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SAMPLE - INDEMNITY AGREEMENT
1. IntroductionThis Indemnity Agreement (“Agreement”) is entered into between [Party providing indemnification] (“Indemnitor”) and [Party receiving indemnification] (“Indemnitee”), collectively referred to as the “Parties.” The purpose of this Agreement is to set forth the terms and conditions under which the Indemnitor agrees to indemnify and hold harmless the Indemnitee from and against certain claims, losses, damages, and liabilities. This Agreement is effective as of [Effective Date] and shall remain in effect until [Termination Date] unless otherwise terminated by either Party in accordance with the terms herein. By signing this Agreement, both Parties acknowledge that they have read, understood, and agreed to be bound by its terms and conditions.
2. DefinitionsFor the purpose of this Agreement, the following terms shall have the meanings set forth below:
- Claim: Refers to any legal action, demand, lawsuit, or proceeding brought against the Indemnitee.
- Losses: Includes, but is not limited to, all financial losses, damages, legal fees, and other expenses incurred by the Indemnitee.
- Liabilities: Refers to any debt or financial obligation, whether current, future, or contingent, incurred by the Indemnitee.
- Damages: Refers to physical damage to property or persons, as well as financial and other forms of harm or loss.
- Effective Date: The date on which this Agreement becomes effective, as mentioned above.
- Termination Date: The date on which this Agreement ceases to be effective, as mentioned above or as terminated by either of the Parties.
- Scope: The Indemnifier agrees to defend, indemnify, and hold harmless the Indemnitee against any and all Claims and Losses arising out of or related to the activities described in this Agreement or any breach of this Agreement by the Indemnifier.
- Notification: Upon becoming aware of any Claim for which indemnification may be required, the Indemnitee shall promptly notify the Indemnifier.
- Settlement and Legal Action: The Indemnifier shall have the right, but not the obligation, to control the defense and any settlement of Claims. However, any settlement requiring any action or payment by the Indemnitee shall require the Indemnitee’s prior written consent, not to be unreasonably withheld.
- Cooperation: The Indemnitee agrees to provide reasonable cooperation in the defense and all related proceedings, including providing necessary documentation and other evidence, subject to reimbursement by the Indemnifier for reasonable expenses incurred.
- Exclusions: The obligations of the Indemnifier will not extend to any Claims or Losses to the extent that they have been caused by the negligence or intentional misconduct of the Indemnitee or arise out of matters for which the Indemnitee is responsible under this Agreement.
4. Limitation of Liability
- Cap on Liability: The total liability of either Party under this Agreement, whether arising from negligence, breach of contract, indemnification, or other causes, will be limited to a fixed amount as agreed upon by both Parties in writing.
- Exceptions: This limitation will not apply in cases involving gross negligence, intentional misconduct, or violations of law by either Party.
- Time Limit: Any claim for indemnification under this Agreement must be made within a time frame as specified in this Agreement, failing which the indemnification claim will be considered waived.
- Disclaimer: No party shall be liable for consequential, indirect, incidental, special, punitive, or exemplary damages arising out of this Agreement.
5. Governing Law and Jurisdiction
- Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of ___________, without regard to its conflict of laws principles.
- Jurisdiction: The Parties agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts located within the State of ___________.
- Dispute Resolution: Any disputes arising from this Agreement should first attempt to be resolved amicably between the Parties. If such efforts are unsuccessful, either Party may initiate legal proceedings as outlined under the Governing Law and Jurisdiction section.
6. Indemnification Process
- Notice of Claim: The Indemnified Party shall notify the Indemnifying Party promptly in writing of any action, claim or liability against which the Indemnified Party seeks indemnification. The notice must include reasonable details of the claim and the extent of damages incurred or anticipated.
- Cooperation: The Parties agree to fully cooperate with each other in the defense of any such claim, including providing any information or documents necessary for the defense.
- Choice of Counsel: The Indemnifying Party shall have the right to control the defense and settlement of the claim, provided that the Indemnified Party may participate in such defense and settlement with its own counsel, at its own cost.
- Settlement Approval: No settlement of any claim that involves a remedy other than the payment of money by the Indemnifying Party shall be entered into without the consent of the Indemnified Party.
7. Limitations on Indemnification
- Exclusions: This Agreement does not oblige the Indemnifying Party to indemnify the Indemnified Party for any damages, losses, or liabilities arising from intentional misconduct, gross negligence, or any actions or omissions where indemnification is prohibited by applicable law.
- Time Limit: The Parties agree that any claim for indemnification must be made within a specific time period, as agreed upon in writing, from the date on which the Indemnified Party becomes aware of the claim.
- Monetary Cap: The total amount to be indemnified will not exceed a predetermined monetary cap, as set forth in this Agreement.
- Jurisdictional Limitations: The indemnification will apply only to claims arising within jurisdictions where both Parties conduct business, unless otherwise agreed in writing.
8. Legal Procedures and Costs
- Notice of Claim: The Indemnified Party shall promptly notify the Indemnifying Party of any claim, legal proceeding, or demand for which indemnification is sought, allowing the Indemnifying Party the option to control the defense of said claim.
- Choice of Counsel: Subject to approval by the Indemnified Party, which shall not be unreasonably withheld, the Indemnifying Party shall have the right to select the legal counsel to represent the Indemnified Party in relation to the claim.
- Cooperation: Both Parties shall fully cooperate with each other in the defense and any related settlement negotiations related to such claim or legal proceeding, sharing all relevant documents, records, and other materials.
- Settlement Approval: No settlement that affects the rights or obligations of the Indemnified Party may be made without the Indemnified Party’s written consent, which shall not be unreasonably withheld or delayed.
9. Duration and Termination
- Effective Date: This Agreement shall become effective as of [Insert Date] and shall remain in force until terminated by either Party.
- Termination Notice: Either Party may terminate this Agreement by providing written notice to the other Party, detailing the reason for termination and any applicable cure period.
- Consequence of Termination: Upon termination, the rights and obligations contained in this Agreement shall cease, except for any provision which by its nature or context is intended to survive termination.
- Survival of Indemnity: The indemnification clauses shall survive the termination or expiration of this Agreement for a period defined by local, state, or federal laws or as mutually agreed upon.
10. Dispute Resolution
- Initial Resolution: Any disputes arising from or in connection to this Agreement shall be initially resolved through friendly consultations between both Parties.
- Arbitration: In the event that the dispute cannot be resolved through consultation, the Parties agree to settle the dispute through arbitration under the rules of the [Insert Name of Arbitration Institution], with the proceedings to be conducted in [Insert Location].
- Legal Recourse: If arbitration fails or is not sought, both Parties reserve the right to submit the dispute to a competent court in the [Insert Jurisdiction].
- Fees and Costs: Each Party shall be responsible for its own arbitration and/or legal fees, unless the arbitrator or court determines otherwise.
11. Entire Agreement
- Full Understanding: This Agreement constitutes the entire understanding between the Parties and supersedes all prior oral agreements, understandings, or arrangements between the Parties relating to the subject matter of this Agreement.
- Conflict Resolution: In the event of a conflict between the terms of this Agreement and any other agreement, document, or communication, the terms of this Agreement shall prevail unless explicitly stated otherwise in a written amendment.
12. Amendments and Modifications
- Amendment Procedure: No modification, amendment, or alteration to this Agreement shall be effective unless executed in writing and signed by both Parties.
- Notification of Changes: Both Parties must be notified of any changes in a timely manner, and the changes must be agreed upon by both Parties.
- Entire Agreement Integration: This section along with the “Entire Agreement” section ensures that any changes made to the agreement are properly documented, replacing any previous versions or understandings.
- Clause Validity: If any provision or part of a provision of this Agreement is found to be illegal, invalid, or unenforceable, that part will be severed, and the remaining provisions will continue to be valid and enforceable to the fullest extent permitted by law.
- Form of Notice: All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person, by email, or by a recognized courier service.
- Address: The addresses for such communications shall be as follows:
- For the Indemnifying Party: [Indemnifying Party’s Address]
- For the Indemnified Party: [Indemnified Party’s Address]