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the happening of which may bring into existence a liability is another, and avery different thing. In the former case, there is a liability which willbecome absolute upon the happening of a certain event. In the latter there isnone until the event happens. The difference is simply that which existsbetween a conditional debt or liability and none at all.Id. (citations omitted); see also Godchaux v. Conveying Techniques, Inc., 846 F.2d 306, 310(5th Cir. 1988) (an employer’s withdrawal liability under ERISA comes into existence notwhen the employer’s pension plan first develops an unfunded vested liability, but ratherwhen the employer actually withdraws from the pension plan; therefore, there was no breachof a warranty that the employer “did not have any liabilities of any nature, whether accrued,absolute, contingent, or otherwise”); East Prairie R-Z School Dist. v. U.S. Gypsum Co., 813F. Supp. 1396 (E.D. Mo. 1993) (cause of action for property damage based on asbestoscontamination had not accrued at time of assumption of liabilities); Grant-Howard Assocs.v. General Housewares Corp., 482 N.Y.S.2d 225, 227 (1984) (there is no contingent liabilityfrom a defective product until the injury occurs).Even though the terms “liability” and “contingent liability” may be narrowlyconstrued, other provisions in the Model Agreement protect the Buyer against variouscontingencies that may not actually constitute “contingent liabilities” as of the Closing Date.For example, the Model Agreement contains representations that no event has occurred thatmay result in a future material adverse change in the business of the Seller as carried on bythe Buyer (see Section 3.15); that no undisclosed event has occurred that may result in afuture violation of law by the Seller (see Section 3.17); that the Seller has no knowledge ofany circumstances that may serve as a basis for the commencement of a future lawsuitagainst the Seller (see Section 3.18); that no undisclosed event has occurred that wouldconstitute a future default under any of the Contracts of the Seller being assigned to orassumed by the Buyer (see Section 3.20); and that the Seller knows of no facts thatmaterially threaten its business (see Section 3.33). In addition, the Model Agreementrequires the Seller and the Shareholders to indemnify the Buyer against liabilities that mayarise in the future from products manufactured by the Seller prior to the Closing Date (seeSection 11.2).If a buyer seeks even broader protection against undisclosed contingencies, it shouldconsider expanding the scope of the seller’s indemnity obligations under Section 11.2 so thatthe seller and the shareholders are obligated to indemnify the buyer not only against futureproduct liabilities, but also against other categories of liabilities that may arise after theClosing Date from circumstances existing before the Closing Date.3.14 TAXES(a) Tax Returns Filed and Taxes Paid. Seller has filed or caused to be filed on a timelybasis all Tax Returns and all reports with respect to Taxes that are or were required to befiled pursuant to applicable Legal Requirements. All Tax Returns and reports filed by Sellerare true, correct and complete. Seller has paid, or made provision for the payment of, allTaxes that have or may have become due for all periods covered by the Tax Returns orotherwise, or pursuant to any assessment received by Seller, except such Taxes, if any, as arelisted in Part 3.14(a) and are being contested in good faith and as to which adequate reserves(determined in accordance with GAAP) have been provided in the Balance Sheet and theInterim Balance Sheet. Except as provided in Part 3.14(a), Seller currently is not the3148166v1- 82 -