Common use of Defensive Actions Clause in Contracts

Defensive Actions. SB will indemnify, defend, and hold harmless ArQule, its Affiliates, and their respective officers, directors, employees, and agents from any and all loss, damage, cost, and expense (including reasonable attorneys fees) and amounts paid in settlement arising from any actual or alleged infringement claim brought by a third party, in law or in equity, based on activities undertaken by SB or by ArQule at the direction of SB pursuant to this Agreement (except for claims based solely on the practice of an ArQule Patent Right or the use of ArQule Technology) or based on the manufacture or sale of a Royalty-Bearing Product. In the event that ArQule intends to claim indemnification under this Subsection, ArQule shall promptly notify SB of the infringement action and SB shall assume the defense of the action under its sole control, including the right to effect a settlement. A failure by ArQule to deliver notice to SB within a reasonable time shall relieve SB of its indemnity obligation under this Subsection to the extent such failure prejudices the ability of SB to defend such action. ArQule shall cooperate fully with SB and its legal representatives in the investigation and defense of the action. In the event of a settlement, SB shall obtain the consent of ArQule before agreeing to any settlement that imposes restrictions which are inconsistent with the rights and obligations of the parties under this Agreement.