Common use of Limitations; Net Losses; Subrogation; Mitigation; Materiality Clause in Contracts

Limitations; Net Losses; Subrogation; Mitigation; Materiality. (a) ▇▇▇▇▇▇▇▇ shall not be required to indemnify and hold harmless any Buyer Indemnified Party pursuant to Section 12.03(a) until the aggregate amount of Buyer Indemnified Parties’ Losses resulting from any breach or inaccuracy of the representations and warranties contained in this Agreement exceeds the Deductible, and then only to the extent of such Losses in excess of the Deductible; provided, however, that the cumulative indemnification obligation of ▇▇▇▇▇▇▇▇ under Section 12.03(a) shall in no event exceed the Cap; provided further, however, that in the case of any breach or inaccuracy of any ▇▇▇▇▇▇▇▇ Fundamental Representations, (A) the Deductible shall not apply and (B) the Cap shall only apply in respect of claims asserted by the Buyer Indemnified Parties after the second (2nd) anniversary of the Closing Date; provided further, that the foregoing limitations shall not apply in connection with claims for actual fraud. (b) From and after first (1st) anniversary of the Closing Date (the “Deductible Dropdown Date”), the Deductible shall be reduced to Four Million Five Hundred Fifty Thousand Dollars ($4,550,000); provided, that to the extent that on or prior to the Deductible Dropdown Date, a Buyer Indemnified Party has notified Seller pursuant to Section 12.04(a) of an indemnification claim under Section 12.03(a), then the initial Deductible of Six Million Eight Hundred Twenty Five Thousand Dollars ($6,825,000) shall continue to apply solely with respect to any such Loss or any Loss that arises out of, relates to or results from the breach identified in such notice of indemnification claim made on or prior to the Deductible Dropdown Date; provided further, that in no circumstances shall the Deductible or the reduced Deductible apply to any claim for actual fraud any indemnification claim for breach of any ▇▇▇▇▇▇▇▇ Fundamental Representations. (c) Notwithstanding anything contained herein to the contrary, the amount of any Losses incurred or suffered by an Indemnified Party shall be calculated after giving effect to (i) any insurance proceeds received by the Indemnified Party (or any of its Affiliates) with respect to such Losses and (ii) any recoveries obtained by the Indemnified Party (or any of its Affiliates) from any other third party, in each case, net of any deductibles or retentions paid (or that reduce the amount of recovery) by the Indemnified Party and any reasonable costs and expenses incurred in obtaining such proceeds and recoveries. Each Indemnified Party shall exercise commercially reasonable efforts to obtain such proceeds, benefits and recoveries (collectively, “Proceeds”). If any such Proceeds are received by an Indemnified Party (or any of its Affiliates) with respect to any Losses after an Indemnifying Party has made a payment to the Indemnified Party with respect thereto, the Indemnified Party (or such Affiliate) shall promptly pay to the Indemnifying Party the amount of such Proceeds (up to the amount of the Indemnifying Party’s payment) net of any deductibles or retentions paid (or that reduce the amount of recovery) by the Indemnified Party and any reasonable costs and expenses incurred in obtaining such Proceeds. With respect to any Losses incurred or suffered by an Indemnified Party, the Indemnifying Party shall have no obligation to indemnify the Indemnified Party for any Losses to the extent that the same Losses have already been recovered by the Indemnified Party from the Indemnifying Party (so that the Indemnified Party may only recover once in respect of the same Loss). (d) Upon making any payment to an Indemnified Party in respect of any Losses, the Indemnifying Party shall, to the extent of such payment, be subrogated to all rights of the Indemnified Party (and its Affiliates) against any third party insurer in respect of the Losses to which such payment relates unless such subrogation would be detrimental in any material respect to the Indemnified Party (or its Affiliates). Such Indemnified Party (and its Affiliates) and Indemnifying Party shall execute upon request all instruments reasonably necessary to evidence or further perfect such subrogation rights. (e) Buyer and ▇▇▇▇▇▇▇▇ shall use commercially reasonable efforts to mitigate any Losses whether by asserting claims against a third party or by otherwise qualifying for a benefit that would reduce or eliminate an indemnified matter; provided, that no party shall be required to use such efforts if they would be detrimental in any material respect to such party. (f) For the purposes of determining (i) whether any breach of any representation or warranty contained in this Agreement has occurred and (ii) the amount of Losses resulting from any such breach, the determination shall, in each case, be made without references to the terms “material,” “materiality,” “Material Adverse Effect,” “material adverse effect” or other similar qualifications as to materiality (other than specific monetary thresholds) contained in any such representation or warranty. (g) ▇▇▇▇▇▇▇▇ shall not be required to indemnify and hold harmless any Buyer Indemnified Party pursuant to Section 12.03(a) in respect of a ▇▇▇▇▇▇▇▇ Breach to the extent that the Buyer Knowledge Group possessed Actual Buyer Knowledge of such ▇▇▇▇▇▇▇▇ Breach on or prior to the date of this Agreement. For the avoidance of doubt, ▇▇▇▇▇▇▇▇ shall bear the burden of proving that the Buyer Knowledge Group possessed any such Actual Buyer Knowledge at such time. (h) For the avoidance of doubt, this Article XII provides for indemnification against Losses incurred or sustained by one or more of the Indemnified Parties whether in connection with a direct claim by any Indemnified Party or in respect of Losses incurred or sustained as a result of a third party claim.