EXHIBIT 10.51 TO CURRENT REPORT ON FORM 8-K DATED AS OF JUNE 30, 2003
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                            ADMINISTRATION AGREEMENT

     This  Administration Agreement is entered into this 30th day of June, 2003,
by  and  among  Health  Net of Arizona, Inc. ("HNT-AZ"), an Arizona corporation,
Health  Net  Life  Insurance Company, a California domiciled life and disability
insurance  company  ("HNL")  and SafeHealth Life Insurance Company, a California
domiciled  life  and  disability  insurance  company  ("SafeHealth").

     WHEREAS,  HNT-AZ  is  a  duly  licensed  health  care services organization
organized  pursuant  to  Arizona  Revised  Statutes Sec. 20-1051 et seq.  HNT-AZ
issues  benefit  agreements  to individuals, employer groups and other entities.
The  benefit  agreements  include  medical  health  maintenance  organization
agreements  and  vision  health  maintenance  organization  agreements.

     WHEREAS,  HNL  is duly licensed in Arizona to provide vision PPO and vision
indemnity  insurance  benefits  to  Arizona  residents;

     WHEREAS,  SafeHealth  represents  and warrants that it is duly licensed and
qualified  to  provide  the administrative services specified in this Agreement.

     WHEREAS,  pursuant  to  a Purchase and Sale Agreement by and between Health
Net,  Inc. and SafeGuard Health Enterprises, Inc. dated June 30, 2003 ("Purchase
and  Sale  Agreement"),  SafeGuard  Health Enterprises, Inc. agreed, among other
things,  to  provide  for  the  transition  of  the  vision  health  maintenance
organization  business  provided  by  HNT-AZ,  and  the  vision  PPO  and vision
indemnity  insurance  business  provided  in Arizona by HNL through December 31,
2004.

     WHEREAS,  HNT-AZ, HNL and SafeHealth intend by entering into this Agreement
that  SafeHealth  shall  provide  administrative and other services specified in
this  Agreement  on  behalf  of  HNT-AZ  and  HNL in connection with the Benefit
Agreements  described  in  Appendix  B to this Agreement ("Benefit Agreements").

                                     ARTICLE
                                     -------
                               CERTAIN DEFINITIONS
                               -------------------

     Capitalized  terms  used  in this Agreement and not otherwise defined shall
have  the  meanings  given  such  terms  in  the  Purchase  and  Sale Agreement.

                                     ARTICLE
                                     -------
                             RELATIONSHIP OF PARTIES
                             -----------------------

     Section 2.1     Relationship of Parties.  The parties to this Agreement are
                     -----------------------
and  shall  remain  independent  contractors.  Neither  party is the employee or
agent  of  the other party, except as set forth herein, and neither party has an
express  or implied right to bind the other party.  The parties do not intend to
form  a  joint  venture,  partnership,  or to be governed by Law relating to any
relationship other than that of independent contractors.  HNT-AZ and HNL agents,
officers, and employees shall not be considered or construed to be the employees
of  SafeHealth  for  any


                                      -1-
<PAGE>
purpose, and SafeHealth's agents, officers and employees shall not be considered
or  construed  to  be  the  employees  of  HNT-AZ  or  HNL  for  any  purpose.

     Section  2.2     Receipt  of Premium.  Payment to SafeHealth of premiums or
                      -------------------
charges  with respect to the Benefit Agreements by or on behalf of the HNT-AZ or
HNL  insureds  or  subscribers  shall  be considered receipt by HNT-AZ or HNL as
appropriate.  The  payment  of  return  premiums  or claims by HNT-AZ and HNL to
SafeHealth  is  not  considered  payment  to  the insured, or claimant until the
payment  is  received  by the insured or claimant.  Nothing in this Section 2.02
shall limit the rights of either HNT-AZ or HNL against SafeHealth resulting from
SafeHealth's failure to make payments to HNT-AZ or HNL or any of their insureds,
Subscribers  or  claimants.

     Section  2.3     Notice of Changes.  SafeHealth shall inform HNT-AZ and HNL
                      -----------------
in  writing:

     (a)  within  thirty  (30)  calendar  days  of  any  changes in its computer
          systems,  including hardware or software, that could materially affect
          the  ability  of  SafeHealth  to  perform  its  obligations under this
          Agreement;

     (b)  within ten (10) calendar days of a change of 25% or more in the direct
          or  indirect  ownership  of  SafeHealth,  and  of  any  changes in the
          licensing  of  SafeHealth  material  to  the  services  rendered  by
          SafeHealth  under  this  Agreement;  and

     (c)  within  ten  (10)  calendar days of changes in governmental approvals,
          the  filing  with  a  Governmental  Authority  of  a complaint against
          SafeHealth,  or  the  filing  of  a  lawsuit against SafeHealth if the
          governmental  approval,  complaint  or  lawsuit is either (i) directly
          related to the services rendered by SafeHealth under this Agreement or
          to HNT-AZ or HNL Benefit Agreements, or (ii) the amount involved is in
          excess  of  $1,000,000.

     Section  2.4     Limitation  of  Authority.  The authority of SafeHealth is
                      -------------------------
limited  to  the  performance  of  the Administrative Services specified in this
Agreement.  SafeHealth  has  no authority to modify, waive, add to or delete any
provision  of the Benefit Agreements.  SafeHealth shall not represent to a third
party  that it has authority that is not provided in this Agreement.  HNT-AZ and
HNL  shall  at  all times exercise ultimate control over their respective assets
and  operations  and  the  ultimate  authority  regarding  coverage  or  the
interpretation  of  any  Benefit Agreement shall remain at all times with HNT-AZ
and HNL.  Notwithstanding anything to the contrary in this Agreement, HNT-AZ and
HNL  shall  (a)  retain  custody  of,  responsibility  for,  and  control of all
investments;  (b)  own,  have  custody  of,  and  keep  their  general corporate
accounts, books, and records; (c) own all of the accounts, books, and records of
their  business;  (d)  have an ultimate veto right on underwriting; (e) have the
ultimate  right  to cancel any risk; (f) have ultimate responsibility for and at
least  general  control of claims adjustments and claim payments; (g) retain the
right  to cancel this Agreement and discharge SafeHealth in the event SafeHealth
fails  to  perform  satisfactorily  according  to  the  terms of this Agreement.

     Section  2.5     Representations  Regarding Coverage.  SafeHealth shall not
                      -----------------------------------
make any representations to applicants for coverage under the Benefit Agreements
or  to  insureds,


                                      -2-
<PAGE>
Subscribers  or  claimants,  regarding the existence or extent of coverage which
are  inconsistent  with  the  terms  and  conditions of coverages available from
HNT-AZ  or  HNL  under  the applicable Benefit Agreement.  SafeHealth shall make
known  to  any applicant, insured or Subscriber the full scope and effect of all
exclusions  and  limitations  under  the  applicable  Benefit  Agreement.

     Section  2.6     Branding.  None of the parties shall make use of any other
                      --------
party's  trade  marks,  service  marks,  trade  names or logos, including domain
names,  electronic  or  written  content  or  other  materials,  descriptions or
representations  of  any  kind that mentions another party or its Affiliates, or
refers  to any products or services of the other party (collectively referred to
as  "Branding") without obtaining the prior written consent of such other party.
The  parties  shall  use  commercially  reasonable  efforts to provide the other
parties  with such consent to utilize their respective Branding where reasonably
necessary  for  the  other  parties  to  perform their duties and exercise their
rights  under  this  Agreement and any such consent granted to utilize a party's
Branding  shall constitute a non-exclusive, revocable license that is limited to
use  of  the  Branding  of  the party in Arizona consistent with this Agreement.

                                     ARTICLE
                                     -------
                             ADMINISTRATIVE SERVICES
                             -----------------------

     Section  3.1     Services  of  SafeHealth.  SafeHealth shall provide HNT-AZ
                      ------------------------
and HNL the administrative services described in Appendix A (the "Administrative
Services")  and  such  other  services  and responsibilities as may be expressly
agreed  upon  in  writing  by  the  parties.

     Section  3.2     Facilities,  Equipment  and  Personnel.  SafeHealth  shall
                      --------------------------------------
maintain  all  facilities,  equipment and trained personnel necessary to perform
the  Administrative  Services  under  this  Agreement.

     Section 3.3     Performance Standard.  The Administrative Services provided
                     --------------------
to HNT-AZ and HNL by SafeHealth pursuant to this Agreement shall at all times be
consistent  with  the  performance  standards set forth in Schedule 3.03 and all
                                                           -------------
applicable laws, regulations, and regulatory actions and pronouncements.  In the
event  SafeHealth  fails  to  perform  the  Administrative  Services in a manner
consistent  with  the  performance  standards  set  forth  in Schedule 3.03, the
                                                              -------------
Service  Fee  payable  to  SafeHealth shall be reduced by the amounts and in the
manner  set  forth  in  Schedule  3.03.
                        --------------

     Section  3.4     Performance  by  Affiliates.  The parties hereto recognize
                      ---------------------------
and  acknowledge  that the Administrative Services to be performed by SafeHealth
may,  by  their  nature,  require specific legal authority to perform or will be
more  effectively  provided by Affiliates of SafeHealth.  In connection with the
provisions  of  such  Administrative  Services, SafeHealth's Affiliates shall be
subject to the terms and conditions of this Agreement as if such Affiliates were
themselves  parties  hereto.

     Section  3.5     Notice  Regarding Relationship.  To the extent required by
                      ------------------------------
applicable  law,  SafeHealth  shall  provide  written notice to persons named as
insureds  or  Subscribers  under  the  Benefit  Agreements, advising them of the
identity  of  and relationships among SafeHealth, the insured or Subscriber, and
HNT-AZ  or  HNL.  If  SafeHealth  collects funds from the insured or Subscriber,
SafeHealth  shall  provide  the insured or Subscriber with written notice of the


                                      -3-
<PAGE>
premium  charged  by  HNT-AZ or HNL for the Benefit Agreement.  SafeHealth shall
provide  the  notice in accordance with the provisions of the Benefit Agreement,
but  no  less  than  thirty (30) calendar days before the premium charges become
effective.

     Section  3.6     Enrollment Reports.  HNT-AZ and HNL shall prepare periodic
                      -------------------
and  timely  reports showing all Benefit Agreements sold, renewed or terminated,
identifying  individuals  who  are  enrolled in each Benefit Agreement, and such
other  enrollment information required by SafeHealth to perform its duties under
this  Agreement.  Such reports shall be made by HNT-AZ and HNL on a periodic and
timely  basis  within  five  (5) Business Days following the end of the month in
which  the  transactions  or other matters occurred, and shall be transmitted by
electronic  transmission  in a form reasonably acceptable to SafeHealth.  HNT-AZ
and  HNL  shall  each  prepare  periodic  reconciliations  of  the  enrollment
information in their possession.  HNT-AZ and HNL shall take all reasonable steps
to ensure that the electronic documentation will be accurate and that SafeHealth
may  rely  on  such  information  in  determining  eligibility.

                                     ARTICLE
                                     -------
           RECORDS, MAINTENANCE AND AVAILABILITY, INSPECTION AND AUDIT
           -----------------------------------------------------------

     Section 4.1     Maintenance of Records.  SafeHealth shall maintain adequate
                     ----------------------
records  (including  copies  of  all  correspondence)  of  all  activities  and
transactions  relating  to  the  Administrative  Services  performed  under this
Agreement,  and  records  clearly recording the deposits in and withdrawals from
the  disbursement  accounts  on  behalf of HNT-AZ and HNL during the period this
Agreement  remains  in  force  and  for a period of five years thereafter.  Such
records  shall  be  the property of HNT-AZ or HNL as appropriate.  At the end of
five  years,  the records shall at HNT-AZ's and HNL's option and at HNT-AZ's and
HNL's  written  direction,  either be transmitted to HNT-AZ or HNL or destroyed.
If  no  written  instructions are received within sixty (60) calendar days after
notice  to  HNT-AZ  and  HNL  of the end of the five-year period, SafeHealth may
transmit  the  records  to  HNT-AZ  and  HNL  at  HNT-AZ's  and  HNL's  expense.
SafeHealth  may  retain  a copy of any records of activities and transactions on
behalf  of  HNT-AZ  and  HNL  pursuant  to  this  Agreement.

     Section  4.2     Information  Maintenance Procedures.  The records shall be
                      -----------------------------------
maintained  in  accordance  with  prudent  information  and  data  maintenance
procedures approved by HNT-AZ and HNL.  Prudent information and data maintenance
procedures  require,  at  a  minimum,  that  backup  data and records (including
software  and  operating  systems)  be  maintained  off-site in a secure manner.

     Section  4.3     Inspection  of  Records.  All  records  maintained  by
                      -----------------------
SafeHealth  under this Agreement shall be made available upon reasonable written
notice  during  normal  business  hours for inspection by HNT-AZ or HNL or their
authorized  representatives  or  by a legally authorized and properly identified
governmental  authority.  The  records,  or  copies  of  the  records,  shall be
delivered  to  HNT-AZ  or  HNL  upon  request  at  HNT-AZ's  or  HNL's  expense.

     Section  4.4     Access to Records.  SafeHealth shall permit HNT-AZ and HNL
                      -----------------
reasonable  access  during  normal  business  hours to its premises, records and
personnel  for  periodic  inspection  or audit upon reasonable written notice by
HNT-AZ or HNL and at HNT-AZ's or HNL's expense.  Inspection or audit may include
all  aspects  of  this  Agreement,


                                      -4-
<PAGE>
including  relevant  financial  information.  Any  corrective action required by
HNT-AZ  or  HNL  as  a result of an inspection or audit shall be communicated in
writing  to  SafeHealth.  SafeHealth  shall,  within a reasonable period of time
specified by HNT-AZ or HNL, but not more than sixty (60) calendar days, take the
corrective  action.

                                     ARTICLE
                                     -------
                                  COMPENSATION
                                  ------------

     Section  5.1     Service  Fee.  Except  as provided in Section 9.02, HNT-AZ
                      ------------
and  HNL shall pay SafeHealth a fee equal to fifteen (15%) percent of the claims
paid  by SafeHealth under the Benefit Agreements for all Administration Services
relating  to  the  Benefit  Agreements  (the  "Service  Fee").

     Section  5.2     Payment  of Fee.  The Service Fee shall be due and payable
                      ---------------
by  HNT-AZ  and  HNL  to  SafeHealth  ten (10) calendar days after receipt of an
invoice  for  such  Service  Fee  from  SafeHealth.

     Section  5.3     Adjustments.  If  it  is  determined  that  there has been
                      -----------
either  an  overpayment or an underpayment of the Service Fee, the parties shall
either  reimburse  or remit the amount of the over or under payment to the party
entitled  thereto  within  fifteen  (15)  calendar  days of notification of such
overpayment  or  underpayment.

                                     ARTICLE
                                     -------
                               DISPUTE RESOLUTION
                               ------------------

     Section 6.1     Meet and Confer.  The parties shall meet and confer in good
                     ---------------
faith  on  all matters of common interest or disputes between the parties hereto
relating  to,  arising  out  of,  or  in  connection  with any provision of this
Agreement  (hereinafter  a  "Dispute")  which  materially affect this Agreement,
including  but  not  limited to, any amendments or appendices to this Agreement.

     Section  6.2     Arbitration.  In  the event any Dispute cannot be resolved
                      -----------
pursuant  to  Section  6.01,  the  parties  to  this  Agreement  and  their
representatives,  designees,  successors and assigns agree that any such Dispute
shall  be  settled  by  binding  arbitration  to  take  place  in Orange County,
California;  provided,  however,  that nothing herein shall preclude the parties
             --------   -------
from  seeking  equitable  judicial relief pending arbitration, including but not
limited  to  injunctive  or  other  provisional  relief.

     Section  6.3     Selection  of Arbitrator.  Any arbitration hereunder shall
                      ------------------------
be  conducted by a single arbitrator chosen from the panel of arbitrators of the
Judicial Arbitration & Mediation Services ("JAMS") with experience and expertise
in  the vision HMO or vision indemnity insurance business.  If a JAMS arbitrator
with  specific  experience  in  the  vision  HMO  or  vision indemnity insurance
business  is  not  available, the arbitrator must have general experience in the
health  insurance  industry.  Within  ten  (10)  calendar  days  of  notice of a
Dispute,  the  parties  to  the Dispute shall use their best efforts to choose a
mutually agreeable arbitrator.  If the parties to the Dispute cannot agree on an
arbitrator,  the  arbitrator  shall  promptly  be  selected  by  JAMS.


                                      -5-
<PAGE>
     Section  6.4     Procedures.  The party submitting a Dispute to arbitration
                      ----------
hereunder  shall present its case to the arbitrator and the other parties to the
Dispute  in  written form within twenty (20) calendar days after the appointment
of the arbitrator.  The other parties to the Dispute shall then have twenty (20)
calendar  days  to  submit a written response to the arbitrator and the original
party  who  submitted  the Dispute to arbitration.  After timely receipt of each
party's  case, the arbitrator shall have twenty (20) calendar days to render his
or  her  decision.

     Section  6.5     Applicable  Law.  The arbitrator is relieved from judicial
                      ---------------
formalities  and,  in  addition to considering the rules of law, the limitations
contained  in  this  Agreement  and the customs and practices of the health care
industry,  shall make his or her award with a view to effectuating the intent of
this  Agreement.  The decision of the arbitrator shall be final and binding upon
the  parties,  and  judgment  may  be  entered  thereon  in a court of competent
jurisdiction.

     Section  6.6     Expenses.  Each party to an arbitration shall bear its own
                      --------
cost  of  arbitration,  and  the costs of the arbitrator shall be shared equally
among  each  party  to  a  Dispute.

     Section  6.7     Survival  of  Article.  This  Article  VI  shall  survive
                      ---------------------
termination  of  this  Agreement.

                                     ARTICLE
                                     -------
                        CONFIDENTIALITY AND TRADE SECRETS
                        ---------------------------------

     Section  7.1     Confidentiality.
                      ---------------

     (a)  None  of  the  parties  shall disclose any proprietary or confidential
          information  of  any  other party to a third party without the express
          written  consent  of  the owner of such information to this Agreement.
          For  purposes  of  this  Agreement,  "proprietary  and  confidential"
          information  will  include,  without limitation, all internal business
          practices  and  business  records, information concerning products and
          pricing, contracts, computer hardware and software or business methods
          in  any  form whatsoever, peer review, quality assurance and grievance
          procedures,  any  aspect  of utilization review programs, provider fee
          schedules,  reimbursement  schedules  or discounts, and advertising or
          marketing  information,  but  not  including  information  otherwise
          available to the public. None of the parties shall use any proprietary
          and  confidential  information of any other party for its own benefit.
          Upon termination of this Agreement, each party will immediately return
          to  the  owner  any  confidential  information,  except  confidential
          information  necessary for the continued administration of any Benefit
          Agreement.

     (b)  The  parties  shall  maintain  the  confidentiality  of  any  personal
          information,  including  health information, pertaining to Subscribers
          including,  without  limitation,  files,  records,  reports, and other
          information prepared and maintained in connection with this Agreement,
          in  accordance  with  all  applicable  Law.

     (c)  Each  party  shall  obtain any necessary consent or authorization from
          Subscribers  with  respect  to  the  release to any other party of any
          non-public  personal  information,  including  health  information,
          relating  to  such  Subscribers,  by  means


                                      -6-
<PAGE>
          of  general  or  specific  releases,  as appropriate. Each party shall
          notify the other parties if it becomes aware that proper releases have
          not  been  obtained.

     (d)  To  the  extent  that  either  of  the  parties  performs  functions,
          activities,  or services for, or on behalf of, the other party to this
          Agreement  involving  the  use  or  disclosure  of  Protected  Health
          Information,  as  that  term is defined in 45 CFR 164.501, the parties
          shall  comply  with  the  Business  Associate  Addendum  set  forth in
          Schedule  7.01  hereto.
          --------------

                                     ARTICLE
                                     -------
                                 INDEMNIFICATION
                                 ---------------

     Section  8.1     Indemnification by SafeHealth.  SafeHealth shall indemnify
                      -----------------------------
and  hold  HNT-AZ  and  HNL  (including their directors, officers and employees)
harmless  from  all  liability,  losses,  damages,  costs or expenses (including
reasonable attorneys' fees) arising out of a claim, demand, lawsuit, or cause of
action asserted against HNT-AZ or HNL by a third party resulting from or arising
out  of SafeHealth's wrongful act or omission, including intentional, negligent,
fraudulent  or criminal conduct of a director, officer, shareholder, employee or
independent  contractor  of  SafeHealth,  except  as  otherwise provided in this
Article  VIII.

     Section  8.2     Indemnification  by  HNT-AZ and HNL.  HNT-AZ and HNL shall
                      -----------------------------------
indemnify  and hold SafeHealth (including its directors, officers and employees)
harmless  from  all  liability,  losses,  damages,  costs or expenses (including
reasonable  attorneys' fees) arising out of a claim, demand, lawsuit or cause of
action  asserted  against  SafeHealth by a third party resulting from or arising
out  of  HNT-AZ's  or  HNL's  wrongful  act  or omission, including intentional,
negligent,  fraudulent  or criminal conduct of a director, officer, shareholder,
employee  or  independent  contractor  of  HNT-AZ  or  HNL,  except as otherwise
provided  in  this  Article  VIII.

     Section  8.3     Comparative  Fault.  In  the  event  that  HNT-AZ, HNL and
                      ------------------
SafeHealth  claim  indemnity under Sections 8.01 and 8.02 of this Agreement, and
in the event it is determined that each is entitled to indemnity from the other,
then  the  amount  of  indemnity  due from each to the other shall be determined
according  to  comparative  fault  principles.

                                     ARTICLE
                                     -------
                              TERM AND TERMINATION
                              --------------------

     Section  9.1     Effective  Date.  This Agreement shall be effective on the
                      ---------------
Closing  Date  of  the  Purchase  and  Sale  Agreement  (the  "Effective Date").

     Section  9.2     Term.  This Agreement shall commence on the Effective Date
                      ----
and  shall  terminate on December 31, 2004 (the "Term"), provided, however, that
                                                         --------  -------
HNT AZ and HNL shall have the option to extend the Term of this Agreement for an
additional  one year period on the same terms and subject to the same conditions
except  that  HNT-AZ and HNL shall pay SafeHealth a fee equal to twenty (20%) of
the  claims  paid  by  SafeHealth  under  the  Benefit  Agreements  for  the
Administrative  Services  provided  during  the  additional  one  year  period.



                                      -7-
<PAGE>
     Section  9.3     Termination.  This Agreement may be terminated as follows:
                      -----------

     (a)  At  any  time  by  mutual  agreement of the parties hereto in writing.

     (b)  By  any  party thirty (30) calendar days after written notice has been
          given  to any other party of the other party's material breach of this
          Agreement  or material default in the performance of any of its duties
          and obligations under this Agreement, if the breach or default has not
          been  cured  within  the  thirty  (30)  day  period.

     (c)  By  any  party  at  any time after written notice, in the event of the
          insolvency, liquidation, rehabilitation, assignment for the benefit of
          creditors,  or voluntary or involuntary declaration or adjudication of
          bankruptcy  of  the  any  other  party.

     (d)  By  HNT-AZ  or  HNL upon written notice to SafeHealth at any time if a
          license  that SafeHealth is legally required to maintain in performing
          the  Administrative  Services  is  revoked, suspended, or has expired.

     (e)  By  HNT-AZ  or  HNL  upon thirty (30) calendar days' written notice to
          SafeHealth,  following  SafeHealth's  notice  to  HNT-AZ  or HNL under
          Section  2.04,  above,  if  a  material  change is not satisfactory to
          HNT-AZ  or  HNL,  or  under Sections 4.04, above, if corrective action
          requested  is  not  performed  to  HNT-AZ's  or  HNL's  satisfaction.

     (f)  By  HNT-AZ  or  HNL  upon thirty (30) calendar days' written notice to
          SafeHealth  in  the  event  SafeHealth fails to perform satisfactorily
          according  to  the  terms  of  this  Agreement and SafeHealth fails to
          remedy  the  unsatisfactory performance to the reasonable satisfaction
          of  HNT-AZ  or  HNL  within  such  thirty  (30)  day  period.

     Section  9.4     Transition  Following  Termination.  In  the  event  this
                      ----------------------------------
Agreement  is  terminated and the Benefit Agreements that are the subject matter
of  this  Agreement  continue  to  be  underwritten by HNT-AZ or HNL, SafeHealth
agrees to cooperate fully and promptly, at SafeHealth's expense, in the transfer
of  administrative  functions  as  directed by HNT-AZ and HNL including, but not
limited  to,  transfer of HNT-AZ's and HNL's proprietary information or records.

     Section  9.5     Liability  Prior  to  Termination.  Termination  of  this
                      ---------------------------------
Agreement  shall not terminate any rights or liabilities of either party arising
out  of  the  period  during  which  this  Agreement  was  in  effect.

                                     ARTICLE
                                     -------
                                  GENERAL TERMS
                                  -------------

     Section 10.1     Compliance with Law.  Each party shall, in the performance
                      -------------------
of their obligations set forth in this Agreement, comply with all applicable Law
and  the rules and regulations of all Governmental Authorities with jurisdiction
over  the  parties  and  each  party shall maintain all licenses or certificates
necessary  or appropriate for the performance of the functions set forth in this
Agreement.  Each  party  shall  conform  its actions under this Agreement to any


                                      -8-
<PAGE>
orders  concerning  the  activities  covered  by  this Agreement by Governmental
Authorities  having  jurisdiction  over  the  parties'  business  affairs  and
operations.  Each party shall take all actions and make all filing, applications
and  provide  all notices required by applicable Law.  Each party shall promptly
notify  the other party of any complaint, inquiry or lawsuit by any Governmental
Authority  relating  to  this  Agreement.

     Section  10.2     Notices.  Any  notice  or other communication required or
                       -------
permitted  hereunder  shall  be  in  writing and shall be delivered by certified
process server, certified or registered mail (postage prepaid and return receipt
requested),  by a nationally recognized overnight courier service (appropriately
marked  for  overnight  delivery)  or  by  facsimile (with request for immediate
confirmation  of  receipt  in  a  manner  customary  for  communications of such
respective  type).  Notices  shall  be  effective  upon  receipt  and  shall  be
addressed  as  follows:

     if  to  SafeHealth  to:

                              SafeGuard  Health  Enterprises,  Inc.
                              95  Enterprise,  Suite  100
                              Aliso  Viejo,  California  92656
                              Attn.:  James  E.  Buncher
                              President  and  Chief  Executive  Officer
                              Tel:  (949)  425-4100
                              Fax:  (949)  425-4101

                 with  a  copy  to:

                              Ronald  I.  Brendzel
                              Senior Vice President and General Counsel
                              SafeGuard  Health  Enterprises,  Inc.
                              95  Enterprise,  Suite  100
                              Aliso  Viejo,  California  92656
                              Tel:  (949)  425-4110
                              Fax:  (949)  425-4586

     if  to  HNT-AZ  or  HNL  to:
                              Health  Net,  Inc.
                              Att:  General  Counsel
                              21650  Oxnard  Street
                              Woodland  Hills,  California  91367
                              Tel:  (818)  676-7601
                              Fax:  (818)  676-7503


                                      -9-
<PAGE>
                 with  a  copy  to:

                              Kenneth  B.  Schnoll
                              Sonnenschein  Nath  &  Rosenthal
                              685  Market  Street
                              San  Francisco,  CA  94105
                              Tel:  (415)  882-1020
                              Fax:  (415)  543-5472

     Section  10.3     Headings.  The headings of the sections of this Agreement
                       --------
are  included  for  the  purposes  of  convenience only and shall not affect the
interpretation  of  any  provision  hereof.

     Section  10.4     Governing  Law.  This  Agreement shall be governed by and
                       --------------
construed  in accordance with the Law of the state of California, without giving
effect  to  the  principles  of  conflicts  of  laws  thereof.

     Section  10.5     Severability.  In  the  event any section or provision of
                       ------------
this  Agreement  or related documents is found to be void and unenforceable by a
court  of  competent jurisdiction, the remaining sections and provisions of this
Agreement  or  related  documents shall nevertheless be binding upon the parties
with  the same force and effect as though the void or unenforceable part had not
been  severed  or  deleted.

Section  10.6     Assignability.  Except as otherwise expressly provided in this
                  -------------
Agreement, none of the parties may assign any of its rights or obligations under
this  Agreement  without the prior written consent of the other parties.  Except
as  specifically  provided  in  this  Agreement,  any  attempted  assignment  or
delegation  of  a  party's  rights,  claims,  privileges,  duties or obligations
hereunder  shall  be  null  and  void.

     Section  10.7     Successors  and  Assigns.  This Agreement and the rights,
                       ------------------------
privileges,  duties  and  obligations  of  the  parties hereunder, to the extent
assignable  or  delegable, shall be binding upon and inure to the benefit of the
parties  and  their  respective  successors  and  permitted  assignees.

     Section  10.8     Waiver.  No  waiver of or failure by any party to enforce
                       ------
any  of  the  provisions,  terms,  conditions,  or  obligations  herein shall be
construed  as  a  waiver  of  any  subsequent  breach  of  such provision, term,
condition,  or  obligation,  or  of  any  other  provision,  term, condition, or
obligation  hereunder, whether the same or different in nature.  No extension of
time  for performance of any obligations or acts shall be deemed an extension of
the  time  for  performance  of  any  other  obligations  or  acts.

     Section  10.9     Expenses.  Except  as may be specifically provided for in
                       --------
this Agreement, all parties shall bear their own expenses incurred in connection
with  this Agreement and the transactions contemplated herein, including but not
limited  to,  legal  and  accounting  fees.

     Section  10.10     Further Assurances.  Each party agrees, at its own cost,
                        ------------------
to  do  such  further acts and things and to execute and deliver such additional
agreements  and  instruments  as  the


                                      -10-
<PAGE>
other  may  reasonably require to consummate, evidence or confirm the agreements
contained  herein  in  the  manner  contemplated  hereby.

     Section  10.11     No Third Party Rights.  This Agreement has been made for
                        ---------------------
the  benefit  of  the  parties  hereto  and  respective successors and permitted
assigns  and  nothing  in  this  Agreement  is  intended to confer any rights or
remedies under or by reason of this Agreement on any other person other than the
parties to it and their respective successors and permitted assigns.  Nothing in
this  Agreement is intended to relieve or discharge the obligations or liability
of  any  third  person  to  any  party  to  this  Agreement.

     Section  10.12     Exhibits  and  Schedules.  All  exhibits  and  Schedules
                        ------------------------
referred  to  in  this  Agreement  are  incorporated  herein  by this reference.

     Section  10.13     Force  Majeure.  None  of  the  parties  hereto shall be
                        --------------
liable  for any delay or failure in the performance of any obligation under this
Agreement or for any loss or damage (including indirect or consequential damage)
to  the  extent that such nonperformance, delay, loss or damage results from any
contingency which is beyond the control of such party, provided such contingency
is  not  caused by the fault or negligence of such party.  A contingency for the
purposes  of  this  Agreement  shall be acts of God, fires, floods, earthquakes,
explosions,  storms,  wars, hostilities, blockades, public disorders, quarantine
restrictions,  embargoes,  strikes  or  other labor disturbances, and compliance
with any law, order or control of, or insistence by any governmental or military
authority.

     Section 10.14     Plurals/Pronouns/Gender.  All pronouns and any variations
                       -----------------------
thereof  shall be deemed to refer to the masculine, feminine or neuter, singular
or  plural,  as  appropriate.

     Section  10.15     Locative  Adverbs.  Whenever  in  this  Agreement  the
                        -----------------
locative  adverbs "herein," "hereof," or "hereunder" are used, the same shall be
understood  to  refer  to this Agreement in its entirety and not to any specific
article,  section,  subsection,  subpart,  paragraph  or  subparagraph.

     Section  10.16     Integration.  This  Agreement  and  all  Exhibits  and
                        -----------
Schedules  attached  hereto  constitute the entire agreement between the parties
with regard to the subject matter hereof and thereof.  This Agreement supersedes
all  previous agreements between or among the parties.  There are no agreements,
representations,  or warranties between or among the parties with respect to the
subject  matter  hereof  other  than  those  set  forth in this Agreement or the
documents  and  agreements  referred  to  in  this  Agreement.

     Section 10.17     Amendments.  No amendment, modification, or supplement to
                       ----------
this  Agreement  shall  be binding on any of the parties unless it is reduced to
writing  and  signed  by  each  of  the  parties.



                                      -11-
<PAGE>
     Section  10.18     Counterparts.  This  Agreement  may  be  executed
                        ------------
simultaneously  in  any  number of counterparts, each of which will be deemed an
original,  but  all  of  which  will  constitute  one  and  the  same agreement.

HEALTH  NET  OF  ARIZONA,  INC.     SAFEHEALTH  LIFE  INSURANCE  COMPANY

By:    /s/ Mark El-Tawil                  By: /s/  James  E.  Buncher
   ------------------------------------       ----------------------------------

Title: President                          Title:  President  and  CEO
      ---------------------------------         --------------------------------

Date:  June 30, 2003                      Date: June  30,  2003
     ----------------------------------        ---------------------------------



HEALTH  NET  LIFE  INSURANCE  COMPANY

By:     /s/  Douglas  King
     ----------------------------------

Title:  President
      ---------------------------------

Date:   June  30,  2003
     ----------------------------------




                                      -12-
<PAGE>
                                   APPENDIX A
                             ADMINISTRATIVE SERVICES
                             -----------------------

A.     CLAIMS  ADMINISTRATION  SERVICES

     1.     SafeHealth  shall  process  claims  for  benefits made under Benefit
Agreements  issued  by  HNT-AZ  and  HNL  in  accordance  with  the terms of the
applicable  Benefit Agreement, applicable law and HNT-AZ's written instructions.

     2.     SafeHealth's  claim  processing  duties  for HNT-AZ and HNL include
the following:

          a.  Receive  bills,  invoices, statements and electronically submitted
demands  for  payment  (collectively  referred  to  as  "claims")  from eligible
providers,  insured  individuals  and  others.

          b.  Determine  the  eligibility  of  an  insured  individual  and  the
reasonableness  of  the  claim,  and  apply  HNT-AZ  or  HNL vision claim review
guidelines,  referring  claims  to  HNT-AZ  or  HNL  as  directed.

          c.  Implement  appropriate  procedures  to  pay,  reject or modify the
amount  of  the  claim  in  accordance with the terms of the appropriate Benefit
Agreement  and  applicable  law.

          d. At SafeHealth's expense, provide HNT-AZ and HNL with on-line access
to  claims  data.

          e.  Provide HNT-AZ with a report by the twentieth (20th) of each month
identifying  all claims paid during the previous month. The report is to include
a  complete  check  register  report and reconciliation of that register against
paid  claims,  and  a reconciliation report on the account including prior month
open  items.

          f.  Prepare  and  file,  in the manner prescribed by law, all IRS 1099
Forms  required  with  respect  to  providers.

          g.  Install  and  maintain  internal  control  systems satisfactory to
HNT-AZ  and  HNL on claims processing, fraudulent claims, claims quality, HNT-AZ
and  HNL  funds,  and  check  stock  and  signature  plates.

          h.  Make  all  reasonable efforts to collect all overpayments or other
incorrect  payments  as  determined  by the provisions of the applicable Benefit
Agreement, and provide HNT-AZ and HNL with information necessary to permit it to
file  Third  Party  Workers'  Compensation  liens.

          i.  Prepare  and  implement a quality control plan, whereby SafeHealth
will assure itself, HNT-AZ and HNL that its processing of claims conforms to all
contractual  benefit  provisions,  does  not violate administrative procedure or
policies  established by HNT-AZ and HNL and communicated to SafeHealth, does not
intentionally  violate  any  applicable state or federal laws, and is reasonably
free  of  error  or  bias.


                                      A-1
<PAGE>
          j.  Conduct  all  aspects of appeals and grievances arising from claim
decisions  in  accordance  with  the  procedures  approved  by  HNT-AZ  and HNL.
SafeHealth will notify HNT-AZ and HNL of each appeal or grievance arising from a
claims  decision within ten calendar days of receipt of the appeal or grievance.
The ultimate determination on an appeal or grievance rests solely with HNT-AZ or
HNL.

          k.  Prepare  the  reports  mutually  acceptable  to  the  parties.

          l.  SafeHealth shall provide reports requested by reinsurers of HNT-AZ
and  HNL  at  SafeHealth's  expense.

     3.     SafeHealth  will  adjudicate,  pay  or  deny  all claims strictly in
accordance with provisions of the Benefit Agreements and, with respect to claims
for services of participating vision providers, claims handling will satisfy the
requirements  of  the  provider  agreements between providers and HNT-AZ or HNL.
Whenever  denying  a  claim,  in  whole  or  in part, SafeHealth will notify the
covered  person, in writing in a form approved by HNT-AZ and HNL, that a dispute
with  HNT-AZ  or  HNL  must be resolved by binding arbitration if the applicable
Benefit  Agreement  contains  an  arbitration  provision.

     4.  In  connection  with  the  payment  of  claims  for  the  services  of
participating  vision  providers,  SafeHealth  shall:

     a.     Determine benefit payment on the basis of the reimbursement rate set
out  on the participating provider contracts and instructions from HNT-AZ or HNL
on  services  included  or  excluded  in  those  rates;  and

          b.  Receive claims from participating providers and pay or deny claims
within  thirty  (30) calendar days of receiving a "clean claim." For purposes of
this  Agreement,  "clean claim" means a claim that has no defect or impropriety,
including  any  lack of any required substantiating documentation, or particular
circumstances  requiring  special  treatment  that prevents timely payments from
being  made  on  the  claim.

          c.  Accept  HNT-AZ  or  HNL  interpretations of provider contracts and
accept  HNT-AZ's  or  HNL's  resolution of questions or disputes with providers.
HNT-AZ  and  HNL  have  final authority to interpret their contracts and resolve
disputes  with  providers.

     5.     In  assisting  HNT-AZ  and  HNL  with utilization review, SafeHealth
will:

          a.  Forward  all provider claims without a required Utilization Review
Certification  Form  either  to  the  provider or to HNT-AZ or HNL, as directed;

          b.  Submit  claims  to  HNT-AZ  and  HNL for retrospective utilization
review  in  accordance  with  HNT-AZ's  or  HNL's  guidelines  and  procedures.

     6.     SafeHealth  will  pay  claims  as  follows:

          a. Issue claim checks in the name of HNT-AZ or HNL from a disbursement
account  established  at an Arizona Bank acceptable to HNT-AZ and HNL. HNT-AZ or
HNL  shall  fund  the  disbursement  accounts  each Monday. HNT-AZ and HNL shall
provide  SafeHealth  with  an  adequate  supply  of  HNT-AZ  and HNL checkstock.


                                      A-2
<PAGE>
          b.  Provide  to  HNT-AZ and HNL by telecopy each Thursday a listing of
all claim checks to be released by the close of business on the following Monday
if  a  Business Day, or in the event a Monday is not a Business Day, then by the
first Business Day of the following week. HNT-AZ and HNL shall have the right to
stop payment on and request more information about a specific claim by notifying
SafeHealth  by  the  close  of  business  on the Friday following receipt of the
listing  of  claim  checks.

          c.  Provide  HNT-AZ and HNL with copies of the claim documentation for
all proposed claim payments over $500. No claims over $1,000 may be paid without
the  countersignature  of  an  authorized  representative  of  HNT-AZ  or  HNL.

     7.     SafeHealth  will  satisfy  the following performance criteria in the
processing  of  claims  and  report  the  results  monthly:

          a. Pay or reject 85% of claims submitted within fourteen (14) calendar
days  of  receipt.

          b.  Pay  or  reject 100% of uncontested claims submitted within thirty
(30)  calendar  days  of  receipt.

          c. Respond to 98% of all claims-related written inquiries from, from a
provider  or  from  a  group  within  fourteen  (14)  calendar  days.

          d.  Answer  on first contact 80% of claims-related telephone inquiries
from  an  individual  insured by HNT-AZ or HNL, from a provider or from a group.

     8.     Should  any  Benefit  Agreement subject to this Agreement terminate,
SafeHealth  will continue to process claims incurred under the Benefit Agreement
with  a  date of service prior to termination, and to process other claims which
may  be  payable under the Benefit Agreement but have not been adjudicated prior
to  termination,  unless SafeHealth is otherwise instructed in writing by HNT-AZ
or  HNL.


                                      A-3
<PAGE>
B.     COMMUNICATIONS

     1.     SafeHealth  will  provide  courteous, timely and accurate assistance
and  response  to  all  verbal or written inquiries received from HNT-AZ and HNL
insureds,  Subscribers,  and  claimants  with  respect  to  all relevant topics,
including  but  not limited to procedural aspects of claim submission, status of
claim  payments,  calculation  of benefits, and notice of conversion rights, and
generally  to  act  as  a  liaison  between  HNT-AZ,  HNL,  members  and groups.

     2.     SafeHealth  will  promptly  forward  to HNT-AZ and HNL all inquiries
which  constitute  a grievance or a request for review under ERISA.  Complaints,
grievances  or  other  communications shall be forwarded by SafeHealth to HNT-AZ
and  HNL.  Inquiries  or  complaints which SafeHealth receives from Governmental
Authorities shall be reported immediately by telephone to the appropriate person
at  HNT-AZ  or  HNL,  with  written  notice  following  immediately  thereafter.

     3.     SafeHealth  will  cooperate  fully with HNT-AZ, HNL and Governmental
Authorities  in  maintaining  the Benefit Agreements in compliance with existing
and  future  Law.

     4.     HNT-AZ  and  HNL shall provide SafeHealth with an adequate supply of
the  most  current  directories of participating vision providers and SafeHealth
shall  promptly  supply  copies  of  the  directories to Subscribers on request.

     5.     SafeHealth  will  design prepare Explanation of Benefits (EOB) forms
for  the  purpose  of  informing  covered persons of actions taken on claims for
benefits.  EOB forms may not be used without HNT-AZ's and HNL's prior review and
approval.

     6.     SafeHealth  will  design  and prepare a remittance advice form to be
used  to  identify  claims  with  respect  to  which  a  payment  is being made.
Remittance  advice forms may not be used without HNT-AZ's and HNL's prior review
and  approval.



                                      A-4
<PAGE>
                                   APPENDIX B
                               BENEFIT AGREEMENTS
                               ------------------


                                      B-1
<PAGE>
<TABLE>
<CAPTION>
                                            SCHEDULE  3.03
                                         PERFORMANCE STANDARDS
                                         ---------------------


                                                                                               % OF
                                                                                           SERVICE FEE
                                                                                             AT RISK
                                                                                           ------------
<S>                                                                                        <C>
MEMBER SERVICE
--------------
70% of calls answered within 60 seconds excluding January due to open enrollments.                 0.5%
Call abandonment rate less than 5% excluding January due to open enrollments.                      0.5%

CLAIMS
------
Process all claims within 30 calendar days on receipt of complete, accurate data.                    1%
Financial accuracy of 98%.                                                                           1%

NEW CASE INSTALLATION - ELECTRONIC DATA INTERFACE
-------------------------------------------------
2 business day turnaround on files received in approved format and media.                            1%
15 business day turnaround on initial set up of group upon receipt of all required data.             1%

PROVIDER NETWORK MANAGEMENT
---------------------------
90% of network retained annually.  Measurement will be based on global basis and reported            1%
annually.

PENALTY EXPRESSED AS A PERCENTAGE OF THE TOTAL NET SERVICE FEE                                       6%
6% OF TOTAL SERVICE FEE AT RISK
PENALTY IS PAID ONLY FOR THE TIME PERIOD STANDARD IS NOT ACHIEVED.
</TABLE>


<PAGE>
                                  SCHEDULE 7.01
                           BUSINESS ASSOCIATE ADDENDUM
                           ---------------------------

This Business Associate Addendum (the "Addendum") supplements and is made a part
of  the  Administration  Agreement  by  and between Health Net of Arizona, Inc.,
Health  Net  Life  Insurance  Company and SafeHealth Life Insurance Company (the
"Agreement"),  and  is  effective  as  of  the  Effective Date of the Agreement.

                                    RECITALS

A.   The  parties may disclose certain information to each other pursuant to the
     terms  of  the  Agreement,  some  of  which may constitute Protected Health
     Information,  as  defined  below.

B.   The  parties  intend to protect the privacy and provide for the security of
     Protected  Health  Information  in  compliance  with  the  Health Insurance
     Portability  and  Accountability  Act  of  1996,  Public  law  No.  104-191
     ("HIPAA") and the regulations promulgated thereunder by the U.S. Department
     of Health and Human Services (the "HIPAA Regulations") and other applicable
     laws.

C.   The  purpose  of  this  Addendum  is  to  satisfy  certain  standards  and
     requirements of HIPAA and the HIPAA Regulations, including, but not limited
     to,  45  CFR  164.502(e)  and  45  CFR  164.504(e).

In  consideration  of  the mutual promises below and the exchange of information
pursuant  to  the  Agreement  and  this  Addendum, the parties agree as follows:

1.     Definitions

(a)     "Business  Associate"  means the party performing functions, activities,
or  services  for,  or  on behalf of, a Covered Entity pursuant to the Agreement
involving  the  use  or  disclosure  of  Protected  Health  Information.

(b)     "Covered  Entity"  means  the  party  for  whom,  or  on  whose  behalf,
functions,  activities,  or  services  are  performed  pursuant to the Agreement
involving  the  use  or  disclosure  of  Protected  Health  Information.

(c)     "Privacy  Rule"  means  the  Standards  for  Privacy  of  Individually
Identifiable  Health Information at 45 CFR part 160 and part 164, subparts A and
E.

(d)     "Protected  Health  Information"  has  the  same  meaning  as  the  term
"protected  health  information"  in  45 CFR 164.501, limited to the information
created  or  received by Business Associate from or on behalf of Covered Entity.

(e)     Capitalized  terms  used but not otherwise defined in this Addendum have
the  same  meaning  as  those  terms  in  the  Privacy  Rule.


<PAGE>
2.     Obligations  and  Activities  of  Business  Associate

(a)     Business  Associate  shall  not  use  or  disclose  Protected  Health
Information  other than as permitted or required by this Addendum or as Required
By  Law.

(b)     Business  Associate  shall  use appropriate safeguards to prevent use or
disclosure of the Protected Health Information other than as provided for by the
Agreement  and  this  Addendum.

(c)     Business  Associate  agrees  to mitigate, to the extent practicable, any
harmful  effect  that  is  known to Business Associate of a use or disclosure of
Protected  Health  Information  by  Business  Associate  in  violation  of  the
requirements  of  this  Addendum.

(d)     Business  Associate shall report to Covered Entity any use or disclosure
of  the  Protected Health Information not provided for by this Addendum of which
it  becomes  aware.

(e)     Business  Associate  shall  ensure  that  any  agent,  including  a
subcontractor,  to  whom it provides Protected Health Information received from,
or created or received by Business Associate on behalf of, Covered Entity agrees
to  the  same  restrictions  and  conditions that apply through this Addendum to
Business  Associate  with  respect  to  such  information.

(f)     Business  Associate  shall  provide  access,  at  the request of Covered
Entity,  and  in  the time and manner designated by Covered Entity, to Protected
Health Information in a Designated Record Set, to Covered Entity or, as directed
by  Covered  Entity, to an Individual in order to meet the requirements under 45
CFR  164.524

(g)     Business  Associate  agrees to make any amendment(s) to Protected Health
Information in a Designated Record Set that the Covered Entity directs or agrees
to pursuant to 45 CFR 164.526 at the request of Covered Entity or an Individual,
and  in  the  time  and  manner  designated  by  Covered  Entity.

(h)     Business  Associate  agrees  to  make its internal practices, books, and
records,  including  policies and procedures, relating to the use and disclosure
of  Protected  Health  Information  received  from,  or  created  or received by
Business Associate on behalf of, Covered Entity available to the Secretary, in a
time  and  manner  designated  by  the  Secretary, for purposes of the Secretary
determining  Covered  Entity's  compliance  with  the  Privacy  Rule.

(i)     Business  Associate  agrees  to  document  such disclosures of Protected
Health  Information  and  information  related  to  such disclosures as would be
required  for  Covered  Entity  to  respond to a request by an Individual for an
accounting  of disclosures of Protected Health Information in accordance with 45
CFR  164.528.

(j)     Business  Associate agrees to provide to Covered Entity, in the time and
manner  designated  by  Covered Entity, information collected in accordance with
Section  (2)(i)  of  this  Addendum,  to  permit  Covered Entity to respond to a
request  by  an  Individual for an accounting of disclosures of Protected Health
Information  in  accordance  with  45  CFR  164.528.


<PAGE>
3.   Permitted  Uses  and  Disclosures  by  Business  Associate  General Use and
     Disclosure  Provisions

     Except as otherwise limited in this Addendum, Business Associate may use or
disclose  Protected  Health  Information  to  perform  functions, activities, or
services  for,  or  on  behalf of, Covered Entity as specified in the Agreement,
provided  that such use or disclosure would not violate the Privacy Rule if done
by  Covered  Entity.

4.   Specific  Use  and  Disclosure  Provisions

(a)     Except as otherwise limited in this Addendum, Business Associate may use
Protected  Health  Information  for  the proper management and administration of
Business  Associate  or  to  carry  out  the  legal responsibilities of Business
Associate.

(b)     Except  as  otherwise  limited  in this Addendum, Business Associate may
disclose  Protected  Health  Information  for  the  proper  management  and
administration  of Business Associate, provided that disclosures are Required By
Law, or Business Associate obtains reasonable assurances from the person to whom
the  information  is  disclosed  that  it  will  remain confidential and used or
further  disclosed  only  as Required By Law or for the purpose for which it was
disclosed  to the person (which purpose shall be consistent with the limitations
imposed  by this Addendum) and the person notifies the Business Associate of any
instances  of  which it is aware in which the confidentiality of the information
has  been  breached.

(c)     Except as otherwise limited in this Addendum, Business Associate may use
Protected  Health  Information  to  provide Data Aggregation services to Covered
Entity  as  permitted  by  42  CFR  164.504(e)(2)(i)(B).

(d)     Business  Associate  may  use  Protected  Health  Information  to report
violations  of law to appropriate Federal and State authorities, consistent with
45  CFR  164.502(j)(1).

5.   Obligations  of  Covered  Entity  Provisions  for  Covered Entity To Inform
     Business  Associate  of  Privacy  Practices  and  Restrictions

(a)     Covered  Entity shall notify Business Associate of any limitation in its
notice  of  privacy  practices  in accordance with 45 CFR 164.520, to the extent
that  such  limitation  may  affect  Business  Associate's  use or disclosure of
Protected  Health  Information.

(b)     Covered  Entity  shall  notify  Business Associate of any changes in, or
revocation  of,  permission by an Individual to use or disclose Protected Health
Information, to the extent that such changes may affect Business Associate's use
or  disclosure  of  Protected  Health  Information.

(c)     Covered Entity shall notify Business Associate of any restriction on the
use or disclosure of Protected Health Information that Covered Entity has agreed
to  in  accordance  with 45 CFR 164.522, to the extent that such restriction may
affect  Business  Associate's use or disclosure of Protected Health Information.


<PAGE>
(d)     Covered  Entity  shall not request Business Associate to use or disclose
Protected  Health  Information in any manner that would not be permissible under
the Privacy Rule if done by Covered Entity, except as permitted by Sections 4(b)
and  4(c)  of  this  Addendum.

6.     Term  and  Termination

(a)     This  Addendum  shall  be  effective  as  of  the  Effective Date of the
Agreement,  and  shall  terminate  when  all of the Protected Health Information
provided  by  Covered  Entity  to  Business Associate, or created or received by
Business  Associate  on  behalf  of  Covered Entity, is destroyed or returned to
Covered  Entity,  or,  if it is infeasible to return or destroy Protected Health
Information,  protections  are  extended to such information, in accordance with
the  termination  provisions  in  this  Section.

(b)     Upon Covered Entity's knowledge of a material breach of this Addendum by
Business  Associate, Covered Entity shall either: (i) provide an opportunity for
Business  Associate  to  cure the breach or end the violation and terminate this
Addendum,  and  the  provision  for  performance  of  functions,  activities, or
services  for,  or  on behalf of Covered Entity under the Agreement, if Business
Associate  does  not  cure  the  breach  or  end  the  violation within the time
specified  by  Covered Entity; (ii) immediately terminate this Addendum, and the
provision  for  performance  of  functions,  activities,  or services for, or on
behalf of Covered Entity under the Agreement, if Business Associate has breached
a  material  term of this Addendum and cure is not possible; or (iii) if neither
termination  nor  cure  is  feasible,  report  the  violation  to the Secretary.

(c)  Effect  of  Termination.

     (i)  Except as provided in paragraph (ii) of this section, upon termination
     of  this  Addendum,  for  any  reason,  Business  Associate shall return or
     destroy  all  Protected Health Information received from Covered Entity, or
     created  or received by Business Associate on behalf of Covered Entity, and
     shall  retain no copies of the Protected Health Information. This provision
     shall  apply  to  Protected Health Information that is in the possession of
     subcontractors  or  agents  of  Business  Associate.

     (ii)  In  the  event  that  Business Associate determines that returning or
     destroying  the  Protected  Health  Information  is  infeasible,  Business
     Associate  shall  provide  to Covered Entity notification of the conditions
     that  make  return  or  destruction  infeasible. Upon mutual agreement that
     return  or  destruction  of  Protected  Health  Information  is infeasible,
     Business  Associate  shall  extend the protections of this Addendum to such
     Protected Health Information and limit further uses and disclosures of such
     Protected  Health  Information  to  those  purposes that make the return or
     destruction  infeasible,  for  so long as Business Associate maintains such
     Protected  Health  Information.

7.   Miscellaneous

(a)     Regulatory  References. A reference in this Addendum to a section in the
        ----------------------
Privacy  Rule  means  the  section  as  in  effect  or  as  amended.


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(b)     Amendment.  The  Parties  agree  to  take such action as is necessary to
        ---------
amend  this  Addendum  from  time  to time as is necessary for Covered Entity to
comply  with  the  requirements  of  the  Privacy  Rule  and  the  HIPAA.

(c)     Survival.  The  respective  rights and obligations of Business Associate
        --------
under  Section  6(c)  of  this  Addendum  shall  survive the termination of this
Addendum.

(d)     Interpretation.  The  provisions of this Addendum shall prevail over any
        --------------
provisions  in  the Agreement that may conflict with or appear inconsistent with
any  provision  of  this  Addendum.  Any  ambiguity  in  this  Addendum shall be
resolved  to  permit  Covered  Entity  to  comply  with  the  Privacy  Rule.


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