The indemnifying party clause outlines the obligations of one party to compensate or reimburse the other party for certain costs or damages incurred. This clause ensures that the indemnifying party takes financial responsibility for any specified liabilities, such as legal claims or losses, arising during the execution of the contract.
Subject to the terms and conditions herein, from and after the Acquisition Closing and until the end of the Survival Period, the Indemnifying Party hereby agrees to indemnify, defend and hold harmless Pubco and its Affiliates (provided, that, for such purpose, the Indemnifying Party shall not be deemed an Affiliate of Pubco) (collectively, the “Indemnitees”) from and against any and all damages, losses, liabilities, Actions, judgments, obligations, claims of any kind, interest, penalties, amounts paid in settlement in accordance with Section 1.5, reasonable costs and expenses (including reasonable court costs, reasonable attorneys’ fees and expenses, the reasonable costs of enforcing any right to indemnification hereunder and the reasonable cost of pursuing any insurance providers) (any of the foregoing, as determined in accordance with Section 1.2, a “Loss”, but excluding any special, consequential, indirect or punitive damages, damages calculated on multiples of earnings, declines in value, lost opportunities, lost profits or other similar damages, except to the extent actually awarded to a third party) paid, suffered or incurred by, or imposed upon, any of the Indemnitees to the extent arising out of, or directly or indirectly from, the breach of or inaccuracy in any representation and warranty contained in the second sentence of Section 4.3(a) or Section 4.17 of the Business Combination Agreement (the “Indemnifiable Matters”).
Subject to the limitations in Section 1.6, any indemnification of the Indemnitees pursuant to Section 1.1 shall be effected by the Indemnifying Party’s surrender, for nil consideration, of a number of Pubco Ordinary Shares (with Pubco Class B Ordinary Shares being surrendered first before any other Pubco Ordinary Shares) for cancellation equal to the Surrender Value calculated based upon any Losses.
The Indemnitees shall not be entitled to indemnification unless they have given a notice of claim (a “Notice of Claim”) to the Indemnifying Party in accordance with Section 4.1 (a) for any Losses suffered by the Indemnitees arising from the Indemnifiable Matters or (b) for any Third Party Claim (as defined below). A Notice of Claim shall specify with reasonable specificity and detail the breach of the representation and warranty pursuant to which Losses are being claimed by the Indemnitees and, if reasonably ascertainable, the amount of Losses that have been, or may be sustained by the Indemnitees. The Notice of Claim shall be given promptly after the Indemnitees becomes aware of any matter or circumstance that may give rise to an indemnifiable claim, including any Third Party Claim; provided, that the failure to give such Notice of Claim shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent that the Indemnifying Party is actually prejudiced thereby, or if the Notice of Claim is not provided prior to the expiration of the Survival Period.
The Indemnifying Party has agreed to provide certain indemnities to the Indemnified Party as provided for in this Agreement.
The Indemnifying Party will indemnify and save harmless the Indemnified Party from the full amount of any Loss which the Indemnified Party may suffer in respect of the Guarantee, provided that such Loss arose entirely after the date hereof.
The Indemnified party acknowledges that the Indemnifying Party has in force, or may put in force, supplement or amend, certain corporate policies including risk management policies (collectively “Above Food Policies”), and that, as an employee, officer and director of the Indemnifying Party, the Indemnified Party must follow all Above Food Policies. The Indemnified Party agrees that in the event the Indemnified Party has not followed all Above Food Policies in respect of a Loss to which this Indemnity would apply, the Indemnifying Party shall not be required to indemnify the Indemnified Party for such Loss and, for greater certainty, this Indemnity, including Section 3.1.1, shall give rise to no liability or obligation of the Indemnifying Party to the Indemnified Party.
The Indemnifying Party agrees to indemnify and hold you harmless against any and all claims of any nature arising from the Solicitation and any related transactions, irrespective of the outcome; provided, however, that you will not be entitled to indemnification for claims arising from your gross negligence, willful misconduct, intentional and material violations of law, criminal actions, intentionally providing the Indemnifying Party, the Company, or any of their respective affiliates with false and/or misleading information (including false and/or misleading information on any questionnaire or other document you are requested to complete by the Company, the Indemnifying Party, or any of their respective affiliates), or any material breach of the terms of this letter agreement; provided, further, that except for acts in connection with the Solicitation and any related transactions which occurred prior to your election as a director of the Company, the indemnification and other obligations hereunder shall terminate upon your becoming a director of the Company. This indemnification will include any and all losses, liabilities, damages, demands, claims, suits, actions, judgments, or causes of action, assessments, costs and expenses, including, without limitation, interest, penalties, reasonable attorneys’ fees, and any and all reasonable costs and expenses incurred in investigating, preparing for or defending against any litigation, commenced or threatened, any civil, criminal, administrative or arbitration action, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation asserted against, resulting, imposed upon, or incurred or suffered by you, directly or indirectly, as a result of or arising from the Solicitation and any related transactions (each, a “Loss”).
In the event of a claim against you pursuant to the prior paragraph or the occurrence of a Loss, you shall give the Indemnifying Party prompt written notice of such claim or Loss (provided that failure to promptly notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have on account of this letter agreement, except to the extent the Indemnifying Party shall have been materially prejudiced by such failure). Upon receipt of such written notice, the Indemnifying Party will provide you with counsel to represent you. Such counsel shall be reasonably acceptable to you. In addition, you will be reimbursed promptly for all Losses suffered by you and as incurred as provided herein.
The Indemnifying Party may not enter into any settlement of any Loss or claim without your consent unless such settlement includes a release of you from any and all liability in respect of such Loss or claim and does not require you to admit to any violation of any law, order or regulation. Notwithstanding anything to the contrary set forth in this letter agreement, the Indemnifying Party shall not be responsible for any fees, costs or expenses of separate legal counsel retained by you without the Indemnifying Party’s prior written approval. In addition, you agree not to enter into any settlement of any Loss or claim without the written consent of the Indemnifying Party, which consent will not be unreasonably withheld.
An Indemnifying Party is a person or entity that agrees to compensate another party, known as the indemnified party, for any losses, damages, or liabilities incurred. This compensation obligation typically arises from claims that may be brought against the indemnified party by third parties, or from any other designated risks captured within a contractual agreement.
An indemnifying party is often identified in contracts and agreements where there’s a likelihood of potential liabilities arising, including:
Using an indemnity clause is particularly crucial in scenarios involving considerable financial risk or legal obligations, allowing parties to delineate risk reallocations more clearly.
When drafting an indemnity clause involving an indemnifying party, the following should be considered:
Example Clause: “The Indemnifying Party shall indemnify, defend, and hold harmless the Indemnified Party against any and all claims, damages, liabilities, and costs, including reasonable legal fees, arising out of [specific situations] to the extent they are caused by the Indemnifying Party’s [actions/omissions].”
Contracts that often feature indemnifying party provisions include, but are not limited to:
These agreements use indemnity clauses to manage risks and liabilities that could arise from contractual operations, helping to clarify financial responsibility between parties involved.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The independent consideration clause refers to the nominal payment or action that is separately identified and provided by one party to another in exchange for specific contractual promises, ensuring the agreement is enforceable under contract law. This element is crucial because it demonstrates that a contract offer has been made and accepted with mutual obligations, adding to the validity and binding nature of the agreement.
An independent contractor relationship clause defines the working relationship between parties, specifying that the contractor operates autonomously and is not an employee of the hiring party. This clause clarifies that the contractor is responsible for their own taxes, insurance, and adherence to laws, and it delineates the absence of benefits typically associated with employment.
An independent contractor clause establishes the relationship between the parties, specifying that the contractor is not an employee and will work independently, managing their own schedule and methods of completing the work. This clause typically outlines the responsibilities of the contractor, their lack of entitlement to employee benefits, and their obligation to pay their own taxes.
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