Common use of Reduction of Loss Clause in Contracts

Reduction of Loss. 12.6.1 The amount which an Indemnitor is required to pay to, for, or on behalf of an Indemnitee pursuant to Section 12 shall be reduced (including, without limitation, retroactively) by any insurance proceeds actually recovered by or on behalf of the Indemnitee in reduction of the related indemnifiable loss and the related tax benefit (as described in subsection 12.6.3) (the "Indemnifiable Loss"). Amounts required to be paid, as so reduced, are sometimes called an "Indemnity Payment". 12.6.2 If an Indemnitee shall have received, or if an Indemnitor shall have paid on its behalf, an Indemnity Payment in respect of an Indemnifiable Loss and shall subsequently receive, directly or indirectly, insurance proceeds in respect of such Indemnifiable Loss, then such Indemnitee shall promptly pay to the Indemnitor the amount of such insurance proceeds, or, if less, the amount of the Indemnity Payment. The parties agree that the foregoing shall not affect the subrogation rights of any insurance companies making payments hereunder. 12.6.3 The amount of any Loss for which the Shareholders are obligated to indemnify and hold harmless Parent pursuant to Section 12.1 and with respect to which such Indemnity Payments are not required to be included in the income of Parent or Acquisition for tax purposes or are otherwise not subject to tax shall be reduced as applicable by the net Federal, state and local tax savings attributable to such Loss available to Parent or Acquisition (to the extent actually received); if Parent or Acquisition receives any such tax savings in respect of Loss for which the Shareholders have reimbursed Parent under Section 12.1, Parent shall promptly pay to the Shareholders' Representative the amount of such tax savings up to the amount previously reimbursed by the Shareholders in respect of such Loss under Section 12.1.