Common use of Response Actions Clause in Contracts

Response Actions. As to any claim for indemnification hereunder which may be satisfied by the performance of a Response Action, the parties agree as follows: (i) An Indemnifying Person shall have no obligation to perform any Response Actions to satisfy a claim for indemnification or to indemnify the Indemnified Person for any Losses related to a Response Action, if the claim for indemnification or the Response Action results from physically invasive tests of soil, groundwater or other environmental media performed or allowed by the Indemnified Person, unless such tests are (A) required by Environmental Law, a Governmental Authority or a judgment or settlement in connection with a Proceeding brought by an unaffiliated third party or (B) performed by such Indemnified Person in the ordinary course of business (without regard to the availability of indemnification hereunder and not including any testing in connection with the financing, lease or sublease of a Transferred Real Property) in connection with (1) the sale or other transfer of ownership by a Purchaser of a Transferred Real Property to an unaffiliated third party or (2) constructing improvements at a Transferred Real Property; (ii) The Indemnified Person shall have the option of performing such Response Action, in which case it shall be entitled to recover only two-thirds (2/3) of the costs of the Response Action from the Indemnifying Person, or of allowing the Indemnifying Person to perform the Response Action at its expense subject, in either case, to the limits on indemnification hereunder; (iii) Notwithstanding the preceding clause (ii), for all 5-Year PELs arising from or discovered due to invasive testing pursuant to Section 12.10(c)(i)(B), the Indemnified Person shall perform the Response Action but shall be entitled to recover only one-half (1/2) of the costs of the Response Action from the Indemnifying Person, subject to the limits on indemnification hereunder; (iv) The costs of any Phase 1 and Phase 2 investigation and reports shall not be included in costs recoverable hereunder except to the extent that such investigation and reports disclose that a Response Action is required under Environmental Law or ordered by a Governmental Authority; (v) Any Response Action shall be conducted in a Commercially Reasonable Manner. “Commercially Reasonable Manner” shall mean methods reasonably estimated to have the lowest cost on a present value basis (from the perspective of a reasonable business person acting without regard to the availability of indemnification hereunder) for performing a particular Response Action, without changing the use of any real property, to achieve compliance with Environmental Law or an order by a Governmental Authority or judgment or settlement in connection with a Proceeding (including for these purposes only any administrative action) brought by an unaffiliated third party; it being understood that such “commercially reasonable manner” shall include methods to obtain a covenant not to ▇▇▇ or a no further action letter or other release from a Governmental Authority from an asserted violation of or liability under Environmental Laws; it being further understood that such Commercially Reasonable Manner shall include, where appropriate, risk-based remedies or remedial standards, institutional or engineering controls or deed restrictions on real property; and