Common use of Assumption of Liabilities; Retained Liabilities Clause in Contracts

Assumption of Liabilities; Retained Liabilities. (a) Upon the terms and subject to the conditions of this Agreement and the Ancillary Agreements, at the Closing, the Purchaser shall assume and shall be solely and exclusively responsible for paying, performing and discharging when due all Liabilities of the Asset Sellers primarily resulting from or relating to the U.S. Business, the Canadian Business or the Mission Hill Business, whether arising before or after the Closing, except for any Retained Liabilities (collectively, the “Assumed Liabilities”). Without limiting the generality of the foregoing, the Assumed Liabilities shall include: (i) all Liabilities primarily relating to the U.S. Business, the Canadian Business or the Mission Hill Business, relating to or arising out of claims that have not been made, resolved or settled prior to the Closing including relating to either express warranties extended by the Asset Sellers prior to the Closing or warranties or obligations implied or provided by Law; (ii) all Liabilities with respect to claims of whatever nature seeking compensation or recovery for personal injury or property damage including resulting from defects or alleged defects in products sold by the U.S. Business, the Canadian Business or the Mission Hill Business either before, on or after the Closing; (iii) all Liabilities primarily incurred in the conduct of the U.S. Business, the Canadian Business or the Mission Hill Business under any Environmental Law; (iv) except to the extent specifically retained by the Sellers under Article VI of this Agreement or in Section 2.03(b)(vi), all Liabilities with respect to the Transferred Employees arising out of or relating to their employment with the Asset Sellers or the termination thereof, including, without limitation, wages or other compensation, vacation, medical, other health benefit and workers compensation claims; (v) all Liabilities of the Purchaser with respect to the U.S. Business, the Canadian Business or the Mission Hill Business pursuant to this Agreement and the Ancillary Agreements; (vi) all Liabilities with respect to claims by other Persons of infringement or other misappropriation of the Intellectual Property rights of such other Persons by the Asset Sellers primarily relating to the conduct of the U.S. Business, the Canadian Business or the Mission Hill Business prior to the Closing; and (vii) all Liabilities relating to or arising out of litigation, proceedings, actions, claims or investigations at Law or in equity pending against the Asset Sellers primarily related to the U.S. Business, the Canadian Business or the Mission Hill Business. (b) Notwithstanding the provisions of Section 2.03(a), the Asset Sellers shall retain, and shall assume and be solely and exclusively responsible for paying, performing and discharging when due, the following Liabilities of the Asset Sellers (the “Retained Liabilities”) whether arising before or after the Closing (unless otherwise expressly provided below): (i) all notes and accounts payable (including Payables) or Indebtedness of the Asset Sellers to the extent relating to the conduct of the U.S. Business, the Canadian Business or the Mission Hill Business held by the Asset Sellers on the Closing Date; (ii) all Taxes owed by the Asset Sellers relating to any taxable period (or any portion of any taxable period) ending on or prior to the Closing Date; (iii) all Liabilities including any arising under Environmental Law to the extent solely relating to or arising out of the Retained Assets and the business conducted in connection therewith; (iv) all Liabilities arising from or relating to the employment or termination of employment of any Business Employee of the Asset Sellers (other than the Transferred Employees) or former employee of the Asset Sellers; (v) the obligations of the Asset Sellers under this Agreement and the Ancillary Agreements (including expenses incurred by the Asset Sellers solely as a result of the transactions contemplated by this Agreement); (vi) except as otherwise provided in Article VI of this Agreement, the Liabilities arising under or relating to (A) the U.S. Pension Plans, the Rhodia U.S. Deferred Compensation Plan or any equity-based Plan provided by any Asset Seller or, to the extent provided on or prior to the Closing Date, any Mexican Subsidiary, (B) Title IV of ERISA, whether arising in connection with the U.S. Pension Plans, any other Plan or otherwise and (C) all claims for benefits incurred prior to the Closing Date by a Business Employee of the Asset Sellers or former employee of the Asset Sellers or any eligible dependent or beneficiary thereof under any of the Asset Sellers’ welfare benefit plans; (vii) the Liabilities explicitly retained by the Sellers under Article VI of this Agreement; (viii) the Liabilities relating to the restructuring identified in the Audited Financial Statements for fiscal year ended December 31, 2003; (ix) all criminal Liabilities arising from or relating to the matters described in item 1 to Section 3.12(c) of the Disclosure Schedule; (x) the Liabilities referred to in Section 2.03(b)(x) of the Disclosure Schedule; and (xi) all Liabilities to the extent arising out of or resulting from the transfer of assets and common stock contemplated by Section 5.11 of this Agreement.