Health Net 2011 Annual Report Download - page 197

(ii) If the Closing Pass Through Net Assets amount is a positive number, the Purchase Price shall be increased, on a
dollar-for-dollar basis, by an amount equal to the Closing Pass Through Net Assets amount. If the Closing Pass Through Net
Assets amount is a negative number, the Purchase Price shall be reduced, on a dollar-for-dollar basis, by an amount equal to the
absolute value of the Closing Pass Through Net Assets amount. If the Closing Pass Through Net Assets amount is equal to zero,
there shall be no adjustment to the Purchase Price under this clause (ii); and
(iii) The Purchase Price shall be increased, on a dollar-for-dollar basis, by an amount equal to the Closing Pre-Paid
Broker and ANOC Amount.
Schedule 4.3(d) sets forth various illustrative examples of the Parties’ intent with respect to the proper application of this Section 4.3
(d).
(e) If the combined, net amount of the adjustments to the Purchase Price under clauses (i), (ii) and (iii) of Section 4.3(d)
results in an increase in the Purchase Price, Purchaser shall pay to Seller, as an addition to the Purchase Price, an amount equal to
such increase; and (ii) if the combined, net amount of such adjustments results in an reduction in the Purchase Price, Seller shall pay
to Purchaser, as a reduction in the Purchase Price, an amount equal to such reduction. Any payment required under this Section 4.3(e)
shall be made by wire transfer of immediately available funds to an account designated by the receiving Party within five (5) Business
Days after the final determination of the Closing GM Net Assets, the Closing Pass Through Net Assets, the Pre-Closing PDP Pre-Tax
Income and the Closing Pre-Paid Broker and ANOC Amount.
4.4 Allocation of Purchase Price.
(a) The consideration (within the meaning of Section 1060 of the Code) paid by Purchaser hereunder shall be allocated in
accordance with the schedule set forth on Schedule 4.4, which the parties agree and acknowledge has been prepared on the basis of
principles that include the following: (i) the transaction set forth in this Agreement is an acquisition of a trade or business within the
meaning of Section 1060 of the Code, (ii) Class V assets (receivables, PPE and other Assets that are not Class VI and Class VII
assets) shall be valued based on their net book value as of the Closing Date, (iii) insurance in force, a Class VI intangible asset, shall
have a value of $1,000,000, and (iv) all other Class VI and Class VII assets shall have a value equal to the residual amount of the
consideration. If the Purchase Price is adjusted pursuant to Sections 4.2 and/or 4.3 or an indemnification payment is made pursuant to
Article XII, Schedule 4.4 shall be revised to reflect such adjustment or payment in accordance with the nature of each such
adjustment or payment. Furthermore, Schedule 4.4 will be adjusted to reflect the Assets and Assumed Liabilities as of the Closing
Date consistent with the methodology used to prepare Schedule 4.4. All adjustments pursuant to this Section 4.4(a) will be made in
good faith by written agreement of the Parties
(b) Purchaser and Seller will each report the federal, state and local income and other tax consequences of the purchase and
sale contemplated hereby in a manner consistent with the allocation of the Purchase Price and Assumed Liabilities among the Assets
set forth in Schedule 4.4 (the “Allocation”), including, if applicable, the preparation and filing of Forms
19