RESULT IN A MATERIAL ADVERSE
EFFECT ON THE COMPANY; PROVIDED, HOWEVER, THAT THE COMPANY MAY MAKE OR RESCIND
ANY SUCH ELECTION, SETTLE OR COMPROMISE ANY SUCH CLAIM, ACTION, SUIT,
LITIGATION, PROCEEDING, ARBITRATION, INVESTIGATION, AUDIT OR CONTROVERSY, CHANGE
ANY SUCH METHOD OF REPORTING OR AMEND ANY SUCH TAX RETURN WITHOUT FOREST'S PRIOR
WRITTEN CONSENT IF THE AMOUNT OF TAX LIABILITIES RELATING TO SUCH ACTION DOES
NOT EXCEED $500,000.
(Q)
DISCHARGE OF LIABILITIES.
UNLESS OTHERWISE PROVIDED IN THIS
AGREEMENT OR REQUIRED BY APPLICABLE LAW, THE COMPANY SHALL NOT, NOR SHALL IT
PERMIT ANY OF ITS SUBSIDIARIES TO, PAY, DISCHARGE OR SATISFY ANY MATERIAL
CLAIMS, LIABILITIES OR OBLIGATIONS (ABSOLUTE, ACCRUED, ASSERTED OR UNASSERTED,
CONTINGENT OR OTHERWISE), OTHER THAN THE PAYMENT, DISCHARGE OR SATISFACTION, IN
THE ORDINARY COURSE OF BUSINESS (WHICH INCLUDES THE PAYMENT OF FINAL AND
UNAPPEALABLE JUDGMENTS) OR IN ACCORDANCE WITH THEIR TERMS, OF LIABILITIES
REFLECTED OR RESERVED AGAINST IN, OR CONTEMPLATED BY, THE MOST RECENT
CONSOLIDATED FINANCIAL STATEMENTS (OR THE NOTES THERETO) OF THE COMPANY AS OF
AND FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004, OR INCURRED IN THE ORDINARY
COURSE OF BUSINESS.
(R)
TAX TREATMENT.
NEITHER THE COMPANY NOR MERGER SUB SHALL TAKE OR
CAUSE OR PERMIT TO BE TAKEN ANY ACTION (I) THAT WOULD DISQUALIFY THE
DISTRIBUTION FROM CONSTITUTING A TAX-FREE DISTRIBUTION UNDER SECTION 355 OF THE
CODE OR THE CONTRIBUTION FROM CONSTITUTING A TAX-FREE REORGANIZATION UNDER
SECTION 368(A) OF THE CODE OR (II) THAT WOULD DISQUALIFY THE MERGER FROM
CONSTITUTING A TAX-FREE REORGANIZATION UNDER SECTION 368(A) OF THE CODE.
(S)
ADVICE OF CHANGES.
SUBJECT TO THE PROVISIONS OF THE
CONFIDENTIALITY AGREEMENT, THE COMPANY SHALL PROMPTLY ADVISE FOREST AND SPINCO
ORALLY AND IN WRITING OF ANY CHANGE OR EVENT HAVING, OR THAT, INSOFAR AS CAN
REASONABLY BE FORESEEN, COULD HAVE, EITHER INDIVIDUALLY OR TOGETHER WITH OTHER
CHANGES OR EVENTS, A MATERIAL ADVERSE EFFECT ON THE COMPANY.
(T)
NO ACTION.
SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, THE COMPANY SHALL NOT, NOR WILL IT PERMIT ANY OF ITS SUBSIDIARIES TO,
INTENTIONALLY TAKE OR AGREE OR COMMIT TO TAKE ANY ACTION THAT WOULD RESULT IN
ANY OF THE CONDITIONS SET FORTH IN ARTICLE VII NOT BEING SATISFIED AT THE
EFFECTIVE TIME.
(U)
HEDGING ACTIVITIES.
THE COMPANY SHALL NOT, NOR SHALL IT PERMIT
ANY OF ITS SUBSIDIARIES TO, ENTER INTO (I) ANY DERIVATIVE TRANSACTION OR
(II) ANY FIXED PRICE COMMODITY SALES AGREEMENT WITH A TERM OF MORE THAN 60 DAYS.
(V)
LENDER CONSENT.
THE COMPANY SHALL USE REASONABLE COMMERCIAL
EFFORTS TO OBTAIN THE LENDER CONSENT REFERENCED IN SECTION 5.3 OF THE COMPANY
DISCLOSURE SCHEDULE AND TO ENTER INTO THE NEW CREDIT FACILITY REFERENCED IN
SECTION 7.3(B).
48
(W)
AGREEMENTS.
THE COMPANY SHALL NOT, NOR SHALL IT PERMIT ANY OF ITS
SUBSIDIARIES TO, AGREE IN WRITING OR OTHERWISE TO TAKE ANY ACTION INCONSISTENT
WITH THE FOREGOING.
Section 6.2
Conduct of Business by Spinco and Forest Pending the
Merger.
Following the date of this Agreement and prior to the earlier of the
Effective Time and the Termination Date, except as