Document:

Prepared by MERRILL CORPORATION

EXECUTION COPY  

HEALTH NET, INC. 

$400,000,000

83/8%
Senior Notes due 2011 

EXCHANGE AND REGISTRATION RIGHTS AGREEMENT  

April 12, 2001 

JPMORGAN,
a division of

CHASE SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

FLEET SECURITIES, INC.

MIZUHO INTERNATIONAL PLC

SALOMON SMITH BARNEY INC.

SCOTIA CAPITAL (USA) INC.

c/o Chase Securities Inc.

270 Park Avenue, 4th floor

New York, New York 10017 

Ladies
and Gentlemen: 

    Health
Net, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to JPMorgan, a division of Chase
Securities Inc. ("JPMorgan"), and Banc of America Securities LLC, Fleet Securities, Inc., Mizuho International plc, Salomon Smith
Barney Inc. and Scotia Capital (USA) Inc. (together with JPMorgan, the "Initial Purchasers"), upon the terms and subject to the conditions
set forth in a purchase agreement dated April 9, 2001 (the "Purchase Agreement"), $400,000,000 aggregate principal amount of its
83/8% Senior Notes due 2011 (the "Securities"). Capitalized terms used but not defined herein shall have the meanings given to such terms
in the Purchase Agreement. 

    As
an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company
agrees with the Initial Purchasers, for the benefit of the holders (including the Initial Purchasers) of the Securities, the Exchange Securities (as defined herein) and the Private Exchange Securities
(as defined herein) (collectively, the "Holders"), as follows: 

    1.  Registered Exchange Offer.  The Company shall (i) prepare and, not later than 90 days
following the date of original issuance of the Securities (the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the Securities Act with respect to a proposed offer to the Holders of the
Securities (the "Registered Exchange Offer") to issue and deliver to such Holders, in exchange for the Securities, a like aggregate principal amount of
debt securities of the Company (the "Exchange Securities") that are identical in all material respects to the Securities, except for the transfer
restrictions relating to the Securities, (ii) use its reasonable best efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act no later than
150 days after the Issue Date and the Registered Exchange Offer to be consummated no later than 180 days after the Issue Date and (iii) keep the Exchange Offer Registration
Statement effective for not less than 20 business days (or longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders (such period
being called the "Exchange Offer Registration Period"). The Exchange Securities will be issued under the Indenture or an indenture (the
"Exchange Securities Indenture") between the Company and the Trustee or such other bank or trust company that is reasonably satisfactory to the Initial
Purchasers, as trustee (the "Exchange Securities Trustee"), such indenture to be identical in all material respects to the Indenture, except for the
transfer restrictions relating to the Securities (as described above). 

 

    Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered
Exchange Offer to enable each Holder electing to exchange Securities for Exchange Securities (assuming that such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as
defined herein) not complying with the requirements of the next sentence, (b) is not an Initial Purchaser holding Securities that have, or that are reasonably likely to have, the status of an
unsold allotment in an initial distribution, (c) acquires the Exchange Securities in the ordinary course of such Holder's business and (d) has no arrangements or understandings with any
person to participate in the distribution of the Exchange Securities) and to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities
Act and without material restrictions under the securities laws of the several states of the United States. The Company, the Initial Purchasers and each Exchanging Dealer acknowledge that, pursuant to
current interpretations by the Commission's staff of Section 5 of the Securities Act, each Holder that is a broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in
Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange
Offer. 

    If,
prior to the consummation of the Registered Exchange Offer, any Holder holds any Securities acquired by it that have, or that are reasonably likely to be determined to have, the
status of an unsold allotment in an initial distribution, or any Holder is not entitled to participate in the Registered Exchange Offer, the Company shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered Exchange Offer, issue and deliver to any such Holder, in exchange for the Securities held by such Holder (the
"Private Exchange"), a like aggregate principal amount of debt securities of the Company (the "Private Exchange
Securities") that are identical in all material respects to the Exchange Securities, except for the transfer restrictions relating to such Private Exchange Securities. The
Private Exchange Securities will be issued under the same indenture as the Exchange Securities, and the Company shall use its reasonable best efforts to cause the Private Exchange Securities to bear
the same CUSIP number as the Exchange Securities. 

    In
connection with the Registered Exchange Offer, the Company shall: 

    (a) mail
or cause to be mailed to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents; 

    (b) keep
the Registered Exchange Offer open for not less than 20 business days (or longer, if required by applicable law) after the date on which notice of the
Registered Exchange Offer is mailed to the Holders; 

    (c) utilize
the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York; 

    (d) permit
Holders to withdraw tendered Securities at any time prior to the close of business, New York City time, on the last business day on which the Registered
Exchange Offer shall remain open; and 

    (e) otherwise
comply in all respects with all laws that are applicable to the Registered Exchange Offer. 

2

 

    As
soon as practicable after the close of the Registered Exchange Offer and any Private Exchange, as the case may be, the Company shall: 

    (a) accept
for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; 

    (b) deliver
to the Trustee for cancellation all Securities so accepted for exchange; and 

    (c) cause
the Trustee or the Exchange Securities Trustee, as the case may be, promptly to authenticate and deliver to each Holder, Exchange Securities or Private
Exchange Securities, as the case may be, equal in principal amount to the Securities of such Holder so accepted for exchange. 

    The
Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein in order to
permit such prospectus to be used by all Exchanging Dealers and broker-dealers subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply
with such requirements in order to resell the Exchange Securities; provided that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging
Dealer, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers have sold all Exchange Securities held by them and (ii) the Company shall make such
prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after
the consummation of the Registered Exchange Offer. 

    Notwithstanding
the provisions of the foregoing paragraph with respect to the period of time during which the Company shall use its reasonable best efforts to enable the use of the
prospectus contained in the Exchange Offer Registration Statement, but subject to Section 3(b), the Company may issue a notice that the Exchange Offer Registration Statement is unusable pending
the announcement of a material corporate transaction and may issue any notice suspending the use of the Exchange Offer Registration Statement required under applicable securities laws to be issued. 

    The
Indenture or the Exchange Securities Indenture, as the case may be, shall provide that the Securities, the Exchange Securities and the Private Exchange Securities shall vote and
consent together on all matters as one class and that none of the Securities, the Exchange Securities or the Private Exchange Securities will have the right to vote or consent as a separate class on
any matter. 

    Interest
on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest
payment date on which interest was paid on the Securities surrendered in exchange therefor or, if no interest has been paid on the Securities, from the Issue Date. 

    Each
Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer
(i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act and (iii) such Holder is not an affiliate of the Company or, if it is such
an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. 

    Notwithstanding
any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming
part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements 

3

 

therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. 

    2.  Shelf Registration.  If (i) because of any change in law or applicable interpretations thereof
by the Commission's staff the Company is not permitted to effect the Registered Exchange Offer as contemplated by Section 1 hereof, or (ii) for any other reason the Registered Exchange
Offer is not consummated within 180 days after the Issue Date, or (iii) any Securities tendered pursuant to the Registered Exchange Offer are not exchanged for Exchange Securities within
10 days of being accepted in the Registered Exchange Offer; or (iv) any Initial Purchaser so requests with respect to Securities or Private Exchange Securities not eligible to be
exchanged for Exchange Securities in the Registered Exchange Offer and held by it following the consummation of the Registered Exchange Offer, or (v) any applicable law or interpretations do
not permit any Holder to participate in the Registered Exchange Offer, or (vi) any Holder that participates in the Registered Exchange Offer does not receive freely transferable Exchange
Securities in exchange for tendered Securities, then the following provisions shall apply: 

    (a) The
Company shall use its reasonable best efforts to file as promptly as practicable (but in no event more than 45 days after so required or requested
pursuant to this Section 2 and not earlier than 90 days after the Issue Date) with the Commission (the "Shelf Filing Date"), and
thereafter shall use its reasonable best efforts to cause to be declared effective, a shelf registration statement on an appropriate form under the Securities Act relating to the offer and sale of the
Transfer Restricted Securities (as defined below) by the Holders thereof from time to time in accordance with the methods of distribution set forth in such registration statement (hereafter, a
"Shelf Registration Statement" and, together with any Exchange Offer Registration Statement, a "Registration
Statement"). 

    (b) The
Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part
thereof to be used by Holders of Transfer Restricted Securities for a period ending on the earlier of (i) two years from the Issue Date or such shorter period that will terminate when all the
Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant thereto and (ii) the date on which the Securities become eligible for resale without volume
restrictions pursuant to Rule 144 under the Securities Act (in any such case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if the Company voluntarily takes any action that
would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless such action is required by
applicable law. 

    (c) Notwithstanding
the provisions of Section 2(b), but subject to Section 3(b), the Company may issue a notice that the Shelf Registration Statement is
unusable pending the announcement of a material corporate transaction and may issue any notice suspending the use of the Shelf Registration Statement required under applicable securities laws to be
issued. 

    (d) Notwithstanding
any other provisions hereof, the Company will ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus
forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Shelf Registration
Statement and any amendment thereto (in either case, other than with respect to information included therein in reliance upon or in conformity with written information furnished to the Company by or
on behalf 

4

 

of any Holder specifically for use therein (the "Holders' Information")) does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Shelf Registration Statement, and any
supplement to such prospectus (in either case, other than with respect to Holders' Information), does not include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

    (e) In
the absence of the events described in clauses (i) through (vi) of the first paragraph of this Section 2, the Company shall not be permitted
to discharge its obligations hereunder by means of the filing of a Shelf Registration Statement. 

    3.  Additional Interest.  (a) The parties hereto agree that the Holders of Transfer Restricted
Securities will suffer damages if the Company fails to fulfill its obligations under Section 1 or Section 2, as applicable, and that it would not be feasible to ascertain the extent of
such damages. Accordingly, if (i) the
Exchange Offer Registration Statement is not filed with the Commission on or prior to 90 days after the Issue Date or the Shelf Registration Statement is not filed with the Commission on or
before the Shelf Filing Date, (ii) the Exchange Offer Registration Statement is not declared effective within 150 days after the Issue Date or the Shelf Registration Statement is not
declared effective within 150 days of the Shelf Filing Date, (iii) the Registered Exchange Offer is not consummated on or prior to 180 days after the Issue Date, or
(iv) the Shelf Registration Statement is filed and declared effective within 150 days after the Shelf Filing Date but shall thereafter cease to be effective (at any time that the Company
is obligated to maintain the effectiveness thereof) without being succeeded within 60 days by an additional Registration Statement filed and declared effective (each such event referred to in
clauses (i) through (iv), a "Registration Default"), the Company will be obligated to pay additional cash interest to each Holder of Transfer
Restricted Securities, during the period of one or more such Registration Defaults, in an amount equal to 0.25% per annum of the principal amount of Transfer Restricted Securities held by such Holder
during the first 90-day period following such registration default, increasing by an additional 0.25% per annum during each subsequent 90-day period up to a maximum of 0.75%
per annum, until (i) the applicable Registration Statement is filed, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is declared
effective, (iii) the Registered Exchange Offer is consummated, or (iv) the Shelf Registration Statement again becomes effective, as the case may be. Following the cure of all
Registration Defaults, the accrual of additional interest will cease. As used herein, the term "Transfer Restricted Securities" means (i) each Security until the date on which such Security has
been exchanged for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) each Security or Private Exchange Security until the date on which it has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iii) each Security or Private Exchange Security until the date on which it is
distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary in this
Section 3(a), the Company shall not be required to pay additional interest to a Holder of Transfer Restricted Securities if such Holder failed to comply with its obligations to make the
representations set forth in the second to last paragraph of Section 1 or failed to provide the information required to be provided by it, if any, pursuant to Section 4(n). 

    (b) If
the Company issues a notice that the Exchange Offer Registration Statement is unusable pursuant to the seventh paragraph of Section 1 or the Shelf
Registration Statement is unusable pursuant to Section 2(c), as the case may be, and the number of days in any consecutive twelve-month period for which all such notices are issued and
effective exceeds 30 days in the aggregate, then the Company will be obligated to pay additional interest to each Holder of Transfer Restricted Securities, with respect to the first
90-day period following such 30 days, in an amount equal to 0.25% per annum (which rate will be increased by an additional 0.25% per 

5

 

annum for each subsequent 90-day period that additional interest continues to accrue, provided that the rate at which such additional interest accrues may in no event exceed 0.75% per
annum) of the principal amount in respect of the Securities constituting Transfer Restricted Securities. Upon declaration by the Company that the Exchange Offer Registration Statement or Shelf
Registration Statement, as the case may be, is usable after the period of time described in the preceding sentence, the amount of accrual shall cease; provided, however, that if after any such
cessation of the accrual of additional interest the Exchange Offer Registration Statement or Shelf Registration Statement again ceases to be usable beyond the period permitted above, additional
interest will again accrue pursuant to the foregoing provisions. 

    (c) The
Company shall notify the Trustee and the Paying Agent under the Indenture immediately upon the happening of each and every Registration Default. The Company
shall pay the additional interest due on the Transfer Restricted Securities by depositing with the Paying Agent (which may not be the Company for these purposes), in trust, for the benefit of the
Holders thereof, prior to 10:00 a.m., New York City time, on the next interest payment date specified by the Indenture and the Securities, sums sufficient to pay the additional interest then
due. The additional interest due shall be payable on each interest payment date specified by the Indenture and the Securities to the record holder entitled to receive the interest payment to be made
on such date. Each obligation to pay additional interest shall be deemed to accrue from and including the date of the applicable Registration Default. 

    (d) The
parties hereto agree that the additional interest provided for in this Section 3 constitute a reasonable estimate of and are intended to constitute the
sole damages that will be suffered by Holders of Transfer Restricted Securities by reason of the failure of (i) the Shelf Registration Statement or the Exchange Offer Registration Statement to
be filed, (ii) the Shelf Registration Statement to remain effective or (iii) the Exchange Offer Registration Statement to be declared effective and the Registered Exchange Offer to be
consummated, in each case to the extent required by this Agreement. 

    4.  Registration Procedures.  In connection with any Registration Statement, the following provisions
shall apply: 

    (a) The
Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each
amendment thereof and each supplement, if any, to the prospectus included therein and shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such
comments as any Initial Purchaser may reasonably propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and
the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement, and include the
information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; and (iii) if requested by any Initial Purchaser, include the
information required by Items 507 or 508 of Regulation S-K, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement. 

    (b) The
Company shall advise each Initial Purchaser, each Exchanging Dealer and the Holders (if applicable) and, if requested by any such person, confirm such advice in
writing (which advice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): 

     (i) when
any Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective
amendment thereto has become effective; 

6

 

    (ii) of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information; 

    (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that
purpose; 

    (iv) of
the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities, the Exchange Securities or the Private
Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and 

    (v) of
the happening of any event that requires the making of any changes in any Registration Statement or the prospectus included therein in order that the statements
therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 

    (c) The
Company will make every reasonable effort to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Registration
Statement. 

    (d) The
Company will furnish to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, at least
one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by reference). 

    (e) The
Company will, during the Shelf Registration Period, promptly deliver to each Holder of Transfer Restricted Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto
as such Holder may reasonably request; and the Company consents to the use of such prospectus or any amendment or supplement thereto by each of the selling Holders of Transfer Restricted Securities in
connection with the offer and sale of the Transfer Restricted Securities covered by such prospectus or any amendment or supplement thereto. 

    (f)  The
Company will furnish to each Initial Purchaser and each Exchanging Dealer, and to any other Holder who so requests, without charge, at least one conformed copy
of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated by reference). 

    (g) The
Company will, during the Exchange Offer Registration Period or the Shelf Registration Period, as applicable, promptly deliver to each Initial Purchaser, each
Exchanging Dealer and such other persons that are required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement or the Shelf Registration Statement and any amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or other persons may reasonably request;
and the Company consents to the use of such prospectus or any amendment or supplement thereto by any such Initial Purchaser, Exchanging Dealer or other persons, as applicable, as aforesaid. 

    (h) Prior
to the effective date of any Registration Statement, the Company will use its reasonable best efforts to register or qualify, or cooperate with the Holders of
Securities, Exchange Securities or Private Exchange Securities included therein and their respective counsel in connection with the registration or qualification of, such Securities, Exchange
Securities or Private Exchange Securities for offer and sale under the securities or blue sky laws of such jurisdictions as 

7

 

any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities, Exchange Securities
or Private Exchange Securities covered by such Registration Statement; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject. 

    (i)  The
Company will cooperate with the Holders of Securities, Exchange Securities or Private Exchange Securities to facilitate the timely preparation and delivery of
certificates representing Securities, Exchange Securities or Private Exchange Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and
registered in such names as the Holders thereof may request in writing prior to sales of Securities, Exchange Securities or Private Exchange Securities pursuant to such Registration Statement. 

    (j)  If
any event contemplated by Section 4(b)(ii) through (v) occurs during the period for which the Company is required to maintain an effective
Registration Statement, the Company will promptly prepare and file with the Commission a post-effective amendment to the Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to purchasers of the Securities, Exchange Securities or Private Exchange Securities from a Holder, the prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

    (k) Not
later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Securities, the Exchange Securities and
the Private Exchange Securities, as the case may be, and provide the applicable trustee with printed certificates for the Securities, the Exchange Securities or the Private Exchange Securities, as the
case may be, in a form eligible for deposit with The Depository Trust Company. 

    (l)  The
Company will comply with all applicable rules and regulations of the Commission and will make generally available to its security holders as soon as
practicable after the effective date of the applicable Registration Statement an earning statement satisfying the provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earning statement be delivered later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month
of the Company's first fiscal quarter commencing after the effective date of the applicable Registration Statement, which statement shall cover such 12-month period. 

    (m) The
Company will cause the Indenture or the Exchange Securities Indenture, as the case may be, to be qualified under the Trust Indenture Act as required by
applicable law in a timely manner. 

    (n) The
Company may require each Holder of Transfer Restricted Securities to be registered pursuant to any Shelf Registration Statement to furnish to the Company such
information concerning the Holder and the distribution of such Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration
Statement, and the Company may exclude from such registration the Transfer Restricted Securities of any Holder that fails to furnish such information within a reasonable time after receiving such
request. 

    (o) Each
Holder of Transfer Restricted Securities agrees by acquisition of such Transfer Restricted Securities that, upon receipt of any notice from the Company
pursuant to the seventh paragraph of Section 1, Section 2(c) or Section 4(b)(ii) through (v), such Holder will discontinue disposition of such Transfer Restricted
Securities until such Holder's receipt of copies of the supplemental or amended prospectus contemplated by Section 4(j) or until advised in writing (the 

8

 

"Advice") by the Company that the use of the applicable prospectus may be resumed. If the Company shall give any notice under the seventh paragraph of
Section 1, Section 2(c) or Section 4(b)(ii) through (v) during the period that the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving
of such notice to and including the date when each seller of Transfer Restricted Securities covered by such Registration Statement shall have received (x) the copies of the supplemental or
amended prospectus contemplated by Section 4(j) (if an amended or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental prospectus is required). 

    (p) In
the case of a Shelf Registration Statement, the Company shall enter into such customary agreements (including, if requested, an underwriting agreement in
customary form) and take all such other action, if any, as Holders of a majority in aggregate principal amount of the Securities, Exchange Securities and Private Exchange Securities being sold or the
managing underwriters (if any) shall reasonably request in order to facilitate any disposition of Securities, Exchange Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement. 

    (q) In
the case of a Shelf Registration Statement, the Company shall (i) make reasonably available for inspection by a representative of, and Special Counsel (as
defined below) acting for, Holders of a majority in aggregate principal amount of the Securities, Exchange Securities and Private Exchange Securities being sold and any underwriter participating in
any disposition of Securities, Exchange Securities or Private Exchange Securities pursuant to such Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries and (ii) use its reasonable best efforts to have its officers, directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such underwriter (an "Inspector") in connection with such Shelf Registration
Statement. 

    (r) In
the case of a Shelf Registration Statement, the Company shall, if requested by Holders of a majority in aggregate principal amount of the Securities, Exchange
Securities and Private Exchange Securities being sold, their Special Counsel or the managing underwriters (if any) in connection with such Shelf Registration Statement, use its reasonable best efforts
to cause (i) its counsel to deliver an opinion relating to the Shelf Registration Statement and the Securities, Exchange Securities or Private Exchange Securities, as applicable, in customary
form, (ii) its officers to execute and deliver all customary documents and certificates requested by Holders of a majority in aggregate principal amount of the Securities, Exchange Securities
and Private Exchange Securities being sold, their Special Counsel or the managing underwriters (if any) and (iii) its independent public accountants to provide a comfort letter or letters in
customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. 

    5.  Registration Expenses.  The Company will bear all expenses incurred in connection with the
performance of its obligations under Sections 1, 2, 3 and 4 and the Company will reimburse the Initial Purchasers and the Holders for the reasonable fees and disbursements of one firm of attorneys (in
addition to any local counsel) chosen by the Holders of a majority in aggregate principal amount of the Securities, the Exchange Securities and the Private Exchange Securities to be sold pursuant to
each Registration Statement (the "Special Counsel") acting for the Initial Purchasers or Holders in connection therewith. 

    6.  Indemnification.  (a) In the event of a Shelf Registration Statement or in connection with
any prospectus delivery pursuant to an Exchange Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging Dealer), its affiliates, their 

9

 

respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof
(including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Securities, Exchange Securities or Private Exchange Securities), to which that Holder
may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or
any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Holder promptly upon demand for any legal or
other expenses reasonably incurred by that Holder in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with any
Holders' Information; and provided, further, that with respect to any such untrue statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this
Section 6(a) shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage, liability or action received Securities, Exchange Securities or Private
Exchange Securities to the extent that such loss, claim, damage, liability or action of or with respect to such Holder results from the fact that both (A) a copy of the final prospectus was not
sent or given to such person at or prior to the written confirmation of the sale of such Securities, Exchange Securities or Private Exchange Securities to such person and (B) the untrue
statement in or omission from the related preliminary prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final prospectus was a result of
non-compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g). 

    (b) In
the event of a Shelf Registration Statement, each Holder shall indemnify and hold harmless the Company, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this
Section 6(b) and Section 7 as the Company), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any
prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with any Holders' Information furnished to the Company by such Holder, and shall reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that no such Holder shall be liable for any indemnity claims hereunder in excess of the amount of net
proceeds 

10

 

received by such Holder from the sale of Securities, Exchange Securities or Private Exchange Securities pursuant to such Shelf Registration Statement. 

    (c) Promptly
after receipt by an indemnified party under this Section 6 of notice of any claim or the commencement of any action, the indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this Section 6. If any such claim or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the indemnified party under this Section 6 for any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than the reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses
available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based upon advice
of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on
behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding. 

    7.  Contribution.  If the indemnification provided for in Section 6 is unavailable or insufficient
to hold harmless an indemnified party under Section 6(a) or 6(b), then each indemnifying party shall, in 

11

 

lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company from the offering and sale of the Securities, on the one hand, and a Holder with respect
to the sale by such Holder of Securities, Exchange Securities or Private Exchange Securities, on the other, or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and
such Holder on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and a Holder on the other with respect to such offering and such sale shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities (before deducting expenses) received by or on behalf of the Company as set forth in the table on the cover of the Offering Memorandum, on the one
hand, bear to the total proceeds received by such Holder with respect to its sale of Securities, Exchange Securities or Private Exchange Securities, on the other. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company or
information supplied by the Company on the one hand or to any Holders' Information supplied by such Holder on the other, the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 7 were to be
determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 7 shall be deemed to
include, for purposes of this Section 7, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an indemnifying party that is a Holder of Securities, Exchange Securities or Private Exchange Securities shall not be required
to contribute any amount in excess of the amount by which the total price at which the Securities, Exchange Securities or Private Exchange Securities sold by such indemnifying party to any purchaser
exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. 

    8.  Rules 144 and 144A.  The Company shall use its reasonable best efforts to file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the written request of any Holder of Transfer Restricted Securities, make publicly available other information so long as necessary to
permit sales of such Holder's securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Transfer Restricted Securities may
reasonably request, all to the extent required from time to time to enable such Holder to sell Transfer Restricted Securities without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including, without limitation, the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Transfer Restricted Securities,
the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange Act. 

    9.  Underwritten Registrations.  If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the investment banker or investment 

12

 

bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed), and such Holders shall be responsible for all underwriting commissions and discounts in
connection therewith. 

    No
person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 

    10.  Miscellaneous.  (a) Amendments and Waivers.
The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority in aggregate principal amount of the Securities, the Exchange Securities and the Private Exchange Securities, taken as a single class. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities, Exchange Securities or Private Exchange
Securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange Securities being sold by such Holders pursuant to such Registration Statement. 

    (b)  Notices.  All notices and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing next-day delivery: 

    (1) if
to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 10(b), which address
initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to JPMorgan, a division of Chase
Securities Inc., Banc of America Securities LLC, Fleet Securities, Inc., Mizuho International plc, Salomon Smith Barney Inc. and Scotia Capital (USA) Inc.; 

    (2) if
to an Initial Purchaser, initially at its address set forth in the Purchase Agreement; and 

    (3) if
to the Company, initially at the address of the Company set forth in the Purchase Agreement. 

    All
such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being delivered to a
next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient's telecopier machine, if sent by telecopier. 

    (c)  Successors And Assigns.  This Agreement shall be binding upon the Company and its successors and
assigns. 

    (d)  Counterparts.  This Agreement may be executed in any number of counterparts (which may be delivered
in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement. 

    (e)  Definition of Terms.  For purposes of this Agreement, (a) the term "business day" means any
day on which the New York Stock Exchange, Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act and (c) except
where otherwise 

13

 

expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Securities Act. 

    (f)  Headings.  The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof. 

    (g)  Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the
State of New York. 

    (h)  Remedies.  In the event of a breach by the Company or by any Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages (other than the
recovery of damages for a breach by the Company of its obligations under Sections 1 or 2 hereof for which additional interest has been paid pursuant to Section 3 hereof), will be entitled to
specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of
any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law
would be adequate. 

    (i)  No Inconsistent Agreements.  The Company represents, warrants and agrees that (i) it has not
entered into, shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person and
(iii) without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Transfer Restricted
Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Securities Act unless the rights so granted are not in conflict
or inconsistent with the provisions of this Agreement. 

    (j)  No Piggyback on Registrations.  Neither the Company nor any of its security holders (other than the
Holders of Transfer Restricted Securities in such capacity) shall have the right to include any securities of the Company in any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities. 

    (k)  Severability.  The remedies provided herein are cumulative and not exclusive of any remedies
provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their
reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable. 

14

    Please
confirm that the foregoing correctly sets forth the agreement among the Company and the Initial Purchasers. 

	 	 	Very truly yours,
	

 	
 	

HEALTH NET, INC.
	

 	

 	

By	

 	

/s/ STEVEN P. ERWIN   

	 	 	 	 	Name:	 	Steven P. Erwin
	 	 	 	 	Title:	 	Executive Vice President and

Chief Financial Officer

Accepted: 

CHASE
SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

FLEET SECURITIES, INC.

MIZUHO INTERNATIONAL PLC

SALOMON SMITH BARNEY INC.

SCOTIA CAPITAL (USA) INC. 

	By	 	/s/ JOSE C. PADILLA   
	 	 
	 	 	Authorized Signatory

	 	 

ANNEX
A 

    Each
broker-dealer that receives Exchange Securities for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange
Securities received in exchange for Securities where such Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan
of Distribution". 

ANNEX
B 

    Each
broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution". 

ANNEX
C 

PLAN
OF DISTRIBUTION 

    Each
broker-dealer that receives Exchange Securities for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of
180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. 

    The
Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the
Registered Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options
on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Registered Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange
Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 

    For
a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Registered Exchange Offer (including the expenses of one counsel for
the Holders of the Securities) other than commissions or concessions of any broker-dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act. 

ANNEX
D 

    /
/        CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF

               THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. 

Name:

Address: 

If
the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities Act.Prepared by MERRILL CORPORATION

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Exhibit 10.10    
  

March 12,
2001 

Dr. Timothy
Moore

94 Glenn Drive

New Caanan, CT 06840 

Dear
Tim: 

    Congratulations!
On behalf of Health Net, Inc. (the "Company" or "HNT") I would like to confirm our offer for the position of Senior Vice President & Chief Medical
Officer. You will report to Cora Tellez, President of Health Plans. Your signature will represent agreement with the following terms: 

    1.  Salary.  You will be paid a monthly base salary of $25,833.33, less
applicable withholdings, (payable on a bi-weekly basis)("Base Salary"), which covers all hours worked. Generally, your base salary will be reviewed annually but the Company reserves the
right to change your compensation at any time. 

    2.  Duties.  Your primary responsibility will be for the medical
management of the Company, but you may be assigned other duties as needed and your duties may change from time to time on reasonable notice, based on your skills and the needs of the Company. In
addition, your reporting relationship may be changed from time-to-time at the discretion of the Company. 

    3.  Adjustments and Changes in Employment Status.  You understand that
the Company reserves the right to make personnel decisions regarding your employment, including but not limited to decisions regarding any promotion, salary adjustment, transfer or disciplinary
action, up to and including
termination, without notice and consistent with the needs of the business. Generally, performance and compensation are reviewed on an annual basis. 

    4.  Protection of Proprietary and Confidential Information.  By signing
this letter below, you agree that your employment creates a relationship of confidence and trust with the Company with respect to proprietary and confidential information of the Company learned by you
during your employment. 

    (a) You
agree not to directly or indirectly use or disclose any of the proprietary or confidential information of the Company or any of its affiliates at any time
except in connection with the services you provide to such entities. "Proprietary and confidential information" shall mean trade secrets, confidential knowledge, data or any other proprietary or
confidential information of the Company or any of its affiliates, but shall not include information previously published publicly by the Company or other information generally in the public domain. By
way of illustration but not limitation, "proprietary and/or confidential information" includes: (i) trade secrets, documents, memoranda, reports, files, correspondence, lists and other written
and graphic records affecting or relating to any such entity's business; (ii) confidential marketing information including without limitation marketing strategies, customer and client names and
requirements, services, prices, margins and costs; (iii) confidential financial information; (iv) personnel information (including without limitation employee compensation); and
(v) other confidential business information. 

    (b) You
further agree that at all times during your employment and at all times after termination of your employment, you will keep in confidence and trust all
proprietary and confidential information, and that you will not use or disclose any proprietary or confidential information or anything related to such information without the written consent of the
Company, except as may be necessary in the ordinary course of performing your duties to the Company. 

    (c) All
property, including, but not limited to, proprietary and confidential information, documents, data, records, apparatus, equipment and other physical property,
whether or not pertaining to proprietary or confidential information, provided to you by the Company or any of its affiliates or produced by you or others in connection with your providing services to
the Company 

 

or any of its affiliates shall be and remain the sole property of the Company or its affiliates (as the case may be) and shall be returned promptly to such appropriate entity as and when requested by
such entity. You shall return and deliver all such property upon termination of your employment, and you may not take any such property or any reproduction of such property upon such termination. 

    (d) You
recognize that the Company and its affiliates have received and in the future will receive information from third parties which is private, proprietary or
confidential information subject to a duty on such entity's part to maintain the confidentiality of such information and to use it only for certain limited purposes. You agree that during the term of
your employment, and thereafter, you owe such entities and such third parties a duty to hold all such private, proprietary or confidential information
received from third parties in the strictest confidence and not to disclose it, except as necessary in carrying out your work for such entities consistent with such entities' agreements with such
third parties, and not to use it for the benefit of anyone other than for such entities or such third parties consistent with such entities' agreements with such third parties. 

    (e) Your
obligations under this section shall continue after the termination of your employment, and that any breach of this Section shall be a material breach of this
agreement (the "Agreement"). 

    5.  Representation and Warranty of Employee.  You represent and warrant
to the Company that the performance of your duties will not violate any agreements with or trade secrets of any other person or entity. 

    6.  Employee Benefits.  You may be eligible for various employee benefits
if you meet the applicable participation requirements. These benefits include paid time off ("PTO"), holidays, group medical, dental, vision, term life, and short and long term disability insurance,
participation in a 401(k) plan, employee stock purchase plan and tuition reimbursement plan. The Company also will provide you with an automobile allowance of $1,000 per month. You will be covered by
workers' compensation insurance and state disability insurance, as required by state law. Although the Company or its subsidiaries or affiliates may sponsor a benefit or plan for some employees, it is
not required to do so for all employees, and may exclude certain employees now or in the future from one or more benefits or plans. The Company or its subsidiaries or affiliates may modify, terminate
or amend any benefit or plan in its discretion, retroactively or prospectively, subject only to applicable law. 

    7.  Additional Benefits.  Subject to approval by the Company's
Compensation and Stock Option Committee of the Board of Directors (the "Committee"), you will be granted an option to purchase 40,000 shares of the Class A common stock of HNT. Such options
will be granted under the applicable HNT stock option plan, in accordance with and subject to each term of HNT's form of option agreement as modified by the Committee. The Committee will determine the
Stock Option Grant date. You also will be reimbursed up to the amount of $2,500.00 per year for documented costs incurred for your personal financial counseling services. You will also be eligible to
participate in HNT's Executive Incentive Plan (also known as the Management Incentive Plan ("MIP")) in accordance with the terms of the MIP, which provides you with a target opportunity to earn up to
50% of your base salary as additional compensation, according to the terms of the actual plan documents. Your relocation will be covered under the applicable Relocation Benefit Guidelines currently in
effect, a copy of which guidelines is attached. All relocation expenses not deductible under IRS regulations will be "grossed up" for income tax purposes at a rate applicable to your personal federal
and state tax liability. 

    8.  Term of Employment.  Your employment with the Company is
"at-will," which means that either you or the Company may terminate the employment relationship at any time, with or without notice and without or without Cause (as defined below). Upon
termination of your employment for any reason, in addition to any other payments that may be payable to you hereunder, you (or your beneficiaries or estate) will be paid (in each case to the extent
not theretofore paid) within thirty (30) days following your date of termination (or such shorter period that may be required by applicable 

2

 

law): your annual Base Salary through the date of termination, any compensation previously deferred by you (together with any interest and earnings therein), accrued but unused PTO, reimbursable
expenses incurred by you prior to the termination date and any other compensatory plan, arrangement or program payment to which you may be entitled. 

    9.  Severance Pay.  

    (a) If
your employment is terminated by the Company without Cause (as defined below) at any time that is not within two (2) years after a Change in Control (as
defined below) of HNT, you will be entitled to receive, provided you sign a Waiver and Release of Claims substantially in the form attached hereto as  Exhibit A, which is incorporated into this
Agreement by reference, (i) a lump sum cash payment equal to twelve (12) months of your
Base Salary in effect immediately prior to the date of your termination, and (ii) the premium payments for continuation, under COBRA, of your medical, dental and vision benefits (as maintained
for your benefit immediately prior to the date of your termination) for you and your dependents for a period of twelve (12) months, provided you properly elect to continue those benefits under
COBRA. The lump sum payment referred to above will be paid within thirty (30) days following your termination of employment. 

    (b) If
at any time within two (2) years after a Change in Control (as defined below) of HNT your employment is terminated by the Company without Cause or you
terminate your employment for Good Reason (as defined below) (by giving the Company at least fourteen (14) days prior written notice of the effective date of termination), then you will be
entitled to receive, provided you sign a Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is
incorporated into this Agreement by reference, (i) a lump sum payment equal to twenty-four (24) months of your Base Salary in effect immediately prior to the date of your
termination, and (ii) the continuation of your medical, dental and vision benefits for you and your dependents for six (6) months following the effective date of your termination and
(iii) the premium payments for continuation, under COBRA, of your medical, dental and vision benefits (maintained for your benefit immediately prior to the date of your termination) for you and
your dependents for a period of eighteen (18) months, provided you properly elect to continue those benefits under COBRA; provided, however, that in the event the Company requests, in writing,
prior to such voluntary termination by you for Good Reason that you continue in the employ of the Company prior to the expiration of such period of time. In the event that your employment is
voluntarily terminated by you at any time (except for Good Reason within two years after a Change in Control of the Company), then you shall not be eligible to receive any payments set forth in this
Section 9). The lump sum payment will be paid within thirty (30) days following your termination of employment. 

    (c) For
purposes of this Agreement, the term Cause shall include, without limitation, (i) an act of dishonesty causing harm to the Company or any of its
affiliates, (ii) the knowing unauthorized disclosure of confidential information relating to the business of the Company or any of its affiliates, (iii) habitual drunkenness or narcotic
drug addiction, (iv) conviction of a felony or a misdemeanor involving moral turpitude, (v) willful refusal to perform or gross neglect of the duties assigned to you, (vi) the
willful breach of any law that, directly or indirectly, affects the Company or any of its affiliates, (vii) a material breach by you following a Change in Control of those duties and
responsibilities of yours that do not differ in any material respect from your duties and responsibilities during the 90-day period immediately
prior to such Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on your part, which is committed in bad faith or
without reasonable belief that such breach is in the best interests of the Company or any of its affiliates and which is not remedied in a reasonable period of time after receipt of written notice
from the Company specifying such breach, or (viii) breach of your obligations hereunder (or under any Company policy) to protect the proprietary and confidential information of the Company or
any of its affiliates. 

3

 

    (d) For purposes of this Agreement Change in Control is defined as any of the following which occurs subsequent to the effective date of your employment: 

     (i) Any
person (as such term is defined under Section 1 3(d)(3) of the Securities Exchange Act of 1934. as amended (the "Exchange Act")), corporation or other
entity (other than HNT or any of its subsidiaries, or any employee benefit plan sponsored by HNT or any of its subsidiaries) is or becomes the beneficial owner (as such term is defined in
Rule 13d-3 under the Exchange Act) of securities of HNT representing twenty percent (20%) or more of the combined voting power of the outstanding securities of HNT which ordinarily
(and apart from rights accruing under special circumstances) have the right to vote in the election of directors (calculated as provided in paragraph (d) of such Rule 13d-3
in the case of rights to acquire HNT's securities) (the "Securities"); 

    (ii) As
a result of a tender offer, merger, sale of assets or other major transaction, the persons who are directors of HNT immediately prior to such transaction cease
to constitute a majority of the Board of Directors of HNT (or any successor corporations) immediately after such transaction; 

    (iii) HNT
is merged or consolidated with any other person, firm, corporation or other entity and, as a result, the shareholders of HNT, as determined immediately before
such transaction, own less than eighty percent (80%) of the outstanding Securities of the surviving or resulting entity immediately after such transaction: 

    (iv) A
tender offer or exchange offer is made and consummated for the ownership of twenty percent (20%) or more of the outstanding Securities of HNT; 

    (v) HNT
transfers substantially all of its assets to another person, firm, corporation or other entity that is not a wholly-owned subsidiary of HNT; or 

    (vi) HNT
enters into a management agreement with another person, firm, corporation or other entity that is not a wholly-owned subsidiary of HNT and such management
agreement extends hiring and firing authority over you to an individual or organization other than HNT. 

    (e) For
purposes of this Agreement the term Good Reason means any of the following which occurs subsequent to the effective date of your employment: 

     (i) A
demotion or a substantial reduction in the scope of your position, duties, responsibilities or status with the Company, or any removal of you from or any failure
to reelect you to any of the positions (or functional equivalent of such positions) referred to in the introductory paragraphs hereof, except in connection with the termination of his/her employment
for Disability (as defined below), normal retirement or Cause or by you voluntarily other than for Good Reason; 

    (ii) A
reduction by the Company in your Base Salary or a material reduction in the benefits or perquisites available to you as in effect immediately prior to any such
reduction; 

    (iii) A
relocation of you to a work location more than fifty (50) miles from your work location immediately prior to such proposed relocation; provided that such
proposed relocation results in a materially greater commute for you based on your residence immediately prior to such relocation; or 

    (iv) The
failure of the Company to obtain an assumption agreement from any successor contemplated under Section 16 of this Agreement. 

    10.  Termination by the Company for Cause.  The Company may terminate
your employment for Cause at any time with or without notice. In the event of such termination, you will not be eligible to receive any of the payments set forth in Section 9 above. 

4

 

    11.  Termination due to Death or Disability.  In the event that your
employment is terminated at any time due to death or Disability, you (or your beneficiaries or estate) shall be entitled, to (a) continuation of all medical and dental insurance for a period of
twelve (12) months from the date of termination and (b) a lump sum payment equal to twelve (12) months of your Base Salary in effect immediately prior to the date of your
termination, to be paid within thirty (30) days following your termination of employment, provided in the event of a termination due to Disability, you sign the Waiver and Release of Claims
which is incorporated into this Agreement by reference as Exhibit A. For purposes of this Agreement, a termination for "Disability" shall mean a
termination of your employment due to your absence from your duties with the Company on a full-time basis for at least 180 consecutive days as a result of your incapacity due to physical
or mental illness. 

    12.  Withholding.  All payments required to be made by the Company
hereunder to you or your estate or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine should be withheld pursuant to any
applicable federal, state, local or other law or regulation. 

    13.  Potential Tax Consequences for "Parachute" Payments.  

    13.1  Notwithstanding
any other provisions of this Agreement, in the event that (i) any payment or distribution by the Company to or for your
benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result
in a Change in Control or any person affiliated with the Company or such person) (all such payments and distributions, including the severance payments and benefits provided for in Section 9
hereof (the "Severance Payments"), being hereinafter called "Total Payments") would be subject (in whole or part) to the excise tax imposed under section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), or any interest or penalties are incurred by you with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax") and (ii) there are any excess parachute payments (within the meaning of section 280G(b) of the Code), in the aggregate, in respect of such
Total Payments in excess of $50,000, then the Company shall pay to you an additional cash payment (the "Tax Gross-up") so that after receipt of such Tax Gross-up, the payment
of any additional federal, state and local income taxes on such Tax Gross-up amount and the payment of any Excise Taxes, you shall receive such net amount of Total Payments equal to the
amount that you would have received if no Excise Tax was due; provided however that you shall cooperate in good faith with the Company to minimize the
amount of the Excise Tax that may become payable by taking any such action or making any such election as may be reasonably requested by the Company in respect of the Total Payments due to you. 

    13.2  Subject
to the provisions of Section 13.3, all determinations required to be made under this Section 13, including whether and when a
Tax Gross-Up is required and the amount of such Tax Gross-Up and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm
that, immediately prior to the Change in Control, was HNT's independent auditor (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and you within fifteen
(15) business days of the receipt of notice from you that you have received Total Payments, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Tax Gross-Up, as determined pursuant to this Section 13, shall be paid by the Company to you within five (5) days of the receipt of
the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by you, then the Accounting Firm shall furnish to you a written opinion that failure to report the
Excise Tax on your applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the
Company. As a result of any uncertainty in the application of section 4999 of the Code at the time of the determination by the Accounting Firm hereunder, it is possible that Tax
Gross-Up which will not have been made by the Company should 

5

 

have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 13.3 and you thereafter
are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company
to you or for your benefit. 

    13.3 You
shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Tax
Gross-Up. Such notification shall be given as soon as practicable but no later than ten (10) business days after you are informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the expiration of the 30-day period following the date
on which you give such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies you in writing prior to
the expiration of such period that it desires to contest such claim, you shall: 

    (1) give
the Company any information reasonably requested by the Company relating to such claim, 

    (2) take
such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, 

    (3) cooperate
with the Company in good faith in order effectively to contest such claim, and 

    (4) permit
the Company to participate in any proceedings relating to such claim; 

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 13.3, the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct you to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided
further, that if the Company directs you to pay such claim and sue for a refund, the Company shall advance the amount of such payment to you on an interest-free
basis and shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations
relating to payment of taxes for your taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to
which a Tax Gross-Up would be payable hereunder and you shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority. 

6

  

      13.4  If, after your receipt of an amount advanced by the Company
pursuant to Section 13.3, you become entitled to receive, and receive, any refund with respect to such claim, you shall (subject to the Company's complying with the requirements of
Section 13.3) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after your receipt of an amount
advanced by the Company pursuant to Section 13.3, a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing
of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof, the amount of Tax Gross-Up required to be paid. 

      13.5  At the time that payments are made under this Agreement, the
Company shall provide you with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or
other advice the Company has received from tax counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 

    14.  Non-Competition.  

    (a) You
hereby agree that, during (i) the six-month period following a termination of your employment with the Company that entitles you to receive
severance benefits under a written agreement with or policy of the Company or (ii) the twelve-month period following a termination of your employment with the Company that does not entitle you
to receive such severance benefits (the period referred to in either clause (i) or (ii), the "Noncompetition Period"), you shall not undertake any employment or activity (including, but not
limited to, consulting services) with a Competitor (as defined below), either (x) if you are a corporate employee of the Company, in all geographic areas in which the Company or any of its
affiliates operate or (y) if you are employed at the divisional level, in the geographic area in which you performed services for such division (the "Market Area"), where the loyal and complete
fulfillment of the duties of the competitive employment or activity would call upon you to reveal, to make judgments on or otherwise use any confidential business information or trade secrets of the
business of the Company or any of its affiliates to which you had access during your employment with the Company. For purposes of this Section, "Competitor" shall refer to any health maintenance
organization or insurance company that provides managed health care or related services similar to those provided by the Company or any of its affiliates. 

    (b) In
addition, you agree that, during the applicable Noncompetition Period following termination of employment with the Company, you shall not, directly or
indirectly, solicit, interfere with, hire, offer to hire or induce any person, who is or was an employee of the Company or any of its affiliates at the time of such solicitation, interference, hiring,
offering to hire or inducement, to discontinue his/her relationship with the Company or any of its affiliates or to accept employment by, or enter into a business relationship with, you or any other
entity or person. 

    (c) It
is hereby further agreed that if any court of competent jurisdiction shall determine that the restrictions imposed in this Section are unreasonable (including,
but not limited to, the definition of Market Area or Competitor or the time period during which this provision is applicable), the parties hereto hereby agree to any restrictions that such court would
find to be reasonable under the circumstances. 

    (d) You
also acknowledge that the services to be rendered by you to the Company are of a special and unique character, which gives this Agreement a peculiar value to
the Company or any of its affiliates, the loss of which may not be reasonably or adequately compensated for by damages in an action at law, and that a material breach or threatened breach by you of
any of the provisions contained in this Section will cause the Company or any of its affiliates irreparable injury. You therefore agree that the Company may be entitled, in addition to the remedies
set forth above in this Section and any other right or remedy, to a temporary, preliminary and 

7

 

permanent injunction, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining you from any such violation or threatened
violations. 

    15.  Adjustments to Outstanding Options.  You hereby consent, in
accordance with Section 14 of the Health Net, Inc. Second Amended and Restated 1991 Stock Option Plan, Section 6.2 of the Health Net, Inc. 1997 Stock Option Plan and
Section 6.2 of the Health Net, Inc. 1998 Stock Option Plan (collectively, the "Plans"), that the Plans, as amended as of December 18, 2000, including amendments to the
Acceleration Provisions of the Plans, shall govern and apply to all of your outstanding options under the Plans, regardless of the date such options were granted. To the extent the option agreements
for your outstanding options under the Plans state anything to the contrary, you agree that such option agreement(s) are hereby amended to be consistent with the foregoing sentence. 

    16.  Successors; Binding Agreement.  

    (a) This
Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a
result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding
upon the surviving or resulting corporation or the person or entity to which such assets are transferred. 

    (b) The
Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in paragraph (a) of this Section, it will cause any
successor or transferee unconditionally to assume, by written instrument delivered to you (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to
obtain such assumption prior to the effectiveness of
any such merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle you to compensation and other benefits from the Company in the same amount and on the same
terms as you would be entitled hereunder if your employment were terminated without Cause. For purposes of implementing the foregoing, the date on which any such merger, consolidation or transfer
becomes effective shall be deemed the date of termination. 

    (c) This
Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you shall die while any amounts would be payable to you hereunder had you continued to live, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to such person or persons appointed in writing by you to receive such amounts or, if no person is so appointed, to your estate. 

    17.  Severability.  If any term of this Agreement is held to be invalid,
void or unenforceable, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected and the parties shall use their best efforts to find an alternative way to
achieve the same result. 

    18.  Integrated Agreement.  This Agreement supersedes any prior
agreements, representations or promises of any kind, whether written, oral, express or implied between the parties hereto with respect to the subject matters herein. It constitutes the full, complete
and exclusive agreement between you and the Company with respect to the subject matters herein. This agreement cannot be changed unless in writing, signed by you and the President of the Company. 

    19.  Waiver.  No waiver of any default hereunder shall operate as a
waiver of any subsequent default. Failure by either party to enforce any of the terms or conditions of this Agreement, for any length of time or from time to time shall not be deemed to waive or
decrease the rights of such party to insist thereafter upon strict performance by the other party. 

    20.  Notices.  All notices and communications required or permitted
hereunder shall be in writing and shall be deemed given (a) if delivered personally, (b) one (1) day after being sent by Federal Express or a similar commercial overnight service
or (c) three (3) days after being mailed by registered 

8

 

or certified mail, return receipt requested, prepaid and addressed to the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: 

	If to the Company:	 	Health Net, Inc.

Attn: Karin D. Mayhew

21650 Oxnard Street, 22nd Floor

Woodland Hills, California 91367
	

If to the Employee:	
 	

Timothy Moore

94 Glen Drive

New Canaan, CT 06840

    21.  Governing Law.  The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full
force and effect. 

    22.  Survival and Enforcement.  Sections 4 and 14 of this Agreement and
any rights and remedies arising out of this Agreement shall survive and continue in full force and effect in accordance with the respective terms thereof, notwithstanding any termination of this
Agreement or your employment. The parties agree that the Company would be damaged irreparably in the event any provision of Sections 4 or 14 of this Agreement were not performed in accordance with its
terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach. Therefore, the Company or its successors or assigns shall be entitled in
addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security). 

    23.  Acknowledgement.  You acknowledge that you have had the opportunity
to discuss this matter with and obtain advice from your attorney, have had sufficient time to and have carefully read and fully understood all of the provisions of this Agreement, and you are
knowingly and voluntarily entering into this Agreement. You further acknowledge that you are obligated to become familiar with and comply at all times with all Company policies. 

    In
order to confirm your agreement with and acceptance of these terms, please sign one copy of this letter and return it to me. The other copy is for your records. If there is any
matter in this letter that you wish to discuss further, please do not hesitate to contact to me. 

Sincerely, 

/s/
Karin D. Mayhew

Karin D. Mayhew
 Senior Vice President, Organization Effectiveness

cc:
Cora Tellez 

I
agree to the terms of employment set forth in this letter. 

/s/
Timothy J. Moore
 Employee

Date:
4/2/01 

9

QuickLinks

Exhibit 10.10

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