Section 22 Environmental Representations and Warranties

• Library: Business Transitions 2009 Forms

The parties may allocate their respective liabilities based on pollution occurring before and after the closing. In such a situation, a "footprint" environmental audit is required to establish baseline levels of hazardous or toxic materials, substances, or pollutants as of the closing that may be a part of the real property or other assets purchased. In such a case, the seller's indemnity would be limited to events occurring before the closing date, and the buyer would indemnify the seller for later-occurring events. An example of an indemnification provision that a seller may give to a buyer is as follows:

Seller shall indemnify...