Health Net 2009 Annual Report Download - page 540

(d) The Company acknowledges and agrees that the agreements between the Company and Health Net Pharmaceutical
Services, Inc. and MHN Services, Inc. with respect to pharmacy benefit management services (including mail order, retail network,
claims processing, specialty pharmacy and other administrative services) (collectively “PBM Services”) and behavioral health
services respectively, are expected to remain in effect as of the Effective Date with such amendments as are necessary to effectuate
the purposes of this Administrative Services Agreement and the Stock Purchase Agreement. The Administrator shall administer
such agreements substantially in the same manner as such contracts were administered prior to the Effective Date. The
Administrator represents that all agreements for PBM Services that are in effect as of the Effective Date, or that are entered into by
the Administrator on behalf of the Company after the Effective Date, contain competitive information that is confidential to the
vendor, manufacturer, and other third parties (each a “Third Party”) and to the Administrator’s Affiliates. The Administrator
represents that disclosure of pricing or other confidential or competitive information directly to the Company or its Affiliates could
result in termination of such agreements or allegations of breach by any such Third Party, or otherwise result in a loss of
competitive pricing and terms for the Company. The Administrator and the Company agree to cooperate to obtain permission from
such Third Parties to provide limited personnel of the Company with access to a redacted version of any such agreements for PBM
Services, solely on a need-to-know basis; provided, however, that the failure to obtain the permission of any such Third Party shall
not excuse the performance of the Company’s obligations under this Administrative Services Agreement or otherwise constitute a
breach by the Administrator of its obligations hereunder. The Company may confirm that it is receiving the benefit of the PBM
Services by engaging an independent auditor reasonably acceptable to the Administrator, to perform a confidential review of such
agreements of which the Company is not a party. Prior to performing the confidential review, the independent auditor shall enter
into a confidentiality agreement, reasonably acceptable to the Administrator and the applicable Third Party. For any agreement
with a Third Party for PBM Services that is required to be filed with or approved by a Governmental Entity, the Administrator shall
file, and cooperate with the Company in obtaining any required Governmental Entity approvals of, such agreements and any
related amendments; provided that such filing shall not relieve the Parties of their obligations or representations set forth in
this Section 9.1(d).
Section 9.2. Filings. Subject to Section 2.3, if required by applicable Law, the Company shall prepare any filings required to be
made with any Governmental Entity that relate to the Administered Contracts, including filings with guaranty associations and filings
of Premium Tax Returns with taxing authorities. Pursuant to Article X, if the Company is required to make any such filings, the
Administrator shall provide promptly to the Company all information with respect to the Administered Contracts that Administrator
possesses that may be reasonably required for the Company or for the Administrator on behalf of the Company to prepare such filings
and Tax Returns.
Section 9.3. [Joint Medicare PDP Contract. The Company acknowledges and agrees that the Joint Medicare PDP Contract is
expected to remain in effect as of the Effective Date with such amendments as may be necessary to effectuate the purposes of this
Administrative Services Agreement. From the Effective Date through December 31, 2010, the Administrator shall administer the
Joint Medicare PDP Contract substantially in the same manner as such contract was administered with respect to the Medicare Part D
plan members in New York sponsored by the Company prior to the Effective Date (the “NY Medicare PDP Members”) and as
otherwise required hereunder. Only to the extent that certain Joint Enterprise Agreement by and between HN Life, Health Net
Insurance of Connecticut and Health Net Insurance of New York, Inc., dated March 31, 2005, as amended, is not terminated, United
shall, or shall cause the Company to, prepare and submit to CMS the application for the 2011 fiscal year and any fiscal years
thereafter with respect to the NY Medicare PDP Members, including any requests required to separate out the NY Medicare PDP
Members from the Joint Medicare PDP Contract; provided, however, in the event the Closing has not occurred as of the deadline for
submitting such application, Parent shall cause the Company and HN Life, respectively, to prepare and submit to CMS separate
applications with respect to the NY Medicare PDP Members and all other Medicare Part D plan members sponsored by HN Life. For
the avoidance of doubt, (a) as long as the Closing occurs before the deadline for submitting the application for the NY Medicare PDP
Members, neither Parent nor the Administrator shall have any obligation to assist the Company or United with, or to prepare or
submit, such application, and (b) Parent and its Affiliates retain the right to prepare and submit to CMS an application for the 2011
fiscal year and any fiscal years thereafter with respect to all Medicare Part D plan members sponsored, or to be sponsored, by HN
Life or any of Parent’s other Affiliates.]
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This provision is found only in the Administrative Services Agreement of Health Net Insurance of New York, Inc.
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