AMENDED AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT
This Amended and Restated Strategic Relationship Agreement ("Agreement") is
made and entered into this 31st day of October, 2003, by and among Health Net,
Inc., a Delaware corporation ("HNI"), Health Net Life Insurance Company, a
California domiciled life and disability insurance company ("HNL") (HNI and HNL
are jointly referred to herein as "Health Net"), SafeGuard Health Enterprises,
Inc., a Delaware corporation ("SFGD"), SafeHealth Life Insurance Company, a
California domiciled life and health insurance company, SafeGuard Health Plans,
Inc., a California specialized Knox-Keene Health Care Service Plan, Health Net
Dental, Inc., a California specialized Knox-Keene Health Care Service Plan
("HND") and Health Net Vision, Inc. ("HNV") (SafeGuard Health Enterprises, Inc.,
SafeGuard Health Plans, Inc., SafeHealth Life Insurance Company, HNV and HND are
jointly referred to herein as "SafeGuard").
RECITALS
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WHEREAS, pursuant to the terms and subject to the conditions set forth in
the Purchase and Sale Agreement by and between HNI and SFGD dated April 7, 2003,
inter alia, SFGD agreed to purchase from HNI and HNI agreed to sell to SFGD, all
the issued and outstanding stock of HND (the "Purchase and Sale Agreement").
WHEREAS, pursuant to the terms of the Purchase and Sale Agreement, HNI and
SFGD 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.
WHEREAS, HNI and SFGD are parties to a Strategic Relationship Agreement
dated as of April 7, 2003 (the "Strategic Relationship Agreement").
WHEREAS, HNI and SFGD wish to amend and completely restate the Strategic
Relationship Agreement and to supersede in its entirety the Strategic
Relationship Agreement with this Amended and Restated Strategic Relationship
Agreement.
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).
"Aggregate Payment Amount" shall have the meaning set forth in Section 6.3.
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1
"Ancillary SafeGuard Products" means dental HMO products, dental PPO and
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dental indemnity products developed jointly by SafeGuard and Health Net with
benefit designs and rate structures that differentiate such products from the
SafeGuard Dental Products offered generally by SafeGuard 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 and set forth on Schedule 5.1.
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"Branding" shall have the meaning set forth in Section 2.7.
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"Bundled Product" means a Health Net Medical Product that also provides
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coverage for dental services and dental products in a single policy or contract
form that is issued and underwritten by a single Health Net Affiliate and under
which the dental benefits are administered by HND.
"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.
"Copayment or Coinsurance" means the specific payment that a Subscriber is
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required to make to a provider at the time Covered Dental Services are provided
and which the provider is required to collect.
"Covered Dental Services" means those dental services or supplies to which
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a Subscriber is entitled pursuant to the terms of the Subscriber's Health Net
Branded Product.
"Dental Provider" means a dentist, dental health service provider, or a
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dental product provider who or which is a party to a contract with any SafeGuard
Affiliate to provide dental services or dental products to Subscribers enrolled
in a Health Net Branded Product.
"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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"Existing Dental or Vision Products" shall have the meaning set forth in
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Section 5.8.
"Health Care Costs" means the capitation and claims paid to Dental
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