Common use of Pre-Closing Operations Clause in Contracts

Pre-Closing Operations. (a) CareFirst. CareFirst hereby covenants and agrees that, pending the Closing, (for purposes of the following, "CareFirst" shall be deemed to include the CareFirst Subsidiaries): (i) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst will operate and conduct its business only in the ordinary course in accordance with prior practices, shall maintain its assets in their present state of repair (ordinary wear and tear excepted), and shall use its Best Efforts to keep available the services of its employees and preserve the goodwill of its business and relationships with the customers, licensors, suppliers, distributors and brokers with whom it has business relations; (ii) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst shall not: (A) sell, transfer or otherwise dispose of any assets, except for sales, transfers or disposals which would not have a CareFirst Material Adverse Effect; (B) enter into any new material contract or commitment relating to its business, with "material contract or commitment" being defined for the purpose of this subsection as customer contracts with a multi-year fee or rate guarantee involving an annual premium or administrative services fee in excess of $2,500,000 and contracts or commitments which involve CareFirst incurring a liability or obligation (X) in excess of $5 million individually, or (Y) in excess of $1 million individually in the event CareFirst enters into new contracts or commitments which involve CareFirst incurring liabilities or obligations not otherwise approved pursuant to this Section 6.1 in excess of $20 million in the aggregate in any calendar year; (C) mortgage, pledge or subject to liens or other encumbrances or charges any assets, except by incurring CareFirst Permitted Liens; (D) purchase or commit to purchase any capital asset outside of the relevant CareFirst Company capital plan for a price exceeding $5 million individually or $25 million in the aggregate per calendar year; (E) terminate or amend in any material respect any CareFirst Material Contract or any insurance policy, in force on the date hereof; (F) amend its charter or bylaws (provided, however, the foregoing will in no way limit the actions which are required to be taken by CareFirst pursuant to Section 6.8); (G) acquire (whether by merger, consolidation, share exchange, acquisition of stock, or acquisition of assets) any corporation, partnership, joint venture, or other business (or any part thereof), except where the consideration paid by CareFirst in connection with such acquisition (including any debt assumed as a result thereof) is less than $5 million individually or $25 million in the aggregate in any calendar year; (H) split, combine or reclassify its outstanding capital stock or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for payments or distributions by a wholly-owned subsidiary of CareFirst to CareFirst or to another wholly-owned subsidiary of CareFirst; (I) except for the issuance of CareFirst Common Stock to the Tax-Exempt Entities in connection with the Conversion, issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of or otherwise cause to become outstanding any shares of or any options, warrants or rights of any kind to acquire any shares of its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock; (J) incur or become contingently liable with respect to any indebtedness for borrowed money or purchase money indebtedness, other than borrowings under CareFirst's revolving credit facility not to exceed an aggregate principal amount of $30 million; (K) modify its current investment policies or practices in any material respect except to accommodate changes in applicable law; (L) materially change its methods of accounting in effect at December 31, 2000, except as required by changes in GAAP or SAP; (M) enter into any Affiliate Transaction in excess of $250,000; (1) change the compensation of its employees, except in the ordinary course of business consistent with past practices, or change in any material respects the methodology for calculating incentive payments to its employees; (2) enter into or modify any severance agreement, plan or arrangement with any employee, or increase any severance benefit under any such agreement, plan or arrangement, except with regard to non-executive employees in the ordinary course of business consistent with past practices prior to January 1, 2001; or (3) adopt or materially change any Benefit Plan, excluding any amendments to any Benefit Plans required by law; (O) materially expand or alter its geographical service area or sell or provide products or services materially different from those currently sold or provided by the CareFirst Companies; (P) settle or compromise any pending or threatened suit, litigation or similar proceeding that would result in a liability to CareFirst in excess of $2 million or that would result in material ongoing restrictions on the conduct of business of CareFirst; (Q) make any material change to its underwriting practices and policies (other than changes required by applicable law); or (R) enter into, or agree to enter into, any agreement to do any of the foregoing; and (iii) CareFirst shall obtain Purchaser's prior written consent to its annual capital plan prior to adoption by CareFirst's Board of Directors if capital expenditures under such plan are to exceed $60 million in the aggregate.

Pre-Closing Operations. (a) CareFirst. CareFirst hereby covenants and agrees thatExcept as expressly contemplated by this Agreement, pending the Closingas required by applicable law or regulation, (for purposes as required by orders of the followingBankruptcy Court or prohibited by restrictions or limitations under the Bankruptcy Code on the activities and operations of Chapter 11 debtors, "CareFirst" or with the prior written consent of Purchaser, prior to the Closing Seller shall, and shall be deemed to include the CareFirst Subsidiaries):cause its Subsidiaries to: (i) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst will operate and conduct its business only in the ordinary course in accordance with prior practices, shall maintain its assets in their present state of repair (ordinary wear and tear excepted), and shall use its Best Efforts to keep available the services of its employees and preserve the goodwill of its business and relationships with the customers, licensors, suppliers, distributors and brokers with whom it has business relationsbusiness; (ii) except use its commercially reasonable efforts to (A) preserve its present business operations, organization (including management and sales force) and goodwill of Seller and its Subsidiary and (B) preserve the present relationships with Persons having business dealings with Seller and its Subsidiaries (including customers and suppliers); (iii) (A) use commercially reasonable efforts to maintain all of the tangible assets and tangible properties of the Seller and its Subsidiaries in their current condition, ordinary wear and tear excepted and (B) maintain insurance upon all of the assets and properties of the Seller and its Subsidiaries in such amounts and of such kinds comparable to that in effect on the date of this Agreement; and (iv) (A) maintain the books, accounts and records of the Seller and its Subsidiaries in the ordinary course of business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts, and (C) comply with all contractual and other obligations applicable to its operation in the ordinary course of business; (b) Except as approved expressly contemplated by this Agreement, as required by applicable law or regulation, as required by orders of Bankruptcy Court or prohibited by restrictions or limitations under the Transition Team Bankruptcy Code on the activities and operations of Chapter 11 debtors or otherwise consented to by with the prior written consent of Purchaser, CareFirst prior to the Closing Seller shall not, nor shall it permit any of its Subsidiaries to: (Ai) subject any of the Purchased Assets to any Encumbrance; (ii) sell, transfer lease, license, pledge, cancel, abandon, permit to lapse or otherwise dispose of any assets, except for sales, transfers or disposals which would not have Purchased Asset having a CareFirst Material Adverse Effect; (B) enter into any new material contract or commitment relating to its business, with "material contract or commitment" being defined for the purpose of this subsection as customer contracts with a multi-year fee or rate guarantee involving an annual premium or administrative services fee fair market value in excess of $2,500,000 and contracts or commitments which involve CareFirst incurring a liability or obligation (X) in excess 25,000, except sales of $5 million individually, or (Y) in excess of $1 million individually Inventory in the event CareFirst enters into new contracts or commitments which involve CareFirst incurring liabilities or obligations not otherwise approved pursuant to this Section 6.1 in excess ordinary course of $20 million in the aggregate in any calendar yearbusiness; (Ciii) mortgageterminate or extend, pledge waive, modify, rescind or subject make any material amendments to liens any Assumed Contract or other encumbrances waive, release or charges assign any assetsmaterial rights or claims thereunder, except by incurring CareFirst Permitted Liensin each case outside of the ordinary course of business; (Div) purchase directly or commit to purchase indirectly, increase, modify, or accelerate the payment of any capital asset outside compensation of any current or former employee, consultant, independent contractor, partner, or agent of the relevant CareFirst Company capital plan for a price exceeding $5 million individually or $25 million in the aggregate per calendar yearBusiness; (Ev) terminate initiate, settle or amend in compromise any material respect any CareFirst Material Contract action, suit, litigation or any insurance policy, in force on other proceeding involving the date hereofPurchased Assets; (Fvi) amend its charter alter, whether through a complete or bylaws (providedpartial liquidation, howeverdissolution, the foregoing will in no way limit the actions which are required to be taken by CareFirst pursuant to Section 6.8); (G) acquire (whether by merger, consolidation, share exchangerestructuring, acquisition reorganization or in any other manner, the legal structure or ownership of stock, or acquisition of assets) any corporation, partnership, joint venture, or other business (itself or any part thereof), except where the consideration paid by CareFirst in connection with such acquisition (including any debt assumed as joint venture or similar arrangement to which Seller is a result thereof) party that is less than $5 million individually or $25 million in the aggregate in any calendar yeara Purchased Asset hereunder; (Hvii) split, combine or reclassify its outstanding capital stock or declare, set aside or pay voluntarily incur any dividend or distribution payable in cash, stock, property or otherwise, except for payments or distributions by a wholly-owned subsidiary of CareFirst to CareFirst or to another wholly-owned subsidiary of CareFirst; (I) except for the issuance of CareFirst Common Stock to the Tax-Exempt Entities in connection with the Conversion, issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of or otherwise cause to become outstanding any shares of or any options, warrants or rights of any kind to acquire any shares of its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock; (J) incur or become contingently liable with respect to any indebtedness for borrowed money or purchase money indebtedness, other than borrowings under CareFirst's revolving credit facility not to exceed an aggregate principal amount of $30 million; (K) modify its current investment policies or practices in any material respect except to accommodate changes in applicable law; (L) materially change its methods of accounting in effect at December 31, 2000, except as required by changes in GAAP or SAP; (M) enter into any Affiliate Transaction in excess of $250,000; (1) change the compensation of its employeesAssumed Liabilities, except in the ordinary course of business consistent with past practicesbusiness, or change in make or agree to make any material respects capital expenditures or investments with respect to the methodology for calculating incentive payments to its employees; (2) enter into or modify any severance agreement, plan or arrangement with any employee, or increase any severance benefit under any such agreement, plan or arrangement, except with regard to non-executive employees in the ordinary course of business consistent with past practices prior to January 1, 2001; or (3) adopt or materially change any Benefit Plan, excluding any amendments to any Benefit Plans required by lawPurchased Assets; (Oviii) materially expand make or alter its geographical service area change any election for Tax purposes, change an annual accounting period, adopt or sell change any accounting method, file any amended Tax Return, fail to pay any tax on or provide products before the date when it becomes due and payable, enter into any closing agreement, settle any Tax claim or services materially different from those currently sold assessment, surrender any right to claim a refund of Taxes, consent to any extension or provided by waiver of the CareFirst Companieslimitation period applicable to any tax claim or assessment, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax; (Pix) settle issue any capital stock, equity interest, option, warrant, subscription, call, exchange right or compromise other right to purchase equity of any pending Person, or threatened suit, litigation issue any obligations convertible into or similar proceeding that would result exchangeable for equity in a liability to CareFirst in excess of $2 million or that would result in material ongoing restrictions on the conduct of business of CareFirst; (Q) make any material change to its underwriting practices and policies (other than changes required by applicable law)Seller; or (Rx) enter intoagree, whether in writing or agree to enter intootherwise, any agreement to do any of the foregoing; and (iii) CareFirst shall obtain Purchaser's prior written consent to its annual capital plan prior to adoption by CareFirst's Board of Directors if capital expenditures under such plan are to exceed $60 million in the aggregate.

Pre-Closing Operations. From the date hereof until the Closing Date, without the US Parent's prior written consent, which consent shall not be unreasonably withheld with respect to Sections 7.2.2, 7.2.5 AND 7.2.6 below, the Contributors shall cause the Company and its Subsidiaries not to, and the Company and its Subsidiaries shall not take any of the following actions: 7.2.1 conduct its business in any manner or take or omit to take any action that would jeopardize the continuance of its material business relationships or cause any of Contributors' representations and warranties contained in this Agreement to be untrue at any time between the date hereof through and including the Closing Date; 7.2.2 except as expressly provided in this Agreement, enter into, amend, modify, terminate or permit to expire any Material Contracts or any Company Permits, or default (a) CareFirst. CareFirst hereby covenants and agrees or take or omit to take any action that, pending with or without the Closinggiving of notice or passage of time or otherwise, would constitute a default) on any of its obligations under any Material Contracts or any Company Permits; 7.2.3 except as expressly provided in this Agreement, amend its Articles of Incorporation, or change its name or business; 7.2.4 except as expressly provided in this Agreement, enter into, amend, modify, terminate or permit to expire any agreement or transaction with or for the benefit of any of its Affiliates; 7.2.5 except as expressly provided in this Agreement, make any change to the compensation, benefit plans or other material terms of employment of its employees, except for (for purposes i) non-recurring bonuses the gross amount of which shall not exceed 5,000 Euros per individual and 50,000 Euros in the aggregate, provided that the individual threshold of 5,000 Euros may be raised to 15,000 Euros should a proposal be submitted to the US Parent and not expressly rejected by it within the two business days following submission, and (ii) severance payments in an amount not exceeding six months gross salary of the following, "CareFirst" shall be deemed to include the CareFirst Subsidiaries):relevant employee plus any applicable social contributions. (i) except make any investments (whether in cash or other assets) exceeding 50,000 Euros (excluding investments in money market funds and other cash equivalent investments), (ii) make any capital expenditures exceeding 100,000 Euros other than as approved by set forth in SCHEDULE 7.2.6. attached hereto, which sets forth anticipated expenditures until the Transition Team Closing Date, (iii) incur, guarantee or otherwise consented become liable with respect to by Purchaserindebtedness exceeding 50,000 Euros other than bridge short-term loans (use of line of credit) to settle the accounts of the Company or any of its Subsidiaries, CareFirst will operate and conduct its business only consistent with past practices, (iv) extend any loans or other credits in excess of 50,000 Euros, or (v) sell, transfer, lease or otherwise dispose of assets in any transaction or series of related transactions, other than in the ordinary course in accordance with prior practices, shall maintain its assets in their present state of repair (ordinary wear and tear excepted), and shall use its Best Efforts to keep available the services of its employees and preserve the goodwill of its business and relationships with the customers, licensors, suppliers, distributors and brokers with whom it has business relations; (ii) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst shall not: (A) sell, transfer or otherwise dispose of any assets, except for sales, transfers or disposals which would not have a CareFirst Material Adverse Effect; (B) enter into any new material contract or commitment relating to its business, with "material contract or commitment" being defined for the purpose of this subsection as customer contracts with a multi-year fee or rate guarantee involving an annual premium or administrative services fee fair market value in excess of $2,500,000 and contracts 100,000 Euros, in each of the above (i) through (v) cases, whether individually or commitments which involve CareFirst incurring a liability or obligation (X) in excess of $5 million individually, or (Y) in excess of $1 million individually in the event CareFirst enters into new contracts or commitments which involve CareFirst incurring liabilities or obligations not otherwise approved pursuant to this Section 6.1 in excess of $20 million in the aggregate in any calendar yearaggregate; (C) mortgage, pledge or subject to liens or other encumbrances or charges any assets, except by incurring CareFirst Permitted Liens; (D) purchase or commit to purchase any capital asset outside of the relevant CareFirst Company capital plan for a price exceeding $5 million individually or $25 million in the aggregate per calendar year; (E) terminate or amend in any material respect any CareFirst Material Contract or any insurance policy, in force on the date hereof; (F) amend its charter or bylaws (provided, however, the foregoing will in no way limit the actions which are required to be taken by CareFirst pursuant to Section 6.8); (G) acquire (whether by merger, consolidation, share exchange, acquisition of stock, or acquisition of assets) any corporation, partnership, joint venture, or other business (or any part thereof), except where the consideration paid by CareFirst in connection with such acquisition (including any debt assumed as a result thereof) is less than $5 million individually or $25 million in the aggregate in any calendar year; (H) split, combine or reclassify its outstanding capital stock or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for payments or distributions by a wholly-owned subsidiary of CareFirst to CareFirst or to another wholly-owned subsidiary of CareFirst; (I) except for the issuance of CareFirst Common Stock to the Tax-Exempt Entities in connection with the Conversion, 7.2.7 issue, sell, pledge redeem or dispose of, or agree to issue, sell, pledge or dispose of or otherwise cause to become outstanding any shares of or any options, warrants or rights of any kind to acquire any shares of the Company or its capital stock Subsidiaries, or other rights or options to acquire the foregoing; 7.2.8 declare or pay dividends or other distributions (in cash or other property) on, or redeem, purchase or otherwise acquire any shares of the Company; 7.2.9 dispose of or permit to lapse any rights to the use of any class or any debt or equity securities convertible into or exchangeable for such capital stockIntellectual Property Rights; (J) incur 7.2.10 discharge any liability of the Company or become contingently liable with respect to its Subsidiaries except in the ordinary course of business, or prepay any indebtedness for borrowed money liabilities of the Company or purchase money indebtedness, other than borrowings under CareFirst's revolving credit facility not to exceed an aggregate principal amount of $30 million; (K) modify its current investment policies or practices in any material respect except to accommodate changes in applicable law; (L) materially change its methods of accounting in effect at December 31, 2000, except as required by changes in GAAP or SAP; (M) enter into any Affiliate Transaction in excess of $250,000; (1) change the compensation of its employeesSubsidiaries, except in the ordinary course of business consistent with past practices, or change in any material respects the methodology for calculating incentive payments to its employees; (2) enter into or modify any severance agreement, plan or arrangement with any employee, or increase any severance benefit under any such agreement, plan or arrangement, except with regard to non-executive employees in the ordinary course of business consistent with past practices prior to January 1, 2001; or (3) adopt or materially change any Benefit Plan, excluding any amendments to any Benefit Plans required by law; (O) materially expand or alter its geographical service area or sell or provide products or services materially different from those currently sold or provided by the CareFirst Companies; (P) settle or compromise any pending or threatened suit, litigation or similar proceeding that would result in a liability to CareFirst in excess of $2 million or that would result in material ongoing restrictions on the conduct of business of CareFirst; (Q) make any material change to its underwriting practices and policies (other than changes required by applicable law)business; or (R) enter into, or 7.2.11 agree to enter into, or make any agreement commitment to do take any of the foregoing; and (iii) CareFirst shall obtain Purchaser's prior written consent to its annual capital plan prior to adoption actions prohibited by CareFirst's Board of Directors if capital expenditures under such plan are to exceed $60 million in the aggregatethis SECTION 7.2.

Pre-Closing Operations. (a) CareFirst. CareFirst hereby covenants and agrees that, pending the Closing, (for purposes of the following, "CareFirst" shall be deemed to include the CareFirst Subsidiaries): (i) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst will operate and conduct its business only in the ordinary course in accordance with prior practices, shall maintain its assets in their present state of repair (ordinary wear and tear excepted), and shall use its Best Efforts to keep available the services of its employees and preserve the goodwill of its business and relationships with the customers, licensors, suppliers, distributors and brokers with whom it has business relations; (ii) except as approved by the Transition Team or otherwise consented to by Purchaser, CareFirst shall not: (A) sell, transfer or otherwise dispose of any assets, except for sales, transfers or disposals which would not have a CareFirst Material Adverse Effect; (B) enter into any new material contract or commitment relating to its business, with "material contract or commitment" being defined for the purpose of this subsection as customer contracts with a multi-year fee or rate guarantee involving an annual premium or administrative services fee in excess of $2,500,000 and contracts or commitments which involve CareFirst incurring a liability or obligation (X) in excess of $5 million individually, or (Y) in excess of $1 million individually in the event CareFirst enters into new contracts or commitments which involve CareFirst incurring liabilities or obligations not otherwise approved pursuant to this Section 6.1 in excess of $20 million in the aggregate in any calendar year; (C) mortgage, pledge or subject to liens or other encumbrances or charges any assets, except by incurring CareFirst Permitted Liens; (D) purchase or commit to purchase any capital asset outside of the relevant CareFirst Company capital plan for a price exceeding $5 million individually or $25 million in the aggregate per calendar year; (E) terminate or amend in any material respect any CareFirst Material Contract or any insurance policy, in force on the date hereofof the Original Agreement; (F) amend its charter or bylaws (provided, however, the foregoing will in no way limit the actions which are required to be taken by CareFirst pursuant to Section 6.8); (G) acquire (whether by merger, consolidation, share exchange, acquisition of stock, or acquisition of assets) any corporation, partnership, joint venture, or other business (or any part thereof), except where the consideration paid by CareFirst in connection with such acquisition (including any debt assumed as a result thereof) is less than $5 million individually or $25 million in the aggregate in any calendar year; (H) split, combine or reclassify its outstanding capital stock or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for payments or distributions by a wholly-owned subsidiary of CareFirst to CareFirst or to another wholly-owned subsidiary of CareFirst; (I) except for the issuance of CareFirst Common Stock to the Tax-Exempt Entities in connection with the Conversion, issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of or otherwise cause to become outstanding any shares of or any options, warrants or rights of any kind to acquire any shares of its capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock; (J) incur or become contingently liable with respect to any indebtedness for borrowed money or purchase money indebtedness, other than borrowings under CareFirst's revolving credit facility not to exceed an aggregate principal amount of $30 million; (K) modify its current investment policies or practices in any material respect except to accommodate changes in applicable law; (L) materially change its methods of accounting in effect at December 31, 2000, except as required by changes in GAAP or SAP; (M) enter into any Affiliate Transaction in excess of $250,000; (1) change the compensation of its employees, except in the ordinary course of business consistent with past practices, or change in any material respects respect the methodology for calculating incentive payments to its employees; (2) enter into or modify any severance agreement, plan or arrangement with any employee, or increase any severance benefit under any such agreement, plan or arrangement, except with regard to non-executive employees in the ordinary course of business consistent with past practices prior to January 1, 2001; or (3) adopt or materially change any Benefit Plan, excluding any amendments to any Benefit Plans required by law; (O) materially expand or alter its geographical service area or sell or provide products or services materially different from those currently sold or provided by the CareFirst Companies; (P) settle or compromise any pending or threatened suit, litigation or similar proceeding that would result in a liability to CareFirst in excess of $2 million or that would result in material ongoing restrictions on the conduct of business of CareFirst; (Q) make any material change to its underwriting practices and policies (other than changes required by applicable law); or (R) enter into, or agree to enter into, any agreement to do any of the foregoing; and (iii) CareFirst shall obtain Purchaser's prior written consent to its annual capital plan prior to adoption by CareFirst's Board of Directors if capital expenditures under such plan are to exceed $60 million in the aggregate.