Common use of Liabilities to be Assumed by Buyer Clause in Contracts

Liabilities to be Assumed by Buyer. Subject to Sections 2.4, 2.5 and 6.2, upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume only the following Liabilities of Sellers (collectively, the “Assumed Liabilities”): (a) Liabilities arising out of or relating to the ownership of the Acquired Assets and the operation of the Business by Buyer or any of its assignees, including Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date; (i) Liabilities under the Assumed Contracts, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); provided, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event or state of facts giving rise to such Liabilities occurs after the Early Funding Date; and (g) Liabilities related to any obligations under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business or other qualified beneficiary but only to the extent Buyer may be required to assume any such Liability by Law.

Liabilities to be Assumed by Buyer. Subject to Sections SECTIONS 2.4, 2.5 and 6.2, upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume only the following Liabilities of Sellers (collectively, the “Assumed Liabilities”"ASSUMED LIABILITIES"): (a) Liabilities arising out of or relating to the ownership of the Acquired Assets and the operation of the Business by Buyer or any of its assignees, including Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date; (i) Liabilities under the Assumed Contracts, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s 's financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit EXHIBIT K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s 's financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; providedPROVIDED, howeverHOWEVER, that Buyer shall not assume any of Sellers’ ' Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section SECTION 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s 's currently existing severance policy and past practice as described in Exhibit EXHIBIT L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s 's request after the date hereof and Liabilities to Allegiance’s 's employees pursuant to Section SECTION 6.8(b); providedPROVIDED, howeverHOWEVER, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event or state of facts giving rise to such Liabilities occurs after the Early Funding Date; and (g) Liabilities related to any obligations under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business or other qualified beneficiary but only to the extent Buyer may be required to assume any such Liability by Law.

Liabilities to be Assumed by Buyer. Subject to Sections 2.4, 2.5 and 6.2, upon At the transfer of the Acquired Assets on the Closing DateClosing, Buyer shall assume and pay when due and discharge only the following Liabilities of Sellers set forth below and no other Liabilities whatsoever (collectively, the “"Assumed Liabilities”"): (a) Liabilities arising out of or relating to the ownership and operation of the Acquired Assets and the operation of the Business by Buyer or any of its assignees, including Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date; (i) Liabilities under the Assumed ContractsClosing, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); provided, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event or state occurrence of facts giving rise to such Liabilities occurs after the Early Funding Date; andClosing; (gb) Liabilities related under the Assumed Assets that first arise on or after the Closing Date (subject to Section 2.6); (c) the amount of any obligations of Sellers under the Cash Collateral Agreement and CitiCapital Credit Agreement, the agreed upon deficiency on the Equipment Indebtedness as set forth in Section 3.3(b), the Assumed First Source Debt, the Assumed Trust Debt, the Assumed IEL Debt, and the DIP Credit Agreement that will be specifically assumed by Buyer in connection with the payment of the Purchase Price under Section 3.3; (d) obligations of Sellers under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business Seller's employees who have been hired by Buyer or other qualified beneficiary beneficiaries of such employees after the Closing; (e) Liabilities related to the termination of employment by Buyer of any employee of Sellers who becomes an employee of Buyer, including, but not limited to any Liability arising under the WARN Act, but only to the extent Buyer may be that the event or occurrence of facts giving rise to such Liabilities occurs after the Closing; (f) the obligations of Debtors as set forth below (the "Employee Administrative Claims"), in each case relating to the period prior to Closing: Estimated Type Amount Self-insured health and dental claims run-out $ 1,600,000 Accrued and unpaid vacation pay 465,000 Owner-operator and driver accounts, plus tire escrow 1,064,000 Employee wages and benefits, including applicable withholding obligations, between last scheduled payroll prior to Closing and Closing 2,980,000 ----------- Total Estimated Amount $ 6,109,000 =========== (g) Cure Amounts to the extent specifically noted on Schedule 2.1(g), 2.1(g)-1, 2.1(g)-2, and 2.1(g)-3 required in connection with the Assumed Assets; and (h) the amount of all outstanding obligations of Sellers, on a non-accelerated basis, under the special assessment by West Valley City relating to assume any such Liability by Lawthe Headquarters property (the "Assumed West Valley City Debt").

Liabilities to be Assumed by Buyer. Subject to Sections 2.4, 2.5 and 6.2, upon At the transfer of the Acquired Assets on the Closing DateClosing, Buyer shall assume and pay when due and discharge only the following Liabilities of Sellers set forth below and no other Liabilities whatsoever (collectively, the “"Assumed Liabilities”"): (a) Liabilities arising out of or relating to the ownership and operation of the Acquired Assets and the operation of the Business by Buyer or any of its assignees, including Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date; (i) Liabilities under the Assumed ContractsClosing, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); provided, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event or state occurrence of facts giving rise to such Liabilities occurs after the Early Funding Date; andClosing; (gb) Liabilities related under the Assumed Assets that first arise on or after the Closing Date (subject to Section 2.6); (c) the amount of any obligations of Sellers under the Cash Collateral Agreement and CitiCapital Credit Agreement, the agreed upon deficiency on the Equipment Indebtedness as set forth in Section 3.3(b), the Assumed First Source Debt, the Assumed Trust Debt, the Assumed IEL Debt, and the DIP Credit Agreement that will be specifically assumed by Buyer in connection with the payment of the Purchase Price under Section 3.3; (d) obligations of Sellers under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business Seller's employees who have been hired by Buyer or other qualified beneficiary beneficiaries of such employees after the Closing; (e) Liabilities related to the termination of employment by Buyer of any employee of Sellers who becomes an employee of Buyer, including, but not limited to any Liability arising under the WARN Act, but only to the extent Buyer may be that the event or occurrence of facts giving rise to such Liabilities occurs after the Closing; (f) the obligations of Debtors as set forth below (the "Employee Administrative Claims"), in each case relating to the period prior to Closing: Estimated Type Amount ---- ------ Self-insured health and dental claims run-out $ 1,600,000 Accrued and unpaid vacation pay 465,000 Owner-operator and driver accounts, plus tire escrow 1,064,000 Employee wages and benefits, including applicable withholding obligations, between last scheduled payroll prior to Closing and Closing 2,980,000 ----------- Total Estimated Amount $ 6,109,000 =========== (g) Cure Amounts to the extent specifically noted on Schedule 2.1(g), 2.1(g)-1, 2.1(g)-2, and 2.1(g)-3 required in connection with the Assumed Assets; and (h) the amount of all outstanding obligations of Sellers, on a non-accelerated basis, under the special assessment by West Valley City relating to assume any such Liability by Lawthe Headquarters property (the "Assumed West Valley City Debt").

Liabilities to be Assumed by Buyer. Subject On the terms and subject to Sections 2.4the conditions set forth in this Agreement (including Section 9.1 hereof), 2.5 and 6.2, upon at the transfer of the Acquired Assets on the Closing DateClosing, Buyer shall assume and thereafter pay, perform when due and discharge only the following Liabilities of Sellers (collectively, the “Assumed Liabilities”"ASSUMED LIABILITIES"): (a) Liabilities arising out of or relating to the ownership of the Acquired Assets and the operation of the Business by Buyer or any of its assigneesBuyer, including including, without limitation, Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date; (i) Liabilities under the Assumed Contracts, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Closing Date, and ; (iib) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only Real Property Leases arising from and related to the extent such Liabilities are reflected in Allegiance’s financial statements as of period after the Early Funding Date and taken into account in the determination of Closing Working CapitalDate; (ic) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit KAssumed Contracts, and in each case only including with respect to the extent that (x) Assumed Central Office Locations, arising from and related to the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of period after the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the CasesDate; (d) Liabilities under the Assumed Equipment Leases arising from and related to the period after the Closing Date; (e) Liabilities for fifty percent Operating Expenses accrued as of the Closing Date; (50%f) Liabilities related to the termination of employment of any Buyer Hire, including, but not limited to any Liability arising under WARN, with respect to the termination of any Buyer Hire; (g) Liabilities under Section 4980B of the Internal Revenue Code or similar state law ("COBRA") and as otherwise set forth in Section 6.8(e); (h) To the extent the transfer of the Assets is not exempt pursuant to Section 1146 of the Bankruptcy Code and the Approval Order, Liabilities for any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10;Agreement; and (ei) Liabilities for severance costs With respect to the allowed, general unsecured claim of Cisco Systems Capital Corporation in the amount of $25,000,000 (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L"CISCO GENERAL UNSECURED CLAIM"), Buyer shall assume the obligation to pay ten percent (10%) related to non-Transferred Employees who are Employees of the distribution otherwise payable by the Sellers under a liquidating plan of reorganization (or by any chapter 7 trustee appointed for Sellers) on account of the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); providedCisco General Unsecured Claim, however, that but in no event shall such assumed obligation exceed the amount of $250,000 (the "CISCO GENERAL UNSECURED CLAIM PAYMENT OBLIGATION"). To secure its obligation under this Section 2.3(i), Buyer be responsible for more than six shall fund an escrow in the amount of $250,000 (6) months of severance per Employee; (f) Liabilities associated with customers of the Business"CISCO GENERAL UNSECURED CLAIM PAYMENT OBLIGATION ESCROW"), including credits on or refunds due such customers for any reason, to before the extent that Closing Date. In the event or state of facts giving rise the Cisco General Unsecured Claim Payment Obligation is fixed at less than $250,000, an amount equal to such Liabilities occurs after $250,000 minus the Early Funding Date; and (g) Liabilities related Cisco General Unsecured Claim Payment Obligation shall be released to any obligations under Section 4980B of Buyer from the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business or other qualified beneficiary but only to the extent Buyer may be required to assume any such Liability by LawCisco General Unsecured Claim Payment Obligation Escrow.

Liabilities to be Assumed by Buyer. Subject to Sections 2.4, 2.5 and 6.2, upon Upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume only and pay when due and discharge the following Liabilities of Sellers (collectively, the “Assumed Liabilities”"ASSUMED LIABILITIES"): (a) Liabilities arising out of or relating to the ownership of the Acquired Assets and the operation of the Business by Buyer or any of its assigneesother Person, including including, without limitation, Liability for personal injury of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding DateClosing; (ib) Liabilities Liabilities, other than Cure Amounts, under the Real Property Leases assumed under this Agreement arising from and after the Closing, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (c) Liabilities, other than Cure Amounts, under the Assumed Contracts, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the CasesClosing; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of Liabilities, other than Cure Amounts, under the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); providedEquipment Leases, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, but only to the extent that the event or state of facts giving rise to such Liabilities Liability occurs after the Early Funding Closing; (e) Liabilities under accounts payable related to the Business, together with any interest accrued thereon, including, without limitation, any post-petition Liability (other than Professional Expenses) incurred by any Seller in the ordinary course of business which remains unpaid on the Closing Date in the ordinary course of business (including any uncleared checks to be listed on a schedule provided by Sellers to Buyer on the Closing Date; and). Notwithstanding the foregoing, Buyer shall assume Liabilities under (i) accounts payable related to the in-transit Inventory whether such Liabilities occur before or after the Closing and (ii) purchase orders for Inventory and non-Inventory items listed on SCHEDULE 2.1(e); (f) Liabilities related to employment of any Continued Employees, including the termination of Continued Employees, occurring or existing after the Closing, including, without limitation, liabilities of Buyer as set forth in Section 6.6; (g) Liabilities related for accrued vacation time, bonus or other incentive compensation payments payable to any obligations under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and Continued Employees after the Early Funding Closing Date with but earned in whole or in part prior to the Closing Date as set forth in SCHEDULE 2.3(g), or incurred or accrued in the ordinary course after the date hereof; (h) Except as provided for in Section 2.4(f), Liabilities under any Benefit Plan, including Sellers' pension plans and supplemental retirement plans or any agreement relating to employee benefits, employment or compensation of any Seller or its respective employees; (i) [Reserved]; (j) [Reserved]; (k) Liabilities of any Seller for replacement of, or refund for, damaged, defective or other returned products or of warranty, products liability, safety, advertising or other claims in respect to any employee or former employee employed in connection with the Business or other qualified beneficiary Inventory, but only to the extent Buyer may that the event or state of facts giving rise to such Liability occurs after the Closing; (l) Liabilities for non-prepaid expenses for the benefit of the Business, but only to the extent that the event or state of facts giving rise to such Liability occurs or continues to exist after the Closing; PROVIDED, HOWEVER, that such expenses shall be substantially as set forth in the marketing plan and budget attached hereto as SCHEDULE 2.3(l); (m) Liabilities related to the Assumed Mortgage; PROVIDED, HOWEVER, in the event that the consents required to assign the Assumed Mortgage to Buyer pursuant to that certain Mortgage and Security Agreement, dated as of December 30, 1996, by and between JBAK Canton, as mortgagor, and The Chase Manhattan Bank, as mortgagee, have not been obtained on or prior to the Closing Date, then Buyer shall not assume the Liabilities under the Assumed Mortgage or acquire ownership of the Owned Real Property until the earlier of (i) the date that such consents are obtained, or (ii) the date that is ninety (90) days after the Closing Date ("DELAYED ASSUMED MORTGAGE DATE"); PROVIDED FURTHER, HOWEVER, between the Closing Date and the Delayed Assumed Mortgage Date, in addition to paying all obligations under the Canton Real Property Lease, Buyer shall reimburse Sellers for any other obligations payable under the Assumed Mortgage or the Note (as defined in the Assumed Mortgage) during such Liability period; (n) Liabilities related to stay bonuses of any Employee payable by Lawany Seller as previously disclosed in writing to Buyer via facsimile transmission on April 10, 2002 (the "EMPLOYEE PAYMENTS"); (o) Liabilities related to severance payments of any Employee payable by any Seller as previously disclosed in writing to Buyer via facsimile transmission on April 10, 2002; and (p) Liabilities relating to any prepayment penalties payable by any Seller as a result of any repayment of amounts under Tranche A and Tranche B of the DIP Facility but not any Liabilities with respect to Tranche C of the DIP Facility.

Liabilities to be Assumed by Buyer. Subject to Sections 2.4, 2.5 and 6.2, upon the transfer of the Acquired Assets on On the Closing Date, Buyer shall assume assume, pay, perform, and discharge only those charges, debts, obligations, contracts, agreements, and liabilities of Seller specifically referenced in Section 2.1 below, and no others (the "Assumed Liabilities"). 2.1 Buyer shall assume, pay, perform and discharge only the following Liabilities liabilities of Sellers (collectively, the “Assumed Liabilities”):Seller: (a) Liabilities arising out of or relating to the ownership All liabilities of the Acquired Assets Seller on the Closing Balance Sheet (rather than in any notes thereto), except as set forth in Section 2.2 hereof; (b) Accounts payable as specified on the Closing Balance Sheet; (c) Accrued bonuses, commissions, salaries, wages, vacation and the operation sick pay, as specified on SCHEDULE 2.1(C); (d) Accrued payroll taxes; (e) Accrued employee deductions; (f) Claims for remedy of the Business by Buyer or any of its assignees, including Liability for personal injury of customers or employeesa defective product pursuant to an existing warranty, but not Product Recall or Product Liability Claims as specified in each case only Section 2.2(h) and (i) hereof; (g) Liabilities under certain real and personal property leases and operating leases as specified on SCHEDULE 2.1(G) to the extent that such liabilities arise subsequent to the event Closing Date; (h) Agreement between United Electrical, Radio and Machine Workers of America (UE) and its agent Local 1128, United Electrical, Radio and Machine Workers of America and SMC Corporation (the "Union Contract") dated April 23, 2001, to the extent liabilities or state of facts giving rise claims arise pursuant to such Liability occurs after Union Contract subsequent to the Early Funding Closing Date, with such liability assumed only as to employees of Seller hired by Buyer, with such hire decisions within the discretion of Buyer; (i) Liabilities All liabilities under the Assumed Contractscontracts, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Early Funding Dateagreements and leases listed on SCHEDULE 1(L) and SCHEDULE 5(U), and (ii) any post-Petition Liabilities under the Assumed Contracts including, without limitation, purchase orders which are incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements (as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(bhereinafter defined); provided, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event liabilities or state of facts giving rise to such Liabilities occurs after the Early Funding Date; and (g) Liabilities related to any obligations under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business or other qualified beneficiary but only claims arise subsequent to the extent Buyer may be required to assume any such Liability by LawClosing Date.

Liabilities to be Assumed by Buyer. Subject to Sections 2.4Upon the conveyance, 2.5 transfer and 6.2, upon the transfer assignment of the Acquired Purchased Assets to Buyer in accordance with this Agreement, Buyer shall assume, and shall thereafter pay or satisfy, as they become due, all non-delinquent liabilities, obligations, or accruals first arising and relating to the operation of the Restaurants in the ordinary course of business or the ownership of the Purchased Assets after 3:00 p.m. local time on the Closing Date (the "Assumed Liabilities") pursuant to the terms and provisions of the Franchise Agreements, the Contracts and the Lease Assignments/Subleases; provided that the Franchise Agreements and Contracts have been validly assigned to Buyer. In addition, Buyer shall assume (a) Seller's liability arising after the Closing Date with respect to the capitalized leases described on Schedule 2.2 for the Tremonton, Utah Restaurant (Unit 6710) and Pavilions- Scottsdale, Arizona Restaurant (Unit 6348) (collectively, the "Capitalized Leases"), and (b) up to $8.6 million of the Seller's debt secured by the Restaurants to CNL American Properties Fund and/or its affiliates. (the "CNL Debt"). Buyer shall not deemed by anything contained herein to have assumed: (a) any obligation or liability of Seller arising from any tort claims made by a third party arising from actions or failures to act by the Seller or otherwise relating to the Restaurant prior to the Closing; or (b) any obligation or liability of Seller relating to employees or independent contractors accruing on or prior to the Closing Date, including, but not limited to, accrued salaries, other compensation or benefits, severance payments, accrued vacations, pensions, retirement plans, distributions or bonuses accruing on or prior to 3:00 p.m. on the Closing Date; it being understood that, Buyer shall assume only at or prior to the following Liabilities of Sellers (collectivelyClosing, the “Assumed Liabilities”): (a) Liabilities arising out of or any employment agreements between Seller and any employees relating to the ownership of the Acquired Assets and the operation of the Business by Buyer Restaurants will be terminated on or before the Closing Date and none of the same will prevent any of its assignees, including Liability for personal injury such employees from becoming employees of customers or employees, but in each case only to the extent that the event or state of facts giving rise to such Liability occurs Buyer after the Early Funding Date; (i) Liabilities under the Assumed Contracts, but only Closing; it being further understood that Seller shall fulfill any obligations relating to the extent that the event or state of facts giving rise to such Liability occurs employees for accrued vacations within five days after the Early Funding Closing Date, and (ii) any post-Petition Liabilities under the Assumed Contracts incurred in the Ordinary Course of Business but only to the extent such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; (i) Liabilities under trade accounts payable arising in the Ordinary Course of Business and (ii) current Liabilities arising in the Ordinary Course of Business under the accounts set forth on Exhibit K, and in each case only to the extent that (x) the event or state of facts giving rise to such Liability occurs post-Petition and (y) such Liabilities are reflected in Allegiance’s financial statements as of the Early Funding Date and taken into account in the determination of Closing Working Capital; provided, however, that Buyer shall not assume any of Sellers’ Liabilities for professional fees and other related costs of administering the Cases; (d) Liabilities for fifty percent (50%) of any and all Transfer Taxes due as a result of the transactions contemplated by this Agreement as set forth in Section 6.10; (e) Liabilities for severance costs (the amount thereof in accordance with Allegiance’s currently existing severance policy and past practice as described in Exhibit L) related to non-Transferred Employees who are Employees on the date hereof or hired in the Ordinary Course of Business thereafter and are terminated at Buyer’s request after the date hereof and Liabilities to Allegiance’s employees pursuant to Section 6.8(b); provided, however, that in no event shall Buyer be responsible for more than six (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, including credits or refunds due such customers for any reason, to the extent that the event or state of facts giving rise to such Liabilities occurs after the Early Funding Date; and (g) Liabilities related to any obligations under Section 4980B of the Internal Revenue Code to provide continuation of group medical coverage on and after the Early Funding Date with respect to any employee or former employee employed in connection with the Business or other qualified beneficiary but only to the extent Buyer may be required to assume any such Liability by Law.