Document:

Executed in 6 Parts
                                             Counterpart No. (   )

                              NATIONAL EQUITY TRUST
                           TOP TEN PORTFOLIO SERIES 44
                            REFERENCE TRUST AGREEMENT

     This  Reference  Trust  Agreement  dated  ________,  2003 among  Prudential
Investment Management Services LLC, as Depositor, Prudential Investments LLC, as
Portfolio  Supervisor  and The Bank of New York,  as Trustee sets forth  certain
provisions  in full  and  incorporates  other  provisions  by  reference  to the
document  entitled  "National Equity Trust,  Trust Indenture and Agreement" (the
"Basic  Agreement")  dated February 2, 2000. Such provisions as are set forth in
full herein and such provisions as are  incorporated  by reference  constitute a
single instrument (the "Indenture").

                                WITNESSETH THAT:

     In  consideration  of the  premises  and of the  mutual  agreements  herein
contained, the Depositor and the Trustee agree as follows: Part I.

                     STANDARD TERMS AND CONDITIONS OF TRUST

     Subject to the provisions of Part II hereof,  all the provisions  contained
in the Basic  Agreement are herein  incorporated  by reference in their entirety
and  shall be deemed  to be a part of this  instrument  as fully and to the same
extent as though said provisions had been set forth in full in this instrument.

A.   Article I, entitled "Definitions," shall be amended as follows:

(i)  Section  1.01-Definitions  shall be amended to add the following definition
     at the end thereof:

     "Portfolio  Supervisor" of the Trust shall have the meaning  assigned to it
in Part II of the Reference Trust Agreement.

B.   Article  III,  entitled  "Administration  of  Trust,"  shall be  amended as
     follows:

<PAGE>

                                      -2-

     (i) The third  paragraph of Section  3.05-Distribution  shall be amended by
deleting any reference to Depositor and replacing it with Portfolio Supervisor.

     (ii)  Section  3.14-Deferred  Sales  Charge  shall  be  amended  to add the
following sentences at the end thereof:

"References to Deferred Sales Charge in this Trust Indenture and Agreement shall
include any Creation and  Development  Fee  indicated  in the  prospectus  for a
Trust.  The  Creation  and  Development  Fee  shall be  payable  on each date so
designated  and in an amount  determined  as specified in the  prospectus  for a
Trust."

C.   Article VIII, entitled "Depositor," shall be amended as follows:

     (i) Section 8.07-Compensation shall be amended by deleting any reference to
Depositor and replacing it with Portfolio Supervisor.

D.   Article IX,  entitled  "Additional  Covenants;  Miscellaneous  Provisions,"
     shall be amended as follows:

     (i) The first sentence of Section 9.05 - Written Notice shall be amended by
deleting the language "Prudential Securities  Incorporated at One Seaport Plaza,
New  York,  New  York  10292"  and  replacing  it  with  "Prudential  Investment
Management LLC at 100 Mulberry Street,  Gateway Center Three, Newark, New Jersey
07102".

                                    Part II.

                     SPECIAL TERMS AND CONDITIONS OF TRUST

     The following special terms and conditions are hereby agreed to:

     A. The Trust is denominated National Equity Trust, Top Ten Portfolio Series
44.

     B. The Units of the Trust shall be subject to a deferred sales charge.

     C. The publicly  traded stocks listed in Schedule A hereto are those which,
subject  to the terms of this  Indenture,  have been or are to be  deposited  in
Trust under this Indenture as of the date hereof.

     D.  The  term  "Depositor"  shall  mean  Prudential  Investment  Management
Services LLC.

E.   The term "Portfolio Supervisor" shall mean Prudential Investments LLC.

<PAGE>

                                      -3-

     F. The aggregate  number of Units  referred to in Sections 2.03 and 9.01 of
the Basic Agreement is                     as of the date hereof.

     G. A Unit of the Trust is hereby  declared  initially equal to 1/        th
of the Trust.

     H. The term "First Settlement Date" shall mean             , 2003.

     I. The terms  "Computation  Day" and "Record  Date" shall mean on the tenth
day of          2004,          2004,         2004 and            2004.

     J. The term "Distribution Date" shall mean on the twenty-fifth day of
          2004,          2004,           2004 and           2004.

     K. The term "Termination Date" shall mean                , 2004.

     L. The Trustee's  Annual Fee shall be $.90 (per 1,000 Units) for 49,999,999
and below Units outstanding, $.84 (per 1,000 Units) for 50,000,000 to 99,999,999
Units  outstanding,  $.78 (per 1,000 Units) for 100,000,000 to 199,999,999 Units
outstanding and $.66 (per 1,000 Units) for Units in excess of 200,000,000 Units.
In  calculating  the Trustee's  annual fee, the fee  applicable to the number of
units outstanding shall apply to all units outstanding.

     M. The  Depositor's  Portfolio  supervisory  service  fee shall be $.25 per
1,000 Units.

               [Signatures and acknowledgments on separate pages]AMENDED AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT

     This Amended and Restated Strategic Relationship Agreement ("Agreement") is
made  and  entered into this 31st day of October, 2003, by and among Health Net,
Inc.,  a  Delaware  corporation  ("HNI"),  Health  Net Life Insurance Company, a
California  domiciled life and disability insurance company ("HNL") (HNI and HNL
are  jointly  referred to herein as "Health Net"), SafeGuard Health Enterprises,
Inc.,  a  Delaware  corporation  ("SFGD"),  SafeHealth Life Insurance Company, a
California  domiciled life and health insurance company, SafeGuard Health Plans,
Inc.,  a  California specialized Knox-Keene Health Care Service Plan, Health Net
Dental,  Inc.,  a  California  specialized  Knox-Keene  Health Care Service Plan
("HND") and Health Net Vision, Inc. ("HNV") (SafeGuard Health Enterprises, Inc.,
SafeGuard Health Plans, Inc., SafeHealth Life Insurance Company, HNV and HND are
jointly  referred  to  herein  as  "SafeGuard").

                                    RECITALS
                                    --------

     WHEREAS,  pursuant  to the terms and subject to the conditions set forth in
the Purchase and Sale Agreement by and between HNI and SFGD dated April 7, 2003,
inter alia, SFGD agreed to purchase from HNI and HNI agreed to sell to SFGD, all
the  issued  and  outstanding  stock of HND (the "Purchase and Sale Agreement").

     WHEREAS,  pursuant to the terms of the Purchase and Sale Agreement, HNI and
SFGD  agreed  to enter into a strategic relationship agreement at the Closing to
promote  and  facilitate  the  sale  of  Health Net Branded Products through the
Health  Net  Marketing  Force  and  the  sale of Health Net Products through the
SafeGuard  Marketing  Force.

     WHEREAS,  HNI  and  SFGD  are parties to a Strategic Relationship Agreement
dated as of April 7, 2003 (the "Strategic Relationship Agreement").

     WHEREAS,  HNI  and  SFGD wish to amend and completely restate the Strategic
Relationship  Agreement  and  to  supersede  in  its  entirety  the  Strategic
Relationship  Agreement  with  this  Amended and Restated Strategic Relationship
Agreement.

     NOW  THEREFORE, in consideration of the mutual agreements contained herein,
the  sufficiency  of  which  is hereby acknowledged, and in consideration of the
performance  by  the  parties  of  their  obligations  under this Agreement, the
parties  agree  as  follows:

                                    ARTICLE I
                                  DEFINITIONS
                                  -----------

     Capitalized  terms  used  in this Agreement and not otherwise defined shall
have  the  meanings  given  such  terms  in the Purchase and Sale Agreement. For
purposes  of  this  Agreement,  the  following  terms  shall  have  the meanings
specified  below (definitions are applicable to both the singular and the plural
form  of  each  term  defined  herein).

     "Aggregate Payment Amount" shall have the meaning set forth in Section 6.3.
      ------------------------

                                        1
<PAGE>
     "Ancillary  SafeGuard  Products"  means dental HMO products, dental PPO and
      ------------------------------
dental  indemnity  products  developed  jointly by SafeGuard and Health Net with
benefit  designs  and  rate structures that differentiate such products from the
SafeGuard  Dental  Products  offered generally by SafeGuard in the Territory and
which shall be sold exclusively by the Health Net Marketing Force only to Health
Net  Clients.

     "Benchmark  Products"  means  those  SafeGuard  Dental  Products  that  are
      -------------------
determined  by  the  parties  to be materially similar to the Health Net Branded
Products  as  of  the  Effective  Date  and  set  forth  on  Schedule  5.1.
                                                             -------------

     "Branding" shall have the meaning set forth in Section 2.7.
      --------

     "Bundled  Product"  means  a  Health Net Medical Product that also provides
      ----------------
coverage  for dental services and dental products in a single policy or contract
form  that is issued and underwritten by a single Health Net Affiliate and under
which  the  dental  benefits  are  administered  by  HND.

     "Change  of Control" means the acquisition, in a single transaction or in a
      ------------------
series  of related transactions, by a person, an entity or a group of persons or
entities  acting  in  concert  of  fifty-one percent (51%) or more of the voting
securities of a party, or fifty-one percent (51%) or more of the aggregate value
of  the  assets  of  a  party.

     "Contractholder"  means  an  employer or individual in the Territory who or
      --------------
which  executes  an  enrollment agreement with respect to any Product subject to
this  Agreement.

     "Copayment  or Coinsurance" means the specific payment that a Subscriber is
      -------------------------
required  to make to a provider at the time Covered Dental Services are provided
and  which  the  provider  is  required  to  collect.

     "Covered  Dental Services" means those dental services or supplies to which
      ------------------------
a  Subscriber  is  entitled pursuant to the terms of the Subscriber's Health Net
Branded  Product.

     "Dental  Provider"  means  a  dentist, dental health service provider, or a
      ----------------
dental product provider who or which is a party to a contract with any SafeGuard
Affiliate  to provide dental services or dental products to Subscribers enrolled
in  a  Health  Net  Branded  Product.

     "Dispute" shall have the meaning set forth in Section 9.1.
      -------

     "Eligible  Employee" means an employee who is eligible to enroll in a group
      ------------------
Product  issued  to  a  Contractholder.

     "Effective Date" means the Closing Date of the Purchase and Sale Agreement.
      --------------

     "Existing  Dental  or  Vision Products" shall have the meaning set forth in
      -------------------------------------
Section  5.8.

     "Health  Care  Costs"  means  the  capitation  and  claims  paid  to Dental
      -------------------
Providers  for  Covered  Dental  Services.

                                        2
<PAGE>
     "Health Net Branded Products" [REDACTED]
      ---------------------------

     "Health Net Clients" shall have the meaning set forth in Section 2.1.
      ------------------

     "Health  Net  Dental  Products"  [REDACTED]
      -----------------------------

     "Health  Net  Indemnities" shall have the meaning set forth in Section 8.1.
      ------------------------

     "Health  Net  Marketing  Force"  [REDACTED]
      -----------------------------

     "Health  Net  Mark-Up"  [REDACTED]
      --------------------

     "Health  Net  Products"  means Medical Products, life insurance, vision and
      ---------------------
behavior health HMO, PPO and indemnity products offered by Health Net Affiliates
in  the  Territory.

     "HMO"  means  a  commercial  contract  for health care services provided by
      ---
Health Net Affiliates to Contractholders in the Territory utilizing a network of
providers  who  or which are under direct or indirect contract with a Health Net
Affiliate  to  provide  health  care  services.  "HMO" includes HMO plans with a
"point-of-service"  feature  that  permits  Subscribers to seek medical services
from providers outside the network of providers who or which are under direct or
indirect  contract  with a Health Net Affiliate to provide health care services.

     "JAMS" shall have the meaning set forth in Section 9.2.
      ----

     "Joint  Health  Net  Subscribers"  [REDACTED]
      -------------------------------

     "Medical Necessity" means dental services or dental products that a prudent
      -----------------
dentist  would provide to a patient for the purpose of preventing, diagnosing or
treating  an  illness,  injury,  disease  or its symptoms in a manner that is in
accordance with accepted standards of dental practice and not provided primarily
for  the  convenience  of  a  Subscriber  or  a  Dental  Provider.

     "Medical  Products"  means (i) PPO and indemnity health insurance contracts
      -----------------
covering  the  cost  of  medical  services  or supplies of Subscribers, and (ii)
medical  HMO  contacts.

     "Most  Favored  Nation  Price"  [REDACTED]
      ----------------------------

     "Net  Price"  [REDACTED]
      ----------

     "Network  List"  shall  have  the  meaning  set  forth  in  Section  4.3.
      -------------

     "Pooled  Net  Price"  [REDACTED]
      ------------------

     "Producer" means an insurance agent, broker or employee of either SafeGuard
      --------
or  Health  Net  or  any  of  their Affiliates authorized to market and sell the
Products  of  a  party  in  any  state  within  the  Territory.

     "Product"  means  any  Health  Net  Product,  Health  Net  Branded Product,
      -------
SafeGuard  Dental Product or Ancillary Product offered for sale or sold pursuant
to  this  Agreement.

                                        3
<PAGE>
     "SafeGuard  Clients"  means  existing  and prospective individual and group
      ------------------
accounts  with  SafeGuard  Dental  Products  or SafeGuard vision products in the
Territory.

     "SafeGuard  Dental  Products"  means the dental HMO products offered in the
      ---------------------------
Territory  by  SafeGuard  Health  Plans,  Inc.,  and  the  dental PPO and dental
indemnity  products  offered  in  the  Territory  by  SafeHealth  Life Insurance
Company.  For purposes of this Agreement, Health Net Branded Products and dental
HMO  Products  provided  by HND prior to the Effective Date that remain in-force
after  the  Effective  Date  shall  be  considered  SafeGuard  Dental  Products.

     "SafeGuard  Indemnities"  shall  have the meaning set forth in Section 8.2.
      ----------------------

     "SafeGuard  Compensation  Amount"  [REDACTED]
      -------------------------------

     "Supplemental  Compensation  Amount" means that dollar amount calculated in
      ----------------------------------
the  manner  described  in  Section  5.5.

     "Subscriber"  means  the  persons  including,  but not limited to, Eligible
      ----------
Employees,  who  meet  the  eligibility  requirements for a Product and who have
enrolled  in  such  Product.

     "Territory"  means Arizona, Oregon and California for dental PPO and dental
      ---------
indemnity Products and California for dental HMO Products.

     "Term"  means  that  period  of  time  commencing on the Effective Date and
      ----
ending on the termination date of this Agreement.

                                   ARTICLE II
                              MARKETING AND SALES
                              -------------------

     Section  2.1.    Marketing and Sale  of  the  Health  Net  Branded Products
                      ----------------------------------------------------------
to Health Net Clients.  Subject to the terms, conditions and limitations of this
---------------------
Agreement,  Health  Net shall have the right to utilize the Health Net Marketing
Force  to  (i)  offer  and  sell  Health  Net  Branded  Products to existing and
prospective[REDACTED}in  the  Territory  (jointly  referred  to  as  "Health Net
Clients")  when  the  Health  Net  Marketing  Force has or is offering to sell a
Health  Net  Medical  Product  to  such  Health  Net  Clients.

     Section  2.2.     Development  of Ancillary Dental Products.  SafeGuard and
                       -----------------------------------------
Health  Net  shall  develop jointly Ancillary SafeGuard Products that Health Net
reasonably  determines  would provide a marketing opportunity for the Health Net
Marketing  Force  in  the Territory.  Any Ancillary SafeGuard Products developed
jointly  by  Health Net and SafeGuard shall be offered exclusively by the Health
Net Marketing Force only as Health Net Branded Products to Health Net Clients in
the  Territory,  and  SafeGuard  shall  not  offer  or sell in the Territory any
SafeGuard Dental Product substantially similar to an Ancillary SafeGuard Product
without  the  prior  written  consent  of  Health  Net.

     Section  2.3.     Obligation  to  Provide  Health  Net  Branded  Products.
                       -------------------------------------------------------
SafeGuard  shall  take  all  actions  or  cause to be done all things necessary,
proper or appropriate to make the Health Net Branded Products available for sale
by  the  Health  Net  Marketing  Force  to  Health Net Clients in the Territory,
including  but  not  limited  to, making or causing to be made all form and rate

                                        4
<PAGE>
filings  with Governmental Authorities necessary to offer the Health Net Branded
Products  in  the  Territory.  Commencing on the Effective Date and as necessary
during  the  Term,  Health Net shall provide SafeGuard all information necessary
for  SafeGuard  to  seek  and  maintain  approvals  from applicable Governmental
Authorities of the rates for the Health Net Branded Products that the Health Net
Marketing  Force  intends  to  offer  to  Health  Net  Clients.

     Section  2.4.     Exclusive  Agreement.
                       --------------------

          (a)  [REDACTED]

          (b)  [REDACTED]

          (c)  Health  Net  shall  have  the  option  to  expand  the  exclusive
strategic relationship described in this Agreement to additional states in which
SafeGuard  is  appropriately  licensed to offer the Health Net Branded Products,
provided  that SafeGuard has no prior commitments in such additional states that
would  conflict  with  the  obligations  of  SafeGuard  under  this  Agreement.
SafeGuard  shall  provide  notice  to  Health Net of its intent to enter into an
exclusive  strategic  relationship in any state outside the Territory that would
be  substantially  similar to its relationship with Health Net described in this
Agreement.  Health Net shall have twenty (20) calendar days from the date of the
SafeGuard  notice  to  exercise  its  option  to  expand its exclusive strategic
relationship  with SafeGuard into the states identified in the SafeGuard notice,
provided,  however,  Health Net shall not have the option to exercise its option
--------   -------
to  expand  this strategic relationship in either Texas or Florida unless Health
Net  has at least [REDACTED] Subscribers enrolled in its Medical Products in the
relevant  state  at  the  time  Health  Net  exercises its option to expand this
strategic  relationship  to  such  state.

     Section  2.5.    Identification  of Health Net Branded Products. Subject to
                      ----------------------------------------------
the  requirements  and  limitations  of  Section  2.8  of this Agreement and all
applicable  Law,  the  Health  Net  Branded Products shall be marketed under the
collective  designation  "Health  Net  Dental."  Each Health Net Branded Product
shall  be  assigned a specific trade name agreed to by Health Net and SafeGuard.
Notwithstanding the foregoing, the Health Net Branded Products shall be marketed
in a way that is not deceptive or misleading and that clearly indicates that the
benefits provided under Health Net Branded Products are obligations of SafeGuard
Health  Plans,  Inc.,  HND or SafeHealth Life Insurance Company, as appropriate,
and  in  a  way  that does not suggest that such benefits are obligations of any
Health  Net  Affiliate.

     Section  2.6.     Marketing  and Sale  of Health Net Products by SafeGuard.
                       ---------------------------------------------------------
Subject  to  the terms and conditions of this Agreement, the SafeGuard Marketing
Force  shall  have the right to market Health Net Products to SafeGuard Clients.

     Section  2.7.     Marketing  Materials.  Each  party shall bear the cost of
                       --------------------
its  own  marketing  and  promotional efforts, including but not limited to, the
development  and  production  of  any marketing and collateral materials used to
promote  or market their respective Products or the Health Net Branded Products.
Any marketing and collateral materials developed by a party to promote or market
Products  pursuant  to this Agreement shall be approved by the other party prior
to  use.

                                        5
<PAGE>
     Section  2.8.     Branding.  Neither SafeGuard or Health Net shall make use
                       --------
of the other party's trade marks, service marks, trade names or logos, including
domain  names,  electric  or written content or other materials, descriptions or
representations  of any kind that mentions the other party or its Affiliates, or
refers  to any Products or services of the other party (collectively referred to
as  "Branding") without obtaining the prior written consent of such other party.
SafeGuard  and  Health  Net shall use commercially reasonable efforts to provide
the  other  party  with  such consent to utilize their respective Branding where
reasonably  necessary for the other party to perform its duties and exercise its
rights  under  this  Agreement and any such consent granted to utilize a party's
Branding  shall constitute a non-exclusive, revocable license that is limited to
use  of  the  Branding  of  the  party  in  the  Territory  consistent with this
Agreement.

     Section  2.9.     Training.  Health Net and SafeGuard shall develop jointly
                       --------
programs  or  prepare  materials to train all necessary Health Net and SafeGuard
personnel  and  the  respective  Marketing  Forces  of the parties regarding the
marketing  and  administration  of  the  Products.

                                  ARTICLE III
                     UNDERWRITING, RATES AND ADMINISTRATION
                     --------------------------------------

     Section  3.1.     Authority Regarding Products.
                       ----------------------------

          (a)     Except  as  provided herein, nothing in this Agreement confers
or  is  intended to confer on a party any authority with respect to the Products
of  the  other  parties, including but not limited to (i) underwriting criteria;
(ii)  pricing;  (ii)  participation  requirements;  (iii)  minimum  employer
contributions;  (iv)  approval  of  applications;  or (v) the authority to issue
policies,  contracts  or any other documents conferring coverage under a Product
of  another  party. Except as otherwise provided herein, each party reserves the
right,  in  its  sole  discretion,  to  amend, change or abolish coverage forms,
premium  rates  or fees, underwriting guidelines, eligibility criteria and other
internal  rules and regulations with respect to its own Products upon sixty (60)
days  advanced  written  notice  to  the  other  parties  hereto.

          (b)     Subject  to  any  limitations  imposed  by applicable Law, the
respective  Marketing  Forces  of Health Net and SafeGuard shall be permitted to
obligate  the other parties to provide coverage to the Clients of the respective
Marketing  Forces under the Products offered for sale pursuant to this Agreement
if  such  Clients  meet the eligibility and underwriting criteria established by
the  party  providing  the  Product.  In  the  event  a Client does not meet the
eligibility  and  underwriting  criteria  established by the party providing the
Product,  the  Marketing Force of the other parties shall not have the authority
to obligate the party providing the Product to provide coverage to such a Client
without  the  prior  consent  of  the  party  providing  the Product.  Except as
provided  in  this  Section  3.1(b),  each  party  retains  the exclusive right,
exercisable  without  permission from the other parties, to accept or reject any
application  or  enrollment  request,  or to cancel the coverage with respect to
their  respective  Products.  Notwithstanding  the foregoing, neither Health Net
nor SafeGuard shall impose any limitations or criteria with respect to a Product
offered  for  sale  pursuant to this Agreement that is more restrictive than the
limitations  and  criteria applicable generally to the Products offered for sale
by  the  party  in  the  Territory.

                                        6
<PAGE>
     Section  3.2.     Product  Administration.
                       -----------------------

          (a)     Except  as  specifically  provided herein, each party shall be
responsible for the design and implementation of all administrative services and
procedures  with  respect  to  its  respective  Products,  including  without
limitation,  enrollment,  applications,  setting  the  Net  Price, underwriting,
reporting,  coverage  determinations,  claims,  grievances,  correspondence  and
communication  with  eligible  and  covered persons, employers, Contractholders,
Subscribers, providers and Governmental Authorities, compliance, record keeping,
eligibility  verification, and providing any notices required by applicable Law,
provided,  however,  the  parties  shall  attempt  to  coordinate  enrollment,
--------   -------
underwriting and the application process to the extent possible and permitted by
Law  under  the  circumstances.

          (b)     To  the  extent  permitted  by applicable Law, the parties may
elect  to  coordinate  the  provision  of one or more administrative services to
minimize  duplication  of  resources and to promote greater profitability of the
Products.  The  fees  payable  for  such  services,  if any, shall be separately
negotiated  by  the  parties.

     Section 3.3.     Enrollment.  [REDACTED]
                      ----------

     Section 3.4.     Enrollment Materials.  Health Net and SafeGuard shall each
                      --------------------
be  responsible  for  the  preparation  and  distribution  of  Product booklets,
certificates,  provider  directories,  identification  cards,  and  all  other
materials  relating  to  their  respective Products.  All enrollment agreements,
forms  and  other  materials,  including Subscriber handbooks and identification
cards  used  for Contractholders and Subscribers shall be either Health Net's or
SafeGuard's  existing  approved  forms, as appropriate, modified as necessary to
reflect  the  terms  of  this  Agreement  and the administrative requirements of
Health  Net  and  SafeGuard, respectively.  All such materials shall specify the
Health Net Affiliate that is the underwriter of the Health Net Products, and the
SafeGuard Affiliate that is the underwriter of the SafeGuard Products, including
but  not  limited  to,  the Health Net Branded Products.  Neither Health Net nor
SafeGuard  shall use enrollment materials utilizing the name of the other party,
without  the  other  party's  written  approval.

     Section  3.5.     Enrollment  Reports.  Health  Net  and  SafeGuard  shall
                       -------------------
prepare enrollment reports not less frequently than monthly showing all Products
sold,  renewed or terminated pursuant to this Agreement, identifying individuals
who  are enrolled in each Product and such other enrollment information required
by  either  party  to  perform  its  duties with respect to such Products.  Such
reports shall be made by Health Net and SafeGuard on a periodic and timely basis
within  five  (5)  Business  Days  following  the  end of the month in which the
transactions  or other matters occurred, and shall be transmitted electronically
in  a  form  reasonably  acceptable  to  the  receiving  party.  Health  Net and
SafeGuard  shall  each  prepare  periodic  reconciliations  of  the  enrollment
information  in  their  possession.

     Section  3.6.     Claims Administration for  Health  Net  Branded Products.
                       --------------------------------------------------------

          (a)     SafeGuard  shall  be solely responsible for the payment of all
claims  submitted  by Dental Providers and Subscribers related to Covered Dental
Services provided to Subscribers, excluding applicable Copayment and Coinsurance
amounts.  SafeGuard  shall  at  all

                                        7
<PAGE>
times  retain full responsibility for determining compensability and for payment
or  non-payment  of  claims  under  the  Health  Net  Branded  Products.

          (b)     SafeGuard  shall  receive,  review, process or deny all claims
for  Covered  Dental  Services  provided  to  Subscribers in accordance with the
applicable  Health  Net  Branded  Products  and  applicable Law. SafeGuard shall
notify  Subscribers  in  writing of any claims denied for lack of coverage under
the  applicable  Health  Net  Branded  Product  by  providing a statement of the
reasons  for  the  denial and advising the Subscriber of the available grievance
procedures  as  required  by  applicable  Law.  SafeGuard  shall  administer
coordination  of  benefits  for  claims  submitted  for Covered Dental Services.

     Section  3.7.     Claims  Administration  for  Health  Net  Products.
                       --------------------------------------------------

          (a)     Health  Net shall be solely responsible for the payment of all
claims  submitted  by  providers and Subscribers related to services provided to
Subscribers  under  Health  Net  Products,  excluding  applicable  Copayment and
Coinsurance  amounts.  Health  Net shall at all times retain full responsibility
for  determining  compensability  and  for payment or non-payment of claims from
providers  under  any  Health  Net  Products.

          (b)     Health  Net  shall receive, review, process or deny all claims
for  services  or  supplies  provided  to  Subscribers  in  accordance  with the
applicable  Health  Net  Products  and  applicable  Law. Health Net shall notify
Subscribers  in  writing  of  any  claims  denied for lack of coverage under the
applicable  Health  Net  Product by providing a statement of the reasons for the
denial  and  advising  the  Subscriber  of the available grievance procedures as
required by applicable Law. Health Net shall administer coordination of benefits
for  claims  submitted  under  the  applicable  Health  Net  Product.

     Section  3.8.     Books  and  Records.  Health Net and SafeGuard shall each
                       -------------------
keep and maintain true and complete records of all transactions pursuant to this
Agreement.  SafeGuard  and  Health  Net  shall permit the other party reasonable
access during normal business hours to its records related to this Agreement for
inspection  and copying by the other party or its authorized representatives, or
by  a  legally authorized and properly identified Governmental Authority. Health
Net  and  SafeGuard shall furnish the other party, upon its written request, all
reasonably  required information in the party's possession regarding any and all
matters,  transactions  or  activities  pertaining  to the Products of the other
party  including  information required for financial reporting purposes, at such
times  and  in  such  formats  as  mutually  agreed  upon  by  the  parties.

     Section  3.9.     Web Site Support.
                       ----------------

          (a)     Health  Net and SafeGuard shall develop jointly (i) individual
web  pages  to appear on their respective web sites that provide the information
and  functionality  mutually  determined  by  Health  Net  and  SafeGuard  to be
necessary  or desirable to provide Subscriber support for the Health Net Branded
Products,  and  (ii)  hyperlinks  between  the  Health  Net  hosted  web  site
(http://www.healthnet.com)  and  the  SafeGuard  hosted  web  site
 ------------------------
(http://www.safeguard.net)  mutually  agreeable  to  Health  Net  and SafeGuard.
 ------------------------
SafeGuard  shall  provide  the  same  level  of  Subscriber functionality on the
SafeGuard  web  site  to  support  the

                                        8
<PAGE>
Health Net Branded Products that it provides to support any other dental benefit
program.  Notwithstanding  the  foregoing,  each  party  shall  have  sole
responsibility  for  providing,  hosting  and maintaining, at its expense, their
respective  web  sites.

          (b)     Subject  to  the  limitations  contained  in Section 2.8, each
party  shall  have sole control over the "look and feel" of their respective web
sites, including but not limited to, the placement of any hyperlinks and the use
of  any  banners  and  frames.  Each party shall have exclusive control over the
posting  of  any  web  page  and  hyperlinks  on  their  respective  web  sites.

     Section 3.10.     Performance  Standards.  Commencing  April 1, 2004  and
                       ----------------------
thereafter  during  the  Term,  SafeGuard  shall  comply  with  the  performance
standards  set  forth  in Schedule 3.10.  In the event SafeGuard fails to comply
with  any  of  the  performance standards, SafeGuard shall pay to Health Net the
amount(s)  corresponding  to  such  failure(s)  set  forth  in  Schedule  3.10.
SafeGuard  shall pay Health Net any amounts due within twenty (20) Business Days
following  the  end  of the relevant measuring period.  SafeGuard and Health Net
shall  use  their  best  efforts  to  report  all  measurements  related  to the
performance  standards  accurately  and completely.  Unless indicated otherwise,
the measurement period shall be calendar year.  SafeGuard shall report quarterly
to  Health  Net  all  measurements  related  to  the  performance  standards.

                                   ARTICLE IV
                       MANAGED CARE SERVICES AND PRODUCTS
                       ----------------------------------

     Section  4.1.     Dental  Provider Network.  SafeGuard shall make available
                       ------------------------
to  Subscribers  under  the  Health Net Branded Products the network of licensed
Dental Providers SafeGuard generally makes available to SafeGuard Subscribers in
the  Territory and such Dental Provider network shall at all times be sufficient
to  make  Covered  Dental  Services  readily  available  and  accessible to each
Subscriber  under  the  Health Net Branded Products.  SafeGuard shall maintain a
documented  system for monitoring and evaluating accessibility to Covered Dental
Services  by  Subscribers,  including  a  system  for  addressing  assessability
problems  that may develop.  SafeGuard shall use commercially reasonable efforts
to  maintain  and enforce all provisions of its contracts with Dental Providers.

     Section  4.2.     Network  Management.
                       -------------------

          (a)     Except  as  otherwise provided in the Network Access Agreement
by  and  between Health Net Life Insurance Company and SafeHealth Life Insurance
Company dated April 7, 2003, (i) all terms and conditions of provider contracts,
including  all  compensation  arrangements  and/or negotiated fees, shall be the
sole  responsibility  of  the  party  contracting  with  the providers, and (ii)
provider  network  recruitment  and management, credentialing protocols, quality
assurance,  utilization  management,  case  management,  and  other managed care
services  with  respect  to each party's Products shall be designed, managed and
performed  by  the party providing the Product for which such services are to be
performed. Each party may recommend to any other party additions to or deletions
from  such other party's provider networks, provided, however, that the decision
                                            --------  -------
to  include  or  exclude  any provider shall be the decision solely of the party
responsible  for  making  the  network  of  providers  available.

                                        9
<PAGE>
          (b)     Each  contract  between  SafeGuard and a Dental Provider shall
require  the  Dental  Providers  to  (i)  provide  Covered  Dental  Services  to
Subscribers  of  the Health Net Branded Products in the same manner and with the
same  availability as offered to other patients or customers and with the skill,
care  and  expertise  that  are  usual  and customary for licensed professionals
providing Covered Dental Services; (ii) not differentiate or discriminate in the
treatment  of  any  Subscriber  because  of race, color, creed, national origin,
ancestry,  religion, gender, marital status, sexual orientation, age, disability
health status or type of illness or condition, or source of payment; (iii) agree
that  in  the  event  SafeGuard fails to pay the applicable Dental Provider, the
Subscriber  shall  not  be  liable  to  the Dental Provider for any sums owed by
SafeGuard;  (iv)  maintain in force adequate professional liability insurance in
limits  sufficient  to  protect the Subscriber and Health Net; and (v) otherwise
comply  with  applicable  Law. Nothing contained herein is intended to require a
Dental  Provider to provide a service he or she is not duly licensed to perform,
does not usually and customarily perform, or in the professional judgment of the
Dental  Provider  declines  to  perform.

          (c)     SafeGuard  shall  require  contractually that Dental Providers
and  their  employees,  contractors,  and  agents  shall confidentially maintain
accurate  and  complete Subscriber records in compliance with applicable Law and
in  a manner that will ensure timely access by Subscribers and Health Net to the
records  pertaining  to  such  Subscribers  in  compliance  with  applicable Law
relating  to  privacy  of  medical  information.

          (d)     Neither party shall be required to disclose to the other party
its  proprietary  information,  including  without  limitation, information with
respect  to  utilization  review, case management, procedure specific protocols,
provider  profiling,  credentialing  criteria,  software  systems  or  any other
information which that party, in its sole discretion, designates as proprietary.
If a party elects to disclose any such proprietary information, such information
shall  be  deemed Confidential Information subject to the limitations of Section
10.15.

     Section  4.3.     Network  List.
                       --------------

          (a)     Within  ten  (10)  days of the Effective Date, SafeGuard shall
deliver  to  Health  Net  a  list of Dental Providers (the "Network List") in an
Excel  spreadsheet  format  that is accurate as of the end of the calendar month
preceding  delivery  of  the  Network  List.  The  Network  List  shall  contain
information  regarding  each  Dental  Provider  including name, billing address,
facility  office  address,  and telephone number. On a monthly basis thereafter,
SafeGuard  shall  deliver  to Health Net updates of all information contained in
the  Network  List  and  any  additional  information  in SafeGuard's possession
reasonably necessary for Health Net to monitor and maintain an accurate database
of  Dental  Providers, including but not limited to, all information required by
this  Section  4.3  for  all  Dental Providers added to the Network List and the
identity  of  all  terminated  Dental  Providers.

          (b)     Health  Net may provide to Subscribers in provider directories
or otherwise the information regarding Dental Providers contained in the Network
List  and may use such information as otherwise necessary to carry out the terms
of  this  Agreement.  Health  Net  shall  not  otherwise use the names, symbols,
trademarks  or  service  marks  of  Dental  Providers  without the prior written
consent  of  SafeGuard  and  the  relevant  Dental  Providers.

                                       10
<PAGE>
          (c)     SafeGuard  shall,  at  its  expense,  maintain  and  provide a
locator  service  of  Dental  Providers and provide such data to Health Net in a
mutually  agreeable electronic format so that Subscribers may access the locator
service  by  accessing  the  Health  Net  web  site  (http://www.healthnet.com).
                                                      ------------------------
Subscribers  may  also  access  such locator services through a toll-free number
which  SafeGuard  shall  maintain  at  its  expense.

     Section  4.4.     Credentialing.  SafeGuard  shall  re-credential  the  HMO
                       -------------
Dental  Providers  at  least  every  thirty-six  (36)  months  utilizing  the
credentialing standards of the National Committee of Quality Assurance Standards
for  Accreditation  of  Managed  Care  Organizations  and  SafeGuard  shall
re-credential  PPO  Dental  Providers  utilizing SafeGuard's PPO Dental Provider
credentialing  criteria  as of the Effective Date and as amended thereafter.  If
Health  Net has a reasonable basis to request that a Dental Provider be excluded
from  the  network  of  Dental  Providers  available  to  provide Covered Dental
Services  to Subscribers, upon the request of Health Net, SafeGuard shall either
exclude  such  Dental Provider from the network of Dental Providers available to
provide  Covered  Dental  Services  to Subscribers, or terminate the contract of
such  Dental  Provider  in accordance with its terms.  Subject to any applicable
confidentiality  requirements,  Health  Net  and  its authorized representatives
shall  have the right, upon prior written notice, at all reasonable times during
normal  business  hours,  to  inspect,  review  and  make copies at Health Net's
expense  of  all  books  and  records  of  SafeGuard  reasonably  related to the
credentialing  of  Dental  Providers.

     Section  4.5.     Quality  of Service.  SafeGuard shall monitor the quality
                       -------------------
of  Covered  Dental  Services  provided  to  Subscribers by the Dental Providers
through  a  quality  management program consistent with the prevailing practices
and procedures of SafeGuard as of the Effective Date.  In the event the standard
or  quality  of  care  or  service furnished by a Dental Provider is found to be
unacceptable  under  such  program,  SafeGuard  shall use best efforts to notify
Health Net promptly and either (i) use commercially reasonable efforts to ensure
that  such  Dental Provider corrects the specified deficiency, or (ii) terminate
the  contract  of  such  Dental  Provider  in  accordance  with  its  terms.

     Section  4.6.     Notice  of Adverse Action.  SafeGuard shall notify Health
                       -------------------------
Net in writing promptly after receiving any actual or constructive notice of any
investigation  by  a Governmental Authority, complaint or adverse action against
any  Dental  Provider,  including  without  limitation  (i) any action against a
Dental  Provider's  state  license, accreditation, or certification, or (ii) any
event or circumstance which reasonably could be expected to interfere materially
with,  modify,  or  alter  the  performance  of  any Dental Provider's duties or
obligations  to  Subscribers  enrolled  in  a  Health  Net  Branded  Product.

     Section  4.7.     Communication  with  Dental  Providers.  SafeGuard  shall
                       --------------------------------------
maintain  an  adequate  administrative  system,  prepare internal administrative
manuals  and  forms  and communicate or arrange to communicate information about
Covered  Dental  Services, rules, policies and procedures to Dental Providers to
support the provision of Covered Dental Services to Subscribers pursuant to this
Agreement, and to provide confirmation to Dental Providers of the eligibility of
Subscribers,  to  answer  questions  regarding  Covered  Dental Services, and to
advise  Dental  Providers  of  applicable  Copayments  and Coinsurance under the
Subscriber's  Health  Net  Branded  Products.

                                       11
<PAGE>
     Section  4.8.     Grievances.
                       ----------

          (a)     SafeGuard  shall  within ten (10) Business Days provide notice
to  Health  Net  of  all  routine  inquiries by Subscribers and Dental Providers
relating  to  a  Health Net Branded Product which SafeGuard is unable to resolve
directly  with the Dental Provider and/or Subscriber, together with any relevant
materials  and  a  written  synopsis of all exchanges with the Subscriber and/or
Dental  Provider.

          (b)     SafeGuard  shall  have  the authority to determine whether any
Covered  Dental  Service  proposed  or  rendered  to  a  Subscriber is Medically
Necessary  subject  to  the Subscriber's and the Dental Provider's appeal rights
under  applicable  Law.  All  denials  of  services regarding Medical Necessity,
Subscriber  appeals of denied services, and grievances involving clinical issues
shall  be  referred  immediately  to  Health  Net  for  review.

          (c)     Health  Net  shall  use its commercially reasonable efforts to
assist  SafeGuard  to  resolve  any  grievance, appeal and non-routine inquiries
relating  to  a  Health  Net  Branded Product. If a grievance of a Subscriber is
resolved in favor of the Subscriber, SafeGuard shall take all necessary steps to
correct  the Subscriber's grievance at no cost to Health Net and only that cost,
if  any,  to  the  Subscriber  set  forth  in  the applicable Health Net Branded
Product.  Health Net may advocate to SafeGuard or a Dental Provider on behalf of
the  Subscriber  for  the  provision  of  Covered  Dental  Services.

                                    ARTICLE V
                    PRODUCT PRICING, COMPENSATIONAND EXPENSES
                    -----------------------------------------

     Section  5.1.     Determination  of  Benchmark  Products.  Set  forth  on
                       --------------------------------------
Schedule  5.1  is a list of those Health Net Dental Products that Health Net and
SafeGuard  have  jointly  determined  as  of  the  Effective Date are materially
similar to comparable SafeGuard Dental Products (the "Benchmark Products").  If,
as  of  the  Effective  Date,  there  is no Health Net Dental Product materially
similar  to  an existing SafeGuard Dental Product, at the request of Health Net,
SafeGuard  shall  develop  a Health Net Branded Product substantially similar to
such SafeGuard Dental Product.  On and after the Effective Date, the "Health Net
Advantage"  suite  of dental HMO Products offered by HND shall be made available
to  the  Health Net Marketing Force and such Health Net Advantage products shall
be  Health  Net  Branded  Products.  As  SafeGuard develops new Dental Products,
Health  Net  shall  have the option to request SafeGuard to develop an identical
Health Net Branded Product.  Any Health Net Branded Product created by SafeGuard
at  the request of Health Net pursuant to this Section 5.1 shall be considered a
Benchmark  Product.

     Section  5.2.     Pricing  of  Benchmark  Products.  [REDACTED]
                       --------------------------------

     Section  5.3.     Pricing  of  Health  Net Branded Products for Individual,
                       ---------------------------------------------------------
Small  and  Mid-Market  Groups.
------------------------------

          (a)     [REDACTED]

          (b)     [REDACTED]

                                       12
<PAGE>
     Section  5.4.     Pricing of Large Group and Government Clients. [REDACTED]
                       ---------------------------------------------

     Section  5.5.     Replacement  of  Health  Net  Dental  Products.
                       ----------------------------------------------

          (a)     The  Joint  Health  Net  Subscribers  with in-force Health Net
Dental Products as of October 1, 2003 are set forth in Schedule 5.5.  Except for
                                                       ------------
Bundled  Products  and  "Health  Net  Advantage" dental HMO products, Health Net
shall  use  commercially reasonably efforts to replace with a Health Net Branded
Product any Health Net Dental Product of a Joint Health Net Subscriber set forth
in  Schedule  5.5.  SafeGuard  shall  be  entitled  to  receive  each  month  a
    -------------
Supplemental  Compensation  Amount  calculated  by  multiplying  the  applicable
Supplemental  Compensation  percentages  set forth below by the Pooled Net Price
and  then multiplying such product by the number of Joint Health Net Subscribers
set  forth  in  Schedule  5.5  whose  Health Net Dental Product is replaced by a
                -------------
Health  Net  Branded  Product after the Effective Date and who are enrolled in a
Health  Net  Branded  Product  in  the  relevant  month  as  follows:

<TABLE>
<CAPTION>
--------------------  -------------------------  -----------------------
                        Dental HMO SafeGuard      Dental PPO/Indemnity
                      Supplemental Compensation  SafeGuard  Supplemental
Period                                                Compensation
--------------------  -------------------------  -----------------------
<S>                   <C>                        <C>
Year 1 after Closing                 [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
Year 2 after Closing                 [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
Year 3 after Closing                 [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
Year 4 after Closing                 [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
Year 5 after Closing                 [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
Thereafter                           [REDACTED]               [REDACTED]
--------------------  -------------------------  -----------------------
</TABLE>

          (b)     For  those  Joint Health Net Subscribers set forth on Schedule
                                                                        --------
5.5  whose  Health Net Dental Products are not converted to a Health Net Branded
---
Product  after  the  Effective  Date, all revenue attributable to the Health Net
Dental  Product  less  Producer  commissions  shall be included in the Aggregate
Payment  Amount  paid  to  SafeGuard pursuant to Section 6.3, provided, however,
                                                              --------  -------
"Health  Net  Advantage  Products" underwritten by HND and providing coverage to
the  Joint Health Net Subscribers on Schedule 5.5 after the Effective Date shall
                                     ------------
be  considered  Health  Net  Branded  Products  and  SafeGuard shall receive the
SafeGuard  Compensation  Amount  for  such  "Health Net Advantage" Products that
remain  in  effect  after  the  Effective  Date.

          (c)     Except for Bundled Products in force as of the Effective Date,
Health  Net  shall use commercially reasonable efforts to replace the Health Net
Dental  Products  with  Health  Net  Branded  Products  for any Joint Health Net
Subscriber  of  Health  Net  Health  Plans  of  Oregon,  Inc.  who or which also
purchased  a  Health Net Medical Product prior to the Effective Date. Health Net
shall  use  commercially  reasonable efforts to effect such replacement upon the
first  renewal  date  of  the Health Net Dental Products following the Effective
Date,  but  in  no  event later than December 31, 2004. The Health Net Marketing
Force  shall  be  authorized  to  sell  the

                                       13
<PAGE>
Health  Net Branded Products to Subscribers of Health Net Health Plan of Oregon,
Inc.  at prices to be determined by Health Net in its sole discretion consistent
with  the  SafeGuard  rates  filed  with  or  rates  approved  by  Governmental
Authorities  in  Oregon  for such Health Net Branded Products. Any Subscriber of
Health Net Health Plans of Oregon, Inc. who or which purchased only a Health Net
Dental  Product  shall  be  offered  a Health Net Branded Product upon the first
renewal  date  of  such  Health  Net  Dental  Products.

          (d)     Except for Bundled Products in force as of the Effective Date,
Health  Net  shall use commercially reasonable efforts to replace the Health Net
Dental  Products  with  Health  Net  Branded  Products  for any Joint Health Net
Subscriber  of  Health Net of Arizona, Inc. or Health Net Life Insurance Company
residing  in  Arizona  upon  the  first  renewal  date  of such Joint Health Net
Subscribers' Health Net Dental Products following the Effective Date. The Health
Net  Marketing Force shall be authorized to sell the Health Net Branded Products
to Arizona Joint Health Net Subscribers at prices to be determined by Health Net
in  its  sole discretion consistent with the SafeGuard rates filed with or rates
approved  by  Governmental  Authorities  in  Arizona for such Health Net Branded
Products.

          (e)     Any Health Net Dental Product purchased prior to the Effective
Date  by  a  Subscriber  of Health Net of California, Inc. in conjunction with a
"Seniority Plus" plan shall be considered a Health Net Branded Product as of the
Effective  Date  and  SafeGuard  shall  be  entitled  to  receive  the SafeGuard
Compensation  Amount with respect to such Health Net Branded Products commencing
as  of  the  Effective  Date.

          (f)     Health  Net  shall  provide  notice  to  all  Joint Health Net
Subscribers  at least ninety (90) days prior to the renewal date of their Health
Net  Dental  Product  informing  such  Joint  Health  Net  Subscribers  of their
opportunity  to  renew their Health Net Dental Product or replace their expiring
Health  Net  Dental  Product with a Health Net Branded Product.  SafeGuard shall
provide  a  similar notice to Subscribers of HND enrolled in a Health Net Dental
HMO  Product  as  of  the Effective Date.  The notice to be provided pursuant to
this  subsection  (f)  shall  describe fully all proposed plan changes, rate and
administrative  changes,  including  details  with  respect  the  involvement of
SafeGuard  pursuant to this Agreement.  Joint Health Net Subscribers residing in
the  Territory  enrolled in a Health Net Dental Product as of the Effective Date
shall  have  the  option  to  renew  their expiring Health Net Dental Product or
replace  their  expiring  Health  Net  Dental  Product with a Health Net Branded
Product.  SafeGuard  shall  be entitled to receive the Supplemental Compensation
Amount with respect to any Health Net Branded Product that replaces a Health Net
Dental Product of a Joint Health Net Subscriber.  Subsection 5.5(b) shall govern
any  Health  Net Dental Product renewed by a Joint Heath Net Subscriber pursuant
to  this  subsection  (f).

          (g)     The  Bundled  Products  shall  remain in force until cancelled
or  nonrenewed  in conformity with applicable Law. After the Effective Date, HND
shall  continue  to  administer  the  dental  benefit  under any Bundled Product
pursuant  to  subcapitation or administrative service agreements between HND and
any  Health  Net Affiliate in effect as of the Effective Date. The parties agree
to  negotiate in good faith to prepare and execute agreements within thirty (30)
days after the Effective Date for HND to administer the dental benefit under any
Bundled  Product  and  such  agreements  shall  replace  the  subcapitation  and
administrative  service  agreements  between HND and any Health Net Affiliate in
effect  as  of  the  Effective  Date.  At  the  time  such

                                       14
<PAGE>
replacement agreements are executed, the subcapitation or administrative service
agreements  between  HND  and  any  Health  Net  Affiliate  in  effect as of the
Effective  Date  shall  be  terminated. The compensation Health Net shall pay to
SafeGuard  with  respect  to  the  administration of the Bundled Products is set
forth  on  Schedule  5.5(g).
           ----------------

     Section  5.6.    Presentation  of  Benchmark  Products.  [REDACTED]
                      -------------------------------------

     Section 5.7.     Compensation to SafeGuard for Sale of Health Net Products.
                      ---------------------------------------------------------
[REDACTED]

     Section  5.8.     Transitional  Provisions.
                       ------------------------

          (a)     Until  March  1, 2004, the  Health  Net  Marketing Force shall
have  the  right  to  market  and  sell  in  the Territory the Health Net Dental
Products  and  Health  Net vision Products offered by HNV, HND and HNL as of the
Effective  Date  and  such  dental and vision Products shall be underwritten and
administered  by HND, HNV or SafeHealth as appropriate (the "Existing Dental and
Vision  Products").  The  Health  Net  Marketing Force may continue to offer and
sell  the  Existing  Dental  and  Vision  Products  to Health Net Clients in the
Territory  at the rates utilized by HNV, HND and HNL for such Products as of the
Effective Date.  SafeGuard shall provide the Existing Dental and Vision Products
to  Health  Net  Clients  at  the  rates  utilized  by HNV, HND and HNL for such
Products  as  of  the  Effective Date regardless of the enrollment date for such
Existing  Dental  and  Vision  Products.  During  the period that the Health Net
Marketing  Force  offers  and  sells  the  Existing  Dental and Vision Products,
SafeGuard  shall  not  be  required  to  provide  any Existing Dental and Vision
Products  at  the  Most  Favored  Nation  Price.

          (b)     On  or  before  January 1, 2004,  SafeGuard  shall  provide to
Health  Net  information  with  respect  to  the  Health  Net  Branded Products,
including  but  not limited to, Net Price information that will be applicable to
quotes  for  such Health Net Branded Products on and after March 1, 2004.  After
the  Health  Net Branded Products are made available to the Health Net Marketing
Force  for  sale to Health Net Clients in the Territory, the right of the Health
Net  Marketing  Force  to  offer  or sell any Existing Dental or Vision Products
shall  terminate.

                                   ARTICLE VI
           BILLING AND COLLECTION OF PREMIUMS; PAYMENT OF COMMISSIONS
           ----------------------------------------------------------

     Section  6.1.     Billing  and  Collection  of  Premiums.
                       --------------------------------------

          (a)     Except  as  provided  in subsection (c), Health Net shall bill
and  collect  premium and contract fees for all Health Net Branded Products sold
by  the Health Net Marketing Force to a Health Net Client. Health Net shall bill
and  collect  all  premium and contract fees attributable to Health Net Products
sold  to  SafeGuard  Clients  by  the  SafeGuard  Marketing  Force.

          (b)     Health  Net  shall  notify  SafeGuard if Health Net determines
that  an individual or group who or which purchased a Health Net Branded Product
is  ineligible  for  any  reason  including,  but not limited to, failure to pay
premiums  or  contract fees. Any adjustments to the eligible Subscribers and the
resulting  SafeGuard  Compensation  Amount  shall  be  subject  to  the standard
retroactivity adjustment policy of SafeGuard at the time of the adjustment.

                                       15
<PAGE>
          (c)     In  the  event  Health Net lacks the systems necessary to bill
and  collect the premium and contract fees for Health Net Branded Products as of
the  Effective  Date,  SafeGuard shall bill and collect the premium and contract
fees  for  all  Health  Net  Branded  Products until such time as Health Net has
developed  the  systems  necessary to bill and collect such premium and contract
fees.  Until  such  time  as Health Net has the capacity to bill and collect the
premium and contract fees for the Health Net Branded Products sold by the Health
Net  Marketing  Force  and  the  premium and contract fee billing and collection
function  has  been transferred to Health Net, SafeGuard shall retain the entire
amount  of  premium and contract fees billed and collected by SafeGuard relating
the  Health  Net Branded Products sold by the Health Net Marketing Force. Health
Net  shall  endeavor  to  develop  the systems necessary to bill and collect the
premium  and  contract  fees  for  all Health Net Branded Products no later than
December  31,  2004.

          (d)     During  the  period  that  SafeGuard  bills  and  collects the
premium  and  contract  fees  for  all  Health  Net Branded Products pursuant to
subsection  (c),  SafeGuard  shall  be  responsible  for  the  payment  of  all
commissions  owing  to  Producers, other than Producers who are employees of any
Health  Net  Affiliate,  resulting  from  the  sale  of  the  Health Net Branded
Products.  During  such  period,  Health  Net  shall  be  obligated  to  pay any
commissions  attributable  to the Health Net Branded Products owing to Producers
who are employees of any Health Net Affiliate and SafeGuard shall pay Health Net
by  the  twentieth  (20th)  day  of  each  month cash equal to [REDACTED] of the
premium  and  contract  fees  billed  by  SafeGuard  in  the  prior  month  and
attributable  to  the  dental  and  vision  HMO  Health Net Branded Products and
[REDACTED]  of  the  premium  and contract fees billed by SafeGuard in the prior
month  and  attributable  to  the Health Net Branded PPO and indemnity Products.
Health  Net  may  utilize  such  amounts  to pay commissions attributable to the
Health  Net  Branded Products owing to Producers who are employees of any Health
Net  Affiliate.

          (e)     After  Health  Net  develops  the capacity to bill and collect
premium and contract fees for the Health Net Branded Products sold by the Health
Net Marketing Force, SafeGuard and Health Net shall cooperate and coordinate the
transfer  of  the  premium  and  contract fee billing and collection function to
Health  Net.  After  the  Health  Net  Branded  Product premium and contract fee
billing  and  collection function has been transferred to Health Net, Health Net
shall  pay  SafeGuard  the  SafeGuard  Compensation  Amount and the Supplemental
Compensation  Amount  for  all  in force Health Net Branded Products sold by the
Health  Net  Marketing  Force  pursuant  to  this Agreement and Health Net shall
thereafter  be responsible for the payment of all commissions owing to Producers
resulting  from  the  sale  of  Health  Net  Branded  Products.

     Section  6.2.     Commissions.
                       -----------

          (a)     Except  as  provided  in Section 6.1(d), Health Net shall make
payment  of  all  commissions  (i)  owing to members of the Health Net Marketing
Force  to the extent that such commissions become due as a result of the sale of
Health  Net  Medical  Products  or  Health Net Branded Products pursuant to this
Agreement, and (ii) owing to SafeGuard to the extent such commissions become due
as a result of the sale of Health Net Medical Products to SafeGuard Clients by a
member  of  the  SafeGuard  Marketing Force. SafeGuard shall make payment of all
commissions  to  members  of  the  SafeGuard  Marketing Force to the extent such
commissions become due as a result of the sale of Health Net Medical Products to
SafeGuard  Clients.  In  the

                                       16
<PAGE>
event  Health  Net  pays SafeGuard commissions owing to members of the SafeGuard
Marketing  Force  resulting  from  the  sale  of Health Net Medical Products and
SafeGuard  fails  to  pay  such  commission  to  the  appropriate members of the
SafeGuard Marketing Force, SafeGuard shall defend, indemnify and hold Health Net
harmless  against  any  claim  for  commissions  by  any member of the SafeGuard
Marketing  Force  resulting  from  the  sale  of  Health  Net  Medical Products.

          (b)     Each  party shall be responsible for ensuring that each member
of  its  respective  Marketing Force is appropriately licensed and appointed, as
necessary,  to  sell  the Products and to receive commissions. The parties shall
not authorize any person or entity to solicit sales of Products pursuant to this
Agreement in any state unless such person or entity is properly licensed in that
state.  All  payments  of  commissions to members of the marketing forces of the
respective  parties  shall  comply  with  applicable  Law.

     Section  6.3.     Health  Net  Payments  to  SafeGuard.
                       ------------------------------------

          (a)     Except  as  provided  in  Section  6.1(c), on  or  before  the
twentieth (20th) day of each month, Health Net shall pay to SafeGuard the sum of
the  (i)  the  SafeGuard Compensation Amount; (ii) the Supplemental Compensation
Amount;  and  (iii)  any  amounts  due  SafeGuard  pursuant  to  Section  5.5(b)
attributable  to  Subscribers who are enrolled in Health Net Branded Products as
of  the  first  (1st)  day  of  each  such  month  (including  any  Subscribers
retroactively  added  or  deleted  pursuant  to  the  SafeGuard  retroactivity
adjustment  policy)  as set forth in the enrollment report provided to SafeGuard
by Health Net pursuant to Section 3.5 (the "Aggregate Payment Amount").  Subject
to  SafeGuard's  retroactivity adjustment policy, if a Subscriber is included as
an  eligible  Subscriber  on  a  monthly enrollment report, Health Net shall pay
SafeGuard  the  applicable  SafeGuard  Compensation  Amount  or  Supplemental
Compensation  Amount for such Subscriber for the entire month regardless of such
Subscriber's  actual  date  of  enrollment.

          (b)     Health  Net  shall  pay SafeGuard the Aggregate Payment Amount
by  issuing  one  check to SafeGuard in an amount equal to the Aggregate Payment
Amount  together  with  remittance  information  sufficient  for  SafeGuard  to
determine  the amount of premium tax owing by SafeGuard in each state within the
Territory  resulting  from  the  aggregate  premium  or contract fees charged to
Health  Net  Clients for the Health Net Branded Products in each such month. The
SafeGuard Compensation Amount plus any Supplemental Compensation Amount shall be
the  sole compensation payable by Health Net to SafeGuard in connection with the
Health  Net  Branded Products sold by the Health Net Marketing Force pursuant to
this  Agreement.

          (c)     SafeGuard,  shall  have  the  right  to  audit  each Aggregate
Payment  Amount  for  up  to  six  (6)  months after each such monthly Aggregate
Payment Amount is made by Health Net.  In the event SafeGuard determines that an
Aggregate  Payment Amount was incorrect, SafeGuard shall present the information
to  Health  Net  for  payment  or refund of the corrected amount.  If Health Net
agrees  that  any such Aggregate Payment Amount was incorrect, either Health Net
shall  make  the  corrected payment amount to SafeGuard within ten (10) Business
Days  after  receiving the information from SafeGuard, or SafeGuard shall refund
to  or  credit  Health  Net  with  the amount of any overpayment.  If Health Net

                                       17
<PAGE>
disagrees  with  the determination of SafeGuard, it shall present information to
SafeGuard  within  ten  (10) Business Days after receipt of the information from
SafeGuard detailing why it disagrees with the information provided.  The parties
shall use good faith efforts to resolve any Dispute.  If any such Dispute is not
capable  of  informal resolution, such Dispute shall be resolved pursuant to the
provisions  of  Article  IX.

     Section  6.4.     Accounting and Reporting.  Health Net and SafeGuard shall
                       ------------------------
each  prepare and supply the other party with any accounting reports and reports
of activities with respect to the Products and sales activities pursuant to this
Agreement  reasonably  requested  by  the  other party.  SafeGuard shall provide
Health  Net a quarterly report that sets forth all rates for each group size and
Benchmark  Product  quoted  by  SafeGuard  in the Territory.  In addition to the
report  regarding  the  rates  for  SafeGuard  Dental  Products  distributed  by
SafeGuard  in  the  Territory, the initial reports to be prepared by the parties
are  set  forth  in  Schedule  6.4.

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

     Section  7.1.     Term.  This  Agreement  shall  become  effective  on  the
                       ----
Effective  Date  and  shall  continue  in  effect  for  sixty (60) months unless
terminated pursuant to the terms of this Article VII.  Unless this Agreement has
been terminated pursuant to the terms of this Article VII, Health Net shall have
the  option  to  extend  this  Agreement on the same terms and conditions for an
additional  sixty  (60) months by providing written notice to SafeGuard not less
than  one  hundred  and eighty (180) days prior to the expiration of the initial
sixty  (60)  months.

     Section  7.2.     Termination  on  Mutual  Consent.  This  Agreement may be
                       --------------------------------
terminated  at  any  time  by  mutual  agreement  of Health Net and SafeGuard in
writing.

     Section 7.3.     Termination for Cause.  Either SafeGuard or Health Net may
                      ---------------------
terminate  this  Agreement for cause by providing the other party written notice
of  its  intention  to  terminate  upon  the occurrence of any of the following:

          (a)     If  a  party  fails  to  remit  any  amounts  due  under  this
Agreement  within  twenty-five  (25)  days  of  the  date such amount is due and
payable.

          (b)     If  a  party  breaches  a material term, covenant or condition
of  this  Agreement  and  fails  to  cure such breach within thirty (30) days of
receiving  written  notice  of  such  breach  from  the non-breaching party. The
written  notice  of  such  breach  shall  make  specific reference to the action
causing  breach.  If  the  breaching  party  fails  to  cure  its  breach to the
reasonable  satisfaction  of  the non-breaching party during the thirty (30) day
cure  period,  this Agreement shall terminate at the option of the non-breaching
party.  In the event such cure cannot reasonably be completed within such thirty
(30) day period, then commencement of such cure within such thirty (30) days and
its  diligent  prosecution  to  completion  shall,  subject to the party's other
rights  to  terminate the Agreement, extend the period to cure the breach for an
additional  period  reasonably  necessary  to  complete  the  cure.

          (c)     If a party engages in fraudulent, illegal or grossly negligent
conduct  with  respect  to  its duties and obligations under this Agreement, the
other  party  shall have the right to terminate this Agreement, upon delivery of
written  notice  of  such  termination  to  the  defaulting

                                       18
<PAGE>
party,  which  shall  be  effective upon receipt, without prejudice to any other
rights  or  remedies  available  to  the  non-defaulting  party by reason of the
defaulting  party's  conduct.

          (d)     If  a  party  becomes  unable to perform its obligations under
this  Agreement  or  its  Products  because  of  financial impairment or loss of
authority  to  act  under  Law,  or by action of any Governmental Authority, the
other  party  shall  have  the  right  to  terminate this Agreement immediately.

          (e)     In  the  event  of  a Change of Control of either SFGD or HNI,
either SFGD or HNI shall have the right to terminate this Agreement effective as
of  the  effective  date  of  the  Change  of  Control.

          (f)     If  the  parties  fail  to  reach  the  membership acquisition
targets  for  a state other than California set forth in Schedule 7.3, SafeGuard
                                                         ------------
and  Health  Net  shall  each  have  the  right to terminate this Agreement with
respect  to  any  such  state  and  enter  into  an agreement with a third party
substantially  similar  to  this  Agreement  with  respect to such state and the
exclusivity  provisions  of  Section  2.3 (a) and (b) with respect to such state
shall  have  no  further  force  and  effect.  If  the parties fail to reach the
membership  acquisition  target for California specified in Schedule 7.3, either
                                                            ------------
SafeGuard  or Health Net shall have the right to terminate this Agreement in its
entirety  upon  ninety  (90)  days  written  notice  to  the  other  party.

          (g)     If  SFGD  or a  SFGD  Subsidiary acquires ownership, merges or
consolidates  with  an  entity  that  operates  a health insurance business that
provides  Medical Products in the Territory, or ownership of SFGD is acquired by
an  entity  that  operates  a  health  insurance  business that provides Medical
Products  in the Territory, either HNI or SFGD shall have the right to terminate
this  Agreement  upon  reasonable  notice  to  the  other  party.

          (h)     If  HNI  or  a  HNI  Subsidiary  acquires ownership, merges or
consolidates  with  an  entity  that operates a dental HMO, dental PPO or dental
indemnity  insurance  business  that  provides  dental HMO, dental PPO or dental
indemnity  insurance  in  the  Territory,  or ownership of HNI is acquired by an
entity  that  operates  a  dental  HMO, dental PPO or dental indemnity insurance
business  in the Territory, either HNI or SFGD shall have the right to terminate
this  Agreement  upon  reasonable  notice  to  the  other  party.

          (i)     If  SafeGuard  fails  to  meet  the  performance standards set
forth  in  Schedule  3.10 for two consecutive calendar quarters in a manner that
           --------------
would result in the imposition of a performance penalty on SafeGuard equal to or
greater  than  [REDACTED]  of the aggregate annual SafeGuard Compensation Amount
and  Supplemental  Compensation  Amount  if such failure continued for an entire
calendar  year  and SafeGuard fails to cure such failure within thirty (30) days
of  receiving  notice of such failure from Health Net, Health Net shall have the
right  to  terminate  this  Agreement  on  ninety (90) days notice to SafeGuard.

     Section 7.4.     Post-Termination Rights and Responsibilities.  Termination
                      --------------------------------------------
of  this  Agreement  shall  not  terminate rights and obligations of the parties
which by their nature extend beyond the term.  Termination of this Agreement for
any  reason  shall  not  release  any party from any liability which has already
accrued  to  another  party  at  the  time  of  termination.  In  the event this
Agreement is terminated, the parties shall continue to perform all customary and

                                       19
<PAGE>
necessary  services  regarding  their respective Products in accordance with the
provisions  of  this  Agreement  until  all  such  Products have been completely
canceled,  transitioned,  nonrenewed, or otherwise terminated and all claims and
payments  relating  thereto  have  been  paid  or  discharged.

                                  ARTICLE VIII
                                INDEMNIFICATION
                                ---------------

     Section  8.1.     Indemnification  by  SafeGuard.  SafeGuard  shall defend,
                       ------------------------------
indemnify  and  hold harmless Health Net and its directors, officers, employees,
shareholders,  Affiliates  and  Subsidiaries ("Health Net Indemnities") from and
against  any and all loss, claim, damage, liability, or action in respect hereof
which  is  caused  by  or  results  from  the malfeasance, negligence, action or
inaction  of  SafeGuard  or  a  breach  of its duties and obligations under this
Agreement.  If any claim, demand, action, suit, or proceeding is made or brought
against  any  of the Health Net Indemnities with respect to matters that are the
subject  of  this  indemnity,  SafeGuard  shall  assume the defense thereof with
counsel  reasonably satisfactory to the Health Net Indemnities and shall pay all
costs  of  such  defense.

     Section  8.2.     Indemnification  by Health Net.  Health Net shall defend,
                       ------------------------------
indemnify  and  hold  harmless SafeGuard and its directors, officers, employees,
shareholders,  Affiliates  and  Subsidiaries  ("SafeGuard Indemnities") from and
against  any and all loss, claim, damage, liability, or action in respect hereof
which  is  caused  by  or  results  from  the malfeasance, negligence, action or
inaction  of  Health  Net  or  a breach of its duties and obligations under this
Agreement.  If any claim, demand, action, suit, or proceeding is made or brought
against  any  of  the SafeGuard Indemnities with respect to matters that are the
subject  of  this  indemnity,  Health  Net shall assume the defense thereof with
counsel  reasonably  satisfactory to the SafeGuard Indemnities and shall pay all
costs  of  such  defense.

     Section 8.3.     Liability under SafeGuard's Products.  Health Net is not a
                      ------------------------------------
guarantor,  insurer,  or  reinsurer  of,  or joint venturer with, SafeGuard, and
Health  Net  shall  have no risk of loss for, nor provide any indemnification to
SafeGuard,  any  Contractholder  or Subscriber, any provider or any other person
with  respect  to  any  SafeGuard  Product or Covered Dental Service.  SafeGuard
shall  indemnify  Health  Net for all liabilities, losses, suits, damages, costs
and  expenses  (including  reasonable  fees of Health Net's attorneys, and other
expenses  of  litigation),  net  of  recoveries  from  third parties, arising in
connection  with  a  SafeGuard  Product,  including  action or failure to act by
SafeGuard,  or  its  employees  or  agents.

     Section  8.4.     Liability  under Health Net Products.  SafeGuard is not a
                       ------------------------------------
guarantor,  insurer,  or  reinsurer  of,  or joint venturer with, Health Net and
SafeGuard  shall have no risk of loss, nor provide any indemnification to Health
Net,  any  Contractholder  or  Subscriber, any provider or any other person with
respect  to  a Health Net Product.  Health Net shall indemnify SafeGuard for all
liabilities,  losses,  suits,  damages, costs and expenses (including reasonable
fees  of  SafeGuard's  attorneys,  and  other  expenses  of  litigation), net of
recoveries  from third parties, arising in connection with a Health Net Product,
including  action  or  failure to act by Health Net, or its employees or agents.

     Section  8.5.     Survival of Article.  This Article VIII shall survive the
                       -------------------
termination  of  this  Agreement.

                                       20
<PAGE>
                                   ARTICLE IX
                                  ARBITRATION
                                  -----------

     Section  9.1.     Arbitration.  In  the  event  of  any dispute between the
                       -----------
parties  hereto relating to, arising out of, or in connection with any provision
of  this  Agreement (hereinafter a "Dispute"), the parties to this Agreement and
their  representatives,  designees,  successors  and assigns agree that any such
Dispute  shall be settled by binding arbitration to take place in Orange County,
California;  provided,  however,  that nothing herein shall preclude the parties
from  seeking  equitable  judicial relief pending arbitration, including but not
limited  to  injunctive  or  other  provisional  relief.

     Section  9.2.     Selection of Arbitrator.  Any arbitration hereunder shall
                       -----------------------
be  conducted by a single arbitrator chosen from the panel of arbitrators of the
Judicial Arbitration & Mediation Services ("JAMS") with experience and expertise
in  the dental HMO or dental indemnity insurance business.  If a JAMS arbitrator
with  specific  experience  in  the  dental  HMO  or  dental indemnity insurance
business  is  not  available, the arbitrator must have general experience in the
health  insurance  industry.  Within  ten  (10) days of notice of a Dispute from
Health  Net  to  SafeGuard or notice from SafeGuard to Health Net, SafeGuard and
Health  Net  shall  use  their  best  efforts  to  choose  a  mutually agreeable
arbitrator.  If  Health  Net  and  SafeGuard  cannot agree on an arbitrator, the
arbitrator  shall  promptly  be  selected  by  JAMS.

     Section 9.3.     Procedures.  The party submitting a Dispute to arbitration
                      ----------
hereunder shall present its case to the arbitrator and the other party hereto in
written  form  within  twenty (20) days after the appointment of the arbitrator.
The  other  party  hereto  shall  then have twenty (20) days to submit a written
response  to  the arbitrator and the original party who submitted the Dispute to
arbitration.  After  timely  receipt  of each party's case, the arbitrator shall
have  twenty  (20)  days  to  render  his  or  her  decision.

     Section  9.4.     Applicable Law.  The arbitrator is relieved from judicial
                       --------------
formalities  and,  in  addition to considering the rules of law, the limitations
contained  in  this  Agreement  and the customs and practices of the health care
industry,  shall make his or her award with a view to effectuating the intent of
this  Agreement.  The decision of the arbitrator shall be final and binding upon
the  parties,  and  judgment  may  be  entered  thereon  in a court of competent
jurisdiction.

     Section  9.5.     Expenses.  Each  party  shall  bear  its  own  cost  of
                       --------
arbitration,  and the costs of the arbitrator shall be shared equally among each
party  to  a  Dispute.

     Section  9.6.      Survival  of  Article.  This  Article  IX  shall survive
                        ---------------------
termination  of  this  Agreement.

                                    ARTICLE X
                                  MISCELLANEOUS
                                  -------------

     Section  10.1.     Misunderstandings  and  Oversights.  If  any  delay,
                        ----------------------------------
omission,  error  or  failure  to  perform any act required by this Agreement is
unintentional  and  caused  by  misunderstanding or oversight, the parties shall
adjust  the  situation  to  what  it would have been had the misunderstanding or
oversight  not  occurred.  The  party  that  first  discovers  such oversight or

                                       21
<PAGE>
incorrect act as a result of the misunderstanding will notify the other party in
writing  promptly  upon  discovery  of  the  misunderstanding or oversight.  The
parties shall act to correct the error, omission or oversight within thirty (30)
days  of  notification of the problem.  This Section 10.1 shall not be construed
as  a  waiver by either party of its right to enforce strictly the terms of this
Agreement.

     Section 10.2.     Cooperation and Further Assurances.  Subject to the terms
                       ----------------------------------
and  conditions  hereof,  each of the parties hereto covenants and agrees to use
its  reasonable  best efforts to take or cause to be taken all actions, or do or
cause  to be done, all things necessary, proper or appropriate to consummate and
make effective the transactions contemplated hereby and to further the intent of
the  parties  hereto.

     Section  10.3.     Performance by Affiliates.  The parties acknowledge that
                        -------------------------
certain  obligations  required  to  be  performed  may, by their nature, require
specific legal authority to perform or will be more effectively performed by the
parties'  Affiliates.  The  parties  will,  to  the extent required in order for
their respective Affiliates to perform the obligations of the respective parties
under  this  Agreement,  cause  their  respective  Affiliates  to  perform  such
obligations  hereunder as if such Affiliates were themselves parties hereto.  In
connection  with  the  performance  of such obligations, the parties' respective
Affiliates  shall be subject to the terms and conditions of this Agreement as if
such  Affiliates  were  themselves  parties  hereto.

     Section  10.4.     Regulatory  Approval.  Performance of the obligations of
                        --------------------
any  party under this Agreement shall be subject to the receipt of any necessary
regulatory  approvals  under  the  applicable  Law and practices of Governmental
Authorities  in  the  Territory.  Health  Net  and  SafeGuard shall cooperate in
attempting  to  obtain  expeditiously  any  necessary  regulatory approvals from
Governmental  Authorities.  Each  party  will bear its own expenses in obtaining
such  approvals.

     Section  10.5.     Compliance  with  Laws.  Each  party  shall,  in  the
                        ----------------------
performance  of  their  obligations set forth in this Agreement, comply with all
applicable  Law  and  the  rules and regulations of all Governmental Authorities
with jurisdiction over the parties and each party shall maintain all licenses or
certificates  necessary  or appropriate for the performance of the functions set
forth  in  this  Agreement.  Each  party  shall  conform  its actions under this
Agreement  to  any orders concerning the activities covered by this Agreement by
Governmental  Authorities  having  jurisdiction  over  the  parties'  Products,
business affairs and operations.  Each party shall take all actions and make all
filing,  applications  and  provide  all  notices  required by applicable Law to
maintain  their  respective Products in compliance in all material respects with
existing  and future applicable Law.  Each party shall promptly notify the other
parties  of  any  complaint,  inquiry  or  lawsuit by any Governmental Authority
relating  to  the  Products  or  to  this  Agreement.

     Section 10.6.     Audits.  Each party shall have the right, upon reasonable
                       ------
notice  to  the other party, and at the requesting party's expense, to audit the
books and records of the other parties relating to this Agreement during regular
business  hours  at  the  premises  of  the audited party where such records are
normally  maintained,  including but not limited to, verifying that SafeGuard is
providing  Health  Net  Clients rates that do not exceed the Most Favored Nation
Price.  The  audited party shall reasonably cooperate in any such audit.  Health
Net  shall  be entitled to recover from SafeGuard any damages suffered by Health
Net  resulting from the

                                       22
<PAGE>
failure  of SafeGuard to provide Health Net Clients rates that do not exceed the
Most  Favored  Nation  Price.

     Section  10.7.     Force  Majeure.  No party hereto shall be liable for any
                        --------------
delay  or  failure  in the performance of any obligation under this Agreement or
for  any  loss  or  damage  (including  indirect or consequential damage) to the
extent  that  such  nonperformance,  delay,  loss  or  damage  results  from any
contingency which is beyond the control of such party, provided such contingency
is  not  caused  by  the  fault  or negligence of such party.  A contingency for
purposes  of  this  Agreement  shall be acts of God, fires, floods, earthquakes,
explosions,  storms,  wars,  hostilities,  acts  of terrorism, blockades, public
disorders,  quarantines,  restrictions,  embargoes,  strikes  or  other  labor
disturbances, and compliance with any Law, order or control of, or insistence of
any  Governmental  Authority  or  military  authority.

     Section  10.8.     Successors  and Assigns; Binding Effect.  This Agreement
                        ---------------------------------------
shall  not  be  assigned  by  Health  Net or SafeGuard without the prior written
approval  of the other party.  The provisions of this Agreement shall be binding
upon  and  inure  to the benefit of and be enforceable by the parties hereto and
their  respective  permitted  successors  and  assigns.

     Section  10.9.     Entire  Agreement; Amendment.  This Amended and Restated
                        ----------------------------
Strategic  Relationship  Agreement  constitutes the entire agreement between the
parties  with respect to the subject matter described herein, and supersedes any
previous written or oral agreements, including but not limited to, the Strategic
Relationship  Agreement.  This  Agreement  shall  be  amended  only  by  written
agreement  signed  by  a  duly  authorized  officer  of  each  of Health Net and
SafeGuard,  and  any change to this Agreement shall be null and void unless made
by  such  written  agreement;  provided,  however,  that where, under insurance,
health  or  other  applicable  Law,  the  approval of any such amendment to this
Agreement by one or more Governmental Authority is required, the amendment shall
not take effect unless and until all such necessary approvals have been obtained
and  received  by  both  Health  Net  and SafeGuard.  In the event that any such
approval  is  required,  Health  Net and SafeGuard shall each take all necessary
actions  in  order  to  obtain  such  approval.

     Section  10.10.     Waivers.  The  waiver  by  either of the parties of the
                         -------
other  party's  prompt  and complete performance, or breach or violation, of any
provisions  of  this  Agreement  and  related  documents shall not operate or be
construed  as  a waiver of any subsequent breach or violation, and the waiver by
any  of  the  parties  to  exercise  any  right  or  remedy which it may possess
hereunder  shall  not  operate  or be construed as a bar to the exercise of such
right  or  remedy  by such party upon the occurrence of any subsequent breach or
violation.

     Section  10.11.     Governing Law.  This Agreement shall be governed by and
                         -------------
construed  in accordance with the Law of the state of California, without giving
effect  to  the  principles  of  conflicts  of  laws  thereof.

     Section  10.12.     Severability.  In the event any section or provision of
                         ------------
this  Agreement  or related documents is found to be void and unenforceable by a
court  of  competent jurisdiction, the remaining sections and provisions of this
Agreement  or  related  documents shall nevertheless be binding upon the parties
with  the same force and effect as though the void or unenforceable part had not
been  severed  or  deleted.

                                       23
<PAGE>
     Section  10.13.     Notices.  Any notice or other communication required or
                         -------
permitted  hereunder  shall  be  in  writing and shall be delivered by certified
process server, certified or registered mail (postage prepaid and return receipt
requested),  by a nationally recognized overnight courier service (appropriately
marked  for  overnight  delivery)  or  by  facsimile (with request for immediate
confirmation  of  receipt  in  a  manner  customary  for  communications of such
respective  type).  Notices  shall  be  effective  upon  receipt  and  shall  be
addressed  as  follows:

          (a)  if  to  SafeGuard  to:

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

               with a copy to:

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

               and

                    David  K.  Meyercord
                    Strasburger  and  Price,  LLP
                    901  Main  Street,  Ste.  4300
                    Dallas,  Texas  75202-3794
                    Tel:  (214)  651-4525
                    Fax:  (214)  659-4023

          (b)  if to Health Net to:

                    Health  Net,  Inc.
                    Attn:  General  Counsel
                    21650  Oxnard  Street
                    Woodland  Hills,  California  91367
                    Tel:  (818)  676-7601
                    Fax:  (818)  676-7503

                                       24
<PAGE>
               with a copy to:

                    Kenneth  B.  Schnoll
                    Sonnenschein  Nath  &  Rosenthal,  L.L.P.
                    685  Market  Street
                    San  Francisco,  CA  94105
                    Tel:  (415)  882-0210
                    Fax:  (415)  543-5472

     Section 10.14.    Notice  of  Legal Proceedings.  If  any  party receives a
                       -----------------------------
notice  of  the  commencement of any legal proceedings involving another party's
Products  or  actions  pursuant  to  this  Agreement, any communication from any
Governmental  Authority,  or  any  person  identifying  a  complaint  by  a
Contractholder  or  Subscriber  (other  than  a  routine inquiry not involving a
communication  from  a  Governmental  Authority  or  the suggestion of any legal
action),  the  party  receiving  such  notice shall immediately advise the other
parties  of  such  notice  and  shall  thereafter  forward promptly to the other
parties  any  correspondence  or  information  pertaining  to  any  such  legal
proceeding  or  communication.

     Section 10.15.    Confidentiality.
                       ---------------

          (a)     Neither  Health  Net  nor  SafeGuard  shall  disclose  any
proprietary  or  confidential  information  of  the other party to a third party
without  the  express written consent of the other party to this Agreement.  For
purposes  of  this  Agreement,  "proprietary  and confidential" information will
include,  without  limitation,  all  internal  business  practices  and business
records,  information  concerning  products  and  pricing,  contracts,  computer
hardware  and  software or business methods in any form whatsoever, peer review,
quality  assurance  and  grievance  procedures, any aspect of utilization review
programs,  provider  fee  schedules,  reimbursement  schedules or discounts, and
advertising  or  marketing  information, but not including information otherwise
available  to  the  public.  Neither  Health  Net  nor  SafeGuard  shall use any
proprietary and confidential information of the other party for its own benefit.
Upon  termination  of  this Agreement, each party will immediately return to the
other  parties  any  confidential  information,  except confidential information
necessary  for  the  continued  administration  of  any  Product.

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

          (c)     Each party shall obtain any necessary consent or authorization
from  Subscribers  with  respect  to  the  release  to  the  other  party of any
non-public  personal information, including health information, relating to such
Subscribers,  by  means  of  general  or specific releases, as appropriate. Each
party  shall  notify the other if it becomes aware that proper releases have not
been  obtained.

          (d)     To  the  extent that either of the parties performs functions,
activities,  or services for, or on behalf of, the other party to this Agreement
involving  the  use  or  disclosure  of

                                       25
<PAGE>
Protected  Health  Information,  as  that term is defined in 45 CFR 164.501, the
parties  shall comply with the Business Associate Addendum set forth in Schedule
                                                                        --------
10.15  hereto.
-----

     Section  10.16.     Press  Releases.  No  public statement or press release
                         ---------------
regarding  the existence of this Agreement shall be made by either party without
obtaining  the  prior  written consent of the other party, except as required by
applicable  Law.

     Section  10.17.     Relationship of Parties.  The parties to this Agreement
                         -----------------------
are  and  shall  remain  independent  contractors.  None  of  the parties is the
employee  or  agent  of any other party, except as set forth herein, and none of
the  parties  has  an  express  or  implied  right to bind any other party.  The
parties do not intend to form a joint venture, partnership, or to be governed by
Law  relating  to  any  relationship other than that of independent contractors.
None  of  the  parties  is authorized to modify, alter or waive the terms of any
Product  issued  by  another  party.

     Section 10.18.     No Third Party Rights.  This Agreement has been made for
                        ---------------------
the  benefit  of  the  parties  hereto  and  respective successors and permitted
assigns  and  nothing  in  this  Agreement  is  intended to confer any rights or
remedies under or by reason of this Agreement on any other person other than the
parties to it and their respective successors and permitted assigns.  Nothing in
this  Agreement is intended to relieve or discharge the obligations or liability
of  any  third  person  to  any  party  to  this  Agreement.

     Section  10.19.     Expenses.  Except  as  otherwise  provided herein, each
                         --------
party  shall  be  responsible for the expenses it incurs in connection with this
Agreement.

     Section  10.20.     Headings  and  Schedules.  Headings used herein are not
                         ------------------------
part  of  this  Agreement.  Any  Schedules  or  Exhibits  attached  hereto  are
incorporated by this reference and made a part of this Agreement.

     Section  10.21.     Counterparts.  This  Agreement  may  be  executed
                         ------------
simultaneously  in  any  number of counterparts, each of which will be deemed an
original, but all of which will constitute one and the same agreement.

                      [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                       26
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  by  their  duly  authorized representatives as of the date first above
written.

                                      HEALTH NET, INC.

                                      By:    /s/ B. Curtis Westen
                                             -----------------------------------
                                      Name:  B. Curtis Westen
                                      Title: Senior Vice President, General
                                             Counsel  and  Secretary

                                      HEALTH NET LIFE INSURANCE COMPANY

                                      By:    /s/ Douglas King
                                             -----------------------------------
                                      Name:  Douglas  King
                                      Title: President

                                      SAFEGUARD HEALTH ENTERPRISES, INC.

                                      By:    /s/ Ronald I. Brendzel
                                             -----------------------------------
                                      Name:  Ronald I. Brendzel
                                      Title: Senior Vice President, General
                                             Counsel and Secretary

                                       27
<PAGE>
                                      SAFEHEALTH  LIFE  INSURANCE  COMPANY

                                      By:    /s/ Ronald I. Brendzel
                                             -----------------------------------
                                      Name:  Ronald I. Brendzel
                                      Title: Senior Vice President, General
                                             Counsel and Secretary

                                      HEALTH NET DENTAL, INC.

                                      By:    /s/ Ronald I. Brendzel
                                             -----------------------------------
                                      Name:  Ronald I. Brendzel
                                      Title: Senior Vice President, General
                                             Counsel and Secretary

                                      HEALTH NET VISION, INC.

                                      By:    /s/ Ronald I. Brendzel
                                             -----------------------------------
                                      Name:  Ronald I. Brendzel
                                      Title: Senior Vice President, General
                                             Counsel and Secretary

                                       28
<PAGE>
                                  SCHEDULE 3.10

                        PERFORMANCE GUARANTEES [REDACTED]

                                       29
<PAGE>
                                  SCHEDULE 5.1

                           BENCHMARK PLANS [REDACTED]

                                       30
<PAGE>
                                  SCHEDULE 5.5

                    JOINT HEALTH NET SUBSCRIBERS [REDACTED]

                                       31
<PAGE>
                                SCHEDULE 5.5(g)

            COMPENSATION TO SAFEGUARD FOR BUNDLED PRODUCTS [REDACTED]

                                       32
<PAGE>
                                  SCHEDULE 6.4

                         INITIAL REPORTING REQUIREMENTS

1.   GROUPS  SOLD  REPORTS

          SafeGuard  shall  provide Health Net with a quarterly report that sets
          forth  Health  Net Branded Product groups sold, effective dates, group
          name,  city,  state,  Subscriber,  dependents, group code, and product
          type.  The  Group Sold Report shall be provided by SafeGuard to Health
          Net  no  later  than  the  3rd  week  after  calendar  quarter  end.

2.   UTILIZATION  REPORTS

          SafeGuard  shall  provide  Health  Net  with  quarterly  reports  of
          utilization  by product type. Report format to be mutually agreed upon
          and  shall  be provided to Health Net no later than the 3rd week after
          calendar  quarter  end.

3.   CLAIM  ACTIVITY  REPORTS

          SafeGuard  shall  provide  Health  Net with a quarterly aggregate data
          file of claim activity relating to the Health Net Branded Products for
          Arizona,  Oregon  and  California  in  a  form  and  with  information
          sufficient  to  enable  Health  Net  to  provide  real time ability to
          provide for group requested experience data. The Claim Activity Report
          shall  be  provided to Health Net no later than the 3rd week following
          each  calendar  quarter  end.

4.   COMPETITIVE  ANALYSIS  REPORTS

          SafeGuard  may  provide  Health  Net  an  annual network comparison by
          competitor,  by  zip  code  and  by  county for the states of Arizona,
          Oregon,  and  California.  The  Competitive  Analysis  Report shall be
          provided  by SafeGuard, if at all, during the 3rd quarter of each year
          with  the  first  report  to  be  provided  by  December  1,  2003.

5.   CALL  CENTER  REPORTS

          SafeGuard to provide a unique 1-800 customer service number for Health
          Net Branded Products. Health Net members shall be placed into a Health
          Net  dedicated  call  queue  specific  to Health Net's Branded Product
          membership. Call statistics will be tracked and reported for such call
          queue  and  shall  meet Health Net's customer service requirements for
          average  speed of answer and abandonment rates. Total call volume will
          be  tracked  by  the  dedicated 1-800 number and dedicated call queue.

6.   NETWORK  REPORTS

          SafeGuard  shall  provide Health Net with quarterly reports indicating
          network  retention,  additions,  and  terminations  (with  and without
          cause)  and  the  reasons  for the termination any provider in Oregon,
          Arizona,  and  California.  The  Network  Reports shall be provided to

                                       33
<PAGE>
          Health  Net  no  later  than  the third week following the end of each
          quarter.  The  first  Network  Report shall be provided during the 3rd
          week  of  April  2004.

7.   CLAIMS  PROCESSING  REPORT

          SafeGuard  shall provide Health Net quarterly claims report for Health
          Net  Branded  Product  membership,  which  includes  Health Net claims
          inventory,  and average days to process and pay Health Net claims. The
          Claim  Processing  Report shall be provided no later than the 3rd week
          after  the  end  of  each  calendar  quarter.

8.   SATISFACTION  SURVEY  REPORTS

          A.  SafeGuard  shall  provide  Health  Net  with  annual  Health  Net
          membership  satisfaction surveys. The first Satisfaction Survey Report
          shall  be  provided  during  the  first  quarter  of  2005.

          B.  SafeGuard shall share existing annual SafeGuard panel satisfaction
          surveys  results.  The  first  annual panel satisfaction survey report
          shall  be  provided  sixty  (60)  days  from  completion  of  survey.

                                       34
<PAGE>
                                  SCHEDULE 7.3

                    MEMBERSHIP ACQUISITION TARGETS [REDACTED]

                                       35
<PAGE>
                                 SCHEDULE 10.15

                          BUSINESS ASSOCIATE ADDENDUM

This Business Associate Addendum (the "Addendum") supplements and is made a part
of the Amended and Restated Strategic Relationship Agreement by and among Health
Net,  Inc.,  Health  Net  Life  Insurance Company, SafeGuard Health Enterprises,
Inc.,  SafeHealth  Life  Insurance Company, SafeGuard Health Plans, Inc., Health
Net Vision, Inc. and Health Net Dental, Inc. (the "Agreement"), and is effective
as  of  the  Effective  Date  of  the  Agreement.

                                       RECITALS

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

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

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

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

1.   Definitions.

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

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

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

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

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

                                       36
<PAGE>
2.   Obligations  and  Activities  of  Business  Associate.

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

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

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

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

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

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

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

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

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

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

                                       37
<PAGE>
3.   Permitted  Uses  and  Disclosures  by  Business  Associate  General Use and
     Disclosure  Provisions.

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

4.   Specific  Use  and  Disclosure  Provisions.

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

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

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

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

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

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

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

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

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

                                       38
<PAGE>
6.   Term  and  Termination.

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

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

(c)  Effect  of  Termination.

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

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

7.   Miscellaneous.

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

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

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

                                       39
<PAGE>
(d)  Interpretation.  The  provisions  of  this  Addendum shall prevail over any
     --------------
provisions  in  the Agreement that may conflict with or appear inconsistent with
any provision of this Addendum. Any ambiguity in this Addendum shall be resolved
to  permit  Covered  Entity  to  comply  with  the  Privacy  Rule.

                                       40
<PAGE>

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