Health Net 2011 Annual Report Download - page 208

shall carry on the PDP Business in the ordinary course and substantially in the same manner as heretofore carried on by it. In
connection therewith, and subject to applicable Law and except as otherwise required pursuant to this Agreement, from the date
hereof until the Closing, Seller shall:
(a) Use commercially reasonable efforts to preserve the Assets and the PDP Business intact;
(b) Comply in all material respects with all Laws applicable to the PDP Business;
(c) Make no material amendments to the Medicare PDP Contract or CSC Contract or make any material change in the
customary terms and conditions upon which it does business with respect to the PDP Business, except for amendments to become
effective January 1, 2012 in accordance with Seller’s bid for the 2012 PDP Contract year which amendments have been disclosed to
the Purchaser;
(d) Duly and timely file, or obtain appropriate extensions of the time for filing, all material Tax Returns, insurance
regulatory reports, and other documents required to be filed with any Governmental Authority related to the Assets or the PDP
Business;
(e) Unless it is contesting the same in good faith and has established reasonable reserves therefor, pay when required to be
paid all Taxes indicated by such Tax Returns or otherwise lawfully levied or assessed upon it, or any of its properties or assets, or
which it is otherwise legally obligated to pay and withhold or collect, in each case to the extent such Taxes relate to the Assets or the
PDP Business, and pay to the proper governmental authorities or hold in separate bank accounts for such payment all Taxes and other
assessments which it believes in good faith to be required by Law to be so withheld or collected in connection with the PDP Business;
and
(f) With respect to matters primarily related to the Assets or the PDP Business, or that would be reasonably expected to
subject the Assets or the PDP Business to any liability or obligation, other than as required by applicable Law, Seller will not (i) adopt
or propose any change in the Seller’s Certificate of Incorporation or By-Laws, (ii) incur any indebtedness for borrowed money that is
not repaid prior to the Closing Date other than trade payables incurred in the ordinary course of business, (iii) acquire any assets or
assume any liability from any other Person, except pursuant to contracts or commitments in effect as of the date of this Agreement
and identified on the Schedules relating to Article VI or otherwise in the ordinary course consistent with past practice, (iv) sell, lease,
license or otherwise dispose of any assets or property except pursuant to contracts or commitments in effect as of the date of this
Agreement and identified on the Schedules relating to Article VI or otherwise in the ordinary course consistent with past practice,
(v) make any material change in financial accounting methods, principles or practices of the Seller or the PDP Business, other than as
required by Law or by GAAP, (vi) pledge, encumber or otherwise subject any Assets to a Lien other than mechanics or tradesmans
liens in the ordinary course of business, (vii) settle or compromise any litigation or other disputes (whether or not commenced prior to
the date of this Agreement) involving injunctive relief relating to the PDP Business or (viii) authorize or commit to do any of the
foregoing.
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