Opinion ID: 3010190
Heading Depth: 4
Heading Rank: 1

Heading: All material liabilities relating to the

Text: conduct of the Business prior to the First Closing Date (regardless when the related claim may be asserted), whether accrued, absolute, contingent or otherwise, which are not assumed by the Buyer under Subsection 3.1 . . . . Subsection 3.3(a) is a reciprocal provision in which SKB indemnifies R&H for: (a) All losses, liabilities, damages or deficiencies to Seller resulting from the operation of the Business by the Buyer after the First Closing Date . . . . These indemnity provisions divide all of the liabilities concerning the operation of the Business between SKB and R&H. This sort of broad language in pre-CERCLA contracts has been construed by courts to encompass CERCLA liability. For example, in Olin Corp. v. Consolidated Aluminum Corp., 5 F.3d 10, 15-16 (2d Cir. 1993), the Court of Appeals for the Second Circuit held an indemnity provision covering all liabilities, obligations and indebtedness of [the business] as they exist on the Closing Date or arise thereafter with respect to actions or failures to act occurring prior to the Closing Date was sufficiently broad to encompass CERCLA liability. Similarly, the District Court for the Western District of New York held a provision indemnifying for all liabilities and obligations . . relating to or arising out of the Assets was expansive enough to include CERCLA liability insofar as such liability related to or arose out of assets transferred. Purolator Products Corp. v. Allied-Signal, Inc., 772 F. Supp. 124, 131 (W.D.N.Y. 1991); see also, American Nat'l Can Co. v. Kerr Glass Mfg. Corp., No. 89-C-0168, 1990 WL 125368,  (N.D. Ill. August 22, 1990) (indemnity provision covering any claim of any kind or nature whatsoever with respect to the business . . . arising out of facts or events occurring prior to the Closing Time was sufficiently broad to encompass CERCLA liability), reconsidered in part, No. 89-C-0168, 1990 WL 129657 (N.D. Ill. August 30, 1990) (reaffirming this holding). We believe the language in the 1978 Purchase Agreement indemnity provisions clearly expresses the parties' intent to allocate all present and future liabilities. Environmental liabilities are among the future unknown liabilities allocated by the parties. Accordingly we agree with the district court that the indemnity provisions are general enough to evidence the parties intent to include CERCLA response costs.