the Closing)) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be $12.00.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Fund shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VIVI as long as such claim is made prior to the Claims Deadline, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days Promptly after receipt by the Indemnified Parties an indemnified party of notice of such suit any claim, liability or proceedingexpense to which the indemnification obligations hereunder would apply, and the indemnified party shall describe give notice thereof in reasonable detail (writing to the indemnifying party, but the omission to so notify the indemnifying party promptly will not relieve the indemnifying party from any liability except to the extent known by that the Indemnified Partiesindemnifying party shall have been prejudiced as a result of the failure or delay in giving such notice. Such notice shall state the information then available regarding the amount and nature of such claim, liability or expense and shall specify the provision or provisions of this Agreement under which the liability or obligation is asserted. With respect to third party claims, if within twenty (20) days after receiving the facts constituting notice described in clause (a) above the basis indemnifying party gives (i) written notice to the indemnified party stating that (A) it would be liable under the provisions hereof for such suit or proceeding and indemnity in the amount of such claim if such claim were successful and (B) that it disputes and intends to defend against such claim, liability or expense at its own cost and expense and (ii) provides reasonable assurance to the claimed damagesindemnified party that such claim will be promptly paid in full if required, then counsel for the defense shall be selected by the indemnifying party and the indemnified party shall not make any payment or settlement with respect to such claim, liability or expense as long as the indemnifying party is conducting a good faith and diligent defense at its own expense; provided, however, that no delay on the part assumption of defense of any such matters by the indemnifying party shall relate solely to the claim, liability or expense that is subject or potentially subject to indemnification. The indemnifying party shall have the right, with the consent of the indemnified party, which consent shall not be unreasonably withheld, to settle all indemnifiable matters related to claims by third parties which are susceptible to being settled, unless such compromise or settlement includes an unconditional release of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notificationParty, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification case no consent shall control such defensebe required. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) indemnifying party shall keep the Non-Controlling Party advised indemnified party apprised of the status of such suit the claim, liability or expense and any resulting suit, proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party or enforcement action, shall furnish the Controlling Party indemnified party with all documents and information that the indemnified party shall reasonably request and shall consult with the indemnified party prior to acting on major matters, including settlement discussions. Notwithstanding anything herein stated, the indemnified party shall at all times have the right to fully participate in such information as it may have with respect defense at its own expense directly or through counsel; provided, however, if the named parties to such suit the action or proceeding (including copies of any summons, complaint or other pleading which may have been served on such include both the indemnifying party and any written claimthe indemnified party and representation of both parties by the same counsel would be inappropriate under applicable standards of professional conduct, demandthe expense of separate counsel for the indemnified party shall be paid by the indemnifying party. If no such notice of intent to dispute and defend is given by the indemnifying party, invoiceor if such diligent good faith defense is not being or ceases to be conducted, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist indemnified party shall, at the Controlling Party as reasonably needed in expense of the indemnifying party, undertake the defense of (with counsel selected by the indemnified party), and shall have the right to compromise or settle (exercising reasonable business judgment), such suit claim, liability or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, provided that any such suit compromise or proceeding settlement shall not, without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall indemnifying party, exceed the amount of the initial claim or any amendment to such claim disclosed to the indemnifying party. If such claim, liability or expense is one that by its nature cannot be required if defended solely by the Indemnifying Parties agrees indemnifying party, then the indemnified party shall make available all information and assistance that the indemnifying party may reasonably request and shall cooperate with the indemnifying party in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayeddefense.
(b) In order With respect to seek indemnification under this Article VInon-third party claims, if within thirty (30) days after receiving the Indemnified Parties shall notice described in clause (a) above the indemnifying party does not give written notification (a “Claim Notice”) notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesindemnified party that it contests such indemnity, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in then the amount of indemnity payable for such claim shall be as set forth in the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountindemnified party’s notice. If the Indemnifying Parties indemnifying party contests such indemnity, the parties shall attempt in the Response disputes its liability for all or part good faith to reach an agreement with regard thereto within thirty (30) days of delivery of the Claimed Amount, indemnifying party’s notice objecting to the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Disputeclaim. If the Dispute is parties cannot resolved reach agreement within such 6030-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which matter may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent submitted by either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification binding arbitration in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 11.7 hereof.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification II (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI II may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within Promptly, and in any event within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if it acknowledges in writing to the Indemnified Party that any Damages that may be assessed against the Indemnified Party in connection with such suit or proceeding shall be indemnified pursuant to this Article II and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) Impark hereby acknowledges that First Union is the Controlling Party with respect to the Oracle Litigation, VenTek Bond I and VenTek Bond II. First Union acknowledges that any damages, fines, costs or other liabilities that may be assessed against Impark in connection with the Oracle Litigation, VenTek Bond I and VenTek Bond II constitute Damages for which Impark shall be indemnified pursuant to this Article II.
(c) In order to seek indemnification under this Article VIII other than as provided in Section 2.2(a) above, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI II for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (cd) below) in the amount of the Claimed Amountsuch Damages.
(cd) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer); (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d2.2(e) for the resolution of such dispute (a “"Dispute”").
(de) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure .
(which may be non-binding or binding upon the parties, as they agree in advancef) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.32.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VIII, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VIII, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VIII, for any such Damages for which it is entitled to indemnification pursuant to this Article VI II (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIII).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VIII (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI VIII may be sought. Such notification shall be given within 20 Business Days twenty (20) business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VIII and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VIII and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding proceeding, or any portion of a suit or proceeding, involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling Non- controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise reasonably cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIVIII, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI VIII for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to CMGI such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to CMGI such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d8.2(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VIII, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the CMGI Lock-In Value and the Engage Lock-In Value, respectively (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the CMGI Common Stock or the Engage Common Stock, respectively, since the last trading day in the period in which the CMGI Lock-In Value and the Engage Lock-In Value, respectively, were determined), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Party shall submit the Dispute to arbitration as provided below. Except with respect to an action seeking specific performance or another equitable remedy, any dispute shall be settled by arbitration in accordance with the commercial arbitration rules of the American Arbitration Association ("AAA"). The arbitration proceeding, including the rendering of an award, shall take place in Boston, Massachusetts and be administered by the AAA. The Parties shall discuss agree to act in good faith the submission to mutually select an arbitrator. The decision of the Dispute to a mutually acceptable alternative dispute resolution procedure (which arbitrator shall be binding on the Parties or their successors and any judgment rendered by such arbitrator may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a enforced by any court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties Each Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and bear its own expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Disputearbitration unless otherwise ordered by the arbitrator. If the Indemnified Party is seeking to enforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to arbitration, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to CMGI and/or the Indemnifying Shareholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.38.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VIVIII, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VIVIII, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VIVIII, for any such Damages for which it is entitled to indemnification pursuant to this Article VI VIII (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIVIII); provided, however, that except with the consent of the Shareholder Representative, no settlement of any such claim with third party claimants shall be determinative of the amount of any claim against the Escrow Shares.
(f) The Shareholder Representative shall have full power and authority on behalf of each Indemnifying Shareholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Shareholders under this Article VIII. The Shareholder Representative shall have no liability to any Indemnifying Shareholder for any action taken or omitted on behalf of the Indemnifying Shareholders pursuant to this Article VIII.
Appears in 1 contract
Indemnification Claims. (a) In the event that If any Purchaser Indemnitee seeks indemnification under Article IX of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to Purchase Agreement and makes a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party Escrow Amount with respect thereto. The Non-Controlling Party , Purchaser shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding deliver, in good faith, a written demand (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered an “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim NoticeIndemnification Demand”) to the Indemnifying Parties Company and the Escrow Agent which contains (i) a description and the amount (the “Claimed Asserted Damages Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesPurchaser Indemnitee, (ii) a statement that the Indemnified Parties Purchaser Indemnitee is entitled to indemnification under this Article VI IX of the Purchaser Agreement for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Asserted Damages Amount.
(cb) Within twenty forty-five (2045) days after delivery of a Claim Noticean Indemnification Demand to the Company, the Indemnifying Parties Company shall deliver to the Indemnified Parties Purchaser a written response (the “Response”) in which the Indemnifying Parties shall: it shall (i) agree that the Indemnified Parties Purchaser Indemnitee is entitled to receive all of the Claimed Asserted Damages Amount, (ii) agree that the Indemnified Parties Purchaser Indemnitee is entitled to receive part, but not all, of the Claimed Asserted Damages Amount (such portion, the “Agreed AmountPortion”) or (iii) dispute that the Indemnified Parties Purchaser Indemnitee is entitled to receive any of the Claimed Asserted Damages Amount. If In the Indemnifying Parties in event that the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of Company does not deliver a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60forty-five (45) day period, the Indemnifying Parties Company shall be deemed to have accepted the Indemnification Demand and agreed that the Indemnified Parties Asserted Damages Amount shall discuss be promptly distributed from the Escrow Account to the Purchaser Indemnitee.
(c) In the event that the Company shall agree that the Purchaser Indemnitee is entitled to receive the Asserted Damages Amount or the Agreed Portion, the Company and Purchaser shall direct the Escrow Agent to distribute such amount from the Escrow Account to the Purchaser Indemnitee in accordance with Section 4(a)(i) hereof. In the event that the Company shall (i) dispute that the Purchaser Indemnitee is entitled to receive any of the Asserted Damages Amount, or (ii) agree that the Purchaser Indemnitee is entitled only to the Agreed Portion of the Asserted Damages Amount (“Disputed Claims”), for a period of forty-five (45) days from the receipt of the Response, the Company and Purchaser shall attempt in good faith to agree upon the submission rights of the Dispute respective parties with respect to a the Disputed Claims. If the Company and Purchaser should so agree regarding the respective rights and/or settle the Disputed Claims, then the Company and Purchaser shall direct the Escrow Agent to distribute any such amount from the Escrow Account to the Purchaser Indemnitee in accordance with Section 4(a)(i) hereof. If the Company and Purchaser shall not agree regarding the respective rights and/or settle the Disputed Claims, then either the Company or Purchaser may initiate binding arbitration proceedings in the State and City of New York in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the “AAA Rules”). If the Company and Purchaser fail to mutually acceptable alternative dispute resolution procedure select an arbitrator within five (which may 5) Business Days following notice to the other party of the initiation of the arbitration proceeding, then arbitration will be nonconducted by three arbitrators: one selected by the Company; one selected by Purchaser; and the third selected by the first two arbitrators. The Company and Purchaser shall agree to use all reasonable efforts to cause the arbitration hearing to be conducted within seventy-binding five (75) days after the appointment of the mutually-selected arbitrator or binding upon the partieslast of the three arbitrators, as they the case may be, and to use all reasonable efforts to cause the decision of the arbitrator(s) to be furnished within ninety-five (95) days after the appointment of the mutually-selected arbitrator or the last of the three arbitrators, as the case may be. The Company and Purchaser shall further agree in advancethat discovery shall be completed at least ten (10) days prior to the date of the arbitration hearing. The decision of the arbitrator(s) (the “ADR ProcedureDecision”) shall relate solely: (i) to the resolution of the Disputed Claims; and (ii) to the determination of the non-prevailing party as provided below. The Decision shall be furnished to the Company, Purchaser and the Escrow Agent in writing and shall constitute a conclusive determination of the issue(s) in question, binding upon the Company, Purchaser and the Purchaser Indemnitees and shall not be contested by any of them. The non-prevailing party in any arbitration shall pay the reasonable expenses (including attorneys’ fees) of the prevailing party, any additional reasonable fees and expenses (including reasonable attorneys’ fees) of the Escrow Agent, and the fees and expenses associated with the arbitration (including the arbitrators’ fees and expenses). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions For purposes of this Section 6.3(d) 5(c), the non-prevailing party shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken be determined solely by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VIarbitrator(s).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Section 8 (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI Section 8 may be sought. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Losses for which the Indemnified Party shall be indemnified pursuant to this Section 8 and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “Damages” "Losses" for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VISection 8, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages Losses incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 8 for such Damages Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Losses.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer, (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer, or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d8.03(d) for the resolution of such dispute (a “"Dispute”").
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d8.03(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, Party and the Indemnified Parties shall pay all such fees and expenses. Party.
(e) Notwithstanding the other provisions of this Section 6.38.03, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages Losses for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VISection 8, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VISection 8, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VISection 8, for any such Damages Losses for which it is entitled to indemnification pursuant to this Article VI Section 8 (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 8).
Appears in 1 contract
Sources: Stock Purchase Agreement (Mechanical Technology Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) The Buyer shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Seller Representative of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be soughtThird Party Action. Such notification shall be given within 20 Business Days days after receipt by the Indemnified Parties Buyer of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Seller Representative shall relieve the Indemnifying Parties Sellers of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Seller Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationBuyer; provided that (i) the Indemnifying Parties Seller Representative may only assume control of such defense if (A) it acknowledges in writing to the Buyer that any damages, fines, costs or other liabilities that are assessed against the Buyer in connection with such Third Party Action constitute Damages for which the Buyer shall be indemnified pursuant to this Section 13 and (B) the ad damnum is less than or equal to the amount of Damages for which the Sellers are liable under this Section 13 and (ii) the Seller Representative may not assume control of the defense of a suit or proceeding Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer. If the Indemnifying Parties do Seller Representative does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at Third Party Action. The fees and expenses of counsel to the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) the Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 13.3 or (ii) the Seller Representative assumes control of such defense and the Buyer reasonably concludes that the Sellers and the Buyer have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Seller Representative shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Buyer, which shall not be unreasonably withheld, conditioned or delayed. The Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesSeller Representative, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement ofwithheld, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld conditioned or delayed.
(b) In order to seek indemnification under this Article VISection 13, the an Indemnified Parties Party shall give written notification (a “Claim Notice”) deliver to the Indemnifying Parties Party a written notification which contains (i) a description of and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty (the “Claimed Amount”) of such Damages, to the extent then known, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI Section 10.3(c) or Section 13 for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages (a “Claim Notice”).
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) response, in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer and is seeking or required to enforce such claim pursuant to Section 13.7, the Buyer shall reduce the Subsequent Consideration to be paid or issued hereunder pursuant to Section 13.7), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer and is seeking or required to enforce such claim pursuant to Section 13.7, the Buyer shall reduce the Subsequent Consideration to be issued or paid hereunder pursuant to Section 13.7) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If Amount (a “Response”).
(d) During the 30-day period following the delivery of a Response in which the Indemnifying Parties in the Response Party disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute Amount (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure .
(which may be non-binding or binding upon the parties, as they agree in advancee) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions For purposes of this Section 6.3(d13.3 if the Sellers comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make any payments) shall not obligate be deemed to refer to the Indemnifying Parties Seller Representative, and (ii) if the Sellers comprise the Indemnified Parties Party, any references to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree Party (except provisions relating to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation obligation to make or seek other remedies with respect a right to receive any payments) shall be deemed to refer to the Dispute prior Seller Representative. The Seller Representative shall have full power and authority on behalf of each Seller to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties take any and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal all actions on behalf of, execute any and state rules of evidenceall instruments on behalf of, and execute or waive any and all statementsrights of, offers, opinions and disclosures (whether written the Sellers under this Section 13. The Seller Representative shall have no liability in to any Seller for any action taken or oral) made in the course of the ADR Procedure by or omitted on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Sellers pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 13.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) Buyer shall give written notification to the other Party or Parties (Stockholders’ Representative and the “Indemnifying Parties”) Escrow Agent of the commencement of any suit or proceeding relating to by a third party claim person or entity for which indemnification pursuant to may be sought by Buyer under this Article VI may be sought10 (a “Third Party Action”). Such notification shall be given within 20 Business Days as soon as practicable after receipt by the Indemnified Parties Buyer of notice of such suit or proceedingThird Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesBuyer) the facts constituting the basis for such suit or proceeding Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Parties Buyer in so notifying the Indemnifying Parties Stockholders’ Representative shall relieve the Indemnifying Parties Stockholders of any liability or obligation indemnification obligations hereunder except to the extent of any damage or liability Damages caused by or arising out of such failuredelay or failure or to the extent such delay or failure will have adversely prejudiced the Stockholders. Buyer will promptly provide the Stockholders’ Representative with such additional information with respect thereto that the Stockholders’ Representative may reasonably request. Within 20 days after delivery of such notification, the Indemnifying Parties Stockholders’ Representative may, upon written notice thereof to the Indemnified Parties seeking indemnificationBuyer, assume control of the defense of such suit or proceeding Third Party Action with counsel reasonably satisfactory to Buyer (it being understood and agreed that the Indemnified Party seeking indemnificationlaw firms listed in Section 10.02 of the Company Disclosure Schedule shall be deemed reasonably satisfactory to Buyer); provided that (i) the Indemnifying Parties Stockholders’ Representative may only assume control of such defense if (A) it acknowledges in writing to Buyer that any Damages that may be assessed against Buyer in connection with such Third Party Action constitute Damages for which Buyer shall be indemnified pursuant to and subject to the limitations of this Article 10 and (B) the Third Party Action is reasonably likely to result in an amount that is less than or equal to the amount of Damages to which Buyer may be entitled under this Article 10 and (ii) the Stockholders’ Representative may not assume control of the defense of a suit or proceeding Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationBuyer. If the Indemnifying Parties do Stockholders’ Representative does not, or is not permitted under the terms hereof to, so assume control of such defensethe defense of a Third Party Action, the Indemnified Parties seeking indemnification Buyer shall control such defense. The Non-controlling Party not controlling may participate in such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Controlling Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost Third Party Action. The reasonable fees and expense expenses of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense counsel to Buyer with respect to a Third Party Action shall be considered “Damages” Damages for purposes of this AgreementAgreement if (i) Buyer controls the defense of such Third Party Action pursuant to the terms of this Section 10.02(a) or (ii) the Stockholders’ Representative assumes control of such defense and Buyer reasonably concludes that the Stockholders and Buyer have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Parties Stockholders’ Representative shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnified PartiesBuyer, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Buyer shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding Third Party Action without the prior written consent of the Indemnifying PartiesStockholders’ Representative, which shall not be unreasonably withheld withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VI10, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains Buyer (i) a description must act in good faith and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) shall deliver as soon as reasonably practicable a statement that Claim Notice to the Indemnified Parties is entitled Stockholders’ Representative, with a copy to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed AmountEscrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Stockholders’ Representative shall deliver to the Indemnified Parties Buyer a written response (the “Response”) ), in which the Indemnifying Parties Stockholders’ Representative shall: (i) agree that the Indemnified Parties Buyer is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a written notice instructing the Escrow Agent to distribute to Buyer a portion of the Escrow Amount equal to the Claimed Amount), (ii) agree that the Indemnified Parties Buyer is entitled to receive part, but not all, the Agreed Amount (in which case the Response shall be accompanied by a written notice instructing the Escrow Agent to distribute to Buyer a portion of the Claimed Escrow Amount (equal to the “Agreed Amount”) or (iii) dispute that the Indemnified Parties Buyer is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 6030-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Stockholders’ Representative and the Indemnified Parties Buyer shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 6030-day period, the Indemnifying Parties Stockholders’ Representative and the Indemnified Parties Buyer shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon arbitration, and if the parties, as they Stockholders’ Representative and Buyer agree in advancewriting to submit the Dispute to such arbitration, then, unless agreed in such written agreement, the provisions of Section 10.02(e) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, shall become effective with respect to such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR ProcedureDispute. The provisions of this Section 6.3(d10.02(d) shall not obligate the Indemnifying Parties Stockholders’ Representative and Buyer to submit to arbitration or any other alternative dispute resolution procedure with respect to any Dispute, and in the absence of an agreement by the Stockholders’ Representative and Buyer to arbitrate a Dispute, such Dispute shall be resolved in a state or federal court sitting in California, in accordance with Section 11.07. The Stockholders’ Representative and Buyer shall deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Amount shall be distributed to Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) If, as set forth in Section 10.02(d), Buyer and the Indemnified Parties Stockholders’ Representative agree to pursue an ADR Procedure submit any Dispute to binding arbitration, then unless otherwise agreed between Buyer and the Stockholders’ Representative, the arbitration shall be conducted by a single arbitrator (the “Arbitrator”) in accordance with the Commercial Arbitration Rules (“Commercial Rules”) of the American Arbitration Association (“AAA”) in effect from time to time and the following provisions:
(i) In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be controlling.
(ii) The parties shall commence the arbitration by jointly filing a written submission with the San Francisco office of the AAA in accordance with Commercial Rule 5 (or prevent either such Party from pursuing any successor provision).
(iii) Not later than 30 days after the Dispute conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the parties a writing setting forth the arbitral award and the Arbitrator’s reasons therefor. Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties, and judgment thereon may be entered and enforced in a any court of competent jurisdiction; provided that.
(iv) The Arbitrator shall have no power or authority, if under the Indemnifying Parties Commercial Rules or otherwise, to (x) modify or disregard any provision of this Agreement, including the provisions of this Section 10.02(e), or (y) address or resolve any issue not submitted by the parties.
(v) In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesArbitrator, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees costs and expenses of any ADR Service used obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the Indemnifying Parties parties (which shall not include any party’s attorneys’ fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by Buyer and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Stockholders.
(f) Notwithstanding the other provisions of this Section 6.310.02, if a third party customer asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries Buyer is liable to such third party customer for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI10, and the Buyer reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling PartiesStockholders’ Representative, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI10, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI10, for any such Damages for which it is entitled to indemnification pursuant to and subject to the limitations of this Article VI 10 (including subject to the right of the Indemnifying Selling Parties Stockholders’ Representative to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI10).
(g) The Stockholders’ Representative shall have full power and authority on behalf of each Stockholder, and holder of In-the-Money Options to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, such Persons under this Article 10. The Stockholders’ Representative shall have no liability to any Person for any action taken or omitted on behalf of the Stockholders and holders of In-the-Money Options pursuant to this Article 10.
Appears in 1 contract
Indemnification Claims. (a) In Notwithstanding the event that any of the Parties are entitledforegoing Sections 3.1 ---------------------- and 3.2, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third each party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for Section (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Damages and a reasonable explanation Indemnified Party has actual knowledge of the basis thereforany claim as to which indemnity may be sought, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, shall permit the Indemnifying Parties Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall deliver to conduct the defense of such claim or litigation, shall be approved by the Indemnified Parties Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action and provided further, that the Indemnifying Party shall not assume the defense for matters as to which there is a written response (the “Response”) in conflict of interest or as to which the Indemnifying Parties shall: (i) agree that Party is asserting separate or different defenses, which defenses are inconsistent with the defenses of the Indemnified Parties is entitled to receive all of the Claimed AmountParty. No Indemnifying Party, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all defense of any such claim or part litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the Claimed Amount, giving by the Indemnifying Parties and the claimant or plaintiff to such Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery Party of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss release from all liability in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior such claim or litigation. No Indemnified Party shall consent to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses entry of any ADR Service used by judgment or enter into any settlement without the consent of each Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Party.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Cummer Moyers Holdings Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification IV (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI IV may be sought. Such notification shall be given within 20 Business Days 5 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; providedPROVIDED, howeverHOWEVER, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided PROVIDED that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article IV and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article IV and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided PROVIDED that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VIIV for matters not involving Satisfaction Consideration, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI IV for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Indemnified Party shall have recourse against pledged Securities equal in value to the Claimed Amount, ); (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Indemnified Party shall have recourse against pledged Securities equal in value to such part of the Claimed Amount); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d4.2(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Section 4.2(c), the value of the pledged Securities shall be deemed to be as follows: Shares shall be valued at the average closing price of shares of the Buyer's Common Stock on the Nasdaq National Market for the 20 trading days (the "Average Trading Price") ending on the date on which Satisfaction Consideration is paid or the Indemnified Persons incur Damages other than Satisfaction Consideration, and Buyer Warrant I, Buyer Warrant II and the Performance Warrant shall each be valued at the same amount per underlying share, based on a calculation to be performed by Ande▇▇▇▇ ▇▇▇, of the value per underlying share of Buyer Warrant I using (i) the Black-Scholes model of valuation, (ii) the Average Trading Price and (iii) the methodology and assumptions consistent with the Buyer's past practices in determining warrant values with the exception that the volatility factor shall be 40%.
(d) During Any Dispute shall be resolved as provided in Section 7.13.
(e) For purposes of this Section 4.2 and the 60-day period following last two sentences of Section 4.3, any references to the delivery Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 4.2 or Section 4.3) shall be deemed to refer to the Indemnification Representatives named in the Pledge Agreement. The Indemnification Representatives shall have full power and authority on behalf of a Response that reflects a Disputeeach Indemnifying Stakeholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR ProcedurePersons under this Article IV. The provisions of this Section 6.3(d) Indemnification Representatives shall not obligate the have no liability to any Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure Stakeholder for any action taken or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or omitted on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Persons pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)IV.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the an “Indemnified PartiesParty”) shall give written notification to the other Party or Parties party from whom indemnification is sought (the an “Indemnifying PartiesParty”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days 10 days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except (i) if such failure to notify the Indemnifying Party materially prejudices the defense of such Indemnifying Party or (ii) if the Indemnifying Party is not materially prejudiced, then to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification(which consent shall not be unreasonably withheld); provided that the Indemnifying Parties Party may only assume control of such defense if (i) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (ii) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and; provided however, that the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party reasonably advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “Claim Notice”) to the Indemnifying Parties Party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall also deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d6.2(d) for the resolution of such dispute (a “Dispute”). For purposes of this Article VI, the “Value” of any Escrow Share delivered in satisfaction of an indemnity claim shall be $21.12 (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d6.2(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent promptly following resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.36.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the BuyerIndemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.2 and the last two sentences of Section 6.3, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.2 or Section 6.3) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the Indemnifying Party shall not have the right to assume control of such defense and the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability and has no other materially adverse effect on the Indemnified PartiesParty. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party and, if the Indemnifying Party is the Company Stockholders and the Escrow Agreement has not terminated pursuant to its terms, to the Escrow Agent a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer, or the Response shall include written instructions directing the Escrow Agent to deliver the Claimed Amount to the Buyer from the Escrow Fund (or some combination thereof); (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer, or the Response shall include written instructions directing the Escrow Agent to deliver the Agreed Amount to the Buyer from the Escrow Fund (or some combination thereof) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If no Response is delivered within 20 days after delivery of a Claim Notice, the Indemnifying Parties in Party shall be deemed to have agreed that the Response disputes its liability for Indemnified Party is entitled to receive all of the Claimed Amount. If the Indemnifying Party shall not have agreed or part be deemed to agree that the Indemnified Party is entitled to receive all of the Claimed Amount, such dispute shall be resolved pursuant to the procedures in Section 8.8 hereof. If the Indemnified Party is the Buyer, it shall seek to satisfy any Claimed Amount and any Agreed Amount by first applying amounts held pursuant to the Escrow Agreement or offsetting against amounts due under the (x) Escrowed Consideration as provided in Section 1.7(a) or (y)Earnout Consideration as set forth on Schedule A for the Fiscal Year in which such Claim Notice is made; provided, however, that any such application of amounts held pursuant to the Escrow Agreement or offset against amounts due under the Earnout Consideration for such Fiscal Year shall only satisfy any Claimed Amount or Agreed Amount to the extent such amounts held pursuant to the Escrow Agreement or due under the Earnout Consideration for such Fiscal Year would have been payable to the Company Stockholders pursuant to Section 1.7 hereof in the absence of an indemnification claim under this Article VI and if such amounts would not otherwise be so payable, the Indemnifying Parties Party shall repay Merger Consideration previously paid in an amount sufficient to satisfy such Claimed Amount and/or Agreed Amount determined pursuant to this Article VI to be due that has not otherwise been paid (or deemed paid, after the application of this proviso). Notwithstanding any other provision in this Article VI, to the extent the Claimed Amount or Agreed Amount (together with any other unpaid Claimed Amounts or Agreed Amounts) determined pursuant to this Article VI to be due exceeds the amounts then held pursuant to the Escrow Agreement and the Indemnified Parties maximum amount of Earnout Consideration set forth on Schedule A that may be payable for the Fiscal Year in which such Claim Notice is made, the Buyer shall be entitled to obtain such amount directly from the Company Stockholders. In applying amounts held pursuant to the Escrow Agreement, in addition to following the procedures of this Article VI, the Buyer shall follow the procedures set forth in Section 6.3(d) for 3 of the resolution of such dispute (a “Dispute”)Escrow Agreement.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) Any amounts paid pursuant to this Article VI shall be treated for tax purposes as an adjustment to the Merger Consideration.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days Promptly after receipt by the Indemnified Parties an indemnified party of notice of any claim, liability or expense to which the indemnification obligations hereunder would apply, the indemnified party shall give notice thereof in writing to the indemnifying party, but the omission to so notify the indemnifying party promptly will not relieve the indemnifying party from any liability except to the extent that the indemnifying party shall have been actually and materially prejudiced as a result of the failure or delay in giving such suit or proceeding, and notice. Such notice shall describe state in reasonable detail the information then available regarding the amount and nature of such claim, liability or expense and shall specify the provision or provisions of this Agreement under which the liability or obligation is asserted.
(b) With respect to third party claims, if within twenty (20) days after receiving the notice described in clause (a) above the indemnifying party gives (i) written notice to the extent known by indemnified party stating that (A) it would be liable under the Indemnified Parties) the facts constituting the basis provisions hereof for such suit or proceeding and indemnity in the amount of such claim if such claim were successful and (B) that it disputes and intends to defend against such claim, liability or expense at its own cost and expense and (ii) provides reasonable assurance to the claimed damagesindemnified party that such claim will be promptly paid in full if required, then counsel for the defense shall be selected by the indemnifying party (subject to the consent of the indemnified party which consent shall not be unreasonably withheld) and the indemnified party shall not be required to make any payment with respect to such claim, liability or expense as long as the indemnifying party is conducting a good faith and diligent defense at its own expense; provided, however, that no delay on the part assumption of defense of any such matters by the indemnifying party shall relate solely to the claim, liability or expense that is subject or potentially subject to indemnification. The indemnifying party shall have the right, with the consent of the Indemnified Parties in notifying indemnified party, which consent shall not be unreasonably withheld, to settle all indemnifiable matters related to claims by third parties which are susceptible to being settled provided the Indemnifying Parties shall relieve indemnifying parties’ obligation to indemnify the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defenseindemnified party therefor will be fully satisfied. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) indemnifying party shall keep the Non-Controlling Party advised indemnified party apprised of the status of such suit the claim, liability or expense and any resulting suit, proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party or enforcement action, shall furnish the Controlling Party indemnified party with all documents and information that the indemnified party shall reasonably request and shall consult with the indemnified party prior to acting on major matters, including settlement discussions. Notwithstanding anything herein stated, the indemnified party shall at all times have the right to fully participate in such information as it may have with respect defense at its own expense directly or through counsel; provided, however, if the named parties to such suit the action or proceeding (including copies of any summons, complaint or other pleading which may have been served on such include both the indemnifying party and any written claimthe indemnified party and representation of both parties by the same counsel would be inappropriate under applicable standards of professional conduct, demandthe reasonable fees, invoicecosts and expenses of separate counsel for the indemnified party shall be paid by the indemnifying party. If no such notice of intent to dispute and defend is given by the indemnifying party, billing or other document evidencing if such diligent good faith defense is not being or asserting ceases to be conducted, the same) and shall otherwise cooperate with and assist indemnified party shall, at the Controlling Party as reasonably needed in expense of the indemnifying party, undertake the defense of (with counsel selected by the indemnified party), and shall have the right to compromise or settle (exercising reasonable business judgment), such suit claim, liability or proceeding at the sole cost and expense. If such claim, liability or expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall is one that by its nature cannot be unreasonably withheld or delayed; provided defended solely by the indemnifying party, then the indemnified party shall make available all information and assistance that the consent of indemnifying party may reasonably request and shall cooperate with the Indemnified Parties shall not be required if the Indemnifying Parties agrees indemnifying party in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountdefense.
(c) Within With respect to non-third party claims, if within twenty (20) days after delivery of a Claim Noticereceiving the notice described in clause (a) above the indemnifying party does not give written notice to the indemnified party that it contests such indemnity, the Indemnifying Parties amount of indemnity payable for such claim shall deliver to be as set forth in the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amountindemnified party’s notice. If the Indemnifying Parties in indemnifying party provides written notice to the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of indemnified party within such dispute (a “Dispute”).
(d) During the 6020-day period following that it contests such indemnity, the parties shall attempt in good faith to reach an agreement with regard thereto within thirty (30) days of delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Disputeindemnifying party’s notice. If the Dispute is parties cannot resolved reach agreement within such 6030-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which matter may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent submitted by either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification binding arbitration in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 12.8 hereof.
Appears in 1 contract
Sources: Stock Purchase Agreement (FusionStorm Global, Inc.)
Indemnification Claims. If (a) In a claim is brought by a Third Party alleging patent infringement by DARA, its Affiliates, or their Sublicensees with respect to the event that any development, manufacture, use, sale, offer for sale or importation of Products, (b) a civil action is brought by a Third Party arising out of or relating to the practice of the Parties are entitledLicensed Patents, or seek to assert rights(c) any Third Party challenges the validity of any claims of any Licensed Patent, to indemnification under this Article VI, the each Party or Parties seeking indemnification (the “Indemnified Parties”) shall will give prompt written notification notice to the other Party or Parties of such claim (the collectively, an “Indemnifying PartiesIndemnification Claim”). DARA will, at its sole cost and expense, (i) of the commencement of defend such Indemnification Claim, (ii) assume all costs, expenses, damages and other obligations for payments incurred in connection with such Indemnification Claim, and (iii) indemnify and hold harmless Nuada and its managers, members, Affiliates, successors and assigns from and against any suit or proceeding and all damages, losses, liabilities and costs relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failureIndemnification Claim. Within 20 days after delivery DARA shall be free to enter into a settlement, consent judgment, or other voluntary disposition of such notificationIndemnification Claim, the Indemnifying Parties mayprovided that any settlement, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense consent judgment or other voluntary disposition of such suit or proceeding with counsel reasonably satisfactory Indemnification shall (x) contain a full and unconditional release of Nuada and its managers, members, Affiliates, successors and assigns, (y) not subject Nuada to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal any liability or in which equitable relief is sought against obligation and (z) not admit fault or wrongdoing on the Indemnified Party seeking indemnificationpart of Nuada. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect Nuada agrees to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed DARA, at DARA’s expense, in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall any reasonable manner deemed by DARA to be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, necessary in defending any such suit Indemnification Claim. DARA shall reimburse Nuada for any reasonable out of pocket expenses incurred in providing such assistance. Any recovery or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld damages received by DARA in any action or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies 6.2.1 with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties rights licensed under this Agreement shall be considered a compromise negotiation used first to reimburse the Parties for purposes of federal and state rules of evidenceunreimbursed reasonable, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and documented expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages incurred in connection with such Disputeaction, and the Indemnified Parties remainder shall pay all such fees and expensesbe deemed Net Sales subject to royalties under Section 4.3. Notwithstanding the other provisions foregoing, either Party, at its expense, shall have the right to be represented by counsel of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result its choice in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to proceeding controlled by the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)other Party.
Appears in 1 contract
Sources: Exclusive License Agreement (DARA BioSciences, Inc.)
Indemnification Claims. (a) In the event that any of Purchaser or the Parties Members are entitled, or seek to assert rights, to indemnification under this Article VI, Purchaser or Member (as the Party or Parties seeking indemnification (the “Indemnified Parties”case may be) shall give written notification to the other Party Members or Parties Purchaser (as the “Indemnifying Parties”case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Partiesparty seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties party seeking indemnification in notifying the Indemnifying Parties indemnifying party shall relieve the Indemnifying Parties indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties indemnifying party may, upon written notice thereof to the Indemnified Parties party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party party seeking indemnification; provided that the Indemnifying Parties indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party party seeking indemnification. If the Indemnifying Parties do indemnifying party does not so assume control of such defense, the Indemnified Parties party seeking indemnification shall control such defense. The Party party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties indemnifying party assumes control of such defense and the Indemnified Parties party seeking indemnification reasonably concludes that the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties party seeking indemnification shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Partiesparty seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties party seeking indemnification shall not be required if the Indemnifying Parties indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties party seeking indemnification from further liability and has no other materially adverse effect on the Indemnified Partiesparty seeking indemnification. The Indemnified Parties party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Partiesindemnifying party, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties party seeking indemnification shall give written notification (a “Claim Notice”) to the Indemnifying Parties indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Partiesparty seeking indemnification, (ii) a statement that the Indemnified Parties party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties indemnifying party shall deliver to the Indemnified Parties party seeking indemnification a written response (the “Response”) in which the Indemnifying Parties indemnifying party shall: (i) agree that the Indemnified Parties party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties party seeking indemnification is entitled to receive any of the Claimed Amount. If the Indemnifying Parties indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification agree to pursue an ADR Procedure, neither the Indemnifying Parties indemnifying party nor the Indemnified Parties party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Partiesindemnifying party, the Indemnified Parties party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties indemnifying party and the Indemnified Parties party seeking indemnification shall be considered to be Damages; provided, that if the Indemnifying Parties indemnifying party are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties party seeking indemnification shall pay all such fees and expenses. Notwithstanding the other provisions .
(e) For purposes of this Section 6.36.3 and the last two sentences of Section 6.4, if any references to the Acquiree Members or the Indemnifying Members (except provisions relating to an obligation to make, or a third party asserts (other than by means right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative. The Indemnification Representative shall have full power and authority on behalf of a lawsuit) that the Buyereach Member or Indemnifying Member to take any and all actions on behalf of, the Company execute any and all instruments on behalf of, and execute or waive any and all rights of, Members or Indemnifying Members under this Article VI. The Indemnification Representative shall have no liability to any Member or Indemnifying Member for any action taken or omitted on behalf of their Subsidiaries is liable to such third party for a monetary Members or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification Indemnifying pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage Damage or liability caused by or arising out of such failure. Within 20 business days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of one counsel to the Indemnified Parties Party with respect to such matters of conflict shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which consent shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties Party shall not be required if the Indemnifying Parties Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties Party from further liability with respect to the claim and has no other materially adverse effect on the Indemnified PartiesParty of a financial nature or with respect to Intellectual Property. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is the Buyer the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be the average of the last reported sale prices per share of the Buyer Common Stock on the Nasdaq National Market over the five consecutive trading days ending on the Closing Date (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the beginning of such five-day period), multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service at a mutually acceptable location (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided thatthat they comply with their good faith obligation to pursue such procedure and, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not to be liable for Damages in connection with such DisputeParty and the Indemnified Party. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.3 and the last two sentences of Section 6.4, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder or to the Buyer and the Merger Subsidiary (beyond their liability as an Indemnifying Stockholder hereunder) for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Netegrity Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the The Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification a Claim Notice to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, each claim for indemnification hereunder in respect of claims made by third parties specifying the reasonable fees amount and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised nature of the status of such suit or proceeding claim, and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading matter which may have been served on such party and any written reasonably appears likely to give rise to an indemnification claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties Party shall not agree have the right, at its expense, to any defend or negotiate a settlement of, or the entry of any judgment arising fromsuch matter, any such suit so long as the defense or proceeding without negotiation is expeditious. Except with the prior written consent of the Indemnified PartiesParty, which consent shall not be unreasonably withheld or delayed; provided that , the consent Indemnifying Party shall not, in defending any claim, enter into any settlement by which the Indemnified Party is to be bound which settlement does not include as an unconditional term thereof the delivery to the Indemnified Party by the party asserting the claim of a release from all liability in respect of such claim. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the right of the Indemnified Parties Party to be indemnified by the Indemnifying Party; provided, however, that the Indemnified Party shall not be required if entitled to reimbursement for costs and expenses, including attorneys' fees, for the defense of a matter incurred prior to the time it gives notice to the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release Party of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedan indemnification claim.
(b) In order to seek indemnification for a direct claim between the parties under this Article VI7, the an Indemnified Parties Party shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Party. Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) response, in which the Indemnifying Parties Party shall: (i) agree in writing that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, or (ii) agree dispute in writing that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in Party disputes the Response disputes its liability for all or part of the Claimed AmountClaim Notice, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”)will be resolved in accordance with Section 8.10.
(dc) During the 60-day period following the delivery of a Response that reflects a DisputeNotwithstanding anything contained herein, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company Stockholders are required to indemnify any Parent Indemnified Parties for any reason whatsoever, Parent shall have the right to reclaim any equity in the Parent issued to any Company Stockholder or to cancel all or a sufficient number or outstanding shares of Parent Common Stock registered in the name of Company Stockholder on the books of Parent, as applicable, in lieu of any cash payment or other indemnification obligations otherwise due hereunder. Any reclaimed or cancelled shares of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer Parent's stock shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)valued at $14.00 per share.
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification Merger Agreement (the “Indemnified Parties”an "INDEMNIFIED PARTY") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “Indemnifying Parties”an "INDEMNIFYING PARTY") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to the Merger Agreement, and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under the Merger Agreement and the indemnification provisions contained herein, and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in 84 which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “Non"NON-Controlling Party”CONTROLLING PARTY") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “Controlling Party”"CONTROLLING PARTY") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Silknet Software Inc)
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek to assert rights, to indemnification under this Article VI, the The Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification a Claim Notice to the other Indemnifying Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, each claim for indemnification hereunder in respect of claims made by third parties specifying the reasonable fees amount and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised nature of the status of such suit or proceeding claim, and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading matter which may have been served on such party and any written reasonably appears likely to give rise to an indemnification claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties Party shall not agree have the right, at its expense, to any defend or negotiate a settlement of, or the entry of any judgment arising fromsuch matter, any such suit so long as the defense or proceeding without negotiation is expeditious. Except with the prior written consent of the Indemnified PartiesParty, which consent shall not be unreasonably withheld or delayed; provided that , the consent Indemnifying Party shall not, in defending any claim, enter into any settlement by which the Indemnified Party is to be bound which settlement does not include as an unconditional term thereof the delivery to the Indemnified Party by the party asserting the claim of a release from all liability in respect of such claim. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the right of the Indemnified Parties Party to be indemnified by the Indemnifying Party; provided, however, that the Indemnified Party shall not be required if entitled to reimbursement for costs and expenses, including attorneys' fees, for the defense of a matter incurred prior to the time it gives notice to the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release Party of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayedan indemnification claim.
(b) In order to seek indemnification for a direct claim between the parties under this Article VI8, the an Indemnified Parties Party shall give written notification (deliver a “Claim Notice”) Notice to the Indemnifying Parties which contains Party. Within thirty (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (2030) days after such delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “Response”) response, in which the Indemnifying Parties Party shall: (i) agree in writing that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, or (ii) agree dispute in writing that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in Party disputes the Response disputes its liability for all or part of the Claimed AmountClaim Notice, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not will be resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)Section 10.10.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Nuvel Holdings, Inc.)
Indemnification Claims. (a) In Subject to the event that any of the Parties are entitledlimitations set forth in Section 7.3, or seek if an Indemnified Party wishes to assert rights, to make an indemnification claim (a “Claim”) under this Article VIVII, the such Indemnified Party or Parties seeking indemnification (the “Indemnified Parties”) shall give written notification to the other Party or Parties (the “Indemnifying Parties”) of the commencement of any suit or proceeding relating to deliver a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days after receipt by the Indemnified Parties of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Entitled Holders’ Agent (with a copy to the Escrow Agent) (or in the event an Indemnified Party elects to pursue such indemnification claim directly against an Indemnifying Parties which contains Party, to such Indemnifying Party directly) (i) stating that an Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Damages, and (ii) specifying in reasonable detail the individual items of such Damages, the date each such item was paid, incurred, suffered or sustained, or the basis for such anticipated liability, and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related. An Indemnified Party may update a description and Claim Notice from time to time to reflect any new information discovered with respect to the amount claim set forth in such Claim Notice.
(b) If the Entitled Holders’ Agent on behalf of the Indemnifying Parties (or the Indemnifying Party in the event that indemnification is being sought hereunder directly from such Indemnifying Party) shall not object in writing within the thirty (30) day period after receipt of a Claim Notice (the “Claimed AmountObjection Period”) by delivery of any Damages incurred or a written notice of objection containing a reasonably expected detailed description of the facts and circumstances supporting an objection to the applicable Claim (an “Objection Notice”), such failure to so object shall be incurred an irrevocable acknowledgment by the Indemnified Parties, Entitled Holders’ Agent on behalf of the Indemnifying Parties (iior the applicable Indemnifying Party) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the full amount of the Claimed Amountclaim for Damages set forth in such Claim Notice, and such Indemnified Party shall be entitled to recover in accordance with Section 7.5(e).
(c) Within twenty In the event that the Entitled Holders’ Agent (20or in the event that indemnification is being sought hereunder directly from an Indemnifying Party, such Indemnifying Party) days after shall deliver an Objection Notice within the Objection Period, the Entitled Holders’ Agent (or such objecting Indemnifying Party) and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to the applicable Claim within the thirty (30) day period following delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response such Objection Notice (the “ResponseDispute Period”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount). If the Entitled Holders’ Agent (or such objecting Indemnifying Parties in the Response disputes its liability for all or part of the Claimed AmountParty) and Buyer should so agree, the Indemnifying Parties and the Indemnified Parties shall follow be entitled to recover the procedures set forth agreed upon amount of Damages in accordance with Section 6.3(d) for the resolution of such dispute (a “Dispute”7.5(e).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may no agreement can be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies reached with respect to the Dispute amount of Damages with respect to a Claim after good faith negotiation and prior to the completion end of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and Dispute Period:
(i) With respect to any portion thereof to which the parties do not dispute, the Indemnified Parties shall be considered a compromise negotiation for purposes entitled to recover such undisputed amount of federal and state rules of evidenceDamages in accordance with Section 7.5(e); and
(ii) With respect to any portion thereof to which the parties continue to dispute, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service such dispute shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes resolved in any litigation or other proceeding relating to accordance with the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions terms of this Section 6.3, if a third party asserts Agreement.
(other than by means of a lawsuite) that In the Buyer, the Company or event any of their Subsidiaries is liable Damages become payable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification an Indemnified Party pursuant to this Article VIVII, and subject to the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill limitations set forth in Section 7.3, such obligation, then Damages shall be recovered as follows:
(i) the Buyer shall be entitled to satisfy such obligationFirst, with prior notice to but without prior consent by recovery from the Indemnifying Selling PartiesEscrow Fund, in which case Buyer and the Entitled Holders’ Agent shall promptly cause the Escrow Agent to release from the Escrow Fund cash equal to the amount owed to such Indemnified Party, or such lesser amount remaining in the Escrow Fund;
(ii) Second, should recovery pursuant to Section 7.5(e)(i) above, if any, be insufficient to satisfy the Buyer may subsequently make a claim for indemnification amount owed to an Indemnified Party in accordance with this Section 7.5, the provisions of this Article VI, and remaining amount shall be set off from any Earnout Consideration pursuant to Section 7.7;
(iii) Third, should recovery pursuant to Section 7.5(e)(i) and Section 7.5(e)(ii) above, if any, be insufficient to satisfy the Buyer shall be reimbursed, amount owed to an Indemnified Party in accordance with this Section 7.5, then the provisions of this Article VIEntitled Holders’ Agent shall, for any within ten (10) Business Days following the date such Damages for which it is entitled became payable, pay to indemnification such Indemnified Party such remaining amount owed to such Indemnified Party from the Entitled Holders’ Agent Expense Fund;
(iv) Lastly, should recovery pursuant to Section 7.5(e)(i), Section 7.5(e)(ii) and Section 7.5(e)(iii) above, if any, be insufficient to satisfy the remaining amount owed to an Indemnified Party in accordance with this Article VI Section 7.5, then each Indemnifying Party shall, within ten (subject 10) Business Days following the date such Damages became payable, pay to the right such Indemnified Party such Indemnifying Party’s Proportionate Share of the Indemnifying Selling Parties such remaining amount owed to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI)such Indemnified Party.
Appears in 1 contract
Sources: Merger Agreement (Inogen Inc)
Indemnification Claims. (a) In Where the event that any of the Parties are Buyer is entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “"Indemnified Parties”Party") it shall give written notification to the other Party or Parties Company Stockholders (the “"Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such suit or proceeding constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties Party assumes control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties Party and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties Party shall be considered “"Damages” " for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Non- controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains contains
(i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Indemnification Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Indemnification Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Indemnification Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Indemnification Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Indemnification Escrow Agent to distribute to the Buyer such number of Indemnity Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Indemnification Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Indemnification Escrow Agent to distribute to the Buyer such number of Indemnity Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d6.2(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Indemnity Escrow Shares delivered in satisfaction of an indemnity claim shall be the average of the last reported sale prices per share of the Buyer Common Stock on the Nasdaq National Market over the ten consecutive trading days ending on the trading day that is three trading days prior to the Closing Date (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the beginning of such ten-day period), multiplied by the number of such Indemnity Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d6.2(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Indemnification Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Indemnification Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Indemnification Escrow Agent as to what (if any) portion of the Indemnity Escrow Shares shall be distributed to the Buyer and/or the -44- 50 Indemnifying Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.36.2, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Section 6.2 and the last two sentences of Section 6.3, any references to the Indemnifying Party (except provisions relating to an obligation to make any payments provided for in Section 6.2 or Section 6.3) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Otg Software Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the Indemnified Party seeking indemnificationParty; provided that (i) the Indemnifying Parties Party may not only assume control of such defense if (A) it acknowledges in writing to the defense of a suit Indemnified Party that any damages, fines, costs or proceeding involving criminal liability or in which equitable relief is sought other liabilities that may be assessed against the Indemnified Party seeking indemnification. If the Indemnifying Parties do not so assume control of such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available in connection with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.or
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”") (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount) or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be $10.00, multiplied by the number of such Escrow Shares.
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(e) For purposes of this Section 6.2 and the last two sentences of Section 6.3, (i) if the Indemnifying Stockholders comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.2 or Section 6.3) shall be deemed to refer to the Indemnification Representatives, and (ii) if the Indemnifying Stockholders comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.2 or Section 6.3) shall be deemed to refer to the Indemnification Representatives. The Indemnification Representatives shall have full power and authority on behalf of each Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Indemnifying Stockholders under this Article VI. The Indemnification Representatives shall have no liability to any Indemnifying Stockholder for any action taken or omitted on behalf of the Indemnifying Stockholders pursuant to this Article VI.
Appears in 1 contract
Sources: Merger Agreement (Otg Software Inc)
Indemnification Claims. (a) In the event that any Purchaser asserts the existence of the Parties are entitled, or seek to assert rights, to a claim for indemnification under this Article VISection 6.1(a), the Party or Parties seeking indemnification (the “Indemnified Parties”) Purchaser shall give written notification notice of such claim to the other Party Company and the Escrow Agent in accordance with the terms of the Escrow Agreement on or Parties before September 1, 2000. Such written notice shall state that it is being given pursuant to this Section 6.3, specify the nature and amount of the receivables Purchaser is claiming are uncollectible, attach evidence of Purchaser's good faith effort to collect such receivables and indicate the date on which such claim shall be deemed accepted (such date to be established in accordance with the “Indemnifying Parties”next sentence). If the Company does not give written notice announcing the Company's intent to contest Purchaser's claim (or the amount thereof) within 30 days of receiving notice thereof, such claim shall be deemed accepted and the Escrow Agent may disburse funds from the Indemnity Deposit in accordance with the terms of the Escrow Agreement to cover such claim. In the event, however, that the Company contests such claim (or the amount thereof) by giving written notice to Purchaser and the Escrow Agent in accordance with the terms of the Escrow Agreement within said period, then the parties shall act in good faith to reach agreement regarding such claim. If the parties cannot resolve such dispute after good faith negotiations with respect thereto within 30 days after the notice of contest provided by the Company, such dispute shall be submitted to arbitration in accordance with provisions of Section 7.10. In the event that arbitration shall arise with respect to any such claim, the prevailing party shall be entitled to reimbursement of costs and expenses incurred in connection with such arbitration, including reasonable attorneys' fees.
(b) Promptly after any party hereto (hereinafter the "Indemnified Party") has received notice of or has knowledge of any claim by a person not a party to this Agreement ("Third Person"), of the commencement of any suit action or proceeding relating by a Third Person that the Indemnified Party believes in good faith is an indemnifiable claim under Section 6.1(b) or 6.2, the Indemnified Party shall give to a third the party claim for which obligated to provide indemnification pursuant to this Article VI may be soughtSection 6.1(b) or 6.2 hereof (hereinafter the "Indemnifying Party") written notice of such claim or the commencement of such action or proceeding. Such notification notice shall state the nature and the basis of such claim and a reasonable estimate of the amount thereof, the Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel, any such matter so long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and in any settlement thereof. Such cooperation shall include, but shall not be given within 20 Business Days after receipt limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party's possession or control. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Parties of notice Party in connection with any defense or settlement of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified Parties) the facts constituting the basis for such suit or proceeding and the amount of the claimed damagesasserted liability; provided, however, that no delay on the part of the Indemnified Parties Party shall be entitled, at its expense, to participate in notifying the Indemnifying Parties shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties may, upon written notice thereof to the Indemnified Parties seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to asserted liability and the negotiations of the settlement thereof. The Indemnifying Party shall not settle any such Third Person claim without the consent of the Indemnified Party seeking indemnification; provided that Party, unless the Indemnifying Parties may not assume control of the defense of a suit or proceeding involving criminal settlement thereof imposes no liability or in which equitable relief is sought against obligation on, and includes a complete release from liability of, the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party desires to accept a final and complete settlement of any such Third Person claim and the Indemnified Party refuses to consent to such settlement, then the Indemnifying Party's liability under this Section with respect to such Third Person claim shall be limited to the amount so offered in settlement by said Third Person; provided, however, that notwithstanding the foregoing, the Indemnified Party shall be entitled to refuse to consent to any such proposed settlement and the Indemnifying Party's liability hereunder shall not so assume control be limited by the amount of the proposed settlement if such settlement does not provide for the complete release of the Indemnified Party. If, upon receiving notice, the Indemnifying Party does not timely undertake to defend such matter to which the Indemnified Party is entitled to indemnification hereunder, or fails diligently to pursue such defense, the Indemnified Parties seeking indemnification shall control such defense. The Party not controlling may undertake such defense (the “Non-Controlling Party”) may participate therein at through counsel of its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceedingchoice, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2Party, which cost and expense shall be considered “Damages” for purposes of this Agreement. The Indemnifying Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified Parties, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying Parties, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the Indemnified Parties shall give written notification (a “Claim Notice”) to the Indemnifying Parties which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Indemnified Parties, (ii) a statement that the Indemnified Parties is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
(c) Within twenty (20) days after delivery of a Claim Notice, the Indemnifying Parties shall deliver to the Indemnified Parties a written response (the “Response”) in which the Indemnifying Parties shall: (i) agree that the Indemnified Parties is entitled to receive all of the Claimed Amount, (ii) agree that the Indemnified Parties is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the Indemnified Parties is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of Party may settle such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shallmatter, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VIits discretion, and the Buyer reasonably determines that Indemnifying Party shall reimburse the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim Indemnified Party for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).paid in such settlement
Appears in 1 contract
Indemnification Claims. (a) In the event that any of the Parties are entitled, or seek An Indemnified Party seeking to assert rights, rights to indemnification under this Article VI, the Party or Parties seeking indemnification (the “Indemnified Parties”) VI shall give written notification to the other Party or Parties (the “Indemnifying Parties”) Stockholder Representatives of the commencement of any action, suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification shall be given within 20 Business Days business days after receipt by the Indemnified Parties Party of notice of such action, suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such action, suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Stockholder Representatives shall relieve the Indemnifying Parties of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Parties Stockholder Representatives may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such action, suit or proceeding with counsel reasonably satisfactory to the Indemnified Party, provided the Stockholder Representatives acknowledge in writing to the Indemnified Party seeking indemnification; provided that the Indemnifying Parties any damages, fines, costs or other liabilities that may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought be assessed against the Indemnified Party seeking indemnificationin connection with such action, suit or proceeding constitute Damages for which the Indemnified Party shall, subject to the limitations set forth in Section 6.4, be indemnified pursuant to this Article VI. If the Indemnifying Parties Stockholder Representatives do not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party not controlling such defense (the “"Non-Controlling Party”") may participate therein at its their own expense; provided that if the Indemnifying Parties assumes Stockholder Representatives assume control of such defense and the Indemnified Parties seeking indemnification Party reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification Party have conflicting interests or different defenses available with respect to such action, suit or proceeding, the reasonable fees and expenses of one counsel to the Indemnified Parties Party shall be considered “"Damages” " for 41 purposes of this Agreement. The Party or Parties controlling such defense (the “Controlling Party”"CONTROLLING PARTY") shall keep the Non-Controlling Party reasonably advised of the status of such action, suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto. The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such action, suit or proceeding (including copies of any summons, complaint or other pleading pleadings which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such action, suit or proceeding at and provide the sole cost Controlling Party and expense of its counsel access to (and the Indemnifying Parties under Section 6.1 or 6.2, which cost right to make copies of) the Surviving Corporation's books and expense shall be considered “Damages” for purposes of this Agreementrecords pertaining to such matter. The Indemnifying Parties Stockholder Representatives shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such action, suit or proceeding without the prior written consent of the Indemnifying PartiesStockholder Representatives, which shall not be unreasonably withheld withheld, conditioned or delayed; provided that if the Stockholder Representatives do not assume the defense of such action, suit or proceeding pursuant to this Section 6.2(a), the Indemnified Party shall be entitled to agree to a settlement of, or the entry of any judgment arising from, such action, suit or proceeding, after giving notice of the same to the Stockholder Representatives, on such terms as the Indemnified Party in good faith may deem appropriate.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give a written notification (a “Claim Notice”"CLAIM NOTICE") to the Indemnifying Parties Stockholder Representatives and the Escrow Agent which contains (i) a description and the amount (the “Claimed Amount”"CLAIMED AMOUNT") of any Damages incurred as a result of any final, unappealable judgment, settlement or acknowledgment of the Stockholder Representatives or reasonably expected to be incurred by the Indemnified PartiesParty as a result of such claim, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amountsuch Damages.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Stockholder Representatives shall deliver to the Indemnified Parties Party a written response (the “Response”"RESPONSE") in which the Indemnifying Parties Stockholder Representatives shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a copy of instructions to the Escrow Agent to release to the Indemnified Party Escrow Shares having a Value (as defined in the Escrow Agreement) equal to the Claimed Amount), (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"AGREED AMOUNT") (in which case the Response shall be accompanied by a copy of instructions to the Escrow Agent to release to the Indemnified Party Escrow Shares having a Value (as defined on the Escrow Agreement) equal to the Agreed Amount”) Amount or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Parties in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties and the Indemnified Parties shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties and the Indemnified Parties shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties and the Indemnified Parties shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”). In the event the Indemnifying Parties and the Indemnified Parties agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties and the Indemnified Parties to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties and the Indemnified Parties agree to pursue an ADR Procedure, neither the Indemnifying Parties nor the Indemnified Parties may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties and the Indemnified Parties shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying Parties, the Indemnified Parties or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties and the Indemnified Parties shall be considered to be Damages; provided, that if the Indemnifying Parties are determined not to be liable for Damages in connection with such Dispute, the Indemnified Parties shall pay all such fees and expenses. Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that the Company or any of their Subsidiaries has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, with prior notice to but without prior consent from the Indemnifying Selling Parties, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).Claimed
Appears in 1 contract
Sources: Merger Agreement (Staples Inc)
Indemnification Claims. (a) In the event that any of the Parties are A party entitled, or seek seeking to assert rights, to indemnification under this Article VI, the Party or Parties seeking indemnification VI (the “an "Indemnified Parties”Party") shall give written notification (a "Notification of Suit") to the other Party or Parties party from whom indemnification is sought (the “an "Indemnifying Parties”Party") of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought. Such notification Notification of Suit shall be given within 20 Business Days 30 business days after receipt by the Indemnified Parties Party of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the Indemnified PartiesParty) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided, however, that no delay on the part of the Indemnified Parties Party in notifying the Indemnifying Parties Party shall relieve the Indemnifying Parties Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 30 days after delivery of such notificationNotification of Suit, the Indemnifying Parties Party may, upon written notice thereof to the Indemnified Parties seeking indemnificationParty, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory if, but only if, the Indemnifying Parties acknowledge in writing their obligation to indemnify the Indemnified Party seeking indemnificationParties hereunder against any Damages that such Indemnified Parties incur or have incurred in connection with such third party claim; provided that the Indemnifying Parties Party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the Indemnified Party seeking indemnificationParty. If the Indemnifying Parties do Party does not so assume control of such defense, the Indemnified Parties seeking indemnification Party shall control such defense. The Party party not controlling such defense (the “"Non-Controlling controlling Party”") may participate therein at its own expense; provided that if the Indemnifying Parties assumes control of such defense and the Indemnified Parties seeking indemnification reasonably concludes that the Indemnifying Parties and the Indemnified Parties seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the Indemnified Parties shall be considered “Damages” for purposes of this Agreement. The Party or Parties party controlling such defense (the “"Controlling Party”") shall keep the Non-Controlling controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling controlling Party with respect thereto. The Non-Controlling controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party as reasonably needed in the defense of such suit or proceeding at the sole cost and expense of the Indemnifying Parties under Section 6.1 or 6.2, which cost and expense shall be considered “Damages” for purposes of this Agreementproceeding. The Indemnifying Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnified PartiesParty, which shall not be unreasonably withheld or delayed; provided that the consent of the Indemnified Parties shall not be required if the Indemnifying Parties agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnified Parties from further liability and has no other materially adverse effect on the Indemnified Parties. The Indemnified Parties Party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the Indemnifying PartiesParty, which shall not be unreasonably withheld or delayed.
(b) In order to seek indemnification under this Article VI, the an Indemnified Parties Party shall give written notification (a “"Claim Notice”") to the Indemnifying Parties Party which contains (i) a description and the amount (the “"Claimed Amount”") of any Damages incurred or reasonably expected to be incurred by the Indemnified PartiesParty, (ii) a statement that the Indemnified Parties Party is entitled to indemnification under this Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of such Damages. If the Claimed AmountIndemnified Party is seeking to enforce such claim pursuant to the Escrow Agreement, the Indemnifying Party shall deliver a copy of the Claim Notice to the Escrow Agent.
(c) Within twenty (20) 20 days after delivery of a Claim Notice, the Indemnifying Parties Party shall deliver to the Indemnified Parties Party a written response (the “"Response”") in which the Indemnifying Parties Party shall: (i) agree that the Indemnified Parties Party is entitled to receive all of the Claimed Amount, ; (ii) agree that the Indemnified Parties Party is entitled to receive part, but not all, of the Claimed Amount (the “"Agreed Amount”) "); or (iii) dispute that the Indemnified Parties Party is entitled to receive any of the Claimed Amount. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive all of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Claimed Amount, by check or by wire transfer, or, if the Indemnifying Parties are the Company Stockholders, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value (as defined below) equal to the Claimed Amount. If the Indemnifying Party agrees that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount, the Indemnifying Party shall deliver to the Indemnified Party with the Response either a payment for the Agreed Amount, by check or by wire transfer, or, if the Indemnifying Parties are the Company Stockholders, deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice instructing the Escrow Agent to distribute to the Buyer such number of Escrow Shares as have an aggregate Value equal to the Agreed Amount. If the Indemnifying Party in the Response disputes its liability for all or part of the Claimed Amount, the Indemnifying Parties Party and the Indemnified Parties Party shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “"Dispute”"). For purposes of this Article VI, the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall equal the number of such Escrow Shares, multiplied by the average of the last reported sale prices per share of the Buyer Common Stock on the Nasdaq National Market over the ten consecutive trading days ending on the last trading day before the date of determination (the "Determination Price"); provided, however, that if the Determination Price is less than $35.50 then the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be based on $35.50 per share and if the Determination Price is greater than $106.50 per share then the "Value" of any Escrow Shares delivered in satisfaction of an indemnity claim shall be based on $106.50 per share (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting the Buyer Common Stock since the beginning of such ten-day period, or, in the case of the $35.50 and $106.50 per share prices, since the date hereof).
(d) During the 60-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Parties Party and the Indemnified Parties Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 60-day period, the Indemnifying Parties Party and the Indemnified Parties Party shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding nonbinding or binding upon the parties, as they agree in advance) (the “"ADR Procedure”"). In the event the Indemnifying Parties Party and the Indemnified Parties Party agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “"ADR Service”"), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of this Section 6.3(d) shall not obligate the Indemnifying Parties Party and the Indemnified Parties Party to pursue an ADR Procedure or prevent either such Party party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the Indemnifying Parties Party and the Indemnified Parties Party agree to pursue an ADR Procedure, neither the Indemnifying Parties Party nor the Indemnified Parties Party may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure. Any ADR Procedure undertaken by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the Indemnifying PartiesParty, the Indemnified Parties Party or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product. Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible). The fees and expenses of any ADR Service used by the Indemnifying Parties Party and the Indemnified Parties Party shall be considered to be Damages; provided, that if shared equally by the Indemnifying Parties are determined not Party and the Indemnified Party. If the Indemnified Party is seeking to be liable for Damages in connection with such Disputeenforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Indemnifying Party and the Indemnified Parties Party shall pay all such fees and expenses. deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, pursuant to an ADR Procedure, as a result of a judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Shares shall be distributed to the Buyer and/or the Company Stockholders (which notice shall be consistent with the terms of the resolution of the Dispute).
(e) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that the Buyer, the Company or any of their Subsidiaries an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and the Buyer such Indemnified Party reasonably determines that the Company or any of their Subsidiaries it has a valid business reason to fulfill such obligation, then (i) the Buyer such Indemnified Party shall be entitled to satisfy such obligation, with without prior notice to but without prior or consent from the Indemnifying Selling PartiesParty, (ii) the Buyer such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer such Indemnified Party shall be reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Selling Parties Party to dispute the Buyer’s Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(f) For purposes of this Agreement, in the case where the Indemnifying Parties are the Company Stockholders, references to the "Indemnifying Party" (except provisions relating to an obligation to make or a right to receive any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative. The Indemnification Representative shall have full power and authority on behalf of each Company Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders under this Article VI. The Indemnification Representative shall have no liability to any Company Stockholder for any action taken or omitted on behalf of the Company Stockholders pursuant to this Article VI. Notices or communications to or from the Indemnification Representative shall constitute notice to or from each of the Company Stockholders.
Appears in 1 contract
Sources: Merger Agreement (Affymetrix Inc)