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and all Tax-Related Losses incurred by Daisytek International or any of them in
connection with any proposed tax assessment or tax controversy with respect to
the Distribution or the Contribution to the extent caused by any breach by
PFSweb of any of its representations, warranties or covenants made pursuant to
this Agreement and (ii) Daisytek International shall indemnify, defend and hold
harmless PFSweb and each PFSweb Affiliate (or any successor to any of them)
against any and all Tax-Related Losses incurred by PFSweb or any of them in
connection with any proposed tax assessment or tax controversy with respect to
the Distribution or the Contribution to the extent caused by any breach by
Daisytek International or Daisytek of any of its representations, warranties or
covenants made pursuant to this Agreement. All interest or penalties incurred in
connection with such Tax-Related Losses shall be computed for the time period up
to and including the date that the Indemnifying Party pays its indemnification
obligation in full.
(b) If Daisytek (i) makes a determination pursuant to
any clause of Section 4.2, on the basis of a Subsequent Tax Opinion/Ruling or
otherwise, and (ii) delivers to PFSweb written notice of such determination
pursuant to Section 4.3(c), PFSweb shall have no obligation pursuant to Section
4.4(a), except to the extent that any Tax-Related Losses so incurred resulted
from the inaccuracy, incorrectness or incompleteness of any representation
provided by PFSweb upon which such Subsequent Tax Opinion/Ruling and/or
determination was based.
(c) The Indemnifying Party shall pay any amount due
and payable to the Indemnitee pursuant to this Section 4.4 on or before the 90th
day following the earlier of agreement or determination that such amount is due
and payable to he Indemnitee. All payments pursuant to this Section 4.4 shall be
made by wire transfer to the bank account designated by the Indemnitee for such
purpose, and on the date of such wire transfer the Indemnifying Party shall give
the Indemnitee notice of the transfer.
4.5. Procedure For Indemnification For Tax Liabilities.
(a) If an Indemnitee receives notice of the assertion
of any Third-Party Claim with respect to which an Indemnifying Party may be
obligated under Section 4.4 to provide indemnification, the Indemnitee shall
give the Indemnifying Party notice thereof (together with a copy of such Third-
Party Claim, process or other legal pleading) promptly after becoming aware of
such Third-Party Claim; provided, however, that the failure of the Indemnitee to
give notice as provided in this Section shall not relieve the Indemnifying Party
of its obligations under Section 4.4, except to the extent that the Indemnifying
Party is actually prejudiced by such failure to give notice. Such notice shall
describe such Third-Party Claim in reasonable detail.
(b) (i) Daisytek and PFSweb shall jointly control the
defense of, and cooperate with each other with respect to defending, any
Third-Party Claim with respect to which either party is obligated under Section
4.4 to provide indemnification, provided that either party shall forfeit such
joint control right with respect to a particular Third-Party Claim if such party
or any Affiliate of such party makes any public statement or filing, or takes
any action (including, but not limited to, the filing of any submission or
pleading, or the giving of a
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