Common use of Assumption of Liabilities and Indemnities Clause in Contracts

Assumption of Liabilities and Indemnities. As used in this ARTICLE V, and the paragraphs hereunder "CLAIMS" shall include claims, demands, causes of action, liabilities, damages, penalties and judgements of any kind or character and all costs and fees in connection therewith. (a) At the Closing, but effective as of the Effective Time, Buyer shall (i) assume, and be responsible for and comply with all duties and obligations of Seller, express or implied, with respect to the Interests, including, without limitation, those arising under or by virtue of the Seller's leases and contracts listed in Exhibit A, and the permits, the applicable statutes or rules, regulations or orders of any governmental authority (specifically including, without limitation, any governmental request or requirement to plug, replug and/or abandon any well of whatsoever type, status or classification, or to take any clean-up, remediation or other action with respect to the Interests), and (ii) except as otherwise provided herein, to defend, indemnify and hold harmless Seller from any and all claims in connection therewith; (b) Subject to the provisions of Paragraphs (c), (d) and (e) below Seller shall defend, indemnify and hold harmless Buyer from any and all claims, costs, expenses, liabilities or causes of action relating to or arising out of Seller's ownership or operation of Seller's Interests prior to the Effective Time and Buyer shall defend, indemnify and hold harmless Seller from any and all claims, costs, expenses, liabilities or causes of action relating to or arising out of Buyer's ownership and operation of the Interests after the Effective Time. Each indemnified party hereunder agrees that upon its discovery of facts giving rise to a claim for indemnity under the provisions of this Agreement, including receipt by it of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such third party actions being referred to herein as a "THIRD PARTY CLAIM"), it will give prompt notice thereof in writing to the indemnifying party together with a statement of such information with respect to any of the foregoing as it shall then have. Such notice shall include a formal demand for indemnification under this Agreement. The indemnified party shall afford the indemnifying party a reasonable opportunity to pay, settle, or contest any Third Party Claim at its expense; (c) Seller shall (i) be responsible for any and all claims, including but not limited to claims for payment of royalties, arising out of the production and sale of hydrocarbons by Seller from the Interests, and the proper accounting and payment of expenses for the Interests, insofar as such claims and payments relate to period of time prior to the Effective Time, and (ii) defend, indemnify and hold harmless Buyer from any and all of such claims and payments; (d) Buyer shall (i) be responsible for any and all claims, including but not limited to claims for payment of royalties, arising out of the production and sale of hydrocarbons by Buyer from the Interests, and the proper accounting and payment of expenses for the Interests, insofar as such claims and payments relate to period of time beginning at the Effective Time and thereafter, and (ii) defend, indemnify and hold harmless Seller from any and all of such claims and payments; and (e) After the execution of this Agreement, Buyer, at its option, and its sole cost, risk and expense, may obtain an environmental audit of the Interests at any time prior to September 20, 1996. Seller shall provide the environmental auditors all information available to it which they may reasonably request and shall grant said auditors physical access to the Interests. For those Interests which are not operated by Seller, Buyer shall obtain permission from the operator to conduct such inspections. If the audit reveals any environmental conditions which are not satisfactory to Buyer, Seller shall immediately be provided a copy of the audit information and either party shall have the option to terminate this Agreement as to the affected Interest(s) with a deduction from the Preliminary Purchase Price of the allocated value attributable to that Interest(s), without liability, unless Seller affirms in writing that it will remediate such conditions to the satisfaction of the Buyer prior to Closing. Buyer shall defend and indemnify Seller from any and all liability, claims, causes of action, injury to Buyer's employees, agents or contractors or to Buyer's property and/or injury to Seller's property, employees, agents or contracts which may arise out of Buyer's inspections, but only to the extent of Buyer's negligence. If such deductions exceed ten percent (10%) of the Preliminary Purchase Price and the parties are unable to mutually agree to proceed with closing, then either party shall have the right to terminate this Agreement without liability. After Closing, Buyer shall be deemed to have fully inspected and accepted the Interests "AS IS" in their then current physical and environmental condition.

Assumption of Liabilities and Indemnities. As used in this ARTICLE V, paragraph ------------------------------------------- and the paragraphs hereunder subparagraphs hereunder, "CLAIMSClaims" shall include claims (including those associated with matters disclosed by Seller at Closing), demands, causes of action, liabilities, damages, penalties and judgments of any kind or character and all costs and fees in connection therewith, including attorney's fees, but shall not include claims, demands, causes of action, liabilities, damages, penalties and judgements judgments arising out of the following: (i) failure of Seller to pay or properly pay income, excise or other taxes, whether federal, state or local, (ii) the continual defense of any kind or character and all costs lawsuits now pending with regard to the Properties and fees the judgments resulting there from and (iii) any liabilities or obligations resulting from or arising out of Seller's violation of laws in connection therewitheffect at the Effective Time, if the particular facts about the liability or obligation were known by an officer, manager or supervisor of Seller and not disclosed to Buyer or otherwise known to Buyer at the Effective Time and (iv) any liabilities or obligations associated with the collective bargaring agreement with Seller's union employees ("Seller Retained Liabilities"). (a) At The Properties have been used for exploring, developing, producing, treating and transporting oil and gas. Properties used for such purposes may have experienced spills of wastes, crude oil, produced water, hazardous substances and other materials, and may have thereon unknown, abandoned wells, plugged wells, pipelxxxx and other exxxxxent on or underneath the surface thereof. It is the intent of Buyer and Seller that all liability, if any, associated with the above matters as well as any liability to plug or replug any such wells in accordance with the xxxxicable rules, regulations and requirements of governmental agencies be passed to Buyer at Closing and that Buyer shall assume all liability, if any, for such matters and all Claims, if any, related thereto. Additionally, Properties used for such purposes may contain asbestos, hazardous substances or Naturally Occurring Radioactive Material ("NORM"). NORM may affix or attach itself to the inside of wells, materials and equipmexx xx scale or in other forms; wells, materials, equipment, xxx surface locations located on such Properties may contain NORM; and NORM containing material may be buried or otherwise disposed of on such Properties. Special procedures may be required for remediating, removing, transporting and disposing of asbestos, NORM, hazardous substances and other materials from the Properties, and Buyer assumes all liability, if any, for any assessment, remediation, removal, transportation and disposal of these materials and associated activities in accordance with the applicable rules, regulations and requirements of governmental agencies. (b) Buyer shall, at Closing, but effective as of the Effective Time, Buyer shall (i) assume, assume and be responsible for and comply with all duties and obligations of Seller, express or implied, with respect to the InterestsProperties, including, without limitation, those arising under or by virtue of the Seller's leases and contracts listed in Exhibit Aany lease, and the permitscontract, the agreement, document, permit, applicable statutes statute or rulesrule, regulations regulation or orders order of any governmental authority authority, (specifically including, without limitation, any governmental request or requirement to plug, replug re-plug and/or abandon any well of whatsoever type, status or classification, or to take any clean-up, remediation up or other action with respect to the InterestsProperty or premises, including hazardous waste cleanup costs under the Resource and Recovery Act (RCRA), 42 U.S.C. 6901-6991, the Comprehensive Environmental Response, Compensation and Liability Act (ii) except as otherwise provided herein, to defend, indemnify and hold harmless Seller from any and all claims in connection therewith; (b) Subject to the provisions of Paragraphs (cCERCLA), (d) and (e) below Seller shall defend42 U.S.C. 9601-9675 or similar laws, indemnify and hold harmless Buyer from any and all claims, costs, expenses, liabilities rules or causes of action relating to or arising out of Seller's ownership or operation of Seller's Interests prior to the Effective Time and regulations). Buyer shall defend, indemnify and hold Seller harmless Seller from any and all claims, costs, expenses, liabilities or causes of action relating to or Claims arising out of Buyer's ownership and operation of the Interests after the Effective Time. Each indemnified party hereunder agrees that upon its discovery of facts giving rise to a claim for indemnity under the provisions of this Agreement, including receipt by it of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such third party actions being referred to herein as a "THIRD PARTY CLAIM"), it will give prompt notice thereof in writing to the indemnifying party together with a statement of such information with respect to any of the foregoing as it shall then have. Such notice shall include a formal demand for indemnification under this Agreement. The indemnified party shall afford the indemnifying party a reasonable opportunity to pay, settle, or contest any Third Party Claim at its expense;connection therewith. (c) Seller Buyer shall (i) be responsible for any and all claimsat Closing, including but not limited to claims for payment of royalties, arising out of the production and sale of hydrocarbons by Seller from the Interests, and the proper accounting and payment of expenses for the Interests, insofar as such claims and payments relate to period of time prior to the Effective Time, and (ii) defend, indemnify and hold Seller harmless Buyer from and against any and all of such claims and payments; (d) Buyer shall (i) be responsible Claims for personal injury, death or damage to property or to the environment, or for any and all claims, including but not limited to claims for payment of royaltiesother relief, arising out directly or indirectly from, or incident to, the use, occupation, operation, maintenance or abandonment of any of the production and sale Properties, or condition of hydrocarbons by Buyer from the InterestsProperty or premises, whether latent or patent, and the proper accounting and payment of expenses for the Interests, insofar as such claims and payments relate to period of time beginning at whether asserted against Buyer and/or Seller after the Effective Time and thereafterTime, and (ii) defendwhether or not any such Claims result from conditions, indemnify and hold harmless Seller from any and all of such claims and payments; and (e) After actions or inactions at or before the execution of this Agreement, Buyer, at its option, and its sole cost, risk and expense, may obtain an environmental audit of the Interests at any time prior to September 20, 1996. Seller shall provide the environmental auditors all information available to it which they may reasonably request and shall grant said auditors physical access to the Interests. For those Interests which are not operated by Seller, Buyer shall obtain permission from the operator to conduct such inspections. If the audit reveals any environmental conditions which are not satisfactory to Buyer, Seller shall immediately be provided a copy of the audit information and either party shall have the option to terminate this Agreement as to the affected Interest(s) with a deduction from the Preliminary Purchase Price of the allocated value attributable to that Interest(s), without liability, unless Seller affirms in writing that it will remediate such conditions to the satisfaction of the Buyer prior to Closing. Buyer shall defend and indemnify Seller from any and all liability, claims, causes of action, injury to Buyer's employees, agents or contractors or to Buyer's property and/or injury to Seller's property, employees, agents or contracts which may arise out of Buyer's inspections, but only to the extent of Buyer's negligence. If such deductions exceed ten percent (10%) of the Preliminary Purchase Price and the parties are unable to mutually agree to proceed with closing, then either party shall have the right to terminate this Agreement without liability. After Closing, Buyer shall be deemed to have fully inspected and accepted the Interests "AS IS" in their then current physical and environmental conditionEffective Time.