STRATEGIC RELATIONSHIP AGREEMENT
This STRATEGIC RELATIONSHIP AGREEMENT ("Agreement") is made and entered
into this 7th day of April, 2003, by and between Health Net, Inc., a Delaware
corporation ("Health Net") and SafeGuard Health Enterprises, Inc., a Delaware
corporation ("SafeGuard").
RECITALS
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WHEREAS, Health Net, through its Subsidiaries, is authorized to offer the
Health Net Products (as defined herein) for sale in the Territory (as defined
herein);
WHEREAS, SafeGuard desires to make the Health Net Products available for
sale by the SafeGuard Marketing Force (as defined herein) in the Territory;
WHEREAS, Health Net is willing to make the Health Net Products available
for sale in the Territory by the SafeGuard Marketing Force;
WHEREAS, SafeGuard through its Subsidiaries is authorized to offer the
SafeGuard Dental Products (as defined herein) for sale in the Territory;
WHEREAS, SafeGuard is willing to make the Health Net Branded Products (as
defined herein) available for sale by the Health Net Marketing Force (as defined
herein) in the Territory; and
WHEREAS, pursuant to the Purchase and Sale Agreement by and between Health
Net and SafeGuard dated April 7, 2003, Health Net and SafeGuard agreed to enter
into a strategic relationship agreement at the Closing to promote and facilitate
the sale of Health Net Branded Products through the Health Net Marketing Force
and the sale of Health Net Products through the SafeGuard Marketing Force.
NOW THEREFORE, in consideration of the mutual agreements contained herein,
the sufficiency of which is hereby acknowledged, and in consideration of the
performance by the parties of their obligations under this Agreement, the
parties agree as follows:
ARTICLE I
DEFINITIONS
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Capitalized terms used in this Agreement and not otherwise defined shall
have the meanings given such terms in the Purchase and Sale Agreement. For
purposes of this Agreement, the following terms shall have the meanings
specified below (definitions are applicable to both the singular and the plural
form of each term defined herein).
"Ancillary SafeGuard Products" means dental HMO products, dental PPO and
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dental indemnity products developed by SafeGuard with benefit designs and rate
structures that differentiate such products from the SafeGuard Dental Products
offered generally by SafeGuard
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in the Territory and which shall be sold exclusively by the Health Net Marketing
Force only to Health Net Clients.
"Benchmark Products" means those SafeGuard Dental Products that are
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determined by the parties to be materially similar to the Health Net Branded
Products as of the Effective Date.
"Branding" shall have the meaning set forth in Section 2.7.
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"Change of Control" means the acquisition, in a single transaction or in a
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series of related transactions, by a person, an entity or a group of persons or
entities acting in concert of fifty-one percent (51%) or more of the voting
securities of a party, or fifty-one percent (51%) or more of the aggregate value
of the assets of a party.
"Contractholder" means an employer or individual in the Territory who or
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which executes an enrollment agreement with respect to any Product subject to
this Agreement.
"Dispute" shall have the meaning set forth in Section 9.1.
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"Eligible Employee" means an employee who is eligible to enroll in a group
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Product issued to a Contractholder.
"Effective Date" means the Closing Date of the Purchase and Sale Agreement
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by and between Health Net and SafeGuard dated as of April 7, 2003.
"Health Net Branded Products" means SafeGuard dental HMO Products,
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SafeGuard dental PPO Products or SafeGuard dental indemnity Products selected by
Health Net to market through the Health Net Marketing Force in the Territory
after the Effective Date with the Branding of Health Net and issued,
underwritten and administered by either SafeGuard Health Plans, Inc. or
SafeHealth Insurance Company.
"Health Net Clients" shall have the meaning set forth in Section 2.1.
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"Health Net Dental Products" means the dental HMO Products offered in the
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Territory as of the Effective Date by Health Net Dental, Inc., the dental PPO
Product offered in Oregon by Health Net Health Plan of Oregon, Inc., the dental
indemnity Product offered in Arizona by Health Net of Arizona, Inc. and the
dental PPO and dental indemnity Products offered in the Territory as of the
Effective Date by Health Net Life Insurance Company.
"Health Net Indemnities" shall have the meaning set forth in Section 8.1.
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"Health Net Marketing Force" means (i) employees of Health Net or its
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Subsidiaries who are licensed in one or more states within the Territory to sell
Products in any state within the Territory; (ii) any agents under contract with
any Health Net Subsidiary who or which are licensed in one or more states within
the Territory and authorized to sell Products on behalf of any Health Net
Subsidiary in any of the states within the Territory; and (iii) any independent
brokers who or which are licensed in one or more states within the Territory to