Common use of Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions Clause in Contracts

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 of the Disclosure Schedule, since the Interim Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, since the Interim Statement Date, the Seller has not: (a) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedule, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (m) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person in connection with the Business, except for any amount that will be discharged prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice or as required by Law (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Plan; (p) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (u) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance; (v) amended, modified or consented to the termination of any Material Contract or the Seller’s rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (x) suffered any Material Adverse Effect; (y) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 3.11 of the Disclosure Schedule, since the Interim Statement Balance Sheet Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As an amplification and not limitation of the foregoing, except as contemplated by this Agreement or as set forth in Section 3.11 of the Disclosure Schedule, and except as would not, individually or in the aggregate, have a Material Adverse Effect, since the Interim Statement Balance Sheet Date, none of the Seller has notPershing Companies has: (ai) except in the ordinary course of business consistent with past practice, permitted or allowed any of the Purchased Assets assets or properties (whether tangible or intangible) of the Pershing Companies to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (bii) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim Statement of Net Assets Financial Statements and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Balance Sheet Date; (ciii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued redeemed any of the Purchased Assets capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other than in property) to the ordinary course holders of business consistent with past practice and in accordance with GAAPcapital stock of any of the Pershing Companies or otherwise; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (giv) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hv) made issued or sold any capital expenditure stock, notes, bonds or commitment for other securities, or any capital expenditure option, in each case relating warrant or other right to acquire the Businesssame, in excess of $500,000 individually of, or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practiceany other interest in, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, Pershing Companies other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (mvi) other than in the ordinary course of business, consistent with past practice, entered into any agreement, arrangement or transaction with any of its directors, officers, employees or stockholders (or with any relative, beneficiary or spouse living with such Person or Affiliate of such Person); (vii) made any loan to, guaranteed material change in any Indebtedness method of accounting or otherwise incurred any Indebtedness on behalf of any Person in connection with accounting practice or policy used by the Business, except for any amount that will be discharged prior to the Closingother than such changes required by U.S. GAAP; (nviii) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except other than in the ordinary course of business consistent with past practice practice, incurred any Indebtedness in excess of $500,000 individually or as required by Law $5,000,000 in the aggregate; (iix) made any capital expenditure or commitment for any capital expenditure in excess of $1,000,000 individually or $5,000,000 in the aggregate; (A) granted any increase, or announced any increase, increase in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by any of the Seller Pershing Companies to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plantheir employees, or (iiB) established or established, increased or promised to increase any benefits under any Company Benefit Plan; (p) entered into , in any agreementcase, except as required by Law or pursuant to any employment contract or arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs involving increases in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 practice of the Regulations or announced or planned any such action or program for the futurePershing Companies; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (u) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance; (vxi) amended, modified or consented to the termination of any Material Contract or any of the Seller’s Pershing Companies’ rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (xxii) suffered any circumstance, change, event, effect or development that would, individually or in the aggregate, constitute a Material Adverse Effect;; or (yxiii) agreed, whether in writing or otherwise, agreed to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice3.11.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except (a) Since December 31, 2005, except as set forth in Section 3.10 3.08(a) of the Disclosure Schedule, since the Interim Statement Date, and, except with respect to clause (xi) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in all material respects in the ordinary course and of business consistent with past practice. practice and (ii) there has been no Material Adverse Effect. (b) As amplification and not limitation of the foregoing, except as set forth in Section 3.08(b) of the Disclosure Schedule, since the Interim Statement DateDecember 31, the Seller has not2005, none of Parent or any of its Affiliates have: (ai) permitted or allowed any of the Purchased Assets (whether tangible or intangible) to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (bii) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets Reference Balance Sheet and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement DateDecember 31, 2005; (ciii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (div) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the BusinessSeller, other than such changes required by GAAP; (ev) amended, terminated, cancelled or compromised any material claims of the Seller Parent or any of its Affiliates (related to the Business) or waived any other rights of substantial value to the Seller such Persons (related to the Business), other than with respect to the Excluded Assets; (fvi) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller Parent or any of its Affiliates (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (gvii) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Carbonless Paper Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Carbonless Paper Business or any division or line of business thereofengaged in the Carbonless Paper Business, or otherwise acquired any material assets relating to for the Business other than in the ordinary course of business consistent with past practice; (hviii) made any capital expenditure or commitment for any capital expenditure expenditure, in each case relating to the Business, in excess of $500,000 50,000 individually or $2,000,000 250,000 in the aggregate; (iix) except in for Shared Contracts and renewals of existing contracts or the ordinary course entering into of business consistent similar renewal or replacement contracts with past practicedifferent suppliers and customers on substantially the same terms (disregarding reasonable cost or similar increases), issued entered into any sales orders Material Contract which is for a term of two years or otherwise agreed to make any purchases, in each case relating to more and involves the Business, involving exchanges in value in excess annual payment of more than $5,000,000 individually or $10,000,000 in the aggregate250,000; (jx) made any material changes change in the customary methods of operations of the Business, including those practices and policies relating to manufacturing, purchasing, Inventories, marketing, booking sales or Receivables, selling and pricingpricing (other than in response to changes in market conditions in the ordinary course of business consistent with past practice); (kxi) except with respect to U.S. federal or state income or franchise Taxes, made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case case, relating to the Business Purchased Assets or the Purchased AssetsBusiness in a material amount; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (mxii) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of to any Person in connection with the Business, except for any amount that will be discharged prior to the Closing; (nxiii) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was (other than amounts being disputed in good faith and subject to customary adjustmentsfaith); (o) except in the ordinary course of business consistent with past practice or as required by Law (iA) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plan, or (iiB) established or increased or promised to increase any benefits under any Plan, in either case except (x) as required by Law, any Plan or any collective bargaining agreement or (y) involving ordinary increases consistent with the past practices of the Seller; (pxv) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, officers or employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (qxvi) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the BusinessOperating Site, or laid off any employees employed in connection with the Business (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (rxvii) disclosed (other than pursuant to customary confidentiality agreements) to any third party any secret or confidential Intellectual Property relating to the Carbonless Paper Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any registered Owned Carbonless Paper Business Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or licenseregistered ▇▇▇▇ Licensed Intellectual Property; (sxviii) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to required in connection with the Business that is scheduled to terminate lapse or expire within 45 calendar days of the Closingterminate; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (uxix) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000250,000, whether or not such loss or damage shall have been covered by insurance; (vxx) amended, modified modified, renewed, cancelled or consented to the termination of any Material Contract or the SellerParent’s or any of its Affiliates’ rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business thereunder except in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly business consistent with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;past practice; or (x) suffered any Material Adverse Effect; (yxxi) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.08(b), except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 3.11 of the Disclosure Schedule, since the Interim Statement Balance Sheet Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As an amplification and not limitation of the foregoing, except as contemplated by this Agreement or as set forth in Section 3.11 of the Disclosure Schedule, and except as would not, individually or in the aggregate, have a Material Adverse Effect, since the Interim Statement Balance Sheet Date, none of the Seller has notPershing Companies has: (ai) except in the ordinary course of business consistent with past practice, permitted or allowed any of the Purchased Assets assets or properties (whether tangible or intangible) of the Pershing Companies to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (bii) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim Statement of Net Assets Financial Statements and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Balance Sheet Date; (ciii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued redeemed any of the Purchased Assets capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other than in property) to the ordinary course holders of business consistent with past practice and in accordance with GAAPcapital stock of any of the Pershing Companies or otherwise; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (giv) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hv) made issued or sold any capital expenditure stock, notes, bonds or commitment for other securities, or any capital expenditure option, in each case relating warrant or other right to acquire the Businesssame, in excess of $500,000 individually of, or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practiceany other interest in, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, Pershing Companies other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (mvi) other than in the ordinary course of business, consistent with past practice, entered into any agreement, arrangement or transaction with any of its directors, officers, employees or stockholders (or with any relative, beneficiary or spouse living with such Person or Affiliate of such Person); (vii) made any loan to, guaranteed material change in any Indebtedness method of accounting or otherwise incurred any Indebtedness on behalf of any Person in connection with accounting practice or policy used by the Business, except for any amount that will be discharged prior to the Closingother than such changes required by U.S. GAAP; (nviii) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except other than in the ordinary course of business consistent with past practice practice, incurred any Indebtedness in excess of $500,000 individually or as required by Law $5,000,000 in the aggregate; (iix) made any capital expenditure or commitment for any capital expenditure in excess of $1,000,000 individually or $5,000,000 in the aggregate; (A) granted any increase, or announced any increase, increase in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by any of the Seller Pershing Companies to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plantheir employees, or (iiB) established or established, increased or promised to increase any benefits under any Company Benefit Plan; (p) entered into , in any agreementcase, except as required by Law or pursuant to any employment contract or arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs involving increases in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 practice of the Regulations or announced or planned any such action or program for the futurePershing Companies; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (u) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance; (vxi) amended, modified or consented to the termination of any Material Contract or any of the Seller’s Pershing Companies' rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (xxii) suffered any circumstance, change, event, effect or development that would, individually or in the aggregate, constitute a Material Adverse Effect;; or (yxiii) agreed, whether in writing or otherwise, agreed to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice3.11.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in on Section 3.10 3.12 of the Disclosure Schedule, since September 30, 2012 (i) the Interim Statement Date, and, except with respect to clause (x) below (which speaks as business of the date hereof and, pursuant to Section 7.02(a), as of Acquired Companies and the date of the Closing), prior to the date hereof, the Business Subsidiaries has been conducted in the ordinary course and consistent with past practicepractice and (ii) there has been no Material Adverse Effect. As amplification and not limitation of the foregoing, except as set forth on Section 3.12 of the Disclosure Schedule, since the Interim Statement DateSeptember 30, the Seller has not2012: (a) no Seller, Acquired Company or Subsidiary has permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and (including Encumbrances that will be released at or prior to the Closing); (b) no Seller, Acquired Company or Subsidiary has, except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to or in connection with the date hereof as disclosed in Section 3.14 of transactions contemplated by this Agreement, including the Disclosure ScheduleRestructuring Transactions, discharged or otherwise obtained the release of any Encumbrance related to the Business, any Acquired Company or Subsidiary or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Dateany Acquired Company or Subsidiary; (c) no Seller, Acquired Company or Subsidiary has written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) no Seller, Acquired Company or Subsidiary has made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Businessany Acquired Company or Subsidiary, other than such changes required by GAAPGAAP and set forth in Section 3.12 of the Disclosure Schedule; (e) no Seller, Acquired Company or Subsidiary has amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) any Acquired Company or Subsidiary or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assetsany Acquired Company or Subsidiary; (f) no Acquired Company or Subsidiary has sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) no Seller, Acquired Company or Subsidiary has issued or sold any Capital Stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of any Acquired Company or Subsidiary, except pursuant to this Agreement; (h) no Seller, Acquired Company or Subsidiary has redeemed any of the Capital Stock, or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of Capital Stock, of any Acquired Company or Subsidiary or otherwise, other than dividends, distributions and redemptions declared, made or paid by any Subsidiary solely to an Acquired Company or another Subsidiary; (i) no Acquired Company or Subsidiary has merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, thereof or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hj) no Acquired Company or Subsidiary has made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 50,000 individually or $2,000,000 250,000 in the aggregateaggregate other than any capital expenditure that will be paid in full at or prior to the Closing; (ik) except in the ordinary course of business consistent with past practiceno Seller, issued any sales orders Acquired Company or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) Subsidiary has made any material changes change in the customary methods of operations of the Businessany Acquired Company or Subsidiary, including those practices and policies relating to manufacturing, purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (kl) since September 30, 2012 to the date of this Agreement, no Seller, Acquired Company or Subsidiary has made, revoked or changed any Tax election or method of Tax accounting, filed any amended Tax Return or claim for refund of Taxes, consented to any waiver of the statute of limitations for any claim or assessment of Taxes, or settled or compromised any liability liability, in each case, with respect to Taxes, in each case relating to the Business Taxes of any Acquired Company or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practiceSubsidiary; (m) no Acquired Company or Subsidiary has incurred any Indebtedness in excess of $10,000 individually or $25,000 in the aggregate other than Indebtedness that will be repaid (or with respect to which the obligations of the Acquired Companies and Subsidiaries will be released) at or prior to the Closing or as contemplated by the Transition Services Agreement; (n) no Acquired Company or Subsidiary has made any loan to, guaranteed any Indebtedness of of, or otherwise incurred any Indebtedness on behalf of of, any Person in connection with the Business, except for any amount that will be discharged prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice practices, other than Indebtedness that will be repaid (or with respect to which the obligations of the Acquired Companies and Subsidiaries will be released) at or prior to the Closing or as contemplated by the Transition Services Agreement; (o) no Acquired Company or Subsidiary has failed to pay any creditor any material amount owed to such creditor when due, except for amounts disputed in good faith with respect to which reserves have been established to the extent required by Law GAAP; (p) no Seller, Acquired Company or Subsidiary has (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller any Acquired Company or Subsidiary to any of its employees to whom offers of employment will be made pursuant to Section 6.01employees, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any PlanPlan with respect to employees of the Acquired Companies or Subsidiaries, in either case except as (A) contemplated by the Employment Documents or (B) required by Law or any collective bargaining agreement and involving ordinary increases consistent with the past practices of such Acquired Company or Subsidiary; (pq) no Seller, Acquired Company or Subsidiary has entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, or employees of any Acquired Company or stockholders Subsidiary (or with any relative, beneficiary, spouse or Affiliate of such Persons), except for (i) advances to employees in the ordinary course of business consistent with past practice, (ii) as contemplated by the Employment Documents or (iii) in connection with the Restructuring Transactions; (qr) no Seller, Acquired Company or Subsidiary has terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Businessowned by an Acquired Company or Subsidiary, or laid off any employees employed in connection with the Business of an Acquired Company or Subsidiary (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (r) disclosed any secret future with respect to an Acquired Company or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or licenseSubsidiary; (s) no Seller, Acquired Company or Subsidiary has allowed any Permit or Environmental Permit relating that was issued to any Acquired Company or Subsidiary or otherwise relates to the Business of any Acquired Company or Subsidiary to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to that was necessary for the conduct of the Business that is scheduled to terminate of such Acquired Company or expire within 45 calendar days of the ClosingSubsidiary; (t) failed to maintain the plantno Seller, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (u) suffered any casualty loss Acquired Company or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance; (v) Subsidiary has amended, modified or consented to the termination of any Material Contract or the Sellerany Acquired Company’s or Subsidiary’s rights thereunderthereunder except (i) as contemplated by the Employment Documents, (ii) in the ordinary course of business consistent with past practice or (iii) in connection with the Restructuring Transactions; (u) no Seller, Acquired Company or Subsidiary has amended or restated the certificate of incorporation, by laws, certificate of formation or limited liability company agreement (or other organizational documents, as applicable) of any Acquired Company or Subsidiary; (v) no Acquired Company or Subsidiary has (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Company Intellectual Property or Transferred Company IP Agreements, including failing (A) to perform or cause to be performed all applicable filings, recordings and other acts, and acts or (B) to pay or caused cause to be paid all required fees and taxes, Taxes to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Company Intellectual Property, other than non-exclusive licenses of Transferred Software to the customers of the Business in the ordinary course of its businessbusiness consistent with past practice, (iii) to the Sellers’ Knowledge, developed, created or invented any Intellectual Property jointly with any third party (other than such joint developmentparty, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) to the Sellers’ Knowledge, disclosed, or allow allowed to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof;thereof and/or permitting further disclosure in the ordinary course of business consistent with past practice subject to confidentiality obligations; or (xw) suffered any Material Adverse Effect; (y) no Seller, Acquired Company or Subsidiary has agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 3.12 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.12, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except From the date of the September Statement of Net Assets, except as set forth disclosed in Section 3.10 3.14 of the Disclosure Schedule, since the Interim Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation Except as disclosed in Section 3.14 of the foregoingDisclosure Schedule, since from the Interim date of the September Statement Dateof Net Assets, the Seller has notno Selling Party has: (ai) made any material changes in the customary methods of operations of the Business, including, without limitation, practices and policies relating to manufacturing, purchasing, Inventories, marketing, selling and pricing; (ii) sold, transferred, leased or otherwise disposed of any assets of the Business, other than the sale of Inventories or the disposition of immaterial amounts of obsolete assets in the ordinary course of the Business consistent with past practice; (iii) acquired any material assets related to the Business other than in the ordinary course of the Business consistent with past practice; (iv) permitted or allowed any of the Purchased Assets assets of the Business to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (bv) except in the ordinary course of business the Business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim September Statement of Net Assets and current liabilities incurred in the ordinary course of business the Business consistent with past practice since the Interim date of the September Statement Dateof Net Assets; (cvi) written down or written up (or failed to write down or write up in accordance with U.S. GAAP consistent with past practice) the value of any Inventories or Receivables related to the Business or revalued any assets of the Purchased Assets Business other than in the ordinary course of business the Business consistent with past practice and in accordance with U.S. GAAP; (dvii) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAPU.S. GAAP and disclosed in Section 3.14 of the Disclosure Schedule; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hviii) made any capital expenditure or commitment for any capital expenditure , in each case relating related to the Business, Business in excess of $500,000 individually or $2,000,000 in the aggregate250,000; (iix) except other than in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (m) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person in connection with the Business, except for any amount that will be discharged prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice or as required by Law (iA) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller such Selling Party to any employees of its employees to whom offers of employment will be made pursuant to Section 6.01the Business, including including, without limitation, any increase or change pursuant to any Plan, or (iiB) established or increased or promised to increase any benefits under any Plan; , in either case except as required by Law or any collective bargaining agreement and involving ordinary increases consistent with the past practice of the Business, or (pC) entered into any agreement, arrangement or transaction relating to the Business with any employees of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons)the Business; (qx) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in of the Business, or laid off any employees employed in connection with of the Business (other than layoffs in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits to employees of the Business within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (uxi) suffered any material casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insuranceAssets; (vxii) amended, modified or consented to the termination of any Material Contract or the Seller’s Selling Party's rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (xxiii) suffered any Material Adverse Effect;; or (yxiv) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.14, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceSelling Party Document.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 4.10 of the Disclosure Schedule, since the Interim Statement Datefrom December 28, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to 2004 through the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, since except as set forth in Section 4.10 of the Interim Statement DateDisclosure Schedule, from December 28, 2004 through the Seller has notdate hereof, neither the Company nor any Subsidiary has: (a) permitted or allowed any of the Purchased Assets to be subjected to any EncumbranceEncumbrance in excess of $50,000 individually or $500,000 in the aggregate, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedule, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (dc) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the BusinessCompany or any Subsidiary, other than such changes required by GAAP; (ed) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) Company or any Subsidiary or waived any other rights of substantial value to the Seller (related to the Business), Company or any Subsidiary other than in amounts not in excess of $250,000 in the aggregate and in the ordinary course of business consistent with respect to the Excluded Assetspast practice; (fe) sold, transferred, leased, subleased, licensed licensed, mortgaged, encumbered or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than (i) the sale of Inventories Inventories, (ii) the sale of any parcel of real property which parcel includes a current or former Pizza Hut restaurant having a fair market value (together with any improvements thereon and personal property located thereon that are sold) in excess of $700,000 and (iii) the sale of any other Assets with a fair market value in excess of $250,000 in the aggregate and, in each case, in the ordinary course of business consistent with past practice; (f) issued or sold any capital stock, notes, bonds or other than with respect securities, or any option, warrant or other right to acquire the Excluded Assetssame, of the Company or any Subsidiary; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business Person, or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 100,000 individually or $2,000,000 1,000,000 in the aggregate; aggregate other than (i) except in connection with the Company Restaurant upgrades set forth in the 2005 Capital Expenditure Report included in Section 4.28 of the Disclosure Schedule or (ii) in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (ji) made any material changes change in the customary methods of operations of the BusinessCompany or any Subsidiary, including those practices and policies relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing, other than a change made in the ordinary course of business consistent with past practice; (kj) made, revoked or changed any Tax election or method of Tax accounting, accounting or settled or compromised any liability with respect to Taxes, in each case relating to Taxes of the Business Company or the Purchased Assets; (l) incurred any material Indebtedness relating to the BusinessSubsidiary, other than Inter-company Payables incurred a change made in the ordinary course of business consistent with past practice; (mk) incurred any Indebtedness other than (i) short-term borrowings for operating purposes pursuant to the Revolving Credit Facility in aggregate amounts outstanding not in excess of $15,000,000 (other than rollovers and reborrowings of existing indebtedness) and in the ordinary course of business consistent with past practice and (ii) other incurrences in an amount not in excess of $100,000 individually or $1,000,000 in the aggregate; (l) other than the ▇▇▇▇▇▇▇▇ Promissory Note, made any loan to, guaranteed any Indebtedness of of, or otherwise incurred any Indebtedness on behalf of of, any Person in connection with the Business, except for any amount that will be discharged prior to the ClosingPerson; (nm) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed other than amounts that are being contested in good faith and subject to customary adjustmentsby the Company or any Subsidiary; (on) except other than in the ordinary course of business consistent with past practice or as required by Law the terms of any Plan or Material Contract in effect on the date hereof, (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller Company or any Subsidiary to any of its employees to whom offers of employment will be made pursuant to Section 6.01employees, including any increase or change pursuant to any Plan, Plan or (ii) established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any collective bargaining agreement; (po) except as set forth in Section 4.10(o) of the Disclosure Schedule, entered into any agreement, arrangement Contract or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons)) other than the Employment Agreements; (qp) (i) terminated, discontinued, or closed or disposed of any plantrestaurant, facility or other business operation used in the Businessoperation, or laid off any employees employed in connection with the Business (other than layoffs in the ordinary course of business consistent with past practice, or (ii) or laid off any employees (other than layoffs in connection with the closure of any restaurant and other layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice); (q) implemented any early retirement, separation or other program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (si) allowed any Permit Permit, Liquor License or Environmental Permit relating necessary for the conduct of the Business as currently conducted that was issued to or relates to the Company or any Subsidiary or otherwise relates to the Business to lapse or terminate and failed to obtain a replacement Permit, Liquor License or Environmental Permit or (ii) failed to renew or replace within a customary period of time consistent with the Company’s past practice, any insurance policy, Permit Permit, Liquor License or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closingexpire; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (us) suffered any casualty loss or damage in excess of $700,000 (on a replacement cost basis) with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000Assets, whether or not such loss or damage shall have been covered by insurance; (vt) entered into, amended, modified or consented to the termination of any Material Contract or the Seller’s rights thereunder; (i) abandonedPizza Hut Franchise Agreement, sold, assigned, Initial Upgrade Schedules or granted Adjusted Upgrade Schedules or any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to Material Contract, Company Lease or marketing plan, or the Company’s or any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual PropertySubsidiary’s rights and obligations thereunder, other than licenses in the case of Transferred Software to the customers of the Business clause (ii) in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly business consistent with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereofpast practice; (xu) amended or restated the Articles of Incorporation or Bylaws (or other organizational documents) of the Company or any Subsidiary; (v) suffered any Material Adverse Effect;; or (yw) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 4.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.104.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceEscrow Agreement.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except Since the Reference Statement Date, except as set forth disclosed in Section 3.10 of the Disclosure Schedule, the Business has been conducted in the ordinary course. Without limiting the generality of the foregoing sentence, except as disclosed in Section 3.10 of the Disclosure Schedule, since the Interim Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, since the Interim Reference Statement Date, the Seller has not: (a) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the ClosingEncumbrances; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulebusiness, discharged or otherwise obtained the release of any Encumbrance related to the BusinessEncumbrance, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim Reference Statement of Net Assets Balance Sheet and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Reference Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to value, except, in each case in the Seller (related to the Business), other than with respect to the Excluded Assetsordinary course of business; (fe) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assetsbusiness; (gf) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make made any purchases, in each case relating with respect to the Business, involving exchanges in value goods in excess of $5,000,000 individually or $10,000,000 in the aggregate10,000; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (kg) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to Taxes of the Business or the Purchased AssetsSeller; (lh) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in excess of $10,000 individually or $50,000 in the ordinary course of business consistent with past practiceaggregate; (mi) made any loan to, guaranteed any Indebtedness of or otherwise incurred became liable for any Indebtedness on behalf of of, any other Person in connection with excess of $10,000 individually or $50,000 in the Business, except for any amount that will be discharged prior to the Closingaggregate; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice or as required by Law (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01employees, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any collective bargaining agreement and involving ordinary increases consistent with the past practices of the Seller; (p) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (qk) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Businessoperation, or laid off any employees employed in connection with the Business (other than layoffs in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (rl) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patentpatent or if such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting the confidentiality thereof) or material to the Business or, to the knowledge of the Seller, permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) material to the Business to which, or under which, the Seller has any right, title, interest or license;. (sm) allowed any Permit or Environmental Permit relating that was issued or relates to the Seller or otherwise relates to the Business to lapse or terminate terminate, or failed to timely renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (tn) failed to maintain the plant, property and equipment included of the Business in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (uo) suffered any casualty loss or damage with respect to any of the Purchased Assets which that in the aggregate have a replacement cost of more than $100,00050,000, whether or not such loss or damage shall have been covered by insurance; (vp) amended, modified amended or consented to restated the termination certificate of any Material Contract formation or limited liability company agreement of the Seller’s rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to, or, to the knowledge of the Seller, abandoned, any item of the Owned Intellectual Property, Licensed Business Intellectual Property or Transferred Business IP AgreementsAgreements material to the Business, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Business Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, or (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Reference Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof); (xr) suffered experienced or otherwise been subject to any change, event, condition or set of circumstances that, individually or in the aggregate, has had a Material Adverse Effect; (ys) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and or the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bbt) settledmade modifications to the Source Code which have resulted, or agreed are reasonably likely to settleresult, any action, suit or proceeding relating to in a Material Adverse Effect (excluding for the Business or the Purchased Assets other than in the ordinary course purposes of business consistent with past practicethis Section 3.10(t) issues and problems which may arise upon initial implementation which are not extraordinary).

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except Since the Balance Sheet Date, except as set forth in Section 3.10 3.12 of the Disclosure Schedule, since Schedule and actions expressly provided herein in connection with the Interim Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereofPre-Closing Restructuring, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not without limitation of to the foregoing, since the Interim Statement Date, Balance Sheet Date neither the Seller has notnor any Company or Transferred Subsidiary has, in connection with the Business: (a) except in the ordinary course of business consistent with past practice, discharged or otherwise obtained the release of any Encumbrance related to the Business or paid or otherwise discharged any Liability related to the Business; (b) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedule, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Businessor any of its Subsidiaries, other than such changes required by Hong Kong GAAP or PRC GAAP, as applicable; (ed) except in the ordinary course of business, amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) claims, or waived any other rights material rights, in respect of substantial value to any of the Seller (related to the Business)MEB Franchise Agreements, other than with respect to the Excluded AssetsMEB Management Contracts, LUB Management Contracts, LUB License Agreements, Company Owned Real Property or Company Leased Real Property; (fe) except in the ordinary course of business, sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property); (f) of issued or sold any shares, capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assetssame; (g) redeemed any of the capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other property); (h) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregateassets; (i) except in the ordinary course of business consistent with past practicebusiness, issued acquired, opened, renovated, commenced operating any sales orders hotel, or otherwise agreed to make (ii) made any purchases, capital expenditure (or commitment for any capital expenditure that will not be paid or satisfied in each case relating full prior to the Business, involving exchanges in value Closing) in excess of $5,000,000 500,000 individually or $10,000,000 5,000,000 in the aggregate; (j) made entered into any material changes contract or agreement which involves making any payment in the customary methods excess of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing$500,000; (k) made, revoked or changed any Tax election or method of Tax accounting, accounting or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the BusinessIndebtedness, other than Inter-company Payables Indebtedness incurred in respect of Company Owned Real Property which will be repaid prior to the ordinary course of business consistent with past practiceClosing; (m) made any loan to, guaranteed any Indebtedness of of, or otherwise incurred any Indebtedness on behalf of, any Person, other than Indebtedness incurred in respect of any Person in connection with the Business, except for any amount that Company Owned Real Property which will be discharged repaid prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustmentsdue; (o) except in the ordinary course of business consistent with past practice or as required by Law business, (i) granted any increase, or announced any increase, in the wages, salaries, compensationcompensation (including, without limitation, severance), bonuses (except for ordinary year-end bonuses), incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01Acquired Business Employee, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Planin either case except as required by Law and involving ordinary increases consistent with the past practices; (p) except in the ordinary course of business, entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) except in the ordinary course of business, terminated, discontinued, closed or disposed of any planthotel, facility any material facilities thereof, or any other business operation used in the Businessoperation, or laid off any employees employed in connection with the Business (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future); (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit that was issued or Environmental Permit relating relates to the Business to lapse or terminate or failed to renew any insurance policy, policy or any Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (ts) failed to maintain the plant, property and equipment included any Company Owned Real Property or Company Leased Real Property in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (ut) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000US$250,000, whether or not such loss or damage shall have been covered by insurance; (vu) except in the ordinary course of business, amended, modified or consented to the termination of any Material Contract or the Seller’s any of their rights thereunder; (v) amended or restated their certificate of incorporation or articles of association (or other organizational documents); (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (x) suffered any Material Adverse Effect;; or (y) agreed, whether in writing or otherwise, entered into any agreement to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.12, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceTransaction Documents.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except Since the Reference Statement Date, except as set forth in Section 3.10 3.08 of the Disclosure Schedule, since the Interim Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Purchased Business has been conducted in the ordinary course and consistent with past practicepractice in all material respects. As amplification and not limitation of the foregoing, except as set forth in Section 3.08 of the Disclosure Schedule, since the Interim Reference Statement Date, the Seller has not: (a) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the ClosingEncumbrances; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Purchased Business, or paid or otherwise discharged any Liability related to the Purchased Business, other than current liabilities reflected on the Interim Reference Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Reference Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Purchased Business, other than such changes required by GAAPGAAP and set forth in Section 3.08(d) of the Disclosure Schedule; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Purchased Business) or waived any other rights of substantial value to the Seller (related to the Purchased Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleasedsubleased (including any sublease to any customer of a Purchased Distribution Center), licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to forming a part of the Purchased Business), other than the sale of Inventories and the disposition of used furniture, fixtures, equipment or other assets that are not material to the operation of the Purchased Business, in each case in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged to be used in a business relating to the Purchased Business or any division or line of business thereof, or otherwise acquired any material assets relating to be used in the Purchased Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure expenditure, in each case relating to the Purchased Business, in excess of $500,000 individually or $2,000,000 in the aggregate350,000; (i) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Purchased Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate100,000; (j) made any material changes in the customary methods of operations of the Purchased Business, including those practices and policies relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (m) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person in connection with the Purchased Business, except for any amount that will be discharged prior to the Closing; (nl) failed to pay any creditor of the Purchased Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustmentsdue; (o) except in the ordinary course of business consistent with past practice or as required by Law (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Plan; (pm) entered into any agreement, arrangement or transaction relating to the Purchased Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (qn) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in connection with the Purchased Business, or laid off any employees employed in connection with the Purchased Business (other than layoffs of fewer than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, retirement or separation program or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (ro) disclosed allowed any secret material permit or confidential Intellectual Property other authorization from any Governmental Authority, including any material permit or authorization required under any Environmental Law, relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Purchased Business to lapse or terminate or failed to renew any material insurance policy, Permit permit or Environmental Permit other authorization relating to the Purchased Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (tp) failed to maintain the plant, property and equipment included in the Purchased Assets in good normal repair and normal operating condition, ordinary wear and tear excepted; (uq) suffered any casualty loss or damage with respect to any of the Purchased Assets Business which in the aggregate have a replacement cost of more than $100,0001,000,000, whether or not such loss or damage shall have been covered by insurance; (vr) amended, amended or modified any Distribution Center Contract or amended or modified any other material Assumed Contract or the Seller’s or any of its Affiliate’s rights thereunder or consented to the termination of any Material Distribution Center Contract or the Seller’s rights thereunderany other material Assumed Contract; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (xs) suffered any Material Adverse Effect; (yi) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable to any Covered Employee, (ii) increased or promised to increase any benefits under any Plan, or (iii) established or promised to adopt, maintain or contribute to any new benefit plan, program or arrangement covering any Covered Employee, in any case except as required by Law, any collective bargaining agreement or any other agreements or contractual arrangements and except for regular periodic increases in pay, salary or bonuses in the ordinary course consistent with past practices; (u) entered into any employment agreement or severance agreement with any Covered Employees or established, adopted or entered into any collective bargaining agreement covering Covered Employees except as required by Law or existing contractual arrangements; (v) made, revoked or changed any Tax election or method of Tax accounting applicable to the Purchased Business, or settled or compromised any Liability with respect to Taxes of the Seller (relating to the Purchased Business or the Purchased Assets) or consented to any claim or assessment relating to such Taxes or any waiver of the statute of limitations for any such claim or assessment, in each case to the extent such action would affect Taxes of the Purchaser or any Affiliate of the Purchaser relating to the Purchased Assets or the Purchased Business for taxable periods (or portions thereof) that begin after the Closing Date; or (w) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 3.08 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.08, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except Since 1 April 2004, except as set forth disclosed in Section 3.10 3.07 of the Disclosure Schedule, since to the Interim Statement DateKnowledge of Sellers, andthere has been no event, circumstance, development or effect or series of related events, circumstances or developments relating specifically to the Business (other than changes in economic conditions generally, changes in the general condition of the industry in which the Business operates, and changes due to the insolvency of Seller’s ultimate parent entity), whether or not covered by insurance, which has resulted in or reasonably would be expected to result in a Material Adverse Effect, and to the Knowledge of Seller, no such event, circumstance, development or effect or series of related events, circumstances or developments is reasonably likely to occur. Since 1 April 2004, except with respect to clause (x) below (which speaks as disclosed in Section 3.07 of the date hereof and, pursuant Disclosure Schedule or as would not reasonably be expected to Section 7.02(a), as of the date of the Closing), prior to the date hereofhave a Material Adverse Effect, the Business has been conducted in the ordinary course and consistent with past practice, except that there has been no business or other commercial activity or operations at the Orrville Site since on or about 1 August 2001. As amplification and not in limitation of the foregoing, except as disclosed in Section 3.07 of the Disclosure Schedule or would not reasonably be expected to have a Material Adverse Effect, since the Interim Statement Date, the Seller has not1 April 2004 none of Sellers has: (a) permitted or allowed any of the Purchased Assets material assets or properties (whether tangible or intangible) forming part of the Business (other than certain Receivables pledged to a factor) to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedule, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) assets of the Seller Business for an amount individually in excess of Two Hundred Thousand U.S. Dollars (related to the BusinessUS $200,000), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hc) made any capital expenditure or commitment for any capital expenditure , in each case expenditures relating to the Business, Business in excess of One-Hundred Thousand U.S. Dollars (US $500,000 individually or 100,000), individually, and One Million U.S. Dollars (US $2,000,000 1,000,000) in the aggregate, other than expenditures listed on Section 3.07(c) of the Disclosure Schedule made in respect of tooling, molds and/or modifications necessary for new customer programs, the cost of which is intended to be reimbursable to Seller by the customer and which tooling and molds become the property of such customer upon such reimbursement; (i) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (jd) made any material changes in the customary methods of operations of the Business, including those including, without limitation, practices and policies relating to manufacturing, purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, pricing other than Inter-company Payables incurred in the ordinary course of business the Business consistent with past practice; (me) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person except as disclosed in connection with the Business, except for any amount that will be discharged prior to the Closing; (nSection 3.07(e) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice or as required by Law (i) Disclosure Schedule, granted any increase, or announced any increase, increase in the wages, salaries, compensation, bonuses, incentives, severance or termination pay or benefits, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01Business Employee, including any increase or change other than as required by Law, pursuant to any collective bargaining agreement or Plan, or (ii) established or increased or promised other increases to increase any benefits under any Plan; (p) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (persons other than layoffs executive officers in the ordinary course of business the Business substantially consistent with past practice) practice of the Business; or implemented adopted, amended, modified or terminated any early bonus, profit sharing, incentive, employment, severance, change in control, retirement, separation welfare or program providing early retirement window benefits within other plan, program, arrangement, contract or other commitment for the meaning benefit of Section 1.401(a)-4 any of the Regulations or announced or planned any such action or program for the futureBusiness Employees; (rf) disclosed experienced any secret strike, walkout, slowdown or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or licensework stoppage; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (ug) suffered any physical damage, destruction or casualty loss or damage with respect to any of the Purchased scope specified in Section 8.02(g) affecting the Transferred Assets which in the aggregate have a replacement cost of more than $100,000, whether or is not such loss or damage shall have been covered by insurance; (vh) amendedwaived any rights under any Contract, modified lease or consented to the termination of any Material Contract license constituting Transferred Assets which waiver, individually or the Seller’s rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its businessaggregate with other such waivers, (iii) developed, created has had or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with is reasonably likely to have a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (x) suffered any Material Adverse Effect; (yi) agreedmade or changed any Tax election, whether in writing adopted or otherwisechanged any Tax accounting method, entered into any closing agreement, settled any Tax claim or assessment, surrendered any right to claim a Tax refund or credit or took or failed to take in a legally enforceable manner any other action that materially increased the Tax liability of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary AgreementsBusiness; (zj) terminated the employment nor received the resignation except as may otherwise be required by applicable Law or GAAP, changed any of any Key EmployeesSeller Accounting Principles; (aak) issued a notice of intention to terminate made any loans or advances to, or guarantees for the employment of benefit of, any Key Employees nor received a notice of intention to resign by any Key EmployeesPerson; or (bbl) settled, or agreed committed to settle, do any action, suit or proceeding relating to of the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceforegoing.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 of Since the Disclosure Schedule, since the Interim Statement Reference Balance Sheet Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, since the Interim Statement Reference Balance Sheet Date, the Seller Company has not: (ai) permitted or allowed any of the Purchased Assets assets or properties (whether tangible or intangible) of the Company to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (bii) except in the ordinary course of business the Business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim Statement of Net Assets Reference Balance Sheet and current current, non-material liabilities incurred in the ordinary course of business the Business consistent with past practice since the Interim Statement Date;date of the Reference Balance Sheet; 10 (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (eiii) amended, terminated, cancelled canceled or compromised any material claims of the Seller (related to the Business) Company or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded AssetsCompany; (fiv) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including including, without limitation, leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories inventories in the ordinary course of business the Business consistent with past practice, other than with respect to the Excluded Assets; (gv) issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of, or any other interest in, the Company; (vi) redeemed any of the equity interests or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of equity interest in the Company or otherwise; (vii) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business the Business consistent with past practice; (hviii) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregatecommitment; (iix) except in the ordinary course of business consistent with past practice, issued incurred any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregateIndebtedness; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (mx) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person in connection with the Business, except for any amount that will be discharged prior to the ClosingPerson; (nxi) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustmentsdue; (o) except in the ordinary course of business consistent with past practice or as required by Law (i) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Plan; (pxii) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders shareholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (rxiii) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become go abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller Company has any right, title, interest or license; (sxiv) allowed an insurance policy, permit or environmental permit that was issued or relates to the Company or otherwise relates to any Permit Asset or Environmental Permit relating to the Business to lapse or terminate or failed to renew any such insurance policy, Permit permit or Environmental Permit relating to the Business environmental permit that is scheduled to terminate or expire within 45 calendar days of the ClosingClosing Date; (txv) failed to maintain the plant, Company's property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted;; 11 (uxvi) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000Assets, whether or not such loss losses or damage shall have been covered by insurance; (vxvii) amended, modified or consented to the termination of any Material Contract or the Seller’s Company's rights thereunder; (ixviii) abandoned, sold, assigned, amended or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect restated its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereoforganizational documents; (xxix) suffered any Material Adverse Effect;; or (yxx) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 3.11 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.11, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceAgreement.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 3.11 of the Disclosure Schedule, since the Interim Statement Balance Sheet Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As an amplification and not limitation of the foregoing, except as contemplated by this Agreement or as set forth in Section 3.11 of the Disclosure Schedule, and except as would not, individually or in the aggregate, have a Material Adverse Effect, since the Interim Statement Balance Sheet Date, none of the Seller has notPershing Companies has: (ai) except in the ordinary course of business consistent with past practice, permitted or allowed any of the Purchased Assets assets or properties (whether tangible or intangible) of the Pershing Companies to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing;; Back to Contents (bii) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the BusinessLiability, other than current liabilities reflected on the Interim Statement of Net Assets Financial Statements and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Balance Sheet Date; (ciii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued redeemed any of the Purchased Assets capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other than in property) to the ordinary course holders of business consistent with past practice and in accordance with GAAPcapital stock of any of the Pershing Companies or otherwise; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assets; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (giv) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hv) made issued or sold any capital expenditure stock, notes, bonds or commitment for other securities, or any capital expenditure option, in each case relating warrant or other right to acquire the Businesssame, in excess of $500,000 individually of, or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practiceany other interest in, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, Pershing Companies other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (mvi) other than in the ordinary course of business, consistent with past practice, entered into any agreement, arrangement or transaction with any of its directors, officers, employees or stockholders (or with any relative, beneficiary or spouse living with such Person or Affiliate of such Person); (vii) made any loan to, guaranteed material change in any Indebtedness method of accounting or otherwise incurred any Indebtedness on behalf of any Person in connection with accounting practice or policy used by the Business, except for any amount that will be discharged prior to the Closingother than such changes required by U.S. GAAP; (nviii) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except other than in the ordinary course of business consistent with past practice practice, incurred any Indebtedness in excess of $500,000 individually or as required by Law $5,000,000 in the aggregate; (iix) made any capital expenditure or commitment for any capital expenditure in excess of $1,000,000 individually or $5,000,000 in the aggregate; (A) granted any increase, or announced any increase, increase in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by any of the Seller Pershing Companies to any of its employees to whom offers of employment will be made pursuant to Section 6.01, including any increase or change pursuant to any Plantheir employees, or (iiB) established or established, increased or promised to increase any benefits under any Company Benefit Plan; (p) entered into , in any agreementcase, except as required by Law or pursuant to any employment contract or arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs involving increases in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 practice of the Regulations or announced or planned any such action or program for the futurePershing Companies; (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit or Environmental Permit relating to the Business to lapse or terminate or failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (t) failed to maintain the plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (u) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000, whether or not such loss or damage shall have been covered by insurance; (vxi) amended, modified or consented to the termination of any Material Contract or any of the Seller’s Pershing Companies’ rights thereunder; (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (xxii) suffered any circumstance, change, event, effect or development that would, individually or in the aggregate, constitute a Material Adverse Effect; ; or (yxiii) agreed, whether in writing or otherwise, agreed to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice3.11.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except Since the Balance Sheet Date, except as set forth in Section 3.10 3.12 of the Disclosure Schedule, since Schedule and subject to the Interim Statement Date, and, except with respect to clause (x) below (which speaks as consummation of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereofPre-Closing Restructuring, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not without limitation of to the foregoing, since the Interim Statement Date, Balance Sheet Date neither the Seller has notnor any Company or Transferred Subsidiary has, in connection with the Business: (a) except in the ordinary course of business consistent with past practice, discharged or otherwise obtained the release of any Encumbrance related to the Business or paid or otherwise discharged any Liability related to the Business; (b) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedule, discharged or otherwise obtained the release of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Businessor any of its Subsidiaries, other than such changes required by Hong Kong GAAP or PRC GAAP, as applicable; (ed) except in the ordinary course of business, amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) claims, or waived any other rights material rights, in respect of substantial value to any of the Seller (related to the Business)MEB Franchise Agreements, other than with respect to the Excluded AssetsMEB Management Contracts, LUB Management Contracts, LUB License Agreements, Company Owned Real Property or Company Leased Real Property; (fe) except in the ordinary course of business, sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property); (f) of issued or sold any shares, capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assetssame; (g) redeemed any of the capital stock or declared, made or paid any dividends or distributions (whether in cash, securities or other property); (h) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregateassets; (i) except in the ordinary course of business consistent with past practicebusiness, issued acquired, opened, renovated, commenced operating any sales orders hotel, or otherwise agreed (ii) made any capital expenditure (or commitment for any capital expenditure that will not be paid or satisfied in full prior to make any purchases, in each case relating to the Business, involving exchanges in value Closing) in excess of $5,000,000 500,000 individually or $10,000,000 5,000,000 in the aggregate; (j) made entered into any material changes contract or agreement which involves making any payment in the customary methods excess of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing$500,000; (k) made, revoked or changed any Tax election or method of Tax accounting, accounting or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the BusinessIndebtedness, other than Inter-company Payables Indebtedness incurred in the ordinary course respect of business consistent with past practiceCompany Owned Real Property which will be repaid prior to Closing; (m) made any loan to, guaranteed any Indebtedness of of, or otherwise incurred any Indebtedness on behalf of, any Person, other than Indebtedness incurred in respect of any Person in connection with the Business, except for any amount that Company Owned Real Property which will be discharged repaid prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustmentsdue; (o) except in the ordinary course of business consistent with past practice or as required by Law business, (i) granted any increase, or announced any increase, in the wages, salaries, compensationcompensation (including, without limitation, severance), bonuses (except for ordinary year-end bonuses), incentives, pension or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01Acquired Business Employee, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Planin either case except as required by Law and involving ordinary increases consistent with the past practices; (p) except in the ordinary course of business, entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (q) except in the ordinary course of business, terminated, discontinued, closed or disposed of any planthotel, facility any material facilities thereof, or any other business operation used in the Businessoperation, or laid off any employees employed in connection with the Business (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future); (r) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or license; (s) allowed any Permit that was issued or Environmental Permit relating relates to the Business to lapse or terminate or failed to renew any insurance policy, policy or any Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (ts) failed to maintain the plant, property and equipment included any Company Owned Real Property or Company Leased Real Property in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (ut) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,000US$250,000, whether or not such loss or damage shall have been covered by insurance; (vu) except in the ordinary course of business, amended, modified or consented to the termination of any Material Contract or the Seller’s any of their rights thereunder; (v) amended or restated their certificate of incorporation or articles of association (or other organizational documents); (w) (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (x) suffered any Material Adverse Effect;; or (y) agreed, whether in writing or otherwise, entered into any agreement to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.12, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceTransaction Documents.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Except as set forth in Section 3.10 of Since the Disclosure Schedule, since the Interim Reference Statement Date, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, since the Interim Reference Statement Date, none of the Seller has notCompanies has: (a) permitted or allowed any of the Purchased Assets to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof as disclosed in Section 3.14 of the Disclosure Schedulepractice, discharged or otherwise obtained the release of any Encumbrance related to the Business, any Company or paid or otherwise discharged any Liability related to the Businessany Company, other than current liabilities reflected on the Interim Reference Statement of Net Assets and current liabilities incurred in the ordinary course of business consistent with past practice since the Interim Reference Statement Date; (c) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories or Receivables or revalued any of the Purchased Assets other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Businessany Company, other than such changes required by GAAPGAAP and set forth in Section 3.13 of the Disclosure Schedule; (e) amended, terminated, cancelled or compromised any material claims of the Seller (related to the Business) any Company or waived any other rights of substantial value to the Seller (related to the Business), other than with respect to the Excluded Assetsany Company; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of any Company; (h) redeemed any of the capital share or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of capital share of any Company or otherwise; (i) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (hj) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 50,000 individually or $2,000,000 100,000 in the aggregate; (ik) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, purchases involving exchanges in value in excess of $5,000,000 50,000 individually or $10,000,000 100,000 in the aggregate; (jl) made any material changes change in the customary methods of operations of the Businessany Company, including those practices and policies relating to manufacturing, purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (km) made, revoked or changed any Tax election or method of Tax accounting, accounting or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased AssetsTaxes of any Company; (ln) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in excess of $50,000 individually or $100,000 in the ordinary course of business consistent with past practiceaggregate; (mo) made any loan to, guaranteed any Indebtedness of of, or otherwise incurred any Indebtedness on behalf of of, any Person in connection with the Business, except for any amount that will be discharged prior to the ClosingPerson; (np) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustmentsdue; (o) except in the ordinary course of business consistent with past practice or as required by Law (iq) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits payable by the Seller any Company to any of its employees to whom offers of employment will be made pursuant to Section 6.01employees, including any increase or change pursuant to any Plan, Plan or (ii) established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any collective bargaining agreement and involving ordinary increases consistent with the past practices of any Company; (pr) entered into any agreement, arrangement or transaction relating to the Business with any of its directors, officers, employees or stockholders shareholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (qs) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Businessoperation, or laid off any employees employed in connection with the Business (other than layoffs of less than 5 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; (rt) disclosed any secret or confidential Intellectual Property relating to the Business (except by way of issuance of a patent) or permitted to lapse or become abandoned any Intellectual Property relating to the Business (or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller any Company has any right, title, interest or license; (su) failed to maintain or faced a revocation or termination of any Permit or Environmental Permit that was issued to or relates to any Company or otherwise relates to the Business or allowed any Permit or Environmental Permit relating that was issued to or relates to each Company or otherwise relates to the Business to lapse or terminate or (ii) failed to renew any insurance policy, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the Closing; (tv) failed to maintain the an Company’s plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (uw) suffered any casualty loss or damage with respect to any of the Purchased Assets which in the aggregate have a replacement cost of more than $100,00050,000, whether or not such loss or damage shall have been covered by insurance; (vx) amended, modified or caused or consented to the termination of any Material Contract or the Sellerany Company’s rights thereunder; (y) amended or restated the Certificate of Incorporation or By-Laws (or other organizational documents) of any Company; (z) made any charitable contribution; (aa) (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred Company IP Agreements, including failing (A) to perform or cause to be performed all applicable filings, recordings and other acts, and acts or (B) to pay or caused cause to be paid all required fees and taxes, taxes to maintain and protect its interest in such Intellectual Property, (ii) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Company Software to the customers of the Business any Company’s in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim the Reference Statement Date) ), or (iv) disclosed, or allow allowed to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof; (xbb) suffered any Material Adverse Effect;; or (ycc) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 3.13 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.103.13, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practiceAgreement.

Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. (a) Except as set forth in on Section 3.10 3.8(a) of the Disclosure Schedule, since the Interim Statement DateDecember 31, and, except with respect to clause (x) below (which speaks as of the date hereof and, pursuant to Section 7.02(a), as of the date of the Closing), prior to the date hereof2007, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and Subject Companies have not limitation of the foregoingsuffered any effects, since the Interim Statement Datechanges, the Seller has not: (a) permitted events or allowed any of the Purchased Assets developments which have had or would reasonably be expected to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closinghave a Material Adverse Effect; (b) except Since December 31, 2007, the Subject Companies have (and, in the case of Section 3.8(b)(xx), the Excluded Entities) operated and conducted their respective businesses in the ordinary course of business consistent with past practice and payments under contracts entered into prior to the date hereof and, except as disclosed in set forth on Section 3.14 3.8(b) of the Disclosure Schedule, discharged have not: (i) incurred any obligation, liability (whether absolute, accrued, contingent or otherwise obtained the release otherwise) or Indebtedness in excess of any Encumbrance related to the Business, or paid or otherwise discharged any Liability related to the Business, other than current liabilities reflected on the Interim Statement of Net Assets and current liabilities incurred $250,000 in the ordinary course aggregate or involving in any case annual expenditures in excess of business consistent with past practice since the Interim Statement Date$100,000; (cii) made any loan to, or guaranteed any Indebtedness of, or otherwise incurred any Indebtedness on behalf of, any Person; (iii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any Inventories inventories or Receivables receivables or revalued any of the Purchased Railroad Assets or rights other than in the ordinary course of business consistent with past practice and in accordance with GAAP; (d) made any change in any method of accounting or accounting practice or policy used by the Seller and relating to the Business, other than such changes required by GAAP; (eiv) amended, terminated, cancelled or compromised any material claims of the Seller (to the extent related to the Business) or any Subject Company or waived any other rights of substantial value to the Seller (to the extent related to the Business), other than with respect to the Excluded Assets) or any Subject Company; (fv) sold, sold transferred, leased, subleased, licensed or otherwise disposed of any properties or assetsRailroad Assets, real, personal or mixed (including leasehold interests and intangible property) of the Seller (related to the Business), other than the sale of Inventories in the ordinary course of business consistent with past practice, other than with respect to the Excluded Assets; (g) merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person engaged in a business relating to the Business or acquired a substantial portion of the assets or business of any Person engaged in a business relating to the Business or any division or line of business thereof, or otherwise acquired any material assets relating to the Business other than in the ordinary course of business consistent with past practice; (h) made any capital expenditure or commitment for any capital expenditure , in each case relating to the Business, in excess of $500,000 individually or $2,000,000 in the aggregate; (i) except in the ordinary course of business consistent with past practice, issued any sales orders or otherwise agreed to make any purchases, in each case relating to the Business, involving exchanges in value in excess of $5,000,000 individually or $10,000,000 in the aggregate; (j) made any material changes in the customary methods of operations of the Business, including those relating to purchasing, Inventories, marketing, booking sales or Receivables, selling and pricing; (k) made, revoked or changed any Tax election or method of Tax accounting, or settled or compromised any liability with respect to Taxes, in each case relating to the Business or the Purchased Assets; (l) incurred any material Indebtedness relating to the Business, other than Inter-company Payables incurred in the ordinary course of business consistent with past practice; (m) made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person in connection with the Business, except for any amount that will be discharged prior to the Closing; (n) failed to pay any creditor of the Business any material amount owed to such creditor when due unless such amount was disputed in good faith and subject to customary adjustments; (o) except in the ordinary course of business consistent with past practice and not in excess of $250,000; (vi) failed to discharge or as required by Law satisfy any Lien or pay or satisfy any obligation or liability (iwhether absolute, accrued, contingent or otherwise), other than liabilities being contested in good faith and for which adequate reserves have been provided; (vii) mortgaged, pledged or subjected to any Lien any of their respective Railroad Assets or rights; (viii) sold or transferred any of their respective assets or cancelled any debts or claims or waived any rights; (ix) disposed of any Intellectual Property; (A) allowed any Permit or Environmental Permit that was issued to or relates to the Subject Company or otherwise relates to the Business to lapse or terminate or (B) failed to renew any insurance policy, Permit or Environmental Permit that is scheduled to terminate or expire within 45 calendar days of the Closing; (xi) entered into any transaction material to their respective businesses or amended, modified or consented to the termination of any material Contract or any Subject Company’s rights thereunder; (xii) amended or restated the Certificate of Incorporation or By-Laws (or other organizational documents) of any Subject Company; (xiii) granted any increase, or announced any increase, in the wagescompensation or benefits of, salaries, compensation, bonuses, incentives, pension or loaned or advanced any money or other benefits payable by the Seller to any of its employees to whom offers of employment will be made pursuant to Section 6.01property to, their respective present or former directors, officers or employees, including any increase or change pursuant to any Plan, or (ii) established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any collective bargaining agreement; (pxiv) entered into any employment or severance agreement, arrangement or transaction relating to the Business with any of its their respective present or former directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons); (qxv) incurred any obligation or liability for the payment of severance benefits; (xvi) declared, paid or set aside for payment any dividend or other distribution in respect of shares of their respective capital stock or other securities (whether in cash, securities or other property) to the holders of capital stock of any Subject Company or otherwise, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of their respective capital stock or other securities, or agreed to do so; (xvii) terminated, discontinued, closed or disposed of any plant, facility or other business operation used in the Business, or laid off any employees employed in connection with the Business (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 1.401(a)(4) of the Regulations or announced or planned any such action or program for the future; (rxviii) disclosed established, adopted, entered into, amended or terminated any secret or confidential Intellectual Property relating Plans, except to the Business (except extent that any such amendments are required by way Law, are necessary to preserve the tax-qualified status of issuance of a patent) any Plan or permitted to lapse do not result in an increase in benefits for their respective present or become abandoned any Intellectual Property relating to the Business (former directors, officers or any registration or grant thereof or any application relating thereto) to which, or under which, the Seller has any right, title, interest or licenseemployees; (sxix) allowed granted, amended, modified, extended or terminated any Permit operating agreement, trackage rights agreement, haulage agreement, power-run-through agreement, switching agreement, marketing agreement, joint facilities agreement or Environmental Permit relating to other agreement with carriers materially affecting the Business to lapse operations on, or terminate marketing of traffic to, from or failed to renew any insurance policyover, Permit or Environmental Permit relating to the Business that is scheduled to terminate or expire within 45 calendar days of the ClosingRail Facilities; (txx) changed any financial or accounting policy or practice, made, changed or revoked any Tax election or method of Tax accounting, filed any amended Tax Return, agreed to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, surrendered any right to claim a Tax refund, entered into any closing agreement with respect to Taxes or settled or compromised any Tax liability; (xxi) made any purchase, or issued any sales orders or otherwise agreed to make purchases involving exchanges in excess of $250,000, or additions to property, plant or equipment used in its operations other than ordinary repairs and maintenance; (xxii) failed to maintain the each Subject Company’s plant, property and equipment included in the Purchased Assets in good repair and operating condition, ordinary wear and tear excepted; (uxxiii) suffered any casualty loss or damage with respect to any of the Purchased Assets assets or properties which in the aggregate have a replacement cost of more than $100,000250,000, whether or not such loss or damage shall have been covered by insurance; (vxxiv) amended, modified granted any equity or consented equity-based awards; or (xxv) entered into any agreement to the termination of take any Material Contract or the Seller’s rights thereunder; action prohibited by clauses (i) abandoned, sold, assigned, or granted any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or Transferred IP Agreements, including failing to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in such Intellectual Property, through (iixxv) granted to any third party any license with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than licenses of Transferred Software to the customers of the Business in the ordinary course of its business, (iii) developed, created or invented any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress prior to Interim Statement Date) or (iv) disclosed, or allow to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof; (x) suffered any Material Adverse Effect; (y) agreed, whether in writing or otherwise, to take in a legally enforceable manner any of the actions specified in this Section 3.10 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.10, except as expressly contemplated by this Agreement and the Ancillary Agreements; (z) terminated the employment nor received the resignation of any Key Employees; (aa) issued a notice of intention to terminate the employment of any Key Employees nor received a notice of intention to resign by any Key Employees; or (bb) settled, or agreed to settle, any action, suit or proceeding relating to the Business or the Purchased Assets other than in the ordinary course of business consistent with past practice3.8).