BUSINESS IN THE ORDINARY COURSE (TAKING INTO ACCOUNT SELLER'S STATUS AS A
DEBTOR-IN-POSSESSION), COMPLY WITH ALL LEGAL REQUIREMENTS APPLICABLE TO THE
OPERATION OF ITS BUSINESS AND PRESERVE ITS PRESENT BUSINESS ORGANIZATION
INTACT.
DURING THE PRE-CLOSING PERIOD, SELLER SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO:
(I)
MAINTAIN IN FULL FORCE AND EFFECT THE PERMITS IN ALL MATERIAL
RESPECTS;
(II)
MAINTAIN ALL OF THE TRANSFERRED ASSETS IN A MANNER CONSISTENT
WITH PAST PRACTICES, REASONABLE WEAR AND TEAR EXCEPTED AND MAINTAIN THE TYPES
AND LEVELS OF INSURANCE CURRENTLY IN EFFECT IN RESPECT OF THE TRANSFERRED
ASSETS;
(III)
UPON ANY DAMAGE, DESTRUCTION OR LOSS TO ANY TRANSFERRED ASSET,
APPLY ANY INSURANCE PROCEEDS RECEIVED WITH RESPECT THERETO TO THE PROMPT REPAIR,
REPLACEMENT AND RESTORATION THEREOF TO THE CONDITION OF SUCH TRANSFERRED ASSET
BEFORE SUCH EVENT OR, IF REQUIRED, TO SUCH OTHER (BETTER) CONDITION AS MAY BE
REQUIRED BY APPLICABLE LEGAL REQUIREMENTS;
(IV)
REPLENISH THE INVENTORY SUCH THAT THE MIX, CHARACTER AND QUALITY
OF THE INVENTORY ON THE CLOSING DATE IS SUBSTANTIALLY SIMILAR AS ON THE DATE
HEREOF;
(V)
PAY WHEN DUE ALL UNDISPUTED AMOUNTS OWED UNDER THE FACILITIES
LEASES; AND
(VI)
CONSULT WITH PURCHASER ON ALL MATERIAL ASPECTS OF THE BUSINESS AS
MAY BE REASONABLY REQUESTED FROM TIME TO TIME BY PURCHASER, INCLUDING, BUT NOT
LIMITED TO, PERSONNEL, ACCOUNTING AND FINANCIAL FUNCTIONS.
(B)
EXCEPT AS OTHERWISE CONTEMPLATED OR PERMITTED BY THIS AGREEMENT,
DURING THE PRE-CLOSING PERIOD, SELLER SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF PURCHASER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, DELAYED
OR CONDITIONED):
(I)
TERMINATE OR AMEND ANY OF THE FACILITIES LEASES (OR EXECUTE ANY
AMENDMENTS OR MODIFICATIONS TO ANY FACILITIES LEASES), OR CANCEL, MODIFY OR
WAIVE ANY CLAIMS HELD IN RESPECT OF THE TRANSFERRED ASSETS OR WAIVE ANY MATERIAL
RIGHTS OF VALUE;
(II)
DO ANY ACT OR FAIL TO DO ANY ACT THAT WILL CAUSE A MATERIAL
BREACH OR DEFAULT IN ANY OF THE FACILITIES LEASES;
(III)
SELL, TRANSFER OR OTHERWISE DISPOSE OF ANY OF THE TRANSFERRED
ASSETS EXCEPT IN THE ORDINARY COURSE OF BUSINESS, CONSISTENT WITH PAST
PRACTICES;
(IV)
MODIFY ANY OF ITS SALES PRACTICES OR RECEIVABLES COLLECTIONS
PRACTICES FROM THOSE IN PLACE ON THE DATE HEREOF, INCLUDING OFFERING ANY
DISCOUNTS, INCENTIVES OR OTHER ACCOMMODATIONS FOR EARLY PAYMENT;
(V)
CONDUCT ANY "GOING OUT OF BUSINESS," LIQUIDATION, BANKRUPTCY, OR
SIMILAR SALES OR TAKE ANY ACTION TO FASHION ITS BUSINESS AS GOING OUT OF
BUSINESS, LIQUIDATING OR CLOSING;
(VI)
GRANT TO ANY EMPLOYEE ANY INCREASE IN COMPENSATION, EXCEPT
INCREASES TO NON-MANAGEMENT EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS;
(VII)
TERMINATE ANY EMPLOYEE RELATED TO THE BUSINESS, EXCEPT
NON-MANAGEMENT EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS;
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(VIII)
MAKE OR RESCIND ANY MATERIAL TAX ELECTION OR TAKE ANY MATERIAL TAX
POSITION (UNLESS REQUIRED BY LAW) OR FILE ANY TAX RETURN OR CHANGE ITS FISCAL
YEAR OR FINANCIAL OR TAX ACCOUNTING METHODS, POLICIES OR PRACTICE, OR SETTLE ANY
TAX LIABILITY, EXCEPT IN EACH CASE AS WOULD NOT REASONABLY BE EXPECTED TO
MATERIALLY AFFECT PURCHASER;
(IX)
MODIFY, RESCIND OR TERMINATE A MATERIAL PERMIT, ALLOWANCE, OR