OF THE
ASSETS, OR THE CONDUCT OF THE BUSINESS OR OPERATIONS OF SPARHAWK OR THE JOINT
VENTURE, AFTER THE CLOSING.
16
SECTION 6.3.
INDEMNIFICATION PROCEDURES.
ALL
CLAIMS FOR INDEMNIFICATION BY A PARTY UNDER ARTICLE VI HEREOF (THE PARTY
CLAIMING INDEMNIFICATION AND THE PARTY AGAINST WHOM SUCH CLAIMS ARE ASSERTED
BEING HEREINAFTER CALLED THE "INDEMNIFIED PARTY" AND THE "INDEMNIFYING PARTY,"
RESPECTIVELY) SHALL BE ASSERTED AND RESOLVED AS FOLLOWS:
(A)
IN THE EVENT THAT ANY CLAIM OR DEMAND FOR
DAMAGES WHICH AN INDEMNIFYING PARTY WOULD BE LIABLE TO AN INDEMNIFIED PARTY
HEREUNDER IS ASSERTED AGAINST OR SOUGHT TO BE COLLECTED FROM SUCH INDEMNIFIED
PARTY BY A THIRD PARTY, SUCH INDEMNIFIED PARTY SHALL WITH REASONABLE PROMPTNESS
GIVE NOTICE (THE "CLAIM NOTICE") TO THE INDEMNIFYING PARTY OF SUCH CLAIM OR
DEMAND, SPECIFYING THE NATURE OF AND 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 INDEMNIFYING PARTY SHALL NOT BE OBLIGATED TO INDEMNIFY THE INDEMNIFIED PARTY
UNDER THIS AGREEMENT WITH RESPECT TO ANY SUCH CLAIM OR DEMAND IF THE INDEMNIFIED
PARTY FAILS TO NOTIFY THE INDEMNIFYING PARTY THEREOF IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT, AND AS A RESULT OF SUCH FAILURE, THE INDEMNIFYING
PARTY'S ABILITY TO DEFEND AGAINST THE CLAIM OR DEMAND IS MATERIALLY PREJUDICED.
THE INDEMNIFYING PARTY SHALL HAVE TEN (10) DAYS FROM THE DELIVERY OR MAILING OF
THE CLAIM NOTICE (THE "NOTICE PERIOD") TO NOTIFY THE INDEMNIFIED PARTY (I)
WHETHER OR NOT IT DISPUTES THE LIABILITY OF THE INDEMNIFYING PARTY TO THE
INDEMNIFIED PARTY HEREUNDER WITH RESPECT TO SUCH CLAIM OR DEMAND, AND (II)
WHETHER OR NOT IT DESIRES, AT THE COST AND EXPENSE OF THE INDEMNIFYING PARTY, TO
DEFEND THE INDEMNIFIED PARTY AGAINST SUCH CLAIM OR DEMAND; PROVIDED, HOWEVER,
THAT ANY INDEMNIFIED PARTY IS HEREBY AUTHORIZED, BUT IS NOT OBLIGATED, PRIOR TO
AND DURING THE NOTICE PERIOD, TO FILE ANY MOTION, ANSWER OR OTHER PLEADING THAT
IT SHALL DEEM NECESSARY OR APPROPRIATE TO PROTECT ITS INTERESTS OR THOSE OF THE
INDEMNIFYING PARTY.
IF THE INDEMNIFYING PARTY NOTIFIES THE INDEMNIFIED PARTY
WITHIN THE NOTICE PERIOD THAT IT DESIRES TO DEFEND THE INDEMNIFIED PARTY AGAINST
SUCH CLAIM OR DEMAND, THE INDEMNIFYING PARTY SHALL, SUBJECT TO THE LAST SENTENCE
OF THIS PARAGRAPH, HAVE THE RIGHT TO CONTROL THE DEFENSE AGAINST THE CLAIM BY
ALL APPROPRIATE PROCEEDINGS AND ANY SETTLEMENT NEGOTIATIONS.
IF THE INDEMNIFIED
PARTY DESIRES TO PARTICIPATE IN, BUT NOT CONTROL, ANY SUCH DEFENSE OR SETTLEMENT
IT MAY DO SO AT ITS SOLE COST AND EXPENSE.
IF THE INDEMNIFYING PARTY FAILS TO
RESPOND TO THE INDEMNIFIED PARTY WITHIN THE NOTICE PERIOD OR AFTER ELECTING TO
DEFEND FAILS TO COMMENCE OR DILIGENTLY PURSUE SUCH DEFENSE, THEN THE INDEMNIFIED
PARTY SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO UNDERTAKE OR CONTINUE THE
DEFENSE OF AND TO COMPROMISE OR SETTLE (EXERCISING REASONABLE BUSINESS JUDGMENT)
THE CLAIM OR OTHER MATTER, ALL ON BEHALF, FOR THE ACCOUNT AND