Common use of Interim Operations of Seller Clause in Contracts

Interim Operations of Seller. Seller covenants and agrees that, except (i) as contemplated by this Agreement, (ii) entering into new warehousing/distribution arrangements to replace the agreement with Cosmetic Essence, Inc., provided that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months or less and (B) is on terms no less favorable in the aggregate in any material respect than the current arrangement, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions in Section 2.20 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of Buyer, after the date hereof and prior to the Closing Date, Seller will cause: (1) the Company and its Subsidiaries to conduct their businesses in the ordinary and usual course of business; (2) the Company and its Subsidiaries not to amend their certificates of incorporation or bylaws or similar organizational documents; (3) the Company not to (i) split, combine or reclassify the Shares, (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, the Shares or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (4) the Company and its Subsidiaries not to (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors; (5) the Company and its Subsidiaries not to, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, acquire, sell, lease or dispose of any assets which in the aggregate are material to the Company and its Subsidiaries taken as a whole; (6) the Company and its Subsidiaries not to (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person except in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as a whole, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice, (iv) pledge or otherwise encumber the Shares or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Encumbrance of any kind with respect to any such asset; (7) the Company and its Subsidiaries not to acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (8) the Company and its Subsidiaries not to authorize any new capital expenditure of capitalized items which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $250,000; (9) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10) the Company and its Subsidiaries not to adopt plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (11) the Company not to materially change any of the accounting policies used by it in preparing the Financial Statements unless required by GAAP or applicable law; (12) the Company and its Subsidiaries not to settle or compromise any claim (including arbitration) or litigation, which after insurance reimbursement is material to the Company taken as a whole, without the prior written consent of Buyer, which consent will not be unreasonably withheld; (13) the Company and its Subsidiaries not to enter into any transaction with Seller or any officer, director or Affiliate (other than the Company or any of its Subsidiaries) of Seller (i) outside the ordinary and usual course of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to any arrangement disclosed in Section 2.20 of the Disclosure Schedule; and (14) the Company and its Subsidiaries not to authorize or enter into an agreement to do any of the foregoing.

Interim Operations of Seller. Promptly upon the execution of this Agreement, Seller agrees that Purchaser may place certain senior executives, including Arnoxx Xxxxxx (xxe "Interim Consulting Team"), in interim consulting positions at the Company and the Insurance Subsidiaries pursuant to consulting arrangements which are reasonably acceptable to the parties and consistent with the terms of this Agreement. The Seller agrees to cause the Company and the Insurance Subsidiaries to take, or not take, such actions as the Interim Consulting Team may reasonably direct with respect to (i) the strategy and execution of the Seller Subsidiaries' underwriting, reinsurance, claims handling and other operational 22 29 functions, and (ii) the restructuring of certain asset positions, both in the Seller Subsidiaries' investment portfolios and otherwise, each subject to Seller's approval, which will not be unreasonably withheld. The Interim Consulting Team will coordinate all of its activities under this Agreement through Jay X. Xxxxxxx, X. Curtxx Xxxxxx xxx Maurxxx X. Xxxxx xx their designees. Notwithstanding any other provision of the Agreement, neither the Seller, nor any of the Seller Subsidiaries, shall be obligated to commute any insurance or reinsurance policy or otherwise take any action that may be reasonably expected to cause any Governmental Entity to require Seller or any of its Affiliates to make a capital contribution to the Seller Subsidiaries. Absent the written approval of one of the Interim Consulting Team, Seller covenants and agrees that, except (i) as contemplated by this Agreement, Agreement (including the distribution of the Excluded Assets) or (ii) entering into new warehousing/distribution arrangements to replace the agreement with Cosmetic Essence, Inc., provided that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months or less and (B) is on terms no less favorable in the aggregate in any material respect than the current arrangement, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions disclosed in Section 2.20 4.1 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of Buyer, Schedule after the date hereof and prior to the Closing Date, Seller will cause: (1a) the Company and its business of the Seller Subsidiaries to conduct their businesses shall be conducted only in the ordinary and usual course of businessbusiness and shall not include any actions inconsistent with the transactions contemplated hereby or by the agreements contemplated hereunder; (2b) none of the Company and Seller Subsidiaries will amend its Subsidiaries not to amend their certificates articles or certificate of incorporation or incorporation, bylaws or similar organizational documents; (3c) the Company will not to (i) split, combine or reclassify the Shares, (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares, provided, that the Company may dividend or otherwise distribute or take any other necessary action to allow Seller to retain the Excluded Assets, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, the Shares or any capital stock of the Company, or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (4d) none of the Company and its Seller Subsidiaries not to shall (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans or as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors; (5) the Company and its Subsidiaries not to, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, acquire, sell, lease or dispose of any assets which in the aggregate are material to the Company and its Subsidiaries taken as a whole; (6) the Company and its Subsidiaries not to (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit promotions in the ordinary course of business consistent with past practicepractices, normal merit increases of five percent (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person except in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as a whole, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice, (iv) pledge or otherwise encumber the Shares or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Encumbrance of any kind with respect to any such asset; (7) the Company and its Subsidiaries not to acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (8) the Company and its Subsidiaries not to authorize any new capital expenditure of capitalized items which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $250,000; (9) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10) the Company and its Subsidiaries not to adopt plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (11) the Company not to materially change any of the accounting policies used by it in preparing the Financial Statements unless required by GAAP or applicable law; (12) the Company and its Subsidiaries not to settle or compromise any claim (including arbitration5%) or litigation, which after insurance reimbursement is material to the Company taken as a whole, without the prior written consent of Buyer, which consent will not be unreasonably withheld; (13) the Company and its Subsidiaries not to enter into any transaction with Seller or any officer, director or Affiliate (other than the Company or any of its Subsidiaries) of Seller (i) outside the ordinary and usual course of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to any arrangement disclosed in Section 2.20 of the Disclosure Schedule; and (14) the Company and its Subsidiaries not to authorize or enter into an agreement to do any of the foregoing.less per

Interim Operations of Seller. Seller covenants From and agrees thatafter December 31, 1997 through the Closing, except as disclosed on Schedule 5.2 Seller: (ia) Has and will conduct its Business only according to its usual, regular and ordinary course in substantially the same manner as contemplated heretofore conducted; (b) Has and will maintain, keep and preserve the Property, Plant and Equipment in normal operating condition and repair, ordinary wear and tear excepted, and maintain insurance with respect to its assets and business as provided in Section 3.21; (c) Has and will use reasonable efforts to preserve for Purchaser the goodwill of Seller's suppliers, customers, landlords and others having business relations with Seller; (d) Has not and will not alter through merger, liquidation, reorganization, restructuring or in any other fashion, the corporate structure or ownership of Seller except for the exercise of options disclosed in Schedule 3.4 or otherwise as disclosed in or anticipated by this Agreement; (e) Has not and will not revalue any of the Purchased Assets, settle or compromise any pending or threatened suit, action or claim relating to Seller or the transactions contemplated hereby, waive or release any right or claim of Seller or pay, discharge or satisfy any claims, liabilities or obligations (ii) entering into new warehousing/distribution arrangements to replace the agreement with Cosmetic Essenceabsolute, Inc.accrued, provided that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months asserted or less and (B) is on terms no less favorable in the aggregate in any material respect unasserted, contingent or otherwise), other than the current arrangementpayment, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions in Section 2.20 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) discharge or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of Buyer, after the date hereof and prior to the Closing Date, Seller will cause: (1) the Company and its Subsidiaries to conduct their businesses satisfaction in the ordinary and usual course of businessbusiness of liabilities reflected or reserved against in, or contemplated by the Interim Balance Sheet or incurred in the ordinary course of business consistent with past practice; (2f) Has not and will not sell, encumber, assign or transfer any assets or properties which would have been included in the Company and its Subsidiaries not to amend their certificates of incorporation Purchased Assets if the Closing had been held on the Interim Balance Sheet Date or bylaws or similar organizational documents; (3) the Company not to (i) split, combine or reclassify the Shares, (ii) declare, set aside or pay on any dividend or other distribution payable in cash, stock or property with respect to the Shares, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, the Shares or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (4) the Company and its Subsidiaries not to (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respectdate subsequent thereto, except as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employmentfor the sale of rental x-ray equipment, severance, termination or similar agreement with any of its present or future officers or directors; (5) the Company and its Subsidiaries not to, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, acquire, sell, lease or dispose of any assets which in the aggregate are material to the Company and its Subsidiaries taken as a whole; (6) the Company and its Subsidiaries not to (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit inventory in the ordinary course of business consistent with past practice, other equipment not in excess of $50,000 and except for Permitted Encumbrances; (iig) assumeHas not and will not amend or terminate any material agreement, guaranteecontract, endorse commitment or otherwise become liable lease to which it is a party or responsible (whether directly, contingently by which it is bound other than termination of leases or otherwise) for the material obligations of any other person except commitments in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as a whole, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice; (h) Has not and will not make any material change in its customary operating methods (including its purchasing, marketing, selling and pricing practices and policies); (ivi) pledge Has not and will not make commitments or otherwise encumber agreements for capital expenditures or capital additions not listed on Exhibit B except such as were or are involved in ordinary repair, maintenance or replacement of its assets not exceeding $25,000 in the Shares aggregate; (j) Has not and will not increase the salaries or other compensation of, or make any advance (vexcluding advances for ordinary and necessary business expenses) mortgage or pledge loan to, any of its material assets, tangible employees or intangiblemake any increase in, or create any material Encumbrance addition to, other benefits to which any of any kind with respect to any such assetits employees is entitled; (7k) the Company Has not and its Subsidiaries will not to acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (8) the Company and its Subsidiaries not to authorize any new capital expenditure of capitalized items which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $250,000; (9) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10) the Company and its Subsidiaries not to adopt plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (11) the Company not to materially change any of the accounting policies used principles followed by it in preparing or the Financial Statements unless required by GAAP methods of applying such principles, or applicable law; (12) the Company and its Subsidiaries not to settle or compromise any claim (including arbitration) or litigation, which after insurance reimbursement is material to the Company taken as a whole, without the prior written consent of Buyer, which consent will not be unreasonably withheld; (13) the Company and its Subsidiaries not to enter into any transaction with Seller or any officer, director or Affiliate (other than the Company or revalued any of its Subsidiaries) of Seller (i) outside the ordinary and usual course of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to any arrangement disclosed in Section 2.20 of the Disclosure Scheduleassets; and (14l) the Company Has not and its Subsidiaries will not agree, whether in writing or otherwise, to authorize or enter into an agreement to do take any of the foregoingactions set forth in this Section 5.2.

Interim Operations of Seller. Seller covenants and agrees that, except (i) as contemplated by this Agreement, (ii) entering into new warehousing/distribution arrangements to replace the agreement with Cosmetic Essence, Inc., provided PROVIDED that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months or less and (B) is on terms no less favorable in the aggregate in any material respect than the current arrangement, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions in Section 2.20 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of Buyer, after the date hereof and prior to the Closing Date, Seller will cause: (1a) the Company and its Subsidiaries to conduct their businesses in the ordinary and usual course of business; (2b) the Company and its Subsidiaries not to amend their certificates certifi cates of incorporation or bylaws or similar organizational documents; (3c) the Company not to (i) split, combine or reclassify the Shares, (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments commit ments or rights of any kind to acquire, the Shares or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (4d) the Company and its Subsidiaries not to (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors; (5e) the Company and its Subsidiaries not to, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, acquire, sell, lease or dispose of any assets which in the aggregate are material to the Company and its Subsidiaries taken as a whole; (6f) the Company and its Subsidiaries not to (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person except in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as a whole, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice, (iv) pledge or otherwise encumber the Shares or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Encumbrance of any kind with respect to any such asset; (7g) the Company and its Subsidiaries not to acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (8) h) the Company and its Subsidiaries not to authorize any new capital expenditure of capitalized items which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $250,000; (9i) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10j) the Company and its Subsidiaries not to adopt plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (11k) the Company not to materially change any of the accounting policies used by it in preparing the Financial Statements unless required by GAAP or applicable law; (12l) the Company and its Subsidiaries not to settle or compromise any claim (including arbitration) or litigation, which after insurance reimbursement is material to the Company taken as a whole, without the prior written consent of Buyer, which consent will not be unreasonably withheld; (13m) the Company and its Subsidiaries not to enter into any transaction transac tion with Seller or any officer, director or Affiliate (other than the Company or any of its Subsidiaries) of Seller (i) outside the ordinary and usual course of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to any arrangement disclosed in Section 2.20 of the Disclosure Schedule; and (14n) the Company and its Subsidiaries not to authorize or enter into an agreement to do any of the foregoing.

Interim Operations of Seller. Promptly upon the execution of this Agreement, Seller agrees that Purchaser may place certain senior executives, including Xxxxxx Xxxxxx (the "INTERIM CONSULTING TEAM"), in interim consulting positions at the Company and the Insurance Subsidiaries pursuant to consulting arrangements which are reasonably acceptable to the parties and consistent with the terms of this Agreement. The Seller agrees to cause the Company and the Insurance Subsidiaries to take, or not take, such actions as the Interim Consulting Team may reasonably direct with respect to (i) the strategy and execution of the Seller Subsidiaries' underwriting, reinsurance, claims handling and other operational functions, and (ii) the restructuring of certain asset positions, both in the Seller Subsidiaries' investment portfolios and otherwise, each subject to Seller's approval, which will not be unreasonably withheld. The Interim Consulting Team will coordinate all of its activities under this Agreement through Xxx X. Xxxxxxx, B. Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxx or their designees. Notwithstanding any other provision of the Agreement, neither the Seller, nor any of the Seller Subsidiaries, shall be obligated to commute any insurance or reinsurance policy or otherwise take any action that may be reasonably expected to cause any Governmental Entity to require Seller or any of its Affiliates to make a capital contribution to the Seller Subsidiaries. Absent the written approval of one of the Interim Consulting Team, Seller covenants and agrees that, except (i) as contemplated by this Agreement, Agreement (including the distribution of the Excluded Assets) or (ii) entering into new warehousing/distribution arrangements to replace the agreement with Cosmetic Essence, Inc., provided that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months or less and (B) is on terms no less favorable in the aggregate in any material respect than the current arrangement, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions disclosed in Section 2.20 4.1 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of Buyer, Schedule after the date hereof and prior to the Closing Date, Seller will cause: (1a) the Company and its business of the Seller Subsidiaries to conduct their businesses shall be conducted only in the ordinary and usual course of businessbusiness and shall not include any actions inconsistent with the transactions contemplated hereby or by the agreements contemplated hereunder; (2b) none of the Company and Seller Subsidiaries will amend its Subsidiaries not to amend their certificates articles or certificate of incorporation or incorporation, bylaws or similar organizational documents; (3c) the Company will not to (i) split, combine or reclassify the Shares, (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares, PROVIDED, that the Company may dividend or otherwise distribute or take any other necessary action to allow Seller to retain the Excluded Assets, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, the Shares or any capital stock of the Company, or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (4d) none of the Company and its Seller Subsidiaries not to shall (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans or as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors, except for promotions in the ordinary course of business consistent with past practices, normal merit increases of five percent (5%) or less per annum in the ordinary and usual course of business and the payment of cash bonuses to employees pursuant to and consistent with existing plans or programs, with respect to which any necessary accruals have been made; (5e) none of the Company and its Seller Subsidiaries not toshall, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, consistent with prior practice, acquire, sell, lease or dispose of any assets which which, individually or in the aggregate aggregate, are material to the Company and its Subsidiaries taken as a wholefinancial position or results of operations of the affected Seller Subsidiary; (6f) none of the Company and its Seller Subsidiaries not to shall (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the material obligations of any other person except in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as a wholeaffected Seller Subsidiary, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice, (iv) pledge or otherwise encumber the Shares or any shares of any Insurance Subsidiary or (v) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Encumbrance of any kind with respect to any such asset; (7g) none of the Company and its Seller Subsidiaries not to shall (i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; therein (8) other than purchases of marketable securities in the Company and its Subsidiaries not ordinary course of business), (ii) other than capital expenditures provided for in the 1998 capital expenditures budgets of the Seller Subsidiaries, which budgets have been delivered or made available to Purchaser, authorize any new capital expenditure of capitalized items or expenditures which, individually, is in excess of $50,000 150,000 or, in the aggregate, are in excess of $250,000; 500,000 or (9iii) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10h) none of the Company and its Seller Subsidiaries not to shall adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; (11i) none of the Company not to Seller Subsidiaries shall materially change any of the accounting policies methods or practices used by it in preparing the Financial Statements unless required by GAAP GAAP, statutory accounting practices or applicable law; (12j) none of the Company and its Seller Subsidiaries not to shall settle or compromise any claim (including arbitration) or litigation, which after insurance reimbursement involves an amount in excess of $500,000 or otherwise is material to the Company Seller Subsidiaries taken as a whole, without the prior written consent of BuyerPurchaser, which consent will not be unreasonably withheld; (13k) none of the Company and Seller Subsidiaries shall make any payment, loan or advance of any amount to or in respect of, or engage in the sale, transfer or lease of any of its Subsidiaries not to property or assets to, or enter into any transaction with Seller or contract with, any officerAffiliate, director or Affiliate (other than the Company or any of its Subsidiaries) of Seller except (i) outside in accordance with the ordinary and usual course terms of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to any arrangement disclosed the agreements set forth in Section 2.20 2.18 of the Disclosure Schedule, and (ii) in connection with Seller's retention of the Excluded Assets and the owned real property, as contemplated by this Agreement; (l) none of the Seller Subsidiaries shall amend the terms of the (i) Material Agreements, as disclosed in Section 2.15 of the Disclosure Schedule and (ii) contracts, agreements or arrangements with any related party, as disclosed in Section 2.18 of the Disclosure Schedule, to cause any change in the cost, services being provided, or term of any such agreements, other than as specifically contemplated by this Agreement; (m) none of the Seller Subsidiaries shall cancel any indebtedness or intentionally waive, release, grant or transfer any rights of substantial value to the affected Seller Subsidiary, except in the ordinary course of business and consistent with past practice, or forgive or waive any rights in connection with any loans to its officers, directors or other related individuals; and (14n) the Company and its Subsidiaries not to neither Seller nor any Seller Subsidiary will authorize or enter into an agreement to do any of the foregoing.

Interim Operations of Seller. Seller covenants and agrees that, except (i) as contemplated by this Agreement, ; (ii) entering into new warehousing/distribution arrangements to replace as disclosed in Section 4.1 of the agreement with Cosmetic Essence, Inc., provided that Seller has consulted with Buyer as to the terms with respect to such new arrangements prior to entering into any definitive agreement related thereto and that any such definitive agreement (A) has an initial term of 24 months Seller's Disclosure Schedule or less and (B) is on terms no less favorable in the aggregate in any material respect than the current arrangement, based on 1997 sales volume and product mix, (iii) the continuation of the Affiliate transactions in Section 2.20 of the Disclosure Schedule, (iv) that Seller will have the right to delay payment of accounts payable by an amount not in excess of (A) $120,000, if Seller and/or its designees elect to purchase, and Buyer sells, the Dermablend Business, the National Cosmetics Business and the Iman Business pursuant to Sections 4.11 (a) and (b) or (B) $1,500,000, if Buyer retains the Dermablend Business but Seller and/or its designees elect to purchase, and Buyer sells, the National Cosmetics Business and the Iman Business pursuant to Section 4.11(b) or (v) with the prior written consent of BuyerPurchaser, which consent shall not be unreasonably conditioned, withheld or delayed, after the date hereof and prior to the Closing Date, Seller will cause: (1a) the business of the Company and its Subsidiaries to conduct their businesses shall be conducted substantially in the ordinary and usual course of businessbusiness and, subject to the terms of the HSR Act (as hereinafter defined), Purchaser shall have the right at its sole cost and expense to have a senior executive level representative present at the Company's office from the date of this Agreement through the Closing with full access to all of the Company's senior management to monitor the conduct of the Company's business during such period, subject to such reasonable limitations as may be imposed by Seller with respect to confidential or competitive information including, without limitation, reimbursement, pricing, or rate data; (2b) the Company and will not amend its Subsidiaries not to amend their certificates articles of incorporation or bylaws or similar organizational documents; (3c) the Company shall not to (i) split, combine or reclassify re-classify the Shares, ; (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Shares, (iii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrantswar-rants, calls, commitments or rights of any kind to acquire, the Shares or (iviii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockthe Shares; (4d) the Company and its Subsidiaries not to (i) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except as may be required by applicable law or (ii) materially increase any compensation or enter into or amend any employment, severance, termination or similar agreement with any of its present or future officers or directors; (5) the Company and its Subsidiaries not toshall not, except as may be required or contemplated by this Agreement or in the ordinary and usual course of business, acquire, sell, lease or dispose of any assets which exceed $50,000 in value individually or $100,000 in value in the aggregate are material to the Company and its Subsidiaries taken as a wholeaggregate; (6e) the Company and its Subsidiaries shall not to (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the ordinary course of business consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other person except in the ordinary and usual course of business consistent with past practice in an amount not material to the Company and its Subsidiaries taken as adopt a whole, (iii) make any material loans, advances or capital contributions to, or investments in, any other person other than in the ordinary and usual course of business consistent with past practice, (iv) pledge or otherwise encumber the Shares or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Encumbrance of any kind with respect to any such asset; (7) the Company and its Subsidiaries not to acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (8) the Company and its Subsidiaries not to authorize any new capital expenditure of capitalized items which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $250,000; (9) the Company and its Subsidiaries not to enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action which would be prohibited hereunder; (10) the Company and its Subsidiaries not to adopt plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganizationreorganization except as may be required for tax planning purposes; (11f) the Company shall not to materially change write or otherwise enter into any of new subscriber agreements at premium rates not specifically approved by Purchaser, except that the accounting policies used Company may enter into new subscriber agreements at (or higher than) premium rates set consistent with past underwriting practice and, if required, approved by it in preparing the Financial Statements unless required by GAAP or applicable lawDOI; (12g) the Company and its Subsidiaries shall not to settle grant a security interest in or compromise otherwise encumber any claim (including arbitration) or litigation, which after insurance reimbursement is material property included as an asset on the most recent balance sheet provided to the Company taken as a wholePurchaser, without except for purchase money, operating leases and capital leases entered into in the prior written consent ordinary course of Buyer, which consent will not be unreasonably withheldbusiness; (13h) the Company and its Subsidiaries shall not enter into any agreement or contract (other than a provider agreement entered into in the ordinary course of the Company's business after disclosure of the Company's intention to enter into any transaction such contract to Purchaser's senior executive monitoring the conduct of the Company's business in accordance with Seller Section 4.1(a)) resulting in payments of $100,000 or any officermore over the twelve (12) months following entering the agreement or contract, director or Affiliate (other than any agreement or contract entered into in replacement or renewal of an agreement or contract in effect as of the Company or any of its Subsidiaries) of Seller date hereof; (i) outside the ordinary and usual course of business consistent with past practice or (ii) other than on an arm's-length basis, other than pursuant to Company shall not enter into any arrangement disclosed in Section 2.20 employment agreement without prior disclosure of the Disclosure ScheduleCompany's intention to enter into such contract to Purchaser's senior executive monitoring the conduct of the Company's business in accordance with Section 4.1(a); and (14j) neither Seller nor the Company and its Subsidiaries not to will authorize or enter into an agreement to do any of the foregoing, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained in this Agreement, the Seller may, without the prior consent of Purchaser, cause the Company to issue cash dividends or make other distributions (including, without limitation, intercompany payments) to the Seller or any of its Affiliates at or prior to the Closing; provided, that the Company maintains the minimum statutory surplus as of the Closing as determined in accordance with Florida Statutes Section 641.225 (2000).