2.3
ASSUMPTION OF LIABILITIES. BUYER SHALL ASSUME AND PAY, PERFORM,
AND DISCHARGE IN THE ORDINARY COURSE OF BUSINESS IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS, SUBJECT TO ANY DEFENSES OR CLAIMED OFFSETS ASSERTED IN GOOD
FAITH AGAINST THE OBLIGEE TO WHOM SUCH LIABILITIES OR OBLIGATIONS ARE OWED, ALL
LIABILITIES AND OBLIGATIONS OF SELLER UNDER THE EQUIPMENT LEASES ARISING FROM
AND AFTER THE CLOSING DATE (THE "ASSUMED LIABILITIES").
2.4
CURE COSTS. BUYER AGREES TO SATISFY, AS AND WHEN DUE, ALL CURE
OBLIGATIONS DUE AND OWING UNDER THE EQUIPMENT LEASES WHICH THE BANKRUPTCY COURT
ORDERS TO BE PAID AS A CONDITION TO SELLER'S ASSUMPTION AND ASSIGNMENT TO BUYER
OF THE EQUIPMENT LEASES IN ACCORDANCE WITH SECTION 365 OF THE BANKRUPTCY CODE
(THE "CURE COSTS"). TO SELLER'S KNOWLEDGE, AS OF THE EFFECTIVE DATE THERE ARE NO
CURE COSTS ASSOCIATED WITH THE EQUIPMENT LEASES.
3.
PRE-CLOSING MATTERS.
3.1
CONDUCT OF KLAMATH NORTHERN'S BUSINESS.
3.1.1
BETWEEN THE EFFECTIVE DATE AND THE CLOSING DATE, SELLER SHALL CAUSE
KLAMATH NORTHERN TO:
(A)
CONDUCT THE BUSINESS AND OPERATE AND MAINTAIN ITS ASSETS IN THE
ORDINARY COURSE OF BUSINESS, EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN; AND
(B)
USE ITS COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN THE RELATIONS
AND GOODWILL WITH EMPLOYEES, SUPPLIERS, CUSTOMERS, AND OTHERS HAVING BUSINESS
RELATIONSHIPS WITH IT.
3.1.2
BETWEEN THE EFFECTIVE DATE AND THE CLOSING DATE, SELLER SHALL NOT
SUFFER OR PERMIT KLAMATH NORTHERN TO:
(A)
SELL, LEASE, OR OTHERWISE TRANSFER OR DISPOSE OF ANY MATERIAL
ASSETS, OR ANY INTEREST THEREIN, OTHER THAN TRANSFERS AND DISPOSITIONS MADE IN
THE ORDINARY COURSE OF BUSINESS, OR PERMIT OR ALLOW ANY MATERIAL ASSETS TO
BECOME SUBJECT TO ANY LIEN (OTHER THAN PERMITTED ENCUMBRANCES);
(B)
ISSUE, SELL, OR PLEDGE ANY STOCK OR ANY WARRANTS OR OTHER RIGHTS
TO ACQUIRE STOCK;
(C)
INCUR OR ASSUME ANY DEBT FOR BORROWED MONEY OR INCUR ANY MATERIAL
LIABILITY OR OBLIGATION;
(D)
ASSUME, GUARANTEE, ENDORSE, OR OTHERWISE BECOME LIABLE OR
RESPONSIBLE (WHETHER DIRECTLY, CONTINGENTLY, OR OTHERWISE) FOR THE OBLIGATIONS
OF ANY OTHER PERSON, EXCEPT IN THE ORDINARY COURSE OF BUSINESS;
(E)
MAKE ANY LOANS OR ADVANCES TO, OR ANY INVESTMENTS IN, ANY PERSON;
(F)
MAKE ANY COMMITMENT FOR CAPITAL EXPENDITURES FOR ADDITIONS TO
PROPERTY, EQUIPMENT, OR FACILITIES TO BE MADE AFTER THE CLOSING DATE;
(G)
CHANGE ANY OF THE ACCOUNTING PRINCIPLES OR PRACTICES USED BY IT,
EXCEPT AS MAY BE REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES;
(H)
AMEND ANY OF ITS ORGANIZATIONAL DOCUMENTS;
(I)
ENTER INTO ANY NEW EMPLOYMENT, SEVERANCE, CONSULTING, OR SALARY
CONTINUATION CONTRACT OR GRANT ANY INCREASES IN COMPENSATION OR OTHER BENEFITS;
2
(J)
OTHERWISE MODIFY OR AMEND THE TERMS OF EMPLOYMENT OF ANY OF ITS
EMPLOYEES, ADOPT ANY EMPLOYEE BENEFIT PLAN, OR TERMINATE MORE THAN FIVE (5)
EMPLOYEES; OR
(K)
ENTER INTO ANY CONTRACT AGREEING TO DO ANY OF THE FOREGOING.
3.1.3
PRIOR TO THE CLOSING, SELLER SHALL CAUSE KLAMATH NORTHERN TO (I)
SATISFY ALL OF ITS DEBTS, LIABILITIES, AND OBLIGATIONS ACCRUING UP TO THE
CLOSING DATE (OTHER THAN A PAYABLE OWED TO CROWN PACIFIC, LTD., AN AFFILIATE OF
SELLER, IN