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

Liabilities to be Assumed by Buyer. Upon the transfer of the Assets on the Closing Date, Buyer shall assume and pay when due and discharge the following Liabilities (collectively, the "ASSUMED LIABILITIES"): (a) Liabilities arising out of the ownership of the Assets and the operation of the Business by Buyer or any other Person, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (b) 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 Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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). 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 for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees after the Closing Date 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 the Inventory, but only to the extent 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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. Upon the conveyance, transfer and assignment of the Purchased Assets on the Closing Dateto Buyer in accordance with this Agreement, Buyer shall assume assume, and shall thereafter pay when due or satisfy, as they become due, all non-delinquent liabilities, obligations, or accruals first arising and discharge the following Liabilities (collectively, the "ASSUMED LIABILITIES"): (a) Liabilities arising out of the ownership of the Assets and relating to the operation of the Business by Buyer or any other Person, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (b) 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 Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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 Restaurants in the ordinary course of business which remains unpaid or the ownership of the Purchased Assets after 3:00 p.m. local time on the Closing Date in (the ordinary course "Assumed Liabilities") pursuant to the terms and provisions of business (including any uncleared checks the Franchise Agreements, the Contracts and the Lease Assignments/Subleases; provided that the Franchise Agreements and Contracts have been validly assigned to be listed on a schedule provided by Sellers to Buyer on the Closing Date)Buyer. Notwithstanding the foregoingIn addition, Buyer shall assume Liabilities under (ia) 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 for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees Seller's liability arising after the Closing Date but earned in whole 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 in part 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 Date as set forth in SCHEDULE 2.3(g), Closing; or incurred (b) any obligation 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 liability of Seller relating to employee benefits, employment employees 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 the Inventory, but only to the extent 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 independent contractors accruing on or prior to the Closing Date, then Buyer shall including, but not assume 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 Liabilities under Closing Date; it being understood that, at or prior to the Assumed Mortgage or acquire ownership Closing, any employment agreements between Seller and any employees relating to the operation of the Owned Real Property until Restaurants will be terminated on or before the earlier Closing Date and none of (i) the date same will prevent any of such employees from becoming employees of Buyer after the Closing; it being further understood that such consents are obtained, or (ii) the date that is ninety (90) Seller shall fulfill any obligations relating to employees for accrued vacations within five 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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. Upon On the transfer of terms and subject to the Assets on conditions set forth in this Agreement (including Section 9.1 hereof), at the Closing DateClosing, Buyer shall assume and pay thereafter pay, perform when due and discharge only the following Liabilities of Sellers (collectively, the "ASSUMED LIABILITIES"): (a) Liabilities arising out of the ownership of the Assets and the operation of the Business by Buyer or any other PersonBuyer, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the ClosingClosing Date; (b) Liabilities, other than Cure Amounts, Liabilities under the Assumed Real Property Leases assumed under this Agreement arising from and related to the period after the Closing, but only to the extent that the event or state of facts giving rise to such Liability occurs after the ClosingClosing Date; (c) Liabilities, other than Cure Amounts, Liabilities under the Assumed Contracts, but only including with respect to the extent that Assumed Central Office Locations, arising from and related to the event or state of facts giving rise to such Liability occurs period after the ClosingClosing Date; (d) Liabilities, other than Cure Amounts, Liabilities under the Assumed Equipment Leases, but only Leases arising from and related to the extent that the event or state of facts giving rise to such Liability occurs period after the ClosingClosing Date; (e) Liabilities under accounts payable related to the Business, together with any interest for Operating Expenses accrued thereon, including, without limitation, any post-petition Liability (other than Professional Expenses) incurred by any Seller in the ordinary course as 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). 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 the termination of employment of any Continued EmployeesBuyer Hire, including including, but not limited to any Liability arising under WARN, with respect to the termination of Continued Employees, occurring or existing after the Closing, including, without limitation, liabilities of any Buyer as set forth in Section 6.6Hire; (g) Liabilities for accrued vacation time, bonus under Section 4980B of the Internal Revenue Code or other incentive compensation payments payable to Continued Employees after the Closing Date but earned in whole or in part prior to the Closing Date similar state law ("COBRA") and as otherwise set forth in SCHEDULE 2.3(gSection 6.8(e), or incurred or accrued in the ordinary course after the date hereof; (h) Except as provided for in To the extent the transfer of the Assets is not exempt pursuant to Section 2.4(f)1146 of the Bankruptcy Code and the Approval Order, Liabilities under for any Benefit Plan, including Sellers' pension plans and supplemental retirement plans or any agreement relating to employee benefits, employment or compensation all Transfer Taxes due as a result of any Seller or its respective employees;the transactions contemplated by this Agreement; and (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 With respect to the Inventoryallowed, general unsecured claim of Cisco Systems Capital Corporation in the amount of $25,000,000 (the "CISCO GENERAL UNSECURED CLAIM"), Buyer shall assume the obligation to pay ten percent (10%) 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 Cisco General Unsecured Claim, but only to in no event shall such assumed obligation exceed the extent that amount of $250,000 (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"CISCO GENERAL UNSECURED CLAIM PAYMENT OBLIGATION"). To secure its obligation under this Section 2.3(i), 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 Buyer shall be substantially as set forth fund an escrow in the marketing plan and budget attached hereto as SCHEDULE 2.3(lamount of $250,000 (the "CISCO GENERAL UNSECURED CLAIM PAYMENT OBLIGATION ESCROW"); (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 before the Closing Date. In the event the Cisco General Unsecured Claim Payment Obligation is fixed at less than $250,000, then Buyer an amount equal to $250,000 minus the Cisco General Unsecured Claim Payment Obligation 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any Seller as previously disclosed in writing be released to Buyer via facsimile transmission on April 10, 2002 (from 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 FacilityCisco General Unsecured Claim Payment Obligation Escrow.

Liabilities to be Assumed by Buyer. Upon Subject to Sections 2.4, 2.5 and 6.2, upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume and pay 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 other Personof its assignees, including, without limitation, 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 ClosingEarly Funding Date; (bi) 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, 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 ClosingEarly 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) LiabilitiesLiabilities 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, other however, that in no event shall Buyer be responsible for more than Cure Amountssix (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, under the Equipment Leasesincluding 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 Liability Liabilities occurs after the 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 Early Funding Date). 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;; and (g) Liabilities for accrued vacation time, bonus 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 incentive compensation payments payable to Continued Employees after the Closing Date 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 the Inventory, qualified beneficiary but only to the extent that the event or state of facts giving rise Buyer may be required to assume any 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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 FacilityLaw.

Liabilities to be Assumed by Buyer. Upon the transfer of the Assets on On the Closing Date, Buyer shall assume and pay when due 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 (collectively, the "ASSUMED LIABILITIES"):liabilities of Seller: (a) Liabilities arising out All liabilities of the ownership 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 sick pay, as specified on SCHEDULE 2.1(C); (d) Accrued payroll taxes; (e) Accrued employee deductions; (f) Claims for remedy of a defective product pursuant to an existing warranty, but not Product Recall or Product Liability Claims as specified in 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 Assets extent such liabilities arise subsequent to the 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 operation "Union Contract") dated April 23, 2001, to the extent liabilities or claims arise pursuant to such Union Contract subsequent to the Closing Date, with such liability assumed only as to employees of Seller hired by Buyer, with such hire decisions within the Business by Buyer or any other Persondiscretion of Buyer; (i) All liabilities under the contracts, agreements and leases listed on SCHEDULE 1(L) and SCHEDULE 5(U), including, without limitation, Liability for personal injury purchase orders which are incurred in the Ordinary Course of customers or employeesBusiness (as hereinafter defined), but only to the extent that the event liabilities or state of facts giving rise to such Liability occurs after the Closing; (b) 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 Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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). 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 for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees after the Closing Date 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 the Inventory, but only to the extent 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 arise subsequent 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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. Upon At the transfer of the 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 LIABILITIESAssumed Liabilities"): (a) Liabilities arising out of the ownership of the Assets and the operation of the Business Acquired Assets by Buyer or any other Person, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (b) 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 occurrence of facts giving rise to such Liability Liabilities occurs after the Closing; (cb) Liabilities, other than Cure Amounts, Liabilities under the Assumed ContractsAssets 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 Code to provide continuation of group medical coverage with respect to Seller's employees who have been hired by Buyer or other qualified 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 that the event or state occurrence of facts giving rise to such Liability Liabilities occurs after the Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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). 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 the obligations of any Continued Employees, including the termination of Continued Employees, occurring or existing after the Closing, including, without limitation, liabilities of Buyer Debtors as set forth below (the "Employee Administrative Claims"), in Section 6.6;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) Liabilities for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees after the Closing Date but earned in whole or in part prior Cure Amounts to the Closing Date as set forth in SCHEDULE 2.3(gextent specifically noted on Schedule 2.1(g), or incurred or accrued 2.1(g)-1, 2.1(g)-2, and 2.1(g)-3 required in connection with the ordinary course after the date hereof;Assumed Assets; and (h) Except as provided for in Section 2.4(f)the amount of all outstanding obligations of Sellers, Liabilities on a non-accelerated basis, under any Benefit Plan, including Sellers' pension plans and supplemental retirement plans or any agreement the special assessment by West Valley City 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 the Inventory, but only to the extent 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any Seller as previously disclosed in writing to Buyer via facsimile transmission on April 10, 2002 Headquarters property (the "EMPLOYEE PAYMENTSAssumed West Valley City Debt"); (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. Upon At the transfer of the 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 LIABILITIESAssumed Liabilities"): (a) Liabilities arising out of the ownership of the Assets and the operation of the Business Acquired Assets by Buyer or any other Person, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (b) 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 occurrence of facts giving rise to such Liability Liabilities occurs after the Closing; (cb) Liabilities, other than Cure Amounts, Liabilities under the Assumed ContractsAssets 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 Code to provide continuation of group medical coverage with respect to Seller's employees who have been hired by Buyer or other qualified 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 that the event or state occurrence of facts giving rise to such Liability Liabilities occurs after the Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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). 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 the obligations of any Continued Employees, including the termination of Continued Employees, occurring or existing after the Closing, including, without limitation, liabilities of Buyer Debtors as set forth below (the "Employee Administrative Claims"), in Section 6.6;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) Liabilities for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees after the Closing Date but earned in whole or in part prior Cure Amounts to the Closing Date as set forth in SCHEDULE 2.3(gextent specifically noted on Schedule 2.1(g), or incurred or accrued 2.1(g)-1, 2.1(g)-2, and 2.1(g)-3 required in connection with the ordinary course after the date hereof;Assumed Assets; and (h) Except as provided for in Section 2.4(f)the amount of all outstanding obligations of Sellers, Liabilities on a non-accelerated basis, under any Benefit Plan, including Sellers' pension plans and supplemental retirement plans or any agreement the special assessment by West Valley City 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 the Inventory, but only to the extent 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any Seller as previously disclosed in writing to Buyer via facsimile transmission on April 10, 2002 Headquarters property (the "EMPLOYEE PAYMENTSAssumed West Valley City Debt"); (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. Upon Subject to SECTIONS 2.4, 2.5 and 6.2, upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume and pay when due and discharge 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 other Personof its assignees, including, without limitation, 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 ClosingEarly Funding Date; (bi) 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, 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 ClosingEarly 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) LiabilitiesLiabilities 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, other HOWEVER, that in no event shall Buyer be responsible for more than Cure Amountssix (6) months of severance per Employee; (f) Liabilities associated with customers of the Business, under the Equipment Leasesincluding 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 Liability Liabilities occurs after the 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 Early Funding Date). 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;; and (g) Liabilities for accrued vacation time, bonus 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 incentive compensation payments payable to Continued Employees after the Closing Date 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 the Inventory, qualified beneficiary but only to the extent that the event or state of facts giving rise Buyer may be required to assume any 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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 FacilityLaw.

Liabilities to be Assumed by Buyer. Upon the transfer of the Acquired Assets on the Closing Date, Buyer shall assume and assume, pay when due and discharge only the following Liabilities (collectively, the "ASSUMED LIABILITIES"“Assumed Liabilities”): (a) Liabilities arising out of the ownership of the Acquired Assets and or the operation of the Business by Buyer or any other Person, including, without limitation, Liability for personal injury of customers or employeesBusiness, but only to the extent that (i) subject to the proviso set forth below in this Section 2.3, such Liabilities are reflected in and constitute Current Liabilities as of the Closing Date, or (ii) the event or state of facts giving rise to any such Liability (A) occurs on or after, or relates to periods beginning on or after, the Closing Date and (B) is not the result of any tort, infringement or violation of Law occurring prior to the Closing Date; (b) Liabilities arising under the Assumed Contracts, but only to the extent that (i) such Liabilities are reflected in and constitute Current Liabilities as of the Closing Date and, or (ii) the event or state of facts giving rise to such Liability (A) occurs after on or after, or relates to periods beginning on or after, the Closing;Closing Date, and (B) is not the result of any breach of contract, breach of warranty or infringement occurring prior to the Closing Date; and (bc) Liabilities, other than Cure Amounts, under the Real Property Leases assumed under this Agreement arising from and after the ClosingLiabilities related to commissions, but only to the extent that (i) such Liabilities are reflected in and constitute Current Liabilities as of the event Closing Date or state of facts giving rise (ii) such Liabilities accrue or relate to such Liability occurs sales made on or 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 Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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 respect of the ordinary course Assumed Contracts; provided, however, that in no event shall the Assumed Liabilities include (i) any Liabilities relating to any indebtedness of business Seller, including, but not limited to, the convertible notes, (ii) any Liabilities to any Affiliate of Seller, (iii) any Taxes of Seller, (iv) any Taxes related to the Acquired Assets that were incurred in or are attributable (determined pursuant to Section 8.11(b) in the case of a Straddle Period) to any taxable period (or portion thereof) ending on or before the Closing Date, (v) any Taxes of another Person for which Seller is liable, including, but not limited to Taxes for which Seller is liable by reason of Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of federal, state, local or foreign Law), being a transferee or successor, any contractual obligation or otherwise, (vi) any income, transfer, sales, use or other Taxes arising in connection with the consummation of the transactions contemplated by this Agreement (including any uncleared checks to be listed on income Taxes arising as a schedule provided result of the transfer by Sellers Seller to Buyer on of the Closing DateAcquired Assets). Notwithstanding the foregoing, Buyer shall assume (vii) any Liabilities under (i) accounts payable related relating to the in-transit Inventory whether such Liabilities occur before or after the Closing any indemnity, warranty, infringement, breach of contract and (ii) purchase orders for Inventory tort claims relating to products and non-Inventory items listed on SCHEDULE 2.1(e); (f) Liabilities related services sold prior 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 for accrued vacation time, bonus or other incentive compensation payments payable to Continued Employees after the Closing Date 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 the Inventory, but only to the extent 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); (mviii) Liabilities related to the Assumed Mortgage; PROVIDEDservice or termination of service of any employee, HOWEVERofficer, in the event that the consents required director or agent of Seller under or with respect to assign the Assumed Mortgage to Buyer pursuant to that certain Mortgage any plan, agreement, or arrangement providing compensation or benefits and Security Agreement, dated currently or previously maintained by Seller or any entity treated 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 affiliated with Seller under the Assumed Mortgage or acquire ownership Section 414 of the Owned Real Property until the earlier of Code, (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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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 (pix) Liabilities relating to, arising out of, or in connection with Seller’s misclassification of employees as consultants or independent contractors, and (x) any other Liability not explicitly assumed pursuant to any prepayment penalties payable by any Seller as a result of any repayment of amounts this Section 2.3. Section 2.3 shall not prejudice Buyer’s applicable indemnification rights under Tranche A and Tranche B of the DIP Facility but not any Liabilities with respect to Tranche C of the DIP Facilitythis Agreement.

Liabilities to be Assumed by Buyer. Upon Subject to the transfer terms and conditions of this Agreement, at the Assets on the Closing DateClosing, Buyer shall assume and thereafter in due course pay when due and discharge fully satisfy all liabilities, obligations and related expenses arising after the following Liabilities (collectively, Effective Date pursuant to the "ASSUMED LIABILITIES"): (a) Liabilities arising out terms of the ownership of the Assets Contracts and the operation of the Business by Buyer or any other PersonLeases as well as all accrued compensation, including, without limitation, Liability for personal injury of customers or employees, but only to the extent that the event or state of facts giving rise to such Liability occurs after the Closing; (b) Liabilities, other than Cure Amounts, under the Real Property Leases assumed under this Agreement arising from accrued expenses 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 Closing; (d) Liabilities, other than Cure Amounts, under the Equipment Leases, but only to the extent that the event or state of facts giving rise to such Liability occurs after the 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) trade payables incurred by any Seller in the ordinary course of business which remains unpaid consistent with past practice and recorded on Sellers' books as of the Closing Effective Date (the "Assumed Liabilities") Except as otherwise specifically provided for 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). Notwithstanding the foregoingthis Section 1.3, Buyer shall assume Liabilities under (i) accounts payable related to the in-transit Inventory whether such Liabilities occur before not assume, 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 in any way be liable or responsible for, any liabilities, obligations or debts of Seller of any Continued Employees, including the termination of Continued Employees, occurring type or existing after the Closingnature, including, without limitation, liabilities arising under any contracts not identified on Schedule 1.1(e), any liabilities arising under any Employee Benefit Plan maintained by Seller or any ERISA Affiliate (as defined below) of Buyer as set forth in Section 6.6; (g) Liabilities for accrued vacation timeSeller, bonus any liabilities arising under any Employee Benefit Plan to which Seller or any ERISA Affiliate is or has been obligated to contribute, any medical, life, disability insurance liabilities, any ▇▇▇▇▇▇▇ compensation claims, any local, state, federal, payroll or other incentive compensation payments payable to Continued Employees after the Closing Date but earned in whole or in part prior to the Closing Date as set forth in SCHEDULE 2.3(g)tax liabilities, 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 liabilities relating to employee benefits, employment or compensation claims for damages based upon the breach by Seller of any Seller federal, state or its respective employees; (i) [Reserved]; (j) [Reserved]; (k) Liabilities of any Seller for replacement oflocal environmental or occupational health and safety laws or regulations, or refund for, damaged, defective or other returned products or of warranty, liabilities related to products liability, safety, advertising tort claims or other claims litigation, any undisclosed liabilities, liabilities incurred for the costs and expenses of negotiating and consummating the transactions contemplated by this Agreement, liabilities incurred in respect connection with the termination of any of the Contracts to be transferred hereunder for which consent of the other party thereto is required but not obtained, any liabilities related to the Inventoryclassification of independent contractors, but only to the extent that the event tort claims asserted against Seller or state claims against Seller for breach of facts giving rise to such Liability occurs contract which are based on acts or omissions of Seller occurring on, before or after the Closing; Effective Date. As used herein, "ERISA Affiliate" shall refer to any trade or business, whether or not incorporated, under common control with the Seller within the meaning of Section 414(b), (l) Liabilities for non-prepaid expenses for the benefit of the Businessc), 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 period; (n) Liabilities related to stay bonuses of any Employee payable by any 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 FacilityCode.