Procedures for Indemnification Sample Clauses: 2k Samples

Appears in 5 contracts

Sources: Separation and Distribution Agreement (New Senior Investment Group Inc.), Separation and Distribution Agreement (Starwood Property Trust, Inc.), Separation and Distribution Agreement (Starwood Waypoint Residential Trust)

Procedures for Indemnification. (ai) ~~An Indemnitee~~ If any DSKX Indemnified Person or PHMD Indemnified Person (each, an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any matter ~~that such Indemnitee has determined has given or would~~ (other than a Third Party Claim) for which indemnification is provided in Article VI, the Indemnified Person shall promptly after it first obtains knowledge of facts which could reasonably be expected to give rise to Losses that will serve the basis for such claim, give written notice (a ~~right~~ “Notice of Claim”) to PHMD or Surviving Corporation, as applicable, setting forth the basis for such claim and the nature and estimated amount of the claim to the extent then feasible (which estimate shall not be conclusive of the final amount of the claim), all in reasonable detail; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Surviving Corporation, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. If PHMD or Surviving Corporation, as applicable, disputes any claim set forth in the Notice of Claim, it may, at any time deliver to the Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim, and the Parties shall attempt in good faith for a period of thirty (30) days after delivery of the dispute notice to agree upon the rights of the Parties with respect to such Notice of Claim. If no such agreement can be reached after good faith negotiation, the Parties shall have the rights and remedies, if any, available to them under this Agreement or applicable Legal Requirements. (ii) If an Indemnified Person shall claim indemnification hereunder arising from any ~~Ancillary Agreement~~ Third Party Claim for which indemnification is provided in Section 6.2, the Indemnified Person shall promptly after it first obtains knowledge of such Third Party Claim, give written notice (~~other than~~ a “Third Party Notice”) to PHMD or Surviving Corporation, as applicable (each, an “Indemnifying Person”), of the basis for such claim, setting forth the nature of the claim or demand in reasonable detail to the extent known by the Indemnified Person; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Surviving Corporation, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. The Indemnifying Person, upon notice to the Indemnified Person, may at any time within thirty (30) days after receiving a Third Party Notice, at its own cost and through counsel of its choosing and reasonably acceptable to the Indemnified Person, defend any claim or demand set forth in a Third Party Notice. The Indemnifying Person shall have the right to compromise and settle all indemnifiable matters related to Third Party Claims which are susceptible to being settled and as to which it shall have properly assumed the defense; provided, that the Indemnifying Party shall not, without the prior written consent of the Indemnified Person settle or compromise any Third Party Claim or consent to the entry of any final judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff of a written release or releases from all liability in respect of such Third Party Claim of all Indemnified Persons named in such Third Party Claim and the sole relief for which are monetary damages that are paid in full by the Indemnifying Party. In the event that a particular Third Party Claim is subject to the limitations set forth in Section 6.3(ii) and Section 6.3(iii) and the aggregate amount of such Third Party Claim exceeds the Indemnifying Person’s applicable maximum aggregate liability, the Indemnifying Person shall not reject any settlement or compromise offer without the prior consent of the Indemnified Person. The Indemnifying Person shall from time to time and otherwise at the Indemnified Person’s request apprise the Indemnified Person of the status of the claim, liability or expense and any resulting Proceeding and shall furnish the Indemnified Person with such documents and information filed or delivered in connection with such claim, liability or expense or otherwise thereto as the Indemnified Person may reasonably request, and shall diligently defend the applicable Third-Party ~~Claim which~~ Claim. The Indemnified Person shall ~~be governed by Section 9.4(b))~~ not admit any liability to any third Party ~~that~~ in connection with any matter which is the subject of a Notice of Claim as to which the Indemnifying Party shall have properly assumed the defense and shall cooperate fully in the manner requested by the Indemnifying Party in the defense of such claim. Notwithstanding anything herein stated, the Indemnified Person shall at all times have the right to fully participate in such defense at its own expense directly or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteethrough counsel; provided, however, that if there exists a material conflict of interest between the ~~failure~~ Indemnified Person, on the one hand, and the Indemnifying Party, on the other hand, or if the Indemnified Person has been advised by counsel that there may be one or more legal or equitable defenses available to ~~provide such notice shall not release~~ it that are different from or additional to those available to the Indemnifying Party, which, in either case, would make it inappropriate for the same counsel to represent both the Indemnifying Party ~~from any of its obligations except~~ and ~~solely to~~ the ~~extent~~ Indemnified Person, then the ~~Indemnifying Party~~ Indemnified Person shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to ~~indemnification pursuant to this Agreement, such Indemnitee shall notify~~ retain its own counsel at the cost and expense of the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure Person (except that the Indemnifying Party ~~or Parties~~ shall not be ~~liable~~ obligated to pay the fees and expenses of more than one separate counsel for ~~any expenses incurred~~ all Indemnified Persons, taken together). Until such time as the Indemnifying Person has timely delivered a notice of intent to defend a Third Party Claim to the Indemnified Person, the Indemnified Person shall, at the expense of the Indemnifying Person, undertake the defense of (with counsel selected by the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (~~Indemnified Person and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~Indemnifying Person) such claim, ~~if it gives written notice of its intention~~ liability or expense, and shall have the right to ~~do so (including a statement that~~ compromise or settle such claim, liability or expense exercising reasonable business judgment; provided, that, such compromise or settlement shall not be effected within the ~~Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within~~ first thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the after Indemnifying Party’s ~~exposure in respect~~ receipt of such ~~Third-~~Third Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim Notice without the prior written consent of the Indemnifying ~~Party~~ Person (such consent not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 5 contracts

Sources: Merger Agreement, Merger Agreement (Ds Healthcare Group, Inc.), Merger Agreement (Photomedex Inc)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against any the Company under this Section 6.2, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of ~~such Third-Party Claim that~~ more than one (1) separate legal counsel for the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitees. In the case of the Indemnitees, the legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitees shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitees which relates to such action or Claim. The Company shall keep the Indemnitees fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitees, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the ~~Third-Party Claim without the consent (not~~ Company shall be subrogated to ~~be unreasonably withheld, conditioned or delayed)~~ all rights of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations Indemnitees with respect to ~~such Third-Party Claim~~ all third parties, firms or ~~includes an admission of guilt or liability on behalf of~~ corporations relating to the ~~Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party,~~ matter for which indemnification has been made. The failure to deliver written notice to the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of~~ Company as provided in this Agreement or shall not relieve the Company of any ~~Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect~~ liability to the ~~foregoing other than~~ Indemnitees under this ~~Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement~~Section 6.2, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 4 contracts

Sources: Series a and a 1 Preferred Stock Purchase Agreement, Series a Preferred Stock Purchase Agreement, Stock Purchase Agreement (RPX Corp)

Procedures for Indemnification. (a) An Indemnitee shall give prompt notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and ~~containing~~ contain a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall promptly notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim ~~promptly~~ (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall promptly deliver to the Indemnifying ~~Party, promptly~~ Party (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such ~~Indemnitee~~▇▇▇▇▇▇▇▇▇▇’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 3 contracts

Sources: Separation and Distribution Agreement (W. P. Carey Inc.), Separation and Distribution Agreement (Net Lease Office Properties), Separation and Distribution Agreement (Net Lease Office Properties)

Procedures for Indemnification. Except as otherwise provided in Section 12.3, promptly after receipt by a party entitled to indemnification under Sections 14.1 or 14.2 or any other provision of this Agreement (athe “Indemnitee”) An of written notice of the assertion or the commencement of any Proceeding with respect to any matter referred to in Sections 14.1 or 14.2 or in any other applicable provision of this Agreement, the Indemnitee shall give written notice describing such claim or Proceeding in reasonable detail in light of ~~any matter that such~~ the circumstances then known to the Indemnitee ~~has determined has given or would reasonably be expected~~ to ~~give rise~~ the party obligated to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification indemnify Indemnitee (the “~~Indemnifying Party~~Indemnitor”~~) promptly (~~), and ~~in any event within fifteen (15) days) after making such a determination. Such notice~~ thereafter shall ~~state~~ keep the ~~amount~~ Indemnitor reasonably informed with respect thereto; provided, however, that failure of the ~~Loss claimed, if known, and method~~ Indemnitee to keep the Indemnitor reasonably informed as provided herein shall not relieve the Indemnitor of ~~computation thereof, and containing a reference~~ its obligations hereunder except to the ~~provisions of this Agreement or~~ extent that the ~~applicable Ancillary Agreement~~ Indemnitor is prejudiced thereby. If any Proceeding is commenced against any Indemnitee by a Third Party, the Indemnitor shall be entitled to participate in ~~respect of which~~ such ~~right of indemnification is claimed by such Indemnitee~~Proceeding and assume the defense thereof at the Indemnitor’s sole expense; provided, however, that the ~~failure to provide such notice~~ Indemnitor shall not ~~release~~ have the ~~Indemnifying Party~~ right to assume the defense of any Proceeding if (a) the Indemnitee shall have one or more legal or equitable defenses available to it which are different from ~~any of its obligations except and solely~~ or in addition to those available to the ~~extent~~ Indemnitor, and, in the ~~Indemnifying Party shall have been materially prejudiced as a result~~ reasonable opinion of outside counsel to the Indemnitee, counsel for the Indemnitor could not adequately represent the interests of the Indemnitee because such ~~failure.~~ interests would be in conflict with those of the Indemnitor; (b) If such Proceeding is reasonably likely to have a ~~claim~~ material adverse effect on any other matter beyond the scope or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, limits of the ~~Third-Party Claim promptly~~ indemnification obligation of the Indemnitor; or (~~and~~ c) the Indemnitor shall not have assumed the defense of the Proceeding in a timely fashion (but in any event within thirty (30) ~~days) after receipt by such Indemnitee~~ days of ~~written~~ notice of ~~the Third-Party Claim; provided, however, that the failure to provide notice of any~~ such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such noticeProceeding). ~~Thereafter~~If the Indemnitor, ~~the Indemnitee~~ shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of ~~a Third-Party Claim~~any Proceeding, ~~such Indemnitee shall have~~ the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to ~~control the defense of such Third-Party Claim,~~ participate in any Proceeding at ~~the Indemnifying Party’s~~ its expense, and the Indemnitor shall not settle such Proceeding unless the settlement shall include as an unconditional term thereof the giving by the claimant or the plaintiff of a full and unconditional release of the Indemnitee, from all Liability with ~~counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable~~ respect to the ~~Indemnifying Party). If the Indemnitee is conducting the defense against any~~ matters that are subject to such ~~Third-Party Claim~~Proceeding, ~~the Indemnifying Party~~ or otherwise shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required have been approved by the Indemnitee~~; provided~~, ~~however, that~~ such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (approval not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 3 contracts

Sources: Asset Contribution Agreement (Allogene Therapeutics, Inc.), Asset Contribution Agreement (Allogene Therapeutics, Inc.), Asset Contribution Agreement (Allogene Therapeutics, Inc.)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ The procedures for indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ shall be ~~governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such~~ as follows: A. The party claiming the indemnification (the “"Claimant") shall promptly give notice to the party from whom indemnification is claimed (the "Indemnifying Party”") ~~promptly~~ of any claim, whether between the parties or brought by a third party, specifying (i) the factual basis for such claim, and ~~in any event within fifteen~~ (15ii) ~~days) after making such a determination. Such notice shall state~~ the amount of the ~~Loss claimed~~claim. If the claim relates to an action, ~~if known~~suit or proceeding filed by a third party against Claimant, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall ~~not release~~ be given by Claimant within five (5) days after written notice of such action, suit or proceeding was given to Claimant. B. Following receipt of notice from the ~~Indemnifying Party from any~~ Claimant of ~~its obligations except and solely to the extent~~ a claim, the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days to make such investigation of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of~~ claim as the Indemnifying Party deems necessary or desirable. For the purposes of such investigation, the Claimant agrees to ~~respond within such~~ make available to the Indemnifying Party and/or its authorized representative(s) the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnifying Party agree at or prior to the expiration of said thirty (30) day period (or any mutually agreed upon extension thereof) to the validity and amount of such claim, or if the Indemnifying Party does not respond to such notice, the Indemnifying Party shall immediately pay to the Claimant the full amount of the claim. Buyer shall be ~~deemed~~ entitled to ~~be an election~~ apply any or all of the Accounts Receivable collected on behalf of Seller to a claim as to which Buyer is entitled to indemnification hereunder. If the Claimant and the Indemnifying Party do not agree within said period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy. C. With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnifying Party shall have the right at its own expense, to participate in or assume control of the defense of such claim, and the Claimant shall cooperate fully with the Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifying Party. If the Indemnifying Party ~~not~~ elects to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third~~any third-~~Party Claim~~party claim, ~~such Indemnitee~~ the Claimant shall have the right to ~~employ separate counsel and to~~ participate in ~~(but not control)~~ the ~~defense, compromise or settlement thereof,~~ defense of such claim at its own ~~expense and~~expense. D. If a claim, ~~in any event~~whether between the parties or by a third party, ~~shall reasonably cooperate~~ requires immediate action, the parties will make all reasonable efforts to reach a decision with respect thereto as expeditiously as possible. E. If the Indemnifying Party does not elect to assume control or otherwise participate in ~~such~~ the defense ~~and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ of any third party claim, it shall be bound by the ~~Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would,~~ results obtained in ~~the~~ good faith ~~judgment of~~ by the ~~Indemnitee, result in the loss of any existing privilege~~ Claimant with respect to such ~~information or violate any applicable Law~~claim. ~~(d) Notwithstanding anything~~ F. The indemnification rights provided in Sections 10.2 and 10.3 shall extend to the ~~contrary~~ shareholders, directors, officers, partners employees and representatives of the Claimant although for the purpose of the procedures set forth in this Section ~~9.4~~10.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any ~~Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with~~ indemnification claims by such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee parties shall be ~~entitled to control~~ made by and through the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawClaimant. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 3 contracts

Sources: Asset Purchase Agreement (American Radio Systems Corp /Ma/), Asset Purchase Agreement (American Radio Systems Corp /Ma/), Asset Purchase Agreement (American Radio Systems Corp /Ma/)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ an Indemnitee by delivery of a written notice to ~~any Party that~~ the Stockholder Representative requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ the procedures set forth in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence Section 10.3 shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be ~~liable for any expenses incurred~~ observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party ClaimStockholder Representative. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the Stockholder Representative shall have 30 days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do such Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by the Stockholder Representative on behalf of all Indemnitors, and the Indemnification Claim shall be paid in accordance with subsection (~~including a statement that~~ d) hereof. If an objection is timely interposed by the Stockholder Representative and the dispute is not resolved by such Indemnitee and the Stockholder Representative within 15 days from the date the Indemnitee ~~is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from~~ receives such ~~Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within~~ objection, such ~~thirty (30) day period~~ dispute shall be ~~deemed to be an election~~ resolved by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate arbitration as provided in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable LawSection 10.11. (d) ~~Notwithstanding anything to~~ Upon determination of the ~~contrary in this Section 9.4, in the event that (i)~~ amount of an ~~Indemnifying Party elects not to assume the defense of a Third-Party~~ Indemnification Claim, ~~(ii) there exists a conflict of interest or potential conflict of interest~~ whether by agreement between the ~~Indemnifying Party~~ Stockholder Representative and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or by an arbitration award or by any ~~of its material Assets~~other final adjudication, such ~~Indemnitee~~ Indemnification Claim shall be ~~entitled to control~~ paid out of the ~~defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable~~ Stock Escrow pursuant to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment provisions of the ~~Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law~~Escrow Agreement. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 3 contracts

Sources: Merger Agreement (National Data Corp), Merger Agreement (National Data Corp), Merger Agreement (National Data Corp)

Procedures for Indemnification. (a) An Other than with respect to Third Party Claims, which shall be governed by Section 5.4(b), each Fortive Indemnitee and Ralliant Indemnitee (each, an “Indemnitee”) shall ~~give notice of~~ notify in writing, with respect to any matter that such Indemnitee has determined has given or ~~would reasonably be expected to~~ could give rise to a right of indemnification under this Agreement or any Ancillary ~~Agreement (other than a Third-~~Agreement, the Party ~~Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that~~ is or may be required pursuant to this ~~Agreement~~ Article V or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within forty-five (45) ~~promptly (and~~ days of such determination, stating in ~~any event within fifteen (15) days) after making~~ such ~~a determination. Such~~ written notice ~~shall state~~ the amount of the Indemnifiable Loss claimed, if known, ~~and~~ and, to the extent practicable, method of computation thereof, and ~~containing a reference~~ referring to the provisions of this ~~Agreement or the applicable Ancillary~~ Agreement in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. The Indemnifying Party will have a period of forty-five (45) days after receipt of a notice under this Section 5.4(a) within which to respond thereto. If the Indemnifying Party fails to respond within such period, the Liability specified in such notice from the Indemnitee shall be conclusively determined to be a Liability of the Indemnifying Party hereunder. If such Indemnifying Party responds within such period and rejects such claim in whole or in part, the disputed matter shall be resolved in accordance with Article VII. (b) If a claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement ~~or an Affiliate of a Party~~ (a “~~Third-~~Third Party Claim”) as to which such Indemnitee is or ~~reasonably expects to~~ may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in ~~writing~~writing (which notice obligation may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), and in reasonable detail, of the ~~Third-~~Third Party Claim promptly (and in any event within ~~thirty~~ the earlier of (30x) ~~days~~forty-five (45) days or (y) two (2) Business Days prior to the final date of the applicable response period under such Third Party Claim) after receipt by such Indemnitee of written notice of the ~~Third-~~Third Party Claim; provided, however, that the failure to provide notice of any such ~~Third-~~Third Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the ~~Third-~~Third Party Claim. For all purposes of this Section 5.4(b), each Party shall be deemed to have notice of the matters set forth on Schedule 1.1(81)(viii). (c) An Other than in the case of (i) Taxes addressed in the Tax Matters Agreement, which shall be addressed as set forth therein or (ii) indemnification by a beneficiary Party of a guarantor Party pursuant to Section 2.9(c) (the defense of which shall be controlled by the beneficiary Party), the Indemnifying Party shall be ~~entitled (but shall not be required)~~ entitled, if it so chooses, to ~~assume, control~~ assume the defense ofthereof, and ~~settle any Third-~~if it does not assume the defense of such Third Party Claim, to participate in the defense of any Third Party Claim in accordance with the terms of Section 5.5 at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be~~ that is reasonably acceptable to the Indemnitee, ~~if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ within thirty (30) days of the receipt of an indemnification notice from such ~~Indemnitees of the Third-Party Claim (failure of~~ Indemnitee; provided, however, that the Indemnifying Party ~~to respond within such thirty (30) day period~~ shall not be ~~deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election~~ entitled to assume the defense of any Third Party Claim to the extent such Third Party Claim (x) is an Action by a ~~Third-~~Governmental Entity, (y) involves an allegation of a criminal violation or (z) seeks injunctive relief against the Indemnitee. In connection with the Indemnifying Party’s defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall ~~reasonably~~ cooperate with the Indemnifying Party in such defense and make available to the Indemnifying ~~Party~~ Party, at the Indemnifying Party’s expense, all ~~witnesses~~ witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event ~~that (i) an Indemnifying Party elects not to assume the defense~~ of a ~~Third-Party Claim, (ii) there exists a conflict of interest or potential~~ conflict of interest between the Indemnifying Party and the ~~Indemnitee~~applicable Indemnitee(s), ~~(iii)~~ or in the event that any ~~Third-~~Third Party Claim seeks ~~an order, injunction or other~~ equitable relief which would restrict or ~~relief for other than money damages against~~ limit the ~~Indemnitee, (iv)~~ future conduct of the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, business or ~~(v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets~~operations, such ~~Indemnitee~~ Indemnitee(s) shall be entitled to ~~control the defense of such Third-Party Claim~~retain, at the Indemnifying Party’s expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter; provided, further, that if the Indemnifying Party has assumed the defense of the Third Party Claim but has specified, and continues to assert, any reservations or exceptions to such defense or to its liability therefor, then, in any such case, the reasonable fees and expenses of one separate counsel ~~of such Indemnitee’s choosing (such counsel to~~ for all Indemnitees shall be ~~reasonably acceptable to~~ borne by the Indemnifying Party). If The Indemnifying Party shall have the ~~Indemnitee is conducting~~ right to compromise or settle a Third Party Claim the defense ~~against~~ of which it shall have assumed pursuant to this Section 5.4(c) and any such ~~Third-~~settlement or compromise made or caused to be made of a Third Party ~~Claim~~Claim in accordance with this Article V shall be binding on the Indemnitee, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise. Notwithstanding the foregoing sentence, the Indemnifying Party shall ~~reasonably cooperate with~~ not settle any such Third Party Claim without the written consent of the Indemnitee unless such settlement (A) completely and unconditionally releases the Indemnitee in connection with such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required matter, (B) provides relief consisting solely of money damages borne by ~~the Indemnitee; provided, however, that such access shall not require~~ the Indemnifying Party and (C) does not involve any admission by the Indemnitee of any wrongdoing or violation of Law. (d) If an Indemnifying Party fails for any reason to ~~disclose any information~~ assume responsibility for defending a Third Party Claim within the ~~disclosure of which would~~period specified in this Section 5.4, in such Indemnitee may defend such Third Party Claim at the ~~good faith judgment~~ cost and expense of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the ~~Third-~~Third Party ~~Claim~~Claim within the time period specified in clause (c) above, it shall not be a defense to any obligation to pay any amount in respect of such ~~Third-~~Third Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such ~~Third-~~Third Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (fe) In Except as otherwise set forth in Section 6.5 and Section 7.3, or to the ~~case of a Third-Party Claim~~extent set forth in any Ancillary Agreement, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent absent fraud or ~~intentional~~ willful misconduct by an Indemnifying Party, the indemnification provisions of this Article IX V shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or ~~Losses~~ losses resulting from any breach of this Agreement or any Ancillary ~~Agreement,~~ Agreement and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX V against any Indemnifying Party. For the avoidance of doubt, all disputes in respect of this Article V shall be resolved in accordance with Article VII. (f) Each Party hereby covenants and agrees that none of it, its Subsidiaries or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any Fortive Liabilities by the Ralliant Group the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Fortive Liabilities by the Fortive Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason, or (c) the provisions of this Article V are void or unenforceable for any reason. (g) Notwithstanding the foregoing, to the extent any Ancillary Agreement provides procedures for indemnification that differ from the provisions set forth in this Section 5.4, the terms of the Ancillary Agreement will govern. (h) ~~Notwithstanding anything~~ The provisions of this Article V shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claims brought or asserted after the date of this Agreement. There shall be no requirement under this Section 5.4 to give a notice with respect to any Third Party Claim that exists as of the Effective Time. The Parties acknowledge that Liabilities for Actions (regardless of the parties to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would Actions) may be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REITpartly Fortive Liabilities and partly Ralliant Liabilities. If the ~~amount payable~~ Parties cannot agree on the allocation of any such Liabilities for ~~any tax year under~~ Actions, they shall resolve the ~~preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay~~ matter pursuant to the ~~relevant Indemnitee pursuant to this Agreement (~~procedures set forth in Article VII. Neither Party shall, nor shall either Party permit its Subsidiaries to, file Third Party Claims or cross-claims against the ~~“Expense Amount”), then: (1) the Indemnifying~~ other Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds its Subsidiaries in an ~~amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A)~~ Action in which a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationThird Party Claim is being resolved.

Appears in 3 contracts

Sources: Separation and Distribution Agreement (Fortive Corp), Separation and Distribution Agreement (Ralliant Corp), Separation and Distribution Agreement (Ralliant Corp)

Procedures for Indemnification. Any claims for indemnification by any party entitled to indemnification hereunder (an "INDEMNIFIED PARTY") from any party hereunder (an "INDEMNITOR") under this ARTICLE XI shall be made by an Indemnified Party by delivery of a written notice to the Indemnitor requesting indemnification (an "INDEMNIFICATION CLAIM") and specifying the basis on which indemnification is sought and the amount of asserted Losses. Indemnitor shall have 30 days after the date on which the Indemnitor receives the notice of an Indemnification Claim to object to such Indemnification Claim by delivery of a written notice of such objection to the Indemnified Party specifying in reasonable detail the basis for such objection. If within 30 days after the date on which the Indemnitor receives the notice of the Indemnification Claim, the Indemnitor has not delivered to the Indemnified Party a notice objecting to all or any portion of the claimed Loss and setting forth the amount of such claimed indemnification for such Loss objected to and the reasons for such objection, the Indemnified Party shall be entitled to indemnification for such Loss, and the Indemnitor shall promptly pay the full amount of such Loss. If, within 30 days after the date on which the Indemnitor receives the notice of an Indemnification Claim, the Indemnitor delivers to the Indemnified Party an objection to all or any portion of the claimed Loss, setting forth the amount of such Loss objected to and the reasons for such objection, the Indemnified Party shall be entitled to reimbursement for the portion of such Loss not objected to by the Indemnitor and the Indemnitor shall promptly pay the full amount of so much of the Loss as to which the Indemnitor did not object. (a) ~~An Indemnitee shall give notice~~ Upon determination of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of an Indemnification Claim, whether by agreement between the ~~Loss claimed~~Indemnitor and the Indemnified Party or by any final adjudication, ~~if known, and method of computation thereof, and containing a reference to~~ the ~~provisions of this Agreement or~~ Indemnitor shall pay the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result amount of such ~~failure~~Indemnification Claim within 5 days of the date such amount is determined. (b) ~~If a claim~~ The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at law or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimequity. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification Any payment under this Article ~~IX)~~ shall be treated for Tax purposes as an adjustment of the Purchase Price to the extent such characterization is proper and permissible under the applicable ~~Indemnitees within thirty (30) days of~~ U.S. Tax law, including the ~~receipt of notice from~~ Code, Treasury regulations, court decisions and administrative promulgations or, alternatively, by Buyer as an offset to a Tax benefit item, if such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or characterization is permissible under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable LawTax law. (d) ~~Notwithstanding anything~~ In no event shall the aggregate liability of Seller for claims asserted pursuant to ~~the contrary in~~ Section 11.1(i) and (iii) of this Agreement and Section ~~9.4, in the event that~~ 9.1 (i) ~~an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ and ~~the Indemnitee,~~ (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnifying Party, result in the loss of any existing privilege~~ Asset Purchase Agreement (excluding indemnification with respect to ~~such information or violate any applicable Law~~the payment of Taxes, penalties, Brighton Governmental Claims, interest and collection costs thereof) exceed $700,000. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any Seller's obligation to ~~pay any amount in respect of such Third-Party Claim that~~ indemnify Buyer under SECTION 11.1(v) above shall terminate on the ~~Indemnifying Party was not consulted in~~ date which is the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), thenearlier of: (1i) ~~the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable~~ Buyer's receipt of evidence that is satisfactory to the ~~Indemnitee and shall not release any portion thereof to the Indemnitee~~Buyer that all actual or potential Brighton Governmental Claims have been resolved, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, or (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile expiration of the ~~Indemnitee or any guarantor~~ applicable statutes of ~~the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization~~limitation.

Appears in 2 contracts

Sources: Stock Purchase Agreement (Intertape Polymer Group Inc), Stock Purchase Agreement (Spinnaker Industries Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ If any Purchaser Indemnified Person or Seller Indemnified Person (each an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any ~~matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement~~ claim (other than a ~~Third~~third-~~Party Claim~~ party claim) for which indemnification is provided in Section 6.1 above, the Indemnified Person shall ~~be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~promptly, and in any event within fifteen (15) ~~days~~days after it first becomes aware of facts which give rise to the basis for such claim, give written notice (a “Notice of Claim”) ~~after making~~ to Parent or Purchaser, as applicable, setting forth the basis for such ~~a determination. Such notice shall state~~ claim and the nature and estimated amount of the ~~Loss claimed~~claim, ~~if known, and method~~ all in reasonable detail. The failure of ~~computation thereof, and containing a reference~~ the Indemnified Person to ~~the provisions~~ give such Notice of ~~this Agreement or the applicable Ancillary Agreement in respect of which~~ Claim within such ~~right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice~~ period shall not ~~release~~ release, waive or otherwise affect the Indemnifying ~~Party from any of its~~ Person’s obligations with respect thereto except ~~and solely~~ to the extent that the Indemnifying ~~Party shall have been~~ Person is materially prejudiced as a result of such failure. If Parent or Purchaser, as applicable, disputes any claim set forth in the Notice of Claim, it may, at any time, deliver to the Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim, and the applicable Parties shall attempt in good faith for a period of thirty (30) days after delivery of such notice of dispute to agree upon the rights of the respective Parties with respect to such Notice of Claim. If no such agreement can be reached after good faith negotiation during such thirty (30) day period, the Parties shall have the rights and remedies, if any, available to them under this Agreement. (b) If a an Indemnified Person shall claim indemnification hereunder arising from any claim or demand ~~is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate~~ of a ~~Party~~ third party for which indemnification is provided in Section 6.1 above, the Indemnified Person shall promptly, and in any event within fifteen (15) days after it first becomes aware of facts which give rise to the basis for such claim or demand, give written notice (a “Third-Party ~~Claim~~Notice”) to Parent or Purchaser, as applicable (each, an “Indemnifying Person”), setting forth, to ~~which~~ the extent known, the basis for such ~~Indemnitee is~~ claim and the nature and estimated amount of the claim or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement~~demand, ~~such Indemnitee shall notify the Indemnifying Party in writing, and~~ all in reasonable detail, . The failure of the ~~Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure~~ Indemnified Person to ~~provide notice of any~~ give such Third-Party ~~Claim pursuant to this sentence~~ Notice within such period shall not ~~release~~ release, waive or otherwise affect the Indemnifying ~~Party from any of its~~ Person’s obligations with respect thereto except ~~and solely~~ to the extent that the Indemnifying ~~Party shall have been~~ Person is materially prejudiced as a result of such ~~failure~~ failure. The Indemnifying Person, upon notice to the Indemnified Person at any time after receiving a Third-Party Notice, may defend any claim or demand set forth in a Third-Party Notice, at its own cost and through counsel of its choosing; provided that (~~except~~ i) the Indemnifying Person acknowledges that the claim asserted is subject to indemnification by such Indemnifying Person pursuant to this Article VI (subject to any limitations set forth therein) and (ii) such counsel is reasonably acceptable to the Indemnified Person. The Indemnifying Person shall from time to time apprise the Indemnified Person of the status of the claim, liability or expense and any resulting suit, proceeding or enforcement action, and shall furnish the Indemnified Person with such documents and information filed or delivered in connection with such claim, liability or expense as the Indemnified Person may reasonably request. The Indemnified Person shall not admit any liability to any third party in connection with any matter which is the subject of a Third Party Notice and shall cooperate fully in the manner requested by the Indemnifying Person in the defense of such claim, at the Indemnifying Person’s expense. Notwithstanding anything herein stated, the Indemnified Person (i) shall at all times have the right to participate fully in such defense at its own expense directly or ~~Parties~~ through counsel or (ii) shall be entitled to assume the control of such defense if the third-party claim involves a criminal proceeding, action or indictment against an Indemnified Person. Until such time as the Indemnifying Person has delivered a notice of intent to defend a third-party claim to the Indemnified Person, the Indemnified Person may, at the expense of the Indemnifying Person, undertake any defense of such claim, liability or expense that is necessary during such period (with counsel selected by the Indemnified Person and reasonably acceptable to the Indemnifying Person); provided that the Indemnified Person shall not be ~~liable~~ entitled to indemnification for any fees, costs or other expenses incurred ~~by the Indemnitee in defending such Third-Party Claim~~ during the ~~period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days)~~ first 30 days after ~~the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to~~ it delivers the Third-Party ~~Claim~~Notice to the Indemnifying Person unless it is obligated to defend a motion for emergency relief or to meet another court imposed deadline occurring during (or within the five (5) Business Days after the end of) such period. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything ~~to the contrary~~ in this Section ~~9.4~~6.2 to the contrary, ~~in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between~~ neither the Indemnifying ~~Party and~~ Person nor the ~~Indemnitee~~Indemnified Person shall, ~~(iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against~~ without the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment written consent of the ~~Indemnifying Party~~other party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any ~~Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned~~ claim or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason demand of a ~~settlement rather than by~~ third party or permit a ~~judgment~~ default or ~~other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall~~ consent to entry of any judgment ~~or enter into any settlement~~ unless (i) the claimant and such party provide to such other party an unqualified release from all Liability in respect of the ~~Third-Party Claim without~~ claim or demand of a third party and (ii) such settlement, compromise, default or judgment (A) does not restrict the ~~consent~~ business of such other party or any of its Affiliates, (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of such other party or any of its Affiliates and (C) only involves Liabilities that will be ~~unreasonably withheld~~fully paid for by the Indemnifying Person. Notwithstanding the foregoing, ~~conditioned or delayed)~~ if a settlement offer solely for money damages is made by the applicable third party claimant, and the Indemnifying Person notifies the Indemnified Person in writing of the ~~Indemnitee if~~ Indemnifying Person’s willingness to accept the ~~effect thereof is~~ settlement offer and, subject to ~~permit~~ the applicable limitations of Section 6.3, pay the amount called for by such offer, and the Indemnified Person declines to accept such offer, the Indemnified Person may continue to contest such claim, free of any ~~injunction~~participation by the Indemnifying Person, ~~declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against~~ and the amount of any ~~Indemnitee, does not release the Indemnitee from all liabilities and obligations~~ ultimate liability with respect to such ~~Third-Party Claim or includes~~ matter that the Indemnifying Person has an ~~admission~~ obligation to pay hereunder shall be limited to the lesser of ~~guilt or liability on behalf~~ (x) the amount of the ~~Indemnitee.~~ settlement offer that the Indemnified Person declined to accept or (gy) ~~Absent fraud or intentional misconduct by an Indemnifying Party,~~ the ~~indemnification provisions~~ aggregate Losses of ~~this Article IX shall be~~ the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Indemnified Person ~~may have~~ with respect to ~~the foregoing other than under this Article IX against any Indemnifying Party~~such matter. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Stock Purchase Agreement (Blucora, Inc.), Stock Purchase Agreement (HowStuffWorks, LLC)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against any the Company under this Section 7, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Purchasers holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the ~~Third-Party Claim without the consent (not~~ Company shall be subrogated to ~~be unreasonably withheld, conditioned or delayed)~~ all rights of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to ~~such Third-Party Claim~~ all third parties, firms or ~~includes an admission of guilt or liability on behalf of~~ corporations relating to the ~~Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party,~~ matter for which indemnification has been made. The failure to deliver written notice to the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of~~ Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 7, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 2 contracts

Sources: Series a Preferred Share Purchase Agreement, Series a Preferred Share Purchase Agreement (Bakbone Software Inc)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other ~~non-monetary relief to be entered, directly or indirectly, against any Indemnitee,~~ compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release ~~the Indemnitee~~ from all ~~liabilities and obligations with~~ liability in respect to such ~~Third-Party~~ Claim ~~or includes an admission of guilt or liability on behalf of~~ and action and proceeding. The failure to deliver written notice to the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Champps Entertainment Inc/ Ma), Securities Purchase Agreement (Dave & Busters Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ If any Purchaser Indemnified Person or Seller Indemnified Person (each, an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any matter ~~that such Indemnitee has determined has given or would~~ (other than a Third Party Claim) for which indemnification is provided in Section 7.1, the Indemnified Person shall promptly after it first obtains knowledge of facts which could reasonably be expected to give rise to Losses that will serve the basis for such claim, give written notice (a ~~right~~ “Notice of Claim”) to PHMD or Purchaser, as applicable, setting forth the basis for such claim and the nature and estimated amount of the claim to the extent then feasible (which estimate shall not be conclusive of the final amount of the claim), all in reasonable detail; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. If PHMD or Purchaser, as applicable, disputes any claim set forth in the Notice of Claim, it may, at any time deliver to the Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim, and the Parties shall attempt in good faith for a period of thirty (30) days after delivery of the dispute notice to agree upon the rights of the Parties with respect to such Notice of Claim. If no such agreement can be reached after good faith negotiation, the Parties shall have the rights and remedies, if any, available to them under this Agreement or applicable Legal Requirements. (b) If an Indemnified Person shall claim indemnification hereunder arising from any ~~Ancillary Agreement~~ Third Party Claim for which indemnification is provided in Section 7.1, the Indemnified Person shall promptly after it first obtains knowledge of such Third Party Claim, give written notice (~~other than~~ a “Third Party Notice”) to PHMD or Purchaser, as applicable (each, an “Indemnifying Person”), of the basis for such claim, setting forth the nature of the claim or demand in reasonable detail to the extent known by the Indemnified Person; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. The Indemnifying Person, upon notice to the Indemnified Person, may at any time within thirty (30) days after receiving a Third Party Notice, at its own cost and through counsel of its choosing and reasonably acceptable to the Indemnified Person, defend any claim or demand set forth in a Third Party Notice. The Indemnifying Person shall have the right to compromise and settle all indemnifiable matters related to Third Party Claims which are susceptible to being settled and as to which it shall have properly assumed the defense; provided, that the Indemnifying Party shall not, without the prior written consent of the Indemnified Person settle or compromise any Third Party Claim or consent to the entry of any final judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff of a written release or releases from all liability in respect of such Third Party Claim of all Indemnified Persons named in such Third Party Claim and the sole relief for which are monetary damages that are paid in full by the Indemnifying Party. In the event that a particular Third Party Claim is subject to the limitations set forth in Section 7.3(b) and the aggregate amount of such Third Party Claim exceeds the Indemnifying Person’s applicable maximum aggregate liability, the Indemnifying Person shall not reject any settlement or compromise offer without the prior consent of the Indemnified Person. The Indemnifying Person shall from time to time and otherwise at the Indemnified Person’s request apprise the Indemnified Person of the status of the claim, liability or expense and any resulting Proceeding and shall furnish the Indemnified Person with such documents and information filed or delivered in connection with such claim, liability or expense or otherwise thereto as the Indemnified Person may reasonably request, and shall diligently defend the applicable Third-Party ~~Claim which~~ Claim. The Indemnified Person shall ~~be governed by Section 9.4(b))~~ not admit any liability to any third party in connection with any matter which is the subject of a Notice of Claim as to which the Indemnifying Party ~~that is~~ shall have properly assumed the defense and shall cooperate fully in the manner requested by the Indemnifying Party in the defense of such claim. Notwithstanding anything herein stated, the Indemnified Person shall at all times have the right to fully participate in such defense at its own expense directly or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteethrough counsel; provided, however, that if there exists a material conflict of interest between the ~~failure~~ Indemnified Person, on the one hand, and the Indemnifying Party, on the other hand, or if the Indemnified Person has been advised by counsel that there may be one or more legal or equitable defenses available to ~~provide such notice shall not release~~ it that are different from or additional to those available to the Indemnifying Party, which, in either case, would make it inappropriate for the same counsel to represent both the Indemnifying Party ~~from any of its obligations except~~ and ~~solely to~~ the ~~extent~~ Indemnified Person, then the ~~Indemnifying Party~~ Indemnified Person shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to ~~indemnification pursuant to this Agreement, such Indemnitee shall notify~~ retain its own counsel at the cost and expense of the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure Person (except that the Indemnifying Party ~~or Parties~~ shall not be ~~liable~~ obligated to pay the fees and expenses of more than one separate counsel for ~~any expenses incurred~~ all Indemnified Persons, taken together). Until such time as the Indemnifying Person has timely delivered a notice of intent to defend a Third Party Claim to the Indemnified Person, the Indemnified Person shall, at the expense of the Indemnifying Person, undertake the defense of (with counsel selected by the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (~~Indemnified Person and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~Indemnifying Person) such claim, ~~if it gives written notice of its intention~~ liability or expense, and shall have the right to ~~do so (including a statement~~ compromise or settle such claim, liability or expense exercising reasonable business judgment; provided, that such compromise or settlement shall not be effected within the ~~Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within~~ first thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the after Indemnifying Party’s ~~exposure in respect~~ receipt of such ~~Third-~~Third Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim Notice without the prior written consent of the Indemnifying ~~Party~~ Person (such consent not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Asset Purchase Agreement (Photomedex Inc), Asset Purchase Agreement (ICTV Brands Inc.)

Procedures for Indemnification. Any indemnification or advance of expenses (aincluding attorneys’ fees, costs and charges) ~~An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification~~ under this Agreement ~~or any Ancillary Agreement (other than a Third-Party Claim which~~ shall be ~~governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~made promptly, and in any event within ~~fifteen (15) days) after making such a determination. Such notice shall state~~ 30 days upon the ~~amount~~ written request of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. Indemnitee (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in ~~any event~~the case of advance of expenses, ~~shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession~~ receipt of a written undertaking by or ~~under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the~~ on behalf of Indemnitee to ~~disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to~~ repay such ~~information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event~~ amount if it shall ultimately be determined that ~~(i) an Indemnifying Party elects~~ Indemnitee is not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to ~~control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel~~ be indemnified therefor pursuant to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement~~, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed~~). ~~If an Indemnifying Party has failed~~ The right to ~~assume~~ indemnification or advances as granted by this Agreement shall be enforceable by the ~~defense~~ Indemnitee in any court of competent jurisdiction, if the ~~Third-Party Claim~~Company denies such request, it in whole or in part, or if no disposition thereof is made within 30 days. Such person’s costs and expenses incurred in connection with successfully establishing his/her right to indemnification, in whole or in part, in any such action shall ~~not~~ also be indemnified by the Company. It shall be a defense to any ~~obligation~~ such action (other than an action brought to ~~pay any amount in respect~~ enforce a claim for the advance of ~~such Third-Party Claim~~ expenses (including attorney’s fees, costs and charges) under this Agreement where the required undertaking, if any, has been received by the Company) that the ~~Indemnifying Party was~~ claimant has not ~~consulted~~ met the standard of conduct set forth in the ~~defense thereof~~DGCL, ~~that such Indemnifying Party’s views~~ as the same exists or ~~opinions as to the conduct of such defense were not accepted or adopted~~hereafter may be amended (but, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In in the case of ~~a Third-Party Claim~~any such amendment, ~~no Indemnifying Party~~ only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), but the burden of proving such defense shall ~~consent to entry of any judgment or enter into any settlement~~ be on the Company. Neither the failure of the ~~Third-Party Claim without~~ Company (including the ~~consent (not~~ Board, its independent legal counsel and its stockholders) to ~~be unreasonably withheld, conditioned or delayed)~~ have made a determination prior to the commencement of such action that indemnification of the ~~Indemnitee if~~ claimant is proper in the ~~effect thereof is to permit any injunction~~circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, ~~declaratory judgment, other order~~ as the same exists or ~~other non-monetary relief to~~ hereafter may be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. amended (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreementbut, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment case of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such ~~amount~~amendment, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and only to the extent ~~paid~~that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), ~~would~~ nor the fact that there has been an actual determination by the Company (including the Board, its independent legal counsel and its stockholders) that the claimant has not ~~constitute Nonqualifying Income~~met such applicable standard of conduct, ~~(ii)~~ shall be a ~~letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time~~ defense to the ~~Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year,~~ action or ~~(iii)~~ create a ~~private letter ruling issued by the IRS to the Protected REIT indicating~~ presumption that the ~~receipt~~ claimant has not met the applicable standard of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationconduct.

Appears in 2 contracts

Sources: Indemnification Agreement (GT Advanced Technologies Inc.), Indemnification Agreement (GT Solar International, Inc.)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ The procedures for indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ shall be ~~governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such~~ as follows: A. The party claiming the indemnification (the “"Claimant") shall promptly give notice to the party from whom indemnification is claimed (the "Indemnifying Party”") ~~promptly~~ of any claim, whether between the parties or brought by a third party, specifying (i) the factual basis for such claim, and ~~in any event within fifteen~~ (15ii) ~~days) after making such a determination. Such notice shall state~~ the amount of the ~~Loss claimed~~claim. If the claim relates to an action, ~~if known~~suit or proceeding filed by a third party against Claimant, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall ~~not release~~ be given by Claimant within five (5) days after written notice of such action, suit or proceeding was given to Claimant. B. Following receipt of notice from the ~~Indemnifying Party from any~~ Claimant of ~~its obligations except and solely to the extent~~ a claim, the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days to make such investigation of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of~~ claim as the Indemnifying Party deems necessary or desirable. For the purposes of such investigation, the Claimant agrees to ~~respond within such~~ make available to the Indemnifying Party and/or its authorized representative(s) the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnifying Party agree at or prior to the expiration of said thirty (30) day period (or any mutually agreed upon extension thereof) to the validity and amount of such claim, or if the Indemnifying Party does not respond to such notice, the Indemnifying Party shall immediately pay to the Claimant the full amount of the claim. Buyer shall be ~~deemed~~ entitled to ~~be an election~~ apply any or all of the Accounts Receivable collected on behalf of Seller to a claim as to which Buyer is entitled to indemnification hereunder. If the Claimant and the Indemnifying Party do not agree within said period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy. C. With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnifying Party shall have the right at its own expense, to participate in or assume control of the defense of such claim, and the Claimant shall cooperate fully with the Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifying Party. If the Indemnifying Party ~~not~~ elects to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third~~any third-~~Party Claim~~party claim, ~~such Indemnitee~~ the Claimant shall have the right to ~~employ separate counsel and to~~ participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such ~~Third-Party Claim,~~ claim at ~~the Indemnifying Party’s~~ its own expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Asset Purchase Agreement (American Radio Systems Corp /Ma/), Asset Purchase Agreement (American Radio Systems Corp /Ma/)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made ~~against an Indemnitee~~ by ~~any Person who is not~~ a ~~Party to this Agreement or an Affiliate of a~~ Third Party (a “Third-Party Claim”) against a SeaSpine Indemnitee or an Integra Indemnitee (each, an “Indemnitee”) as to which such Indemnitee is ~~or reasonably expects to be~~ entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to Sections 5.1 or 5.2 hereof to make such indemnification (the “Indemnifying ~~Party~~ Party”) in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event ~~within thirty (30) days)~~ by the date that is the 15th Business Day after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that ~~the~~ failure to ~~provide notice of any~~ give such ~~Third-Party Claim pursuant to this sentence~~ notification shall not ~~release~~ affect the ~~Indemnifying Party from any of its obligations~~ indemnification provided hereunder except ~~and solely~~ to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such ~~failure~~ failure. (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). b) Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ~~ten (10) days)~~ 10 Business Days after the Indemnitee’s receipt thereof), copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notice under this Section 5.3 shall be provided in accordance with Section 10.6. For the avoidance of doubt, knowledge of a Third-Party Claim by a Person who is a director of both Integra and SeaSpine shall not constitute notice for purposes of this Section 5.3. (c) An Subject to Section 5.3(e), if a Third-Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled ~~(but shall not be required)~~ to ~~assume, control~~ participate in the defense ~~of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee~~thereof and, if it ~~gives written notice of~~ so chooses and irrevocably acknowledges without condition or reservation its ~~intention~~ obligation to ~~do so (including a statement that~~ fully indemnify the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not therefor, to assume the defense ~~for~~ thereof with counsel selected by the Indemnifying Party; provided, however, that such ~~Third-Party Claim)~~counsel is not reasonably objected to by the Indemnitee. ~~After a notice from an~~ Should the Indemnifying Party ~~to an Indemnitee of its election~~ so elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the nature of the Third-Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee’s reasonable judgment, (A) a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such Parties by one counsel inappropriate, or (B) the Third-Party Claim involves substantially different defenses for the Indemnifying Party and the Indemnitee, and in such event the fees and expenses of such single separate counsel ~~and~~ shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate in ~~(but not control)~~ the ~~defense~~defense thereof and to employ counsel, ~~compromise or settlement thereof~~subject to the proviso of the preceding sentence, at its own ~~expense and~~expense, ~~in any event, shall reasonably cooperate with~~ separate from the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required counsel employed by the Indemnifying Party~~; provided~~, ~~however,~~ it being understood that the Indemnifying Party shall control such ~~access~~ defense. The Indemnifying Party shall ~~not require~~ be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to ~~disclose any information~~ assume the ~~disclosure of which would, in~~ defense thereof (other than during the ~~good faith judgment~~ period prior to the time the Indemnitee shall have given notice of the ~~Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law~~Third-Party Claim as provided above). (d) ~~Notwithstanding anything to~~ If the ~~contrary in this Section 9.4, in the event that (i) an~~ Indemnifying Party ~~elects not to assume~~ shall have assumed the defense of a Third-Party Claim, ~~(ii) there exists a conflict of interest~~ in no event will the Indemnitee admit any liability with respect to, or ~~potential conflict of interest between the Indemnifying Party and the Indemnitee~~settle, ~~(iii)~~ compromise or discharge, any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed without the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemniteeprior written consent; provided, however, that the Indemnitee shall have the right to settle, compromise or discharge such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party ~~(not to be unreasonably withheld, conditioned or delayed). If an~~ if the Indemnitee releases the Indemnifying Party ~~has failed~~ from its indemnification obligation hereunder with respect to ~~assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of~~ such Third-Party Claim ~~that~~ and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying ~~Party was not consulted in the defense thereof, that such Indemnifying~~ Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no . The Indemnifying Party shall ~~consent to entry of any judgment or~~ not enter into any ~~settlement~~ settlement, compromise or discharge of ~~the~~ a Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the settlement (A) has the effect ~~thereof is to permit~~ of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against ~~any~~ the Indemnitee, (B) does not completely release the Indemnitee from all ~~liabilities~~ Liabilities and obligations with respect to such ~~Third-Party Claim~~ claim, (C) includes a statement or ~~includes an~~ admission of ~~guilt~~ fault, culpability or ~~liability~~ failure to act by or on behalf of the Indemnitee, or (D) is otherwise prejudicial to the Indemnitee. If an Indemnifying Party elects not to assume the defense of a Third-Party Claim, or fails to notify an Indemnitee of its election to do so as provided herein, such Indemnitee may compromise, settle or defend such Third-Party Claim; provided that the Indemnitee shall not compromise or settle such Third-Party Claim without the consent of the Indemnifying Party, which consent is not to be unreasonably withheld, conditioned or delayed. (e) Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. (f) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim. (g) ~~Absent fraud~~ SeaSpine shall, and shall cause the other SeaSpine Indemnitees to, and Integra shall, and shall cause the other Integra Indemnitees to, cooperate as may reasonably be required in connection with the investigation, defense and settlement of any Third-Party Claim. In furtherance of this obligation, the Parties agree that if an Indemnifying Party chooses to defend or ~~intentional misconduct by~~ to compromise or settle any Third-Party Claim, Integra or SeaSpine, as the case may be, shall use its reasonable best efforts to make available to the other Party, upon written request, the former and then current directors, officers, employees and agents of Integra or any SeaSpine Entity (as applicable) as witnesses and any Records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such Person, Records or other documents may reasonably be required in connection with such defense, settlement or compromise. At the request of an Indemnifying Party, ~~the indemnification provisions of~~ an Indemnitee shall enter into a reasonably acceptable joint defense agreement. (h) The remedies provided in this Article IX V shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the ~~sole and exclusive remedy~~ seeking of ~~an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes~~ any and all ~~rights, claims or~~ other remedies ~~such Person may have with respect to the foregoing other than under this Article IX~~ against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Separation and Distribution Agreement (SeaSpine Holdings Corp), Separation and Distribution Agreement (SeaSpine Holdings Corp)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other ~~non-monetary relief to be entered, directly or indirectly, against any Indemnitee,~~ compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release ~~the Indemnitee~~ from all ~~liabilities and obligations with~~ liability in respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of~~ Claim, action and proceeding. The failure to deliver written notice to the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Ats Medical Inc), Securities Purchase Agreement (Rockford Corp)

Procedures for Indemnification. (a) An Other than with respect to Third Party Claims, which shall be governed by Section 5.4(b), each Fortive Indemnitee and Vontier Indemnitee (each, an “Indemnitee”) shall ~~give notice of~~ notify in writing, with respect to any matter that such Indemnitee has determined has given or ~~would reasonably be expected to~~ could give rise to a right of indemnification under this Agreement or any Ancillary ~~Agreement (other than a Third-~~Agreement, the Party ~~Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that~~ is or may be required pursuant to this ~~Agreement~~ Article V or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within forty-five (45) ~~promptly (and~~ days of such determination, stating in ~~any event within fifteen (15) days) after making~~ such ~~a determination. Such~~ written notice ~~shall state~~ the amount of the Indemnifiable Loss claimed, if known, ~~and~~ and, to the extent practicable, method of computation thereof, and ~~containing a reference~~ referring to the provisions of this ~~Agreement or the applicable Ancillary~~ Agreement in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. The Indemnifying Party will have a period of forty-five (45) days after receipt of a notice under this Section 5.4(a) within which to respond thereto. If the Indemnifying Party fails to respond within such period, the Liability specified in such notice from the Indemnitee shall be conclusively determined to be a Liability of the Indemnifying Party hereunder. If such Indemnifying Party responds within such period and rejects such claim in whole or in part, the disputed matter shall be resolved in accordance with Article VII. (b) If a claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement ~~or an Affiliate of a Party~~ (a “~~Third-~~Third Party Claim”) as to which such Indemnitee is or ~~reasonably expects to~~ may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in ~~writing~~writing (which notice obligation may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), and in reasonable detail, of the ~~Third-~~Third Party Claim promptly (and in any event within ~~thirty~~ the earlier of (30x) ~~days~~forty-five (45) days or (y) two (2) Business Days prior to the final date of the applicable response period under such Third Party Claim) after receipt by such Indemnitee of written notice of the ~~Third-~~Third Party Claim; provided, however, that the failure to provide notice of any such ~~Third-~~Third Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the ~~Third-~~Third Party Claim. For all purposes of this Section 5.4(b), each Party shall be deemed to have notice of the matters set forth on Schedule 1.1(152)(vii). (c) An Other than in the case of (i) Taxes addressed in the Tax Matters Agreement, which shall be addressed as set forth therein or (ii) indemnification by a beneficiary Party of a guarantor Party pursuant to Section 2.10(c) (the defense of which shall be controlled by the beneficiary Party), the Indemnifying Party shall be ~~entitled (but shall not be required)~~ entitled, if it so chooses, to ~~assume, control~~ assume the defense ofthereof, and ~~settle any Third-~~if it does not assume the defense of such Third Party Claim, to participate in the defense of any Third Party Claim in accordance with the terms of Section 5.5 at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be~~ that is reasonably acceptable to the Indemnitee, ~~if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ within thirty (30) days of the receipt of an indemnification notice from such ~~Indemnitees of the Third-Party Claim (failure of~~ Indemnitee; provided, however, that the Indemnifying Party ~~to respond within such thirty (30) day period~~ shall not be ~~deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election~~ entitled to assume the defense of any Third Party Claim to the extent such Third Party Claim (x) is an Action by a ~~Third-~~Governmental Entity, (y) involves an allegation of a criminal violation or (z) seeks injunctive relief against the Indemnitee. In connection with the Indemnifying Party’s defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, ~~compromise~~ compromise, or settlement thereof, at its own expense and, in any event, shall ~~reasonably~~ cooperate with the Indemnifying Party in such defense and make available to the Indemnifying ~~Party~~ Party, at the Indemnifying Party’s expense, all ~~witnesses~~ witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event ~~that (i) an Indemnifying Party elects not to assume the defense~~ of a ~~Third-Party Claim, (ii) there exists a conflict of interest or potential~~ conflict of interest between the Indemnifying Party and the ~~Indemnitee~~applicable Indemnitee(s), ~~(iii)~~ or in the event that any ~~Third-~~Third Party Claim seeks ~~an order, injunction or other~~ equitable relief which would restrict or ~~relief for other than money damages against~~ limit the ~~Indemnitee, (iv)~~ future conduct of the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, business or ~~(v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets~~operations, such ~~Indemnitee~~ Indemnitee(s) shall be entitled to ~~control the defense of such Third-Party Claim~~retain, at the Indemnifying Party’s expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter; provided, further, that if the Indemnifying Party has assumed the defense of the Third Party Claim but has specified, and continues to assert, any reservations or exceptions to such defense or to its liability therefor, then, in any such case, the reasonable fees and expenses of one separate counsel ~~of such Indemnitee’s choosing (such counsel to~~ for all Indemnitees shall be ~~reasonably acceptable to~~ borne by the Indemnifying Party). If The Indemnifying Party shall have the ~~Indemnitee is conducting~~ right to compromise or settle a Third Party Claim the defense ~~against~~ of which it shall have assumed pursuant to this Section 5.4(c) and any such ~~Third-~~settlement or compromise made or caused to be made of a Third Party ~~Claim~~Claim in accordance with this Article V shall be binding on the Indemnitee, in the same manner as if a final judgment or decree had been entered by a court of competent jurisdiction in the amount of such settlement or compromise. Notwithstanding the foregoing sentence, the Indemnifying Party shall ~~reasonably cooperate with~~ not settle any such Third Party Claim without the written consent of the Indemnitee unless such settlement (A) completely and unconditionally releases the Indemnitee in connection with such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required matter, (B) provides relief consisting solely of money damages borne by ~~the Indemnitee; provided, however, that such access shall not require~~ the Indemnifying Party and (C) does not involve any admission by the Indemnitee of any wrongdoing or violation of Law. (d) If an Indemnifying Party fails for any reason to ~~disclose any information~~ assume responsibility for defending a Third Party Claim within the ~~disclosure of which would~~period specified in this Section 5.4, in such Indemnitee may defend such Third Party Claim at the ~~good faith judgment~~ cost and expense of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the ~~Third-~~Third Party ~~Claim~~Claim within the time period specified in clause (c) above, it shall not be a defense to any obligation to pay any amount in respect of such ~~Third-~~Third Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such ~~Third-~~Third Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (fe) In Except as otherwise set forth in Section 6.5 and Section 7.3, or to the ~~case of a Third-Party Claim~~extent set forth in any Ancillary Agreement, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent absent fraud or ~~intentional~~ willful misconduct by an Indemnifying Party, the indemnification provisions of this Article IX V shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or ~~Losses~~ losses resulting from any breach of this Agreement or any Ancillary ~~Agreement,~~ Agreement and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX V against any Indemnifying Party. For the avoidance of doubt, all disputes in respect of this Article V shall be resolved in accordance with Article VII. (f) Each Party hereby covenants and agrees that none of it, its Subsidiaries or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any Fortive Liabilities by the Vontier Group the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Fortive Liabilities by the Fortive Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason, or (c) the provisions of this Article V are void or unenforceable for any reason. (g) Notwithstanding the foregoing, to the extent any Ancillary Agreement provides procedures for indemnification that differ from the provisions set forth in this Section 5.4, the terms of the Ancillary Agreement will govern. (h) ~~Notwithstanding anything~~ The provisions of this Article V shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claims brought or asserted after the date of this Agreement. There shall be no requirement under this Section 5.4 to give a notice with respect to any Third Party Claim that exists as of the Effective Time. The Parties acknowledge that Liabilities for Actions (regardless of the parties to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would Actions) may be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REITpartly Fortive Liabilities and partly Vontier Liabilities. If the ~~amount payable~~ Parties cannot agree on the allocation of any such Liabilities for ~~any tax year under~~ Actions, they shall resolve the ~~preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay~~ matter pursuant to the ~~relevant Indemnitee pursuant to this Agreement (~~procedures set forth in Article VII. Neither Party shall, nor shall either Party permit its Subsidiaries to, file Third Party Claims or cross-claims against the ~~“Expense Amount”), then: (1) the Indemnifying~~ other Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds its Subsidiaries in an ~~amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A)~~ Action in which a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationThird Party Claim is being resolved.

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Vontier Corp), Separation and Distribution Agreement (Vontier Corp)

Procedures for Indemnification. ~~(a) An Indemnitee~~ The Buyer Indemnitees and Seller Indemnitees shall be referred to in this Section 7.4 as the “Indemnitees”. Indemnitees shall give ~~notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ the party against whom indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that~~ is ~~or may be required~~ sought pursuant to this ~~Agreement or any Ancillary Agreement to make such indemnification~~ Section 7 (the “Indemnifying ~~Party~~Person”) ~~promptly (and~~ prompt notice of any written claim, demand, assessment, action, suit or Proceeding to which the indemnity set forth in ~~any event within fifteen (15) days) after making~~ this Section 7 applies. If the document evidencing such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is ~~made against an Indemnitee by any Person who is not~~ a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereaftercourt pleading, the Indemnitee shall ~~deliver to the Indemnifying Party~~give such notice, ~~promptly~~ including a copy of such pleading, within seven (~~and in any event within ten (10~~7) ~~days) after the Indemnitee’s~~ days of receipt ~~thereof~~of such pleading, ~~copies of all notices and documents (including court papers) received by~~ otherwise, the Indemnitee ~~relating to the Third-Party Claim. (c) An Indemnifying Party~~ shall ~~be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at~~ give such ~~Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written~~ notice ~~of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ within thirty (30) days of the ~~receipt~~ date it receives written notice of such claim. Failure to give timely notice ~~from such Indemnitees~~ of a matter which may give rise to an indemnification claim shall not affect the rights of the ~~Third-Party Claim (failure of~~ Indemnitee to collect such Loss from the Indemnifying ~~Party~~ Person so long as such failure to ~~respond within such thirty (30) day period shall be deemed to be an election by~~ so notify does not materially adversely affect the Indemnifying ~~Party not~~ Person’s ability to defend such Loss against a third party. If the Indemnitee’s request for indemnification arises from the claim of a third party, the Indemnifying Person may, at its option, assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third-Party Claim~~any such claim, or any litigation resulting from such ~~Indemnitee shall have the right to employ separate counsel and to participate in~~ claim so long as (~~but not control~~a) the ~~defense~~Indemnifying Person gives written notice to the Indemnitee within twenty (20) days after the Indemnitee has given notice of the third party claim that the Indemnifying Person will indemnify the Indemnitee from and against the entirety of any and all Losses the Indemnitee may suffer resulting from, ~~compromise or settlement thereof~~arising out of, ~~at its own expense and~~relating to, in ~~any event~~the nature of, ~~shall~~ or caused by the third party claim, (b) the Indemnifying Person provides the Indemnitee with evidence reasonably ~~cooperate~~ acceptable to the Indemnitee that the Indemnifying Person will have adequate financial resources to defend against the third party claim and fulfill its indemnification obligations hereunder, (c) the third party claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnitee, (d) the Indemnitee has not been advised in writing by counsel that an actual or potential conflict exists between the Indemnitee and the Indemnifying Person in connection with the ~~Indemnifying Party in such~~ defense ~~and make available~~ of the third party claim, (e) settlement of, an adverse judgment with respect to or the Indemnifying ~~Party all witnesses and information in such Indemnitee~~Person’s ~~possession or under such Indemnitee’s control relating thereto as are reasonably required by~~ conduct of the ~~Indemnifying Party; provided, however, that such access shall not require~~ defense of the ~~Indemnitee to disclose any information the disclosure of which would~~third party claim is not, in the good faith judgment of the Indemnitee, ~~result in the loss of any existing privilege with respect~~ likely to ~~such information or violate any applicable Law. (d) Notwithstanding anything~~ be adverse to the ~~contrary in this Section 9.4~~Indemnitee’s reputation or continuing business interests (including its relationships with current or potential customers, in suppliers or other parties material to the ~~event that~~ conduct of its business) and (if) an the Indemnifying ~~Party elects not to assume~~ Person conducts the defense of ~~a Third~~the third party claim actively and diligently. The Indemnitee may retain separate co-~~Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ counsel at its sole cost and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability expense and participate in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of ~~such Third-Party Claim, at~~ the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemniteethird party claim; provided, however, that ~~such access shall not require~~ the Indemnifying ~~Party~~ Person will pay the reasonable fees and expenses of separate co-counsel retained by the Indemnitee that are incurred prior to ~~disclose any information the disclosure~~ Indemnifying Person’s assumption of ~~which would, in the good faith judgment~~ control of ~~the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume~~ the defense of the ~~Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of~~ third party claim. Failure by the Indemnifying ~~Party~~ Person to notify the Indemnitee of its election to defend a complaint by a third party within twenty (~~not~~ 20) days shall be a waiver by the Indemnifying Person of its right to respond to such complaint and within thirty (30) days after notice thereof shall be ~~unreasonably withheld, conditioned or delayed). If an~~ a waiver by the Indemnifying ~~Party has failed~~ Person of its right to assume control of the defense of such claim or action. If the ~~Third-Party Claim, it shall not be a~~ Indemnifying Person assumes control of the defense ~~to any obligation to pay any amount in respect~~ of such ~~Third-Party Claim that~~ claim or litigation resulting therefrom, the Indemnifying ~~Party was not consulted~~ Person shall take all reasonable steps necessary in the defense ~~thereof, that such Indemnifying Party’s views~~ or ~~opinions as to the conduct~~ settlement of such ~~defense were not accepted~~ claim or ~~adopted~~litigation resulting therefrom. The Indemnifying Person shall not, ~~that such Indemnifying Party does not approve of the quality or manner of~~ in the defense ~~thereof~~ of such claim or ~~that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim~~litigation, ~~no Indemnifying Party shall~~ consent to entry of any judgment against any Indemnitee or enter into any ~~settlement of the Third-Party Claim without the consent (not to be unreasonably withheld~~settlement, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against involving any Indemnitee, ~~does not release the Indemnitee from all liabilities and obligations~~ except in either case with ~~respect to such Third-Party Claim or includes an admission of guilt or liability on behalf~~ written consent of the Indemnitee~~. (g) Absent fraud~~ , which consent shall not be unreasonably withheld or ~~intentional misconduct by an~~ delayed. The Indemnitee shall furnish the Indemnifying ~~Party,~~ Person in reasonable detail all information the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an~~ Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to ~~the foregoing other than under this Article IX against~~ any ~~Indemnifying Party. (h) Notwithstanding anything~~ such third-party claim and shall make available to the ~~contrary in this Agreement,~~ Indemnifying Person and its representatives all records and other similar materials which are reasonably required in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment defense of such ~~amounts to~~ third-party claim and shall otherwise cooperate with and assist the ~~relevant Indemnitee~~Indemnifying Person in the defense of such third-party claim. If the Indemnifying Person does not assume control of the defense of any such third-party claim or litigation resulting therefrom, the ~~amount paid~~ Indemnitee may defend against such claim or litigation in such manner as it may reasonably deem appropriate, and the Indemnifying Person shall indemnify the Indemnitee from any Loss indemnifiable under Section 7 incurred in connection therewith. The Indemnifying Person shall not be obligated to the Indemnitee ~~pursuant~~ for any settlement or consent to ~~this Agreement in~~ a stay of judgment made by any ~~tax year~~ Indemnitee if such settlement or consent is entered into without the prior written consent of the Indemnifying Person which consent shall not ~~exceed the maximum amount that can~~ be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel unreasonably withheld or ~~independent accountants to the Protected REIT~~delayed. If the ~~amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant~~ Indemnitee ~~pursuant to this Agreement (the “Expense Amount”), then: (1)~~ should have a claim against the Indemnifying ~~Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall~~ Person that does not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) involve a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Partythird party claim, the Indemnitee shall ~~have~~ deliver a notice of such claim to the ~~right~~Indemnifying Person. If the Indemnifying Person notifies the Indemnitee that it does not dispute the claim described in such notice or fails to notify the Indemnitee within thirty (30) days after delivery of such notice by the Indemnitee whether the Indemnifying Person disputes the claim described in such notice, ~~but not~~ the ~~obligation, to borrow~~ Loss in the ~~Expense Amount from~~ amount specified in the ~~Escrow Account pursuant to~~ Indemnitee’s notice will be conclusively deemed a ~~loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ liability of the Indemnifying Person and the Indemnifying Person shall pay the amount of such Loss to the Indemnitee ~~that (i) requires~~ on demand. If the Indemnifying ~~Party~~ Person has timely disputed its liability with respect to ~~lend~~ such claim, a senior executive of each of the Indemnifying Person and the Indemnitee ~~immediately available cash proceeds~~ with full negotiating authority will proceed in ~~an amount equal~~ good faith to ~~the Expense Amount (an “Indemnity Loan”)~~negotiate a resolution of such dispute, and if not resolved through the negotiations of such executives within sixty (ii60) ~~provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account~~ days after the ~~credit standing and profile of the Indemnitee or any guarantor~~ delivery of the Indemnitee~~, including the Protected REIT, at the time~~ ’s notice of such ~~loan~~claim, such dispute shall be resolved fully and ~~(B)~~ finally by a ~~15 year maturity with no periodic amortization~~court of competent jurisdiction.

Appears in 2 contracts

Sources: Asset Purchase Agreement (Coolbrands International Inc), Asset Purchase Agreement (Coolbrands International Inc)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the ~~Third-Party Claim without the consent (not~~ Company shall be subrogated to ~~be unreasonably withheld, conditioned or delayed)~~ all rights of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to ~~such Third-Party Claim~~ all third parties, firms or ~~includes an admission of guilt or liability on behalf of~~ corporations relating to the ~~Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party,~~ matter for which indemnification has been made. The failure to deliver written notice to the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of~~ Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Electroglas Inc), Securities Purchase Agreement (Electroglas Inc)

Procedures for Indemnification. (a) An Indemnitee shall give the Indemnifying Party notice of any matter that ~~such~~ an Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement ~~or any Ancillary Agreement~~ (other than a Third-Party ~~Claim~~ Claim, which shall be governed by this Section ~~9.4(b)~~4.6) ~~to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make~~ within twenty (20) Business Days of such ~~indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a~~ determination~~. Such notice shall state~~ , stating the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement ~~or the applicable Ancillary Agreement~~ in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure. (b) If a claim or demand is made against a WDC Indemnitee or a Spinco Indemnitee (each, an ~~Indemnitee~~ “Indemnitee”) by any Person who is not a Party ~~to this Agreement~~ or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall promptly (and in any event by no later than thirty (30) calendar days after receipt by such Indemnitee of written notice of the Third-Party Claim) notify the Party that is or may be required pursuant to this Section 4 or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying ~~Party~~ Party”) in writing, and in reasonable detail, of the Third-Party Claim and provide copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim as of the date of such notice by the Indemnitee to the Indemnifying Party. With respect to notices and documents (including court papers) relating to the Third-Party Claim received by the Indemnitee after the date of such notice by the Indemnitee to the Indemnifying Party, the Indemnitee shall promptly (and in any event ~~within thirty~~ by no later than ten (3010) ~~days~~Business Days after the Indemnitee’s receipt thereof) ~~after receipt by~~ deliver to the Indemnifying Party copies of such ~~Indemnitee of written notice of the Third-Party Claim; provided, however, that~~ notices and documents. However the failure to provide notice of any such Third-Party Claim or any subsequent notices or documents pursuant to this ~~sentence~~ clause shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure (except that the Indemnifying Party or Indemnifying Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Other than in the case of any Liability being managed by a Party in accordance with any Ancillary Agreement or as provided in Section 4.8(a) and 4.6(d), an Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, ~~and~~ and, subject to Section 4.6(f), settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~applicable Indemnitees, if it gives written notice of its intention to do so ~~(including a statement~~ and agreement that the Indemnitee is entitled to indemnification under this ~~Article IX)~~ Section 4 to the applicable Indemnitees within the earlier of (i) thirty (30) calendar days of the receipt of notice from such Indemnitees of the Third-Party Claim and (~~failure of~~ ii) ten (10) Business Days before the ~~Indemnifying Party~~ due date for the answer or response to ~~respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim)~~a claim. After a such notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all ~~witnesses~~ witnesses, pertinent and ~~information~~ material Information and materials in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the ~~good faith~~ reasonable judgment of the Indemnitee, result in the loss of any existing ~~privilege~~ Privileges with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section ~~9.4~~4.6, in the event ~~that~~ that: (i) an Indemnifying Party elects not to assume ~~the defense of~~ responsibility for defending a Third-Party Claim, ; (ii) there exists a conflict of interest or potential conflict of ~~interest~~ interest, as reasonably determined by counsel for the Indemnitee, between the Indemnifying Party and the ~~Indemnitee,~~ applicable Indemnitee(s); (iii) ~~any~~ a Third-Party Claim primarily seeks criminal culpability or an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, ; or (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person party making such Third-Party Claim is a Governmental Authority with (A) regulatory authority over the Indemnitee or any of its material ~~Assets~~Assets or (B) authority to bring a criminal charge against the Indemnitee, such ~~Indemnitee~~ Indemnitee(s) shall be entitled to ~~control~~ assume the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s ~~choosing (such counsel to be reasonably acceptable to the Indemnifying Party)~~choosing. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all ~~witnesses~~ witnesses, pertinent and ~~information~~ material Information and materials in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the ~~Indemnitee~~Indemnitee pursuant to a joint defense agreement to be entered into by Indemnitee and the Indemnifying Party; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the ~~good faith~~ reasonable judgment of the Indemnifying Party, result in the loss of any existing ~~privilege~~ Privileges with respect to such information or violate any applicable Law. (e) ~~Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no~~ No Indemnitee may ~~settle~~ settle, compromise or ~~compromise~~ admit liability with respect to any Third-Party Claim without the consent of the Indemnifying ~~Party (~~Party, which consent shall not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has ~~failed~~ elected not to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if (i) the effect thereof is to permit any criminal culpability, injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, (ii) such settlement does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party ~~Claim or~~ Claim, (iii) such settlement includes an admission of ~~guilt~~ guilt, liability, criminal culpability or ~~liability~~ violation of Law by or on behalf of the Indemnitee, or (iv) the Indemnifying Party is not obligated to or cannot pay the full amount of Losses arising from such judgment or settlement. (g) ~~Absent fraud~~ For the avoidance of doubt, the provisions of this Section 4.6 shall not apply to Tax Contests which shall be governed exclusively by the Tax Matters Agreement. (h) Except as otherwise provided in Section 9.4 or ~~intentional misconduct by an Indemnifying Party~~any Ancillary Agreement, following the Separation Time, the indemnification provisions of this ~~Article IX~~ Section 4 shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement (including with respect to monetary or compensatory damages or Losses arising out of or relating to, as the case may be, any Flash Liability or Excluded Liability) or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (hi) Notwithstanding anything to the contrary in this ~~Agreement~~Section 4.6, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”conflict or inconsistency between this Section 4.6(i), and ~~(ii~~any other provision of Section 4.6, the following provisions shall control with respect to any Third-Party Claim in respect of any Shared Liabilities; provided, however, that nothing in this Section 4.6(i) ~~provides~~ shall alter or amend the allocation of responsibilities for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ set forth in Section 1.6. If a Third-Party Claim in respect of any Shared Liabilities is made against a Party, then (A) ~~a commercially reasonable interest rate and commercially reasonable covenants, taking into account~~ such Party shall assume the ~~credit standing and profile~~ defense of such Third-Party Claim with counsel of such Party’s choosing (subject to the approval of the ~~Indemnitee~~ other Party, such approval not to be unreasonably withheld, conditioned or ~~any guarantor of~~ delayed), with both Parties sharing equally the ~~Indemnitee~~total fees, ~~including the Protected REIT, at the time of~~ costs and expenses incurred in connection with such ~~loan~~defense, and (B) any Indemnitee affiliated with such Party (other than a ~~15 year maturity~~ member of the WDC Group or Spinco Group) that is or becomes a named party to the same Third-Party Claim shall be represented by the same counsel as such Party; provided, however, that notwithstanding the foregoing, in the event there is, in the reasonable opinion of the joint counsel referenced herein, a material conflict of interest between or among any of the Persons referenced in this sentence, then each such Person that is subject to any such conflict shall be entitled to their own counsel in connection with such Third-Party Claim, and the expenses of such separate counsel shall be shared equally by the Parties. The Parties shall reasonably cooperate and consult with each other regarding any Third-Party Claim in respect of any Shared Liabilities, including with respect to the defense thereof. Any Indemnitee that is not a member of the WDC Group or Spinco Group shall reasonably cooperate with the Parties regarding any Third-Party Claim in respect of any Shared Liabilities. Each Party shall make available to the other Party all witnesses, pertinent and material Information and materials in such Party’s possession or under such Party’s control, in each case, to the extent such witnesses, pertinent and material Information and materials are reasonably required in connection with a Third-Party Claim in respect of any Shared Liabilities; provided, however, that such access shall be made pursuant to a joint defense agreement; provided further that such access shall not require a Party to disclose any information the disclosure of which would, in the reasonable judgment of the such Party, result in the loss of any existing Privileges with respect to such information or violate any applicable Law. Notwithstanding anything to the contrary herein, no ~~periodic amortization~~Party will settle, compromise or admit liability with respect to any Third-Party Claim regarding any Shared Liability without the consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed).

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Sandisk Corp), Separation and Distribution Agreement (Sandisk Corp)

Procedures for Indemnification. (a) An Any Buyer Indemnitee seeking indemnification under Section 8.1 shall give prompt written notice to Seller of the assertion of any ~~matter~~ claim that ~~such Indemnitee has determined has given or would reasonably be expected~~ does not involve a Proceeding brought by a third party. The notice shall describe in reasonable detail the nature of the claim, an estimate of the amount of Damages attributable to ~~give rise~~ the claim to ~~a right~~ the extent feasible and the basis of the request for indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failureAgreement. (b) If a ~~claim or demand is made against an~~ Buyer Indemnitee ~~by any Person who is not a Party to this Agreement or an Affiliate~~ receives notice of a ~~Party~~ Proceeding brought by a third party for which the Buyer Indemnitee intends to assert an indemnification claim under Section 8.1 against Seller, then the Buyer Indemnitee shall give notice of the Proceeding to Seller no later than fifteen (~~a “Third-Party Claim”~~15) as Business Days before the answer or other response to ~~which such Indemnitee~~ the Proceeding is ~~or reasonably expects~~ required to be ~~entitled~~ made (the “Answer Period”). Seller shall assume the defense of any Proceeding by notice to ~~indemnification~~ Buyer Indemnitees no later than five (5) Business Days prior to the date by which an answer or other response to the Proceeding is required to be made. Any failure by either party to give the requisite notice within the time specified in this Section 8.3(b) will not relieve Seller of the obligation to indemnify Buyer Indemnitees or Buyer Indemnitees of the obligation to allow Seller to defend pursuant to this ~~Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30~~Section 8.3(b) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except ~~and solely~~ to the extent that the ~~Indemnifying Party shall have been~~ defense of any Proceeding is materially prejudiced ~~as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred~~ by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimdelay. (c) ~~An Indemnifying Party shall~~ If Seller assumes the defense of a Proceeding pursuant to Section 8.3(a), then Seller may defend and conduct any proceedings or negotiations in connection with the Proceeding, take all other required steps or proceedings to settle or defend any Proceeding, and to employ counsel to contest any Proceeding in the name of the Buyer Indemnitees or otherwise. If Seller assumes the defense, the expenses of all proceedings, contests or lawsuits with respect to the Proceedings will be ~~entitled~~ borne by Seller. (~~but shall~~ d) If Seller does not ~~be required) to assume, control~~ assume the defense of, or if after so assuming Seller fails to defend, any Proceeding, then the Buyer Indemnitees may defend against any claim or Proceeding in the manner they may deem appropriate and the Buyer Indemnitees may settle any ~~Third-Party Claim~~claim or Proceeding on the terms they deem appropriate, and Seller will promptly reimburse the Buyer Indemnitees for the amount of all expenses, legal and otherwise, reasonably and necessarily incurred by the Buyer Indemnitees in connection with the defense against and settlement of any claim or Proceeding. (e) If in any Proceeding covered by the indemnification under this Agreement, a judgment is rendered against any of the Buyer Indemnitees, or any Lien in respect of any judgment attaches to any of the assets of any of the Buyer Indemnitees, Seller will upon any entry or attachment pay the relevant judgment in full or discharge the relevant Lien unless, at ~~such Indemnifying Party’s own cost and~~ the expense and ~~by such Indemnifying Party’s own counsel~~direction of Seller, an appeal is taken under which ~~counsel must be reasonably acceptable to~~ the ~~Indemnitee~~execution of the judgment or satisfaction of the Lien is stayed. If and when a final judgment is rendered in any Proceeding, ~~if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled~~ subject to indemnification under ~~this Article IX) to the applicable Indemnitees within thirty (30) days~~ Section 8.1, Seller will satisfy any judgment or discharge any Lien before any of the ~~receipt of notice from such~~ Buyer Indemnitees of is compelled to do so. (f) Seller or the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party ClaimBuyer Indemnitees, ~~such Indemnitee~~ as appropriate, shall have the right to ~~employ separate counsel and to~~ participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of ~~a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ any Proceeding related to any indemnified Damages at its sole cost and expense and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect cost and expense of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it participation shall not be ~~a defense~~ Damages subject to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemniteeindemnification. (g) ~~Absent fraud~~ In the event of a claim covered by Section 8.3(a) or ~~intentional misconduct by an Indemnifying Party~~a claim related to a Proceeding which Buyer defends pursuant to Section 8.3(b), ~~the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an~~ Buyer Indemnitee will use good faith, commercially reasonable efforts to achieve a Reasonable Cost Response for any ~~monetary~~ Environmental Liability or ~~compensatory damages~~ Environmental Condition. In addition, Buyer Indemnitee will provide Seller with notice of any meetings with third parties concerning the investigation or ~~Losses resulting from~~ response action and copies of any ~~breach~~ work plans for investigation or response action regarding any claim covered by Section 8.3(b) hereof related to any Environmental Liability or Environmental Condition. For purposes of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Asset Purchase Agreement (Challenger Powerboats, Inc.), Asset Purchase Agreement (Execute Sports Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ In the event an Indemnified Party seeks indemnification under this Agreement, the Indemnified Party shall promptly give notice hereunder to the Indemnitor upon obtaining notice of any ~~matter that~~ demand for payment of any Covered Obligation, or any claim, investigation, or service of a summons or other initial or continuing legal or administrative process or proceeding in any Proceeding instituted, or threatened to be instituted, against the Indemnified Party as to which recovery or other action may be sought against the Indemnified Party because of the indemnification provided for herein, and the Indemnified Party shall be required to permit the Indemnitor to assume the defense of any such ~~Indemnitee has determined has given or would reasonably~~ Proceeding. The right to indemnification hereunder shall not be ~~expected~~ affected by any failure of the Indemnified Party to give ~~rise to a right of indemnification under this Agreement~~ such notice (or ~~any Ancillary Agreement (other than a Third-~~by delay by the Indemnified Party ~~Claim which shall be governed by Section 9.4(b)~~in giving such notice) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if knownunless, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely only to the extent that, the ~~Indemnifying Party~~ rights and remedies of the Indemnitor shall have been ~~materially~~ prejudiced as a result of the failure to give, or the delay in giving, such ~~failure~~notice. Failure by the Indemnitor to notify the Indemnified Party of its affirmative intent to defend any such Proceeding within thirty (30) days after notice thereof shall have been given to the Indemnitor shall be deemed a waiver by the Indemnitor of its right to defend such Proceeding. (b) If the Indemnitor assumes the defense of any such Proceeding, the obligations of the Indemnitor hereunder as to such Proceeding shall include taking all steps reasonably necessary in the defense or settlement of such Proceeding and holding the Indemnified Party harmless from and against any and all Losses caused by or arising out of any settlement approved by the Indemnitor or any judgment entered in connection with such Proceeding except where, and only to the extent that, the Indemnitor has been prejudiced by the actions or omissions of the Indemnified Party. The Indemnitor shall not, in the defense of any such Proceeding, consent to entry of any judgment (other than a ~~claim~~ judgment of dismissal on the merits without cause) except with the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, delayed or ~~demand~~ conditioned), or enter into any settlement (except with the written consent of the Indemnified Party, which consent shall not be unreasonably withheld, delayed or conditioned) unless (i) there is no finding or omission of any violation of law and no material effect on any claims that could reasonably be expected to be made against ~~an Indemnitee~~ the Indemnified Party, (ii) the sole relief provided is monetary damages, and (iii) the settlement shall include the giving by the claimant or the plaintiff to the Indemnified Party a release from all liability in respect of such Proceeding. Upon the Indemnitor’s assumption of the defense of any ~~Person who is not a~~ such Proceeding, the Indemnified Party ~~to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to~~ shall be entitled to ~~indemnification pursuant~~ participate in the defense of the Proceeding, but solely by observation and comment to ~~this Agreement~~the Indemnitor, and the counsel selected by the Indemnified Party shall not appear on its behalf in any Proceeding arising hereunder. The Indemnified Party shall bear the fees and expenses of any additional counsel retained by it to participate in its defense unless any of the following shall apply: (i) the employment of such ~~Indemnitee~~ counsel and the payment of fees by the Indemnitor shall ~~notify~~ have been authorized in advance in writing by the ~~Indemnifying Party~~ Indemnitor; or (ii) the Indemnitor’s legal counsel shall advise the Indemnitor in writing, ~~and~~ with a copy to the Indemnified Party, that there is a conflict of interest that would make it inappropriate under applicable standards of professional conduct to have common counsel. If clause (i) or (ii) in ~~reasonable detail~~the immediately preceding sentence is applicable, then the Indemnified Party may employ separate counsel at the expense of the ~~Third-Party Claim promptly (~~Indemnitor to represent the Indemnified Party, but in no event shall the Indemnitor be obligated to pay the costs and expenses of more than one such separate counsel for any one Proceeding in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties one jurisdiction. The Indemnitor shall not be liable for any ~~expenses incurred by~~ settlement of any Proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter~~plaintiff, the ~~Indemnitee shall deliver~~ Indemnitor agrees to indemnify the ~~Indemnifying Party, promptly (and in~~ Indemnified Party against any ~~event within ten (10) days) after the Indemnitee’s receipt thereof, copies~~ Loss by reason of ~~all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim~~such settlement or judgment. (c) ~~An Indemnifying Party~~ Each party hereto shall cooperate in good faith and in all respects with the Indemnitor and its representatives (including without limitation its counsel) in the investigation, negotiation, settlement, trial and/or defense of any Proceedings (and any appeal arising therefrom). The parties shall cooperate with each other and any notifications to and information requests of any insurers. No individual representative of any party hereto or the respective affiliates shall be ~~entitled (but shall not be required) to assume~~personally liable for any loss, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction claim or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or amount under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, ~~no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not~~ except as specifically agreed to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by ~~reason of a settlement rather than by a judgment or other determination of liability~~said individual representative. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Indemnification Agreement (Welsh Property Trust, Inc.), Indemnification Agreement (Welsh Property Trust, Inc.)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ The procedures for indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ shall be ~~governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such~~ as follows: A. The party claiming the indemnification (the “"Claimant") shall promptly give notice to the party from whom indemnification is claimed (the "Indemnifying Party”") ~~promptly~~ of any claim, whether between the parties or brought by a third party, specifying (i) the factual basis for such claim, and ~~in any event within fifteen~~ (15ii) ~~days) after making such a determination. Such notice shall state~~ the amount of the ~~Loss claimed~~claim. If the claim relates to an action, ~~if known~~suit or proceeding filed by a third party against Claimant, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall ~~not release~~ be given by Claimant within five (5) days after written notice of such action, suit or proceeding was given to Claimant. B. Following receipt of notice from the ~~Indemnifying Party from any~~ Claimant of ~~its obligations except and solely to the extent~~ a claim, the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days to make such investigation of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of~~ claim as the Indemnifying Party deems necessary or desirable. For the purposes of such investigation, the Claimant agrees to ~~respond within such~~ make available to the Indemnifying Party and/or its authorized representative(s) the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnifying Party agree at or prior to the expiration of said thirty (30) day period (or any mutually agreed upon extension thereof) to the validity and amount of such claim, or if the Indemnifying Party does not respond to such notice, the Indemnifying Party shall ~~be deemed~~ immediately pay to ~~be an election~~ the Claimant the full amount of the claim. If the Claimant and the Indemnifying Party do not agree within said period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy. C. With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnifying Party shall have the right at its own expense, to participate in or assume control of the defense of such claim, and the Claimant shall cooperate fully with the Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifying Party. If the Indemnifying Party ~~not~~ elects to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third~~any third-~~Party Claim~~party claim, ~~such Indemnitee~~ the Claimant shall have the right to ~~employ separate counsel and to~~ participate in ~~(but not control)~~ the ~~defense, compromise or settlement thereof,~~ defense of such claim at its own ~~expense and~~expense. D. If a claim, ~~in any event~~whether between the parties or by a third party, ~~shall reasonably cooperate~~ requires immediate action, the parties will make all reasonable efforts to reach a decision with respect thereto as expeditiously as possible. E. If the Indemnifying Party does not elect to assume control or otherwise participate in ~~such~~ the defense ~~and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ of any third party claim, it shall be bound by the ~~Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would,~~ results obtained in ~~the~~ good faith ~~judgment of~~ by the ~~Indemnitee, result in the loss of any existing privilege~~ Claimant with respect to such ~~information or violate any applicable Law~~claim. ~~(d) Notwithstanding anything~~ F. The indemnification rights provided in Sections 10.2 and 10.3 shall extend to the ~~contrary~~ shareholders, directors, officers, partners employees and representatives of the Claimant although for the purpose of the procedures set forth in this Section ~~9.4~~10.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any ~~Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with~~ indemnification claims by such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee parties shall be ~~entitled to control~~ made by and through the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawClaimant. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Asset Purchase Agreement (American Radio Systems Corp /Ma/), Asset Purchase Agreement (American Radio Systems Corp /Ma/)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of~~ In case any ~~matter that such Indemnitee has determined has given~~ action, proceeding or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that claim is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement brought against an indemnified party in respect of which ~~such right of~~ indemnification is ~~claimed by such Indemnitee; provided~~sought hereunder, ~~however, that~~ the ~~failure to provide such notice~~ indemnifying party shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to ~~indemnification pursuant~~ participate and, unless in the reasonable judgment of legal counsel to ~~this Agreement~~the indemnified party a conflict of interest between the indemnified party and the indemnifying party may exist with respect of such action, ~~such Indemnitee shall notify~~ proceeding or claim, to assume the ~~Indemnifying Party in writing, and in reasonable detail, of~~ defense thereof with counsel reasonably satisfactory to the ~~Third-Party Claim promptly (and in any~~ indemnified party. In the event ~~within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however,~~ that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafterindemnifying party fails, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of ~~the~~ receipt of ~~notice from~~ any indemnification notice, to notify, in writing, such ~~Indemnitees~~ person of the ~~Third-Party Claim~~ indemnifying party’s election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (~~failure of~~ or discontinues its defense at any time after it commences such defense), then the ~~Indemnifying Party to respond within~~ indemnified party may, at its option, defend, settle or otherwise compromise or pay such ~~thirty (30) day period shall be deemed to be an election by~~ action or claim. In any event, unless and until the ~~Indemnifying Party not~~ indemnifying party elects in writing to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to~~ and does so assume the defense of ~~a Third-Party Claim~~any such claims, ~~such Indemnitee shall have~~ proceeding or action, the ~~right to employ separate counsel~~ indemnified party’s costs and ~~to participate in (but not control)~~ expenses arising out of the defense, settlement or compromise of any such action, claim or ~~settlement thereof, at its own expense and, in any event,~~ proceeding shall ~~reasonably~~ be losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the ~~Indemnifying Party~~ indemnifying party in connection with any negotiation or defense of any such ~~defense~~ action, claim or proceeding by the indemnifying party and ~~make~~ shall furnish to the indemnifying party all information reasonably available to the ~~Indemnifying Party~~ indemnified party which relates to such action, claim or proceeding. The indemnifying party shall keep the indemnified party fully apprised at all ~~witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto~~ times as ~~are reasonably required by~~ to the ~~Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment~~ status of the ~~Indemnitee, result in the loss of~~ defense or any ~~existing privilege~~ settlement negotiations with respect thereto. If the indemnifying party elects to defend any such ~~information~~ action or ~~violate any applicable Law. (d) Notwithstanding anything to~~ claim, then the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee indemnified party shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee participate in such defense using counsel of its choice at its sole cost and ~~make available~~ expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent. Notwithstanding anything in this Article 7 to the ~~Indemnitee all witnesses and information in such Indemnifying Party~~contrary, the indemnifying party shall not, without the indemnified party’s ~~possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided~~prior written consent, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any ~~Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned~~ claim or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party of a release ~~the Indemnitee~~ from all ~~liabilities and obligations with~~ liability in respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationclaim.

Appears in 2 contracts

Sources: VPC Sublicense Agreement, VPC Sublicense Agreement (Liquidmetal Technologies Inc)

Procedures for Indemnification. Any claims for indemnification by any party entitled to indemnification hereunder (an "INDEMNIFIED PARTY") from any party hereunder (an "INDEMNITOR") under this ARTICLE IX shall be made by an Indemnified Party by delivery of a written notice to the Indemnitor requesting indemnification (an "INDEMNIFICATION CLAIM") and specifying the basis on which indemnification is sought and the amount of asserted Losses. Indemnitor shall have 30 days after the date on which the Indemnitor receives the notice of an Indemnification Claim to object to such Indemnification Claim by delivery of a written notice of such objection to the Indemnified Party specifying in reasonable detail the basis for such objection. If within 30 days after the date on which the Indemnitor receives the notice of the Indemnification Claim, the Indemnitor has not delivered to the Indemnified Party a notice objecting to all or any portion of the claimed Loss and setting forth the amount of such claimed indemnification for such Loss objected to and the reasons for such objection, the Indemnified Party shall be entitled to indemnification for such Loss, and the Indemnitor shall promptly pay the full amount of such Loss. If, within 30 days after the date on which the Indemnitor receives the notice of an Indemnification Claim, the Indemnitor delivers to the Indemnified Party an objection to all or any portion of the claimed Loss, setting forth the amount of such Loss objected to and the reasons for such objection, the Indemnified Party shall be entitled to reimbursement for the portion of such Loss not objected to by the Indemnitor and the Indemnitor shall promptly pay the full amount of so much of the Loss as to which the Indemnitor did not object. (a) ~~An Indemnitee shall give notice~~ Upon determination of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of an Indemnification Claim, whether by agreement between the ~~Loss claimed~~Indemnitor and the Indemnified Party or by any final adjudication, ~~if known, and method of computation thereof, and containing a reference to~~ the ~~provisions of this Agreement or~~ Indemnitor shall pay the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result amount of such ~~failure~~Indemnification Claim within 5 days of the date such amount is determined. (b) ~~If a claim~~ The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at law or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimequity. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification Any payment under this Article ~~IX)~~ shall be treated for Tax purposes as an adjustment of the Purchase Price to the extent such characterization is proper and permissible under the applicable ~~Indemnitees within thirty (30) days of~~ U.S. Tax law, including the ~~receipt of notice from~~ Code, Treasury regulations, court decisions and administrative promulgations or, alternatively, by Buyer as an offset to a Tax benefit item, if such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or characterization is permissible under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable LawTax law. (d) ~~Notwithstanding anything~~ In no event shall the aggregate liability of Seller and Parent for claims asserted pursuant to ~~the contrary in this~~ Section ~~9.4, in the event that (i~~9.1(i) ~~an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii~~and 9.1(iii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (fAgreement and Section 11.1(i) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayedand 11.1(iii) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. Stock Purchase Agreement (~~g) Absent fraud or intentional misconduct by an Indemnifying Party, the~~ excluding indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of ~~such amounts to the relevant Indemnitee~~Taxes, ~~the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not~~ penalties, Brighton Governmental Claims, interest and collection costs thereof) exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization$700,000.

Appears in 2 contracts

Sources: Asset Purchase Agreement (Spinnaker Industries Inc), Asset Purchase Agreement (Intertape Polymer Group Inc)

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Ashford Hospitality Trust Inc), Separation and Distribution Agreement (Ashford Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give~~ Other than with respect to notice of Third Party Claims, which shall be governed by Section 5.4(b), each Veoneer Indemnitee and Autoliv Indemnitee (each, an “Indemnitee”) shall notify in writing, with respect to any matter that such Indemnitee has determined has given or ~~would reasonably be expected to~~ could give rise to a right of indemnification under this Agreement or any Ancillary ~~Agreement (other than a Third-~~Agreement, the Party ~~Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that~~ is or may be required pursuant to this ~~Agreement~~ Article V or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within thirty (30) ~~promptly (and in any event within fifteen (15) days) after making~~ days of such a determination~~. Such notice shall state~~ , stating the amount of the Indemnifiable Loss claimed, if known, and method of computation thereof, and ~~containing a reference~~ referring to the provisions of this ~~Agreement or the applicable Ancillary~~ Agreement in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure. Each such Indemnitee shall provide the applicable Indemnifying Party with reasonable access, upon reasonable prior written notice and during normal business hours, in a manner so as not to unreasonably interfere in any material respect with the normal business operations of such Indemnitee, to its books and records, properties and personnel relating to the claim the Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement or any Ancillary Agreement. (b) If ~~a claim~~ any Claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement ~~or an Affiliate of a Party~~ (a “~~Third-~~Third Party Claim”) as to which such Indemnitee is or ~~reasonably expects to~~ may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the ~~Third-~~Third Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the ~~Third-~~Third Party Claim; provided, however, that the failure to provide notice of any such ~~Third-~~Third Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ~~ten~~ five (105) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the ~~Third-~~Third Party Claim. (c) An Subject to Section 5.16, an Indemnifying Party shall be ~~entitled (but shall not be required) to assume, control~~ responsible for the defense ~~of,~~ of any Third Party Claim and ~~settle any Third-Party Claim~~shall assume the defense thereof, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be~~ that is reasonably acceptable ~~to the Indemnitee, if it gives written notice of its intention to do so~~ (~~including a statement~~ provided that ~~the Indemnitee is entitled to indemnification under this Article IX~~insurer-appointed counsel shall be automatically deemed acceptable) to the applicable ~~Indemnitees~~ Indemnitees, within thirty (30) days of the receipt of such notice from such ~~Indemnitees of~~ Indemnitees; provided, that, in the ~~Third-~~event that: (i) the Third Party Claim seeks relief other than monetary damages, such as an injunction or other equitable relief against the Indemnitee(s), (~~failure~~ ii) defense of such Third Party Claim would void or otherwise adversely impact the Indemnitee’s insurance policy, or (iii) the Indemnifying Party fails to ~~respond within~~ conduct the defense of the Third Party Claim actively and diligently, then, in each case, the Indemnitee(s) shall have the option to control such ~~thirty (30) day period shall be deemed~~ defense by providing written notice of the assumption of such defense to ~~be an election by~~ the Indemnifying Party; provided, however, in the event the Indemnitees assume the defense, the Indemnifying Party shall, nevertheless, have the right to employ separate counsel to participate in (but not ~~to assume~~ control) the defense, compromise or settlement thereof at its own expense. In connection with a Third Party Claim for which the Indemnifying Party is controlling the defense ~~for such Third-Party Claim~~pursuant to this Section 5.4(c)~~. After a notice from an Indemnifying Party to an Indemnitee of its election to assume~~ , the ~~defense of a Third-Party Claim, such~~ Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, ~~compromise~~ compromise, or settlement thereof, at its own expense and, in any event, shall ~~reasonably~~ cooperate with the Indemnifying Party in such defense and make available to the Indemnifying ~~Party~~ Party, at the Indemnifying Party’s expense, all ~~witnesses~~ witnesses, experts, pertinent Information, personnel, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event ~~that (i) an Indemnifying Party elects not to assume the defense~~ of a ~~Third-Party Claim, (ii) there exists a conflict of interest or potential~~ conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assetsapplicable Indemnitee(s), such ~~Indemnitee~~ Indemnitee(s) shall be entitled to ~~control the defense of such Third-Party Claim~~retain, at the Indemnifying Party’s expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter; provided, further, that if the Indemnifying Party has assumed the defense of the Third Party Claim but has specified, and continues to assert, any reservations or exceptions to such defense or to its liability therefor, then, in any such case, the reasonable fees and expenses of one separate counsel ~~of such Indemnitee’s choosing (such counsel to~~ for all Indemnitees shall be ~~reasonably acceptable to~~ borne by the Indemnifying Party. (d) Notwithstanding any assumption of defense of a Third Party Claim by an Indemnifying Party in accordance with Section 5.4(c), in the event that in the course of defending such Third Party Claim the Indemnifying Party or another Party shall become aware that the subject matter of such Third Party Claim relates to a Liability of another Party and not to a Liability of such Indemnifying Party, then the Indemnifying Party shall, subject to the prior written consent of the other Party to which such Liability belongs, use commercially reasonable efforts to transfer the defense of such claim to such other Party, and shall thereafter cooperate fully with such other Party in such defense and make available to such other Party, at such Party’s expense, all witnesses, experts, pertinent Information, personnel, materials and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating to such Third Party Claim as are reasonably required by such other Party. (e) If an Indemnifying Party fails for any reason to assume responsibility for, or is prohibited from assuming responsibility for, defending a Third Party Claim within the time specified, such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense against any such ~~Third-~~Third Party Claim, the Indemnifying Party shall ~~reasonably~~ cooperate with the Indemnitee in such defense and make available to the ~~Indemnitee~~ Indemnitee, at the Indemnitee’s expense, all ~~witnesses~~ witnesses, experts, pertinent Information, personnel, materials and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee. (f) Neither the Indemnifying Party nor the Indemnitee shall, without the prior written consent of the other Party (such written consent not to be unreasonably withheld or delayed), settle, compromise or offer to settle or compromise any Third Party Claim; provided, however, ~~that such access shall not require~~ the Indemnifying Party ~~to disclose~~ may settle, compromise any ~~information the disclosure of which would, in the good faith judgment~~ Third Party Claim without consent of the ~~Indemnifying Party~~Indemnitee if (i) such settlement or compromise shall include as an unconditional, ~~result in~~ irrevocable term thereof the ~~loss~~ giving by the claimant of ~~any existing privilege~~ a full release of each Indemnitee from all liability with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Third Party Claim, ~~it shall~~ (ii) such settlement or compromise does not ~~be a defense to~~ involve any ~~obligation to pay any amount~~ finding or determination of Liability, wrongdoing or violation of Law by the other Party and (iii) the sole relief provided is monetary damages that are paid in ~~respect of such Third-Party Claim that~~ full by the Indemnifying ~~Party was not consulted in the defense thereof, that such Indemnifying~~ Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) ~~Absent fraud~~ In the event of payment by or ~~intentional misconduct by an~~ on behalf of any Indemnifying Party to any Indemnitee in connection with any Third Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, ~~the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for~~ in prosecuting any ~~monetary~~ subrogated right, defense or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Partyclaim. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the The Indemnifying Party shall ~~place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement~~ establish a procedure reasonably acceptable to the Indemnitee ~~and shall not release any portion thereof~~ to ~~the Indemnitee, and~~ keep the Indemnitee ~~shall not be entitled~~ reasonably informed of the progress of the Third Party Claim and to notify the Indemnitee when any such ~~amount~~Third Party Claim is closed, ~~unless and until the Indemnitee delivers to the Indemnifying Party~~regardless of whether such Third Party Claim was resolved by settlement, ~~at the sole option of the relevant Protected REIT~~verdict, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, dismissal or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationotherwise.

Appears in 2 contracts

Sources: Distribution Agreement (Autoliv Inc), Distribution Agreement (Veoneer, Inc.)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, a reasonably detailed description of the claim, and ~~containing~~ contain a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such specified claim shall be conclusively deemed a Liability of the Indemnifying Party under this Section 9.4(a) or, in the case of any written notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of the claim (or such portion thereof) becomes finally determined. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnitee shall, subject to the provisions of Article X, be free to pursue such remedies as may be available to such party as contemplated by this Agreement and the Ancillary Agreements, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution hereunder. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall ~~notify~~ provide written notice to the Indemnifying Party ~~in writing~~promptly, ~~and in reasonable detail, of the Third-Party Claim promptly~~ (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim, which notice shall include reasonable detail and, at a minimum, a copy of the Third Party Claim and a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Subject to Sections 9.4(d) and 9.4(e), an Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own ~~counsel, which~~ counsel ~~must be reasonably acceptable to the Indemnitee,~~ if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to ~~assume~~ assume, control the defense ~~for~~ of, or have the right to settle such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume and control the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the ~~defense, compromise or settlement thereof,~~ defense at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, (v) an Indemnifying Party’s stockholders’ equity, as reported on any annual audited balance sheet or unaudited quarterly balance sheet after the Effective Time is less than $100 million; (vi) the Indemnitee is a current or former individual director or officer of InvenTrust or Highlands or (vvii) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, ~~such~~ then the Indemnitee shall be entitled to assume, control the defense of of, and subject to Section 9.4(e), settle such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s ~~choosing (such counsel to be reasonably acceptable to the Indemnifying Party)~~choosing. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of ~~a Third-~~any Third Party ~~Claim~~Claim subject to indemnification by an Indemnifying Party, no the Indemnitee or Indemnifying Party that is controlling the defense shall have the right to consent to entry of any judgment or enter into any settlement or compromise of the Third-Party ~~Claim without~~ Claim, subject to the consent of the Indemnifying Party (where the Indemnitee is controlling the defense) or Indemnitee (where the Indemnifying Party is controlling the defense), which consent shall not to be unreasonably withheld, conditioned or delayed. (f) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee.[Reserved] (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the ~~event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that~~ amount of any indemnification payments due under this Agreement ~~would be treated as Nonqualifying Income upon the payment of such amounts~~ to ~~the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year~~ a Protected REIT shall not exceed an amount equal to the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if ~~the~~ such indemnification payment ~~of such amount were~~ was Nonqualifying Income as determined by ~~such~~ the REIT tax counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount ~~which~~ that the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and (2) the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion ~~(an “Expense Amount Tax Opinion”)~~ of the Protected REIT’s REIT tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter ~~(an “Expense Amount Accountant’s Letter”)~~ from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable ~~year~~year (in which case, the Indemnitee shall be entitled to receive from the Escrow Account an amount not in excess of such maximum amount), or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that Requirements. (i) ~~requires~~ For the ~~Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal~~ avoidance of doubt, to the ~~Expense Amount (an “Indemnity Loan”~~extent there is any conflict between the provisions of this Section 9.4 and the provisions of Section 7.2(f), ~~and (ii~~the provisions of Section 7.2(f) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity shall control with ~~no periodic amortization~~respect to Tax Contests.

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Highlands REIT, Inc.), Separation and Distribution Agreement (Highlands REIT, Inc.)

Procedures for Indemnification. The Principal Shareholder and the Other Principal Shareholder will jointly have the right to control, at their own cost, the defense of any actions, suits or proceedings that may result in indemnity pursuant to Section 5 (an “Excess Price Proceeding”) with counsel reasonably satisfactory to the Company. If the Principal Shareholder and the Other Principal Shareholder do not jointly elect to assume the control of an Excess Price Proceeding within three (3) days after the commencement of any such Excess Price Proceeding, then the Company will assume and have the right to control, at its own cost, the defense of any Excess Price Proceeding. If the Company controls the defense of any Excess Price Proceeding, the Company shall (a) ~~An Indemnitee~~ obtain the written consent of the Principal Shareholder to the selection of legal counsel to the Company for the defense of any such claims (which consent shall not be unreasonably withheld, delayed or conditioned), (b) reasonably consult, and cause the Company’s legal counsel to reasonably consult, with the Principal Shareholder and its legal counsel regarding such defense upon the Principal Shareholder’s reasonable request, (c) keep the Principal Shareholder and its legal counsel reasonably informed of any material developments in such action, suit or proceeding, and (d) prior to compromising or settling any Excess Price Proceeding, obtain the prior written consent of the Principal Shareholder (which consent will not be unreasonably withheld, delayed or conditioned). The Company will have the right, at its own expense, to engage legal counsel to participate in the defense of such action, suit or proceeding. If the Principal Shareholder and the Other Principal Shareholder jointly control the defense of any Excess Price Proceeding, the Principal Shareholder and the Other Principal Shareholder shall (a) obtain the written consent of the Company to the selection of legal counsel to the Principal Shareholder and the Other Principal Shareholder for the defense of any such claims (which consent shall not be unreasonably withheld, delayed or conditioned), (b) reasonably consult, and cause their legal counsel to reasonably consult, with the Company and its legal counsel regarding such defense upon the Company’s reasonable request, (c) keep the Company and its legal counsel reasonably informed of any material developments in such action, suit or proceeding, and (d) prior to compromising or settling any Excess Price Proceeding, obtain the prior written consent of the Company (which consent will not be unreasonably withheld, delayed or conditioned). The Company will give the Principal Shareholder written notice of ~~any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ all claims for indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of ~~the Loss claimed~~such claims promptly upon their determination, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, provided that the failure to provide any such notice shall not ~~release~~ prejudice the ~~Indemnifying Party from any~~ rights of ~~its obligations except and solely to~~ the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled Company to indemnification ~~pursuant to this Agreement,~~ hereunder. All such ~~Indemnitee~~ claims shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be ~~liable for any expenses incurred~~ satisfied by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received Principal Shareholder by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such ~~amounts~~ obligation directly to the ~~relevant Indemnitee~~current or former shareholder of the Company entitled to such indemnifiable amount within five business days of receipt of such notice by wire transfer of immediately available funds to an account or accounts specified by such current or former shareholder, ~~the amount paid to the Indemnitee pursuant to this Agreement~~ or at such other time and in such other manner as may otherwise be provided in any ~~tax year shall~~ final Order not ~~exceed the maximum amount that can be paid~~ subject to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee further appeal or any ~~guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization~~final binding settlement agreement.

Appears in 2 contracts

Sources: Funding and Indemnification Agreement (Gander Mountain Co), Funding and Indemnification Agreement (Gander Mountain Co)

Procedures for Indemnification. (a) An The Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “~~Indemnifying Party~~Indemnification Notice”) ~~promptly (and~~ of any Damages or the commencement of any Proceeding by a third party with respect to any matter referred to in ~~any event within fifteen (15) days) after making such~~ Section 10.2 thereof to the Indemnitor, which Indemnification Notice shall include a ~~determination. Such notice shall state~~ description of the Damages or Proceeding, the amount of thereof (if known and quantifiable) and the ~~Loss claimed, if known, and method of computation thereof, and containing a reference to~~ basis for the ~~provisions of this Agreement~~ Damages or ~~the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Proceeding; provided, ~~however,~~ that failure of the ~~failure~~ Indemnitee to ~~provide such notice~~ give the Indemnification Notice as provided herein shall not ~~release~~ relieve the ~~Indemnifying Party from any~~ Indemnitor of its obligations ~~except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure~~hereunder. (b) If ~~a claim or demand is made against an Indemnitee by any Person who is~~ the Indemnitor does not ~~a Party~~ object to ~~this Agreement or an Affiliate~~ the Damages within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor, after Indemnitee’s delivery of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of cancellation (the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX“Cancellation Notice”) to the ~~applicable Indemnitees~~ Indemnitor, Indemnitor shall pay the aggregate amount of Damages set forth in the Indemnification Notice within five (5) Business Days of Indemnitee’s delivery of the Cancellation Notice. Indemnitor may object to the claim on the Indemnification Notice by delivery to Indemnitee of such objection in writing within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor. In case Indemnitor shall so object in writing to any claim or claims by Indemnitee made in any Indemnification Notice, Indemnitee shall have thirty (30) days after receipt of such objection to respond in a written statement that describes the nature of such objection and/or Indemnitor’s assessment of the ~~receipt of notice from such Indemnitees~~ amount of the ~~Third-Party Claim (failure of the Indemnifying Party to respond within~~ Damages. If after such thirty (30) day period there remains a dispute as to any claims, Indemnitee and Indemnitor shall attempt in good faith for thirty (30) days to agree upon the rights of the respective parties with respect to each of such claims. If no agreement can be reached after good faith negotiation between the parties pursuant to this Section, then the parties shall subject such dispute to the dispute resolution procedures set forth in Section 11.13. (c) Indemnitor shall be ~~deemed~~ entitled to participate in the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its option (subject to the limitations set forth below) shall be ~~an election by the Indemnifying Party not~~ entitled to assume the defense ~~for~~ thereof by appointing a nationally recognized and reputable counsel reasonably acceptable to the Indemnitee to be the lead counsel in connection with such ~~Third-Party Claim). After a notice from an Indemnifying Party~~ defense; provided that: (i) the Indemnitee shall be entitled to ~~an Indemnitee of its election to assume~~ participate in the defense of such claim and to employ counsel of its choice for such purpose; provided that the fees and expenses of such separate counsel shall be borne by the Indemnitee (other than any fees and expenses of such separate counsel that are incurred prior to the date the Indemnitor effectively assumes control of such defense which, notwithstanding the foregoing, shall be borne by the Indemnitor, and except that the Indemnitor shall pay all of the fees and expenses of such separate counsel if the Indemnitee has been advised by counsel that a ~~Third~~reasonable likelihood exists of a conflict of interest between the Indemnitor and the Indemnitee); (ii) the Indemnitor shall not be entitled to assume control of such defense (unless otherwise agreed to in writing by the Indemnitee) and shall pay the fees and expenses of counsel retained by the Indemnitee if: (A) the claim for indemnification relates to or arises in connection with any criminal or quasi-~~Party Claim~~criminal proceeding, action, indictment, allegation or investigation; (B) the Indemnitee reasonably believes an adverse determination with respect to the action, lawsuit, investigation, proceeding or other claim giving rise to such claim for indemnification would be detrimental to or injure the Indemnitee’s reputation or future business prospects; (C) the claim seeks an injunction or equitable relief against the Indemnitee; (D) the Indemnitee has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnitor and the Indemnitee; (E) the claim involves environmental matters in which case the Indemnitee shall have sole control and management authority over the ~~right to employ separate~~ resolution of such claim (including hiring legal counsel and ~~to participate in (but not control) the defense~~environmental consultants, ~~compromise~~ conducting environmental investigations and cleanups, negotiating with governmental agencies and third parties and defending or ~~settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense~~ settling claims and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Partyactions); ~~provided, however,~~ provided that ~~such access shall not require~~ the Indemnitee shall keep the Indemnitor apprised of any major developments relating to ~~disclose~~ any ~~information the disclosure of which would, in the good faith judgment of~~ environmental claim; (F) upon petition by the Indemnitee, ~~result in~~ the ~~loss~~ appropriate court or arbitral rules that the Indemnitor failed or is failing to vigorously prosecute or defend such claim; or (G) the Indemnitee reasonably believes that the Damages relating to the claim could exceed the maximum amount that such Indemnitee could then be entitled to recover under the applicable provisions of Article 10; and (iii) if the Indemnitor shall control the defense of any ~~existing privilege~~ such claim, the Indemnitor shall obtain the prior written consent of the Indemnitee before entering into any settlement of a claim or ceasing to defend such claim if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief will be imposed against the Indemnitee or if such settlement does not expressly and unconditionally release the Indemnitee from all Liabilities with respect to such ~~information or violate any applicable Law. (d)~~ claim, without prejudice. Notwithstanding anything to the contrary contained in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or ~~any Ancillary Agreement~~otherwise, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would neither Seller nor Buyer shall be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements responsible for any ~~tax year~~special, ~~determined as if the payment of such amount were Nonqualifying Income as determined by such counsel~~ incidental, punitive or ~~independent accountants to the Protected REIT. If the amount payable~~ consequential Damages (including Damages for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”lost profits), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Asset Purchase Agreement, Asset Purchase Agreement (Cardium Therapeutics, Inc.)

Procedures for Indemnification. (a) An Other than with respect to Third-Party Claims, which shall be governed by Section 4.4(b), an Everest Indemnitee or a Newco Indemnitee (each, as applicable, an “Indemnitee”) shall ~~give notice of~~ notify in writing, with respect to any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this ~~Agreement or any Ancillary Agreement (other than a Third-~~Agreement, the Party ~~Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that~~ is or may be required pursuant to this ~~Agreement or any Ancillary Agreement~~ Article IV to make such indemnification (the “Indemnifying Party”), within thirty (30) ~~promptly (and~~ days of such determination, stating in ~~any event within fifteen (15) days) after making~~ such ~~a determination. Such~~ written notice ~~shall state~~ the amount of the Indemnifiable Loss claimed, if known, ~~and~~ and, to the extent practicable, method of computation thereof, and ~~containing a reference~~ referring to the provisions of this ~~Agreement or the applicable Ancillary~~ Agreement in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party ~~to this Agreement~~ or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in ~~writing~~writing (which notice obligation may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third-Party Claim), and in reasonable detail, of the Third-Party Claim promptly (and in any event within the earlier of (x) thirty (30) ~~days~~days or (y) two (2) Business Days prior to the final date of the applicable response period under such Third-Party Claim) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim; provided, however, that the failure to deliver such notices and documents of shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure. (c) An Other than in the case of indemnification by a beneficiary Party of a guarantor Party pursuant to Section 2.9(c) (the defense of which shall be controlled by the beneficiary Party), the Indemnifying Party shall be ~~entitled (but shall not be required)~~ entitled, if it so chooses, to ~~assume, control~~ assume the defense ofthereof, and ~~settle any~~ if it does not assume the defense of such Third-Party Claim, to participate in the defense of any Third-Party Claim in accordance with the terms of Section 4.5 at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be~~ that is reasonably acceptable to the Indemnitee, ~~if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ within thirty (30) days of the receipt of an indemnification notice from such ~~Indemnitees~~ Indemnitee; provided, however, that the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim if (x) in the reasonable judgment of the Indemnitee, after consultation with outside counsel, there exists a conflict of interest between the Indemnifying Party and the applicable Indemnitee(s) in the defense of such Third-Party Claim by the Indemnifying Party, (y) the party making such Third-Party Claim is a Governmental Body with regulatory or other authority over the Indemnitee or any of its material assets or (z) the Third-Party Claim ~~(failure of~~ seeks injunctive or other non-monetary relief that, if granted, would reasonably be expected to have a material and adverse effect on the Indemnitee’s business. In connection with the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the Party’s defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, ~~compromise~~ compromise, or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all ~~witnesses~~ witnesses, pertinent materials and information (subject to Section 5.7 as applicable) in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party~~; provided~~. To the extent permitted by law, ~~however, that such access~~ no Indemnifying Party shall ~~not require~~ settle or compromise any Third-Party Claim without the ~~Indemnitee to disclose any information the disclosure of which would, in the good faith judgment~~ written consent of the Indemnitee, ~~result~~ such consent not to be unreasonably withheld, conditioned or delayed, unless such settlement (A) completely and unconditionally releases the Indemnitee in connection with such matter, (B) provides relief consisting solely of money damages borne by the ~~loss~~ Indemnifying Party and (C) does not involve any admission by the Indemnitee of any ~~existing privilege with respect to such information~~ wrongdoing or ~~violate any applicable Law~~violation of a Legal Requirement. (d) ~~Notwithstanding anything to the contrary in this Section 9.4, in the event that (i)~~ If an Indemnifying Party ~~elects~~ does not to (or is not entitled to) assume ~~the defense of~~ responsibility for defending a Third-Party ~~Claim, (ii) there exists a conflict of interest or potential conflict of interest between~~ Claim within the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability period specified in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assetsthis Section 4.4, such Indemnitee ~~shall be entitled to control the defense of~~ may defend such Third-Party Claim~~, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party)~~. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all ~~witnesses~~ witnesses, pertinent materials and information (subject to Section 5.7 as applicable) in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee~~; provided, however, that such access shall not require~~ . To the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreementextent permitted by law, no Indemnitee may settle or compromise any Third-Party Claim without the prior written consent of the Indemnifying ~~Party (~~Party, such consent not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (fe) In Except as otherwise set forth in Section 5.6 or to the ~~case of a Third-Party Claim~~extent set forth in any Ancillary Agreement, ~~no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of~~ following the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying PartyClosing, the indemnification provisions of this Article IX IV shall be the sole and exclusive remedy of ~~an Indemnitee~~ any Party or member of its Group for any monetary ~~or compensatory~~ damages or Indemnifiable Losses arising out of, relating to or resulting from this Agreement, the Merger Agreement, any ~~breach of this~~ Ancillary Agreement or ~~any Ancillary Agreement,~~ the transactions contemplated hereby or thereby and each ~~Indemnitee~~ Party expressly waives and relinquishes any and all rights, claims or remedies such ~~Person~~ Party or any member of its Group may have with respect to the foregoing other than under this Article IX IV against any Indemnifying Party. (hf) ~~Notwithstanding anything~~ The provisions of this Article IV shall apply to Third-Party Claims that are already pending or asserted as well as Third-Party Claims brought or asserted after the ~~contrary in~~ date of this Agreement~~, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due~~ . There shall be no requirement under this ~~Agreement would be treated as Nonqualifying Income upon the payment of such amounts~~ Section 4.4 to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled give a notice with respect to any ~~such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option~~ Third-Party Claim that exists as of the ~~relevant Protected REIT~~Separation Effective Time. Neither Everest nor Athena shall, ~~(i) an opinion (an “Expense Amount Tax Opinion”)~~ nor shall either permit any member of its Group to, file Third-Party Claims or cross-claims against the ~~Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii)~~ other Party or its Subsidiaries in a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) Legal Proceeding in which a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Third-Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationClaim is being resolved.

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Ecolab Inc.), Separation and Distribution Agreement (Apergy Corp)

Procedures for Indemnification. The obligations and -------------------------------- liabilities of the parties with respect to an Indemnification Claim shall be subject to the following terms and conditions: (ai) An an Indemnification Claim shall be made by a STR Indemnitee by delivery of a written notice to the Controlling Shareholder Indemnitor's Representative requesting indemnification from the Controlling Shareholder Indemnitor and specifying the basis on which indemnification is sought and the amount of asserted Losses and, in the case of a Third Party Claim, containing (by attachment or otherwise) such other information as such Indemnitee shall ~~give~~ have concerning such Third Party Claim; (ii) an Indemnification Claim shall be made by a Controlling Shareholder Indemnitee by delivery of a written notice to the STR Indemnitors' Representative requesting indemnification and specifying the basis on which indemnification is sought and the amount of ~~any matter that~~ asserted Losses and, in the case of a Third Party Claim, containing (by attachment or otherwise) such other information as such Indemnitee ~~has determined has given or would reasonably~~ shall have concerning such Third Party Claim. (iii) if the Indemnification Claim involves a Third Party Claim, the procedures set forth in Section 8.5 hereof shall also be ~~expected to give rise to~~ observed by ----------- the Indemnitee and the Indemnitors' Representative; (iv) if the Indemnification Claim involves a ~~right of indemnification under this Agreement or any Ancillary Agreement (~~matter other than a ~~Third-~~Third Party ~~Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (~~Claim, the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitors' Representative shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) ~~days) after receipt~~ days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to such Indemnitee specifying in reasonable detail the ~~Third-Party~~ basis for such objection. Failure to object in a timely manner shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitors' Representative on behalf of all the subject Indemnitors, and the Indemnification Claim shall be paid in accordance with subsection (v) hereof; and (v) upon determination of the amount of an Indemnification Claim~~; provided~~, ~~however~~whether by agreement between the Indemnitors' Representative and the Indemnitee or otherwise, ~~that~~ the ~~failure to provide notice of any such Third-Party Claim pursuant to this sentence~~ Indemnitors shall ~~not release~~ pay the ~~Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result~~ amount of such ~~failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party~~ Indemnification Claim ~~during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event~~ within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of date such amount ~~were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence~~ is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationdetermined.

Appears in 2 contracts

Sources: Merger Agreement (Worldwide Petromoly Inc), Merger Agreement (Worldwide Petromoly Inc)

Procedures for Indemnification. (a) An If a claim is made by any Taxing authority, which, if successful, might result in an indemnity payment by a party ("Tax Indemnitor") to another ("Tax Indemnitee") pursuant to Section 11.02, Tax Indemnitee shall ~~give~~ promptly notify Tax Indemnitor in writing of such claim (a "Tax Claim"). If notice of ~~any matter~~ a Tax Claim is not given to Tax Indemnitor within a sufficient period of time to allow Tax Indemnitor to effectively contest such Tax Claim, or in reasonable detail to apprise Tax Indemnitor of the nature of the Tax Claim, in each case taking into account the facts and circumstances with respect to such Tax Claim, Tax Indemnitor shall not be liable to Tax Indemnitee to the extent that Tax Indemnitor's ability to effectively contest such ~~Indemnitee has determined has given or would reasonably be expected to give rise to~~ Tax Claim is actually prejudiced as a ~~right of indemnification under this Agreement or any Ancillary Agreement~~ result thereof. (~~other than a Third-Party Claim which shall be governed by Section 9.4(b)~~b) With respect to any ~~Party that is~~ Tax Claim, Tax Indemnitor shall control all proceedings taken in connection with such Tax Claim (including, without limitation, selection of counsel) and, without limiting the foregoing, may in its sole discretion pursue or ~~may be required pursuant to this Agreement~~ forego any and all administrative appeals, proceedings, hearings and conferences with any Taxing authority with respect thereto and may, in its sole discretion, either pay the Tax claimed and ▇▇▇ for a refund where Applicable Law permits such refund suits or ~~any Ancillary Agreement to make such indemnification (~~contest the ~~“Indemnifying Party”) promptly (and~~ Tax Claim in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteepermissible manner; provided, however, that ~~the failure to provide such notice~~ Tax Indemnitor shall not ~~release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as~~ settle or compromise a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Tax Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within without giving thirty (30) days notice to Tax Indemnitee and without Tax Indemnitee's consent, which shall not be unreasonably withheld, if such settlement or compromise would result in a material Tax Liability of Tax Indemnitee or members of its affiliated group for any Taxable period. If Tax Indemnitee reasonably withholds its consent, the ~~receipt~~ indemnification obligation of ~~notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party~~ Tax Indemnitor to ~~respond within such thirty (30) day period~~ Tax Indemnitee under this Article XI shall be ~~deemed~~ limited to ~~be an election by~~ the ~~Indemnifying Party not to assume the defense for~~ amount of such ~~Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim~~settlement or compromise, ~~such~~ and Tax Indemnitee shall have the right to ~~employ separate counsel and to participate in (but not control)~~ take over the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any ~~existing privilege~~ proceedings with respect to such Tax Claim at its own expense. (c) Buyer and Seller shall cooperate with each other in contesting any Tax Claim, which cooperation shall include, without limitation, granting powers of attorney to the party who is entitled to control the proceedings, retaining and providing records and information that are reasonably relevant to such Tax Claim, and making employees available on a mutually convenient basis to provide additional information or ~~violate~~ explanation of any ~~applicable Law~~material provided hereunder or to testify at proceedings relating to such Tax Claim. (d) ~~Notwithstanding anything~~ Any payment under this Article XI shall be treated for tax purposes as an adjustment of the Purchase Price to the ~~contrary in this Section 9.4~~extent such characterization is proper and permissible under relevant Tax authorities, ~~in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim~~including court decisions, ~~(ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ statutes, regulations and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Lawadministrative promulgations. (e) ~~Unless the Indemnifying Party has failed to assume the defense~~ The indemnification obligations of the ~~Third-Party Claim~~ parties set forth in ~~accordance with~~ this Article XI shall survive until the ~~terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent~~ expiration of the ~~Indemnifying Party (not~~ applicable statute of limitations relating to ~~be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume~~ the ~~defense~~ Taxes that are the subject of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liabilityindemnification obligation. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 2 contracts

Sources: Stock Purchase Agreement (Metromedia International Group Inc), Stock Purchase Agreement (Metro-Goldwyn-Mayer Inc)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ an Indemnitee by delivery of a written notice to ~~any Party that~~ Indemnitor requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an~~ Third Party Claim the procedures set forth in SECTION 7.4 hereof shall be observed by Indemnitee ~~by any Person who is not~~ and Indemnitor. (c) If the Indemnification Claim involves a ~~Party to this Agreement or an Affiliate of~~ matter other than a ~~Party (a “Third-~~Third Party Claim~~”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~, ~~such Indemnitee~~ Indemnitor shall ~~notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within~~ have thirty (30) ~~days) after receipt~~ days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to such Indemnitee specifying in reasonable detail the ~~Third-Party~~ basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by Indemnitor, and the Indemnification Claim shall be paid in accordance with subsection (d) hereof. If an objection is timely interposed by Indemnitor and the dispute is not resolved by Indemnitee and Indemnitor within fifteen (15) days from the date Indemnitee receives such objection, such dispute shall be resolved by arbitration as provided in Section 8.14 of this Agreement. (d) Upon determination of the amount of an Indemnification Claim~~; provided~~, ~~however~~whether by agreement between Indemnitor and Indemnitee or by an arbitration award or by any other final adjudication, ~~that~~ Indemnitor shall pay the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result amount of such ~~failure (except that~~ Indemnification Claim in accordance with the ~~Indemnifying Party or Parties shall not be liable for any expenses incurred by~~ instructions of the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of date such amount ~~were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence~~ is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationdetermined.

Appears in 2 contracts

Sources: Stock Purchase Agreement (Satellink Communications Inc), Stock Purchase Agreement (Satellink Communications Inc)

Procedures for Indemnification. (a) An Other than with respect to Third Party Claims, which shall be governed by Section 4.3(b), each Veoneer Indemnitee and Autoliv Indemnitee (each, an “Indemnitee”) shall ~~give notice of~~ notify in writing, with respect to any matter that such Indemnitee has determined has given or ~~would reasonably be expected to~~ could give rise to a right of indemnification under this Agreement or any Ancillary ~~Agreement (other than a Third-~~Agreement, the Party ~~Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that~~ is or may be required pursuant to this ~~Agreement~~ Article IV or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within thirty (30) ~~promptly (and in any event within fifteen (15) days) after making~~ days of such a determination~~. Such notice shall state~~ , stating the amount of the Indemnifiable Loss claimed, if known, and method of computation thereof, and ~~containing a reference~~ referring to the provisions of this ~~Agreement or the applicable Ancillary~~ Agreement in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure. Each such Indemnitee shall provide the applicable Indemnifying Party with reasonable access, upon reasonable prior written notice and during normal business hours, in a manner so as not to unreasonably interfere in any material respect with the normal business operations of such Indemnitee, to its books and records, properties and personnel relating to the claim the Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement or any Ancillary Agreement. (b) If a claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement ~~or an Affiliate of a Party~~ (a “~~Third-~~Third Party Claim”) as to which such Indemnitee is or ~~reasonably expects to~~ may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the ~~Third-~~Third Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the ~~Third-~~Third Party Claim; provided, however, that the failure to provide notice of any such ~~Third-~~Third Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ~~ten~~ five (105) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the ~~Third-~~Third Party Claim. (c) An Indemnifying Party shall be entitled ~~(but shall not be required)~~ to ~~assume, control~~ participate in the defense ofof any Third Party Claim and, ~~and settle any Third-Party Claim~~if it so chooses, to assume the defense thereof, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be~~ that is reasonably acceptable ~~to the Indemnitee, if it gives written notice of its intention to do so~~ (~~including a statement~~ provided that ~~the Indemnitee is entitled to indemnification under this Article IX~~insurer-appointed counsel shall be automatically deemed acceptable) to the applicable ~~Indemnitees~~ Indemnitees, within thirty (30) days of the receipt of such notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.such

Appears in 2 contracts

Sources: Distribution Agreement (Autoliv Inc), Distribution Agreement (Veoneer, Inc.)

Appears in 2 contracts

Sources: Separation and Distribution Agreement (Ashford Hospitality Trust Inc), Separation and Distribution Agreement (Ashford Hospitality Prime, Inc.)

Procedures for Indemnification. The obligations and liabilities of the parties with respect to an Indemnification Claim shall be subject to the following terms and conditions: (ai) An an Indemnification Claim shall be made by a NM Indemnitee by delivery of a written notice to the Company Indemnitors' Representative requesting indemnification from the Company Indemnitors and specifying the basis on which indemnification is sought and the amount of asserted Losses and, in the case of a Third Party Claim, containing (by attachment or otherwise) such other information as such Indemnitee shall ~~give~~ have concerning such Third Party Claim; (ii) an Indemnification Claim shall be made by a Company Indemnitee by delivery of a written notice to the NM Indemnitors' Representative requesting indemnification and specifying the basis on which indemnification is sought and the amount of ~~any matter that~~ asserted Losses and, in the case of a Third Party Claim, containing (by attachment or otherwise) such other information as such Indemnitee ~~has determined has given or would reasonably~~ shall have concerning such Third Party Claim. (iii) if the Indemnification Claim involves a Third Party Claim, the procedures set forth in Section 8.5 hereof shall also be ~~expected to give rise to~~ observed by the Indemnitee and the Indemnitors Representative; (iv) if the Indemnification Claim involves a ~~right of indemnification under this Agreement or any Ancillary Agreement (~~matter other than a ~~Third-~~Third Party ~~Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (~~Claim, the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitors Representative shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) ~~days) after receipt~~ days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to such Indemnitee specifying in reasonable detail the ~~Third-Party~~ basis for such objection. Failure to object in a timely manner shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitors Representative on behalf of all the subject Indemnitors, and the Indemnification Claim shall be paid in accordance with subsection (v) hereof; and (v) upon determination of the amount of an Indemnification Claim~~; provided~~, ~~however~~whether by agreement between the Indemnitors Representative and the Indemnitee or otherwise, ~~that~~ the ~~failure to provide notice of any such Third-Party Claim pursuant to this sentence~~ Indemnitors shall ~~not release~~ pay the ~~Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result~~ amount of such ~~failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party~~ Indemnification Claim ~~during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event~~ within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of date such amount ~~were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence~~ is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationdetermined.

Appears in 2 contracts

Sources: Merger Agreement (Grace Development Inc), Merger Agreement (Grace Development Inc)

Procedures for Indemnification. The party making a claim under this Article 11 is referred to as the "Indemnitee" and the party against whom such claims are asserted under this Article 11 is referred as the "Indemnitor." All claims by an Indemnitee under this Article 11 shall be asserted and resolved as follows: (a) An In the event that any claim or demand by a third party for which an Indemnitor would be liable to an Indemnitee hereunder is asserted against or sought to be collected from such Indemnitee, the Indemnitee shall ~~give~~ with reasonable promptness (but in no event later than five (5) Business Days after the Indemnitee knew or should have known about the existence of such claim) notify in writing the Indemnitor of such claim or demand, specifying the nature of the specific basis for such claim or demand, and the amount or the estimated amount thereof to the extent then feasible which estimate shall not be conclusive of the final amount of such claim and demand (the "Claim Notice"). To the extent a claim will be made under the Indemnification Agreement among Purchaser, Edward Ateyeh, Jr., Wade Saadi and Edgar Saadi, notice shall also be g▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ w▇▇▇ ▇▇▇▇ ▇ndemn▇▇▇▇▇▇▇▇▇ ▇greement. Notwithstanding anything herein to the contrary, failure of ~~any matter that such~~ the Indemnitee ~~has determined has given or would reasonably be expected~~ to give ~~rise~~ the Indemnitor notice as provided herein shall not relieve the Indemnitor of the obligation hereunder except to the extent that the Indemnitor is prejudiced thereby. The Indemnitor shall within ten (10) days of receipt of a ~~right~~ Claim Notice notify the Indemnitee whether it will defend such third party claim or demand on behalf of ~~indemnification under this Agreement~~ the Indemnitee. In the event the Indemnitor elects to defend such claim or ~~any Ancillary Agreement~~ demand on behalf of the Indemnitee, it shall retain counsel (~~other than a Third-Party Claim which~~ who shall be ~~governed by Section 9.4(b)~~reasonably acceptable to the Indemnitee) to ~~any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make~~ represent the Indemnitee and shall pay the reasonable fees and disbursements of such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteecounsel with regard thereto; provided, however, that ~~the failure to provide such notice shall not release the Indemnifying Party from~~ any ~~of its obligations except and solely~~ Indemnitee is hereby authorized prior to the ~~extent~~ date on which it receives written notice from the ~~Indemnifying Party~~ Indemnitor designating such counsel, to retain counsel, whose fees and expenses shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be ~~entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify~~ at the ~~Indemnifying Party in writing, and in reasonable detail,~~ expense of the ~~Third-Party Claim promptly (~~Indemnitor, to file any motion, answer or other pleading and ~~in any event within thirty (30) days) after receipt by~~ take such ~~Indemnitee of written notice~~ other action which it reasonably shall deem necessary to protect its interests or those of the ~~Third-Party Claim; provided, however, that~~ Indemnitor until the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in date on which the Indemnitee ~~failed~~ received such notice from the Indemnitor. In the event the Indemnitor elects to ~~give~~ defend such ~~notice). Thereafter~~claim or demand, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to ~~employ separate~~ retain its own counsel, but the fees and expenses of such counsel ~~and to participate in~~ shall be at the expense of such Indemnitee unless (~~but not control~~x) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, Indemnitor and the Indemnitee shall ~~not be entitled~~ have mutually agreed in writing to the retention of such counsel or (y) the named parties of any such ~~amount, unless~~ proceeding (including any impleaded parties) include both the Indemnitor and ~~until~~ the Indemnitee ~~delivers~~ and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Indemnitor shall not, in connection with any proceedings or related proceedings in the ~~Indemnifying Party~~same jurisdiction, at be liable for the ~~sole option~~ fees and expenses of more than one such firm for the ~~relevant Protected REIT,~~ Indemnitee (~~i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and~~ except to the extent ~~paid, would not constitute Nonqualifying Income,~~ the Indemnitee retained counsel to protect its (iior the Indemnitor's) ~~a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time~~ right prior to the ~~Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued~~ selection of counsel by the ~~IRS~~ Indemnitor as set forth above). If requested by the Indemnitor, the Indemnitee agrees to cooperate with the Indemnitor and its counsel in contesting any claim or demand which the Indemnitor defends. A claim or demand may not be settled by the Indemnitor without the prior written consent of the Indemnitee unless the settlement is for cash and as part of such settlement the Indemnitee shall receive a full and unconditional release reasonably satisfactory to the ~~Protected REIT indicating that~~ Indemnitee. If the ~~receipt of any Expense Amount hereunder will~~ Indemnitor does not ~~cause the Protected REIT~~ elect to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Partydefend such third party claim or demand or does not defend such third party claim or demand in good faith, the Indemnitee shall have the right, ~~but not~~ in addition to any other right or remedy it may have hereunder, at the ~~obligation~~Indemnitor's reasonable expense, to ~~borrow~~ defend such third party claim or demand; provided, however, that (a) the ~~Expense Amount~~ Indemnitor shall not have any obligation to participate in the defense of, or defend, any such third party claim or demand; and (b) the Indemnitor's defense of, or its participation in the defense of any such third party claim or demand, shall not in any way diminish or lessen the obligations of the Indemnitor under the agreements of indemnification set forth in this Article 11. (b) In the event any Indemnitee shall have a claim against any Indemnitor hereunder which does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the ~~Escrow Account~~ Indemnitee shall send a written Claim Notice with respect to such claim to the Indemnitor. If the Indemnitor does not notify the Indemnitee within twenty (20) Business Days of receipt of such Claim Notice that it disputes such claim, the amount of such claims shall be conclusively deemed a liability of the Indemnitor hereunder. (c) So long as any right to indemnification exists pursuant to ~~a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ this Article 11, the affected parties each agree to retain all books and records related to the ~~Indemnitee that (i) requires~~ Claim Notice. In each instance where the ~~Indemnifying Party~~ Indemnitor elects to ~~lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A)~~ defend a ~~commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee~~ claim or ~~any guarantor~~ demand on behalf of the Indemnitee, ~~including~~ the ~~Protected REIT~~Indemnitee shall have the right to be kept fully informed by the Indemnitor and its legal counsel with respect to any legal proceedings. Any information or documents made available to any party hereunder and designated as confidential by the party providing such information or documents and which is not otherwise generally available to the public and not already within the knowledge of the party to whom the information is provided (unless otherwise covered by the confidentiality provisions of any other agreement among the parties hereto, ~~at the time~~ or any of ~~such loan~~them), and except as may be required by applicable law, shall not be disclosed to any third party (~~B) a 15 year maturity~~ except for the representatives of the party being provided with ~~no periodic amortization~~the information, in which event the party being provided with the information shall request its representatives not to disclose any such information which is otherwise required hereunder to be kept confidential.)

Appears in 1 contract

Sources: Asset Purchase Agreement (Mti Technology Corp)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ A claim for indemnification under ~~this Agreement or any Ancillary Agreement~~ Section 8 (~~other than a Third-Party Claim which~~ an “ Indemnification Claim”) shall be ~~governed~~ made by ~~Section 9.4(b))~~ a party by delivery of a written declaration to ~~any Party that~~ the other party requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim (as defined in Section 10(d) hereof), ~~if known, and method of computation thereof, and~~ containing ~~a reference to~~ such other information as the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party party seeking indemnity shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim”, the procedures set forth in Section 10(d) ~~as to which such Indemnitee is or reasonably expects to~~ hereof shall be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred observed by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimparties. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the party to provide indemnity shall have twenty (20) business days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do the party seeking indemnity specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute acceptance of the Indemnification Claim by the party to provide indemnity. (~~including~~ d) Should any claim be made, or suit or proceeding be instituted against a ~~statement that~~ party by a third party which, if prosecuted successfully, would be a matter for which the ~~Indemnitee~~ party is entitled to indemnification under this ~~Article IX)~~ Agreement (a “ Third Party Claim”), the obligations and liabilities of the parties hereunder with respect to such Third Party Claim shall be subject to the ~~applicable Indemnitees within thirty~~ following terms and conditions: (30i) ~~days~~ The party seeking indemnity shall give to the party to provide indemnity written notice of any such claim promptly after receipt by the ~~receipt~~ party seeking indemnity of notice ~~from such Indemnitees of~~ thereof, and the ~~Third-Party Claim (failure of the Indemnifying Party~~ party to ~~respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume~~ provide indemnity will undertake the defense ~~for~~ thereof by representatives of such ~~Third-Party Claim)~~party’s (or its insurer’s) choosing. ~~After a notice from an Indemnifying Party to an Indemnitee~~ The assumption of ~~its election to assume~~ the defense of ~~a Third-Party Claim~~any such claim by the party to provide indemnity shall be an acknowledgment by the party to provide indemnity of its obligation to indemnify the party seeking indemnity with respect to such claim hereunder. The party seeking indemnity shall be entitled to participate with the party to provide indemnity in the defense of such matters at its own expense. If the party to provide indemnity fails or refuses to undertake the defense of such claim within twenty (20) business days after written notice of such claim has been given to the party to provide indemnity by the party seeking indemnity, ~~such Indemnitee~~ the party seeking indemnity shall have the right to ~~employ separate counsel and to participate in (but not control)~~ undertake the defense, compromise or and, subject to Section 10(e), settlement ~~thereof, at~~ of such claim with counsel of its own ~~expense and~~choosing. In the circumstances described in the preceding sentence, the party seeking indemnity shall promptly, upon its assumption of the defense of such claim, make an Indemnification Claim as specified in ~~any event,~~ Section 10(a). (ii) Buyer and Seller shall reasonably cooperate with ~~the Indemnifying Party~~ each other in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege connection with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume~~ the defense of ~~a Third-~~any Third Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) ~~Unless~~ No settlement of a Third Party Claim involving the ~~Indemnifying Party~~ asserted liability of any party under this Section 10 shall be made without the prior written consent of such party, which consent shall not be unreasonably withheld or delayed. In the event of any dispute regarding the reasonableness of any proposed settlement, (i) the party to provide indemnity shall make the final determination in respect thereto in cases in which the party to provide indemnity has ~~failed~~ assumed the defense of such claim pursuant to Section 10(d)(i), which determination shall be final and binding on all parties, or (ii) with regard to any dispute regarding the reasonableness of any proposed settlement of any such claim, if the party to provide indemnity does not assume the defense of such claim, the ~~Third-Party Claim in accordance with the~~ advisability and terms of ~~this Agreement, no Indemnitee may settle or compromise~~ any ~~Third-Party Claim without~~ such settlement shall be a matter for the ~~consent~~ good faith determination of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liabilityparty seeking indemnity. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Purchase Agreement (American Commercial Lines Inc.)

Procedures for Indemnification. (a) An Promptly after receipt by a party entitled to indemnification hereunder (the “Indemnitee”) of written notice of the assertion or the commencement of any Proceeding by a third party with respect to any matter referred to in Section 9.2, the Indemnitee shall give written notice ~~of any matter that such~~ thereof to the party obligated to indemnify Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “~~Indemnifying Party~~Indemnitor”~~) promptly (and in any event within fifteen (15) days) after making such a determination. Such~~ ), which notice shall ~~state~~ include a description of the Proceeding, the amount of thereof (if known and quantifiable) and the ~~Loss claimed, if known~~basis for the Proceeding, and ~~method of computation thereof, and containing a reference to~~ thereafter shall keep the ~~provisions of this Agreement or the applicable Ancillary Agreement in~~ Indemnitor reasonably informed with respect ~~of which such right of indemnification is claimed by such Indemnitee~~thereto; provided, ~~however,~~ that failure of the ~~failure~~ Indemnitee to ~~provide such~~ give the Indemnitor notice as provided herein shall not ~~release~~ relieve the ~~Indemnifying Party from any~~ Indemnitor of its obligations hereunder except ~~and solely~~ to the extent that the ~~Indemnifying Party~~ Indemnitor is prejudiced thereby. A claim for indemnification for any matter not involving a third-party Proceeding may be asserted by notice to the party from whom indemnification is sought and shall ~~have been materially prejudiced as a result of~~ be paid promptly after such ~~failure~~notice. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to An Indemnitor shall be entitled to ~~indemnification pursuant to this Agreement, such Indemnitee shall notify~~ assume in the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice defense of any ~~such Third-Party Claim pursuant~~ action, lawsuit, proceeding, investigation or other claim giving rise to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the an Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, claim for indemnification at such ~~Indemnifying Party~~Indemnitor’s ~~own cost~~ expense by appointing a nationally recognized and ~~expense and by such Indemnifying Party’s own counsel, which~~ reputable counsel ~~must be~~ reasonably acceptable to the ~~Indemnitee, if it gives written notice of its intention to do so (including a statement that the~~ Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be ~~an election by~~ the ~~Indemnifying Party not to assume the defense for~~ lead counsel in connection with such ~~Third-Party Claim)~~defense. ~~After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such~~ Each Indemnitee shall have the right to employ separate counsel in such claim and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of each Indemnitee unless: (~~but not control~~i) the ~~defense, compromise~~ Indemnitor has agreed to pay such expenses; or ~~settlement thereof, at its own expense and, in any event, shall reasonably cooperate with~~ (ii) the ~~Indemnifying Party in such~~ Indemnitor has failed promptly to assume the defense and ~~make~~ employ counsel reasonably satisfactory to such Indemnitee; or (iii) the named parties to any such action, claim or proceeding (including any impleaded parties) include an Indemnitee and such Indemnitee shall have been advised by counsel that either (x) there may be one or more legal defenses available to it which are different from or in addition to those available to the ~~Indemnifying Party all witnesses~~ Indemnitor or (y) a conflict of interest may exist if such counsel represents such Indemnitee and ~~information~~ the Indemnitor; provided, that, if such Indemnitee notifies the Indemnitor in writing that it elects to employ separate counsel in the circumstances described in clauses (ii) or (iii) above, the Indemnitor shall not have the right to assume the defense thereof and such ~~Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by~~ counsel shall be at the ~~Indemnifying Party~~expense of the Indemnitor; provided, however, that ~~such access~~ the Indemnitor shall ~~not require the Indemnitee to disclose any information the disclosure of which would~~not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the ~~good faith judgment~~ same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the fees and expenses of more than one such firm of separate counsel (in addition to any local counsel), which counsel shall be designated by such Indemnitee~~, result in the loss of any existing privilege with respect to such information or violate any applicable Law~~. (dc) ~~Notwithstanding anything to~~ If the ~~contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume~~ Indemnitor assumes the defense of any such claim, the Indemnitor shall obtain the prior written consent of the Indemnitee before entering into any settlement of a ~~Third-Party Claim~~claim or ceasing to defend such claim if, ~~(ii) there exists~~ pursuant to or as a ~~conflict~~ result of ~~interest~~ such settlement or ~~potential conflict of interest between the Indemnifying Party and the Indemnitee~~cessation, ~~(iii) any Third-Party Claim seeks an order, injunction~~ injunctive or other equitable relief ~~or relief for other than money damages~~ will be imposed against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or ~~any of its material Assets,~~ if such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party settlement does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not expressly and unconditionally release the Indemnitee from all liabilities and obligations with respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee~~claim with prejudice. (gd) ~~Absent fraud~~ A failure to give timely notice as provided in this Section 9.3 will not affect the rights or ~~intentional misconduct by an Indemnifying Party, the indemnification provisions~~ obligations of ~~this Article IX shall be the sole and exclusive remedy of an Indemnitee for~~ any ~~monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement~~party hereunder except if, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and only to the extent ~~paid~~that, ~~would not constitute Nonqualifying Income, (ii)~~ as a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt result of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Partysuch failure, the ~~Indemnitee shall have the right, but not the obligation,~~ party which was entitled to ~~borrow the Expense Amount from the Escrow Account pursuant to~~ receive such notice was actually prejudiced as a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time result of such ~~loan, and (B) a 15 year maturity with no periodic amortization~~failure.

Appears in 1 contract

Sources: Asset Purchase Agreement (Transgenomic Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ If any Purchaser Indemnified Person or Seller Indemnified Person (each, an "Indemnified Person") shall ~~give notice of~~ claim indemnification hereunder for any matter ~~that such Indemnitee has determined has given or would~~ (other than a Third Party Claim) for which indemnification is provided in Section 8.1, the Indemnified Person shall promptly after it first obtains knowledge of facts which could reasonably be expected to give rise to Losses that will serve the basis for such claim, give written notice (a ~~right~~ "Notice of Claim") to PHMD or Purchaser, as applicable, setting forth the basis for such claim and the nature and estimated amount of the claim to the extent then feasible (which estimate shall not be conclusive of the final amount of the claim), all in reasonable detail; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. If PHMD or Purchaser, as applicable, disputes any claim set forth in the Notice of Claim, it may, at any time deliver to the Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim, and the Parties shall attempt in good faith for a period of thirty (30) days after delivery of the dispute notice to agree upon the rights of the Parties with respect to such Notice of Claim. If no such agreement can be reached after good faith negotiation, the Parties shall have the rights and remedies, if any, available to them under this Agreement or applicable Legal Requirements. (b) If an Indemnified Person shall claim indemnification hereunder arising from any ~~Ancillary Agreement~~ Third Party Claim for which indemnification is provided in Section 8.1, the Indemnified Person shall promptly after it first obtains knowledge of such Third Party Claim, give written notice (~~other than~~ a "Third Party Notice") to PHMD or Purchaser, as applicable (each, an "Indemnifying Person"), of the basis for such claim, setting forth the nature of the claim or demand in reasonable detail to the extent known by the Indemnified Person; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. The Indemnifying Person, upon notice to the Indemnified Person, may at any time within thirty (30) days after receiving a Third Party Notice, at its own cost and through counsel of its choosing and reasonably acceptable to the Indemnified Person, defend any claim or demand set forth in a Third Party Notice. The Indemnifying Person shall have the right to compromise and settle all indemnifiable matters related to Third Party Claims which are susceptible to being settled and as to which it shall have properly assumed the defense; provided, that the Indemnifying Party shall not, without the prior written consent of the Indemnified Person settle or compromise any Third Party Claim or consent to the entry of any final judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff of a written release or releases from all liability in respect of such Third Party Claim of all Indemnified Persons named in such Third Party Claim and the sole relief for which are monetary damages that are paid in full by the Indemnifying Party. In the event that a particular Third Party Claim is subject to the limitations set forth in Section 8.3(b) and the aggregate amount of such Third Party Claim exceeds the Indemnifying Person's applicable maximum aggregate liability, the Indemnifying Person shall not reject any settlement or compromise offer without the prior consent of the Indemnified Person. The Indemnifying Person shall from time to time and otherwise at the Indemnified Person's request apprise the Indemnified Person of the status of the claim, liability or expense and any resulting Proceeding and shall furnish the Indemnified Person with such documents and information filed or delivered in connection with such claim, liability or expense or otherwise thereto as the Indemnified Person may reasonably request, and shall diligently defend the applicable Third-Party ~~Claim which~~ Claim. The Indemnified Person shall ~~be governed by Section 9.4(b))~~ not admit any liability to any third party in connection with any matter which is the subject of a Notice of Claim as to which the Indemnifying Party ~~that is~~ shall have properly assumed the defense and shall cooperate fully in the manner requested by the Indemnifying Party in the defense of such claim. Notwithstanding anything herein stated, the Indemnified Person shall at all times have the right to fully participate in such defense at its own expense directly or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteethrough counsel; provided, however, that if there exists a material conflict of interest between the ~~failure~~ Indemnified Person, on the one hand, and the Indemnifying Party, on the other hand, or if the Indemnified Person has been advised by counsel that there may be one or more legal or equitable defenses available to ~~provide such notice shall not release~~ it that are different from or additional to those available to the Indemnifying Party, which, in either case, would make it inappropriate for the same counsel to represent both the Indemnifying Party ~~from any of its obligations except~~ and ~~solely to~~ the ~~extent~~ Indemnified Person, then the ~~Indemnifying Party~~ Indemnified Person shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to ~~indemnification pursuant to this Agreement, such Indemnitee shall notify~~ retain its own counsel at the cost and expense of the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure Person (except that the Indemnifying Party ~~or Parties~~ shall not be ~~liable~~ obligated to pay the fees and expenses of more than one separate counsel for ~~any expenses incurred~~ all Indemnified Persons, taken together). Until such time as the Indemnifying Person has timely delivered a notice of intent to defend a Third Party Claim to the Indemnified Person, the Indemnified Person shall, at the expense of the Indemnifying Person, undertake the defense of (with counsel selected by the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (~~Indemnified Person and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~Indemnifying Person) such claim, ~~if it gives written notice of its intention~~ liability or expense, and shall have the right to ~~do so (including a statement that~~ compromise or settle such claim, liability or expense exercising reasonable business judgment; provided, that, such compromise or settlement shall not be effected within the ~~Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within~~ first thirty (30) days ~~of the~~ after Indemnifying Party's receipt of ~~notice from~~ such ~~Indemnitees of the Third-~~Third Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim Notice without the prior written consent of the Indemnifying ~~Party~~ Person (such consent not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Photomedex Inc)

Procedures for Indemnification. (ai) ~~An Indemnitee~~ If any ATP Indemnified Person or Seller Indemnified Person (each an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any ~~matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement~~ claim (other than a ~~Third-~~Third Party ~~Claim~~ Claim) for which indemnification is provided in Section 11(a), the Indemnified Person shall ~~be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~promptly, and in any event within ~~fifteen~~ one hundred twenty (15120) days, after such Indemnified Person first becomes aware of facts that give rise to the basis for such claim, give written notice (a “Notice of Claim”) ~~after making~~ to the Seller and C▇▇▇▇ or ATP, as applicable, setting forth the basis for such ~~a determination. Such notice shall state~~ claim and the nature and estimated amount of the ~~Loss claimed~~claim (which estimated amount shall include, ~~if known~~without limitation, an estimate of the Losses that may be incurred in connection with defending any such claim), all in reasonable detail. The failure to give a Notice of Claim to the Indemnifying Person shall not relieve the Indemnifying Person of any liability hereunder unless the Indemnifying Person was actually prejudiced by such failure and then only to the extent of such prejudice. If the Seller and C▇▇▇▇ or ATP, as applicable, disputes any claim set forth in the Notice of Claim, it shall deliver to such Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim in reasonable detail (an “Objection Notice”) within thirty (30) days after the date the Notice of Claim is given (the “Response Period”). (ii) If an Indemnified Person shall make a Third Party Claim for which indemnification is provided in Section 11(a), the Indemnified Person shall promptly, and ~~method~~ in any event within ninety (90) days, after such Indemnified Person first becomes aware of ~~computation thereof~~facts which give rise to the basis for such claim, give written notice (a “Third Party Notice”) to the Seller and C▇▇▇▇ or ATP, as applicable (each, an “Indemnifying Person”), of the basis for such claim, setting forth the nature of the claim or demand in reasonable detail, and ~~containing~~ the estimated amount of the claim (which estimated amount shall include, without limitation, an estimate of the Losses that may be incurred in connection with defending any such claim). The failure to give a ~~reference~~ Third Party Notice to the ~~provisions~~ Indemnifying Person shall not relieve the Indemnifying Person of ~~this Agreement or~~ any liability hereunder unless the ~~applicable Ancillary Agreement in respect of which such right of indemnification is claimed~~ Indemnifying Person was actually prejudiced by such ~~Indemnitee~~failure and then only to the extent of such prejudice. The Indemnifying Person shall be entitled to participate therein and, to the extent that it wishes (but subject to the consent of the Indemnified Person), to assume the defense thereof with counsel reasonably satisfactory to such Indemnified Person so long as the Indemnifying Person notifies the Indemnified Person in writing within sixty (60) days after the Indemnified Person has given a Third Party Notice to the Indemnifying Person that the Indemnifying Person will indemnify the Indemnified Person from and against the entirety of any Losses the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the claim, and the Indemnifying Person assumes the defense of the Proceeding. If the Indemnifying Person (with the consent of the Indemnified Person) assumes the defense of such claim, the Indemnifying Person shall not be liable to such Indemnified Person under such section for any fees of other counsel or any other expenses, incurred by such Indemnified Person in connection with the defense thereof; provided, however, that in the ~~failure to provide such notice shall not release~~ event that the interests of the Indemnified Person and the Indemnifying ~~Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim~~ Person are, or ~~demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or~~ may reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense andbecome, in ~~any event, shall reasonably cooperate~~ conflict with ~~the Indemnifying Party in such defense and make available~~ or adverse to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege one another with respect to such ~~information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-~~Third Party Claim, ~~(ii) there exists a conflict of interest or potential conflict of interest between~~ the Indemnified Person may retain its own counsel at the Indemnifying Person’s expense with respect to such Third Party ~~and the Indemnitee, (iii) any Third-Party Claim seeks~~ Claim. If an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying ~~Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the~~ Person ~~making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control~~ assumes the defense of such ~~Third-Party Claim~~an action, at (i) no compromise or settlement thereof may be effected by the Indemnifying ~~Party~~Person without the Indemnified Person’s ~~expense~~consent (which shall not be unreasonably withheld, ~~with counsel~~ conditioned or delayed) unless (A) there is no finding or admission of ~~such Indemnitee’s choosing~~ any violation of law or any violation of the rights of any Person and no effect on any other claims that may be made against the Indemnified Person and (~~such counsel to be reasonably acceptable to~~ B) the sole relief provided is monetary damages that are paid in full by the Indemnifying ~~Party). If the Indemnitee is conducting the defense against any such Third-Party Claim,~~ Person and (ii) the Indemnifying ~~Party~~ Person shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege have no liability with respect to ~~such information~~ any compromise or ~~violate any applicable Law.~~ settlement thereof effected without its consent (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (which shall not to be unreasonably withheld, conditioned or delayed). If notice is given to an Indemnifying ~~Party has failed~~ Person of the commencement of any action and it does not, within sixty (60) days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its election to assume the defense ~~of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that~~ thereof (or the Indemnifying ~~Party was~~ Person does not ~~consulted in~~ consent to the election by the Indemnifying Person to assume the defense thereof), ~~that such Indemnifying Party’s views or opinions as to~~ the ~~conduct of such defense were not accepted or adopted~~Indemnified Person shall, ~~that such Indemnifying Party does not approve~~ at the expense of the ~~quality or manner of~~ Indemnifying Person, undertake the defense ~~thereof or that such Third-Party Claim was incurred~~ of (with counsel selected by ~~reason of a settlement rather than by a judgment or other determination of liability. (f) In~~ the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities Indemnified Person and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the ~~Indemnitee and shall not release any portion thereof to the Indemnitee~~Indemnifying Person) such claim, liability or expense, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the ~~right~~right to compromise or settle such claim, ~~but not~~ liability or expense with the ~~obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires~~ consent of the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationPerson.

Appears in 1 contract

Sources: Master Transaction Agreement (COHEN & Co INC.)

Procedures for Indemnification. Other than as set forth in Section 7.13(e) and (af), if a party entitled to indemnification under this Section 9 (an "Indemnitee") An asserts that a party obligated to indemnify it under this Section 9 (an "Indemnitor") has become obligated to such Indemnitee pursuant to Section 9.2 or 9.3, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Indemnitor may become obligated to an Indemnitee hereunder, such Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the ~~provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Indemnitor; provided, however, that the failure of the Indemnitee to ~~provide such~~ give prompt notice to the Indemnitor shall not release the ~~Indemnifying Party from any~~ Indemnitor of its indemnification obligations hereunder, except ~~and solely~~ to the extent the ~~Indemnifying Party~~ Indemnitor shall have been materially prejudiced ~~as a result of~~ by such failure~~. (b) If a~~ . The Indemnitor agrees to defend, contest or otherwise protect the Indemnitee against any such suit, action, investigation, claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of proceeding at its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own sole cost and expense ~~and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable~~ subject to the ~~Indemnitee, if it gives written notice~~ provisions of ~~its intention to do so (including a statement that the Indemnitee is entitled to indemnification under~~ this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim)Section 9. ~~After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee~~ The Indemnitor shall have the ~~right~~ sole power to ~~employ separate counsel~~ direct and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such ~~Third-Party Claim~~suit, ~~the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession~~ action, investigation, claim or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed)proceeding. If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the The Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the ~~Expense Amount from~~ defense thereof by counsel of the ~~Escrow Account pursuant~~ Indemnitee's choice. The Indemnitee shall make available all information and assistance that the Indemnitor may reasonably request and shall fully cooperate with the Indemnitor in such defense, including with respect to indemnification with respect to Taxes, providing powers of attorney authorizing Leucadia or its designee to control and take action in connection with any such Taxes. In the event of a ~~loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ failure of the Indemnitee to provide cooperation as required under this Section 9.4, the Indemnitor's obligation to indemnify the Indemnitee shall be reduced to the ~~Indemnitee that~~ extent of the Losses with respect to which the Indemnitor's ability to defend against the action, investigation, claim or proceeding underlying such indemnification obligation has been prejudiced by such failure. The Indemnitor shall not compromise or settle any such suit, action, investigation, claim or proceeding unless (ix) ~~requires~~ such compromise or settlement is on exclusively monetary terms and shall be paid entirely by the ~~Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal~~ Indemnitor (subject to the ~~Expense Amount (an “Indemnity Loan”),~~ provisions of Section 9.2(b)(i) and (ii) ~~provides for~~ and 9.3(b)(i) and (Aii), which shall be controlling) ~~a commercially reasonable interest rate~~ and ~~commercially reasonable covenants, taking into account the credit standing and profile of~~ the Indemnitee receives an unconditional release in such compromise or ~~any guarantor of~~ settlement or (y) the ~~Indemnitee, including~~ Indemnitee shall have consented in writing to the ~~Protected REIT, at the time~~ terms of such ~~loan~~compromise or settlement, which consent shall not unreasonably withheld; provided, however, that if the Indemnitee fails to consent thereto, the Indemnitor's liability with respect to such matter shall not exceed the proposed settlement amount. If the Indemnitor fails timely to defend, contest or otherwise protect against such suit, action, investigation, claim or proceeding, the Indemnitee shall have the right to do so, including, without limitation, the right to make any compromise or settlement thereof, and ~~(B) a 15 year maturity with no periodic amortization~~the Indemnitee shall be entitled to recover the entire cost thereof from the Indemnitor subject to the provisions of this Section 9, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such suit, action, investigation, claim or proceeding.

Appears in 1 contract

Sources: Purchase Agreement (Leucadia National Corp)

Procedures for Indemnification. (a) An Indemnitee shall give the Indemnifying Party notice of any matter that ~~such~~ an Indemnitee has determined has given or ~~would~~ is reasonably ~~be expected~~ likely to give rise to a right of indemnification under this ~~Agreement or any Ancillary~~ Agreement (other than a Third-Party Claim which shall be governed by Section ~~9.4(b~~6.3(b)), within thirty (30) ~~to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make~~ days of such ~~indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a~~ determination~~. Such notice shall state~~ , stating the amount of the Indemnifiable Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement ~~or the applicable Ancillary Agreement~~ in respect of which such right of indemnification is claimed by such ~~Indemnitee~~Indemnitee or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement or an Affiliate of a ~~Party~~ party to this Agreement or an Indemnitee is the subject of an audit or other review by a Governmental Entity related to its Taxes under which it is reasonably likely that the Governmental Entity will take a position which would give rise to a Liability for Taxes (a “Third-Party Claim”) as to which such Indemnitee is or ~~reasonably expects to~~ may be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to this Article VI or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying ~~Party~~ Party”) in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been ~~materially~~ actually prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ~~ten~~ five (105) ~~days~~Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to ~~assume,~~ assume and control the defense ~~of, and settle~~ of any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, ~~which counsel must be reasonably acceptable to the Indemnitee,~~ if it gives ~~written~~ notice of its intention to do so ~~(including a statement that the Indemnitee is entitled to indemnification under this Article IX)~~ to the applicable Indemnitees within thirty (30) days of the receipt of such notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim)Indemnitees. After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in ~~(but not control)~~ the defense, ~~compromise~~ compromise, or settlement thereof, at its own expense and, in any event, shall ~~reasonably~~ cooperate with the Indemnifying Party in such defense and make available to the Indemnifying ~~Party~~ Party, at the Indemnifying Party’s expense, all ~~witnesses~~ witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event ~~that (i)~~ of an ~~Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest~~ actual or potential conflict of interest between the Indemnifying Party and the ~~Indemnitee~~applicable Indemnitee(s), ~~(iii) any~~ if the Indemnifying Party has elected to assume the defense of the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material AssetsClaim, such ~~Indemnitee~~ Indemnitee(s) shall be entitled to ~~control the defense of such Third-Party Claim~~retain, at the Indemnifying Party’s reasonable cost and expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter; provided, further, that if the Indemnifying Party has elected to assume the defense of the Third-Party Claim but has specified, and continues to assert, any reservations or exceptions in such notice, then, in any such case, the reasonable fees and expenses of one separate counsel ~~of such Indemnitee’s choosing (such counsel to~~ for all Indemnitees shall be ~~reasonably acceptable to~~ borne by the Indemnifying Party. (d) If an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, or fails to notify an Indemnitee of its election as provided in Section 6.3(c), such Indemnitee may defend such Third-Party Claim at the reasonable cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall ~~reasonably~~ cooperate with the Indemnitee in such defense and make available to the ~~Indemnitee~~ Indemnitee, at the Indemnifying Party’s expense, all ~~witnesses~~ witnesses, pertinent Information, material and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) ~~Unless~~ Subject to Section 6.3(j), unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying ~~Party (~~Party, which consent shall not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent ~~(not to be unreasonably withheld, conditioned or delayed)~~ of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any ~~Indemnitee,~~ Indemnitee or if such judgment or settlement does not absolutely, forever and unconditionally release the Indemnitee from ~~all liabilities and obligations with respect to such~~ any further claims arising out of the allegations underlying the Third-Party ~~Claim or includes an admission of guilt or liability on behalf of the Indemnitee~~Claim. (g) In the case of any claim or demand made by or Action brought or initiated by a Party or a member of its Group that is related primarily to or arises out of any Business other than the Corresponding Business of such Party, such Party shall promptly notify the Corresponding Group of such Business of such claim, demand or Action and such notified party shall be entitled (but shall not be required) to assume and control the prosecution of such claim, demand or Action, at such party’s own cost and expense and by such party’s own counsel, if it gives notice of its intention to do so to the notifying party by the later of thirty (30) days of receiving notice of such claim, demand or Action and thirty (30) days from the Closing Date. If such notified party elects not to assume responsibility for prosecuting such a claim, demand or Action, such notifying party shall prosecute such claim, demand or Action at the cost and expense of such notified party (such costs and expenses to be paid with thirty (30) days of the presentation of an invoice therefor). (h) Absent fraud or ~~intentional~~ willful misconduct by an Indemnifying ~~Party~~Party and except as otherwise expressly agreed to in any other agreement among the Parties or any of their Affiliates, the indemnification provisions of this Article IX VI shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or ~~Losses~~ losses resulting from any breach of this Agreement ~~or any Ancillary Agreement,~~ and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX VI against any Indemnifying Party. (hi) ~~Notwithstanding anything~~ In the case of a Third Party Claim made in connection with a Tax Contest involving an Indemnitee such that the Indemnitee is required by Law to make a payment to any Person (a “Third Party” for the ~~contrary~~ purposes of this paragraph) with respect to such Third Party Claim before the completion of settlement negotiations or related legal proceedings or in ~~this Agreement~~connection with an objection to any reassessment of Taxes, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon Indemnitee may make such payment and the ~~payment of such amounts to~~ Indemnifying Party shall, forthwith after demand by the ~~relevant~~ Indemnitee, ~~the amount paid to~~ reimburse the Indemnitee ~~pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements~~ for any ~~tax year, determined as if the payment of~~ such ~~amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT~~payment. If the amount ~~payable for~~ of any ~~tax year~~ Liability under the ~~preceding sentence~~ Third Party Claim in respect of which such a payment was made, as finally determined, is less than the amount ~~which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1)~~ that was paid by the Indemnifying Party ~~shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof~~ to the Indemnitee, ~~and~~ the Indemnitee ~~shall not be entitled to any~~ shall, forthwith after receipt of the difference from the Third Party, pay such ~~amount, unless and until the Indemnitee delivers~~ difference to the Indemnifying Party, ~~at the sole option of the relevant Protected REIT~~together with, ~~(i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount~~for greater certainty, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document refund interest received by the Indemnitee from the Third Party, less any Taxes payable in respect of such refund interest, including any withholding taxes. (j) If an Indemnifying Party has elected to assume responsibility for defending a Third-Party Claim made in connection with a Tax Contest involving an Indemnitee and such Indemnitee subsequently determines that it would be in the best interests of such Indemnitee to settle such Tax Contest in whole or in part, such Tax Contest may be so settled, in whole or in part, without the consent of the Indemnifying Party, ~~the~~ provided that such Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires provides the Indemnifying Party with a release of the Indemnifying Party’s obligations with respect to ~~lend the Indemnitee immediately available cash proceeds in an amount equal~~ such Third Party Claim to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time extent of such ~~loan, and (B) a 15 year maturity with no periodic amortization~~settlement.

Appears in 1 contract

Sources: Separation and Distribution Agreement (Canwest Mediaworks Inc)

Procedures for Indemnification. The following procedures shall be applicable with respect to indemnification for third-party claims. On the earlier to occur of receipt of by the Party seeking indemnification hereunder (ahereinafter referred to as the “Indemnitee”) ~~An Indemnitee shall give~~ of notice of the commencement of any ~~matter that such Indemnitee has determined has given~~ action and the assertion of any claim, liability or ~~would reasonably be expected to give rise to~~ obligation by a ~~right of indemnification under this Agreement~~ third party (whether by legal process or ~~any Ancillary Agreement (~~otherwise), against which claim, liability or obligation the other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Purchase Agreement ~~or an Affiliate of a Party~~ (a hereinafter the “~~Third-Party Claim~~Indemnitor”) as is, or may be, required under this Purchase Agreement to ~~which~~ indemnify such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). ThereafterIndemnitee, the Indemnitee shall, if a claim thereon is to be, or may be, made against the Indemnitor, notify the Indemnitor in writing of the commencement or assertion thereof and give the Indemnitor a copy of such claim, notice, information, process and all legal pleadings. The Indemnitor shall ~~deliver~~ have the right to (i) participate in the ~~Indemnifying Party, promptly~~ defense of such action with counsel of reputable standing and (~~and in any event~~ ii) assume the defense of such action by agreeing to assume such defense within ten (10) ~~days) after~~ days of transmittal of the ~~Indemnitee’s receipt thereof, copies~~ notice of ~~all notices and documents (including court papers) received~~ the claim by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from in writing unless such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for claim (A) ~~a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile~~ may result in criminal proceedings or injunctions in respect of the Indemnitee or ~~any guarantor~~ its business; (B) may result in liabilities which would not be fully indemnified hereunder; (C) may have a material adverse effect on the business or financial condition of the Indemnitee after the Closing Date (including an effect on the tax liabilities, earnings or ongoing business relationships of the Indemnitee); or (D) is not being vigorously prosecuted or defended by the Indemnitor, ~~including the Protected REIT, at the time of such loan~~as determined by an appropriate court ruling, and ~~(B) a 15 year maturity with no periodic amortization~~Indemnitee petitions to assume the defense.

Appears in 1 contract

Sources: Stock Purchase and Sale Agreement (Awaysis Capital, Inc.)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ the Indemnitee by delivery of a written notice to ~~any Party that~~ the Indemnitor Representative requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of Losses claimed and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to~~ (by attachment or otherwise) such other information as the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an~~ Third Party Claim, the procedures set forth in Section 8.4 hereof shall be observed by the Indemnitee and the Indemnitor Representative. (c) If the Indemnification Claim involves a matter other than a Third Party Claim, the Indemnitor Representative shall have sixty (60) days to object to such Indemnification Claim by ~~any Person who is not a Party to this Agreement or an Affiliate~~ delivery of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of ~~the Third-Party Claim; provided, however, that the failure to provide notice of any~~ such ~~Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely~~ objection to the ~~extent~~ Indemnitee specifying in reasonable detail the ~~Indemnifying Party~~ basis for such objection. Failure to timely so object shall ~~have been materially prejudiced as~~ constitute a ~~result~~ final and binding acceptance of ~~such failure (except that~~ the ~~Indemnifying Party or Parties~~ Indemnification Claim by the Indemnitor Representative, and the Indemnification Claim shall be paid in accordance with Section 8.3(d) hereof. If an objection is timely interposed by the Indemnitor Representative, and the dispute is not ~~be liable for any expenses incurred~~ resolved by the Indemnitee ~~in defending such Third~~and the Indemnitor Representative within forty-~~Party Claim during~~ five (45) days from the ~~period in which~~ date the Indemnitee ~~failed to give~~ receives such ~~notice). Thereafter~~objection or such longer period as the Indemnitee and Indemnitor Representatives may agree, such dispute shall be resolved by arbitration as provided in Article 9 of this Agreement. (d) Upon determination of the amount of an Indemnification Claim whether by agreement between the Indemnitor Representative and the Indemnitee or by an arbitration award or by any other final adjudication, the ~~Indemnitee~~ amount of such Indemnification Claim shall ~~deliver to the Indemnifying Party, promptly (and in any event~~ be paid within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the ~~receipt of notice from~~ date such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim amount is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party)determined. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee Indemnitor responsible for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such ~~amounts~~ Indemnification Claim is Purchaser, such payment shall be made by wire transfer by Purchaser to ▇▇▇▇. If the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements Indemnitors responsible for ~~any tax year, determined as if the~~ payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, Indemnification are ▇▇▇▇ and the ~~Indemnitee~~ Seller, such payment shall ~~not~~ be ~~entitled~~ made by wire transfer by ▇▇▇▇ to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationPurchaser.

Appears in 1 contract

Sources: Share Transfer Agreement (Shaw Industries Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice~~ If a claim for Damages is to be made by any of ~~any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement~~ the NETGEAR Indemnified Parties or any ~~Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required~~ of the Infrant Indemnified Parties pursuant to this ~~Agreement~~ Article XI (the “Indemnified Party”), the Indemnified Party agrees to give written notice to the Holders or ~~any Ancillary Agreement to make such indemnification~~ NETGEAR and Merger Sub, as applicable, (the “Indemnifying ~~Party~~Parties”) promptly and in any event not later than sixty (60) days after the date the Indemnified Party shall first become aware of such claim of the assertion of any fact, condition, event, claim, action or proceeding that may give rise to Damages in respect of which indemnity may be sought under this Article XI (a “Claim”); provided that the failure to give such prompt notice shall not affect the rights of the Indemnified Party except to the extent the Indemnifying Party is actually prejudiced by such failure. The notice shall state in reasonable detail the information then available regarding the amount and nature of the Claim and shall specify the provision or provisions of this Agreement under which the Claim is asserted. The Indemnifying Party shall be deemed to have accepted the notice of the Claim and to have agreed to pay the Damages at issue if such Indemnifying Party does not send a notice of disagreement to the Indemnified Party within sixty (60) calendar days after receiving notice of the Claim. In the case of a disputed Claim, the parties shall use their reasonable best efforts to resolve the matter internally on an expeditious basis and in any event within forty-five (45) calendar days after notice is received by the Indemnifying Party. If after such forty-five (45) calendar day period has passed, the parties have not mutually resolved the matter, then the Indemnified Parties may initiate legal proceedings with respect to such Claim. (b) If any lawsuit or enforcement action is filed against any Indemnified Party, written notice thereof shall be given to the Indemnifying Party as promptly as practicable (and in any event no later than the earlier of (i) ten (10) calendar days after the service of the citation or summons and (ii) sixty (60) days after the Indemnified Party shall first become aware of the filing of such suit or action); provided that the failure to give such notice shall not affect the rights of the Indemnified Party except to the extent the Indemnifying Party is actually prejudiced by such failure. After such notice, provided that the Indemnifying Party acknowledges in writing, based on the information then available to the Indemnified Party that the Indemnifying Party shall be obligated under the terms of its indemnity hereunder in connection with such lawsuit or action, then the Indemnifying Party shall be entitled, if it so elects, by written notice to the Indemnified Party given within fifteen (15) ~~days)~~ calendar days after ~~making such a determination. Such~~ the date of notice ~~shall state the amount~~ of the ~~Loss claimed~~claim from the Indemnified Party pursuant to the first sentence of this paragraph (b), ~~if known~~at its own cost, risk and expense, (i) to take control of the defense and investigation of such lawsuit or action (except with respect to any claims for equitable relief, provided that the Indemnified Party shall consult with the Indemnifying Party in connection with any such proceeding), (ii) to employ and engage attorneys of its own choice to handle and defend the same, unless the Indemnified Party has been advised by counsel that there may be one or more legal defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, in which event the Indemnified Party shall be entitled, at the Indemnifying Party’s cost, risk and expense, to engage separate counsel of its own choosing, and ~~method~~ (iii) to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of ~~computation thereof~~the Indemnified Party, such consent not to be unreasonably withheld (it being agreed that it shall be reasonable to withhold such consent if such compromise or settlement does not include a complete release of the Indemnified Party from all liability with respect thereto, or imposes any liability on the Indemnified Party). The Indemnified Party shall cooperate at the expense of the Indemnifying Party in all reasonable respects with the Indemnifying Party and ~~containing a reference to~~ its attorneys in the ~~provisions~~ investigation, trial and defense of ~~this Agreement~~ such lawsuit or ~~the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~action and any appeal arising therefrom; provided, however, that the ~~failure to provide~~ Indemnified Party may, at its own cost, participate in the investigation, trial and defense of such ~~notice shall not release~~ lawsuit or action and any appeal arising therefrom. If the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election fails to assume the defense of ~~a Third-~~such claim within fifteen (15) calendar days after the notice of the claim referred to in the first sentence of this paragraph (b), the Indemnified Party ~~Claim,~~ against which such ~~Indemnitee shall~~ claim has been asserted will (upon delivering notice to such effect to the Indemnifying Party) have the right to ~~employ separate counsel~~ undertake, at the Indemnifying Party’s cost, risk and ~~to participate in (but not control)~~ expense, the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party)claim. If the ~~Indemnitee is conducting the defense against any such Third-~~Indemnified Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume assumes the defense of the ~~Third-~~claim, the Indemnified Party ~~Claim~~ will keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement. The Indemnifying Party shall be liable for indemnifiable Damages arising from the settlement or resolution of any claim pursuant to and in accordance with ~~the terms of~~ this ~~Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party~~ Section 11.4 (~~not~~ subject to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. XI (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the ~~Indemnitee shall not be entitled to any such amount, unless~~ limitations contained herein) and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow ~~Account pursuant to a loan agreement (an “Indemnity Loan~~ Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Merger Agreement (Netgear, Inc)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by an Indemnitee by delivery of a written notice to the Indemnitor Representative (as defined in Section ~~9.4(b)~~9.10 below) ~~to any Party that~~ requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ the procedures set forth in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence Section 8.3 shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be ~~liable for any expenses incurred~~ observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the ~~period in which the Indemnitee failed to give such notice~~Indemnitor Representative(s). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the Indemnitor Representative(s) shall have 30 days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do such Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so ~~(including~~ object shall constitute a ~~statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days~~ final and binding acceptance of the ~~receipt~~ Indemnification Claim by the Indemnitor Representative(s) on behalf of ~~notice from such Indemnitees of~~ all Indemnitors, and the ~~Third-Party~~ Indemnification Claim ~~(failure of the Indemnifying Party to respond within such thirty (30) day period~~ shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate paid in accordance with subsection (~~but not control~~d) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawhereof. (d) ~~Notwithstanding anything to~~ Upon determination of the ~~contrary in this Section 9.4~~amount of an Indemnification Claim, in whether by agreement between the Indemnitor Representative(s) and the Indemnitee or by an arbitration award or by any other final adjudication, the Indemnitors shall pay the amount of such Indemnification Claim within ten days of the date such amount is determined. In the event that ~~(i)~~ the ACSYS Shareholders are the Indemnitors that are required to pay an ~~Indemnifying Party elects not to assume the defense of a Third-Party~~ Indemnification Claim, ~~(ii) there exists a conflict~~ if the ACSYS Shareholders beneficially own shares of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect ICCE Common Stock as of such ~~Third-Party Claim taking into account~~ date, the ~~indemnification obligations hereunder~~ACSYS Shareholders shall, ~~or (v)~~ if so required by ICCE, pay the ~~Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense~~ amount of such ~~Third-Party Claim, at the Indemnifying Party’s expense, with counsel~~ Indemnification Claim by surrender to ICCE of such ~~Indemnitee’s choosing (~~number of shares of ICCE Common Stock as shall equal the quotient obtained by dividing the amount of such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required Indemnification Claim by the ~~Indemnitee~~amount set forth in Section 8.2 of the ICCE Disclosure Memorandum; provided, ~~however,~~ that if the ACSYS Shareholders do not beneficially own a sufficient number of shares of ICCE Common Stock to pay in full the amount of such ~~access shall not require the Indemnifying Party to disclose any information the disclosure~~ Indemnification Claim by surrender of ~~which would,~~ such shares as provided in the ~~good faith judgment~~ preceding clause of this sentence, the ACSYS Shareholders shall surrender to ICCE such number of shares of ICCE Common Stock as such ACSYS Shareholders beneficially own and shall pay any remaining balance of the ~~Indemnifying Party, result~~ Indemnification Amount in ~~the loss of any existing privilege with respect to such information or violate any applicable Law~~cash. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Merger Agreement (Acsys Inc)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ The procedures for indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ shall be ~~governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such~~ as follows: A. The party claiming the indemnification (the “"Claimant") shall promptly give notice to the party from whom indemnification is claimed (the "Indemnifying Party”") ~~promptly~~ of any claim, whether between the parties or brought by a third party, specifying (i) the factual basis for such claim, and ~~in any event within fifteen~~ (15ii) ~~days) after making such a determination. Such notice shall state~~ the amount of the ~~Loss claimed~~claim. If the claim relates to an action, ~~if known~~suit or proceeding filed by a third party against Claimant, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall ~~not release~~ be given by Claimant within five (5) days after written notice of such action, suit or proceeding was given to Claimant. B. Following receipt of notice from the ~~Indemnifying Party from any~~ Claimant of ~~its obligations except and solely to the extent~~ a claim, the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days to make such investigation of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of~~ claim as the Indemnifying Party deems necessary or desirable. For the purposes of such investigation, the Claimant agrees to ~~respond within such~~ make available to the Indemnifying Party and/or its authorized representative(s) the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnifying Party agree at or prior to the expiration of said thirty (30) day period (or any mutually agreed upon extension thereof) to the validity and amount of such claim, or if the Indemnifying Party does not respond to such notice, the Indemnifying Party shall immediately pay to the Claimant the full amount of the claim. Buyer shall be ~~deemed~~ entitled to ~~be an election~~ apply any or all of the Accounts Receivable collected on behalf of Seller to a claim as to which Buyer is entitled to indemnification hereunder. If the Claimant and the Indemnifying Party do not agree within said period (or any mutually agreed upon extension thereof), the Claimant may seek appropriate legal remedy. C. With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder, the Indemnifying Party shall have the right at its own expense, to participate in or assume control of the defense of such claim, and the Claimant shall cooperate fully with the Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifying Party. If the Indemnifying Party ~~not~~ elects to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third~~any third-~~Party Claim~~party claim, ~~such Indemnitee~~ the Claimant shall have the right to ~~employ separate counsel and to~~ participate in ~~(but not control)~~ the ~~defense, compromise or settlement thereof,~~ defense of such claim at its own ~~expense and~~expense. D. If a claim, ~~in any event~~whether between the parties or by a third party, ~~shall reasonably cooperate~~ requires immediate action, the parties will make all reasonable efforts to reach a decision with respect thereto as expeditiously as possible. E. If the Indemnifying Party does not elect to assume control or otherwise participate in ~~such~~ the defense ~~and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ of any third party claim, it shall be bound by the ~~Indemnifying Party; provided, however, that such access shall not require~~ results obtained by the ~~Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege~~ Claimant with respect to such ~~information or violate any applicable Law~~claim. ~~(d) Notwithstanding anything~~ F. The indemnification rights provided in Sections 10.2 and 10.3 shall extend to the ~~contrary~~ shareholders, directors, officers, partners employees and representatives of the Claimant although for the purpose of the procedures set forth in this Section ~~9.4~~10.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any ~~Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with~~ indemnification claims by such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee parties shall be ~~entitled to control~~ made by and through the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawClaimant. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (American Radio Systems Corp /Ma/)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ an Indemnitee by delivery of a written notice to ~~any Party that~~ Indemnitor requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an~~ Third Party Claim the procedures set forth in SECTION 10.05 hereof shall be observed by Indemnitee ~~by any Person who is not~~ and Indemnitor. (c) If the Indemnification Claim involves a ~~Party to this Agreement or an Affiliate of~~ matter other than a ~~Party (a “Third-~~Third Party Claim~~”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~, ~~such Indemnitee~~ Indemnitor shall ~~notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within~~ have thirty (30) ~~days) after receipt~~ days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to such Indemnitee specifying in reasonable detail the ~~Third-Party~~ basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by Indemnitor, and the Indemnification Claim shall be paid in accordance with subsection (d) hereof. If an objection is timely interposed by Indemnitor and the dispute is not resolved by Indemnitee and Indemnitor within fifteen (15) days from the date Indemnitee receives such objection, such dispute shall be resolved by arbitration as provided in SECTION 11.13 of this Agreement. (d) Upon determination of the amount of an Indemnification Claim~~; provided~~, ~~however~~whether by agreement between Indemnitor and Indemnitee or by an arbitration award or by any other final adjudication, ~~that~~ Indemnitor shall pay the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result amount of such ~~failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party~~ Indemnification Claim ~~during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event~~ within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the ~~receipt of notice from~~ date such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim amount is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Lawdetermined. (e) ~~Unless~~ Any Indemnification Claim to be paid by Satellink Indemnitor to the ~~Indemnifying Party has failed~~ Cape Fear Indemnitees shall be paid through the issuance to ~~assume~~ the ~~defense~~ Cape Fear Indemnitees of shares of Satellink Common Stock. The number of shares of Satellink Common Stock to be issued in respect of an Indemnification Claim shall be determined by: (i) subtracting from $22,805,064 the amount of Losses suffered by the Cape Fear Indemnitees as a result of the ~~Third-Party~~ Indemnification Claim (the "Reduced Value"); (ii) dividing the Reduced Value by the number of Shares issued in ~~accordance~~ respect of the Mergers with the ~~terms~~ result of ~~this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without~~ such division being referred to as the ~~consent~~ "Reduced Share Price"; and (iii) dividing the amount of Losses by the ~~Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume~~ Reduced Share Price with the ~~defense~~ number of shares resulting from such division being the ~~Third-Party Claim, it shall not be a defense to any obligation to pay any amount~~ number of additional shares of Satellink Common Stock issuable in respect of such ~~Third-Party~~ Indemnification Claim ~~that~~ (the ~~Indemnifying Party was not consulted~~ "Additional Shares"). Any Additional Shares shall be issued to the Cape Fear Indemnitees pursuant to the formulas set forth in SECTION 3.01 and cash will be paid in lieu of issuance of fractional Additional Shares pursuant to the ~~defense thereof~~formula set forth in SECTION 3.03, provided however, that ~~such Indemnifying Party’s views or opinions as to~~ for purposes of determining the ~~conduct~~ amount of such ~~defense were not accepted or adopted~~cash payment, ~~that such Indemnifying Party does not approve~~ the market value of one share of Satellink Common Stock shall be the ~~quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability~~Reduced Share Price. (f) ~~In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party~~ Any Indemnification Claim ~~without the consent (not~~ to be ~~unreasonably withheld, conditioned or delayed)~~ paid by the Cape Fear Indemnitors to the Satellink Indemnitees shall be paid through the return to Parent of ~~the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief~~ shares of Satellink Common Stock. The number of shares of Satellink Common Stock to be ~~entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with~~ returned to Parent in respect ~~to such Third-Party~~ of an Indemnification Claim ~~or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX~~ shall be determined by dividing the ~~sole and exclusive remedy~~ amount of ~~an Indemnitee for any monetary or compensatory damages or~~ Losses ~~resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with~~ suffered in respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such ~~amounts to~~ Indemnification Claim by $9.00 with the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment result of such ~~amount were Nonqualifying Income as determined by such counsel or independent accountants~~ division being the number of shares of Satellink Common Stock to ~~the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise~~ be ~~obligated to pay to the relevant Indemnitee pursuant to this Agreement~~ so returned (the ~~“Expense Amount”~~"Returned Shares"). The Returned Shares shall first be deducted from the Escrow Shares and, then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent ~~paid, would~~ the Escrow Shares are not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail sufficient to satisfy the ~~REIT Requirements (a “REIT Qualification Ruling” and~~amount of Returned Shares, ~~collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the~~ by delivery to Parent of a ~~Release Document by~~ portion of the ~~Indemnitee~~ shares of Satellink Common Stock issued to the ~~Indemnifying Party~~Cape Fear Indemnitors in respect of the Mergers. The number of Returned Shares to be delivered to Parent by each Cape Fear Indemnitor shall be determined in accordance with the formulas set forth in SECTION 3. 01. To the extent that the number of Returned Shares to be delivered by one or more Cape Fear Indemnitors is not a round number, ~~the Indemnitee~~ such Cape Fear Indemnitor shall ~~have the right, but not the obligation,~~ deliver to ~~borrow the Expense Amount from the Escrow Account pursuant to~~ Parent a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount number of Returned Shares equal to the ~~Expense Amount (an “Indemnity Loan”),~~ next highest round number of Returned Shares and ~~(ii) provides for (A)~~ Parent shall return to such Cape Fear Indemnitor a ~~commercially reasonable interest rate and commercially reasonable covenants, taking into account~~ cash payment determined in accordance with the ~~credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time~~ formula set forth in SECTION 3.03 in respect of such ~~loan~~fractional Returned Share. All Returned Shares shall be delivered to Parent duly endorsed in blank or accompanied by a duly executed assignment, free and ~~(B) a 15 year maturity with no periodic amortization~~clear of all liens and encumbrances of any nature whatsoever.

Appears in 1 contract

Sources: Merger Agreement (Satellink Communications Inc)

Procedures for Indemnification. ~~(a) An Indemnitee~~ The Buyer Indemnitees and Seller Indemnitees shall be referred to in this Section 10.4 as the “Indemnitees”. Indemnitees shall give ~~notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ the party against whom indemnification ~~under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that~~ is ~~or may be required~~ sought pursuant to this ~~Agreement or any Ancillary Agreement to make such indemnification~~ Section 10 (the “Indemnifying ~~Party~~Person”) ~~promptly (and~~ prompt notice of any written claim, demand, assessment, action, suit or Proceeding to which the indemnity set forth in ~~any event within fifteen (15) days) after making~~ this Section 10 applies. If the document evidencing such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is ~~made against an Indemnitee by any Person who is not~~ a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereaftercourt pleading, the Indemnitee shall ~~deliver to the Indemnifying Party~~give such notice, ~~promptly~~ including a copy of such pleading, within seven (~~and in any event within ten (10~~7) ~~days) after the Indemnitee’s~~ days of receipt ~~thereof~~of such pleading, ~~copies of all notices and documents (including court papers) received by~~ otherwise, the Indemnitee ~~relating to the Third-Party Claim. (c) An Indemnifying Party~~ shall ~~be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at~~ give such ~~Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written~~ notice ~~of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ within thirty (30) days of the ~~receipt~~ date it receives written notice of such claim. Failure to give timely notice ~~from such Indemnitees~~ of a matter which may give rise to an indemnification claim shall not affect the rights of the ~~Third-Party Claim (failure of~~ Indemnitee to collect such Loss from the Indemnifying ~~Party~~ Person so long as such failure to ~~respond within such thirty (30) day period shall be deemed to be an election by~~ so notify does not materially adversely affect the Indemnifying ~~Party not~~ Person’s ability to defend such Loss against a third party. If the Indemnitee’s request for indemnification arises from the claim of a third party, the Indemnifying Person may, at its option, assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third-Party Claim~~any such claim, or any litigation resulting from such ~~Indemnitee shall have the right to employ separate counsel and to participate in~~ claim so long as (~~but not control~~a) the ~~defense~~Indemnifying Person gives written notice to the Indemnitee within twenty (20) days after the Indemnitee has given notice of the third party claim that the Indemnifying Person will indemnify the Indemnitee from and against the entirety of any and all Losses the Indemnitee may suffer resulting from, ~~compromise or settlement thereof~~arising out of, ~~at its own expense and~~relating to, in ~~any event~~the nature of, ~~shall~~ or caused by the third party claim, (b) the Indemnifying Person provides the Indemnitee with evidence reasonably ~~cooperate~~ acceptable to the Indemnitee that the Indemnifying Person will have adequate financial resources to defend against the third party claim and fulfill its indemnification obligations hereunder, (c) the third party claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnitee, (d) the Indemnitee has not been advised in writing by counsel that an actual or potential conflict exists between the Indemnitee and the Indemnifying Person in connection with the ~~Indemnifying Party in such~~ defense ~~and make available~~ of the third party claim, (e) settlement of, an adverse judgment with respect to or the Indemnifying ~~Party all witnesses and information in such Indemnitee~~Person’s ~~possession or under such Indemnitee’s control relating thereto as are reasonably required by~~ conduct of the ~~Indemnifying Party; provided, however, that such access shall not require~~ defense of the ~~Indemnitee to disclose any information the disclosure of which would~~third party claim is not, in the good faith judgment of the Indemnitee, ~~result in the loss of any existing privilege with respect~~ likely to ~~such information or violate any applicable Law. (d) Notwithstanding anything~~ be adverse to the ~~contrary in this Section 9.4~~Indemnitee’s reputation or continuing Business interests (including its relationships with current or potential customers, in suppliers or other parties material to the ~~event that~~ conduct of its Business) and (if) an the Indemnifying ~~Party elects not to assume~~ Person conducts the defense of ~~a Third~~the third party claim actively and diligently. The Indemnitee may retain separate co-~~Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ counsel at its sole cost and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability expense and participate in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of ~~such Third-Party Claim, at~~ the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemniteethird party claim; provided, however, that ~~such access shall not require~~ the Indemnifying ~~Party~~ Person will pay the reasonable fees and expenses of separate co-counsel retained by the Indemnitee that are incurred prior to ~~disclose any information the disclosure~~ Indemnifying Person’s assumption of ~~which would, in the good faith judgment~~ control of ~~the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume~~ the defense of the ~~Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of~~ third party claim. Failure by the Indemnifying ~~Party~~ Person to notify the Indemnitee of its election to defend a complaint by a third party within twenty (~~not~~ 20) days shall be a waiver by the Indemnifying Person of its right to respond to such complaint and within thirty (30) days after notice thereof shall be ~~unreasonably withheld, conditioned or delayed). If an~~ a waiver by the Indemnifying ~~Party has failed~~ Person of its right to assume control of the defense of such claim or action. If the ~~Third-Party Claim, it shall not be a~~ Indemnifying Person assumes control of the defense ~~to any obligation to pay any amount in respect~~ of such ~~Third-Party Claim that~~ claim or litigation resulting therefrom, the Indemnifying ~~Party was not consulted~~ Person shall take all reasonable steps necessary in the defense ~~thereof, that such Indemnifying Party’s views~~ or ~~opinions as to the conduct~~ settlement of such ~~defense were not accepted~~ claim or ~~adopted~~litigation resulting therefrom. The Indemnifying Person shall not, ~~that such Indemnifying Party does not approve of the quality or manner of~~ in the defense ~~thereof~~ of such claim or ~~that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim~~litigation, ~~no Indemnifying Party shall~~ consent to entry of any judgment against any Indemnitee or enter into any ~~settlement of the Third-Party Claim without the consent (not to be unreasonably withheld~~settlement, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against involving any Indemnitee, ~~does not release the Indemnitee from all liabilities and obligations~~ except in either case with ~~respect to such Third-Party Claim or includes an admission of guilt or liability on behalf~~ written consent of the Indemnitee~~. (g) Absent fraud~~ , which consent shall not be unreasonably withheld or ~~intentional misconduct by an~~ delayed. The Indemnitee shall furnish the Indemnifying ~~Party,~~ Person in reasonable detail all information the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an~~ Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to ~~the foregoing other than under this Article IX against~~ any ~~Indemnifying Party. (h) Notwithstanding anything~~ such third-party claim and shall make available to the ~~contrary in this Agreement,~~ Indemnifying Person and its representatives all records and other similar materials which are reasonably required in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment defense of such ~~amounts to~~ third-party claim and shall otherwise cooperate with and assist the ~~relevant Indemnitee~~Indemnifying Person in the defense of such third-party claim. If the Indemnifying Person does not assume control of the defense of any such third-party claim or litigation resulting therefrom, the ~~amount paid~~ Indemnitee may defend against such claim or litigation in such manner as it may reasonably deem appropriate, and the Indemnifying Person shall indemnify the Indemnitee from any Loss indemnifiable under Section 10 incurred in connection therewith. The Indemnifying Person shall not be obligated to the Indemnitee ~~pursuant~~ for any settlement or consent to ~~this Agreement in~~ a stay of judgment made by any ~~tax year~~ Indemnitee if such settlement or consent is entered into without the prior written consent of the Indemnifying Person which consent shall not ~~exceed the maximum amount that can~~ be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel unreasonably withheld or ~~independent accountants to the Protected REIT~~delayed. If the ~~amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant~~ Indemnitee ~~pursuant to this Agreement (the “Expense Amount”), then: (1)~~ should have a claim against the Indemnifying ~~Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall~~ Person that does not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) involve a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Partythird party claim, the Indemnitee shall ~~have~~ deliver a notice of such claim to the ~~right~~Indemnifying Person. If the Indemnifying Person notifies the Indemnitee that it does not dispute the claim described in such notice or fails to notify the Indemnitee within thirty (30) days after delivery of such notice by the Indemnitee whether the Indemnifying Person disputes the claim described in such notice, ~~but not~~ the ~~obligation, to borrow~~ Loss in the ~~Expense Amount from~~ amount specified in the ~~Escrow Account pursuant to~~ Indemnitee’s notice will be conclusively deemed a ~~loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ liability of the Indemnifying Person and the Indemnifying Person shall pay the amount of such Loss to the Indemnitee ~~that (i) requires~~ on demand. If the Indemnifying ~~Party~~ Person has timely disputed its liability with respect to ~~lend~~ such claim, a senior executive of each of the Indemnifying Person and the Indemnitee ~~immediately available cash proceeds~~ with full negotiating authority will proceed in ~~an amount equal~~ good faith to ~~the Expense Amount (an “Indemnity Loan”)~~negotiate a resolution of such dispute, and if not resolved through the negotiations of such executives within sixty (ii60) ~~provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account~~ days after the ~~credit standing and profile of the Indemnitee or any guarantor~~ delivery of the Indemnitee~~, including the Protected REIT, at the time~~ ’s notice of such ~~loan~~claim, such dispute shall be resolved fully and ~~(B)~~ finally by a ~~15 year maturity with no periodic amortization~~court of competent jurisdiction.

Appears in 1 contract

Sources: Asset Purchase Agreement (Coolbrands International Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ No Seller Indemnifying Party shall ~~give~~ be liable for any claim for indemnification under this Article VIII unless written notice of a claim for indemnification is delivered by the Purchaser Indemnified Party seeking indemnification to the Seller Indemnifying Party from whom indemnification is sought prior to the expiration of any applicable survival period set forth in Section 8.01 (in which event the claim shall survive until finally and fully resolved). If any third party notifies the Purchaser Indemnified Party with respect to any matter ~~that such Indemnitee has determined has given or would reasonably be expected to~~ which may give rise to a ~~right of~~ claim for indemnification (a “Third Party Claim”) against the Seller Indemnifying Party under this ~~Agreement or~~ Article VIII, then the Purchaser Indemnified Party shall notify the Seller Indemnifying Party reasonably promptly thereof in writing; provided, that no delay on the part of the Purchaser Indemnified Party in notifying the Seller Indemnifying Party shall relieve the Seller Indemnifying Party from any ~~Ancillary Agreement (other than a Third-~~obligation hereunder except to the extent that the Seller Indemnifying Party ~~Claim which shall be governed by Section 9.4(b)) to any Party that~~ is ~~or may be required~~ actually and materially prejudiced thereby. All notices given pursuant to this ~~Agreement or any Ancillary Agreement to make such indemnification (~~Section 8.05(a) shall describe with reasonable specificity the ~~“Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ nature of the claim, the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely claim (to the extent then known) and the ~~Indemnifying Party shall have been materially prejudiced as a result~~ basis of ~~such failure~~the Purchaser Indemnified Party’s claim for indemnification. (b) If Following receipt of notice in accordance with Section 8.05(a) (other than a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate~~ notice of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ against the Purchaser Indemnified Party, in ~~any event within thirty (30~~which case Section 8.05(c) ~~days) after receipt by such Indemnitee of written notice of~~ below shall apply), the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Seller Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days from the date it receives such notice (the “Dispute Period”) to make such investigation of the ~~receipt~~ claim as the Seller Indemnifying Party deems necessary or desirable. For purposes of such investigation, the Purchaser Indemnified Party shall make available to the Seller Indemnifying Party all the material information related to such claim relied upon by or in possession or control of, the Purchaser Indemnified Party; provided, that such Purchaser Indemnified Party shall not be required to violate any Governmental Order or any applicable Law to which it is subject or to waive any attorney-client privilege or work product doctrine which any of them may possess or that may otherwise apply to such information. If the Seller Indemnifying Party disagrees with the validity or amount of all or a portion of such claim made by the Purchaser Indemnified Party, the Seller Indemnifying Party shall deliver to the Purchaser Indemnified Party written notice ~~from such Indemnitees~~ thereof (the “Dispute Notice”) prior to the expiration of the ~~Third-~~Dispute Period. If no Dispute Notice is received by the Purchaser Indemnified Party ~~Claim (failure of~~ within the Dispute Period or the Seller Indemnifying Party provides notice that it does not have a dispute with respect to ~~respond~~ such claim, such claim shall be deemed approved and consented to by the Seller Indemnifying Party (such claim, an “Approved Indemnification Claim”). If a Dispute Notice is received by the Purchaser Indemnified Party within the Dispute Period and the Purchaser Indemnified Party and the Seller Indemnifying Party do not agree to the validity and/or amount of such ~~thirty~~ disputed claim, no payment shall be made until such disputed claim is resolved, whether by adjudication of such matter, agreement between the Purchaser Indemnified Party and the Seller Indemnifying Party, or otherwise (~~30) day period~~ and upon any such resolution, such claim shall be deemed to be an ~~election by the Indemnifying Party not to assume the defense for such Third-Party~~ Approved Indemnification Claim). Each Approved Indemnification Claim shall be paid by Sellers or Parent and Purchaser, as applicable, no later than five (5) Business Days after the date on which the subject claim became an Approved Indemnification Claim, in each case by wire transfer of immediately available funds to the account designated in writing by the party entitled to such payment. (c) After the Purchaser Indemnified Party has given notice of a ~~notice from an~~ Third Party Claim to the Seller Indemnifying Party pursuant to ~~an Indemnitee of~~ Section 8.05(a), the Seller Indemnifying Party may, at its ~~election to assume~~ election, undertake and conduct the defense of ~~a Third-~~such Third Party Claim at its own expense; provided, that the Seller Indemnifying Party fully acknowledges in writing its indemnification obligations to the Purchaser Indemnified Party. In such case, the Purchaser Indemnified Party may continue to participate in the defense of such Third Party Claim. If the Seller Indemnifying Party assumes the defense of any Third Party Claim, and unless (i) such ~~Indemnitee shall have~~ settlement or consent to judgment does not impose or purport to impose any obligation or restriction on such Purchaser Indemnified Party or any of its Affiliates or any action or restrictions upon the ~~right to employ separate counsel and to participate in~~ conduct of the businesses of the Purchaser Indemnified Party or any of its Affiliates, (~~but not control~~ii) the ~~defense~~Purchaser Indemnified Party receives a full release of and from any other claims that may be made against the Purchaser Indemnified Party in connection with such Third Party Claim, ~~compromise~~ (iii) the sole relief provided is monetary damages that are paid in full by the Seller Indemnifying Party, and (iv) there is no finding or ~~settlement thereof~~admission of any violation by the Purchaser Indemnified Party of any applicable Law or any rights of any Person, ~~at its own expense and, in any event, shall reasonably cooperate with~~ the Seller Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not ~~require the Indemnitee~~ settle or consent to ~~disclose any information the disclosure of which would, in the good faith~~ judgment ~~of the Indemnitee, result in the loss of any existing privilege~~ with respect to such ~~information~~ Third Party Claim without the written consent of the Purchaser Indemnified Party, which consent shall not be unreasonably withheld, conditioned or ~~violate any applicable Law. (d)~~ delayed. Notwithstanding anything to the ~~contrary in this Section 9.4~~contrary, in the ~~event~~ Seller Indemnifying Party shall not be entitled to assume the administration and defense of any Third Party Claim that involves any Material Customer or Material Supplier or if: (i) ~~an Indemnifying Party elects not to assume~~ the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Seller Indemnifying Party has failed to assume the defense of ~~the Third-~~such Third Party Claim within thirty (30) days of the Purchaser Indemnified Party’s delivery of notice of such Third Party Claim to the Seller Indemnifying Party, (ii) the aggregate amount reasonably expected to be incurred in ~~accordance~~ connection with such Third Party Claim and all other outstanding claims on the RWI Indemnity Escrow Funds exceeds 150% of the remaining amount of the RWI Indemnity Escrow Funds, (iii) such Third Party Claim involves criminal or quasi-criminal allegations, (iv) the Third Party Claim includes a claim for injunctive relief, or (v) any Seller is the Seller Indemnifying Party and (A) Purchaser or the Insurer is required to assume the defense of the Third Party Claim pursuant to the terms thereof or (B) any Seller’s assumption of the defense of the Third Party Claim would reasonably be expected to cause a Purchaser Indemnified Party to lose coverage under the R&W Insurance Policy. The Purchaser Indemnified Party and the Seller Indemnifying Party shall render to each other such assistance as may reasonably be required of each other in order to ensure proper and adequate defense of any Third Party Claim subject to this ~~Agreement~~Section 8.05. To the extent that the Purchaser Indemnified Party or the Seller Indemnifying Party does not participate in the defense of a particular Third Party Claim, ~~no Indemnitee may~~ the Person so proceeding with such Third Party Claim shall keep the other Person informed of all material developments and events relating to such Third Party Claim. No Purchaser Indemnified Party shall settle or ~~compromise~~ consent to judgment with respect to any ~~Third-~~Third Party Claim for which the Seller Indemnifying Party has provided a written acknowledgement of its indemnification obligations to the Purchaser Indemnified Party without the written consent of the Seller Indemnifying ~~Party (~~Party, which consent shall not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Purchase and Sale Agreement (Local Bounti Corporation/De)

Procedures for Indemnification. (a) An The Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “~~Indemnifying Party~~Indemnification Notice”) ~~promptly (~~of any Damages or the commencement of any Proceeding by a third party with respect to any matter referred to in Section 10.2 thereof to the Indemnitor and ~~in any event within fifteen (15) days) after making such~~ the Escrow Agent, which Indemnification Notice shall include a ~~determination. Such notice shall state~~ description of the Damages or Proceeding, the amount of thereof (if known and quantifiable) and the ~~Loss claimed, if known, and method of computation thereof, and containing a reference to~~ basis for the ~~provisions of this Agreement~~ Damages or ~~the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Proceeding; provided, ~~however,~~ that failure of the ~~failure~~ Indemnitee to ~~provide such notice~~ give the Indemnification Notice as provided herein shall not ~~release~~ relieve the ~~Indemnifying Party from any~~ Indemnitor of its obligations ~~except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure~~hereunder. (b) If ~~a claim or demand is made against an Indemnitee by any Person who is~~ the Indemnitor does not ~~a Party~~ object to ~~this Agreement or an Affiliate~~ the Damages within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor, after Indemnitee’s delivery of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of cancellation (the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely “Cancellation Notice”) to the ~~extent~~ Indemnitor and the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). ThereafterEscrow Agent, the Indemnitee shall ~~deliver~~ be entitled to immediately offset the aggregate amount of Damages set forth in the Indemnification Notice against the Closing Escrow Shares (whether by means of the cancellation of any shares of Common Stock issuable to Indemnitor or otherwise). Indemnitor may object to the ~~Indemnifying Party, promptly~~ claim on the Indemnification Notice by delivery to Indemnitee (~~and~~ with a copy to the Escrow Agent) of such objection in writing within twenty (20) Business Days of Indemnitee’s delivery of the Indemnification Notice to Indemnitor. In case Indemnitor shall so object in writing to any claim or claims by Indemnitee made in any ~~event within ten (10) days) after the Indemnitee’s receipt thereof~~Indemnification Notice, ~~copies of all notices and documents (including court papers) received by the~~ Indemnitee ~~relating to the Third-Party Claim. (c) An Indemnifying Party~~ shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within have thirty (30) days after receipt of such objection to respond in a written statement that describes the nature of such objection and/or Indemnitor’s assessment of the ~~receipt of notice from such Indemnitees~~ amount of the ~~Third-Party Claim (failure of the Indemnifying Party to respond within~~ Damages. If after such thirty (30) day period there remains a dispute as to any claims, Indemnitee and Indemnitor shall attempt in good faith for thirty (30) days to agree upon the rights of the respective parties with respect to each of such claims. If no agreement can be reached after good faith negotiation between the parties pursuant to this Section, then the parties shall subject such dispute to the dispute resolution procedures set forth in Section 11.13. (c) Indemnitor shall be ~~deemed~~ entitled to participate in the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its option (subject to the limitations set forth below) shall be ~~an election by the Indemnifying Party not~~ entitled to assume the defense ~~for~~ thereof by appointing a nationally recognized and reputable counsel reasonably acceptable to the Indemnitee to be the lead counsel in connection with such ~~Third-Party Claim). After a notice from an Indemnifying Party~~ defense; provided that: (i) the Indemnitee shall be entitled to ~~an Indemnitee of its election to assume~~ participate in the defense of ~~a Third-Party Claim,~~ such ~~Indemnitee shall have the right~~ claim and to employ counsel of its choice for such purpose; provided that the fees and expenses of such separate counsel shall be borne by the Indemnitee (other than any fees and expenses of such separate counsel that are incurred prior to ~~participate in (but not control)~~ the ~~defense~~date the Indemnitor effectively assumes control of such defense which, ~~compromise or settlement thereof, at its own expense and, in any event~~notwithstanding the foregoing, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required be borne by the ~~Indemnifying Party; provided~~Indemnitor, ~~however,~~ and except that the Indemnitor shall pay all of the fees and expenses of such ~~access shall not require~~ separate counsel if the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event has been advised by counsel that ~~(i) an Indemnifying Party elects not to assume the defense~~ a reasonable likelihood exists of a ~~Third-Party Claim, (ii) there exists a conflict of interest or potential~~ conflict of interest between the ~~Indemnifying Party~~ Indemnitor and the Indemnitee); (ii) the Indemnitor shall not be entitled to assume control of such defense (unless otherwise agreed to in writing by the Indemnitee) and shall pay the fees and expenses of counsel retained by the Indemnitee if: (A) the claim for indemnification relates to or arises in connection with any criminal or quasi-criminal proceeding, action, indictment, allegation or investigation; (B) the Indemnitee reasonably believes an adverse determination with respect to the action, lawsuit, investigation, proceeding or other claim giving rise to such claim for indemnification would be detrimental to or injure the Indemnitee’s reputation or future business prospects; (C) the claim seeks an injunction or equitable relief against the Indemnitee; (D) the Indemnitee has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnitor and the Indemnitee; (E) the claim involves environmental matters in which case the Indemnitee shall have sole control and management authority over the resolution of such claim (including hiring legal counsel and environmental consultants, conducting environmental investigations and cleanups, negotiating with governmental agencies and third parties and defending or settling claims and actions); provided that the Indemnitee shall keep the Indemnitor apprised of any major developments relating to any environmental claim; (F) upon petition by the Indemnitee, the appropriate court rules that the Indemnitor failed or is failing to vigorously prosecute or defend such claim; or (G) the Indemnitee reasonably believes that the Damages relating to the claim could exceed the maximum amount that such Indemnitee could then be entitled to recover under the applicable provisions of Article 10; and (iii) if the Indemnitor shall control the defense of any ~~Third-Party Claim seeks an order~~such claim, ~~injunction~~ the Indemnitor shall obtain the prior written consent of the Indemnitee before entering into any settlement of a claim or ceasing to defend such claim if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief ~~or relief for other than money damages~~ will be imposed against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or ~~any of its material Assets,~~ if such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party settlement does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not expressly and unconditionally release the Indemnitee from all ~~liabilities and obligations~~ Liabilities with respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee~~claim, without prejudice. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Cardium Therapeutics, Inc.)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such The party claiming indemnification (the “"Claimant") shall promptly give written notice of the claim to the party from whom indemnification is claimed (the "Indemnifying Party”"), whether involving a claim between the parties or brought by a third party, specifying (i) ~~promptly~~ in reasonable detail the factual basis for the claim, and (~~and in any event within fifteen (15~~ii) ~~days) after making such a determination. Such notice shall state~~ the amount of the ~~Loss claimed~~Indemnification Fund to be reserved against the claim (if Buyer is the Claimant). If the claim relates to an action, ~~if known~~suit or proceeding filed by a third party against the Claimant, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall ~~not release~~ be given by the ~~Indemnifying Party from any~~ Claimant within ten days after written notice of ~~its obligations except and solely~~ such action, suit, or proceeding was given to the ~~extent~~ Claimant. Following receipt of notice from the Claimant of a claim, the Indemnifying Party shall have ~~been materially prejudiced~~ thirty days to make such investigation of the claim as ~~a result~~ the Indemnifying Party deems necessary or desirable. For the purposes of such ~~failure~~investigation, the Claimant agrees to make available to the Indemnifying Party and/or its authorized representatives the information relied upon by the Claimant to substantiate the claim. If Buyer and Trustee agree at or prior to the expiration of the thirty-day period (or any mutually agreed upon extension thereof) to the validity and amount of such claim, Trustee shall immediately disburse to Buyer such portion of the Indemnification Fund as shall be necessary to reimburse Buyer for such claim, if Buyer is the Claimant, or Buyer shall reimburse the Estate for such claim, if the Estate is the Claimant. If the Claimant and the Indemnifying Party do not agree within the thirty-day period (or any mutually agreed upon extension thereof), the Claimant may seek from the Court an appropriate remedy at law or inequity. (b) If With respect to any claim by a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”)~~ third party as to which ~~such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify~~ the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee Claimant is entitled to indemnification under this ~~Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of~~ Agreement, the Indemnifying Party shall have the right at its own expense, to ~~respond within~~ participate in or assume control of the defense of such ~~thirty (30) day period~~ claim, and the Claimant shall ~~be deemed~~ cooperate fully with the Indemnifying Party, subject to ~~be an election~~ reimbursement for actual out-of-pocket expenses incurred by the Claimant as the result of a request by the Indemnifying Party. If the Indemnifying Party ~~not~~ elects to assume ~~the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ control of ~~its election to assume~~ the defense of ~~a Third~~any third-~~Party Claim~~party claim, ~~such Indemnitee~~ the Claimant shall have the right to ~~employ separate counsel and to~~ participate in ~~(but not control)~~ the ~~defense, compromise or settlement thereof,~~ defense of such claim at its own ~~expense and, in any event, shall reasonably cooperate with~~ expense. If the Indemnifying Party does not elect to assume control or otherwise participate in ~~such~~ the defense ~~and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ of any third party claim, it shall be bound by the ~~Indemnifying Party; provided, however, that such access shall not require~~ results obtained by the ~~Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege~~ Claimant with respect to such ~~information~~ claim. (c) If a claim, whether between the parties or ~~violate any applicable Law~~by a third party, requires immediate action, the parties will make every effort to reach a decision with respect thereto as expeditiously as possible. (d) ~~Notwithstanding anything to the contrary~~ The indemnifications rights provided in this Section ~~9.4~~shall extend to the shareholders, directors, officers, employees, and representatives of any Claimant, although for the purpose of the procedures set forth in ~~the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim~~this Section 13.5, ~~(ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii)~~ any ~~Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with~~ indemnification claims by such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee parties shall be ~~entitled to control~~ made by and through the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawClaimant. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Paxson Communications Corp)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a ~~claim or demand is made against an~~ Purchaser Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, asserts that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it ~~gives written notice of its intention to do so (including a statement that the Indemnitee~~ is entitled to indemnification under this Article IXXIV, or if any suit, action, investigation, claim or proceeding (each, a "PROCEEDING") is begun, made or instituted as a result of which the Purchaser Indemnitee may become entitled to indemnification hereunder, such Purchaser Indemnitee shall give prompt written notice to the ~~applicable Indemnitees within thirty (30) days~~ Principal Stockholders; PROVIDED, HOWEVER, that no delay on the part of the ~~receipt of notice~~ Purchaser Indemnitee in notifying the Principal Stockholders shall relieve the Principal Stockholders from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claimany obligation hereunder unless, ~~such Indemnitee shall have the right to employ separate counsel~~ and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available then solely to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession~~ extent that, the Principal Stockholders are materially prejudiced thereby. The Principal Stockholders shall defend, contest or ~~under such Indemnitee’s control relating thereto as are reasonably required by~~ otherwise protect the ~~Indemnifying Party; provided, however, that such access shall not require the~~ Purchaser Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such ~~Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense~~ Proceeding at their sole cost and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed)expense. If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the The Purchaser Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the ~~Expense Amount from~~ defense thereof by counsel of the ~~Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ Purchaser Indemnitee's choice and shall in any event cooperate with and assist the Principal Stockholders to the extent reasonably possible. If the Principal Stockholders fail timely to defend, contest or otherwise protect against such Proceeding, the Purchaser Indemnitee ~~that~~ shall have the right to do so, and the Purchaser Indemnitee shall be entitled to recover the entire cost thereof, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such Proceeding. If the Principal Stockholders assume the defense of any Proceeding, (i) ~~requires~~ no compromise or settlement of such claims may be effected without the ~~Indemnifying Party to lend~~ Purchaser' consent, which shall not be unreasonably withheld, unless (x) there is no finding or admission of any violation of federal, state, local, municipal, foreign, international, multinational or other administrative order, law, ordinance, principal of common law, regulation, statute or treaty or any violation of the rights of any Person and no effect on any other claims that may be made against Purchaser Indemnitee ~~immediately available cash proceeds~~ and (y) the sole relief provided is monetary damages that are paid in ~~an amount equal to~~ full by the ~~Expense Amount (an “Indemnity Loan”),~~ Principal Stockholders; and (ii) ~~provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account~~ the ~~credit standing and profile of the Indemnitee~~ Purchaser Indemnitees will have no liability with respect to any compromise or ~~any guarantor of the Indemnitee, including the Protected REIT, at the time~~ settlement of such ~~loan, and (B) a 15 year maturity with no periodic amortization~~claims effected without the Purchaser Indemnitee's consent.

Appears in 1 contract

Sources: Merger Agreement (Medical Staffing Network Holdings Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ If any of the Parent Indemnified Parties seek indemnification under this Article VIII, Parent shall give notice ("Claim Notice") to the Shareholder Representative of the basis of the claim (the "Claim") (i) within a reasonable time after discovery of the facts and (ii) in any event, within the time periods set forth in Section 8.1, provided that the failure to give such notice shall not relieve the Company Shareholders of any ~~matter~~ liability hereunder except to the extent that the Company Shareholders are materially adversely prejudiced by such ~~Indemnitee has determined has given or would reasonably be expected~~ failure. The Shareholder Representative shall give notice to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event Parent within fifteen (15) ~~days)~~ business days after ~~making such a determination. Such notice shall state the amount~~ receipt of the ~~Loss claimed, if known~~notice requested by this Section 8.3 advising whether he (i) acknowledges the Company Shareholders' obligation to indemnify the Parent Indemnified Parties or (ii) disputes the obligation to indemnify the Parent Indemnified Parties. If the Shareholder Representative acknowledges the Company Shareholders' indemnification obligation with respect to the Claim, and ~~method of computation thereof, and containing~~ such Claim is based upon an asserted liability or obligation to a ~~reference to the provisions of this Agreement~~ person or ~~the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however,~~ entity that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a ~~Party~~ party to this Agreement ~~or an Affiliate of a Party~~ (a ~~“Third-~~"Third Party Claim~~”) as to which~~ "), Parent shall control and conduct the defense of any such ~~Indemnitee is or reasonably expects to~~ Third Party Claim, including settlement. The Shareholder Representative shall be entitled ~~to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail,~~ (on behalf of the ~~Third-Party Claim promptly (and in~~ Company Shareholders), at its expense, to participate in, but not to determine or conduct the defense of any ~~event within thirty (30) days) after receipt by~~ such ~~Indemnitee of written notice~~ Claim. Notwithstanding anything to the contrary set forth herein, except with the consent of the ~~Third-Party Claim; provided~~Shareholder Representative (which consent shall not be unreasonably withheld or delayed), ~~however, that the failure to provide notice~~ no settlement of any such Third-Party Claim ~~pursuant~~ shall alone be determinative of the amount of Damages for which the Parent Indemnified Parties are entitled to ~~this sentence~~ indemnification with respect to such Claim. If such Claim is not a Third Party Claim, Parent shall ~~not release the Indemnifying Party from any of its obligations except and solely~~ be entitled to ~~the extent the Indemnifying Party shall have been materially prejudiced as a result~~ immediate satisfaction of such ~~failure~~ Claim. If the Shareholder Representative does not notify Parent within fifteen (~~except~~ 15) business days following receipt of notice of a Claim that is not a Third Party Claim that the ~~Indemnifying Party~~ Company Shareholders disputes such Claim, such Claim shall be deemed a liability of the Company Shareholders and the Company Shareholders shall pay the amount of the Claim on demand by Parent, or ~~Parties shall not be liable for~~ in the case of any ~~expenses incurred by the Indemnitee in defending such Third-Party Claim during the period~~ notice in which the ~~Indemnitee failed to give~~ amount of the Claim is estimated, on such ~~notice)~~later date when the amount of the Claim is finally determined. ~~Thereafter~~If the Shareholder Representative disputes the Claim in a timely manner as set forth herein, the ~~Indemnitee~~ Shareholder Representative and Parent shall ~~deliver~~ proceed in good faith to negotiate a resolution of the ~~Indemnifying Party~~dispute, ~~promptly (and in~~ or, if necessary, to final judgment or order of a court of competent jurisdiction determining the amount of the Damages or by any ~~event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received~~ other means elected by ~~the Indemnitee relating to the Third-Party Claim~~Parent. (cb) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to Company Shareholders seek indemnification under this Article ~~IX)~~ VIII, it shall give a Claim Notice to ~~the applicable Indemnitees within thirty (30) days~~ Parent of the ~~receipt of notice from such Indemnitees~~ basis of the ~~Third-Party~~ Claim (~~failure~~ i) within a reasonable time after discovery of the ~~Indemnifying Party to respond within such thirty~~ facts and (30ii) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, within the time periods set forth in Section 8.1, provided that the failure to give such notice shall ~~reasonably cooperate with the Indemnifying Party in such defense and make available~~ not relieve Parent of any liability hereunder except to the ~~Indemnifying Party all witnesses and information in~~ extent that Parent is materially adversely prejudiced by such ~~Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by~~ failure. Parent shall give notice to the ~~Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment~~ Shareholder Representative within fifteen (15) business days after receipt of the ~~Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in~~ notice requested by this Section ~~9.4, in the event that~~ 8.3 advising whether it (i) ~~an Indemnifying Party elects not~~ acknowledges Parent's obligation to ~~assume~~ indemnify the ~~defense of a Third-Party Claim,~~ Company Shareholders or (ii) ~~there exists a conflict of interest or potential conflict of interest between~~ disputes the ~~Indemnifying Party and~~ obligation to indemnify the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party)Company's Shareholders. If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any Parent acknowledges Parent's indemnification obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the ~~foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to~~ Claim, such Claim shall be deemed a liability of Parent and Parent shall pay the ~~contrary in this Agreement~~amount of the Claim on demand by the Shareholder Representative, or in the ~~event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that~~ case of any ~~indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee,~~ notice in which the amount ~~paid to~~ of the ~~Indemnitee pursuant to this Agreement in any tax year shall not exceed~~ Claim is estimated, on such later date when the ~~maximum~~ amount ~~that can be paid to~~ of the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REITClaim is finally determined. If Parent disputes the Claim in a timely manner as set forth herein, Parent and the Shareholder Representative shall proceed in good faith to negotiate a resolution of the dispute, or, if necessary, to final judgment or order of a court of competent jurisdiction determining the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for Damages or by any ~~relevant taxable year, or (iii) a private letter ruling issued~~ other means elected by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationParent.

Appears in 1 contract

Sources: Merger Agreement (Neoware Systems Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ A claim for indemnification ~~under this Agreement or any Ancillary Agreement~~ hereunder (~~other than a Third-Party Claim which~~ "Indemnification Claim") shall be ~~governed~~ made by ~~Section 9.4(b)~~CT or ESRN ("Indemnitee") by delivery of a written declaration to ~~any Party that is~~ the Company or ~~may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification~~ the applicable Stockholder (the ~~“Indemnifying Party”~~"Indemnitor") ~~promptly (~~requesting indemnification and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ specifying the basis on which indemnification is sought and the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim (as defined hereinafter), ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party other information as Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (~~the procedures set forth in Section 7.3 hereof shall be observed by Indemnitee and ~~in any event within thirty (30) days) after receipt by such Indemnitee of written notice of~~ the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party ClaimIndemnitor. (c) ~~An Indemnifying Party shall be entitled (but shall~~ If the Indemnification Claim involves a matter that is not ~~be required) to assume, control the defense of, and settle any Third-~~a Third Party Claim, at the Indemnitor shall have ten (10) days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so ~~(including~~ object shall constitute a ~~statement that~~ final and binding acceptance of the ~~Indemnitee~~ Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid in accordance with Section 7.2(d) hereof. If an objection is ~~entitled to indemnification under this Article IX) to~~ timely interposed by the ~~applicable Indemnitees~~ Indemnitor and the dispute is not resolved within thirty (30) days from the date (such period is hereinafter the "Negotiation Period") Indemnitee receives such objection, such dispute shall be resolved by (i) arbitration in accordance with the rules of the ~~receipt~~ American Arbitration Association, if the amount in controversy is less than Fifty Thousand Dollars ($50,000) or (ii) institution of ~~notice from~~ such ~~Indemnitees of~~ proceedings as Indemnitee may elect if the ~~Third-Party Claim~~ amount in controversy is Fifty Thousand Dollars (~~failure of the Indemnifying Party to respond within such thirty (30~~$50,000) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawmore. (d) ~~Notwithstanding anything to~~ Upon a final determination of the ~~contrary in this Section 9.4, in the event that (i)~~ amount of an ~~Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest~~ Indemnification Claim whether by agreement between the ~~Indemnifying Party~~ Indemnitor and ~~the~~ Indemnitee, ~~(iii)~~ or by an arbitration award, or by any ~~Third-Party Claim seeks an~~ other final judgment or another final nonappealable order, ~~injunction or other equitable relief or relief for other than money damages against~~ the ~~Indemnitee, (iv)~~ Indemnitor shall pay the ~~Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect~~ amount of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Indemnification Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Contribution Agreement (Ct Holdings Inc)

Procedures for Indemnification. The obligations and liabilities of the Seller with respect to any Buyer's Damages and the obligations and liabilities of the Buyer with respect to any Seller's Damages shall be subject to the following terms and conditions, with the indemnified party designated as the "Indemnitee", the party with the indemnification obligations designated as the "Indemnitor", and the Buyer's Damages or Seller's Damages, as the case may be, designated as the "Indemnified Claim" for the purposes of this Section 9.4: (ai) An As soon as reasonably practicable after Indemnitee receives written notice of any basis for an Indemnified Claim, Indemnitee shall give the Indemnitor written notice of any ~~matter that~~ such ~~Indemnitee has determined has given or would reasonably be expected to give~~ Indemnified Claim, which notice shall state the facts giving rise to ~~a right~~ an alleged basis for the Indemnified Claim and an approximation of ~~indemnification~~ the amount of liability under ~~this Agreement~~ such Indemnified Claim, to the extent known to Indemnitee, and copies of any notice, summons, complaint or ~~any Ancillary Agreement (~~other ~~than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is~~ documentation thereof or ~~may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification~~ with respect thereto (the ~~“Indemnifying Party”~~"Indemnification Notice"). (ii) ~~promptly (and in~~ In the event any ~~event~~ action, suit or proceeding is brought against the Indemnitee with respect to an Indemnified Claim, the action, suit or proceeding shall, at the Indemnitor's written election made within fifteen (15) ~~days) after making such a determination. Such notice shall state the amount~~ days of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after Indemnitor's receipt ~~by such Indemnitee~~ of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result commencement of such ~~failure (except that the Indemnifying Party~~ action, suit or ~~Parties shall not~~ proceeding, be ~~liable for any expenses incurred~~ defended by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents Indemnitor (including ~~court papers~~all proceedings on appeal or review in connection therewith) ~~received by~~ at the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and Indemnitor's expense and ~~by such Indemnifying Party’s own counsel~~liability. Pending the Indemnitor's election hereunder, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ ~~separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at~~ its own counsel to file a request for an extension of time to file an answer, or to file an answer if the Indemnitor fails to have its counsel file an answer within three (3) days prior to the expiration of the period within which an answer must be filed, as such period may be extended, without waiving any of Indemnitee's rights under Article IX. The Indemnitee shall have the right to employ its own counsel, for the duration of such action, suit or proceeding, but the fees and expenses of such counsel shall be at the expense ~~and~~of the Indemnitee unless the Indemnitor has not elected within the required time period to defend any such action, suit or proceeding, or unless the actions or inactions of counsel retained by Indemnitor appear reasonably likely to result in a judgment against Indemnitee because of a failure to defend the action in a reasonably prudent manner (the burden to prove same by a preponderance of the evidence to rest with Indemnitee), in ~~any event~~which event the Indemnitor shall pay such counsel fees and expenses. The Indemnitee shall be kept fully informed of such action, ~~shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party~~ suit or proceeding at all ~~witnesses and information in such Indemnitee’s possession~~ stages, whether or ~~under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall~~ not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawit is so represented. (diii) ~~Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects~~ If Indemnitor does not to assume the defense of ~~a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii)~~ any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Indemnified Claim in accordance with the terms ~~of this Agreement~~hereof, no Indemnitee may defend against such Indemnified Claim in such manner as it may deem appropriate or may settle or ~~compromise any Third-Party Claim without the consent~~ pay such claim, after giving notice of the ~~Indemnifying Party (not~~ same to ~~be unreasonably withheld~~Indemnitor, ~~conditioned or delayed)~~on such terms as Indemnitee may deem appropriate. If ~~an Indemnifying Party has failed to~~ Indemnitor does assume the defense of ~~the Third-Party Claim~~any Indemnified Claim and, ~~it shall not be a defense to any obligation~~ for whatever reason (including, without limitation, Indemnitor's failure to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, ~~other order~~ settlement or ~~other non-monetary relief~~ attorney's fees with respect thereto) Indemnitor fails to ~~be entered~~resolve or settle such matter, ~~directly~~ or ~~indirectly, against any Indemnitee, does not release the~~ if Indemnitee ~~from all liabilities and obligations~~ is permitted to retain its own counsel with respect to any Indemnified Claim at Indemnitor's expense, Indemnitee may pay such ~~Third-Party Claim or includes an admission~~ amounts which Indemnitee may deem appropriate after giving notice of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect same to ~~the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in~~ Indemnitor. In the event ~~that counsel or independent accountants for a Protected REIT determine that there exists a material risk that~~ of any ~~indemnification~~ such payments ~~due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the~~ by Indemnitee pursuant to this ~~Agreement in any tax year~~ Section 9.4, Indemnitor shall ~~not exceed~~ reimburse Indemnitee for the ~~maximum amount that can be~~ amounts actually so paid to by Indemnitee within ten (10) days after Indemnitee's demand therefor. (iv) In the ~~Indemnitee in such year without causing~~ event the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated Indemnitor fails to pay to Indemnitee any of the ~~relevant~~ Indemnitor's obligations to Indemnitee pursuant to this ~~Agreement~~ Section 9.4, when such payments are due, the amounts of such payments shall accrue interest at the rate per annum equal to one percent (1%) above the so-called variable Prime Rate per annum announced from time to time by The Wall Street Journal (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”"Prime Rate") from the ~~Protected REIT’s independent accountants indicating~~ due date hereunder (i.e., with respect to amounts actually paid by Indemnitee) through and including the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued date of such payment by the ~~IRS~~ Indemnitor. The Indemnitor shall be liable to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion Indemnitee for all reasonable attorneys' fees and ~~an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document~~ expenses incurred by ~~the~~ Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), enforce its rights and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationremedies under this Section 9.4.

Appears in 1 contract

Sources: Asset Purchase Agreement (PRT Group Inc)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice~~ A. In the event of any ~~matter that such Indemnitee has determined has given or would reasonably be expected~~ Claim hereunder, the party entitled to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the ~~“Indemnifying Party”~~"INDEMNITEE") ~~promptly~~ shall, with reasonable promptness, provide the indemnifying party (the "INDEMNITOR") with written notice (during the Indemnification Period) and in copies of any ~~event within fifteen (15) days) after making such a determination. Such notice~~ claims or other documents received; provided that the Indemnitee's failure to so notify the Indemnitor shall ~~state~~ not relieve the ~~amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions~~ Indemnitor from any liability it might otherwise have on account of this ~~Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided~~indemnity, ~~however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations~~ except ~~and solely~~ to the extent that the ~~Indemnifying Party shall have~~ Indemnitor has been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such ~~Indemnitee of written notice of the Third-Party Claim; provided, however, that the~~ failure to ~~provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely~~ notify or to the extent ~~the Indemnifying Party shall have been materially prejudiced as a result of such failure (except~~ that the ~~Indemnifying Party~~ notice is not given reasonably promptly after the end of the Indemnification Period. B. Subject to paragraph C., the Indemnitor may undertake full responsibility for the defense or ~~Parties~~ prosecution of any claim relating to a third-party allegation or claim as described in clause (ii) of Sections 13.2.1 and 13.2.2 ("THIRD-PARTY CLAIM") and may contest or settle it on such terms as the Indemnitor may choose, provided that the Indemnitor shall not ~~be liable~~ have the right, without the Indemnitee's written consent, to settle any such claim if such settlement arises from or is part of any criminal action, suit or proceeding, or contains a stipulation to, confession of judgment with respect to, or admission or acknowledgment of, any liability or wrongdoing on the part of the Indemnitee; provided that: (i) Notice of the Indemnitor's intention to defend, accompanied by an acknowledgment in writing in form and substance reasonably satisfactory to counsel for ~~any expenses incurred by~~ the Indemnitee that such claim is covered in ~~defending such Third-Party Claim during~~ its entirety by this indemnity (the ~~period in which~~ "ACKNOWLEDGMENT"), shall be delivered to the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days from the date of receipt by such Indemnitor of notice of the ~~receipt~~ institution of ~~notice from~~ such ~~Indemnitees of the Third-Party Claim~~ action or proceeding. (~~failure of the Indemnifying Party to respond within such thirty (30~~ii) ~~day period~~ Such defense shall be ~~deemed~~ conducted by attorneys reasonably satisfactory to ~~be an election~~ the Indemnitee and retained by the ~~Indemnifying Party not~~ Indemnitor at the Indemnitor's cost and expense (in the manner and to ~~assume~~ the ~~defense for such Third-Party Claim~~extent herein set forth)~~. After a notice from an Indemnifying Party to an Indemnitee of its election to assume~~ , but the ~~defense of a Third-Party Claim, such~~ Indemnitee shall have the right to ~~employ~~ participate in such proceedings and to be separately represented by attorneys of its own choosing. The Indemnitee shall be responsible for the costs for such separate representation unless the Indemnitee has reasonably concluded that the interests of the Indemnitee and of the Indemnitor in the action conflict in such a manner and to such an extent as to require, consistent with applicable standards of professional responsibility, the retention of separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of for the Indemnitee, ~~result~~ in which case the ~~loss of any existing privilege with respect to such information or violate any applicable Law~~Indemnitor shall pay for the separate counsel chosen by the Indemnitee. (diii) If the Indemnitor fails to deliver the Acknowledgment or fails to choose counsel reasonably satisfactory to the Indemnitee, the Indemnitor shall not thereafter be entitled to elect to defend and the Indemnitor shall be bound by and shall be liable for the result obtained by the Indemnitee, including without limitation the amount of any judgment or good faith out-of-court settlement or compromise and all costs and related fees of counsel incurred by Indemnitee. If at any time the Indemnitee reasonably concludes that the Indemnitor will be unable to indemnify the Indemnitee for any claim, the Indemnitee shall be entitled to assume and control the defense with counsel of its own choosing. C. Notwithstanding anything to the contrary contained in ~~this Section 9.4~~paragraph B., in to the ~~event~~ extent that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim ~~seeks an order, injunction or other equitable relief or relief for other than money damages~~ against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable Buyer relates to the ~~Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim~~Product, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee Buyer shall have the right, ~~but not the obligation~~at its election exercisable at any time by written notice to Seller specifically referencing this Section 11.2.3C., to ~~borrow~~ undertake full responsibility for the ~~Expense Amount from the Escrow Account pursuant~~ defense or prosecution of such Claim and to ~~a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ contest or settle it on such terms as Buyer may choose; provided that Seller's indemnification obligations shall not apply to the ~~Indemnitee~~ extent the Seller reasonably objected in writing to Buyer (specifying the reasons for their objection) within ten (10) business days from Seller's receipt of notice from Buyer of a proposed settlement or compromise; and provided, further, that ~~(i) requires~~ Seller's indemnification obligations shall not apply to Buyer's attorneys' fees incurred after the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of date on which Buyer has assumed such ~~loan, and (B) a 15 year maturity with no periodic amortization~~control.

Appears in 1 contract

Sources: Product Purchase Agreement (Level 8 Systems)

Procedures for Indemnification. The procedures for Indemnification shall be as follows: (ai) ~~An Indemnitee~~ The party claiming indemnification ("Claimant") shall promptly give notice to the party or parties from whom indemnification is claimed ("Indemnitor") of any ~~matter that~~ claim, whether between the parties or brought by a third party, specifying the factual basis for such ~~Indemnitee has determined has~~ claim and the amount of claim. If the claim relates to an action, suit or proceeding filed by a third party against Claimant, such notice shall be given by Claimant to Indemnitor within five (5) business days after written notice of such action, suit or ~~would reasonably be expected~~ proceeding was given to ~~give rise~~ Claimant. (ii) Following receipt of notice from the Claimant of any claim, the Indemnitor shall have thirty (30) days, except where such claim requires a sooner response, in which to ~~a right~~ make such investigation of ~~indemnification under this Agreement~~ the claims as the Indemnitor deems necessary or desirable. For the purpose of such investigation, the Claimant agrees to make available to the Indemnitor and/or Indemnitor's authorized representatives, the information relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnitor agree at or prior to the expiration of said period (or any ~~Ancillary Agreement~~ mutually agreed upon extension thereof) as to the validity and amount of such claim, the Indemnitor or Indemnitors shall pay to the Claimant their pro rata portion of such claim in the manner and subject to the limitations set forth hereinafter in '6(e). If the Claimant and the Indemnitor fail to agree as aforesaid, then the Claimant may seek appropriate legal remedy. (iii) With respect to any claim by a third party as to which the Claimant is entitled to indemnification hereunder (other than ~~a Third-Party Claim~~ those relating to liabilities for Taxes, which are subject to subparagraph (iv) hereof), the Indemnitor shall ~~be governed by Section 9.4(b))~~ have the right at any time at its own expense to ~~any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (~~assume and thereafter conduct and control the ~~“Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount~~ defense of the ~~Loss claimed~~third party claim with counsel of Indemnitor's choice. The Claimant shall cooperate fully with the Indemnitor, ~~if known, and method of computation thereof, and containing a reference~~ subject to reimbursement for actual out-of-pocket expenses incurred by the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced Claimant as a result of request by the Indemnitor. If the Indemnitor elects to assume control of the defense of any third party claim, the Claimant shall have the right to participate in such ~~failure~~defense at its own expense. If the Indemnitor does not elect to assume control or otherwise participate in the defense of any third party claim, the Indemnitor shall be bound by the results obtained by the Claimant with respect to such claim. Indemnitor has three (3) business days to either consent to such action or defend against the claim. In the event that the Indemnitor fails to consent or commence defending the claim within the time specified, then the Claimant may enter into such consent or judgement without the Indemnitors consent. Notwithstanding anything to the contrary set forth in this '8(d)(iii) the Claimant shall not settle or consent to the entry of any judgment with respect to the third party claim without the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld. However, in the event that the consent requires the payment of money damages only, and the payment is to be made by the Indemnitor at the time of entering into the settlement, then Indemnitor need not receive the consent of the Claimant. (biv) ~~If a claim~~ In the case of any audit, examination or ~~demand is made against an Indemnitee by any Person who is not a Party~~ other proceeding ("Proceeding") with respect to ~~this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as~~ Taxes for which Sellers have agreed to ~~which such Indemnitee is or reasonably expects to be entitled to indemnification~~ indemnify Acquirer pursuant to this Agreement, ~~such Indemnitee~~ Acquirer shall ~~notify the Indemnifying Party in writing~~promptly inform Sellers, and ~~in reasonable detail~~shall afford Sellers, at Seller's expense the opportunity to control the conduct of such Proceeding. Acquirer shall execute or cause to be executed powers of attorney or other documents necessary to enable Sellers to take all actions desired by Sellers with respect to such Proceeding to the ~~Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by~~ extent such ~~Indemnitee~~ Proceeding may affect the amount of ~~written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim~~ Taxes for which Sellers are liable pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice)Agreement. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee Sellers shall have the right to ~~employ separate counsel~~ control any such Proceeding and ~~to participate in (but not control) the defense~~if necessary initiate any claim for refund, ~~compromise~~ file any amended return or ~~settlement thereof, at its own expense and, in~~ take any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of other action which ~~would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege~~ it deems appropriate with respect to such ~~information or violate~~ Taxes. Sellers shall be entitled to retain any ~~applicable Law. (d)~~ refund attributable to any tax period prior to the Closing, except with respect to the Tax Period. Notwithstanding anything to the contrary set forth in this ~~Section 9.4~~'6(d)(iv) the Claimant shall not settle or consent to the entry of any judgment with respect to the third party claim without the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld. However, in the event that ~~(i) an Indemnifying Party elects not to assume~~ the ~~defense~~ consent requires the payment of ~~a Third-Party Claim~~money damages only, ~~(ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ and the ~~Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against~~ payment is to be made by the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, Indemnitor at the ~~Indemnifying Party’s expense~~time of entering into the settlement, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall then Indemnitor need not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without receive the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liabilityClaimant. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Stock Purchase Agreement (Fun Tyme Concepts Inc)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of such Indemnitee, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Buyers holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other ~~non-monetary relief to be entered, directly or indirectly, against any Indemnitee,~~ compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release ~~the Indemnitee~~ from all ~~liabilities and obligations with~~ liability in respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of~~ Claim, action and proceeding. The failure to deliver written notice to the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 1 contract

Sources: Securities Purchase Agreement (Viropharma Inc)

Procedures for Indemnification. (ai) An If any claim or other matter (each, a “Claim”) concerning this Section is threatened or commenced against an Indemnitee (each, an “Indemnitee”), then in each such case, Indemnitee shall ~~give~~ deliver prompt written notice thereof to the other Party (“Indemnitor”). After receipt of ~~any matter~~ such notice, if Indemnitor acknowledges, in writing, to Indemnitee that ~~such Indemnitee has determined has given or would reasonably be expected to give rise to a~~ the right of indemnification under this Agreement ~~or any Ancillary Agreement (other than a Third-Party Claim which~~ applies with respect to such Claim, then Indemnitor shall be ~~governed by Section 9.4(b))~~ entitled, if it so elects in a written notice delivered to ~~any Party that~~ Indemnitee not fewer than 20 calendar days prior to the date on which a response to such Claim is ~~or may be required pursuant~~ due, to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount take control of the ~~Loss claimed, if known,~~ defense and ~~method~~ investigation of ~~computation thereof,~~ such Claim and ~~containing a reference~~ to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any employ and engage attorneys of its ~~obligations except~~ sole choice to handle and ~~solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure~~defend same, at Indemnitor’s expense. (bii) ~~If a claim~~ Indemnitee shall cooperate in all reasonable respects with Indemnitor and its attorneys in the investigation, trial, and defense of such Claim and any appeal arising from it; except that, Indemnitee may, at its own expense, participate, through its attorneys or ~~demand is made against an Indemnitee by~~ otherwise, in such investigation, trial, and defense of such Claim and any ~~Person who is not a Party to this Agreement or an Affiliate~~ appeal arising from it. No settlement of a ~~Party (~~Claim that involves a ~~“Third-Party Claim”) as to~~ remedy other than the payment of money by Indemnitor shall be entered into without the consent of Indemnitee, which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties consent shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimunreasonably withheld or delayed. (ciii) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and~~ After notice by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee Indemnitor of its election to assume full control of the defense of any such Claim, Indemnitee shall not be liable to Indemnitor for any legal expenses incurred thereafter by Indemnitor in connection with the defense of that Claim. If Indemnitor does not assume full control over the defense of a ~~Third-Party Claim~~Claim subject to such defense as provided in this Section, Indemnitor may participate in such defense, at its expense, and the Indemnitee shall have the right to ~~employ separate counsel and to participate~~ defend the Claim in ~~(but not control) the defense, compromise or settlement thereof~~such manner as it may deem appropriate, at ~~its own~~ the expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of ~~which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law~~Indemnitor. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) ~~the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect~~ For purposes of ~~such Third-Party Claim taking into account the indemnification obligations hereunder~~this paragraph (c), ~~or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee~~ ADEPTIA shall be ~~entitled~~ obligated to ~~control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel~~ cause its respective Indemnitees to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance comply with the terms of this ~~Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party~~ paragraph (~~not to be unreasonably withheld, conditioned or delayed~~c). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Software License Agreement

Procedures for Indemnification. (a) ~~An Indemnitee~~ The Indemnified Person shall promptly give written notice ~~of any matter that~~ (which such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such written notice shall state in reasonable detail the ~~amount~~ nature of ~~the Loss claimed, if known,~~ any such claim for indemnification and ~~method of computation thereof, and containing a reference to~~ the provisions of this Agreement ~~or the applicable Ancillary Agreement in respect of~~ upon which such ~~right of~~ claim for indemnification is ~~claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely~~ made) hereunder to the ~~extent~~ party required to indemnify (the "Indemnifying ~~Party shall have been materially prejudiced as a result~~ Person") after obtaining notice of ~~such failure. (b) If a~~ any claim ~~or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”)~~ as to which ~~such Indemnitee is or reasonably expects to~~ recovery may be ~~entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify~~ sought against the Indemnifying ~~Party in writing, and in reasonable detail,~~ Person because of the ~~Third-Party Claim promptly (and~~ indemnity in ~~any event within thirty (30) days) after receipt by~~ Section 9.1 or Section 9.2 hereof, and, if such ~~Indemnitee~~ indemnity shall arise from the claim of ~~written notice of~~ a third party, shall permit the ~~Third-Party Claim; provided, however, that~~ Indemnifying Person to assume the ~~failure to provide notice~~ defense of any such ~~Third-Party Claim pursuant to this sentence shall not release~~ claim and any litigation resulting from such claim. Failure by the Indemnifying ~~Party from any~~ Person to notify an Indemnified Person of its ~~obligations except and solely~~ election to ~~the extent the Indemnifying Party shall have been materially prejudiced as~~ defend any such claim or action by a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees third party within thirty (30) days ~~of the receipt of~~ after notice ~~from such Indemnitees of the Third-Party Claim (failure of~~ thereof shall have been given to the Indemnifying ~~Party to respond within such thirty (30) day period~~ Person shall be deemed ~~to be an election~~ a waiver by the Indemnifying ~~Party not~~ Person of its right to ~~assume~~ defend such claim or action. The Indemnified Person shall (unless the Indemnifying Person assumes the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not controlthereof as provided below) ~~the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with~~ keep the Indemnifying ~~Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are~~ Person reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss apprised of any ~~existing privilege with respect~~ significant developments relating to any such ~~information~~ action, lawsuit, proceeding, investigation or ~~violate any applicable Law~~other claim. (db) ~~Notwithstanding anything to the contrary in this Section 9.4~~The Indemnifying Person shall not, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such ~~Third-Party Claim~~claim or any litigation resulting therefrom, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment ~~or enter into any settlement~~ (other than a judgment of dismissal on the merits without costs) except with the written consent of the ~~Third-Party Claim without the~~ Indemnified Person (such consent (not to be unreasonably ~~withheld, conditioned~~ withheld or delayed) ). Anything in this Section 9.7 to the contrary notwithstanding, the Indemnified Person may, with counsel of its choice and at its expense, participate in the ~~Indemnitee if~~ defense of any such claim or litigation. In all cases, the ~~effect thereof is to permit any injunction~~Indemnified Person shall provide its reasonable cooperation with the Indemnifying Person in the defense of claims or litigation, ~~declaratory judgment~~including by making employees, ~~other order or other non-monetary relief to be entered~~information, ~~directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities~~ and ~~obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee~~documentation reasonably available. (gc) ~~Absent fraud~~ If the Indemnifying Person shall not assume the defense of any such claim by a third party or ~~intentional misconduct by an Indemnifying Party~~litigation resulting therefrom after receipt of notice from such Indemnified Person, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Indemnified Person may ~~have with respect to the foregoing other than under this Article IX~~ defend against ~~any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel~~ such claim or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee litigation in such ~~year~~ manner as it deems appropriate; provided that the Indemnified Person may not settle such claim or litigation without ~~causing~~ the ~~Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment~~ prior written consent of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying ~~Party shall place the Expense Amount into an escrow account~~ Person (~~the “Escrow Account”) using an escrow agent and agreement reasonably acceptable~~ such consent not to ~~the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not~~ be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, unreasonably withheld or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”delayed); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Purchase Agreement (Progress Software Corp /Ma)

Procedures for Indemnification. Other than as set forth in Section 7.13(e) and (af), if a party entitled to indemnification under this Section 9 (an “Indemnitee”) An asserts that a party obligated to indemnify it under this Section 9 (an “Indemnitor”) has become obligated to such Indemnitee pursuant to Section 9.2 or 9.3, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Indemnitor may become obligated to an Indemnitee hereunder, such Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the ~~provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Indemnitor; provided, however, that the failure of the Indemnitee to ~~provide such~~ give prompt notice to the Indemnitor shall not release the ~~Indemnifying Party from any~~ Indemnitor of its indemnification obligations hereunder, except ~~and solely~~ to the extent the ~~Indemnifying Party~~ Indemnitor shall have been materially prejudiced ~~as a result of~~ by such failure~~. (b) If a~~ . The Indemnitor agrees to defend, contest or otherwise protect the Indemnitee against any such suit, action, investigation, claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of proceeding at its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own sole cost and expense ~~and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable~~ subject to the ~~Indemnitee, if it gives written notice~~ provisions of ~~its intention to do so (including a statement that the Indemnitee is entitled to indemnification under~~ this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim)Section 9. ~~After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee~~ The Indemnitor shall have the ~~right~~ sole power to ~~employ separate counsel~~ direct and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such ~~Third-Party Claim~~suit, ~~the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession~~ action, investigation, claim or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed)proceeding. If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the The Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the ~~Expense Amount from~~ defense thereof by counsel of the ~~Escrow Account pursuant~~ Indemnitee’s choice. The Indemnitee shall make available all information and assistance that the Indemnitor may reasonably request and shall fully cooperate with the Indemnitor in such defense, including with respect to indemnification with respect to Taxes, providing powers of attorney authorizing Leucadia or its designee to control and take action in connection with any such Taxes. In the event of a ~~loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ failure of the Indemnitee to provide cooperation as required under this Section 9.4, the Indemnitor’s obligation to indemnify the Indemnitee shall be reduced to the ~~Indemnitee that~~ extent of the Losses with respect to which the Indemnitor’s ability to defend against the action, investigation, claim or proceeding underlying such indemnification obligation has been prejudiced by such failure. The Indemnitor shall not compromise or settle any such suit, action, investigation, claim or proceeding unless (ix) ~~requires~~ such compromise or settlement is on exclusively monetary terms and shall be paid entirely by the ~~Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal~~ Indemnitor (subject to the ~~Expense Amount (an “Indemnity Loan”),~~ provisions of Section 9.2(b)(i) and (ii) ~~provides for~~ and 9.3(b)(i) and (Aii), which shall be controlling) ~~a commercially reasonable interest rate~~ and ~~commercially reasonable covenants, taking into account the credit standing and profile of~~ the Indemnitee receives an unconditional release in such compromise or ~~any guarantor of~~ settlement or (y) the ~~Indemnitee, including~~ Indemnitee shall have consented in writing to the ~~Protected REIT, at the time~~ terms of such ~~loan~~compromise or settlement, which consent shall not unreasonably withheld; provided, however, that if the Indemnitee fails to consent thereto, the Indemnitor’s liability with respect to such matter shall not exceed the proposed settlement amount. If the Indemnitor fails timely to defend, contest or otherwise protect against such suit, action, investigation, claim or proceeding, the Indemnitee shall have the right to do so, including, without limitation, the right to make any compromise or settlement thereof, and ~~(B) a 15 year maturity with no periodic amortization~~the Indemnitee shall be entitled to recover the entire cost thereof from the Indemnitor subject to the provisions of this Section 9, including, without limitation, reasonable attorneys’ fees, disbursements and amounts paid as the result of such suit, action, investigation, claim or proceeding.

Appears in 1 contract

Sources: Purchase Agreement (Level 3 Communications Inc)

Procedures for Indemnification. 15.6.1. If Southern States Indemnified Persons seek indemnification from Gold ▇▇▇▇ for indemnifiable losses, Southern States Indemnified Persons shall give notice to Gold ▇▇▇▇ of such loss, specifying in reasonable detail the nature and basis for the claim and the amount thereof (the "Notice of Loss"). If, within sixty days after the date on which Gold ▇▇▇▇ receives the Notice of Loss, Gold ▇▇▇▇ has not delivered to Southern States a notice objecting to all or any portion of the claimed loss and setting forth the amount of such claimed loss objected to and the reasons for such objection, Southern States Indemnified Persons shall be entitled to indemnification for such loss unless Gold ▇▇▇▇'▇ failure to object was inadvertent, and Gold ▇▇▇▇ shall promptly pay such loss. If the failure of Gold ▇▇▇▇ was inadvertent, the process should be begun again but the Survival Period with respect to the Claim shall be extended if the First Notice of Loss was within the Survival Period. If, within sixty days after the date on which Gold ▇▇▇▇ receives a Notice of Loss, Gold ▇▇▇▇ delivers to Southern States an objection to all or any portion of the claimed loss, setting forth the amount of such loss objected to and the reasons for such objection, Southern States Indemnified Persons shall be entitled to reimbursement for the portion of such loss not objected to by Gold ▇▇▇▇ and Gold ▇▇▇▇ shall promptly pay such amount. Southern States Indemnified Persons shall be entitled to indemnification for the portion of such claimed loss to which Gold ▇▇▇▇ objected to upon the earlier of: (a) ~~An Indemnitee~~ the Gold ▇▇▇▇'▇ and Southern States' written agreement with respect to the indemnification of such loss or (b) a final judgment or award of an arbitrator as provided in Section 18.12. 15.6.2. If Gold ▇▇▇▇ Indemnified Persons seek indemnification from Southern States for indemnifiable losses, Gold ▇▇▇▇ Indemnified Persons shall give a Notice of Loss to Southern States, specifying in reasonable detail the nature and basis for the claim and the amount thereof. If, within sixty days after the date on which Southern States receives the Notice of Loss, Southern States has not delivered to Gold ▇▇▇▇ a notice objecting to all or any portion of the claimed loss and setting forth the amount of such claimed loss objected to and the reasons for such objection, Gold ▇▇▇▇ Indemnified Persons shall be entitled to indemnification for such loss unless Southern States' failure to object was inadvertent, and Southern States shall promptly pay such loss. If the failure of Southern States was inadvertent, the process should be begun again but the Survival Period with respect to the Claim shall be extended if the first Notice of Loss was within the Survival Period. If, within sixty days after the date on which Southern States receives a Notice of Loss, Southern States delivers to Gold ▇▇▇▇ an objection to all or any portion of the claimed loss, setting forth the amount of such loss objected to and the reasons for such objection, Gold ▇▇▇▇ Indemnified Persons shall be entitled to reimbursement for the portion of such loss not objected to by Southern States and Southern States shall promptly pay such amount. Gold ▇▇▇▇ Indemnified Persons shall be entitled to indemnification for the portion of such claimed loss to which Southern States objected to upon the earlier of: (a) the Gold ▇▇▇▇'▇ and Southern States' written agreement with respect to the indemnification of such loss or (b) a final judgment or award of an arbitrator pursuant to Section 18.12. 15.6.3. The obligations and liabilities of an Indemnifying Person with respect to losses resulting from the assertion of liability by third parties (each, a "Third Party Claim") shall be subject to the following terms and conditions: (a) The Indemnified Persons shall promptly give written notice to the Indemnifying Persons of any ~~matter that such Indemnitee has determined has given or would reasonably be expected to~~ Third Party Claim which might give rise to ~~a right~~ any loss by the Indemnified Persons, stating the nature and basis of ~~indemnification under this Agreement or any Ancillary Agreement (other than a Third-~~such Third Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (Claim, and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount ~~of the Loss claimed, if known, and method of computation thereof, and containing a reference~~ thereof to the ~~provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~extent known; provided, however, that no delay on the ~~failure to provide such notice~~ part of the Indemnified Persons in notifying any Indemnifying Persons shall ~~not release~~ relieve the Indemnifying ~~Party~~ Persons from any ~~of its obligations except~~ liability or obligation hereunder unless (and then solely to the ~~extent~~ extent) the Indemnifying Person thereby is prejudiced by the delay. Such notice shall be accompanied by copies of all relevant documentation with respect to such Third Party ~~shall~~ Claim, including, without limitation, any summons, complaint or other pleading which may have been ~~materially prejudiced as a result of such failure~~served, any written demand or any other document or instrument. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying ~~Party~~ Persons shall acknowledge in ~~writing, and in reasonable detail, of~~ a writing delivered to the ~~Third-~~Indemnified Persons that such Third Party Claim ~~promptly (~~is properly subject to their indemnification obligations hereunder, then the Indemnifying Persons shall have the right to assume the defense of any Third Party Claim at their own expense and ~~in any event within thirty (30) days) after receipt~~ by ~~such Indemnitee of written notice of~~ their own counsel, which counsel shall be reasonably satisfactory to the ~~Third-Party Claim~~Indemnified Persons; provided, however, that -------- ------- the ~~failure~~ Indemnifying Persons shall not have the right to ~~provide notice~~ assume the defense of any Third Party Claim, notwithstanding the giving of such ~~Third-Party Claim pursuant to this sentence shall not release~~ written acknowledgment, if (i) the ~~Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnified Persons shall have been ~~materially prejudiced as a result of such failure (except~~ advised by counsel that ~~the Indemnifying Party~~ there are one or ~~Parties shall not be liable for any expenses incurred by the Indemnitee~~ more legal or equitable defenses available to them which are different from or in ~~defending such Third-Party Claim during the period in which the Indemnitee failed~~ addition to ~~give such notice). Thereafter, the Indemnitee shall deliver~~ those available to the Indemnifying ~~Party~~Persons, ~~promptly~~ and, in the reasonable opinion of the Indemnified Persons, counsel for the Indemnifying Persons could not adequately represent the interests of the Indemnified Persons because such interests could be in conflict with those of the Indemnifying Persons, (~~and~~ ii) such action or proceeding involves, or could have a material effect on, any material matter beyond the scope of the indemnification obligation of the Indemnifying Persons or (iii) the Indemnifying Persons shall not have assumed the defense of the Third Party Claim in ~~any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim~~a timely fashion. (c) An If the Indemnifying Persons shall assume the defense of a Third Party ~~shall be entitled~~ Claim (~~but~~ under circumstances in which the proviso to Section 15.6.3(b) is not applicable), the Indemnifying Persons shall not be ~~required) to assume, control~~ responsible for any legal or other defense costs subsequently incurred by the Indemnified Persons in connection with the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of thereof. If the Indemnifying ~~Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party~~ Persons do not ~~to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election~~ exercise their right to assume the defense of a ~~Third-~~Third Party ~~Claim~~Claim by giving the written acknowledgment referred to in Section 15.6.3(b), ~~such Indemnitee~~ or are otherwise restricted from so assuming by the proviso to Section 15.6.3(b), the Indemnifying Persons shall ~~have the right to employ separate counsel and~~ nevertheless be entitled to participate in such defense with their own counsel and at their own expense. If the defense of a Third Party Claim is assumed by the Indemnified Persons pursuant to clause (~~but~~ i) or (ii) of the proviso of Section 15.6.3(b), the Indemnified Persons shall not ~~control)~~ be entitled to settle such Third Party Claim without the ~~defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with~~ prior written consent of the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; providedPersons, ~~however, that such access~~ which consent shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information be unreasonably withheld or ~~violate any applicable Law~~delayed. (d) ~~Notwithstanding anything to~~ If the ~~contrary in this Section 9.4, in the event that (i) an~~ Indemnifying ~~Party elects not~~ Persons exercise their right to assume the defense of a ~~Third-~~Third Party ~~Claim,~~ Claim pursuant to clauses (i) or (ii) ~~there exists a conflict~~ of ~~interest or potential conflict of interest between the Indemnifying Party and the Indemnitee~~Section 15.6.3(b), (~~iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv~~i) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee Indemnified Persons shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee participate in such defense with their own counsel at their own expense and (ii) the Indemnifying Persons shall not make ~~available~~ any settlement of any claims without the written consent of the Indemnified Persons, which consent shall not be unreasonably withheld or delayed. 15.6.4. Notwithstanding any other provisions of this Agreement, neither Gold ▇▇▇▇ nor Southern States shall have any claim for indemnification hereunder unless such claim is asserted, as provided herein, against the other within the Survival Period (in which event the party's right to indemnification for such matters shall continue until liability is finally determined), it being acknowledged that the ~~Indemnitee all witnesses~~ Survival Period of certain indemnities is without limitation as to time as provided in Sections 15.1, 15.2 and ~~information~~ 15.4. 15.6.5. Notwithstanding any other provision in ~~such Indemnifying Party’s possession~~ this Article XV, the following procedures shall apply to any claim arising under clause (iv) of Section 15.2. above or ~~under such Indemnifying Party’s control relating thereto as are reasonably required~~ with respect to a breach of the representations and warranties set forth in Section 6.16. (collectively "Environmental Claims"). (a) Any Environmental Claim that is of the nature of a third party claim shall also be governed by the ~~Indemnitee;~~ notification procedures set forth in Section 15.6.1., provided, however, that Southern States shall be deemed to have provided notice to Gold ▇▇▇▇ of the matters identified in Schedule 14.12. as of the Closing Date. In the event of any inconsistency between the Section 15.6.1. procedures and the procedures set forth in this Section 15.6.5., the procedures set forth in this Section 15.6.5. shall govern. (b) Gold ▇▇▇▇ shall assume Principal Management for the matters identified in Schedule 14.12. (c) Upon assertion of any Environmental Claim other than claims arising from the matters identified in Schedule 14.12., Gold ▇▇▇▇ shall be entitled to assume Principal Management. To assume Principal Management, Gold ▇▇▇▇ must notify Southern States within thirty days of notice to Gold ▇▇▇▇ of the Environmental Claim, or such ~~access~~ other period as the parties may agree to in writing, that it intends to assume Principal Management. In the event Gold ▇▇▇▇ does not undertake Principal Management, Southern States may assume Principal Management of the subject matter of the Environmental Claim. (d) The party that does not have Principal Management for an Environmental Claim shall be entitled, at its sole cost and expense, to reasonably participate in the management of such Environmental Claim. Such participation shall include: (i) receiving copies of all reports, work plans and analytical data submitted to governmental agencies, all notices or other letters or documents received from governmental agencies, any other non-privileged documents and correspondence materially bearing on the Environmental Claim, and notices of material meetings; (ii) the opportunity to attend and participate in such material meetings; (iii) the right of reasonable consultation with the party exercising Principal Management; and (iv) the right to approve in writing in advance all budgets for the Environmental Claim, all material contracts related thereto, the submission of any cleanup plan or any similar material action relating to the Environmental Claim and any amendment or modification thereof, and the acceptance of any consensual governmental orders or requirements (which approval shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information be unreasonably withheld or ~~violate any applicable Law~~delayed). (e) ~~Unless~~ The party undertaking Principal Management hereunder for any matter shall manage the ~~Indemnifying Party has failed to assume the defense of the Third-Party Claim~~ matter in ~~accordance with the terms of this Agreement~~good faith and in a responsible manner, ~~no Indemnitee may settle or compromise~~ and any ~~Third-Party Claim without the consent of the Indemnifying Party (not to~~ activities conducted in connection therewith shall be ~~unreasonably withheld~~undertaken promptly and concluded as expeditiously and as economically as practicable using commercially reasonable efforts, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as subject to the ~~conduct of~~ schedules and approvals required by the applicable governmental authorities. The parties agree to reasonably cooperate with one another in connection with addressing any Environmental Claim. Either party may take such ~~defense were not accepted~~ action as is reasonable under the circumstances to respond to an actual or ~~adopted, that such Indemnifying Party does not approve of the quality~~ threatened emergency or ~~manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability~~imminent endangerment situation arising from an Environmental Claim. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations Any action with respect to an Environmental Claim shall be deemed adequate for purposes of satisfying the obligations of this Section 15.6.5. to the extent such ~~Third-Party Claim~~ action: (i) attains compliance with any lawful government order or ~~includes an admission of guilt~~ directive and with applicable Environmental Laws, including any action levels or ~~liability on behalf of the Indemnitee~~cleanup standards enforced thereunder; (ii) mitigates any significant risk to human health and (iii) achieves such actions as economically as practicable. (g) ~~Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for~~ The parties agree to negotiate in good faith regarding any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than dispute arising under this ~~Article IX against any Indemnifying Party~~section 15.6. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Southern States Cooperative Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of~~ If any ~~matter that such Indemnitee has determined has given or would reasonably be expected~~ ------------------------------ Buyer Indemnified Person who is entitled to ~~give rise to~~ assert a ~~right of~~ claim for indemnification under this Agreement shall receive notice of the assertion by any person or entity of any ~~Ancillary Agreement~~ claim or of the commencement by any such person or entity of any action or proceeding (~~other than~~ a ~~Third-Party Claim~~ "THIRD PARTY CLAIM") with respect to which JWGFC is obligated to provide indemnification to the Buyer Indemnified Person, the said Buyer Indemnified Person shall ~~be governed by Section 9.4(b))~~ give prompt notice thereof to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determinationJWGFC. Such notice shall ~~state~~ describe the ~~amount of the Loss claimed~~Third Party Claim in reasonable detail. (b) JWGFC may elect to compromise or defend, ~~if known~~at JWGFC's own expense and effort, and ~~method of computation thereof~~by JWGFC's own counsel, ~~and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee;~~ any Third Party Claims provided, however, that ~~the failure to provide such notice~~ JWGFC shall not ~~release~~ settle or compromise, or enter into a commitment with respect to settlement or compromise of, such Third Party Claim without the ~~Indemnifying~~ prior written consent of Buyer. If JWGFC elects to defend a Third Party ~~from any~~ Claim it shall, within 30 days of receipt of the notice referred to in Section 3.02(a) above (or sooner, if the nature of such Third Party Claim so requires), notify the Buyer Indemnified Person of its ~~obligations except~~ intent to do so, and ~~solely to~~ the ~~extent~~ Buyer Indemnified Person shall reasonably cooperate in the ~~Indemnifying Party shall have been materially prejudiced as a result of~~ compromise of, or defense against, such ~~failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim~~”) as to which~~ . JWGFC shall pay such ~~Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing,~~ Buyer Indemnified Person all actual and in reasonable ~~detail, of the Third~~out-~~Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third~~of-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any pocket expenses incurred ~~by the Indemnitee~~ in ~~defending~~ connection with such ~~Third-Party Claim during the period in which the Indemnitee failed to give such notice)~~cooperation. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of After notice from JWGFC to such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee Buyer Indemnified Person of its election to assume the defense of a ~~Third-~~Third Party Claim, JWGFC shall not be liable to such ~~Indemnitee~~ Buyer Indemnified Person for any legal expenses subsequently incurred by such Buyer Indemnified in connection with the defense thereof provided, that such Buyer Indemnified Person shall have the right to employ ~~separate~~ one counsel ~~and~~ for each Third Party Claim to ~~participate in (but not control) the defense, compromise or settlement thereof, at its own expense and~~represent such Buyer Indemnified Person if, in ~~any event, shall reasonably cooperate with the Indemnifying Party in~~ such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the Buyer Indemnified Person's good faith ~~judgment of the Indemnitee~~judgment, ~~result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that~~ (i) ~~an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists~~ a conflict of interest ~~or potential conflict of interest~~ between ~~the Indemnifying Party~~ such Buyer Indemnified Person and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure JWGFC exists in respect of such ~~Third-~~Third Party Claim ~~taking into account the indemnification obligations hereunder,~~ or (vii) ~~the Person making~~ where JWGFC is also a party to such ~~Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-~~Third Party Claim, ~~at the Indemnifying Party’s expense, with counsel~~ different or conflicting expenses of such ~~Indemnitee’s choosing (such~~ separate counsel to shall be ~~reasonably acceptable to the Indemnifying Party)~~paid by JWGFC. If ~~the Indemnitee is conducting the defense~~ JWGFC elects not to defend against ~~any such Third-~~a Third Party Claim, or fails to notify a Buyer Indemnified Person of its election not to defend, such Buyer Indemnified Person may, without advance notice to JWGFC, pay, compromise or defend such Third Party Claim reasonably and in good faith on behalf of and for the ~~Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense~~ account and ~~make available~~ risk of JWGFC to the ~~Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by~~ extent that the ~~Indemnitee; provided, however, that such access~~ Buyer Indemnified Person is entitled to receive indemnification from JWGFC hereunder. JWGFC shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or ~~enter~~ entry into any settlement ~~of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned~~ against or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to ~~such Third-Party Claim or includes an admission of guilt or liability on behalf of~~ any Buyer Indemnified Person without the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment written consent of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amountBuyer Indemnified Person, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, judgment or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for settlement (A) ~~a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee~~ provides solely for money damages or ~~any guarantor of the Indemnitee, including the Protected REIT, at the time of~~ other payments for which such ~~loan,~~ Buyer Indemnified Person is entitled to indemnification hereunder and (B) includes as an unconditional term thereof the giving by the claimant or plaintiff to such Buyer Indemnified Person of a ~~15 year maturity with no periodic amortization~~full and unconditional release for all liability in respect of such Third Party Claim.

Appears in 1 contract

Sources: Transition Services Agreement (Jwgenesis Financial Corp /)

Procedures for Indemnification. (a) An Indemnification Claim (including as a result of a Third Party Claim) shall be made by the Indemnitee by delivery of a written notice to the Indemnitor, prior to the expiration of the applicable Survival Period, requesting indemnification and specifying the general basis on which indemnification is sought and the amount of asserted Losses (if known or reasonably estimable) and containing (by attachment or otherwise) such other material information as the Indemnitee shall have concerning such Indemnification Claim. An Indemnitee seeking indemnification pursuant to this Article 10 shall give notice as promptly as is reasonably practicable to the Indemnitor of the assertion of any ~~matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right~~ claim, the incurrence of ~~indemnification under this Agreement or~~ any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimedLoss, ~~if known, and method of computation thereof, and containing a reference to the provisions of this Agreement~~ or the ~~applicable Ancillary Agreement~~ commencement of any action, suit or proceeding, of which it has knowledge and in respect of which indemnity may be sought, and shall promptly give the Indemnitor such ~~right~~ additional information with respect thereto as the Indemnitor may reasonably request. The rights of ~~indemnification is claimed~~ the Indemnitee to be indemnified hereunder shall not be adversely affected by ~~such Indemnitee; provided, however, that the~~ its failure to ~~provide~~ give, or its failure to timely give, such notice ~~shall not release the Indemnifying Party from any of its obligations except~~ with respect thereto unless, and ~~solely~~ if so, only to the extent that, the ~~Indemnifying Party~~ delay results in the forfeiture by the Indemnitor of material rights and defenses otherwise available to the Indemnitor with respect to such Indemnification Claim. Notwithstanding the foregoing, the time limitations on the Indemnitee’s right to bring an Indemnification Claim set forth above shall ~~have been materially prejudiced as a~~ not apply to Indemnification Claims relating to Losses that result from or arise out of ~~such failure~~intentional misrepresentation or fraud. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim~~”) as to which such Indemnitee is or reasonably expects to~~ , the procedures set forth in Section 10.5 hereof shall be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party ClaimIndemnitor. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, ~~at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to~~ the ~~Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within~~ Indemnitor shall have thirty (30) days to object to such Indemnification Claim by delivery of a written notice of such objection to the Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the ~~receipt~~ Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid in accordance with Section 10.4(d) hereof. If Indemnitor disputes its liability with respect to such Indemnification Claim, as provided above, then the Indemnitee and the Indemnitor shall attempt to resolve such dispute in good faith for a period of ~~notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such~~ thirty (30) ~~day~~ days from the date Indemnitee received notice of Indemnitor’s dispute of the Indemnification claim (such period ~~shall be deemed~~ is hereinafter referred to ~~be an election by~~ as the ~~Indemnifying Party not to assume the defense for such Third-Party Claim~~“Negotiation Period”). ~~After~~ Upon the expiration of the Negotiation Period, if the Indemnitor and the Indemnitee have not agreed upon a ~~notice from an Indemnifying Party to an Indemnitee~~ resolution of ~~its election to assume~~ the ~~defense of a Third-Party~~ Indemnification Claim, the parties may take such ~~Indemnitee shall have the right~~ legal action to ~~employ separate counsel~~ which they may be entitled under this Agreement and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) ~~Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of~~ Upon a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment final determination of the ~~Indemnifying Party, result in the loss~~ amount of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an ~~Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party~~ Indemnification Claim that is binding on both the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, Indemnitor and the Indemnitee (either by mutual agreement or order of court of competent jurisdiction), the Indemnitor shall ~~not be entitled to any~~ pay the amount of such ~~amount~~Indemnification Claim by wire transfer of immediately available funds, ~~unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option~~ within ten (10) days of the ~~relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that~~ date such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationis finally determined.

Appears in 1 contract

Sources: Asset Purchase Agreement (Telkonet Inc)

Procedures for Indemnification. (ai) ~~An Indemnitee shall give notice of~~ If any ~~matter that such Indemnitee has determined has given~~ suit, action, proceeding, investigation, claim or ~~would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ demand shall be ~~governed~~ brought or asserted by ~~Section 9.4(b)~~any third person (including, without limitation, any Governmental Body) to (a “Third Party Claim”) against any ~~Party that is or~~ Person in respect of which indemnity may be ~~required~~ sought pursuant to ~~this Agreement~~ Section 8(a) or ~~any Ancillary Agreement to make~~ Section 8(b), such ~~indemnification~~ person (the “Indemnified Person”) shall notify the Person against whom such indemnity may be sought (the “Indemnifying ~~Party~~Person”) ~~promptly (and~~ in ~~any event within fifteen (15) days) after making such a determination. Such notice shall state the amount~~ writing in reasonable detail of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and in any event~~ within ~~thirty (30) days)~~ 30 days after receipt by such ~~Indemnitee~~ Indemnified Person of ~~written~~ formal notice of ~~the Third-~~such Third Party Claim~~; provided~~, ~~however~~and, ~~that the failure to provide notice of any~~ thereafter, such ~~Third-Party Claim pursuant to this sentence~~ Indemnified Person shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver promptly forward to the Indemnifying ~~Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies~~ Person a copy of all notices and documents (including court papers) received by the ~~Indemnitee relating~~ Indemnified Person pursuant to the ~~Third-~~Third Party Claim~~. (c) An Indemnifying Party shall be entitled (but~~ ; provided, however, that the failure to give such notification within 30 days after such receipt of formal notice and the failure to forward a copy of such notices and documents shall not ~~be required)~~ affect the obligations of the Indemnifying Person or the rights of the Indemnified Person except to ~~assume, control~~ the ~~defense of, and settle any Third-~~extent the Indemnifying Person has actually been prejudiced in a material way as a result of such failure. Upon the receipt by the Indemnifying Person of notice of a Third Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying ~~Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not~~ Person may elect to assume the defense ~~for~~ of such ~~Third-~~Third Party ~~Claim). After~~ Claim by promptly delivering a notice ~~from~~ to the Indemnified Person of the assumption of such defense and to retain defense counsel to represent the Indemnified Person. Any election made by an Indemnifying ~~Party to an Indemnitee of its election~~ Person to assume the defense of a ~~Third-~~Third Party ~~Claim,~~ Claim shall not be deemed an acknowledgement that such ~~Indemnitee shall have the right~~ Third Party Claim is subject to ~~employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with~~ indemnification under this Section 8. If the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party Person so elects ~~not~~ to assume the defense of a ~~Third-~~Third Party Claim, then (i) the Indemnified Person may participate in such defense and employ counsel, at such Indemnified Person’s expense, separate from the reasonably acceptable counsel employed by the Indemnifying Person, but the Indemnifying Person shall control such defense and shall not be liable to such Indemnified Person for the fees and expenses of the separate counsel retained by such Indemnified Person, and (ii) ~~there exists a conflict of interest or potential conflict of interest between~~ the Indemnified Person and any other Indemnified Persons will cooperate with the Indemnifying ~~Party~~ Person in such defense, including by providing, upon the reasonable request of the Indemnifying Person, books, records, contractual agreements, maintenance histories and all other reasonably necessary items (including the ~~Indemnitee, (iii~~computer systems housing such information) and by making available employees on a mutually convenient basis. The Indemnifying Person shall not be liable for any ~~Third-~~settlement of any Third Party Claim ~~seeks an order~~effected without its prior written consent. No Indemnifying Person shall, ~~injunction~~ without the prior written consent of the Indemnified Person, effect any settlement of any pending or ~~other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-~~threatened Third Party Claim ~~is reasonably expected to exceed the Indemnifying Party’s exposure~~ in respect of which such ~~Third-Party Claim taking into account the indemnification obligations hereunder~~Indemnified Person is or could have been a party, or ~~(v)~~ is or could have been subject, and in respect of which indemnity is or could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all Losses related to the ~~Person making~~ subject matter of such ~~Third-~~pending or threatened Third Party ~~Claim is a Governmental Authority with regulatory authority over the Indemnitee or~~ Claim. The Indemnifying Party shall, at any ~~of its material Assets~~time, ~~such Indemnitee shall~~ be entitled to ~~control~~ elect to no longer defend a Third Party Claim; provided, that the Indemnifying Person shall reasonably assist in transitioning the defense of such ~~Third-~~Third Party ~~Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable~~ Claim back to the ~~Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense~~ Indemnified Person and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to make a claim for reimbursement of expenses incurred in connection with its assumption of the defense of such Third Party Claim. (ii) In the event any Indemnified Person should have a claim against the Indemnifying Person under this Section 8 that does not involve a Third Party Claim being asserted against such ~~amount~~Indemnified Person, ~~unless~~ the Indemnified Person shall deliver written notice of such claim, specifying with particularity and ~~until~~ detail the ~~Indemnitee delivers~~ nature of such claim, with reasonable promptness to the Indemnifying Party. The failure by the Indemnified Person to deliver such notification shall not relieve the Indemnifying Person from any liability which it may have to such Indemnified Person under this Section 8, ~~at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and~~ except to the extent ~~paid~~the Indemnifying Person has actually been prejudiced in a material way by such failure. If the Indemnifying Person objects to such claim in a timely manner, ~~would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from~~ the ~~Protected REIT’s independent accountants indicating~~ Indemnified Person and the ~~maximum amount that can be paid at that time~~ Indemnifying Person shall proceed in good faith to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” resolve such dispute and, ~~collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending~~ upon the ~~delivery of a Release Document by the Indemnitee~~ failure to ~~the Indemnifying Party~~resolve such dispute, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds parties may pursue remedies in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity accordance with ~~no periodic amortization~~Section 11.

Appears in 1 contract

Sources: Environmental Liabilities Agreement (3055854 Nova Scotia Co)

Procedures for Indemnification. (a) An If a party entitled to indemnification under this Article 10 (an “Indemnitee”) asserts that a party obligated to indemnify it under this Article 10 (an “Indemnitor”) has become obligated to such Indemnitee pursuant to Section 10.2 or 10.3, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Indemnitor may become obligated to an Indemnitee under Section 10.2 or 10.3, such Indemnitee shall give prompt written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference thereof to the ~~provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Indemnitor; provided, however, that the failure of the Indemnitee to ~~provide such~~ give notice to the Indemnitor shall not release the ~~Indemnifying Party from any~~ Indemnitor of its indemnification obligations hereunder, except ~~and solely~~ to the extent the ~~Indemnifying Party~~ Indemnitor shall have been ~~materially~~ prejudiced ~~as a result of~~ by such failure~~. (b) If a~~ . The Indemnitor shall have the right, but not the obligation, to defend, contest or otherwise protect the Indemnitee against any such suit, action, investigation, claim or ~~demand is made against an Indemnitee by any Person who is not a Party~~ proceeding at its sole cost and expense. If the Indemnitor so elects to ~~this Agreement~~ defend, contest or ~~an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify~~ otherwise protect the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). ThereafterIndemnitee, the Indemnitee shall ~~deliver to the Indemnifying Party, promptly~~ (~~and in any event within ten (10~~i) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the ~~Indemnifying Party~~ Indemnitor all ~~witnesses~~ relevant books and ~~information~~ records in ~~such Indemnitee’s~~ its possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, and (ii) ~~there exists a conflict of interest or potential conflict of interest between~~ cooperate and assist the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and Indemnitor to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the reasonably possible. The Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor defense thereof by counsel of the Indemnitee’s choice. If the Indemnitor fails to defend, ~~including~~ contest or otherwise protect against such suit, action, investigation, claim or proceeding, the ~~Protected REIT~~Indemnitee shall have the right to do so, at including, without limitation, the ~~time~~ right to make any compromise or settlement thereof, and the Indemnitee shall be entitled to recover the entire cost thereof from the Indemnitor, including, without limitation, reasonable attorneys’ fees, disbursements and amounts paid as the result of such ~~loan~~suit, ~~and (B) a 15 year maturity with no periodic amortization~~action, investigation, claim or proceeding.

Appears in 1 contract

Sources: Stock Purchase Agreement (Scientific Games Corp)

Procedures for Indemnification. 15.6.1. If Southern States Indemnified Persons seek indemnification from Gold ▇▇▇▇ for indemnifiable losses, Southern States Indemnified Persons shall give notice to Gold ▇▇▇▇ of such loss, specifying in reasonable detail the nature and basis for the claim and the amount thereof (the "Notice of Loss"). If, within sixty days after the date on which Gold ▇▇▇▇ receives the Notice of Loss, Gold ▇▇▇▇ has not delivered to Southern States a notice objecting to all or any portion of the claimed loss and setting forth the amount of such claimed loss objected to and the reasons for such objection, Southern States Indemnified Persons shall be entitled to indemnification for such loss unless Gold ▇▇▇▇'▇ failure to object was inadvertent, and Gold ▇▇▇▇ shall promptly pay such loss. If the failure of Gold ▇▇▇▇ was inadvertent, the process should be begun again but the Survival Period with respect to the Claim shall be extended if the First Notice of Loss was within the Survival Period. If, within sixty days after the date on which Gold ▇▇▇▇ receives a Notice of Loss, Gold ▇▇▇▇ delivers to Southern States an objection to all or any portion of the claimed loss, setting forth the amount of such loss objected to and the reasons for such objection, Southern States Indemnified Persons shall be entitled to reimbursement for the portion of such loss not objected to by Gold ▇▇▇▇ and Gold ▇▇▇▇ shall promptly pay such amount. Southern States Indemnified Persons shall be entitled to indemnification for the portion of such claimed loss to which Gold ▇▇▇▇ objected to upon the earlier of: (a) ~~An Indemnitee~~ the Gold ▇▇▇▇'▇ and Southern States' written agreement with respect to the indemnification of such loss or (b) a final judgment or award of an arbitrator as provided in Section 18.12. 15.6.2. If Gold ▇▇▇▇ Indemnified Persons seek indemnification from Southern States for indemnifiable losses, Gold ▇▇▇▇ Indemnified Persons shall give a Notice of Loss to Southern States, specifying in reasonable detail the nature and basis for the claim and the amount thereof. If, within sixty days after the date on which Southern States receives the Notice of Loss, Southern States has not delivered to Gold ▇▇▇▇ a notice objecting to all or any portion of the claimed loss and setting forth the amount of such claimed loss objected to and the reasons for such objection, Gold ▇▇▇▇ Indemnified Persons shall be entitled to indemnification for such loss unless Southern States' failure to object was inadvertent, and Southern States shall promptly pay such loss. If the failure of Southern States was inadvertent, the process should be begun again but the Survival Period with respect to the Claim shall be extended if the first Notice of Loss was within the Survival Period. If, within sixty days after the date on which Southern States receives a Notice of Loss, Southern States delivers to Gold ▇▇▇▇ an objection to all or any portion of the claimed loss, setting forth the amount of such loss objected to and the reasons for such objection, Gold ▇▇▇▇ Indemnified Persons shall be entitled to reimbursement for the portion of such loss not objected to by Southern States and Southern States shall promptly pay such amount. Gold ▇▇▇▇ Indemnified Persons shall be entitled to indemnification for the portion of such claimed loss to which Southern States objected to upon the earlier of: (a) the Gold ▇▇▇▇'▇ and Southern States' written agreement with respect to the indemnification of such loss or (b) a final judgment or award of an arbitrator pursuant to Section 18.12. 15.6.3. The obligations and liabilities of an Indemnifying Person with respect to losses resulting from the assertion of liability by third parties (each, a "Third Party Claim") shall be subject to the following terms and conditions: (a) The Indemnified Persons shall promptly give written notice to the Indemnifying Persons of any ~~matter that such Indemnitee has determined has given or would reasonably be expected to~~ Third Party Claim which might give rise to ~~a right~~ any loss by the Indemnified Persons, stating the nature and basis of ~~indemnification under this Agreement~~ such Third Party Claim, and the amount thereof to the extent known; provided, however, that no delay on the part of the Indemnified Persons in notifying any Indemnifying Persons shall relieve the Indemnifying Persons from any liability or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly obligation hereunder unless (and ~~in any event within fifteen (15~~then solely to the extent) ~~days) after making such a determination~~the Indemnifying Person thereby is prejudiced by the delay. Such notice shall ~~state~~ be accompanied by copies of all relevant documentation with respect to such Third Party Claim, including, without limitation, any summons, complaint or other pleading which may have been served, any written demand or any other document or instrument. (b) If the ~~amount of the Loss claimed, if known, and method of computation thereof, and containing~~ Indemnifying Persons shall acknowledge in a ~~reference~~ writing delivered to the ~~provisions~~ Indemnified Persons that such Third Party Claim is properly subject to their indemnification obligations hereunder, then the Indemnifying Persons shall have the right to assume the defense of ~~this Agreement or~~ any Third Party Claim at their own expense and by their own counsel, which counsel shall be reasonably satisfactory to the ~~applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee~~Indemnified Persons; provided, however, that the ~~failure to provide such notice~~ Indemnifying Persons shall not ~~release~~ have the ~~Indemnifying~~ right to assume the defense of any Third Party ~~from any~~ Claim, notwithstanding the giving of ~~its obligations except and solely to~~ such written acknowledgment, if (i) the ~~extent the Indemnifying Party~~ Indemnified Persons shall have been ~~materially prejudiced as a result of such failure. (b) If a claim~~ advised by counsel that there are one or ~~demand is made against an Indemnitee by any Person who is not a Party~~ more legal or equitable defenses available to ~~this Agreement~~ them which are different from or ~~an Affiliate of a Party (a “Third-Party Claim”) as~~ in addition to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver those available to the Indemnifying ~~Party~~Persons, ~~promptly~~ and, in the reasonable opinion of the Indemnified Persons, counsel for the Indemnifying Persons could not adequately represent the interests of the Indemnified Persons because such interests could be in conflict with those of the Indemnifying Persons, (~~and~~ ii) such action or proceeding involves, or could have a material effect on, any material matter beyond the scope of the indemnification obligation of the Indemnifying Persons or (iii) the Indemnifying Persons shall not have assumed the defense of the Third Party Claim in ~~any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim~~a timely fashion. (c) An If the Indemnifying Persons shall assume the defense of a Third Party ~~shall be entitled~~ Claim (~~but~~ under circumstances in which the proviso to Section 15.6.3(b) is not applicable), the Indemnifying Persons shall not be ~~required) to assume, control~~ responsible for any legal or other defense costs subsequently incurred by the Indemnified Persons in connection with the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of thereof. If the Indemnifying ~~Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party~~ Persons do not ~~to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election~~ exercise their right to assume the defense of a ~~Third-~~Third Party ~~Claim~~Claim by giving the written acknowledgment referred to in Section 15.6.3(b), ~~such Indemnitee~~ or are otherwise restricted from so assuming by the proviso to Section 15.6.3(b), the Indemnifying Persons shall ~~have the right to employ separate counsel and~~ nevertheless be entitled to participate in such defense with their own counsel and at their own expense. If the defense of a Third Party Claim is assumed by the Indemnified Persons pursuant to clause (~~but~~ i) or (ii) of the proviso of Section 15.6.3(b), the Indemnified Persons shall not ~~control)~~ be entitled to settle such Third Party Claim without the ~~defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with~~ prior written consent of the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; providedPersons, ~~however, that such access~~ which consent shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information be unreasonably withheld or ~~violate any applicable Law~~delayed. (d) ~~Notwithstanding anything to~~ If the ~~contrary in this Section 9.4, in the event that (i) an~~ Indemnifying ~~Party elects not~~ Persons exercise their right to assume the defense of a ~~Third-~~Third Party ~~Claim,~~ Claim pursuant to clauses (i) or (ii) ~~there exists a conflict~~ of ~~interest or potential conflict of interest between the Indemnifying Party and the Indemnitee~~Section 15.6.3(b), (~~iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv~~i) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee Indemnified Persons shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee participate in such defense with their own counsel at their own expense and (ii) the Indemnifying Persons shall not make ~~available~~ any settlement of any claims without the written consent of the Indemnified Persons, which consent shall not be unreasonably withheld or delayed. 15.6.4. Notwithstanding any other provisions of this Agreement, neither Gold ▇▇▇▇ nor Southern States shall have any claim for indemnification hereunder unless such claim is asserted, as provided herein, against the other within the Survival Period (in which event the party's right to indemnification for such matters shall continue until liability is finally determined), it being acknowledged that the ~~Indemnitee all witnesses~~ Survival Period of certain indemnities is without limitation as to time as provided in Sections 15.1, 15.2 and ~~information~~ 15.4. 15.6.5. Notwithstanding any other provision in ~~such Indemnifying Party’s possession~~ this Article XV, the following procedures shall apply to any claim arising under clause (iv) of Section 15.2. above or ~~under such Indemnifying Party’s control relating thereto as are reasonably required~~ with respect to a breach of the representations and warranties set forth in Section 6.16. (collectively "Environmental Claims"). (a) Any Environmental Claim that is of the nature of a third party claim shall also be governed by the ~~Indemnitee;~~ notification procedures set forth in Section 15.6.1., provided, however, that Southern States shall be deemed to have provided notice to Gold ▇▇▇▇ of the matters identified in Schedule 14.12. as of the Closing Date. In the event of any inconsistency between the Section 15.6.1. procedures and the procedures set forth in this Section 15.6.5., the procedures set forth in this Section 15.6.5. shall govern. (b) Gold ▇▇▇▇ shall assume Principal Management for the matters identified in Schedule 14.12. (c) Upon assertion of any Environmental Claim other than claims arising from the matters identified in Schedule 14.12., Gold ▇▇▇▇ shall be entitled to assume Principal Management. To assume Principal Management, Gold ▇▇▇▇ must notify Southern States within thirty days of notice to Gold ▇▇▇▇ of the Environmental Claim, or such ~~access~~ other period as the parties may agree to in writing, that it intends to assume Principal Management. In the event Gold ▇▇▇▇ does not undertake Principal Management, Southern States may assume Principal Management of the subject matter of the Environmental Claim. (d) The party that does not have Principal Management for an Environmental Claim shall be entitled, at its sole cost and expense, to reasonably participate in the management of such Environmental Claim. Such participation shall include: (i) receiving copies of all reports, work plans and analytical data submitted to governmental agencies, all notices or other letters or documents received from governmental agencies, any other non-privileged documents and correspondence materially bearing on the Environmental Claim, and notices of material meetings; (ii) the opportunity to attend and participate in such material meetings; (iii) the right of reasonable consultation with the party exercising Principal Management; and (iv) the right to approve in writing in advance all budgets for the Environmental Claim, all material contracts related thereto, the submission of any cleanup plan or any similar material action relating to the Environmental Claim and any amendment or modification thereof, and the acceptance of any consensual governmental orders or requirements (which approval shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information be unreasonably withheld or ~~violate any applicable Law~~delayed). (e) ~~Unless~~ The party undertaking Principal Management hereunder for any matter shall manage the ~~Indemnifying Party has failed to assume the defense of the Third-Party Claim~~ matter in ~~accordance with the terms of this Agreement~~good faith and in a responsible manner, ~~no Indemnitee may settle or compromise~~ and any ~~Third-Party Claim without the consent of the Indemnifying Party (not to~~ activities conducted in connection therewith shall be ~~unreasonably withheld~~undertaken promptly and concluded as expeditiously and as economically as practicable using commercially reasonable efforts, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as subject to the ~~conduct of~~ schedules and approvals required by the applicable governmental authorities. The parties agree to reasonably cooperate with one another in connection with addressing any Environmental Claim. Either party may take such ~~defense were not accepted~~ action as is reasonable under the circumstances to respond to an actual or ~~adopted, that such Indemnifying Party does not approve of the quality~~ threatened emergency or ~~manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability~~imminent endangerment situation arising from an Environmental Claim. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations Any action with respect to an Environmental Claim shall be deemed adequate for purposes of satisfying the obligations of this Section 15.6.5. to the extent such ~~Third-Party Claim~~ action: (i) attains compliance with any lawful government order or ~~includes an admission of guilt~~ directive and with applicable Environmental Laws, including any action levels or ~~liability on behalf of the Indemnitee~~cleanup standards enforced thereunder; (ii) mitigates any significant risk to human health and (iii) achieves such actions as economically as practicable. (g) ~~Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for~~ The parties agree to negotiate in good faith regarding any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than dispute arising under this ~~Article IX against any Indemnifying Party~~section 15.6. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Gold Kist Inc)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is party entitled to indemnification under this ~~Article IX~~Section 10 (an "Indemnitee") asserts that a party obligated to indemnify it under this Section 10 (an "Indemnitor") has become obligated to such Indemnitee pursuant to Section 10.2 or 10.3, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party Indemnitor may become obligated to an Indemnitee ~~of its election to assume the defense of a Third-Party Claim~~hereunder, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available give written notice to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession~~ Indemnitor. The Indemnitor agrees to defend, contest or ~~under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require~~ otherwise protect the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such ~~Third-Party Claim~~suit, ~~the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense~~ action, investigation, claim or proceeding at its sole cost and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access expense. The Indemnitor shall not ~~require the Indemnifying Party~~ consent to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement ~~rather than by a judgment~~ of, or ~~other determination of liability. (f) In~~ the ~~case of a Third-Party Claim, no Indemnifying Party shall consent to~~ entry of any judgment arising from, any such suit, action investigation, claim or ~~enter into any settlement~~ proceeding unless it has given 15 days' prior written notice of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable same to the Indemnitee and ~~shall not release any portion thereof to~~ has obtained the ~~Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option~~ written consent of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to such settlement or judgment, which consent will not be withheld if the ~~Indemnifying Party,~~ sole relief is monetary damages that will be paid in full by the Indemnitor and otherwise will not be unreasonably withheld. The Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor defense thereof by counsel of the Indemnitee's choice and shall in any event cooperate with and assist the Indemnitor to the extent reasonably possible. If the Indemnitor fails timely to defend, ~~including~~ contest or otherwise protect against such suit, action, investigation, claim or proceeding, the ~~Protected REIT~~Indemnitee shall have the right to do so, at including, without limitation, the ~~time~~ right to make any compromise or settlement thereof, and the Indemnitee shall be entitled to recover the entire cost thereof from the Indemnitor, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such ~~loan~~suit, action, investigation, claim or proceeding. (b) Neither the Seller nor the Seller Parties will have liability (for indemnification or otherwise) with respect to the matters described in Section 10.2(i) (other than for a breach of Sections 5.5, 5.9 5.13(a) or 5.20) until the total of all Losses with respect to such matters exceeds three hundred seventy five thousand dollars ($375,000), it being understood that once such amount is exceeded, the Seller and the Seller Parties shall be jointly and severally liable for the aggregate of all such Losses (Bfrom the first dollar of Loss). In no event shall any liability of Seller or the Seller Parties with respect to the matters described in Section 10.2(i) (other than for a ~~15 year maturity with no periodic amortization~~breach of Sections 5.5, 5.9, 5.13(a) or 5.20) exceed eight million six hundred thousand dollars ($8,600,000), in the aggregate. (c) For purposes of Section 10.2(i), all Losses arising out of or relating to breach of Section 5.12 shall be computed net of any net collections from insurance policies that reduce the Losses that would otherwise be sustained.

Appears in 1 contract

Sources: Securities Purchase Agreement (Mueller Industries Inc)

Procedures for Indemnification. (a) An Promptly after receipt by a party entitled to indemnification hereunder (the “Indemnitee”) of written notice of the assertion or the commencement of any Action by a third-party (“Third Party Claim”) with respect to any matter referred to in Sections 10.2 or 10.3, the Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification thereof (the “~~Indemnifying Party~~Claim Notice”) ~~promptly~~ to the party obligated to indemnify Indemnitee (~~and in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the ~~amount of the Loss claimed, if known~~“Indemnitor”), and ~~method of computation thereof, and containing a reference to~~ thereafter shall keep the ~~provisions of this Agreement or the applicable Ancillary Agreement in~~ Indemnitor reasonably informed with respect ~~of which such right of indemnification is claimed by such Indemnitee~~thereto; provided, however, that failure of the ~~failure~~ Indemnitee to ~~provide such~~ give the Indemnitor notice as provided herein shall not ~~release~~ relieve the ~~Indemnifying Party from any~~ Indemnitor of its obligations hereunder except ~~and solely~~ to the extent that the ~~Indemnifying Party shall have been materially~~ Indemnitor is prejudiced ~~as a result of such failure~~thereby. (b) ~~If a claim or demand is made against an Indemnitee by any Person who is not a Party~~ With respect to ~~this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to~~ claims for indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any ~~expenses incurred by the Indemnitee~~ matter referred to in ~~defending such Third-Party Claim during the period in which the Indemnitee failed~~ Section 10.2(a) other than claims arising out of or related to ~~give such notice). Thereafter~~a Fundamental Representation, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party Buyer shall be ~~entitled (~~entitled, but ~~shall~~ not ~~be required)~~ obligated, to ~~assume,~~ assume and control the defense ~~of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which~~ (with counsel ~~must be~~ reasonably acceptable to ~~the Indemnitee,~~ Buyer) of such Third Party Claim at its expense if it gives ~~written~~ notice of its intention to do so ~~(including a statement that the Indemnitee is entitled~~ to ~~indemnification under this Article IX) to the applicable Indemnitees~~ Seller within thirty (30) calendar days of the receipt of ~~notice from such Indemnitees~~ the Claim Notice by Seller; provided, however, that if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the ~~Third-Party Claim (failure~~ reasonable judgment of Seller for the ~~Indemnifying Party~~ same counsel to ~~respond within such thirty (30) day period~~ represent both Buyer and Seller, then Seller shall be ~~deemed~~ entitled to ~~be an election by~~ retain its own counsel, reasonably acceptable to Buyer, at the ~~Indemnifying Party not to assume~~ expense of Seller. In the ~~defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have~~ event Buyer exercises the right to ~~employ separate counsel and to participate in (but not control) the defense~~undertake any such defense against any such Third Party Claim as provided above, ~~compromise or settlement thereof, at its own expense and, in any event,~~ Seller shall ~~reasonably~~ cooperate with ~~the Indemnifying Party~~ Buyer in such defense and make available to ~~the Indemnifying Party~~ Buyer all ~~witnesses~~ witnesses, pertinent records, materials and information in ~~such Indemnitee~~Seller’s possession or under ~~such Indemnitee~~Seller’s control relating thereto as ~~are~~ is reasonably required by Buyer. (c) With respect to claims for indemnification for any matter referred to in Sections 10.2(b) or 10.2(c) or arising out of or related to a Fundamental Representation, Seller shall be entitled, but not obligated, to assume and control the ~~Indemnifying Party~~defense (with counsel reasonably acceptable to Buyer) of such Third Party Claim at its expense if it gives notice of its intention to do so to Buyer within thirty (30) calendar days of the receipt of such Claim Notice by Seller; provided, however, that ~~such access shall not require the Indemnitee to disclose any information the disclosure of which would,~~ (a) Buyer may participate (at its own expense) in the ~~good faith judgment~~ Third Party Claim, and provide reasonable advice on the litigation strategy which Seller shall incorporate into its litigation strategy if it would be reasonable or advantageous to do so and (b) Buyer shall receive copies of all pleadings and settlement papers, and shall be permitted to attend all court proceedings and depositions and all litigation strategy and settlement meetings; and provided, further, that Buyer (instead of Seller) shall be entitled, but not obligated, to assume and control such defense of such Third Party Claim (and, for the ~~Indemnitee~~avoidance of doubt, ~~result in the loss~~ Buyer’s reasonable costs and expenses (including reasonable attorney’s fees and expenses) of ~~any existing privilege with respect to~~ conducting such ~~information or violate any applicable Law.~~defense shall be included as indemnifiable Buyer Losses) if: ~~(d) Notwithstanding anything to the contrary in this Section 9.4, in the event that~~ (i) ~~an Indemnifying Party elects~~ Seller is not using commercially reasonable and diligent efforts to ~~assume the defense of a Third-~~defend such Third Party Claim, or Seller is not achieving reasonable success on the procedural matters and the merits of such Third Party Claim, or Seller is not in compliance with the preceding portion of this sentence above; (ii) there exists or is reasonably likely to exist a conflict of interest ~~or potential conflict~~ that would make it inappropriate in the reasonable judgment of ~~interest between~~ Buyer for the ~~Indemnifying Party~~ same counsel to represent both Buyer and ~~the Indemnitee,~~ Seller; (iii) ~~any Third-~~the Third Party Claim ~~seeks~~ seeks, (x) an ~~order~~amount of damages that is, ~~injunction~~ or would reasonably be expected to be, in excess of the Escrow Amount or (y) in addition to or in lieu of monetary damages, any injunctive or other equitable ~~relief or relief for other than money damages against the Indemnitee,~~ relief; (iv) the ~~Indemnitee’s exposure~~ Third Party Claim relates to ~~Liability~~ or arises in connection with ~~such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder~~any criminal Action, indictment or allegation; or (v) ~~the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any~~ Seller fails to provide reasonable assurance to Buyer of ~~its material Assets, such Indemnitee shall be entitled~~ Seller’s financial capacity to ~~control~~ prosecute the defense of such ~~Third-~~Third Party Claim. In the event Seller is, ~~at the Indemnifying Party’s expense~~directly or indirectly, ~~with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is~~ conducting the defense against any such ~~Third-~~Third Party Claim, ~~the Indemnifying Party~~ Buyer shall ~~reasonably~~ cooperate with ~~the Indemnitee~~ Seller in such defense and make available to ~~the Indemnitee~~ Seller all ~~witnesses~~ such witnesses, pertinent records, materials and information in ~~such Indemnifying Party~~Buyer’s possession or under ~~such Indemnifying Party~~Buyer’s control relating thereto as ~~are~~ is reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawSeller. (ed) ~~Unless the Indemnifying Party has failed to assume the defense of the Third-~~Neither Buyer nor Seller shall settle or compromise any Third Party Claim or consent to the entry of any judgment (i) unless Seller or Buyer, as the case may be, is given an unconditional written release by the claimant or plaintiff from all liability in respect of such Third Party Claim or (ii) without the prior written consent of Seller or Buyer, as the case may be, which consent shall not be unreasonably withheld, conditioned or delayed. No Third Party Claim which is being defended in good faith by Buyer or Seller, as applicable, in accordance with the terms of this ~~Agreement~~Agreement shall be settled by Buyer or Seller, ~~no Indemnitee may settle or compromise any Third-Party Claim~~ as applicable, without the prior written consent of ~~the Indemnifying Party (~~Seller or Buyer, as applicable, which consent shall not to be unreasonably withheld, conditioned or delayed). ~~If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall~~ A claim for indemnification for any matter not be involving a ~~defense to any obligation to pay any amount in respect of such Third-~~Third Party Claim ~~that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as~~ may be asserted by notice to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof party from whom indemnification is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities sought and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies paid promptly after such ~~Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party~~notice. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Stock Purchase Agreement (DealerTrack Holdings, Inc.)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against any the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the ~~Third-Party Claim without the consent (not~~ Company shall be subrogated to ~~be unreasonably withheld, conditioned or delayed)~~ all rights of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to ~~such Third-Party Claim~~ all third parties, firms or ~~includes an admission of guilt or liability on behalf of~~ corporations relating to the ~~Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party,~~ matter for which indemnification has been made. The failure to deliver written notice to the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of~~ Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 1 contract

Sources: Securities Purchase Agreement (Xicor Inc)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter~~ If an event occurs that ~~such Indemnitee has determined has given~~ entitles a Parent Indemnified Party, or ~~would~~ that an Parent Indemnified Party reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimedbelieves entitles it, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this ~~Agreement~~Article VII, Parent, on behalf of such ~~Indemnitee~~ Parent Indemnified Party, shall promptly notify the ~~Indemnifying Party in writing~~Securityholder Representative, ~~and~~ which notice shall set forth in reasonable ~~detail,~~ detail the basis and amount of such claim; provided that no delay on the ~~Third-Party Claim promptly (and~~ part of Parent in ~~any event within thirty (30) days) after receipt by such Indemnitee of written notice of~~ notifying the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ Securityholder Representative shall relieve a Founder of any ~~such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations~~ liability or obligation hereunder, except ~~and solely~~ to the extent ~~the Indemnifying Party shall have~~ that such Founder has been materially prejudiced ~~as a result of such~~ by Parent’s failure ~~(except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed~~ to give such notice). ~~Thereafter~~The Parent Indemnified Party shall have the right to undertake, conduct, control and settle the ~~Indemnitee shall deliver to the Indemnifying Party, promptly (and in~~ defense of any ~~event within ten (10) days)~~ third party claim made after the ~~Indemnitee’s receipt thereof~~Effective Time; provided that any judgment, ~~copies~~ order or settlement to which the Securityholder Representative has not provided its prior written consent shall not, in itself, be determinative of ~~all notices~~ the Founders’ obligation to provide indemnification or reimbursement pursuant to this Article VII (or the amount of such obligation) or that the Company has breached a representation, warranty, covenant or agreement set forth herein. The Securityholder Representative shall cooperate with the Parent Indemnified Party and ~~documents (including court papers) received by~~ its counsel in the ~~Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party~~ defense of such claim and shall be entitled ~~(but shall not be required)~~ to ~~assume, control~~ participate in the defense ~~of, and settle any Third-Party Claim,~~ thereof at ~~such Indemnifying Party’s~~ its own cost and ~~expense~~ expense, and ~~by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable~~ Parent shall give good faith and due consideration to the ~~Indemnitee~~Securityholder Representative’s recommendations with respect thereto. To the extent that the Securityholder Representative disputes a claim for indemnification or reimbursement pursuant this Article VII, ~~if it gives~~ the Securityholder Representative shall provide written notice of ~~its intention~~ such dispute to ~~do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees~~ Parent within thirty (30) days of receipt of notice of such claim, setting forth in reasonable detail the basis and amount of such dispute. In the event that the Securityholder Representative fails to provide written notice to Parent within the required number of days of receipt of notice from Parent that the Securityholder Representative either acknowledges and agrees to pay such ~~Indemnitees of~~ Loss or dispute such Loss (and Parent has made at least one further good faith effort to solicit the ~~Third-Party Claim (failure of~~ Securityholder Representative’s response, provided such solicitation shall not restart the ~~Indemnifying Party to respond within such~~ thirty (30) day period the Securityholder Representative has to dispute a claim for indemnification), the Founders shall be deemed to ~~be an election by the Indemnifying Party not~~ have acknowledged and agreed to ~~assume the defense for~~ pay such ~~Third-Party Claim). After a notice from an Indemnifying Party~~ Loss in full and to ~~an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall~~ have ~~the~~ waived any right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in dispute such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable LawLoss. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Merger Agreement (Netsuite Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of any matter that such Indemnitee has determined has given~~ All claims for indemnification by either a Company Indemnified Person or ~~would reasonably be expected to give rise to a right of indemnification~~ Parent Indemnified Person under this ~~Agreement or any Ancillary Agreement (other than a Third-Party Claim which~~ Article IX shall be ~~governed by~~ asserted and resolved in accordance with Section ~~9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~9.5 and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failureSection 9.6. (b) If a ~~claim or demand is made against an Indemnitee by any~~ Parent Indemnified Person ~~who is not a Party~~ intends to ~~this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to~~ seek indemnification pursuant to this ~~Agreement~~Article IX with respect to a third-party claim, Parent Indemnified Person shall, promptly following such ~~Indemnitee shall~~ Parent Indemnified Person’s knowledge of such claim, notify the ~~Indemnifying Party~~ Stockholder Representative in ~~writing~~writing of such claim, ~~and~~ describing such claim in reasonable ~~detail,~~ detail and the amount or estimated amount of any alleged Damages relating to such claim (the ~~Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim~~“Claims Notice”); ~~provided, however,~~ provided that the failure to provide prompt notice will relieve the indemnifying party of any ~~such Third-Party Claim pursuant to~~ liability it may have under this ~~sentence shall not release the Indemnifying Party from any of its obligations except and solely~~ Article IX to the extent the ~~Indemnifying Party shall have been materially prejudiced as a result~~ defense of such ~~failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred~~ claim is adversely affected by the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed~~ indemnified party’s failure to ~~give such~~ provide prompt notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) ~~An Indemnifying Party shall be entitled (but shall not be required)~~ If a Company Indemnified Person intends to ~~assume~~seek indemnification pursuant to this Article IX with respect to a third-party claim, ~~control~~ the ~~defense of~~Stockholder Representative shall, ~~and settle any Third-Party Claim~~promptly following the Stockholder Representative’s knowledge of such claim, ~~at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable~~ deliver a Claims Notice to ~~the Indemnitee, if it gives written notice of its intention to do so (including a statement~~ Parent; provided that the ~~Indemnitee is entitled~~ failure to ~~indemnification~~ provide prompt notice will relieve the indemnifying party of any liability it may have under this Article ~~IX)~~ IX to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume extent the defense of ~~a Third-Party Claim,~~ such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required claim is adversely affected by the ~~Indemnifying Party; provided, however, that such access shall not require the Indemnitee~~ indemnified party’s failure to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawprovide prompt notice. (d) ~~Notwithstanding anything~~ The party from which any Indemnitee is seeking indemnification under this Article IX (the “Indemnitor”) shall have 30 days from the date on which the Indemnitor received the Claims Notice to notify the ~~contrary in this Section 9.4, in~~ Indemnitee that the ~~event that (i) an Indemnifying Party elects not~~ Indemnitor desires to assume the defense or prosecution of ~~a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between~~ the ~~Indemnifying Party~~ third party claim and ~~the Indemnitee, (iii)~~ any ~~Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection~~ litigation resulting therefrom with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any counsel of its ~~material Assets, such Indemnitee shall be entitled to control~~ choice. If the Indemnitor assumes the defense of such ~~Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing~~ claim in accordance herewith: (~~such counsel to be reasonably acceptable to the Indemnifying Party). If~~ i) the Indemnitee ~~is conducting the defense against any such Third~~may retain separate co-~~Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee~~ counsel at its sole cost and expense and participate in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of such third party claim, but the ~~Third-Party Claim in accordance with~~ Indemnitor shall control the ~~terms of this Agreement~~investigation, no defense and settlement thereof; (ii) the Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not ~~be a defense to~~ file any ~~obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views~~ papers or ~~opinions as~~ consent to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf~~ third party claim without the prior written consent of the ~~Indemnitee.~~ Indemnitor; and (giii) ~~Absent fraud~~ the Indemnitor shall not consent to the entry of any judgment or ~~intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for~~ enter into any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have settlement with respect to such third party claim without the ~~foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to~~ prior written consent of the ~~contrary in this Agreement, in~~ Indemnitee unless the ~~event that counsel~~ judgment or ~~independent accountants~~ settlement provides solely for ~~a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon~~ the payment of money, the Indemnitor makes such ~~amounts~~ payment (subject to the applicable limitations contained herein) and the Indemnitee receives an unconditional release. The parties shall act in good faith in responding to, defending against, settling or otherwise dealing with third party claims, and cooperate in any such defense and give each other reasonable access to all information relevant ~~Indemnitee~~thereto. Whether or not the Indemnitor has assumed the defense of such third party claim, the ~~amount paid to the Indemnitee pursuant to this Agreement in any tax year shall~~ Indemnitor will not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to indemnify the Indemnitee ~~and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled~~ hereunder with respect to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking settlement entered into ~~account the credit standing and profile of the Indemnitee~~ or any ~~guarantor of~~ judgment consented to without the ~~Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization~~Indemnitor’s prior written consent.

Appears in 1 contract

Sources: Merger Agreement (Trinet Group Inc)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ the Indemnitee by delivery of a written declaration to ~~any Party that~~ the Indemnitor requesting indemnification and specifying in reasonable detail the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to~~ (by attachment or otherwise) such other information as the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim”, the procedures set forth in Section 12.4 hereof shall be observed by the Indemnitee and the Indemnitor. (c) ~~as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~If the Indemnification Claim involves a matter other than a Third Party Claim, ~~such Indemnitee~~ the Indemnitor shall ~~notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within~~ have thirty (30) ~~days) after receipt~~ Business Days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to the ~~Third-Party Claim~~Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid in accordance with Section 12.3(d) hereof. If an objection is timely interposed by the Indemnitor, then the Indemnitee and the Indemnitor shall negotiate in good faith for a period of sixty (60) Business Days from the date (such period is hereinafter referred to as the “Negotiation Period”) the Indemnitee receives such objection. After the Negotiation Period, if the Indemnitor and the Indemnitee still cannot agree on an Indemnification Claim amount, either the Indemnitor or Indemnitee may submit the dispute concerning such Indemnification Claim for resolution as provided in Section 13.2 below; provided, however, nothing herein shall prevent the parties from seeking equitable or injunctive relief in a court of equity with respect to such dispute. (d) Upon determination of the amount of an Indemnification Claim that is binding on both the ~~failure to provide notice of any such Third-Party Claim pursuant to this sentence~~ Indemnitor and the Indemnitee, the Indemnitor shall ~~not release~~ pay the ~~Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result~~ amount of such ~~failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred~~ Indemnification Claim by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event wire transfer of immediately available funds from Seller within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of date such amount ~~were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence~~ is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationdetermined.

Appears in 1 contract

Sources: Asset Purchase Agreement (Crescent Banking Co)

Procedures for Indemnification. (a) An Any Indemnitee under Section 9.1 or Section 9.2 shall notify the applicable indemnifying party (the “Indemnitor”), of the claim in writing, including a reasonable description of the claim based on information then known to the Indemnitee and an estimate of the amount sought thereunder (if known and quantifiable), which estimate shall not be conclusive of the final amount of such claim. Subject to Section 9.3(b), the Indemnitor shall have a period of 30 days within which to respond to such claim, and will be deemed to have accepted such claim if it has not so responded within such 30-day period. If the Indemnitor rejects all or any part of such claim, the Indemnitee shall ~~give notice~~ be free to seek enforcement of ~~any matter that such Indemnitee has determined has given or would reasonably be expected~~ its rights to ~~give rise to a right of~~ indemnification under this Agreement ~~or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b))~~ with respect to ~~any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make~~ such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failureclaim. (b) If a claim for indemnification under Section 9.1 or Section 9.2 results from a third-party action, suit, claim or demand ~~is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party~~ (a “Third-Party Claim”~~) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~), ~~such~~ the Indemnitee shall ~~notify~~ provide the ~~Indemnifying Party~~ claim notice described in ~~writing, and in reasonable detail,~~ the first sentence of ~~the Third-Party Claim~~ Section 9.3(a) promptly ~~(and in any event within thirty (30) days)~~ after its receipt ~~by such Indemnitee~~ of written notice of ~~the~~ such Third-Party Claim; provided, however, that the failure timely to ~~provide~~ give such claim notice shall affect the rights of ~~any such Third-Party Claim pursuant to this sentence shall not release~~ the ~~Indemnifying Party from any of its obligations except and solely~~ Indemnitee hereunder only to the extent ~~the Indemnifying Party shall have been materially prejudiced as a result of~~ that such failure ~~(except that~~ has a material prejudicial effect on the ~~Indemnifying Party~~ defenses or ~~Parties shall not be liable for any expenses incurred by~~ other rights available to the Indemnitee ~~in defending~~ with respect to such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Third Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the . Upon receipt of a claim notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense in respect of a Third-Party Claim, ~~such Indemnitee~~ the Indemnitor shall have 30 days (or such lesser number of days set forth in such claim notice as may be required by court proceeding in the ~~right~~ event of a litigated matter) after the date of receipt of such claim notice to ~~employ separate counsel and~~ notify the Indemnitee that it desires to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party ~~Claim,~~ Claim at ~~the Indemnifying Party~~such Indemnitor’s expense, ~~with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If~~ and upon so notifying the Indemnitee ~~is conducting~~ the ~~defense against any such Third-Party Claim, the Indemnifying Party~~ Indemnitor shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed be entitled to assume the defense of ~~the~~ such Third-Party Claim by appropriate proceedings and shall have the sole power to direct and control such defense with counsel reasonably satisfactory to the Indemnitee; provided that the Indemnitee shall be entitled to participate (but not control or make decisions related thereto) in ~~accordance with~~ the ~~terms~~ defense of ~~this Agreement, no~~ such Third-Party Claim and to employ counsel of its choice for such purpose at the Indemnitee’s expense and the Indemnitee shall cooperate in good faith in such defense. The Indemnitor may not settle ~~or compromise~~ any Third-Party Claim without the Indemnitee’s prior written consent unless (i) there is no finding or admission of any violation of Law or any violation of the ~~Indemnifying Party~~ rights of any Person, (~~not to be unreasonably withheld, conditioned or delayed). If~~ ii) the sole relief provided is monetary damages that are paid in full by the Indemnitor and (iii) there is an ~~Indemnifying Party has failed to assume the defense~~ unconditional release of the Indemnitee from all liability or obligation with respect to the claims asserted in such Third-Party Claim. If the Indemnitor (a) elects not to undertake the good faith defense or settlement of the claim in accordance with this Section 9.3(b), ~~it shall~~ whether by not ~~be a defense~~ giving the Indemnitee timely notice of its desire to ~~any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in~~ so defend or otherwise, or (b) after assuming the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a ~~settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-~~Third Party Claim, ~~no Indemnifying~~ fails to take reasonable steps necessary to defend diligently such Third Party ~~shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld~~Claim, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, then the Indemnitee shall have the ~~right~~right to contest, ~~but not~~ settle or compromise the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REITclaim at its exclusive discretion, at the ~~time~~ risk and expense of ~~such loan~~Indemnitor, and to seek indemnification for any and all Losses arising from or related to such claim. The Indemnitee and the Indemnitor shall use reasonable best efforts to avoid production of confidential information (Bconsistent with applicable Law) in connection with the defense of any Third Party Claim, and to cause all communications among employees, counsel and others representing any party to a ~~15 year maturity with no periodic amortization~~Third Party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.

Appears in 1 contract

Sources: Membership Interest Purchase Agreement (B. Riley Financial, Inc.)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of~~ A claim for indemnification under this Agreement ~~or any Ancillary Agreement~~ (~~other than a Third-Party Claim which~~ an "INDEMNIFICATION CLAIM") shall be ~~governed~~ made by ~~Section 9.4(b))~~ the Indemnitee by delivery of a written declaration to ~~any Party that~~ the Indemnitor requesting indemnification and specifying the basis on which indemnification is or may be ~~required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed, if known, and method~~ case of ~~computation thereof, and containing~~ a ~~reference to the provisions~~ Third Party Claim (as defined in Section 11.5 of this ~~Agreement~~ Agreement), containing (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party other information as Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ the procedures set forth in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence Section 11.5 shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be ~~liable for any expenses incurred~~ observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party ClaimIndemnitor. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the Indemnitor shall have 30 days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid in accordance with the following subsection (~~including a statement that~~ d). If an objection is timely interposed by the Indemnitor and the dispute is not resolved within 60 days from the date the Indemnitee ~~is entitled to indemnification under this Article IX) to~~ receives such objection (the ~~applicable Indemnitees within thirty (30) days~~ "NEGOTIATION PERIOD"), such dispute may be resolved by binding arbitration in Lexington, Kentucky, in accordance with the Commercial Arbitration Rules of the ~~receipt of notice from~~ American Arbitration Association then in effect, or by another appropriate proceeding. If such ~~Indemnitees of the Third-Party Claim (failure of the Indemnifying Party~~ dispute is submitted to ~~respond within such thirty (30) day period~~ arbitration, any award made therein shall be ~~deemed to be an election by~~ conclusive and binding on the ~~Indemnifying Party not to assume the defense for such Third-Party Claim). After~~ parties and enforceable in a ~~notice from an Indemnifying Party to an Indemnitee~~ court of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawlaw. (d) ~~Notwithstanding anything to~~ Upon determination of the ~~contrary in this Section 9.4, in the event that (i)~~ amount of an ~~Indemnifying Party elects not to assume the defense of a Third-Party~~ Indemnification Claim, ~~(ii) there exists a conflict of interest or potential conflict of interest~~ whether by the Indemnitor's failure to timely object, by agreement between the ~~Indemnifying Party~~ Indemnitor and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or ~~any~~ by an adjudication of ~~its material Assets~~a court of law or an arbitration award, ~~such Indemnitee~~ Indemnitor shall ~~be entitled to control~~ pay the ~~defense~~ amount of such ~~Third-Party Claim,~~ Indemnification Claim by check within 10 days of the date such amount is determined. Any Indemnification Claim not paid within 10 day period shall accrue interest until paid at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable LawCommercial Paper Rate. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Holiday Rv Superstores Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ Whenever a claim shall arise for indemnification under Section 9.02 (a “Claim”) that does not involve a third party, the Person entitled to indemnification (“Indemnified Party”) shall give written notice ~~of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement~~ (~~other than a Third-Party~~ the “Claim ~~which shall be governed by Section 9.4(b)~~Notice”) to ~~any~~ the Party ~~that~~ from which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification~~ sought (~~the~~ “Indemnifying Party”) ~~promptly (~~of such Claim within a reasonable time after such Indemnified Party becomes aware of any fact, condition or event giving rise to Losses for which indemnification may be sought under Section 9.02, which Claim Notice shall specify in reasonable detail, to the extent reasonably known and ~~in any event within fifteen (15) days) after making~~ practicable at such ~~a determination. Such notice shall state~~ time, the amount of the Claim and each individual item of Loss ~~claimed, if known,~~ included in the amount so stated and ~~method~~ the basis for indemnification. The failure of ~~computation thereof, and containing a reference~~ any Indemnified Party to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such give timely notice hereunder shall not ~~release the Indemnifying Party from any of its obligations~~ affect such Indemnified Party’s rights to indemnification hereunder, except ~~and solely~~ to the extent the Indemnifying Party is actually prejudiced by such delay or failure, in which case the amount of reimbursement to which the Indemnified Party is entitled shall be reduced by the amount, if any, by which the Indemnified Party’s Losses would have been ~~materially prejudiced~~ less had such Claim Notice been timely given. If the applicable Indemnifying Party notifies the Indemnified Party that they do not dispute the claim described in such Claim Notice, the Losses identified in the Claim Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.02(a) or Section 9.02(b), as ~~a result~~ applicable. If the Indemnifying Party disputes its liability with respect to such Claim or the estimated amount of such ~~failure.~~Losses pursuant to this Section 9.04 within thirty (30) days following receipt of such Claim Notice or fails to respond within such thirty (30) day period, the Parties shall attempt in good faith to resolve such dispute; provided, that if such dispute has not been resolved within sixty (60) days following receipt of such Claim Notice, then the Indemnifying Party and the Indemnified Party may seek legal redress in accordance with ARTICLE X. (b) If a any Indemnified Party receives notice of the assertion of any claim or ~~demand is made against an Indemnitee~~ the commencement of any Action by ~~any Person who is not~~ a ~~Party to this Agreement or an Affiliate of a Party~~ third party (each a “~~Third-~~Third Party Claim”) as with respect to ~~which such Indemnitee is or reasonably expects~~ a matter subject to indemnity hereunder, notice thereof (a “Third Party Notice”) shall promptly be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver given to the Indemnifying Party, ~~promptly (~~which Third Party Notice shall specify in reasonable detail, to the extent reasonably known and practicable at such time, the amount of the Third Party Claim and each individual item of Loss included in ~~any event within ten (10) days) after~~ the ~~Indemnitee’s receipt thereof~~amount so stated and the basis for indemnification, and will include copies of all notices and documents (including court papers) served on or received by the ~~Indemnitee relating~~ Indemnified Party. The failure of any Indemnified Party to give timely notice hereunder shall not affect such Indemnified Party’s rights to indemnification hereunder, except to the ~~Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at~~ extent such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (delay or failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed actually prejudices the Indemnifying Party’s ~~exposure in respect of~~ ability to defend such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Third Party Claim, and the amount of reimbursement to which the Indemnified Party is entitled shall be reduced by the amount, if any, by which the Indemnified Party’s Losses would have been less had such Third Party Notice been timely delivered. After receipt of a Third Party Notice, the Indemnifying Party shall have the right, but not the obligation, by providing written notice to the Indemnified Party, subject to Section 9.04(d), to (i) take control of the defense and investigation of such Third Party Claim at the Indemnifying Party’s sole costs and expense, ~~with counsel~~ (ii) employ and engage attorneys of ~~such Indemnitee’s choosing~~ its own choice (~~such counsel to be reasonably acceptable~~ subject to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment approval of the ~~Indemnifying~~ Indemnified Party, ~~result in the loss of any existing privilege with respect to~~ such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (approval not to be unreasonably withheld, conditioned or delayed) to handle and defend the same, at the Indemnifying Party’s sole cost and expense, and (iii) compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the ~~Indemnitee~~ Indemnified Party; provided, that such consent will not be required if such settlement includes an unconditional release of the ~~effect thereof is~~ Indemnified Party and provides solely for payment of monetary damages for which the Indemnified Party will be indemnified in full under this Agreement. (c) In the event that the Indemnifying Party desires to ~~permit~~ defend the Indemnified Party against a Third Party Claim, (i) the Indemnifying Party shall use its reasonable best efforts to defend diligently such Third Party Claim, and (ii) the Indemnified Party, prior to the period in which the Indemnifying Party assumes the defense of such matter, may take such reasonable actions to preserve any ~~injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from~~ and all ~~liabilities and obligations~~ rights with respect to such ~~Third-~~matter, without such actions being construed as a waiver of the Indemnified Party’s rights to defense and indemnification pursuant to this Agreement, but with such actions not being determinative of the amount of any Losses. The Indemnified Party shall cooperate in all reasonable respects, at the Indemnifying Party’s request, with the Indemnifying Party and its attorneys in the investigation, trial and defense of such Third Party Claim and any appeal arising therefrom, including, if appropriate and related to such Third Party Claim, in making any counterclaim against the third party claimant, or ~~includes an admission of guilt or liability on behalf~~ any cross complaint against any Person, in each case, at the expense of the ~~Indemnitee.~~ Indemnifying Party. The Indemnified Party may, at its own sole cost and expense, monitor and further participate in (gbut not control) ~~Absent fraud~~ the investigation, trial and defense of such Third Party Claim and any appeal arising therefrom; provided, however, that if (i) the employment of counsel shall have been authorized in writing by the Indemnifying Party in connection with the defense of such action or ~~intentional misconduct by an~~ claim, (ii) the Indemnifying Party shall not have employed, or are prohibited under this Section 9.04 from employing, counsel in the defense of such action or claim, or (iii) such Indemnified Party shall have reasonably concluded that a conflict or potential conflict exists between the Indemnified Party and the Indemnifying Party or there may be defenses available to the Indemnified Party that are contrary to, or inconsistent with, those available to the Indemnifying Party, then, in any such event, the ~~indemnification provisions~~ fees and expenses of ~~this Article IX~~ not more than one additional counsel for the Indemnified Party shall be borne by the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (hd) Notwithstanding ~~anything to~~ the ~~contrary in this Agreement~~foregoing, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (~~the “Expense Amount”), then: (1~~i) the Indemnifying Party ~~shall place~~ elects not to assume such defense and investigation or do not acknowledge in writing within a reasonable period, but no later than ten (10) days, after receipt of the ~~Expense Amount into an escrow account~~ Third Party Notice their obligation to indemnify the Indemnified Party against any Losses arising from such Third Party Claim, (ii) the ~~“Escrow Account”) using an escrow agent~~ Indemnifying Party fails to actively and ~~agreement~~ diligently, with legal counsel reasonably acceptable to the ~~Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying~~ Indemnified Party, at conduct the ~~sole option~~ defense of the ~~relevant Protected REIT~~action, (iiii) such Third Party Claim seeks an ~~opinion (an “Expense Amount Tax Opinion”)~~ injunction or other equitable remedies in respect of the ~~Protected REIT’s tax counsel~~ Indemnified Party or its business or involves any Governmental Entity, (iv) such Third Party Claim is reasonably likely to ~~the effect that such amount~~result in liabilities that, ~~if and to the extent paid~~taken with other then-existing claims under this ARTICLE IX, would not ~~constitute Nonqualifying Income~~be fully indemnified hereunder, (iiv) ~~a letter (~~the Indemnified Party has been advised by counsel that an ~~“Expense Amount Accountant’s Letter”) from~~ actual or potential conflict exists between the ~~Protected REIT’s independent accountants indicating~~ Indemnified Party and the ~~maximum amount that can be paid at that time to~~ Indemnifying Party in connection with the ~~Indemnitee without causing~~ defense of the ~~Protected REIT to fail to meet the REIT Requirements for any relevant taxable year~~Third Party Claim, or (~~iii~~vi) such Third Party Claim seeks a ~~private letter ruling issued~~ finding or admission of a violation of Law or violation of the rights of any Person by the ~~IRS to~~ Indemnified Party or any of its Affiliates, then the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee Indemnified Party shall have the right, but not the ~~obligation,~~ obligation (upon delivering notice to ~~borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ such effect to the ~~Indemnitee~~ Indemnifying Party) to retain separate counsel of its choosing, defend such Third Party Claim and have the sole power to direct and control such defense (all at the cost and expense of the Indemnifying Party); it being understood that the Indemnified Party’s right to indemnification for a Third Party Claim shall not be adversely affected by assuming the defense of such Third Party Claim. (ie) ~~requires~~ The Indemnified Party and the Indemnifying Party shall use commercially reasonable efforts to ~~lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount~~ avoid production of confidential information (~~an “Indemnity Loan”~~consistent with Law), and ~~(ii) provides for (A)~~ to cause all communications among employees, counsel and others representing any party to a ~~commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee~~ Third Party Claim to be made so as to preserve any applicable attorney-client or ~~any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization~~work-product privileges.

Appears in 1 contract

Sources: Purchase and Sale Agreement (Atlantic Power Corp)

Procedures for Indemnification. (a) ~~An Indemnitee~~ If any Purchaser Indemnified Person or Seller Indemnified Person (each, an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any matter ~~that such Indemnitee has determined has given or would~~ (other than a Third Party Claim) for which indemnification is provided in Section 8.1, the Indemnified Person shall promptly after it first obtains knowledge of facts which could reasonably be expected to give rise to Losses that will serve the basis for such claim, give written notice (a ~~right~~ “Notice of Claim”) to PHMD or Purchaser, as applicable, setting forth the basis for such claim and the nature and estimated amount of the claim to the extent then feasible (which estimate shall not be conclusive of the final amount of the claim), all in reasonable detail; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. If PHMD or Purchaser, as applicable, disputes any claim set forth in the Notice of Claim, it may, at any time deliver to the Indemnified Person that has given the Notice of Claim a written notice indicating its dispute of such Notice of Claim, and the Parties shall attempt in good faith for a period of thirty (30) days after delivery of the dispute notice to agree upon the rights of the Parties with respect to such Notice of Claim. If no such agreement can be reached after good faith negotiation, the Parties shall have the rights and remedies, if any, available to them under this Agreement or applicable Legal Requirements. (b) If an Indemnified Person shall claim indemnification hereunder arising from any ~~Ancillary Agreement~~ Third Party Claim for which indemnification is provided in Section 8.1, the Indemnified Person shall promptly after it first obtains knowledge of such Third Party Claim, give written notice (~~other than~~ a “Third Party Notice”) to PHMD or Purchaser, as applicable (each, an “Indemnifying Person”), of the basis for such claim, setting forth the nature of the claim or demand in reasonable detail to the extent known by the Indemnified Person; provided, that the failure of any Indemnified Person to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve PHMD or Purchaser, as the case may be, from any of its indemnification obligations hereunder, except to the extent that it is actually prejudiced by such failure. The Indemnifying Person, upon notice to the Indemnified Person, may at any time within thirty (30) days after receiving a Third Party Notice, at its own cost and through counsel of its choosing and reasonably acceptable to the Indemnified Person, defend any claim or demand set forth in a Third Party Notice. The Indemnifying Person shall have the right to compromise and settle all indemnifiable matters related to Third Party Claims which are susceptible to being settled and as to which it shall have properly assumed the defense; provided, that the Indemnifying Party shall not, without the prior written consent of the Indemnified Person settle or compromise any Third Party Claim or consent to the entry of any final judgment that does not include as an unconditional term thereof the delivery by the claimant or plaintiff of a written release or releases from all liability in respect of such Third Party Claim of all Indemnified Persons named in such Third Party Claim and the sole relief for which are monetary damages that are paid in full by the Indemnifying Party. In the event that a particular Third Party Claim is subject to the limitations set forth in Section 8.3(b) and the aggregate amount of such Third Party Claim exceeds the Indemnifying Person’s applicable maximum aggregate liability, the Indemnifying Person shall not reject any settlement or compromise offer without the prior consent of the Indemnified Person. The Indemnifying Person shall from time to time and otherwise at the Indemnified Person’s request apprise the Indemnified Person of the status of the claim, liability or expense and any resulting Proceeding and shall furnish the Indemnified Person with such documents and information filed or delivered in connection with such claim, liability or expense or otherwise thereto as the Indemnified Person may reasonably request, and shall diligently defend the applicable Third-Party ~~Claim which~~ Claim. The Indemnified Person shall ~~be governed by Section 9.4(b))~~ not admit any liability to any third party in connection with any matter which is the subject of a Notice of Claim as to which the Indemnifying Party ~~that is~~ shall have properly assumed the defense and shall cooperate fully in the manner requested by the Indemnifying Party in the defense of such claim. Notwithstanding anything herein stated, the Indemnified Person shall at all times have the right to fully participate in such defense at its own expense directly or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemniteethrough counsel; provided, however, that if there exists a material conflict of interest between the ~~failure~~ Indemnified Person, on the one hand, and the Indemnifying Party, on the other hand, or if the Indemnified Person has been advised by counsel that there may be one or more legal or equitable defenses available to ~~provide such notice shall not release~~ it that are different from or additional to those available to the Indemnifying Party, which, in either case, would make it inappropriate for the same counsel to represent both the Indemnifying Party ~~from any of its obligations except~~ and ~~solely to~~ the ~~extent~~ Indemnified Person, then the ~~Indemnifying Party~~ Indemnified Person shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to ~~indemnification pursuant to this Agreement, such Indemnitee shall notify~~ retain its own counsel at the cost and expense of the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure Person (except that the Indemnifying Party ~~or Parties~~ shall not be ~~liable~~ obligated to pay the fees and expenses of more than one separate counsel for ~~any expenses incurred~~ all Indemnified Persons, taken together). Until such time as the Indemnifying Person has timely delivered a notice of intent to defend a Third Party Claim to the Indemnified Person, the Indemnified Person shall, at the expense of the Indemnifying Person, undertake the defense of (with counsel selected by the ~~Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (~~Indemnified Person and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~Indemnifying Person) such claim, ~~if it gives written notice of its intention~~ liability or expense, and shall have the right to ~~do so (including a statement that~~ compromise or settle such claim, liability or expense exercising reasonable business judgment; provided, that, such compromise or settlement shall not be effected within the ~~Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within~~ first thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the after Indemnifying Party’s ~~exposure in respect~~ receipt of such ~~Third-~~Third Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim Notice without the prior written consent of the Indemnifying ~~Party~~ Person (such consent not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Mela Sciences, Inc. /Ny)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ an Indemnitee by delivery of a written notice to ~~any Party that~~ the Acquiror or the Indemnitor Representative, as appropriate, requesting indemnification and specifying in reasonable detail the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim~~”) as to which such Indemnitee is or reasonably expects to~~ , the procedures set forth in Section 11.3 shall be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the ~~period in which~~ Acquiror or the ~~Indemnitee failed to give such notice). Thereafter~~Indemnitor Representative, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claimas appropriate. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the Acquiror or the Indemnitor Representative, as appropriate, shall have 30 days after actual receipt by him or it of the written notice described in Section 11.2(a) to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to ~~do so (including a statement that~~ the Indemnitee ~~is entitled~~ specifying in reasonable detail the basis for such objection. Failure to ~~indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days~~ timely so object shall constitute a final and binding acceptance of the ~~receipt~~ Indemnification Claim by the Acquiror, or the Indemnitor Representative on behalf of ~~notice from such Indemnitees of~~ all Shareholder Indemnitors, as appropriate, and the ~~Third-Party~~ Indemnification Claim ~~(failure of the Indemnifying Party to respond within such thirty (30) day period~~ shall be ~~deemed to be~~ paid in accordance with subsection (d) hereof. If an ~~election~~ objection is timely interposed by the ~~Indemnifying Party~~ Acquiror or the Indemnitor Representative, as appropriate, and the dispute is not ~~to assume~~ resolved by the ~~defense for~~ Indemnitee and the Acquiror or the Indemnitor Representative, as appropriate, within 15 days after the date the Indemnitee receives such ~~Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim~~objection, such ~~Indemnitee~~ dispute shall ~~have the right to employ separate counsel and to participate~~ be resolved by arbitration as provided in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable LawSection 11.12. (d) ~~Notwithstanding anything to~~ Upon determination of the ~~contrary in this Section 9.4, in the event that (i)~~ amount of an ~~Indemnifying Party elects not to assume the defense of a Third-Party~~ Indemnification Claim, ~~(ii) there exists a conflict of interest or potential conflict of interest~~ whether by agreement between the ~~Indemnifying Party and~~ Acquiror or the ~~Indemnitee~~Indemnitor Representative, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemniteeappropriate, and the Indemnitee or by an arbitration award or by any other final adjudication, the Indemnitors shall ~~not be entitled to any~~ pay the amount of such ~~amount, unless and until~~ Indemnification Claim within thirty days after the ~~Indemnitee delivers~~ date such amount is determined. Subject to the ~~Indemnifying Party, at the sole option~~ terms of the ~~relevant Protected REIT~~Escrow Agreement, ~~(i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that~~ such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can payment shall be ~~paid at that time~~ made by delivering to the Indemnitee ~~without causing~~ certificates, duly endorsed for transfer, representing that number of shares of Acquiror Common Stock having a value (based on the ~~Protected REIT to fail to meet the REIT Requirements for any relevant taxable year~~Closing Price), ~~or (iii) a private letter ruling issued by the IRS~~ rounded to the ~~Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and~~nearest share, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the ~~Expense Amount (an “Indemnity Loan”)~~amount due such Indemnitee hereunder, in each case subject to Sections 11.6 and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization11.7.

Appears in 1 contract

Sources: Merger Agreement (Mohawk Industries Inc)

Appears in 1 contract

Sources: Separation and Distribution Agreement (Ashford Inc)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice~~ Upon obtaining knowledge of the assertion of any ~~matter that such Indemnitee has determined has given~~ personal injury, property damage, nuisance, tort, contract or ~~would reasonably be expected to~~ other claims, actions or demands, including any and all investigations, suits, demands, actions, fines, penalties, enforcement actions, Losses, deficiencies, injunctions, reasonable attorneys' fees, costs and expenses actually paid, imposed or incurred ("Claims") by any person or entity who is not an Indemnified Person (as defined below) (i.e., a third-party claim) and which could give rise to a ~~right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required~~ claim for indemnity pursuant to ~~this Agreement or any Ancillary Agreement to make such~~ Sections 9.2 and 9.3 above, the party seeking indemnification (the “"Indemnified Person") from the other party (the "Indemnifying ~~Party”~~Person") shall promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide ~~such notice shall not release~~ the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of with written ~~notice of the Third-Party Claim; provided, however, that the failure to provide~~ notice of any such ~~Third-Party~~ Claim and use such Indemnified Person's reasonable efforts to cooperate fully with the Indemnifying Person, at the Indemnifying Person's expense, in any defense or settlement thereof, but the failure of the Indemnified Person to so promptly notify and cooperate fully with the Indemnifying Person shall not affect the Indemnifying Person's obligation pursuant to this ~~sentence shall not release~~ Article IX unless such failure materially prejudices the Indemnifying ~~Party from any of its obligations except and solely~~ Person's right to participate in the ~~extent the Indemnifying Party shall have been materially prejudiced as a result~~ contest of such ~~failure (except that the~~ Claim as hereinafter provided. The Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee Person shall have the right at its expense to employ ~~separate~~ counsel ~~and to participate in (but not control) the defense, compromise or settlement thereof, at~~ of its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not choice to assume ~~the defense~~ control of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee Indemnified Person shall have the right, but not the obligation, to ~~borrow~~ participate in the ~~Expense Amount from~~ investigation and defense of any such Claim with separate counsel chosen by such Indemnified Person; provided, however, that in the ~~Escrow Account pursuant~~ event that the Indemnifying Person has employed counsel to defend a ~~loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable~~ Claim and the Indemnified Person elects to engage its own counsel to assist in the ~~Indemnitee that~~ defense, the Indemnified Person shall pay all fees and expenses of its own counsel, unless (i) ~~requires~~ the Indemnifying ~~Party~~ Person has previously agreed to ~~lend~~ pay the ~~Indemnitee immediately available cash proceeds in~~ fees and expenses of counsel retained by an ~~amount equal to the Expense Amount (an “Indemnity Loan”)~~Indemnified Person, ~~and~~ (ii) ~~provides for~~ the Indemnifying Person has failed to assume the defense of such Claim or (Aiii) in the reasonable judgment of such Indemnified Person, based upon advice of its counsel, there is a ~~commercially~~ conflict of interest between the Indemnifying Person and such Indemnified Person with respect to such Claim, then the reasonable ~~interest rate~~ fees and ~~commercially reasonable covenants, taking into account~~ expenses of such Indemnified Person's counsel shall be at the ~~credit standing and profile~~ expense of the ~~Indemnitee~~ Indemnifying Person, provided that the Indemnifying Person approves such counsel, which approval shall not be unreasonably withheld. So long as the Indemnifying Person is defending such Claim in good faith, the Indemnified Person will not settle such Claim without the Indemnifying Person's written consent, which consent shall not be unreasonably withheld, and the Indemnifying Person will not settle any Claim on behalf of the Indemnified Person without the Indemnified Person's written consent, which consent shall not be unreasonably withheld. The Indemnified Person shall make available to the Indemnifying Person all records and other materials at the Indemnifying Person's expense, as shall reasonably be required by the Indemnifying Person to contest such Claim. In the event there is a Claim for indemnification hereunder, the Indemnifying Person shall have a reasonable period of time, not to exceed thirty (30) days, to resolve the matter with the person or entity making the Claim and to have the Claim dismissed as to any applicable Indemnified Person. (b) If the Indemnifying Person assumes the defense of a third-party Claim, the obligations of the Indemnifying Person hereunder as to such Claim shall include taking all steps necessary to defend or settle such Claim and holding the Indemnified Person harmless against any and all expenses, costs, losses and Losses caused by or arising out of any settlement approved by the Indemnifying Person or any ~~guarantor~~ judgment in connection with such Claim. Except with the prior written consent of the ~~Indemnitee~~Indemnified Person, ~~including~~ the ~~Protected REIT~~Indemnifying Person shall not, at in the ~~time~~ defense of such ~~loan~~Claim, consent to the entry of any judgment (other than a judgment of dismissal on the merits without costs), or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Person a release from all liability in respect of such Claim. (c) In the event any Claim is made pursuant to Section 9.2 or 9.3 of this Agreement, the party asserting the Claim (the Indemnified Person with respect to such Claim) shall notify the other parties hereto in writing as to the existence and amount of the Claim. If the Indemnifying Person with respect to such Claim disputes the existence or the amount of such Claim, the Indemnifying Person shall so notify the Indemnified Person in writing within fifteen (B15) ~~a 15 year maturity~~ days following the Indemnifying Person's receipt of written notice as to the existence and amount of the Claim. Upon such an exchange of written notification, the parties will negotiate in good faith for up to thirty (30) days or such other period of time as the parties mutually agree and if after such period of time the parties are unable to resolve their differences with ~~no periodic amortization~~respect to such Claim, the matter shall be resolved in accordance with the arbitration procedures set forth in Article XI hereof. Any decision of the arbitrator with respect to both the existence and amount of such Claim shall be final and binding on the parties hereto.

Appears in 1 contract

Sources: Purchase and Sale Agreement (TVN Entertainment Corp)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the ~~amount paid~~ legal counsel referred to in the immediately preceding sentence shall be selected by the Buyers holding at least a majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee ~~pursuant~~ which relates to ~~this Agreement in any tax year~~ such action or Claim. The Company shall ~~not exceed~~ keep the ~~maximum amount that can be paid~~ Indemnitee fully apprised at all times as to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option status of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee defense or any ~~guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity~~ settlement negotiations with ~~no periodic amortization.~~respect

Appears in 1 contract

Sources: Securities Purchase Agreement (Richardson Electronics LTD/De)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result~~ further, that the Company shall not be responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Indemnitee. The Indemnitee shall cooperate fully with the Company in ~~the loss~~ connection with any negotiation or defense of any ~~existing privilege~~ such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect ~~to such information~~ thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, however, that the Company shall not unreasonably withhold, delay or ~~violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement~~condition its consent. The Company shall not, ~~no Indemnitee may settle or compromise any Third-Party Claim~~ without the prior written consent of the ~~Indemnifying Party (not to be unreasonably withheld~~Indemnitee, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other ~~non-monetary relief to be entered, directly or indirectly, against any Indemnitee,~~ compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release ~~the Indemnitee~~ from all ~~liabilities and obligations with~~ liability in respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of~~ Claim, action and proceeding. The failure to deliver written notice to the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is materially prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 1 contract

Sources: Securities Purchase Agreement (Monogram Biosciences, Inc.)

Procedures for Indemnification. (ai) ~~An Indemnitee~~ If any Buyer Indemnified Person or Seller Indemnified Person (each an “Indemnified Person”) shall ~~give notice of~~ claim indemnification hereunder for any ~~matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement~~ claim (other than a ~~Third-~~Third Party ~~Claim~~ Claim) for which indemnification is provided in Section 11(a), the Indemnified Person shall ~~be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~promptly, and in any event within ~~fifteen~~ 120 days, after such Indemnified Person first becomes aware of facts which give rise to the basis for such claim, give written notice (15a “Notice of Claim”) ~~days) after making~~ to Seller or Buyer, as applicable, setting forth the basis for such ~~a determination. Such notice shall state~~ claim and the nature and estimated amount of the ~~Loss claimed~~claim (which estimated amount shall include, ~~if known~~without limitation, an itemized estimate of the Losses which may be incurred as a result of, and ~~method~~ in connection with defending, any such claim), all in reasonable detail. The failure to give a Notice of ~~computation thereof, and containing a reference~~ Claim to the ~~provisions~~ Indemnifying Person shall not relieve the Indemnifying Person of ~~this Agreement or~~ any liability hereunder unless the ~~applicable Ancillary Agreement in respect of which such right of indemnification is claimed~~ Indemnifying Person was actually prejudiced by such ~~Indemnitee; provided, however, that the~~ failure ~~to provide such notice shall not release the Indemnifying Party from any of its obligations except~~ and ~~solely~~ then only to the extent ~~the Indemnifying Party shall have been materially prejudiced as a result~~ of such ~~failure. (b)~~ prejudice. If either of Seller or Buyer, as applicable, dispute any claim set forth in the Notice of Claim, it shall deliver to such Indemnified Person that has given the Notice of Claim a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate~~ written notice indicating its dispute of ~~a Party (a “Third-Party Claim”) as to which~~ such ~~Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and~~ Notice of Claim in reasonable ~~detail, of the Third-Party Claim promptly (and in any event~~ detail within thirty (30) ~~days~~days after the date the Notice of Claim is given. (ii) ~~after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-~~If an Indemnified Person shall make a Third Party Claim ~~pursuant to this sentence shall not release~~ for which indemnification is provided in Section 11(a), the ~~Indemnifying Party from any~~ Indemnified Person shall, after such Indemnified Person first becomes aware of ~~its obligations except and solely~~ facts which give rise to the ~~extent the Indemnifying Party shall have been materially prejudiced as a result of~~ basis for such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Partyclaim, promptly (and in any event within ~~ten~~ ninety (1090) days) ~~after~~ give written notice (a “Third Party Notice”) to Seller or Buyer, as applicable (each, an “Indemnifying Person”), of the ~~Indemnitee’s receipt thereof~~basis for such claim, ~~copies~~ setting forth the nature of ~~all notices~~ the claim or demand in reasonable detail, and ~~documents~~ the estimated amount of the claim (~~including court papers) received by~~ which estimated amount shall include, without limitation, an itemized estimate of the ~~Indemnitee relating~~ Losses which may be incurred as a result of, and in connection with defending, any such claim). The failure to give a Third Party Notice to the ~~Third-Party Claim. (c) An~~ Indemnifying ~~Party~~ Person shall not relieve the Indemnifying Person of any liability hereunder unless the Indemnifying Person was actually prejudiced by such failure and then only to the extent of such prejudice. The Indemnifying Person shall be entitled ~~(but shall not be required)~~ to ~~assume~~participate therein and, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the ~~Indemnitee~~extent that it wishes, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense ~~for~~ thereof with counsel reasonably satisfactory to such ~~Third-~~Indemnified Person so long as the Indemnifying Person notifies the Indemnified Person in writing within sixty (60) days after the Indemnified Person has given a Third Party ~~Claim). After a notice~~ Notice to the Indemnifying Person that the Indemnifying Person will indemnify the Indemnified Person from an and against the entirety of any Losses the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the claim, and the Indemnifying ~~Party to an Indemnitee of its election to assume~~ Person assumes the defense of ~~a Third-Party Claim~~the Proceeding. If the Indemnifying Person assumes the defense of such claim, the Indemnifying Person shall not be liable to such ~~Indemnitee shall have the right to employ separate~~ Indemnified Person under such section for any fees of other counsel ~~and to participate~~ or any other expenses, incurred by such Indemnified Person in ~~(but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate~~ connection with the ~~Indemnifying Party in such~~ defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Partythereof; provided, however, that ~~such access shall not require~~ in the ~~Indemnitee to disclose any information~~ event that the ~~disclosure~~ interests of ~~which would~~the Indemnified Person and the Indemnifying Person are, or may reasonably become, in ~~the good faith judgment of the Indemnitee, result in the loss of any existing privilege~~ conflict with or adverse to one another with respect to such ~~information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-~~Third Party Claim, ~~(ii) there exists a conflict of interest or potential conflict of interest between~~ the Indemnified Person may retain its own counsel at the Indemnifying Person’s expense with respect to such Third Party ~~and the Indemnitee, (iii) any Third-Party Claim seeks~~ Claim. If an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying ~~Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the~~ Person ~~making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control~~ assumes the defense of such ~~Third-Party Claim~~an action, at (a) no compromise or settlement thereof may be effected by the Indemnifying ~~Party~~Person without the Indemnified Person’s ~~expense~~consent (which shall not be unreasonably withheld, ~~with counsel~~ conditioned or delayed) unless (i) there is no finding or admission of ~~such Indemnitee’s choosing~~ any violation of law or any violation of the rights of any Person and no effect on any other claims that may be made against the Indemnified Person and (~~such counsel to be reasonably acceptable to~~ ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying ~~Party). If the Indemnitee is conducting the defense against any such Third-Party Claim,~~ Person and (b) the Indemnifying ~~Party~~ Person shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege have no liability with respect to ~~such information~~ any compromise or ~~violate any applicable Law.~~ settlement thereof effected without its consent (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (which shall not to be unreasonably withheld, conditioned or delayed). If notice is given to an Indemnifying ~~Party has failed~~ Person of the commencement of any action and it does not, within 60 days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its election to assume the defense of thereof (or the ~~Third-Party Claim, it shall~~ Indemnified Person does not ~~be a defense~~ consent to ~~any obligation to pay any amount in respect of such Third-Party Claim that~~ the election by the Indemnifying ~~Party was not consulted in~~ Person to assume the defense thereof), ~~that such~~ the Indemnified Person shall, at the expense of the Indemnifying ~~Party’s views or opinions as~~ Person, undertake the defense of (with counsel selected by the Indemnified Person and reasonably acceptable to the ~~conduct of~~ Indemnifying Person) such ~~defense were not accepted~~ claim, liability or ~~adopted~~expense, ~~that~~ and shall have the right to compromise or settle such ~~Indemnifying Party does not approve~~ claim, liability or expense with the consent of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party ClaimIndemnifying Person, ~~no Indemnifying Party~~ which consent shall ~~consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (~~not to be unreasonably withheld, ~~conditioned~~ conditioned, or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Master Transaction Agreement (Cohen & Co Inc.)

Procedures for Indemnification. (a) ~~An Indemnitee shall give notice of any matter~~ If an indemnified party asserts that ~~such Indemnitee has determined has given or would reasonably be expected~~ it is entitled to ~~give rise to a right of~~ indemnification under this ~~Agreement~~ ARTICLE XI or in the event that any ~~Ancillary Agreement (other than~~ suit, action, investigation, proceeding, complaint or litigation is commenced by a ~~Third-Party Claim~~ third party involving a claim for which ~~shall be governed by Section 9.4(b)) to any Party that is or~~ an indemnifying party may be ~~required pursuant~~ liable to ~~this Agreement or any Ancillary Agreement to make~~ an indemnified party hereunder (an “Asserted Liability”), the indemnified party shall promptly notify the indemnifying party in writing of such ~~indemnification~~ Asserted Liability (the “~~Indemnifying Party~~Claim Notice”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee); provided, however, that no delay on the ~~failure to provide~~ part of an indemnified party in giving any such ~~notice~~ Claim Notice shall ~~not release~~ relieve the ~~Indemnifying Party from~~ indemnifying party of any ~~of its obligations~~ indemnification obligation hereunder except ~~and solely~~ to the extent that the ~~Indemnifying Party~~ indemnifying party is materially prejudiced by such delay. The indemnifying party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) ~~days) after receipt by such Indemnitee of written notice~~ days (or less if the nature of the ~~Third-Party Claim; provided~~Asserted Liability so requires) from receipt of the Claim Notice (the “Notice Period”) to notify the indemnified party whether or not the indemnifying party desires, ~~however, that~~ at the ~~failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any~~ indemnifying party’s sole cost and expense and by counsel of its ~~obligations except and solely~~ choosing, which shall be reasonably satisfactory to the ~~extent the Indemnifying Party shall have been materially prejudiced as~~ indemnified party, to defend against such Asserted Liability; provided that if, under applicable standards of professional conduct a ~~result~~ conflict on any significant issue between any indemnifying party and any indemnified party exists in respect of such ~~failure (except that~~ Asserted Liability, then the ~~Indemnifying Party or Parties~~ indemnifying party shall ~~not~~ promptly reimburse the indemnified party for the reasonable fees and expenses of counsel to be ~~liable for any expenses incurred~~ retained in order to resolve such conflict upon presentation by the ~~Indemnitee in defending~~ indemnified party of invoices or other documentation evidencing such ~~Third-Party Claim during~~ amounts to be reimbursed. If the indemnifying party undertakes to defend against such Asserted Liability, (i) the indemnifying party shall use its commercially reasonable efforts to defend and protect the interests of the indemnified party with respect to such Asserted Liability, (ii) the indemnified party, prior to the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume indemnifying party assumes the defense of such matter, may take such reasonable actions as the indemnified party deems necessary to preserve any and all rights with respect to such matter without such actions being construed as a ~~Third~~waiver of the indemnified party’s rights to defense and indemnification pursuant to this Agreement and (iii) without the consent of the indemnified party (such consent not to be unreasonably withheld), the indemnifying party shall not agree to any compromise or settlement which (A) does not contain a release of the indemnified party with respect to the subject matter of the compromise or settlement that is the same in all material respects as the release given to the indemnifying party, (B) requires the payment of monetary damages by the indemnified party, or (C) imposes any non-~~Party Claim~~monetary liabilities or obligations on the indemnified party that affects in any material respect the operation of the business of the indemnified party. If the indemnifying party undertakes to defend against such Asserted Liability, the indemnified party shall, and shall cause its Affiliates to, cooperate with the indemnifying party and its counsel in the investigation, defense and settlement thereof. If the indemnified party desires to participate in any such ~~Indemnitee~~ defense it may do so at its sole cost and expense, except in circumstances in which counsel is retained to resolve a conflict under applicable rules of professional conduct in which case the indemnifying party shall be responsible for payment of the fees and expenses of counsel to the indemnified party. If the indemnifying party does not undertake to defend against an Asserted Liability within the Notice Period, then the indemnifying party shall have the right to ~~employ separate counsel and to~~ participate in ~~(but not control) the defense, compromise or settlement thereof,~~ any such defense at its ~~own expense and~~sole cost and expense, but, in ~~any event~~such case, the indemnified party shall ~~reasonably cooperate with~~ control the ~~Indemnifying Party in such~~ investigation and defense and ~~make available~~ may settle or take any other actions the indemnified party deems advisable and the indemnified party shall be entitled to recover the ~~Indemnifying Party all witnesses~~ entire cost thereof including, without limitation, reasonable attorneys’ fees, disbursements and ~~information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto~~ amounts paid as ~~are reasonably required by~~ the ~~Indemnifying Party~~result of the Asserted Liability; provided, however, that such ~~access~~ claim shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information be compromised or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim settled without the written consent of the ~~Indemnifying Party (~~indemnifying party, which consent shall not to be unreasonably withheld, conditioned or delayed). ~~If an Indemnifying Party has failed~~ The indemnified party and the indemnifying party agree to ~~assume~~ make available to each other, their counsel and other representatives, all information and documents available to them which relate to a claim or demand and to render to each other such assistance and cooperation as may reasonably be required to ensure the proper and adequate defense of ~~the Third-Party Claim, it shall not be~~ a ~~defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views~~ claim or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liabilitydemand. (fb) ~~In the case of~~ No later than thirty (30) days after a ~~Third-Party Claim, no Indemnifying Party shall consent to entry of any~~ final judgment or ~~enter into any settlement~~ award shall have been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the expiration of the ~~Third-Party Claim without~~ time in which to appeal therefrom, or a settlement shall have been consummated, or the ~~consent (not to be unreasonably withheld, conditioned or delayed) of~~ indemnified party and the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations indemnifying party shall have arrived at a mutually binding agreement with respect to ~~such Third-Party Claim or includes~~ a claim hereunder, the indemnifying party shall pay the amounts, if any, due and owing by the indemnifying party to the indemnified party by wire transfer of immediately available funds to an ~~admission of guilt or liability on behalf of~~ account designated in writing by the ~~Indemnitee~~indemnified party. (gc) ~~Absent fraud or intentional misconduct~~ The parties hereto agree to treat any indemnity payments made hereunder as an adjustment to the Merger Consideration for federal, state, local and foreign income Tax purposes to the extent permitted by Law. (d) The parties hereto agree if an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have amount with respect to ~~the foregoing other than~~ which any indemnity claim is made under this ~~Article IX against any Indemnifying Party. (h) Notwithstanding anything~~ ARTICLE XI gives rise to a Tax Benefit to the ~~contrary in this Agreement, in~~ party making the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemniteeclaim, the indemnity payment shall be reduced by the amount ~~paid to~~ of the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined Tax Benefit realized by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationparty.

Appears in 1 contract

Sources: Merger Agreement (Medical Staffing Network Holdings Inc)

Procedures for Indemnification. If a party entitled to indemnification under this Section 13 (aan "Indemnitee") An asserts that a party obligated to indemnify it under this Section 13 (an "Indemnitor") has become obligated to such Indemnitee pursuant to Section 13.2 or 13.3, or if any suit, action, investigation, claim or proceeding is begun, made or instituted as a result of which the Indemnitor may become obligated to an Indemnitee hereunder, such Indemnitee shall give written notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the ~~provisions of this Agreement~~ Indemnitor. The Indemnitor agrees to defend, contest or otherwise protect the ~~applicable Ancillary Agreement in respect of which~~ Indemnitee against any such suit, action, investigation, claim or proceeding at its sole cost and expense and shall have the right ~~of indemnification is claimed by~~ to defend against, negotiate, settle, or otherwise deal with any such ~~Indemnitee~~suit, action, investigation, claim or proceeding; provided, however, that the ~~failure to provide such notice~~ Indemnitor shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable settle for any ~~expenses incurred by~~ type of equitable relief under any law, regulation or ordinance without the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives prior written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment consent of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the The Indemnitee shall have the right, but not the obligation, to ~~borrow~~ participate at its own expense in the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor defense thereof by counsel of the Indemnitee's choice and shall in any event cooperate with and assist the Indemnitor to the extent reasonably possible. If the Indemnitor fails timely to defend, ~~including~~ contest or otherwise protect against such suit, action, investigation, claim or proceeding, the ~~Protected REIT~~Indemnitee shall have the right to do so, at including, without limitation, the ~~time~~ right to make any compromise or settlement thereof, and the Indemnitee shall be entitled to recover the entire cost thereof from the Indemnitor, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such ~~loan~~suit, ~~and (B) a 15 year maturity with no periodic amortization~~action, investigation, claim or proceeding.

Appears in 1 contract

Sources: Purchase Agreement (West Corp)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a ~~claim or demand is made against an Indemnitee by any~~ Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IXXII (an “Indemnitee”) claims that a Person obligated to indemnify it under this Article XII (an “Indemnitor”) has become obligated to such Indemnitee pursuant to Section 12.02 (other than pursuant to Section 12.02(a)(iii)) or 12.03, or if any suit, action, investigation, claim or proceeding is begun, made or instituted by a third party as a result of which the Indemnitor may become obligated to an Indemnitee hereunder (a “Third Party Claim”), such Indemnitee shall give prompt written notice to the ~~applicable Indemnitees within thirty~~ Indemnitor describing such claim with reasonable detail. No delay in delivering such written notice to the Indemnitor shall relieve the Indemnitor from any obligation hereunder unless, and then solely to the extent that, the Indemnitor is actually and materially prejudiced thereby. (30b) ~~days~~ Any Indemnitor shall have the right, but not the obligation, to participate at its own expense in the defense thereof by counsel of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period~~ Indemnitor’s choice and at its option shall be ~~deemed to be an election by the Indemnifying Party not~~ entitled to assume the defense ~~for such Third-Party Claim~~thereof (including the matters set forth in Section 12.02(a)(iii)~~. After a notice from~~ ), other than an ~~Indemnifying Party~~ action, lawsuit, proceeding, investigation or other claim with respect to ~~an Indemnitee of its election~~ Taxes, which shall be governed solely by Section 11.02; provided that the Indemnitor shall not have the right to assume the defense of ~~a Third~~any criminal or quasi-criminal claims. If the Indemnitor fails to actively and diligently defend or contest such Third Party Claim, ~~such~~ the Indemnitee shall have the right to ~~employ separate counsel and~~ do so. In the event that the Indemnitor elects to ~~participate in (but not control)~~ conduct the ~~defense~~defense of the subject Third Party Claim, ~~compromise or settlement thereof, at~~ the Indemnitee will use its ~~own expense and, in any event, shall reasonably~~ reasonable best efforts to cooperate with ~~the Indemnifying Party in such defense~~ and make available to the ~~Indemnifying Party~~ Indemnitor such assistance and materials as may be reasonably requested by it, and the Indemnitee shall have the right at its expense to participate in the defense assisted by counsel of its own choosing; provided that the Indemnitor shall be responsible for the fees and expenses of one separate co‑counsel for all ~~witnesses and information~~ Indemnitees choosing to participate in ~~such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ the defense to the extent the Indemnitee is advised, in writing by ~~the Indemnifying Party; provided, however~~its outside counsel, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that either (i) ~~an Indemnifying Party elects~~ the counsel the Indemnitor has selected has a conflict of interest or (ii) there are legal defenses available to the Indemnitee that are materially different from or additional to those available to the Indemnitor. Notwithstanding the foregoing, the Indemnitor will not have the right to assume the defense of ~~a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii)~~ any ~~Third-~~Third Party Claim ~~seeks an order~~or will cease to defend against such claim, ~~injunction~~ if (i) injunctive or other equitable relief or relief for other than money damages that the Indemnitee reasonably determines, after conferring with its outside counsel, is material and not incidental to such claim and cannot be separated from any related claim for money damages, is sought and could be imposed against the Indemnitee, (ivii) ~~the Indemnitee’s exposure to Liability in connection with~~ such ~~Third-Party Claim is~~ claim would reasonably be expected to ~~exceed~~ result in greater liability to the ~~Indemnifying Party’s exposure in respect of such Third-Party Claim~~ Indemnitee than the Indemnitor, taking into account the Deductible Amount and other limitations on indemnification ~~obligations hereunder~~herein, or (viii) the ~~Person making~~ Indemnitor is also a party or has an interest in such ~~Third-~~Third Party ~~Claim is a Governmental Authority~~ Claim, which interest conflicts with ~~regulatory authority over~~ the ~~Indemnitee or any~~ interests of ~~its material Assets, such Indemnitee shall be entitled~~ the Indemnitee. (c) If the Indemnitor elects to control the defense of ~~such Third-~~any Third Party Claim, at then the ~~Indemnifying Party’s expense, with counsel of~~ Indemnitor shall be entitled to settle such ~~Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-~~Third Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, ~~however~~that, ~~that such access~~ the Indemnitor shall ~~not require~~ obtain the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter Indemnitee before entering into any settlement of a claim or ceasing to defend such claim if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief will be imposed against the ~~Third-Party Claim without~~ Indemnitee or will involve an admission of fault or wrongdoing on the ~~consent (not to be unreasonably withheld, conditioned or delayed)~~ part of the Indemnitee or the applicable Indemnitees, or if ~~the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee,~~ such settlement does not expressly and unconditionally release the Indemnitee from all liabilities and obligations with respect to such ~~Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party~~claim without prejudice, ~~the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee~~ except for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event payments that ~~counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement~~ would be ~~treated as Nonqualifying Income upon the payment of such amounts~~ required to ~~the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can~~ be paid to by the ~~Indemnitee in such year without causing~~ Purchaser representing the ~~Protected REIT to fail to meet~~ Deductible Amount and/or the ~~REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT~~Threshold Amount. If the ~~amount payable for~~ Indemnitor has elected not to control the defense of any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the such claim then Indemnitee shall not ~~be entitled to any~~ settle such ~~amount, unless and until~~ claim without the ~~Indemnitee delivers to the Indemnifying Party, at the sole option~~ prior written consent of the ~~relevant Protected REIT~~Indemnitor (which consent shall not be unreasonably withheld, ~~(i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii)~~ conditioned or delayed). If a ~~letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the~~ Purchaser Indemnitee ~~without causing the Protected REIT to fail to meet the REIT Requirements~~ is asserting a claim for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Partyindemnification under Section 12.02, the ~~Indemnitee~~ Seller shall have the ~~right, but not~~ rights of the ~~obligation,~~ Indemnitor hereunder and the reasonable expenses of the Seller incurred in defending a claim (or any participation in a claim that could result in a disbursement to ~~borrow~~ the ~~Expense Amount~~ Purchaser Indemnitees from the Indemnity Escrow Account ~~pursuant to a loan agreement (an “~~or the Tax Indemnity ~~Loan Agreement”~~Escrow Account) ~~reasonably acceptable to~~ shall be reimbursed, when and as incurred, from the ~~Indemnitee that (i) requires~~ funds remaining in the ~~Indemnifying Party to lend~~ Indemnity Escrow Account or the ~~Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “~~Tax Indemnity ~~Loan”)~~Escrow Account, and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationas applicable.

Appears in 1 contract

Sources: Securities Purchase Agreement (Cowen Group, Inc.)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ the Indemnitee by delivery of a written declaration to ~~any Party that~~ the Indemnitor requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Damages and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to~~ (by attachment or otherwise) such other information as the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim”, the procedures set forth in Section 12.4 hereof shall be observed by the Indemnitee and the Indemnitor. (c) ~~as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~If the Indemnification Claim involves a matter other than a Third Party Claim, ~~such Indemnitee~~ the Indemnitor shall ~~notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within~~ have thirty (30) ~~days) after receipt~~ Business Days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to the ~~Third-Party~~ Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid within ten (10) Business Days. If an objection is timely interposed by the Indemnitor, then the Indemnitee and the Indemnitor shall negotiate in good faith for a period of sixty (60) Business Days from the date (such period is hereinafter referred to as the “Negotiation Period”) the Indemnitee receives such objection. After the Negotiation Period, if the Indemnitor and the Indemnitee still cannot agree on the amount of an Indemnification Claim, either the Indemnitor or the Indemnitee may submit the dispute concerning such Indemnification Claim for resolution as provided in Section 15.2 below; provided, however, ~~that~~ nothing herein shall prevent the ~~failure to provide notice~~ parties from seeking equitable or injunctive relief in a court of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege equity with respect to such ~~information or violate any applicable Law~~dispute. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Securities Purchase Agreement (Global Payments Inc)

Procedures for Indemnification. ~~(a) An Indemnitee~~ a. Each indemnified party shall promptly give notice hereunder to the indemnifying party after becoming aware of any ~~matter that such Indemnitee has determined has given or would reasonably be expected~~ claim as to ~~give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim~~ which ~~shall be governed by Section 9.4(b)) to any Party that is or~~ recovery may be ~~required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (~~sought against the ~~“Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount~~ indemnifying party because of the ~~Loss claimed~~indemnity in this Article IX, and, if ~~known~~such indemnity shall arise from the claim of a third party, shall permit the indemnifying party to assume the defense of any such claim and ~~method of computation thereof, and containing a reference to the provisions of this Agreement~~ any litigation or ~~the applicable Ancillary Agreement in respect of which~~ other proceeding resulting from such ~~right of indemnification is claimed by such Indemnitee~~claim; provided, ~~however~~that any indemnified party may, ~~that~~ in any event, at its own expense, monitor and participate in, but not control, the defense of any such claim or litigation. Notwithstanding the foregoing, the right to indemnification hereunder shall not be affected by any failure of an indemnified party to ~~provide~~ give such notice ~~shall not release the Indemnifying Party from any of its obligations except~~ (or by delay by an indemnified party in giving such notice) unless, and ~~solely~~ then only to the extent that, the ~~Indemnifying Party~~ rights and remedies of the indemnifying party shall have been ~~materially~~ prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to ~~provide~~ give, or delay in giving, such notice. The notice ~~of any such Third-Party Claim pursuant to this sentence~~ required hereunder shall ~~not release~~ specify the ~~Indemnifying Party from any of its obligations except and solely~~ basis for the claim for indemnification to the extent ascertainable at the ~~Indemnifying Party shall have been materially prejudiced as a result~~ time of ~~such failure (except that~~ the ~~Indemnifying Party or Parties shall not be liable for any expenses incurred~~ notice. Failure by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying indemnifying Party to ~~respond within such thirty (30) day period shall be deemed to be~~ notify an ~~election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee~~ indemnified party of its election to ~~assume the defense of~~ defend any such claim or action by a ~~Third-Party Claim, such Indemnitee~~ third party within 30 days after notice thereof shall have been given to the indemnifying party shall be deemed a waiver by the indemnifying party of its right to ~~employ separate counsel and to participate in (but not control) the defense, compromise~~ defend such claim or ~~settlement thereof, at its own expense and~~action. b. The indemnifying party shall not, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such ~~Third-Party Claim~~claim or any litigation resulting therefrom, at consent to entry of any judgment (other than a judgment of dismissal on the ~~Indemnifying Party’s expense~~merits without costs) or enter into any settlement, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate except with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the written consent of the ~~Indemnifying Party (~~indemnified party, which consent shall not to be unreasonably withheld, conditioned or delayed). , which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party a release from all liability in respect of such claim or litigation. c. If ~~an Indemnifying Party has failed to~~ the indemnifying party shall not assume the defense of ~~the Third-Party Claim, it shall not be a defense to~~ any ~~obligation to pay any amount in respect of~~ such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than claim by a ~~judgment~~ third party, or ~~other determination~~ litigation resulting therefrom, after receipt of ~~liability. (f) In~~ notice from the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Partyindemnified party, the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary~~ indemnified party may defend against such claim or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee litigation in such ~~year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined~~ manner as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationit deems appropriate.

Appears in 1 contract

Sources: Asset Purchase Agreement (Imcor Pharmaceutical Co)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any ~~Person~~ person who is not a ~~Party~~ party to this Distribution Agreement ~~or an Affiliate of a Party~~ (a “~~Third-~~Third Party Claim”) as to which such Indemnitee is ~~or reasonably expects to be~~ entitled to indemnification pursuant to this Distribution Agreement, such Indemnitee shall notify ~~the Indemnifying Party~~ International Spirit in writing, and in reasonable detail, of the ~~Third-~~Third Party Claim promptly (and in any event within ~~thirty (30)~~ 20 business days) after receipt by such Indemnitee of written notice of the ~~Third-~~Third Party Claim; provided, however, that ~~the~~ failure to ~~provide notice of any~~ give such ~~Third-Party Claim pursuant to this sentence~~ notification within such 20 business day period shall not ~~release~~ affect the ~~Indemnifying Party from any of its obligations~~ indemnification provided hereunder except ~~and solely~~ to the extent ~~the Indemnifying Party~~ to which International Spirit shall have been ~~materially~~ actually prejudiced as a result of such failure (except that ~~the Indemnifying Party or Parties~~ International Spirit shall not be liable for any expenses incurred ~~by the Indemnitee in defending such Third-Party Claim~~ during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to ~~the Indemnifying Party,~~ International Spirit promptly (and in any event within ~~ten (10)~~ 20 business days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the ~~Third-~~Third Party Claim. (cb) ~~An Indemnifying~~ If a Third Party Claim is made against an Indemnitee, International Spirit shall be entitled ~~(but shall not be required)~~ to ~~assume, control~~ participate in the defense ~~of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee~~thereof and, if it ~~gives written notice of~~ so chooses and acknowledges in writing its ~~intention~~ obligation to ~~do so (including a statement that~~ indemnify the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not therefor, to assume the defense ~~for~~ thereof with counsel selected by International Spirit; provided that such ~~Third-Party Claim)~~counsel is not reasonably objected to by the Indemnitee. ~~After a notice from an Indemnifying Party to an Indemnitee of its election~~ Should International Spirit so elect to assume the defense of a ~~Third-~~Third Party Claim, International Spirit shall not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof. If International Spirit assumes such defense, the Indemnitee shall have the right to ~~employ separate counsel~~ participate in the defense thereof and to ~~participate in (but not control) the defense, compromise or settlement thereof~~employ counsel, at its own ~~expense and~~expense, separate from the counsel employed by International Spirit, it being understood that International Spirit shall control such defense. International Spirit shall be liable for the fees and expenses of counsel employed by the Indemnitee (i) for any period during which International Spirit has failed to assume the defense thereof (other than during the 20 business day period prior to the time the Indemnitee shall have given notice of the Third Party Claim as provided above) or (ii) in ~~any event~~the event the Indemnitee reasonably determines, based on the advice of its counsel that there shall ~~reasonably cooperate with~~ exist a conflict of interest between the ~~Indemnifying Party in such defense~~ Indemnitee and ~~make~~ International Spirit or that there are defenses available to the ~~Indemnifying Party all witnesses~~ Indemnitee that are not available to Distribution Agreement(DKTS-ISBG) International Spirit, the effect of which shall be to make it impractical for the Indemnitee and ~~information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required~~ International Spirit to be jointly represented by the ~~Indemnifying Party~~same counsel, in which case International Spirit shall be liable for the fees and expenses of one counsel for all Indemnitees in any single or series of related Actions. If International Spirit so elects to assume the defense of any Third Party Claim, the Indemnitee shall cooperate with International Spirit in the defense or prosecution thereof. (c) If International Spirit acknowledges in writing liability for indemnification of a Third Party Claim, then in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without International Spirit’s prior written consent; provided, however, that ~~such access shall not require~~ the Indemnitee shall have the right to ~~disclose any information~~ settle, compromise or discharge such Third Party Claim without the ~~disclosure~~ consent of ~~which would, in~~ International Spirit if the ~~good faith judgment of the Indemnitee, result in the loss of any existing privilege~~ Indemnitee releases International Spirit from its indemnification obligations hereunder with respect to such ~~information~~ Third Party Claim and such settlement, compromise or ~~violate~~ discharge would not otherwise adversely affect International Spirit. If International Spirit acknowledges in writing liability for indemnification of a Third Party Claim, the Indemnitee will agree to any ~~applicable Law~~settlement, compromise or discharge of a Third Party Claim that International Spirit may recommend that by its terms (i) obligates International Spirit to pay the full amount of the liability in connection with such Third Party Claim, (ii) releases the Indemnitee completely in connection with such Third Party Claim and (iii) would not otherwise adversely affect the Indemnitee; provided, however, that the Indemnitee may refuse to agree to any such settlement, compromise or discharge and may assume the defense of such Third Party Claim if the Indemnitee agrees (A) that International Spirit’s indemnification obligation with respect to such Third Party Claim shall not exceed the amount that would have been required to be paid by or on behalf of International Spirit in connection with such settlement, compromise or discharge and (B) to assume all costs and expenses thereafter incurred in connection with the defense of such Third Party Claim (other than those contemplated by subclause (A) herein above). (d) Notwithstanding ~~anything to~~ the ~~contrary in this Section 9.4~~foregoing, ~~in the event that (i) an Indemnifying Party elects~~ International Spirit shall not be entitled to assume the defense of ~~a Third-~~any Third Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third Party Claim~~, (ii~~) ~~there exists a conflict of interest or potential conflict of interest between~~ if the ~~Indemnifying Party and the Indemnitee, (iii) any Third-~~Third Party Claim seeks an order, injunction or other equitable relief or relief ~~for~~ other than money damages against the ~~Indemnitee~~Indemnitee which the Indemnitee reasonably determines, ~~(iv)~~ based on the ~~Indemnitee’s exposure to Liability in connection with~~ advice of its counsel, cannot be separated from any related claim for money damages. If such ~~Third-~~equitable or other relief portion of the Third Party Claim ~~is reasonably expected to exceed~~ can be so separated from the ~~Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder~~claim for money damages, ~~or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee~~ International Spirit shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the ~~Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not~~ portion relating to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liabilitymoney damages. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Distribution Agreement (International Spirits & Beverage Group, Inc.)

Procedures for Indemnification. ~~(a) An~~ Promptly after an Indemnitee ~~shall give notice~~ has knowledge of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is reasonably believes indemnity may be sought or ~~reasonably expects to be entitled to indemnification pursuant to this Agreement,~~ promptly after such Indemnitee ~~shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written~~ receives notice of the ~~Third-Party Claim; provided, however, that the failure to provide notice~~ commencement of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party action or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents proceeding (including ~~court papers~~any governmental action or proceeding) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including involving a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall, if a Claim in respect thereof is to be made against any the Company under this Section 8, deliver to the Company a written notice of such Claim, and the Company shall have the right to ~~employ separate counsel and to~~ participate ~~in (but not control) the defense~~in, ~~compromise or settlement thereof, at its own expense~~ and, ~~in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available~~ to the ~~Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s~~ extent the Company so desires, to assume control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the ~~Indemnitee, result in the loss of any existing privilege~~ defense thereof with ~~respect to such information or violate any applicable Law. (d) Notwithstanding anything~~ counsel mutually satisfactory to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party Company and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that ~~such access~~ an Indemnitee shall ~~not require~~ have the ~~Indemnifying Party~~ right to ~~disclose any information the disclosure of which would~~retain its own counsel if, in the ~~good faith judgment~~ reasonable opinion of counsel retained by the Company, the representation by such counsel of the ~~Indemnifying Party~~Indemnitee and the Company would be inappropriate due to actual or potential differing interests between such Indemnitee and the Company; provided, ~~result in~~ further, that the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it Company shall not be ~~a defense to any obligation to pay any amount in respect~~ responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) Indemnitee. In the case of an Indemnitee, the legal counsel referred to in the immediately preceding sentence shall be selected by the Buyers holding at least a ~~Third-Party~~ majority in interest of the Securities to which the Claim relates. The Indemnitee shall cooperate fully with the Company in connection with any negotiation or defense of any such action or Claim by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Claim. The Company shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any Claim effected without its prior written consent; provided, ~~no Indemnifying Party~~ however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the ~~Third-Party Claim without the consent (not~~ Company shall be subrogated to ~~be unreasonably withheld, conditioned or delayed)~~ all rights of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to ~~such Third-Party Claim~~ all third parties, firms or ~~includes an admission of guilt or liability on behalf of~~ corporations relating to the ~~Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party,~~ matter for which indemnification has been made. The failure to deliver written notice to the ~~indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of~~ Company as provided in this Agreement or shall not relieve the Company of any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid liability to the Indemnitee ~~pursuant to~~ under this ~~Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year~~Section 8, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and except to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the ~~receipt of any Expense Amount hereunder will not cause the Protected REIT~~ Company is prejudiced in its ability to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of defend such ~~loan, and (B) a 15 year maturity with no periodic amortization~~action.

Appears in 1 contract

Sources: Securities Purchase Agreement (Manufacturers Services LTD)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by an Indemnitee by delivery of a written notice to the Indemnitor Representative (as defined in Section ~~9.4(b)~~9.10 below) ~~to any Party that~~ requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to the provisions of this Agreement~~ (by attachment or ~~the applicable Ancillary Agreement in respect of which~~ otherwise) such ~~right of indemnification is claimed by~~ other information as such ~~Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party~~ Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ the procedures set forth in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence Section 9.3 shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be ~~liable for any expenses incurred~~ observed by the Indemnitee ~~in defending such Third-Party Claim during~~ and the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party ClaimIndemnitor Representative. (c) ~~An Indemnifying Party shall be entitled (but shall not be required) to assume, control~~ If the ~~defense of, and settle any Third-~~Indemnification Claim involves a matter other than a Third Party Claim, at the Indemnitor Representative shall have 30 days to object to such ~~Indemnifying Party’s own cost and expense and~~ Indemnification Claim by ~~such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives~~ delivery of a written notice of ~~its intention~~ such objection to do such Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so ~~(including~~ object shall constitute a ~~statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days~~ final and binding acceptance of the ~~receipt~~ Indemnification Claim by the Indemnitor Representative on behalf of ~~notice from such Indemnitees of~~ all Indemnitors, and the ~~Third-Party~~ Indemnification Claim ~~(failure of the Indemnifying Party to respond within such thirty (30) day period~~ shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate paid in accordance with subsection (~~but not control~~d) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Lawhereof. (d) ~~Notwithstanding anything to~~ Upon determination of the ~~contrary in this Section 9.4~~amount of an Indemnification Claim, in whether by agreement between the Indemnitor Representative and the Indemnitee or by an arbitration award or by any other final adjudication, the Indemnitors shall pay the amount of such Indemnification Claim within ten days of the date such amount is determined. In the event that ~~(i)~~ the Shareholders are the Indemnitors that are required to pay an ~~Indemnifying Party elects not to assume the defense of a Third-Party~~ Indemnification Claim, ~~(ii) there exists a conflict~~ if the Shareholders beneficially own shares of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect ICCE Common Stock as of such ~~Third-Party Claim taking into account~~ date, the ~~indemnification obligations hereunder~~Shareholders shall, ~~or (v)~~ if so required by ICCE, pay the ~~Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense~~ amount of such ~~Third-Party Claim, at the Indemnifying Party’s expense, with counsel~~ Indemnification Claim by surrender to ICCE of such ~~Indemnitee’s choosing (~~number of shares of ICCE Common Stock as shall equal the quotient obtained by dividing the amount of such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required Indemnification Claim by the ~~Indemnitee~~amount set forth in Section 9.2 of the ICCE Disclosure Memorandum; provided, ~~however,~~ that if the Shareholders do not beneficially own a sufficient number of shares of ICCE Common Stock to pay in full the amount of such ~~access shall not require the Indemnifying Party to disclose any information the disclosure~~ Indemnification Claim by surrender of ~~which would,~~ such shares as provided in the ~~good faith judgment~~ preceding clause of this sentence, the Shareholders shall surrender to ICCE such number of shares of ICCE Common Stock as such Shareholders beneficially own and shall pay any remaining balance of the ~~Indemnifying Party, result~~ Indemnification Amount in ~~the loss of any existing privilege with respect to such information or violate any applicable Law~~cash. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Merger Agreement (Acsys Inc)

Procedures for Indemnification. (a) ~~An Indemnitee~~ No Seller Indemnifying Party shall ~~give~~ be liable for any claim for indemnification under this Article VIII unless written notice of a claim for indemnification is delivered by the Purchaser Indemnified Party seeking indemnification to the Seller Indemnifying Party from whom indemnification is sought prior to the expiration of any applicable survival period set forth in Section 8.01 (in which event the claim shall survive until finally and fully resolved). If any third party notifies the Purchaser Indemnified Party with respect to any matter ~~that such Indemnitee has determined has given or would reasonably be expected to~~ which may give rise to a ~~right of~~ claim for indemnification (a “Third Party Claim”) against the Seller Indemnifying Party under this ~~Agreement or~~ Article VIII, then the Purchaser Indemnified Party shall notify the Seller Indemnifying Party reasonably promptly thereof in writing; provided, that no delay on the part of the Purchaser Indemnified Party in notifying the Seller Indemnifying Party shall relieve the Seller Indemnifying Party from any ~~Ancillary Agreement (other than a Third-~~obligation hereunder except to the extent that the Seller Indemnifying Party ~~Claim which shall be governed by Section 9.4(b)) to any Party that~~ is ~~or may be required~~ actually and materially prejudiced thereby. All notices given pursuant to this ~~Agreement or any Ancillary Agreement to make such indemnification (~~Section 8.05(a) shall describe with reasonable specificity the ~~“Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ nature of the claim, the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely claim (to the extent then known) and the ~~Indemnifying Party shall have been materially prejudiced as a result~~ basis of ~~such failure~~the Purchaser Indemnified Party’s claim for indemnification. (b) If Following receipt of notice in accordance with Section 8.05(a) (other than a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate~~ notice of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Third Party Claim ~~promptly (and~~ against the Purchaser Indemnified Party, in ~~any event within thirty (30~~which case Section 8.05(c) ~~days) after receipt by such Indemnitee of written notice of~~ below shall apply), the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Seller Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days from the date it receives such notice (the “Dispute Period”) to make such investigation of the ~~receipt~~ claim as the Seller Indemnifying Party deems necessary or desirable. For purposes of such investigation, the Purchaser Indemnified Party shall make available to the Seller Indemnifying Party all the material information related to such claim relied upon by or in possession or control of, the Purchaser Indemnified Party; provided, that such Purchaser Indemnified Party shall not be required to violate any Governmental Order or any applicable Law to which it is subject or to waive any attorney-client privilege or work product doctrine which any of them may possess or that may otherwise apply to such information. If the Seller Indemnifying Party disagrees with the validity or amount of all or a portion of such claim made by the Purchaser Indemnified Party, the Seller Indemnifying Party shall deliver to the Purchaser Indemnified Party written notice ~~from such Indemnitees~~ thereof (the “Dispute Notice”) prior to the expiration of the ~~Third-~~Dispute Period. If no Dispute Notice is received by the Purchaser Indemnified Party ~~Claim (failure of~~ within the Dispute Period or the Seller Indemnifying Party provides notice that it does not have a dispute with respect to ~~respond~~ such claim, such claim shall be deemed approved and consented to by the Seller Indemnifying Party (such claim, an “Approved Indemnification Claim”). If a Dispute Notice is received by the Purchaser Indemnified Party within the Dispute Period and the Purchaser Indemnified Party and the Seller Indemnifying Party do not agree to the validity and/or amount of such ~~thirty~~ disputed claim, no payment shall be made until such disputed claim is resolved, whether by adjudication of such matter, agreement between the Purchaser Indemnified Party and the Seller Indemnifying Party, or otherwise (~~30) day period~~ and upon any such resolution, such claim shall be deemed to be an ~~election by the Indemnifying Party not to assume the defense for such Third-Party~~ Approved Indemnification Claim). Each Approved Indemnification Claim shall be paid by Sellers or Parent and Purchaser, as applicable, no later than five (5) Business Days after the date on which the subject claim became an Approved Indemnification Claim, in each case by wire transfer of immediately available funds to the account designated in writing by the party entitled to such payment. (c) After the Purchaser Indemnified Party has given notice of a ~~notice from an~~ Third Party Claim to the Seller Indemnifying Party pursuant to ~~an Indemnitee of~~ Section 8.05(a), the Seller Indemnifying Party may, at its ~~election to assume~~ election, undertake and conduct the defense of ~~a Third-~~such Third Party Claim at its own expense; provided, that the Seller Indemnifying Party fully acknowledges in writing its indemnification obligations to the Purchaser Indemnified Party. In such case, the Purchaser Indemnified Party may continue to participate in the defense of such Third Party Claim. If the Seller Indemnifying Party assumes the defense of any Third Party Claim, and unless (i) such ~~Indemnitee shall have~~ settlement or consent to judgment does not impose or purport to impose any obligation or restriction on such Purchaser Indemnified Party or any of its Affiliates or any action or restrictions upon the ~~right to employ separate counsel and to participate in~~ conduct of the businesses of the Purchaser Indemnified Party or any of its Affiliates, (~~but not control~~ii) the ~~defense~~Purchaser Indemnified Party receives a full release of and from any other claims that may be made against the Purchaser Indemnified Party in connection with such Third Party Claim, ~~compromise~~ (iii) the sole relief provided is monetary damages that are paid in full by the Seller Indemnifying Party, and (iv) there is no finding or ~~settlement thereof~~admission of any violation by the Purchaser Indemnified Party of any applicable Law or any rights of any Person, ~~at its own expense and, in any event, shall reasonably cooperate with~~ the Seller Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not ~~require the Indemnitee~~ settle or consent to ~~disclose any information the disclosure of which would, in the good faith~~ judgment ~~of the Indemnitee, result in the loss of any existing privilege~~ with respect to such ~~information~~ Third Party Claim without the written consent of the Purchaser Indemnified Party, which consent shall not be unreasonably withheld, conditioned or ~~violate any applicable Law. (d)~~ delayed. Notwithstanding anything to the ~~contrary in this Section 9.4~~contrary, in the ~~event that~~ Seller Indemnifying Party shall not be entitled to assume the administration and defense of any Third Party Claim if: (i) ~~an Indemnifying Party elects not to assume~~ the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Seller Indemnifying Party has failed to assume the defense of ~~the Third-~~such Third Party Claim within thirty (30) days of the Purchaser Indemnified Party’s delivery of notice of such Third Party Claim to the Seller Indemnifying Party, (ii) the aggregate amount reasonably expected to be incurred in ~~accordance~~ connection with such Third Party Claim and all other outstanding claims on the RWI Indemnity Escrow Funds exceeds 150% of the remaining amount of the RWI Indemnity Escrow Funds, (iii) such Third Party Claim involves criminal or quasi-criminal allegations, (iv) the Third Party Claim includes a claim for injunctive relief, or (v) any Seller is the Seller Indemnifying Party and (A) Purchaser or the Insurer is required to assume the defense of the Third Party Claim pursuant to the terms thereof or (B) any Seller’s assumption of the defense of the Third Party Claim would reasonably be expected to cause a Purchaser Indemnified Party to lose coverage under the R&W Insurance Policy. The Purchaser Indemnified Party and the Seller Indemnifying Party shall render to each other such assistance as may reasonably be required of each other in order to ensure proper and adequate defense of any Third Party Claim subject to this ~~Agreement~~Section 8.05. To the extent that the Purchaser Indemnified Party or the Seller Indemnifying Party does not participate in the defense of a particular Third Party Claim, ~~no Indemnitee may~~ the Person so proceeding with such Third Party Claim shall keep the other Person informed of all material developments and events relating to such Third Party Claim. No Purchaser Indemnified Party shall settle or ~~compromise~~ consent to judgment with respect to any ~~Third-~~Third Party Claim for which the Seller Indemnifying Party has provided a written acknowledgement of its indemnification obligations to the Purchaser Indemnified Party without the written consent of the Seller Indemnifying ~~Party (~~Party, which consent shall not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Purchase and Sale Agreement (Local Bounti Corporation/De)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected~~ Promptly after receipt by a party entitled to ~~give rise to a right of~~ indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification hereunder (the “~~Indemnifying Party~~Indemnitee”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the ~~Third-Party Claim; provided, however, that~~ assertion or the ~~failure to provide notice~~ commencement of any ~~such Third~~Proceeding by a third-~~Party Claim pursuant~~ party with respect to ~~this sentence shall not release the Indemnifying Party from~~ any ~~of its obligations except and solely~~ matter referred to ~~the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party~~ in Sections 11.2 or ~~Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter~~11.3, the Indemnitee shall ~~deliver~~ give written notice thereof to the ~~Indemnifying Party~~party obligated to indemnify Indemnitee (the “Indemnitor”), ~~promptly~~ which notice shall include a description of the Proceeding, the amount thereof (if known and ~~in any event within ten (10~~quantifiable) ~~days) after~~ and the ~~Indemnitee’s receipt thereof~~basis for the Proceeding, ~~copies~~ and thereafter shall keep the Indemnitor reasonably informed with respect thereto; provided, that failure of ~~all notices and documents (including court papers) received by~~ the Indemnitee ~~relating~~ to give the Indemnitor notice as provided herein shall not relieve the Indemnitor of its obligations hereunder except to the ~~Third~~extent that the Indemnitor is prejudiced thereby. A claim for indemnification for any matter not involving a third-~~Party Claim. (c) An Indemnifying Party~~ party Proceeding may be asserted by notice to the party from whom indemnification is sought and shall be paid promptly after such notice. Any Indemnitor shall be entitled ~~(but shall not be required)~~ to ~~assume, control~~ participate in the defense ofof such action, lawsuit, proceeding, investigation or other claim giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and ~~settle any Third-Party Claim,~~ at ~~such Indemnifying Party’s own cost~~ its option (subject to the limitations set forth below) shall be entitled to assume the defense thereof by appointing a nationally recognized and ~~expense and by such Indemnifying Party’s own counsel, which~~ reputable counsel ~~must be~~ reasonably acceptable to the ~~Indemnitee, if it gives written notice of its intention~~ Indemnitee to ~~do so~~ be the lead counsel in connection with such defense; provided that: (~~including a statement that~~ i) the Indemnitee is shall be entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume participate in the defense of ~~a Third-Party Claim,~~ such ~~Indemnitee shall have the right~~ claim and to employ counsel of its choice for such purpose; provided that the fees and expenses of such separate counsel shall be borne by the Indemnitee (other than any fees and expenses of such separate counsel that are incurred prior to ~~participate in (but not control)~~ the ~~defense~~date the Indemnitor effectively assumes control of such defense which, ~~compromise or settlement thereof, at its own expense and, in any event~~notwithstanding the foregoing, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required be borne by the ~~Indemnifying Party; provided~~Indemnitor, ~~however,~~ and except that the Indemnitor shall pay all of the fees and expenses of such ~~access shall not require~~ separate counsel if the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event has been advised by counsel that ~~(i) an Indemnifying Party elects not to assume the defense~~ a reasonable likelihood exists of a ~~Third-Party Claim, (ii) there exists a conflict of interest or potential~~ conflict of interest between the ~~Indemnifying Party~~ Indemnitor and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.;

Appears in 1 contract

Sources: Asset Purchase Agreement (PLC Systems Inc)

Procedures for Indemnification. ~~(a) An Indemnitee shall give notice of~~ 9.4.1. If any ~~matter~~ Indemnified Party determines in good faith that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that it is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this ~~Agreement~~Section 9 and such Indemnified Party desires to seek an indemnification claim hereunder, ~~such Indemnitee~~ the Indemnified Party shall ~~notify~~ give to the Indemnifying Party and the Escrow Agent a written notice with respect thereto (a "NOTICE OF CLAIM") setting forth in ~~writing~~reasonable detail the basis for such claim, and ~~in reasonable detail~~specifying the amount of Losses claimed (which, if not finally determined, may be a good faith estimate thereof) (the amount of Losses so claimed being hereinafter referred to as the ~~Third-~~"INDEMNITY CLAIM AMOUNT"). 9.4.2. The Indemnifying Party ~~Claim promptly (and in any event~~ may, within ~~thirty (30) days)~~ 15 days after receipt of any Notice of Claim, object to such Notice of Claim and dispute the claim in full or any Indemnity Claim Amount set forth in such Notice of Claim by ~~such Indemnitee~~ delivery to the Indemnified Party and the Escrow Agent of written notice of such dispute (a "DISPUTE NOTICE"), setting forth in reasonable detail the ~~Third-Party Claim; provided, however, that~~ basis for such dispute and the ~~failure to provide notice~~ amount of ~~any such Third-Party~~ the Indemnity Claim ~~pursuant to this sentence shall not release~~ Amount which the Indemnifying Party objects to being claimed by the Indemnified Party in respect of the Notice of Claim. 9.4.3. If the Indemnified Party does not receive a Dispute Notice that relates to a Notice of Claim within fifteen (15) days after the Indemnified Party delivers such Notice of Claim, the Escrow Agent will disburse to Purchaser, on behalf of all the Indemnified Parties, from ~~any~~ the Escrow Consideration Shares a number of ~~its obligations except and solely~~ shares with a value, based on the Average Share Price as of the date of disbursement, equal to the ~~extent~~ Indemnity Claim Amount specified in such Notice of Claim within three (3) Business Days after the expiration of such 15-day period. If the Indemnified Party and the Escrow Agent receive a Dispute Notice that relates to a Notice of Claim within fifteen (15) days after receipt of such Notice of Claim, the Escrow Agent (A) will, in respect of such Notice of Claim, disburse to Purchaser, on behalf of the Indemnified Parties, from the Escrow Consideration Shares a number of Consideration Shares with a value, based on the Average Share Price as of the date of disbursement, equal to the portion, if any, of the Indemnity Claim Amount specified in such Notice of Claim which is not objected to in such Dispute Notice within three Business Days after the receipt of such Dispute Notice, and (B) will not disburse to Purchaser from the Escrow Consideration Shares, any shares in respect of such portion of the Indemnity Claim Amount which is objected to in such Dispute Notice unless it has received either a joint notice of release signed by the Indemnifying Party ~~shall have been materially prejudiced~~ and the Purchaser directing the Escrow Agent to deliver Escrow Consideration Shares with a value, based on the Average Share Price as ~~a result~~ of the date of delivery of such ~~failure~~ Escrow Consideration Shares, equal to all or any portion of such funds, which joint notice the parties agree to deliver to the Escrow Agent promptly following resolution of such Notice of Claim, or a final order by a court of competent jurisdiction or an arbitral award, which order or award is not subject to appeal (~~except~~ a "PURCHASER FINAL Order"), directing the Escrow Agent to disburse to Purchaser, on behalf of all the Indemnified Parties, from the Escrow Consideration Shares, shares with a value, based on the Average Share Price as of the date of delivery of such Escrow Consideration Shares, equal to an amount set forth in such Purchaser Final Order. 9.4.4. In the event that under the terms of the Escrow Agreement any Escrow Consideration Shares are due to be released from escrow while any dispute under Section 9.4.4 is pending, the number of Escrow Consideration Shares to be released from escrow shall be reduced by a number of Escrow Consideration Shares with a value, based on the Average Share Price as of the date of release, equal to all Indemnity Claim Amounts pending at such time that are either subject to dispute or due to be disbursed to the Purchaser. 9.4.5. If it has been determined that any Indemnified Party is due Escrow Consideration Shares pursuant to Sections 9.2 and 9.4 hereof, the Indemnifying Party may elect to pay the value of the applicable Indemnity Claim Amount (or ~~Parties~~ portion thereof) in immediately available funds (in U.S. dollars) by wire transfer no later than the date on which release of the Escrow Consideration Shares for such Indemnity Claim Amount (or portion thereof) is required. The Indemnifying Party shall provide Purchaser and the Escrow Agent notice of its election to pay cash no later than five (5) days prior to the date on which release of Escrow Consideration Shares is due. If the Indemnifying Party breaches its obligation and does not make cash payment of such amount on the date so scheduled, Escrow Consideration Shares for the applicable Indemnity Claim Amount (or portion thereof) shall be released to Purchaser on the next day in accordance with the provisions of Section 9. 9.4.6. Prolink Amount Shares will be held in escrow only for the purposes described in this Section 9.4.6 and shall not serve for indemnification for any other matter under Section 9. 2.1. At such time that USDATA or USDATA Sub pays any portion of the Prolink Amount in accordance with and at such time required by the Prolink Agreement, Prolink Amount Shares in an amount equal to the amount so paid divided by the Average Share Price as of the date of payment shall be released from escrow to USDATA. In the event that any Prolink Amount due to be paid to Prolink is not paid by USDATA or USDATA Sub to Prolink as required under the Prolink Agreement, Prolink Amount Shares in an amount equal to the amount so defaulted, based on the Average Share Price as of the date of default will be disbursed to Purchaser. Notwithstanding anything to the contrary, the Prolink Amount Shares shall not be ~~liable~~ released to USDATA or Purchaser other than in accordance with this Section 9.4.6 and Section 9.4.7. In the event that the Prolink Amount Shares are not sufficient to indemnify Purchaser for any ~~expenses incurred by the Indemnitee~~ default in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days payment of the ~~receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period~~ Prolink Amount then any excess damages shall be deemed to be an ~~election by the Indemnifying Party not to assume the defense for such Third-Party Claim)~~Excluded Liability. After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary set forth herein, when the Prolink Amount has been paid in ~~this Section 9.4, in~~ full by USDATA or any Affiliate of USDATA and written evidence of such payment has been provide to the ~~event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party~~ Escrow Agent and the ~~Indemnitee~~Purchaser, ~~(iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability~~ all Prolink Amount Shares remaining in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee escrow shall be ~~entitled~~ released to ~~control~~ USDATA. 9.4.7. At any time as USDATA or USDATA Sub pays a portion of the ~~defense of~~ Prolink Amount in accordance with and at such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably time required by the ~~Indemnitee; provided~~Prolink Agreement, ~~however~~it shall provide the Escrow Agent and the Purchaser with written notice with respect thereto which notice shall be deemed a Notice of Claim under Section 9.4.1. Purchaser may, ~~that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss~~ within 15 days after receipt of any ~~existing privilege~~ such notice, dispute such notice and give to USDATA and the Escrow Agent a written notice with respect thereto which notice shall be deemed a Dispute Notice under Section 9.4.2. In addition, Purchaser may also provide the Seller and the Escrow Agent a written notice at any time requesting that Prolink Amount Shares be disbursed to ~~such information or violate any applicable Law. (e) Unless~~ the ~~Indemnifying Party has failed to assume the defense of the Third-Party Claim~~ Purchaser in accordance with Section 9.4.6 above, if Purchaser determines in good faith that USDATA or USDATA Sub is in default under the ~~terms of this~~ Prolink Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX which notice shall be ~~the sole~~ deemed a Notice of Claim under Section 9.4.1. and ~~exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement~~USDATA may, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the within 15 days after receipt of any ~~Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and~~such notice, ~~collectively with an Expense Amount Tax Opinion~~ dispute such notice and ~~an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee~~ give to the ~~Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from~~ Purchaser and the Escrow ~~Account pursuant to~~ Agent a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) written notice with respect thereto which notice shall be deemed a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationDispute Notice under Section 9.4.

Appears in 1 contract

Sources: Asset Purchase Agreement (Tecnomatix Technologies LTD)

Procedures for Indemnification. Promptly after receipt by a party entitled to indemnification under Sections 11.1 or 11.2 or any other provision of this Agreement (athe “Indemnitee”) An of written notice of the assertion or the commencement of any Proceeding with respect to any matter referred to in Sections 11.1 or 11.2 or in any other applicable provision of this Agreement, the Indemnitee shall give written notice describing such claim or Proceeding in reasonable detail in light of ~~any matter that such~~ the circumstances then known to the Indemnitee ~~has determined has given or would reasonably be expected~~ to ~~give rise~~ the party obligated to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification indemnify Indemnitee (the “~~Indemnifying Party~~Indemnitor”~~) promptly (~~), and ~~in any event within fifteen (15) days) after making such a determination. Such notice~~ thereafter shall ~~state~~ keep the ~~amount~~ Indemnitor reasonably informed with respect thereto; provided, however, that failure of the ~~Loss claimed, if known, and method~~ Indemnitee to provide the initial notice or keep the Indemnitor reasonably informed as provided in this Section 11.4 shall not relieve the Indemnitor of ~~computation thereof, and containing a reference~~ its obligations hereunder except to the ~~provisions of this Agreement or~~ extent that the ~~applicable Ancillary Agreement~~ Indemnitor is prejudiced thereby. If any Proceeding shall be commenced against any Indemnitee by a third party, the Indemnitor shall be entitled to participate in ~~respect of which~~ such ~~right of indemnification is claimed by such~~ Proceeding and assume the defense thereof with counsel reasonably satisfactory to the Indemnitee, at the Indemnitor’s sole expense; provided, however, that the ~~failure to provide such notice~~ Indemnitor shall not ~~release~~ have the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure. (b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-Party Claim”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that the failure to provide notice of any such Third-Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election right to assume the defense of ~~a Third-Party Claim,~~ any such ~~Indemnitee shall have the right to employ separate counsel and to participate in~~ Proceeding if (~~but not control~~i) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the ~~good faith judgment~~ reasonable opinion of counsel to the Indemnitee, ~~result~~ counsel for the Indemnitor could not adequately represent the interests of the Indemnitee because such interests would reasonably be expected to be in conflict with those of the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party ClaimIndemnitor, (ii) ~~there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim~~ such Proceeding seeks an ~~order,~~ injunction or other equitable relief against the Indemnitee except where such equitable relief is immaterial incidental to claims for monetary damages, (iii) the Indemnitor has failed or ~~relief for other than money damages against~~ is failing, in the reasonable good faith opinion of the Indemnitee, based on proffered evidence, to prosecute or defend such Proceeding diligently and in good faith, or (iv) in any case where a Purchaser Indemnified Person is the Indemnitee~~’s exposure to Liability~~ , the amount of Damages or potential Damages arising out of such Proceeding, as determined by the Indemnitee in ~~connection with such Third-Party Claim~~ good faith, is reasonably expected to exceed the ~~Indemnifying Party’s exposure in respect~~ Purchase Price. If the Indemnitor shall assume the defense of any such ~~Third-Party Claim taking into account~~ Proceeding, the ~~indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such~~ Indemnitee shall be entitled to ~~control the defense of such Third-Party Claim,~~ participate in any Proceeding at ~~the Indemnifying Party’s~~ its expense~~, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party)~~. ~~If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee~~ Unless approved in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required writing by the Indemnitee~~; provided~~, ~~however, that~~ such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (approval not to be unreasonably withheld, conditioned or delayed~~). If an Indemnifying Party has failed to assume~~ , the ~~defense of the Third-Party Claim, it~~ Indemnitor shall not ~~be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof~~settle, ~~that such Indemnifying Party’s views~~ or ~~opinions as~~ consent to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment with respect to, any such Proceeding unless such settlement or ~~enter into~~ judgment (w) does not include any ~~settlement of~~ monetary damages payable by the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, (x) does not ~~release~~ admit to any Liability on the ~~Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf~~ part of the Indemnitee. , (gy) ~~Absent fraud or intentional misconduct by an Indemnifying Party,~~ does not include any restriction on the ~~indemnification provisions~~ operations of ~~this Article IX shall be~~ the ~~sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement~~Indemnitee, and ~~each Indemnitee expressly waives~~ (z) includes as an unconditional term thereof the giving by the claimant or the plaintiff of a full and ~~relinquishes any and~~ unconditional release of the Indemnitee, in customary form, from all ~~rights, claims or remedies such Person may have~~ Liability with respect to the ~~foregoing other than under this Article IX against any Indemnifying Party~~matters that are subject to such Proceeding. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortization.

Appears in 1 contract

Sources: Asset Purchase Agreement (Novavax Inc)

Procedures for Indemnification. (a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Indemnification Claim ~~which~~ shall be ~~governed~~ made by ~~Section 9.4(b))~~ the Indemnitee by delivery of a written declaration to ~~any Party that~~ the Indemnitor requesting indemnification and specifying the basis on which indemnification is ~~or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “Indemnifying Party”) promptly (~~sought and ~~in any event within fifteen (15) days) after making such a determination. Such notice shall state~~ the amount of asserted Losses and, in the ~~Loss claimed~~case of a Third Party Claim, ~~if known, and method of computation thereof, and~~ containing ~~a reference to~~ (by attachment or otherwise) such other information as the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party Indemnitee shall have ~~been materially prejudiced as a result of~~ concerning such ~~failure~~Third Party Claim. (b) If the Indemnification Claim involves a ~~claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “Third-~~Third Party Claim”, the procedures set forth in Section 12.4 hereof shall be observed by the Indemnitee and the Indemnitor. (c) ~~as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement~~If the Indemnification Claim involves a matter other than a Third Party Claim, ~~such Indemnitee~~ the Indemnitor shall ~~notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within~~ have thirty (30) ~~days) after receipt~~ Business Days to object to such Indemnification Claim by ~~such Indemnitee~~ delivery of a written notice of such objection to the ~~Third-Party~~ Indemnitee specifying in reasonable detail the basis for such objection. Failure to timely so object shall constitute a final and binding acceptance of the Indemnification Claim by the Indemnitor and the Indemnification Claim shall be paid in accordance with Section 12.3(d) hereof. If an objection is timely interposed by the Indemnitor, then the Indemnitee and the Indemnitor shall negotiate in good faith for a period of sixty (60) Business Days from the date (such period is hereinafter referred to as the “Negotiation Period”) the Indemnitee receives such objection. After the Negotiation Period, if the Indemnitor and the Indemnitee still cannot agree on an amount related to the Indemnification Claim, either the Indemnitor and Indemnitee may submit the dispute concerning such Indemnification Claim for resolution as provided in Section 13.1 below; provided, however, nothing herein shall prevent the parties from seeking equitable or injunctive relief in a court of equity with respect to such dispute. (d) Upon determination of the amount of an Indemnification Claim that is binding on both the ~~failure to provide notice of any such Third-Party Claim pursuant to this sentence~~ Indemnitor and the Indemnitee, the Indemnitor shall ~~not release~~ pay the ~~Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result~~ amount of such ~~failure (except that the Indemnifying Party~~ Indemnification Claim by wire transfer of immediately available funds, if such payment is due from Seller, or ~~Parties shall not be liable for any expenses incurred~~ by ~~the Indemnitee in defending~~ wire transfer of immediately available funds if such ~~Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter~~payment is due from Purchaser, ~~the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event~~ within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. (c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Person making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided, however, that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law. (e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee. (g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party. (h) Notwithstanding anything to the contrary in this Agreement, in the event that counsel or independent accountants for a Protected REIT determine that there exists a material risk that any indemnification payments due under this Agreement would be treated as Nonqualifying Income upon the payment of such amounts to the relevant Indemnitee, the amount paid to the Indemnitee pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to the Indemnitee in such year without causing the Protected REIT to fail to meet the REIT Requirements for any tax year, determined as if the payment of date such amount ~~were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence~~ is less than the amount which the relevant Indemnifying Party would otherwise be obligated to pay to the relevant Indemnitee pursuant to this Agreement (the “Expense Amount”), then: (1) the Indemnifying Party shall place the Expense Amount into an escrow account (the “Escrow Account”) using an escrow agent and agreement reasonably acceptable to the Indemnitee and shall not release any portion thereof to the Indemnitee, and the Indemnitee shall not be entitled to any such amount, unless and until the Indemnitee delivers to the Indemnifying Party, at the sole option of the relevant Protected REIT, (i) an opinion (an “Expense Amount Tax Opinion”) of the Protected REIT’s tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an “Expense Amount Accountant’s Letter”) from the Protected REIT’s independent accountants indicating the maximum amount that can be paid at that time to the Indemnitee without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a “REIT Qualification Ruling” and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountant’s Letter, a “Release Document”); and (2) pending the delivery of a Release Document by the Indemnitee to the Indemnifying Party, the Indemnitee shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an “Indemnity Loan Agreement”) reasonably acceptable to the Indemnitee that (i) requires the Indemnifying Party to lend the Indemnitee immediately available cash proceeds in an amount equal to the Expense Amount (an “Indemnity Loan”), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of the Indemnitee or any guarantor of the Indemnitee, including the Protected REIT, at the time of such loan, and (B) a 15 year maturity with no periodic amortizationdetermined.

Appears in 1 contract

Sources: Stock Purchase Agreement (Encore Bancshares Inc)

Common use of Procedures for Indemnification Clause in Contracts