Closing. If any such preferential right is exercised after such date and time,
Buyer agrees to convey such affected Oil and Gas Assets to the party exercising
such right on the same terms and conditions under which Seller conveyed such Oil
and Gas Assets to Buyer. In such event, Buyer shall retain all amounts paid by
the party exercising such preferential right to purchase. In the event of such
exercise, Buyer shall prepare a form of conveyance of such interest from Buyer
to such exercising party, such conveyance to be in form and substance as
provided in this Agreement, except that such conveyance shall be made free and
clear of all Liens, royalty interests, production payments and other charges or
defects created by, through or under Buyer.
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ARTICLE IX
Environmental Matters.
Section 9.1
Environmental Obligations.
UPON CLOSING BUYER (A) SHALL ASSUME
ALL LIABILITY AND COSTS ARISING UNDER ENVIRONMENTAL LAWS WITH REGARD TO THE OIL
AND GAS ASSETS ASSIGNED TO BUYER HEREUNDER, INCLUDING BUT NOT LIMITED TO (I) THE
LEASES, EQUIPMENT AND ANY PRODUCTION CONTAINING HAZARDOUS MATERIALS, INCLUDING
BUT NOT LIMITED TO LIABILITY AND COSTS FOR NORM, (II) VIOLATIONS OF
ENVIRONMENTAL LAWS OR PERMITS AND (III) THE EXISTENCE OR PRESENCE OF ADVERSE
PHYSICAL CONDITIONS, INCLUDING BUT NOT LIMITED TO UNKNOWN OR ABANDONED OIL AND
GAS WELLS, WATER WELLS, SUMPS AND PIPELINES THAT MAY NOT HAVE BEEN REVEALED BY
BUYER'S INVESTIGATION; AND (B) HEREBY EXPRESSLY AGREES TO PROTECT, RELEASE,
DEFEND, INDEMNIFY AND HOLD SELLER, ITS OFFICERS, MANAGERS, MEMBERS, PARTNERS,
REPRESENTATIVES, AGENTS AND ITS EMPLOYEES FREE AND HARMLESS FROM AND AGAINST ANY
AND ALL COSTS, EXPENSES, CLAIMS, DEMANDS, LITIGATION COSTS AND ATTORNEYS FEES
(TO THE EXTENT REASONABLE IF SUCH ATTORNEYS ARE ENGAGED BY SELLER), AND CAUSES
OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING BUT NOT LIMITED TO INJURIES OR
DEATH TO PERSONS, DAMAGES TO OR LOSS OF PROPERTY, ENVIRONMENTAL CLAIMS OR
VIOLATIONS OF ENVIRONMENTAL LAWS, ARISING OUT OF THE USE, OPERATION, OCCUPANCY,
OCCUPATION, RESALE OR ABANDONMENT OF THE OIL AND GAS ASSETS ASSIGNED TO BUYER
HEREUNDER REGARDLESS OF WHETHER THE CLAIM IS A RESULT OF AN ACT OR OMISSION
OCCURRING OR CONDITION EXISTING PRIOR TO OR AFTER THE CLOSING DATE. THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION 9.1
COMPLIES WITH THE EXPRESS NEGLIGENCE RULE.
IF ANY TERM OR OTHER PROVISION OF
THIS INDEMNIFICATION IS INVALID, ILLEGAL, OR INCAPABLE OF BEING ENFORCED BY ANY
RULE OF LAW OR PUBLIC POLICY, ALL OTHER CONDITIONS AND PROVISIONS OF THIS
INDEMNIFICATION SHALL NEVERTHELESS REMAIN IN FULL FORCE AND EFFECT SO LONG AS
THE ECONOMIC OR LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT REMAIN IN EFFECT. BUYER REPRESENTS THAT IT HAS HAD AN ADEQUATE
OPPORTUNITY TO REVIEW THE INDEMNITY PROVISION CONTAINED IN THIS SECTION 9.1,
INCLUDING THE OPPORTUNITY TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW AND
COMMENT, AND UNDERSTANDS THE INDEMNITY OBLIGATIONS CONTAINED HEREIN.
Section 9.2.
Definitions of Environmental Defect.
"Environmental Defect"
means, with respect to any given Oil and Gas Asset, a violation of