Common use of Existing Condition Clause in Contracts

Existing Condition. Since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller has: (1) suffered any material adverse change in its working capital, financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospects; (2) incurred any liability or obligation (absolute, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Date; (4) permitted or allowed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due; (5) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Section.

Existing Condition. Since Except as otherwise disclosed in the PIA Disclosure Letter, since the PIA Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller PIA Company has: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice; (b) discharged or satisfied any lien or encumbrance or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities, other than in the ordinary course of business consistent with past practice, or where the obligation is being contested in good faith, and the failure to pay or discharge has not caused and would not be reasonably likely to cause any PIA Material Adverse Effect; (c) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of any PIA Company or any interest therein, except for sales and dispositions in the ordinary course of business consistent with past practice and except for the transactions contemplated under this Agreement; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever other than in the ordinary course of business (including, without limitation, future advances and floating liens under existing or replacement credit facilities); (e) made or suffered any early cancellation or termination of any Material PIA Document (other than in the ordinary course of business with a vendor to a PIA Company); or amended, modified or waived any substantial debts or claims held by it under any Material PIA Document other than in the ordinary course of business; (f) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any shares of its capital stock or its other ownership interests; (g) suffered any damage, destruction or loss that has had or will have (i) a PIA Material Adverse Effect, or (ii) a replacement cost individually or in the aggregate at more than $100,000; (h) suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (i) suffered any material adverse change in its working capital, financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, the business, operations operations, properties, assets or prospectsfinancial condition of the PIA Parties taken as a whole; (2j) incurred received notice or had knowledge of any liability actual or obligation (absoluteovertly threatened organized or coordinated labor trouble, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency strike or other reservessimilar occurrence, event or condition of any similar character that has had or would be reasonably likely to have a PIA Material Adverse Effect; (3k) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation made any increase in, or any addition to, other benefits to which any of its employees are entitled (whether absolute, accrued, contingent or otherwise) in each case other than the payment, discharge increases in salaries or satisfaction other compensation in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since and that in the Balance Sheet Dateaggregate have not resulted in a PIA Material Adverse Effect); (4l) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5m) written down the value of except as contemplated by this Agreement, entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10n) made except as contemplated by this Agreement, changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12o) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since Except as otherwise set forth in the SPAR Disclosure Letter, since the Interim SPAR Marketing Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller SPAR Marketing Company has: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice (including, without limitation, advances under its commitments and lines of credit), the liabilities contemplated under the SPAR Premerger Agreements; (b) discharged or satisfied any lien or encumbrance or paid any liabilities, other than in the ordinary course of business consistent with past practice (including, without limitation, repayments under its commitments and lines of credit), or failed to pay or discharge when due any liabilities, other than in the ordinary course of business consistent with past practice, or where the obligation is being contested in good faith, and the failure to pay or discharge has not caused and would not be reasonably likely to cause any SPAR Material Adverse Effect; (c) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of any SPAR Marketing Company or any interest therein, except for sales and dispositions in the ordinary course of business consistent with past practice, and except for the transactions contemplated under the SPAR Premerger Agreements and this Agreement; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, other than (i) in the ordinary course of business (including, without limitation, future advances and floating liens under existing, increased or replacement credit facilities), or (ii) in connection with the financing of the MCI Acquisition; (e) made or suffered any early cancellation or termination of any Material SPAR Document (other than in the ordinary course of business with a vendor to a SPAR Marketing Company); or amended, modified or waived any substantial debts or claims held by it under any Material SPAR Document other than in the ordinary course of business; (f) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of shares of its capital stock or its other ownership interests; (g) suffered any damage, destruction or loss that has had or will have (i) a SPAR Material Adverse Effect, or (ii) a replacement cost individually or in the aggregate at more than $100,000; (h) suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (i) suffered any material adverse change in its working capital, financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, the business, operations operations, properties, assets or prospectsfinancial condition of the SPAR Marketing Companies taken as a whole; (2j) incurred received notice or had knowledge of any liability actual or obligation (absoluteovertly threatened organized or coordinated labor trouble, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency strike or other reservessimilar occurrence, event or condition of any similar character that has had or would be reasonably likely to have a SPAR Material Adverse Effect; (3k) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation made any increase in, or any addition to, other benefits to which any of its employees are entitled (whether absolute, accrued, contingent or otherwise) in each case other than the payment, discharge increases in salaries or satisfaction other compensation in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since and that in the Balance Sheet Dateaggregate have not resulted in a SPAR Material Adverse Effect); (4l) permitted or allowed changed any of the Hotels accounting principles followed by it or the methods of applying such principles, other than the contemplated change for certain of the SPAR Marketing Companies from "subchapter s" status to "subchapter c" status for federal income tax purposes (to be subjected to any Lien, except for Liens for current Taxes not yet dueeffected shortly before the Effective Time) and other changes in implementing the SPAR Premerger Transactions; (5m) written down except as contemplated by the value of SPAR Premerger Agreements or this Agreement, entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10n) made except as contemplated by the SPAR Premerger Agreements or this Agreement, changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12o) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since Except as set forth in Schedule 6.30, between the Audited Balance Sheet DateDate and the date of this Agreement, neither the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Company nor any CLA Company has: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any CLA Company or any interest therein (other than as contemplated by Section 10.13 hereof); (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance other than in the ordinary course of business consistent with past practice. (d) except in the ordinary course of business consistent with past practice, made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, where such amendments, terminations, cancellations, modifications and waivers in the aggregate do not or could not reasonably be expected to have a material adverse effect on the business, operations, assets, properties, prospects or condition (financial or otherwise) of the Company or the CLA Company, taken as a whole; (e) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (f) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reservesother than as directly caused by adverse economic conditions not specific to, or having an extraordinary impact upon, the Company and the CLA Companies; (g) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2h) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction except in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since the Balance Sheet Dateor such as may be involved in ordinary repair, maintenance or replacement of its assets; (4i) permitted increased the salaries or allowed other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its non-Stockholder employees or made any increase in, or any addition to, other benefits to which any of its non-Stockholder employees may be entitled; (j) changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5k) written down the value of any Inventory (including write-downs by reason of shrinkage changed its authorized capital or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred its securities outstanding or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Markschanged its ownership interests, or disposed of granted any options, warrants, calls, conversion rights or disclosed commitments with respect to any person other than representatives of Buyer any trade secret, formula, process, know-how its capital stock or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceownership interests; or (12l) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since the Balance Sheet Effective Date, except as provided on Schedule 3.4, neither Selling Party with respect to the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Business has: 3.4.1 incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to Seller or any of Seller's assets or properties; 3.4.2 sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the Effective Date or on any date since then, except for the sale of Inventory in the ordinary course of business consistent with past practice; 3.4.3 created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever; 3.4.4 made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; 3.4.5 declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares; 3.4.6 suffered any damage, destruction or loss, whether or not covered by insurance, (1i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $10,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; 3.4.7 suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); 3.4.8 received notice or had knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2) incurred any liability 3.4.9 made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $10,000 except such as may be involved in ordinary repair, maintenance or replacement of its assets; 3.4.10 increased the salaries or other compensation of, or increasedmade any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its employees or made any increase in, or experienced any change in addition to, other benefits to which any assumptions underlying of its employees may be entitled; 3.4.11 changed any of the accounting principles followed by it or the methods of calculating, applying such principles; 3.4.12 made any bad debt, contingency distribution or transfer whatsoever of cash or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) assets to Northland other than the payment, discharge or satisfaction in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since the Balance Sheet Date; (4) permitted or allowed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes which is not yet due; (5) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights subject to the use other provisions of this Section 3.4; or 3.4.13 entered into any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase ordinary course of business consistent with past practice (except as otherwise disclosed in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this SectionSchedule 3.4).

Existing Condition. Since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary CourseExcept as set forth on SCHEDULE 3.1(H), and no Seller has: (1) suffered except for such changes as have affected the oil field services business generally, since December 31, 1997, there has not been, and through the date of the Closing there will not have been, any material adverse change in its working capital, the Assets or the Business or the financial condition, operations, results of operationoperations, assetsor future prospects of the Business. Without limiting the generality of the foregoing, liabilities (absolutesince that date, accrued, contingent or otherwiseexcept as otherwise stated on SCHEDULE 3.1(H), reserves, none of the Sellers has (i) entered into any transaction or agreement affecting the Business or the Assets except in the ordinary course of business, operations or prospects; (2) incurred any liability or obligation (absolute, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice practice; (ii) encumbered, leased, licensed or transferred any tangible or intangible assets which would have been included in the Assets if the Closing had been held on December 31, 1997 or on any date since the Balance Sheet Date; then; (4iii) permitted or allowed subjected any of the Hotels to be subjected Assets to any Lien, except for Liens for current Taxes not yet due; (5) written down the value lien or other encumbrance of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible)nature whatsoever, except in the Ordinary Course; ordinary course of business, consistent with past practices, and except for Permitted Liens (8) disposed defined in Section 3.1(i)); (iv) entered into any agreement, Contract, lease, or license (or series of related agreements, Contracts, leases, and licenses) outside the ordinary course of business, made any amendment to or permitted to lapse terminated any material agreement affecting the Business or the Assets, or canceled, modified or waived any rights to affecting the use Business or the Assets, whether or not in the ordinary course of business; (v) changed any of the accounting principles followed by it or the methods of applying such principles; (vi) increased the compensation of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) employee other than in the Ordinary Courseordinary course of business, granted entered into any general increase employment Contract or collective bargaining agreement, written or oral, or modified the terms of any existing Contract or agreement, made any other change in the compensation employment terms for any of officers its directors, officers, or employees outside the ordinary course of any Hotels (including any such increase pursuant to business, or adopted, amended, modified, or terminated any bonus, pensionprofit-sharing, profitsharing incentive, severance, retirement, employee benefit plan, employee pension benefit plan, or other plan plan, Contract, or commitmentcommitment relating to its directors, officers, and employees; (vii) suffered any damage, destruction or loss to its property or other loss, whether or not covered by insurance, (a) materially and adversely affecting the Business or Assets or (b) of any items which amount to $20,000 or more in the aggregate; (vii) granted any license or sublicense of any rights under or with respect to any of Seller's intellectual property or other proprietary rights; (viii) canceled, compromised, waived, or released any right or claim (or series of related rights and claims) outside of the ordinary course of business; (ix) delayed or postponed the payment of accounts payable or any other increase in liabilities outside the compensation payable ordinary course of business; or to become payable (x) committed to any officer of the foregoing. In addition, no party (including the Sellers) has accelerated, terminated, modified, or employee canceled any agreement, Contract, lease, or license (or series of any Hotelrelated agreements, Contracts, leases, and no such increase licenses) to which any of the Sellers is customary on or was a periodic basis party or required by agreement which any of them is or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Sectionwas bound.

Existing Condition. Since Except as disclosed in Section 5.25 of the Balance Sheet Date------------------ ATS Disclosure Memorandum, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Coursesince March 31, and no Seller has1998 ATS has not: (1a) incurred any Liabilities, other than Liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any Liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any Liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on March 31, 1998 or on any date since then, except for the sale of inventory in the ordinary course of business consistent with past practice; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $5,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (h) received notice or had Knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000 except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course benefits to which any of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateits employees may be entitled; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by it or the methods of applying such principles; or (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Courseordinary course of business consistent with past practice. Until the Closing Date, granted neither ATS nor any general increase in Subsidiary will permit any of the compensation foregoing except as may be specifically required or permitted by the terms of officers this Agreement, or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether approved in writing or otherwise, to take any action described in this Sectionby Premiere.

Existing Condition. Since the Interim Balance Sheet Date, Seller with respect to the Sellers have operated or caused to be operated their respective Hotels only in Business and the Ordinary Course, and no Seller hasAssets has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Business or the Assets if the Closing had been held on the Interim Balance Sheet Date or on any date since then, except for the sale of inventory in the ordinary course of business consistent with past practice; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except for Permitted Liens (hereinafter defined in Section 3.1.13); (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $10,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (h) received notice or had knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $10,000 except such as may be involved in ordinary repair, maintenance or replacement of its assets; which are disclosed on the Disclosure Schedule. (j) increased the salaries or other compensation of, or increasedmade any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its employees or made any increase in, or experienced any change in addition to, other benefits to which any assumptions underlying or methods of calculating, any bad debt, contingency or other reservesits employees may be entitled; (3k) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Date; (4) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by it or the methods of applying such principles; or (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding;business consistent with past practice. (10m) made entered into any material capital expenditure except transaction obligating Seller to make payment in excess of $10,000 other than as disclosed on the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this SectionDisclosure Schedule.

Existing Condition. Since Except as disclosed in Section 3.13 of the Disclosure Schedule, since the St. ▇▇▇ Balance Sheet Date, neither TPGC nor any of the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Subsidiaries has: (1a) suffered any material adverse change in its working capital(i) to the knowledge of the Sellers and TPGC, financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospects; (2) incurred any liability or obligation (absoluteliabilities, accrued, contingent or otherwise) except non-material items other than liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3ii) paid, discharged or satisfied any claim, liability lien or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Date; (4) permitted or allowed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due; (5) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marksencumbrance, or disposed of or disclosed to paid any person other than representatives of Buyer any trade secretliabilities, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Courseordinary course of business consistent with past practice, granted or failed to pay or discharge when due any general liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or its Assets or properties; (b) sold, assigned or transferred any of its material Assets except in the ordinary course of business consistent with past practice; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien (other than Permitted Liens), any of its Assets; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any material debts or claims held by it, other than in the ordinary course of business consistent with past practice; (e) changed any of the material accounting principles followed by it or the methods of applying such principles; (f) made or promised any material increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing salary or other plan or commitment) or any other increase in the compensation payable or to become payable to any executive officer or other employee of TPGC or any Hotel, and no such increase is customary on a periodic basis of the Subsidiaries other than in the ordinary course of business or required by agreement as contemplated under any Benefit Plan or understandingemployment arrangement currently in effect; (10g) made waived or released any material capital expenditure except in right or claim relating to TPGC or any of the Ordinary Course; (11) made any change in any method of accounting Subsidiaries or accounting practicethe Business; or (12h) agreed, whether in writing or otherwise, entered into an agreement to take do any action of the things described in this Sectionthe preceding clauses (a) through (g).

Existing Condition. Since Except as set forth on Schedule 3.12, since the Company Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only business of the Company has been conducted in the Ordinary Course, ordinary course consistent with past practice and no Seller hasthe Company has not: (1a) suffered declared, set aside or paid any material adverse change dividend or made or agreed to make any other distribution or payment in respect of its working capitalsecurities or redeemed, financial conditionpurchased or otherwise acquired or agreed to redeem, results purchase or acquire any of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsits securities; (2b) incurred any liability or obligation (absoluteLiabilities, accrued, contingent or otherwise) except non-material items other than Liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) Lien other than the paymentPermitted Liens or paid any Liabilities, discharge or satisfaction other than in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since practice, or failed to pay or discharge when due any Liabilities; (c) sold, assigned or transferred any of its assets or properties, except in the ordinary course of business consistent with past practice; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, any of its material assets or properties, other than Liens, if any, for current Taxes not yet due and payable or other Permitted Liens; (e) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any debts or claims held by it, other than in the ordinary course of business consistent with past practice, or waived any rights of material value; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) that could be reasonably expected to have a Material Adverse Effect on the Company or (ii) of any item carried on its books of account at more than Twenty-Five Thousand dollars ($25,000); (g) suffered any repeated, recurring or prolonged shortage, cessation or interruption of material supplies or utility services required to conduct its Business and operations; (h) received notice of or had Knowledge of any actual or threatened labor dispute or trouble, labor organizing effort, strike, or work stoppage; (i) made any capital expenditure or capital addition or betterment except in the ordinary course of business consistent with past practice; (j) except in the ordinary course of business consistent with past practice, (i) increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Shareholders, directors, officers or employees, (ii) made any increase in, or any addition to, other benefits to which any of its Shareholders, directors, officers or employees may be entitled, (iii) granted any severance or termination pay to any of its Shareholders, directors, officers or employees, or (iv) entered into any employment, deferred compensation or other similar agreement with (or any amendment to any such existing agreement) any of its Shareholders, directors, officers or employees; (k) changed any of the accounting principles followed by it or the methods of applying such principles except as required by changes in applicable laws or regulations; (l) entered into any transaction that creates an obligation that will continue to bind the Company after the Effective Time other than as contemplated by this Agreement or in the ordinary course of business consistent with past practice; (m) issued, or entered into an agreement with an obligation to issue, equity securities of the Company; (n) failed to use all commercially reasonable efforts to (i) carry on its business in substantially the same manner as it has heretofore been carried on; (ii) maintain its properties and facilities, including those held under Leases, in good working order and condition, ordinary wear and tear excepted; (iii) perform all of its obligations under agreements relating to or affecting its assets, properties or rights, or operate, manage or maintain its leased premises in the usual and customary manner for similar properties, or (iv) keep in full force and effect all insurance policies in effect as of the Company Balance Sheet Date; (4o) permitted introduced any new method of management or allowed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueoperation; (5p) written down the value committed a breach of any Inventory (including write-downs by reason contract, indenture, mortgage, deed of shrinkage trust, lease, note or ▇▇▇▇-down) note agreement or written off as uncollectible any notes other agreement or Accountsinstrument, except for immaterial write-downs and write-offs in permit, license or other right of the Ordinary CourseCompany; (6q) cancelled made any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) Tax election other than in the Ordinary Courseordinary course of business and consistent with past practice, granted changed any general increase Tax election, adopted any Tax accounting method other than in the compensation ordinary course of officers business and consistent with past practice, changed any Tax accounting method, filed any Tax Return (other than any estimated Tax Returns, payroll Tax Returns, sales Tax Returns or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitmentproperty Tax Returns) or any other increase in the compensation payable amendment to a Tax Return, entered into any closing agreement, settled any Tax claim or to become payable assessment or consented to any officer Tax claim or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingassessment; (10r) made authorized, committed or agreed to take any material capital expenditure of the actions described in subsections (a) through (q) of this Section 3.12, except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceas otherwise permitted by this Agreement; or (12s) agreedexperienced any event or condition that has had, whether in writing or otherwisecould be expected to have, to take any action described in this Sectiona Material Adverse Effect.

Existing Condition. Since Except as disclosed in Section 3.12 of the Company's Disclosure Schedule, since the Company Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) suffered declared, set aside or paid any material adverse change dividend or made or agreed to make any other distribution or payment in respect of its working capitalcapital shares or redeemed, financial conditionpurchased or otherwise acquired or agreed to redeem, results purchase or acquire any of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsits capital shares; (2b) incurred any liability or obligation (absoluteLiabilities, accrued, contingent or otherwise) except non-material items other than Liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) Lien other than the paymentPermitted Liens or paid any Liabilities, discharge or satisfaction other than in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since practice, or failed to pay or discharge when due any Liabilities which the Balance Sheet Datefailure to pay or discharge has caused or could be reasonably expected to cause a Material Adverse Effect on the Company; (4c) permitted sold, assigned or allowed transferred any of its assets or properties, except in the Hotels to be ordinary course of business consistent with past practice; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, except for Liens any of its material assets or properties, other than Liens, if any, for current Taxes not yet duedue and payable or other Permitted Liens; (5e) written down the value made or suffered any amendment or termination of any Inventory (including write-downs material agreement, contract, commitment, lease or plan to which it is a party or by reason of shrinkage which it is bound, or ▇▇▇▇-down) cancelled, modified or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled waived any debts or claims held by it, other than in the ordinary course of business consistent with past practice, or waived any claims or rights of substantial value; (7f) soldsuffered any damage, transferred destruction or otherwise disposed loss, whether or not covered by insurance, (i) that could be reasonably expected to have a Material Adverse Effect on the Company or (ii) of any Hotel properties item carried on its books of account at more than $100,000; (g) suffered any repeated, recurring or assets prolonged shortage, cessation or interruption of material supplies or utility services required to conduct its business and operations; (realh) received notice or had Knowledge of any actual or threatened labor trouble, personal labor organizing effort, strike, work stoppage; (i) made any capital expenditure or mixed, tangible capital addition or intangible), betterment except in the Ordinary Courseordinary course of business consistent with past practice; (8) disposed j) except in the ordinary course of business consistent with past practice, (i) increased the salaries or permitted to lapse any rights to the use of any Marksother compensation of, or disposed made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its stockholders, directors, officers or disclosed employees, (ii) made any increase in, or any addition to, other benefits to which any of its stockholders, directors, officers or employees may be entitled, (iii) granted any severance or termination pay to any person other than representatives of Buyer its stockholders, directors, officers or employees, or (iv) entered into any trade secretemployment, formula, process, know-how deferred compensation or other intellectual property not theretofore a matter similar agreement (or any amendment to any such existing agreement) with any of public knowledgeits stockholders, directors, officers or employees; (9k) other than in changed any of the Ordinary Course, granted any general increase in accounting principles followed by it or the compensation methods of officers or employees of any Hotels (including any applying such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or principles except as required by agreement changes in applicable laws or understandingregulations; (10l) made entered into any material capital expenditure except transaction that creates an obligation that will continue to bind the Company after the Effective Time other than as contemplated by this Agreement or in the Ordinary Courseordinary course of business consistent with past practice; (11m) made any change in any method issued equity securities of accounting or accounting practicethe Company, other than pursuant to Company Options outstanding as of the date hereof; or (12n) agreedauthorized, whether in writing committed or otherwise, agreed to take any action of the actions described in subsections (a) through (m) of this SectionSection 3.12, except as otherwise permitted by this Agreement.

Existing Condition. Since the Interim Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only except as set forth in the Ordinary CourseSchedule 3.1.11, and no Seller has: (1) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties other than with the prior written consent of PRG; (2) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the Interim Balance Sheet Date or on any date since then, except (i) for the sale of property in the ordinary course of business consistent with past practice or with the prior written consent of PRG or (ii) the disposition of damaged or obsolete inventory and equipment no longer useful in the business in an amount not exceeding $100,000; (3) mortgaged, pledged or subjected any of its Assets (other than any Excluded Assets) to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except for Permitted Liens (as defined in subsection 3.1.12), other than with the prior written consent of PRG; (4) agreed to any amendment or received notice of termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound (not including any rental agreement with aggregate rentals after the date hereof reasonably expected not to exceed $2500 per week), or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business, other than with the prior written consent of PRG; (5) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets or properties or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $50,000 or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (6) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities (absoluteprospects, accrued, contingent properties or otherwise), reserves, business, operations or prospectsfinancial condition; (27) incurred received notice or had knowledge of any liability actual or obligation (absolutethreatened labor trouble, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency strike or other reservesoccurrence, event or condition of any similar character which has had or could reasonably be expected to have a material adverse effect on its business, operations, assets or properties; (3) paid8) made commitments or agreements for capital expenditures or capital additions or betterments involving expenditures of more than $100,000 in the aggregate except such as may be involved in ordinary repair, discharged maintenance or satisfied any claimreplacement of its assets, liability or obligation (whether absolute, accrued, contingent or otherwise) other than with the payment, discharge or satisfaction in the Ordinary Course prior written consent of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet DatePRG; (49) permitted increased the salaries or allowed other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due; (5) written down the value of any Inventory (including write-downs by reason of shrinkage its employees other than ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇-down) ▇▇ ▇▇▇▇▇▇ or written off as uncollectible made any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marksincrease in, or disposed any addition to, other benefits to which any of or disclosed to any person its employees other than representatives of Buyer any trade secret▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇ may be entitled, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) other than in with the Ordinary Course, granted any general increase in the compensation prior written consent of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingPRG; (10) made changed any material capital expenditure except in of the Ordinary Course;accounting principles followed by it or the methods of applying such principles other than with the prior written consent of PRG; or (11) made entered into any change transaction other than in any method the ordinary course of accounting or accounting business consistent with past practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Sectionother than with the prior written consent of PRG.

Existing Condition. Since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller has: (1) suffered any material adverse change in its working capital, financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsprospects which would have a Material Adverse Effect on the Hotels; (2) incurred any liability or obligation (absolute, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or materially increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any material claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Date; (4) permitted or allowed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet duedue and Liens included in the Permitted Exceptions; (5) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary CourseCourse and consistent with past practice; (6) cancelled any debts or waived any claims or rights of substantial valuevalue except in the Ordinary Course; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Courseexcept as set forth on Schedule 5.1(s)(8), granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (109) made any material single capital expenditure except or commitment (i) not set forth on the Schedule of Capital Expenditures or (ii) in the Ordinary Courseexcess of $100,000 (on a per-Hotel basis) for additions to property, plant or equipment; (1110) except as set forth on Schedule 5.1(s)(10), made any change in any method of accounting or accounting practice; or (1211) agreed, whether in writing or otherwise, to take any action described in this SectionSection 5.1(s).

Existing Condition. Since the Audited Balance Sheet Date, except as set forth on Schedule 6.30 neither the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Company nor any Subsidiary has: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company, any Subsidiary or any interest therein; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except in the ordinary course of business consistent with past practice; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) except for (i) the Redemption and (ii) payment of the monthly dividend on the Company's preferred stock consistent with past practice, declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reservesother than as directly caused by adverse economic conditions not specific to, or having an extraordinary impact upon, the Company; (h) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course benefits to which any of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateits employees may be entitled; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10m) made changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since the 1997 Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only except as set forth in the Ordinary CourseDisclosure Schedule, and no Seller hashas not: (1i) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties other than with the prior written consent of PRG; (ii) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the 1997 Balance Sheet Date or an any date since then, except for the sale of property in the ordinary course of business consistent with past practice or with the prior written consent of PRG; (iii) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except for Permitted Liens (as defined in subsection 3.1.12), other than with the prior written consent of PRG; (iv) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business, other than with the prior written consent of PRG; (v) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares, other than with the prior written consent of PRG (other than distributions to the Shareholders for the payment of their taxes in the amount indicated in Schedule 3.1.11); (vi) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $7,500 or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations in each case which would reasonably be expected to have a material adverse effect on the Business; (vii) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (viii) received notice or had knowledge of any actual or threatened labor dispute, reservesstrike or other occurrence, event or condition of any similar character which has had or would reasonably be expected to have a material adverse effect on its business, operations operations, assets, properties or prospects; (2ix) incurred any liability made commitments or obligation (absoluteagreements for capital expenditures or capital additions or betterments except such as may be involved in ordinary repair, accruedmaintenance or replacement of its assets, contingent or otherwise) except non-material items incurred in other than with the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods prior written consent of calculating, any bad debt, contingency or other reservesPRG; (3x) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other benefits to which any of its employees may be entitled, other than with the payment, discharge or satisfaction in the Ordinary Course prior written consent of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet DatePRG; (4xi) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by it or the methods of applying such principles other than with the prior written consent of PRG; or (5xii) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Courseordinary course of business consistent with past practice, granted any general increase in other than with the compensation prior written consent of officers or employees PRG. PRG agrees that to the extent such transaction occurs between the signing of any Hotels (including any such increase pursuant to any bonusthis Agreement and the Closing Date, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee consent of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this SectionPRG shall not be unreasonably withheld.

Existing Condition. Since the date of the Most Recent Balance Sheet DateSheet, Transferor with respect to the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasBusiness has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the date of the Most Recent Balance Sheet or on any date since then, except for the sale of inventory in the ordinary course of business consistent with past practice; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance or any nature whatsoever; (d) made or suffered any amendment or termination of any agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) suffered any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting its business, operations, assets, properties or prospects or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (f) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reserves, business, operations or prospects; (2g) incurred any liability made commitments or obligation (absoluteagreements for capital expenditures or capital additions or betterments except such as may be involved in ordinary repair, accrued, contingent maintenance or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3h) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Date; (4) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by it or the methods of applying such principles; or (5i) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting business consistent with past practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Section.

Existing Condition. Since Except as set forth in Schedule 5.29, between the Audited Balance Sheet DateDate and the date of this Agreement, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any interest therein; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance other than in the ordinary course of business consistent with past practice; (d) except in the ordinary course of business consistent with past practice, made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, where such amendments, terminations, cancellations, modifications and waivers in the aggregate do not or could not reasonably be expected to have a material adverse effect on the business, operations, assets, properties, prospects or condition (financial or otherwise) of the Company; (e) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (f) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reservesother than as directly caused by adverse economic conditions not specific to, or having an extraordinary impact upon, the Company; (g) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2h) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction except in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since the Balance Sheet Dateor such as may be involved in ordinary repair, maintenance or replacement of its assets; (4i) permitted increased the salaries or allowed other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its officers, directors, employees or Agents (as defined in Section 7.1(j)) or made any increase in, or any addition to, other benefits to which any of such persons may be entitled; (j) changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5k) written down the value of any Inventory (including write-downs by reason of shrinkage changed its authorized capital or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred its securities outstanding or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Markschanged its ownership interests, or disposed of granted any options, warrants, calls, conversion rights or disclosed commitments with respect to any person other than representatives of Buyer any trade secret, formula, process, know-how its capital stock or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceownership interests; or (12l) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary CourseExcept as set forth on Schedule 3.1(h), and no Seller has: (1) suffered except for such changes as have affected the oil field services business generally, since December 31, 1997, there has not been, and through the date of the Closing there will not have been, any material adverse change in its working capital, the Assets or the Business or the financial condition, operations, results of operationoperations, assetsor future prospects of the Business. Without limiting the generality of the foregoing, liabilities (absolutesince that date, accrued, contingent or otherwiseexcept as otherwise stated on Schedule 3.1(h), reserves, none of the Sellers has (i) entered into any transaction or agreement affecting the Business or the Assets except in the ordinary course of business, operations or prospects; (2) incurred any liability or obligation (absolute, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice practice; (ii) encumbered, leased, licensed or transferred any tangible or intangible assets which would have been included in the Assets if the Closing had been held on December 31, 1997 or on any date since the Balance Sheet Date; then; (4iii) permitted or allowed subjected any of the Hotels to be subjected Assets to any Lien, except for Liens for current Taxes not yet due; (5) written down the value lien or other encumbrance of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible)nature whatsoever, except in the Ordinary Course; ordinary course of business, consistent with past practices, and except for Permitted Liens (8) disposed defined in Section 3.1(i)); (iv) entered into any agreement, Contract, lease, or license (or series of related agreements, Contracts, leases, and licenses) outside the ordinary course of business, made any amendment to or permitted to lapse terminated any material agreement affecting the Business or the Assets, or canceled, modified or waived any rights to affecting the use Business or the Assets, whether or not in the ordinary course of business; (v) changed any of the accounting principles followed by it or the methods of applying such principles; (vi) increased the compensation of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) employee other than in the Ordinary Courseordinary course of business, granted entered into any general increase employment Contract or collective bargaining agreement, written or oral, or modified the terms of any existing Contract or agreement, made any other change in the compensation employment terms for any of officers its directors, officers, or employees outside the ordinary course of any Hotels (including any such increase pursuant to business, or adopted, amended, modified, or terminated any bonus, pensionprofit-sharing, profitsharing incentive, severance, retirement, employee benefit plan, employee pension benefit plan, or other plan plan, Contract, or commitmentcommitment relating to its directors, officers, and employees; (vii) suffered any damage, destruction or loss to its property or other loss, whether or not covered by insurance, (a) materially and adversely affecting the Business or Assets or (b) of any items which amount to $20,000 or more in the aggregate; (vii) granted any license or sublicense of any rights under or with respect to any of Seller's intellectual property or other proprietary rights; (viii) canceled, compromised, waived, or released any right or claim (or series of related rights and claims) outside of the ordinary course of business; (ix) delayed or postponed the payment of accounts payable or any other increase in liabilities outside the compensation payable ordinary course of business; or to become payable (x) committed to any officer of the foregoing. In addition, no party (including the Sellers) has accelerated, terminated, modified, or employee canceled any agreement, Contract, lease, or license (or series of any Hotelrelated agreements, Contracts, leases, and no such increase licenses) to which any of the Sellers is customary on or was a periodic basis party or required by agreement which any of them is or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Sectionwas bound.

Existing Condition. Since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any interest therein, except for any agreement or commitment, any option or right to acquire any Leases of the Company or any interest therein granted in the ordinary course of business consistent with past practice,; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) declared, set aside or paid any dividend or made or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests or agreed to make any other distribution or payment in respect of its capital shares, other than distributions to Stockholders which do not reduce the aggregate stockholders' equity of the Company below approximately $300,000.00; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $10,000.00, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (h) received notice or had knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $10,000.00, except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees, directors or obligation agents or made any increase in, or any addition to, other benefits to which any of its employees, directors or agents may be entitled, except as set forth in Schedule 6.30; (whether absolute, accrued, contingent k) changed any of the accounting principles followed by it or otherwisethe methods of applying such principles; (l) entered into any transaction other than the payment, discharge or satisfaction in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since the Balance Sheet Dateother than this transaction; (4m) permitted changed its authorized capital or allowed its securities outstanding or otherwise changed its ownership interests, or granted any options, warrants, calls, conversion rights or commitments with respect to any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due; (5) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how its capital stock or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since Except as disclosed in Schedule 3.12, since the Company Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only business of the Company has been conducted in the Ordinary Courseordinary course consistent with past practice and, and no Seller hasexcept as contemplated by this Agreement, the Company has not: (1a) suffered declared, set aside or paid any material adverse change dividend or made or agreed to make any other distribution or payment in respect of its working capitalsecurities or redeemed, financial conditionpurchased or otherwise acquired or agreed to redeem, results purchase or acquire any of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsits securities; (2b) incurred any liability or obligation (absoluteLiabilities, accrued, contingent or otherwise) except non-material items other than Liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice (unless any such Liability exceeds One Hundred Thousand dollars ($100,000) with respect to a Current Government Contract), or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) Lien other than the paymentPermitted Liens or paid any Liabilities in excess of One Hundred Thousand dollars ($100,000) with respect to any Current Government Contract and Fifty Thousand dollars ($50,000) with respect to any other matter, discharge or satisfaction other than in the Ordinary Course ordinary course of liabilities and obligations reflected business consistent with past practice, or reserved against failed to pay or discharge when due any Liabilities, other than Liabilities that are being contested in good faith by the Company; (c) sold, assigned or transferred any of its assets or properties, except in the Balance Sheet or incurred in the Ordinary Course and ordinary course of business consistent with past practice since or in the sale or other disposition which does not exceed Fifty Thousand dollars ($50,000) in value; (d) except in the ordinary course of business consistent with past practice, created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, any of its material assets or properties, other than Liens, if any, for current Taxes not yet due and payable or other Permitted Liens; (e) made or suffered any material amendment or termination of any Listed Contract, or cancelled, modified or waived any debts or material claims held by it, other than in the ordinary course of business consistent with past practice, or waived any rights of material value; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) that could be reasonably expected to have a Material Adverse Effect on the Company or (ii) of any item carried on its books of account at more than Fifty Thousand dollars ($50,000); (g) suffered any repeated, recurring or prolonged shortage, cessation or interruption of material supplies or utility services required to conduct its Business and operations; (h) received notice of or had Knowledge of any actual or threatened labor dispute or trouble, labor organizing effort, strike, or work stoppage; (i) made any capital expenditure or capital addition or betterment in excess of One Hundred Thousand dollars ($100,000), except in the ordinary course of business consistent with past practice; (j) except in the ordinary course of business consistent with past practice, (i) increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Shareholders, directors, officers or employees, (ii) made any increase in, or any addition to, other benefits to which any of its Shareholders, directors, officers or employees may be entitled, (iii) granted any severance or termination pay to any of its Shareholders, directors, officers or employees, or (iv) entered into any employment, deferred compensation or other similar agreement with (or any amendment to any such existing agreement) any of its Shareholders, directors, officers or employees; (k) changed any of the accounting principles followed by it or the methods of applying such principles except as required by changes in applicable laws or regulations or applicable accounting pronouncements issued by the Financial Accounting Standards Board; (l) entered into any transaction that creates a material obligation that will continue to bind the Company after the Effective Time other than as contemplated by this Agreement or in the ordinary course of business consistent with past practice; (m) issued, or entered into an agreement with an obligation to issue, equity securities of the Company; (n) failed to use all commercially reasonable efforts to (i) carry on its business in substantially the same manner as it has heretofore been carried on; (ii) maintain its properties and facilities, including those held under leases, in good working order and condition, ordinary wear and tear excepted; (iii) perform all of its obligations under agreements relating to or affecting its assets, properties or rights, or operate, manage or maintain its leased premises in the usual and customary manner for similar properties, or (iv) keep in full force and effect all insurance policies in effect as of the Company Balance Sheet Date; (4o) permitted or allowed introduced any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet duenew material operation; (5p) written down the value committed a breach of any Inventory (including write-downs by reason Listed Contract, permit, license or other material right of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary CourseCompany; (6q) cancelled made any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) Tax election other than in the Ordinary Courseordinary course of business and consistent with past practice, granted changed any general increase Tax election, adopted any Tax accounting method other than in the compensation ordinary course of officers business and consistent with past practice, changed any Tax accounting method, filed any Tax Return (other than any estimated Tax Returns, payroll Tax Returns, sales Tax Returns or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitmentproperty Tax Returns) or any other increase in the compensation payable amendment to a Tax Return, entered into any closing agreement, settled any Tax claim or to become payable assessment or consented to any officer Tax claim or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingassessment; (10r) made authorized, committed or agreed to take any material capital expenditure of the actions described in subsections (a) through (q) of this Section 3.12, except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceas otherwise permitted by this Agreement; or (12s) agreedexperienced any event or condition that has had, whether in writing or otherwiseis reasonably expected to have, to take any action described in this Sectiona Material Adverse Effect.

Existing Condition. Since Except as set forth in Schedule 6.30, since the Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any interest therein, except in the ordinary course of business consistent with past practice; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except in the ordinary course of business consistent with past practice; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, except in the ordinary course of business consistent with past practice; (e) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise)) other than as directly caused by adverse economic conditions not specific to, reservesor having an extraordinary impact upon, the Company; (h) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, except in the ordinary course of business or increasedas may be involved in ordinary repair, maintenance or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction benefits to which any of its employees may be entitled except for scheduled increases in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course business and consistent with past practice since the Balance Sheet Datepractices or increases required by any existing plan; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Courseordinary course of business consistent with past practice, granted any general increase in except (i) the compensation of officers or employees of any Hotels transactions contemplated by this Agreement, (including any such increase ii) those transactions identified on schedules attached hereto and (iii) as otherwise permitted pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingthis Section 6.30; (10m) made changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since the Audited Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) except as set forth on Schedule 6.30(a), incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) except as set forth on Schedule 6.30(b), sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any interest therein; (c) except as set forth on Schedule 6.30(c), created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) except as set forth on Schedule 6.30(e), declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $10,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (h) received notice or had knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $10,000, except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course benefits to which any of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateits employees may be entitled; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off except as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangibleset forth on Schedule 6.30(l), except in the Ordinary Course; (8) disposed of or permitted to lapse entered into any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10m) made except as set forth on Schedule 6.30(m), changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since Except as disclosed in Schedule 3.12 of the Company’s Disclosure Schedule, since the Company Balance Sheet DateDate or as contemplated by this Agreement, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) suffered declared, set aside or paid any material adverse change dividend or made or agreed to make any other distribution or payment in respect of its working capitalcapital shares or redeemed, financial conditionpurchased or otherwise acquired or agreed to redeem, results purchase or acquire any of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsits capital shares; (2b) incurred any liability or obligation (absoluteLiabilities, accrued, contingent or otherwise) except non-material items other than Liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) Lien other than the paymentPermitted Liens or paid any Liabilities, discharge or satisfaction other than in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since practice, or failed to pay or discharge when due any Liabilities which the Balance Sheet Datefailure to pay or discharge has caused or could be reasonably expected to cause a Material Adverse Effect on the Company; (4c) permitted sold, assigned or allowed transferred any of its assets or properties, except in the Hotels to be ordinary course of business consistent with past practice; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, except for Liens any of its material assets or properties, other than Liens, if any, for current Taxes not yet duedue and payable or other Permitted Liens; (5e) written down the value made or suffered any amendment or termination of any Inventory (including write-downs material agreement, contract, commitment, lease or plan to which it is a party or by reason of shrinkage which it is bound, or ▇▇▇▇-down) cancelled, modified or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled waived any debts or claims held by it, other than in the ordinary course of business consistent with past practice, or waived any claims or rights of substantial value; (7f) soldsuffered any damage, transferred destruction or otherwise disposed loss, whether or not covered by insurance, (i) that could be reasonably expected to have a Material Adverse Effect on the Company or (ii) of any Hotel properties item carried on its books of account at more than $50,000; Table of Contents (g) suffered any repeated, recurring or assets prolonged shortage, cessation or interruption of material supplies or utility services required to conduct its business and operations; (realh) received notice of any actual or threatened labor trouble, personal labor organizing effort, strike, work stoppage; (i) made any capital expenditure or mixed, tangible capital addition or intangible), betterment except in the Ordinary Courseordinary course of business consistent with past practice; (8) disposed j) except in the ordinary course of business consistent with past practice, (i) increased the salaries or permitted to lapse any rights to the use of any Marksother compensation of, or disposed made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of the Company Shareholders, directors, officers or disclosed employees, (ii) made any increase in, or any addition to, other benefits to which any of the Company Shareholders, directors, officers or employees may be entitled, (iii) granted any severance or termination pay to any person other than representatives of Buyer the Company Shareholders, directors, officers or employees, or (iv) entered into any trade secretemployment, formula, process, know-how deferred compensation or other intellectual property not theretofore a matter similar agreement with (or any amendment to any such existing agreement) any of public knowledgethe Company Shareholders, directors, officers or employees; (9k) other than in changed any of the Ordinary Course, granted any general increase in Accounting Principles followed by it or the compensation methods of officers or employees of any Hotels (including any applying such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or principles except as required by agreement changes in applicable laws or understandingregulations; (10l) made entered into any material capital expenditure except transaction that creates an obligation that will continue to bind the Company after the Effective Time other than as contemplated by this Agreement or in the Ordinary Courseordinary course of business consistent with past practice; (11m) made any change issued equity securities of the Company, other than pursuant to Company Options outstanding as of the date hereof and the issuance of Company Options after such date in any method the ordinary course of accounting or accounting practicebusiness and consistent with past practice (and the issuance of capital stock of the Company upon exercise thereof), all of which are reflected on Schedule 3.12(m) of the Company’s Disclosure Schedule; or (12n) agreedauthorized, whether in writing committed or otherwise, agreed to take any action of the actions described in subsections (a) through (m) of this SectionSection 3.12, except as otherwise permitted by this Agreement.

Existing Condition. Since Except as set forth in the SEC Reports, since the Balance Sheet Date, Seller with respect to the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasPublic Safety Software Business has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to any of the Assets; (b) sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the Balance Sheet Date or on any date since then, except for the sale of inventory in the ordinary course of business consistent with past practice; (c) mortgaged, pledged or subjected any of its Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except for Permitted Liens (hereinafter defined in Section 3.1.13); (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business included in the Assets or the liability assumed by the Purchaser hereunder; (e) [Intentionally left Blank]; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its Public Safety Software Business, or the Assets or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000 related to the Public Safety Software Business or the Assets or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its Public Safety Software Business; (g) suffered any material adverse change in its working capitalPublic Safety Software Business, or the Assets, (financial condition, results of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospects; (2h) incurred received notice or had knowledge of any liability actual or obligation (absolutethreatened labor trouble, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency strike or other reservesoccurrence, event or condition of any similar character which has had or might have an adverse effect on its Public Safety Software Business or the Assets; (3i) paid, discharged made commitments or satisfied any claim, liability agreements for capital expenditures or obligation (whether absolute, accrued, contingent capital additions or otherwise) other than the payment, discharge or satisfaction betterments exceeding in the Ordinary Course aggregate $50,000 in connection with the Public Safety Software Business or the Assets except such as may be involved in ordinary repair, maintenance or replacement of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateany Assets; (4j) permitted or allowed [Intentionally left Blank]; (k) changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by it or the methods of applying such principles; or (51) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting business consistent with past practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Section.

Existing Condition. Since the Interim Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any interest therein; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (e) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests, other than in the ordinary course of business, consistent with past practice; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $10,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise); (h) received notice or had knowledge of any actual or threatened labor trouble, reservesstrike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $10,000, except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course benefits to which any of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateits employees may be entitled; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10m) made changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since Except as disclosed in Schedule 3.12 of the Company's Disclosure Schedule, since the Company Balance Sheet Date, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasCompany has not: (1a) suffered declared, set aside or paid any material adverse change dividend or made or agreed to make any other distribution or payment in respect of its working capitalcapital shares or redeemed, financial conditionpurchased or otherwise acquired or agreed to redeem, results purchase or acquire any of operation, assets, liabilities (absolute, accrued, contingent or otherwise), reserves, business, operations or prospectsits capital shares; (2b) incurred any liability or obligation (absoluteLiabilities, accrued, contingent or otherwise) except non-material items other than Liabilities incurred in the Ordinary Courseordinary course of business consistent with past practice, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) Lien other than the paymentPermitted Liens or paid any Liabilities, discharge or satisfaction other than in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since practice, or failed to pay or discharge when due any Liabilities which the Balance Sheet Datefailure to pay or discharge has caused or could be reasonably expected to cause a Material Adverse Effect on the Company; (4c) permitted sold, assigned or allowed transferred any of its assets or properties, except in the Hotels to be ordinary course of business consistent with past practice; (d) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected to any Lien, except for Liens any of its material assets or properties, other than Liens, if any, for current Taxes not yet duedue and payable or other Permitted Liens; (5e) written down the value made or suffered any amendment or termination of any Inventory (including write-downs material agreement, contract, commitment, lease or plan to which it is a party or by reason of shrinkage which it is bound, or ▇▇▇▇-down) cancelled, modified or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled waived any debts or claims held by it, other than in the ordinary course of business consistent with past practice, or waived any claims or rights of substantial value; (7f) soldsuffered any damage, transferred destruction or otherwise disposed loss, whether or not covered by insurance, (i) that could be reasonably expected to have a Material Adverse Effect on the Company or (ii) of any Hotel properties item carried on its books of account at more than $25,000; (g) suffered any repeated, recurring or assets prolonged shortage, cessation or interruption of material supplies or utility services required to conduct its business and operations; (realh) received notice, personal or mixedto the Knowledge of the Company, tangible been made aware of any facts or intangible)circumstances giving rise to any actual or threatened labor trouble, labor organizing effort, strike, work stoppage; (i) made any capital expenditure or capital addition or betterment except in the Ordinary Courseordinary course of business consistent with past practice; (8) disposed j) except in the ordinary course of business consistent with past practice, (i) increased the salaries or permitted to lapse any rights to the use of any Marksother compensation of, or disposed made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Shareholders, directors, officers or disclosed employees, (ii) made any increase in, or any addition to, other benefits to which any of its Shareholders, directors, officers or employees may be entitled, (iii) granted any severance or termination pay to any person other than representatives of Buyer its Shareholders, directors, officers or employees, or (iv) entered into any trade secretemployment, formula, process, know-how deferred compensation or other intellectual property not theretofore a matter similar agreement with (or any amendment to any such existing agreement) any of public knowledgeits Shareholders, directors, officers or employees; (9k) other than in changed any of the Ordinary Course, granted any general increase in accounting principles followed by it or the compensation methods of officers or employees of any Hotels (including any applying such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or principles except as required by agreement changes in applicable laws or understandingregulations; (10l) made entered into any material capital expenditure except transaction that creates an obligation that will continue to bind the Company after the Effective Time other than as contemplated by this Agreement or in the Ordinary Courseordinary course of business consistent with past practice; (11m) made any change in any method issued equity securities of accounting or accounting practicethe Company; or (12n) agreedauthorized, whether in writing committed or otherwise, agreed to take any action of the actions described in subsections (a) through (m) of this SectionSection 3.12, except as otherwise permitted by this Agreement.

Existing Condition. Since Except as set forth in Schedule 6.30, between the Audited Balance Sheet DateDate and the date of this Agreement, neither the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Company nor any NSJ Company has: (a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any NSJ Company or any interest therein; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance other than in the ordinary course of business consistent with past practice. (d) except in the ordinary course of business consistent with past practice, made or suffered any material amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, materially modified or waived any substantial debts or claims held by it or waived any rights of substantial value, where such amendments, terminations, cancellations, modifications and waivers in the aggregate do not or could not reasonably be expected to have a material adverse effect on the business, operations, assets, properties, prospects or condition (financial or otherwise) of the Company or the NSJ Company, taken as a whole; (e) except in the ordinary course of business consistent with past practice during the period beginning on January 1, 1998 and ending on the day prior to the Closing Date and for any dividends in such amounts necessary to pay taxes on account of any income of the Company or any NSJ Company, declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reservesother than as directly caused by adverse economic conditions not specific to, or having an extraordinary impact upon, the Company and the NSJ Companies; (h) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwise) other than the payment, discharge or satisfaction except in the Ordinary Course ordinary course of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and business consistent with past practice since the Balance Sheet Dateor such as may be involved in ordinary repair, maintenance or replacement of its assets; (4j) permitted increased the salaries or allowed other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its non- Stockholder employees or made any increase in, or any addition to, other benefits to which any of its non-Stockholder employees may be entitled; (k) materially changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of any Inventory (including write-downs by reason of shrinkage changed its authorized capital or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred its securities outstanding or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Markschanged its ownership interests, or disposed of granted any options, warrants, calls, conversion rights or disclosed commitments with respect to any person other than representatives of Buyer any trade secret, formula, process, know-how its capital stock or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting practiceownership interests; or (12m) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.

Existing Condition. Since With respect to the LEC Business, since the date of the Audited Balance Sheet DateSheet, the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller hasLEC has not: (1i) other than the restructuring of certain debt to The Bank of New York or with the prior written consent of Buyer (A) incurred any liabilities which in the aggregate exceed $5,000, other than in the ordinary course of business consistent with past practice, or (B) discharged or satisfied any lien or encumbrance, or (C) paid any material liabilities which in the aggregate exceed $5,000, other than in the ordinary course of business consistent with past practice, or (D) failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of the Assets; (ii) other than with the prior written consent of Buyer, sold, encumbered, assigned or transferred any assets or properties which would have been included in the Assets if the Closing had been held on the date of the Audited Balance Sheet or on any date since then, except for the sale of inventory in the ordinary course of business consistent with past practice; (iii) other than the restructuring of certain debt to The Bank of New York or with the prior written consent of Buyer, created, incurred, assumed or guaranteed any indebtedness for money borrowed in excess of $5,000, or mortgaged, pledged or subjected any of the Assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except for the items set forth on Schedule 5.1(g)(iii) attached hereto; (iv) other than with the prior written consent of Buyer, made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, whether or not in the ordinary course of business; (v) suffered any damage, destruction or loss, whether or not covered by insurance, (A) materially and adversely affecting business, operations, assets properties or prospects of LEC, or (B) of any item or items carried on books of account of LEC individually or in the aggregate at more than $15,000 or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (vi) suffered any material adverse change in its working capitalthe business, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reserves, business, operations or prospects) of LEC not previously disclosed to Buyer; (2vii) incurred received notice or had knowledge of any liability actual or obligation (absolutethreatened labor trouble, accrued, contingent or otherwise) except non-material items incurred in the Ordinary Course, or increased, or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency strike or other reservesoccurrence, event or condition of any similar character which has had or might have an adverse effect on business, operations, assets, properties or prospects of LEC; (3) paid, discharged or satisfied any claim, liability or obligation (whether absolute, accrued, contingent or otherwiseviii) other than with the paymentprior written consent of Buyer, discharge increased the salaries or satisfaction in the Ordinary Course other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any employee of liabilities and obligations reflected LEC or reserved against in the Balance Sheet made any increase in, or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateany addition to, other benefits to which any such employee may be entitled; (4ix) permitted or allowed other than with the prior written consent of Buyer, changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet due;accounting principles followed by LEC or the methods of applying such principles; or (5x) written down the value of any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives with the prior written consent of Buyer Buyer, entered into any trade secrettransaction having a projected economic value in excess of $5,000, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understanding; (10) made any material capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting or accounting business consistent with past practice; or (12) agreed, whether in writing or otherwise, to take any action described in this Section.

Existing Condition. Since Except as set forth on Schedule 6.30, since the Interim Balance Sheet Date, neither the Sellers have operated or caused to be operated their respective Hotels only in the Ordinary Course, and no Seller Company nor any Subsidiary has: (1a) incurred any liabilities, other than liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties; (b) sold, encumbered, assigned or transferred any assets, properties or rights or any interest therein, except for the sales in the ordinary course of business consistent with past practice, or made any agreement or commitment or granted any option or right with, of or to any person to acquire any assets, properties or rights of the Company or any Subsidiary or any interest therein; (c) created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of its assets to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever, except in the ordinary course of business consistent with past practice; (d) made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or canceled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, except in the ordinary course of business consistent with past practice. (e) declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its shares of capital stock or other ownership interests; (f) suffered any damage, destruction or loss, whether or not covered by insurance, (i) materially and adversely affecting its business, operations, assets, properties or prospects or (ii) of any item or items carried on its books of account individually or in the aggregate at more than $25,000, or suffered any repeated, recurring or prolonged shortage, cessation or interruption of supplies or utility or other services required to conduct its business and operations; (g) suffered any material adverse change in its working capitalbusiness, financial condition, results of operationoperations, assets, liabilities properties, prospects or condition (absolute, accrued, contingent financial or otherwise), reservesother than as directly caused by adverse economic conditions not specific to, or having an extraordinary impact upon, the Company; (h) received notice or had knowledge of any actual or threatened labor trouble, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations operations, assets, properties or prospects; (2i) incurred any liability made commitments or obligation (absolute, accrued, contingent agreements for capital expenditures or otherwise) except non-material items incurred capital additions or betterments exceeding in the Ordinary Courseaggregate $25,000, except such as may be involved in ordinary repair, maintenance or increased, or experienced any change in any assumptions underlying or methods replacement of calculating, any bad debt, contingency or other reservesits assets; (3j) paidincreased the salaries or other compensation of, discharged or satisfied made any claimadvance (excluding advances for ordinary and necessary business expenses) or loan to, liability any of its employees or obligation (whether absolutemade any increase in, accruedor any addition to, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course benefits to which any of liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course and consistent with past practice since the Balance Sheet Dateits employees may be entitled; (4k) permitted or allowed changed any of the Hotels to be subjected to any Lien, except for Liens for current Taxes not yet dueaccounting principles followed by it or the methods of applying such principles; (5l) written down the value of entered into any Inventory (including write-downs by reason of shrinkage or ▇▇▇▇-down) or written off as uncollectible any notes or Accounts, except for immaterial write-downs and write-offs in the Ordinary Course; (6) cancelled any debts or waived any claims or rights of substantial value; (7) sold, transferred or otherwise disposed of any Hotel properties or assets (real, personal or mixed, tangible or intangible), except in the Ordinary Course; (8) disposed of or permitted to lapse any rights to the use of any Marks, or disposed of or disclosed to any person other than representatives of Buyer any trade secret, formula, process, know-how or other intellectual property not theretofore a matter of public knowledge; (9) transaction other than in the Ordinary Course, granted any general increase in the compensation ordinary course of officers or employees of any Hotels (including any such increase pursuant to any bonus, pension, profitsharing or other plan or commitment) or any other increase in the compensation payable or to become payable to any officer or employee of any Hotel, and no such increase is customary on a periodic basis or required by agreement or understandingbusiness consistent with past practice; (10m) made changed its authorized capital or its securities outstanding or otherwise changed its ownership interests, or granted any material options, warrants, calls, conversion rights or commitments with respect to any of its capital expenditure except in the Ordinary Course; (11) made any change in any method of accounting stock or accounting practiceother ownership interests; or (12n) agreed, whether in writing or otherwise, agreed to take any action described in this Sectionof the actions referred to above.