Health Net 2009 Annual Report Download - page 167

7. Amendment of Section 1.4(i). Sections 1.4(i) shall be amended and replaced in its entirety with the following:
(i) Statutory Minimum Payments. If, at any time between the Closing Date and the earlier of the Transition Date and the
ASA Termination Date, the capital and surplus of any Acquired Company is less than the statutory minimum required under any
applicable Laws or an applicable Governmental Entity notifies an Acquired Company in writing that it has determined that such
Acquired Company has a capital and surplus deficiency (such deficiency, a “Capital and Surplus Deficiency”), Buyer shall
provide written notice of such Capital and Surplus Deficiency to Parent. Promptly after Parent’s receipt of any written notice of
a Capital and Surplus Deficiency from Buyer, but in no event later than the earliest of the dates that are (i) twenty (20) Business
Days after the date of such notice, (ii) five (5) Business Days prior to the end of the applicable quarter or (iii) five (5) Business
Days prior to the date upon which such Capital and Surplus Deficiency must be cured under applicable Law (as applicable, the
“Contribution Date”), Parent shall deliver to Buyer an amount (the “Capital and Surplus Contribution Amount”) equal to (A) the
amount of such Capital and Surplus Deficiency, minus (B) the Buyer Contribution Amount (as defined below). By the
Contribution Date, Buyer shall also contribute to the applicable Acquired Company an amount (not to exceed the Capital and
Surplus Deficiency) equal to the aggregate amount of cash or other assets withdrawn from the applicable Acquired Company by
Buyer or its Affiliates in excess of the Adjusted Tangible Net Equity Payments made by Buyer at such date (the “Buyer
Contribution Amount”). In the event that Parent does not deliver such Capital and Surplus Contribution Amount to Buyer within
such time period, Buyer may, at its sole option, advance such Capital and Surplus Contribution Amount to the applicable
Acquired Company and provide written notice of such advance to Parent, and Parent shall be liable to Buyer for the full Capital
and Surplus Contribution Amount actually funded by Buyer.
8. Amendment of Section 1.5. The first paragraph of Section 1.5 shall be amended and replaced with the following:
Section 1.5 Dispute of Payment Amounts. Except with respect to disputes governed under Section 1.4(g), this Section 1.5
shall govern the resolution of any disputes between the parties with respect to (i) the preparation of the Initial Membership
Statement, any Membership Renewal Statement, the 2010 Medicare Actual Income Statement, the Medicaid Statement of
Revenues, the Closing Date Combined Balance Sheet, any Quarterly Combined Financial Statement, the Actual Final Combined
Financial Statement, or the Termination Date Combined Financial Statement delivered pursuant to Section 1.4 and (ii) the
calculations of the Membership Renewal Amount, the 2010 Actual Medicare Profit/Loss Amount, the 2010 Actual Medicare
Revenue-Based Payment Amount, the Medicaid Revenue-Based Payment Amount, the Closing Adjusted Tangible Net Equity,
the Second Anniversary Adjusted Tangible Net Equity Payment, the Quarterly Net Payments, the Actual Final Net Payment and
the Termination Date Net Payment pursuant to Section 1.4 (each item under (i) or (ii), a “Calculation Statement”).
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