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deposition or production of documents, in any administrative or court
proceeding) in connection with such Third-Party Claim that is inconsistent in a
material respect with any representation or warranty made by such party in this
Agreement, the Tax Opinions/Rulings, or the Representation Letters.
(ii) PFSweb and Daisytek shall exercise their
rights to jointly control the defense of any such Third-Party Claim solely for
the purpose of defeating such Third-Party Claim and, unless required by
applicable law, neither PFSweb nor Daisytek shall make any statements or take
any actions that could reasonably result in the shifting of liability for any
Losses arising out of such Third-Party Claim from the party making such
statement or taking such action (or any of its Affiliates) to the other party
(or any of its Affiliates).
(iii) Statements made or actions taken by either
PFSweb or Daisytek in connection with the defense of any such Third-Party Claim
shall not prejudice the rights of such party in any subsequent action or
proceeding between the parties.
(iv) If either Daisytek or PFSweb fails to
jointly defend any such Third-Party Claim, the other party shall solely defend
such Third-Party Claim and the party failing to jointly defend shall use
commercially reasonable efforts to cooperate with the other party in its defense
of such Third-Party Claim; provided, however, that an Indemnitee may not
compromise or settle any such Third-Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. All costs and expenses of either party in connection with,
and during the course of, the joint control of the defense of any such
Third-Party Claim shall be initially paid by the party that incurs such costs
and expenses. Such costs and expenses shall be reallocated and reimbursed in
accordance with the respective indemnification obligations of the parties at the
conclusion of the defense of such Third-Party Claim.
4.6. Arbitration. Any dispute between the parties arising
out of or relating to this Section 4, including the interpretation of this
Section 4, or any actual or purported breach of this Section 4, shall be
resolved only in accordance with the following provisions:
(a) Daisytek and PFSweb shall attempt in good faith
to resolve any such dispute promptly through negotiations of the parties. In the
event of any such dispute, either party may deliver a Dispute Notice to the
other party, and within 20 Business Days after the receipt of such Dispute
Notice, the appropriate representatives of Daisytek and PFSweb shall meet to
attempt to resolve such dispute. If such dispute has not been resolved within
the Negotiation Period, or if one of the parties fails or refuses to negotiate
such dispute, the issue shall be settled by arbitration pursuant to Section
4.6(b). The results of such arbitration shall be final and binding on the
parties.
(b) Either party may initiate arbitration with regard
to such dispute by giving the other party written notice either (i) at any time
following the end of the Negotiation Period, or (ii) if the parties do not meet
within 20 Business Days of the receipt of the Dispute Notice, at any time
thereafter. The arbitration shall be conducted by three arbitrators in
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