Health Net 2009 Annual Report Download - page 530

Section 3.8. Force Majeure. Neither Party shall have any liability for any failure to perform this Administrative Services
Agreement if such failure arises out of unforeseeable causes beyond such Party’s control. Such unforeseeable causes may include acts
of civil or military authority, war, terrorism, accidents, explosions, sabotage, riots, strikes, lockouts or other labor disturbances, or acts
of God, including fires, floods, storms, earthquakes, and natural disasters, or national emergency. A force majeure event shall not
include the non-performance or failure of any vendor or subcontractor (unless such non-performance or failure results from an
unforeseen cause of the kind described in the preceding sentence). If a Party is unable to perform any provision of this Administrative
Services Agreement (including, with respect to the Administrator, the provision of Administrative Services) for any of the reasons
described in this Section 3.8, such provision (including, if applicable, the provision of Administrative Services) shall be suspended for
the duration, and to the extent of, such force majeure event. The Party experiencing the force majeure event agrees to give the other
Party notice promptly following the occurrence of a force majeure event, and to use diligent efforts to re-commence performance as
promptly as commercially practicable. Notwithstanding the foregoing, nothing in this Section 3.8 shall be construed as relieving the
Administrator of its obligation to implement applicable disaster recovery plans upon the occurrence of a force majeure event and to
comply with the provisions of Section 3.6.
ARTICLE IV.
COLLECTION SERVICES
From and after the Effective Date, the Administrator shall assume all rights and responsibilities for the billing, receipt and
processing of all Premiums, recoverables, deposits and other amounts with respect to the Administered Contracts, including
administering, drawing down and collecting any letters of credit, funds held in or under trust agreements, loss funds, Premium
deposits, deductible deposits, outstanding cash advances and any proceeds thereof provided by third-party reinsurers,
Brokers/Consultants, Contract Holders or Customers to cover losses and/or reinsurance or other recoverables; provided, that United
will provide the Administrator retroactive membership information following the transfer of Company Employer Groups to Legacy
United Entities’ Plans to allow the Administrator to apply any membership changes to the Administrator’s systems and adjust
Premiums accordingly. The Administrator may initiate litigation relating to collections under this Article IV subject to Section 7.5.
ARTICLE V.
RENEWAL CONTRACTS AND TRANSITION
The Company and its Affiliates intend to transfer the membership (as contemplated by Section 10.8 below) of the Company to
Legacy United Entities’ Plans at or before the first renewal of any Insurance/HMO Contract or ASO Contract following the Effective
Date. However, the Company may choose or may be required by applicable Law to renew Insurance/HMO Contracts or ASO
Contracts until the date on which the Company is no longer obligated by applicable Law or the terms of any such ASO Contract to
offer such renewal. The Company will not write new business or renew any Administered Contracts beyond such date without the
Administrator’s prior written consent, except (i) for new or renewal contracts arising from quotations outstanding as of the Effective
Date; provided that the effective date for such new or renewal contracts is not later than ninety (90) days after the Effective Date or
such later date as applicable if such quotations are irrevocable, and provided further that the Administrator shall have the right to
rescind, on behalf of the Company, any quotes outstanding after the Effective Date in accordance with applicable Law; (ii) with
respect to those Insurance/HMO Contracts that are guaranteed renewable such that they cannot, by their terms or under applicable
Law, be terminated at such time by notice from, or by other unilateral action initiated or taken by, the Company; or (iii) for Medicare
and Medicaid business (for which the Company and its Affiliates shall not write new business or renew any Administered Contracts
except as contemplated pursuant to the Stock Purchase Agreement) (any new contract or contract so renewed due to the requirements
of applicable Law or in compliance with this sentence, a “Renewal Contract”). The Administrator shall be responsible for providing
the Administrative Services for the Renewal Contracts. The Administrator shall, upon consultation with the Company, determine the
applicable fees or rates and term of any such required renewal, and unless otherwise agreed by the Parties, any such required renewal
by the Administrator on behalf of the Company shall be renewed for a term that is limited to the minimum requirements of such
guarantees or applicable Law.
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