Health Net 2009 Annual Report Download - page 534

Section 7.2. Legal Proceedings.
(a) From and after the Effective Date, but subject to Section 2.3, the Administrator shall:
(b) The Company shall have the right to timely review and approve all material court filings in any Legal Proceeding
related to a material issue; provided that such review and approval process does not prejudice the Administrator’s ability to defend the
Legal Proceeding.
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(i) notify the Company promptly of any lawsuit, arbitration or other dispute resolution proceedings (“Legal
Proceeding(s)”) to the extent known to the Administrator that are instituted with respect to any matter relating
to the Business other than any grievances or appeals with respect to Provider or Contract Holder disputes that
are reviewed and decided solely by the Company or that do not constitute a material issue, within such time as
to permit timely response by the Company and in no event more than five (5) Business Days after receipt of
notice thereof, and promptly furnish to the Company copies of all pleadings received in connection with any
such Legal Proceeding (other than grievances or appeals with respect to Provider or Contract Holder disputes
that are reviewed and decided solely by the Company or that do not constitute a material issue); provided,
however, that promptly following receipt of notice of any Legal Proceeding, in a collaborative effort to reduce
administrative costs, the Administrator shall provide pleadings to the Company with respect to such Legal
Proceeding unless the Company provides notice to the Administrator that the Company does not wish to
continue to receive pleadings with respect to such Legal Proceeding;
(ii) supervise, assume and control the investigation, contest, defense and/or settlement of all Legal Proceedings
with respect to the Business and in the name of the Company; provided, however, that Company shall have the
right to choose to participate in or control the investigation, contest, defense and/or settlement of any Legal
Proceeding at any time; provided, further, that the Administrator shall obtain the Company’s consent for any
settlement of a Legal Proceeding related to a material issue (other than a Legal Proceeding related to a material
issue falling solely under clause (b) of the definition of “material issue”; provided that Administrator shall
provide the Company notice prior to the settlement of such Legal Proceeding), which consent the Company
shall exercise in its sole discretion; and
(iii) promptly respond to any request by the Company for information on the progress of any Legal Proceedings
handled by the Administrator in which the Company is named a party and, at the Company’s request, provide
to the Company a report summarizing the nature of such Legal Proceedings, and copies of any files or other
documents that the Company may reasonably request in connection with its review of these matters.