Document:

Members Agreement

 EXHIBIT 10.32 
  
 CONFIDENTIAL TREATMENT REQUESTED 
 Redacted Portions are indicated by [****] 
  
 MEMBERS AGREEMENT 
  
 This Members Agreement (this “Agreement”) is made effective as of the
1st day of January, 2008, by and among Genzyme Corporation, a Massachusetts corporation having its principal place of business at 500 Kendall
Square, Cambridge, Massachusetts 02142 (“Genzyme”); BioMarin Pharmaceutical Inc., a Delaware corporation having its principal place of business at 105 Digital Drive, Novato, California 94949 (“BioMarin”); BioMarin
Genetics, Inc., a Delaware corporation and a wholly-owned subsidiary of BioMarin having its principal place of business at 105 Digital Drive, Novato, California 94949 (“BioMarin Subsidiary”); and BioMarin/Genzyme LLC, a Delaware
limited liability company having its principal place of business at 500 Kendall Street, Cambridge, Massachusetts 02142 (the “Company”), of which BioMarin, BioMarin Subsidiary and Genzyme are the only members. Genzyme, BioMarin,
BioMarin Subsidiary and the Company are sometimes referred to herein individually as a “Party” and collectively as the “Parties”. BioMarin, BioMarin Subsidiary and Genzyme are sometimes referred to herein
individually as a “Member” and collectively as the “Members”. 
  
 RECITALS 
  
 WHEREAS,
BioMarin, Genzyme and the Company are parties to a Collaboration Agreement dated as of September 4, 1998 (the “Original Collaboration Agreement”) pursuant to which BioMarin and Genzyme, through the Company, develop,
manufacture, market and sell Aldurazyme; 
  
 WHEREAS, the Parties
no longer desire to develop, manufacture, market and sell Aldurazyme through a joint venture and instead have agreed that: (1) BioMarin will manufacture Aldurazyme and sell finished product to Genzyme; (2) Genzyme will label and
commercially distribute, market and sell Aldurazyme globally; (3) each of Genzyme and BioMarin may conduct its own research and development of Aldurazyme and other Collaboration Products in accordance with the terms of the Amended and Restated
Collaboration Agreement (as defined below) and the Manufacturing, Marketing and Sales Agreement among BioMarin, Genzyme and the Company of even date herewith (the “Manufacturing, Marketing and Sales Agreement”); and (4) the
Company will maintain and provide intellectual property licenses and sublicenses to BioMarin and Genzyme so that they may fulfill their respective obligations under the Amended and Restated Collaboration Agreement, the Manufacturing, Marketing and
Sales Agreement, and the Fill Agreement among BioMarin and Genzyme of even date herewith (the “Fill Agreement”); 
  
 WHEREAS, BioMarin, Genzyme and the Company have entered into an amendment and restatement of the Original Collaboration Agreement of even date herewith
(the “Amended and Restated Collaboration Agreement”) so that hereafter the Company will no longer engage in commercial activities and will solely (1) hold the intellectual property relating to Aldurazyme and 

 
license all such intellectual property on the terms set forth in the Amended and Restated Collaboration Agreement and the Manufacturing, Marketing and Sales
Agreement to BioMarin and Genzyme and (2) engage in research and development activities that are mutually selected and funded by BioMarin and Genzyme; and 
  

WHEREAS, to effect the foregoing, the Members desire to acquire and assume from the Company, and the Company desires to transfer and assign to the
Members, certain assets and Liabilities of the Company and its subsidiaries, on the terms and subject to the conditions described below in this Agreement. 
  
 AGREEMENT 
  
 NOW THEREFORE, in consideration of the premises and of the covenants herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties mutually agree as follows: 
  
 1. DEFINITIONS. For purposes of this Agreement, the terms defined in this Section 1 will have the meanings specified below. Certain other capitalized terms are defined elsewhere in this Agreement. 
  
 1.1. “Acquired Assets” means the BioMarin
Acquired Assets, the BioMarin Subsidiary Acquired Assets, and the Genzyme Acquired Assets. 
  
 1.2. “Aldurazyme” has the meaning set forth in the Amended and Restated Collaboration Agreement. 
  
 1.3. “BioMarin Acquired Assets” means all
of the Company’s right, title and interest in and to the following assets, properties and rights as of the Calculation Date, but no others: 
  
 1.3.1 all of the inventory held by the Company or to which it otherwise has rights; and 
  
 1.3.2 the BioMarin Cash Distribution, as defined in
Section 2.9.1. 
  
 1.4. “BioMarin
Assumed Liabilities” means the following specified Liabilities of the Company as of the Calculation Date, but no others: 
  
 1.4.1 amounts payable to BioMarin or any subsidiary. 
  
 1.5. “BioMarin Subsidiary Acquired Assets” means all of the Company’s right, title and
interest in and to the following assets, properties and rights as of the Calculation Date, but no others: 
  
 1.5.1 the BioMarin Subsidiary Cash Distribution, as defined in Section 2.9.1. 
  
 1.6. “Business Day” means any weekday other
than a weekday on which banks in New York, NY are authorized or required to be closed. 
  
 1.7. “Calculation Date” means December 31, 2007. 
  

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 1.8. “Collaboration Products” has the meaning set forth in the Amended
and Restated Collaboration Agreement. 
  
 1.9.
“Encumbrance” means any charge, claim, condition, equitable interest, lien, license, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first offer or first refusal, buy/sell
agreement and any other restriction or covenant with respect to, or condition governing the use, construction, transfer, receipt of income or exercise of, any other attribute of ownership. 
  
 1.10. “GAAP” means generally accepted
accounting principles in the United States as in effect from time to time. 
  
 1.11. “Genzyme Acquired Assets” means all of the Company’s right, title and interest in and to the following assets, properties and rights as of the Calculation Date, but no others: 

 
 1.11.1 all of the accounts receivable held by the
Company; 
  
 1.11.2 all of the Company’s
pre-paid value-added taxes (VAT); and 
  
 1.11.3
the Genzyme Cash Distribution, as defined in Section 2.9.1. 
  
 1.12. “Genzyme Assumed Liabilities” means the following specified Liabilities of the Company as of the Calculation Date, but no others: 
  
 1.12.1 amounts payable to Genzyme or any subsidiary; 
  
 1.12.2 all of the Company’s accrued expenses, including
accrued royalty expenses and Medicaid-related accrued expenses; and 
  
 1.12.3 all of the Company’s Liabilities in respect of deferred revenue. 
  
 1.13. “Liability” means, with respect to any person or entity, any liability or obligation, including any liability for
tax, or assessment against such person or entity whether known or unknown, whether asserted or unasserted, whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, whether incurred or consequential, whether due or to become due and whether or not required under GAAP to be accrued on the financial statements of such person or entity. 
  
 1.14. “Operating Agreement” means the Operating Agreement of the Company dated as of
September 4, 1998 by and among BioMarin, BioMarin Subsidiary and Genzyme. 
  
 1.15. “Percentage Interest” has the meaning set forth in the Operating Agreement. 
  
 1.16. “Related Agreements” means the
Amended and Restated Collaboration Agreement, the Manufacturing, Marketing and Sales Agreement, the Fill Agreement and the Operating Agreement. 
  
 1.17. “Retained Cash” means two million five hundred thousand dollars (US$2,500,000.00). 
  

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 2. DISTRIBUTION OF ASSETS. 
  

 2.1. Distribution of Assets to Genzyme. The Company hereby distributes, conveys, transfers and delivers to Genzyme,
and Genzyme hereby acquires from the Company, subject to the terms and conditions of this Agreement, free and clear of any Encumbrance, the Genzyme Acquired Assets. 
  
 2.2. Distribution of Assets to BioMarin and BioMarin Subsidiary. 
  
 2.2.1 The Company hereby distributes, conveys, transfers and
delivers to BioMarin, and BioMarin hereby acquires from the Company, subject to the terms and conditions of this Agreement, free and clear of any Encumbrance, the BioMarin Acquired Assets. 
  
 2.2.2 The Company hereby distributes, conveys, transfers and
delivers to BioMarin Subsidiary, and BioMarin Subsidiary hereby acquires from the Company, subject to the terms and conditions of this Agreement, free and clear of any Encumbrance, the BioMarin Subsidiary Acquired Assets. 
  
 2.3. Assets Held by the Company’s Subsidiaries.
To the extent that any of the Acquired Assets are held by a subsidiary of the Company, the Company hereby causes its subsidiaries to transfer all Acquired Assets to the Company so that the Company may simultaneously transfer the Acquired Assets to
the Members in accordance with Sections 2.1 and 2.2 of this Agreement. 
  
 2.4. Retained Assets. The Company retains all of the Company’s right, title and interest in and to all of the Company’s assets, properties and rights, other than the Acquired Assets. 
  
 2.5. Assumption of Certain Liabilities by Genzyme.
Subject to the terms and conditions of this Agreement, Genzyme hereby assumes and the Company hereby assigns to Genzyme the Genzyme Assumed Liabilities. Notwithstanding any provision in this Agreement to the contrary, Genzyme is not assuming, and
will not be deemed to have assumed, any Liability of the Company of any nature other than the Genzyme Assumed Liabilities. 
  
 2.6. Assumption of Certain Liabilities by BioMarin. Subject to the terms and conditions of this Agreement, BioMarin hereby assumes
and the Company hereby assigns to BioMarin the BioMarin Assumed Liabilities. Notwithstanding any provision in this Agreement to the contrary, BioMarin is not assuming, and will not be deemed to have assumed, any Liability of the Company of any
nature other than the BioMarin Assumed Liabilities. 
  
 2.7. Assumption of No Liabilities by BioMarin Subsidiary. Notwithstanding any provision in this Agreement to the contrary, BioMarin Subsidiary is not assuming and will not be deemed to have assumed, any Liability of the Company.

  
 2.8. Additional Documentation. The
transfer of the BioMarin Acquired Assets and the BioMarin Subsidiary Acquired Assets by the Company to BioMarin and BioMarin Subsidiary in accordance with this Agreement will be further evidenced by a Distribution and Assignment Agreement in the
form attached hereto as Exhibit 1. The transfer of the Genzyme Acquired Assets and Genzyme Assumed Liabilities by the Company to Genzyme in accordance with this Agreement will be further evidenced by an Assignment and Assumption
Agreement in the form attached hereto as Exhibit 2. The Company will execute and deliver to each Member such other instruments and documents of conveyance and assignment as are reasonably requested by such Member to vest in the Member
title to the Member’s Acquired Assets. 
  

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 2.9. Final Distribution. 
  
 2.9.1 Calculation. All of the Company’s cash
other than the Retained Cash will be distributed to one or more Members in such amounts as to cause the fair value of the net assets distributed to the Members under this Agreement to be in proportion to the Members’ respective Percentage
Interests (or in a circumstance where such proportion cannot be achieved, as nearly equal to the Members’ respective Percentage Interests as possible). The amount of cash, if any, distributed to each Member in accordance with this
Section 2.9 is hereinafter referred to as the “Genzyme Cash Distribution”, the “BioMarin Cash Distribution” or the “BioMarin Subsidiary Cash Distribution”, as applicable (collectively, the
“Cash Distribution”). The Parties agree that for purposes of calculating the fair value of the assets and Liabilities to be distributed and/or assigned to and assumed by the Members in accordance with this Section 2 (the
“Final Distribution”), the book value of the Company’s balance sheet assets and liabilities determined in accordance with GAAP approximate their fair value. 
  
 2.9.2 Final Balance Sheet. As soon as
practicable following the date hereof (but in no event later than the tenth (10th) Business Days after the Company’s independent auditors
complete the Company’s 2007 year end audit), Genzyme will prepare or cause to be prepared, and will provide to BioMarin, a balance sheet of the Company as of the Calculation Date prepared in good faith and in accordance with GAAP (the
“Final Balance Sheet”), together with a written statement setting forth in reasonable detail its calculation of the Final Distribution in accordance with Section 2.9.1, based on the Final Balance Sheet (the
“Distribution Statement”). Genzyme shall afford BioMarin reasonable access to the work papers used by Genzyme in the preparation of the Final Balance Sheet and the Distribution Statement. For illustrative purposes only, the attached
Exhibit 3 is a model Final Balance Sheet and Distribution Statement, prepared as if the Calculation Date was November 30, 2007. 
  
 2.9.3 Dispute Notice. The Final Balance Sheet and the Distribution Statement
will be final, conclusive and binding on the Parties unless BioMarin (on behalf of itself and BioMarin Subsidiary) provides a written notice (a “Dispute Notice”) to Genzyme setting forth in reasonable detail (a) any item on the
Final Balance Sheet and/or the Distribution Statement that BioMarin believes is not the correct amount in accordance with GAAP (each, a “Disputed Item”), (b) the correct amount of such item in accordance with GAAP and
(c) the correct calculation of the Final Distribution based solely on the correct amount of each Disputed Item. BioMarin shall deliver the Dispute Notice by the tenth (10th) Business Day after Genzyme delivers the Final Balance Sheet and Distribution Statement; provided, however, that if Genzyme delivers the Final Balance Sheet and Distribution Statement before the
Company’s independent auditors complete the Company’s 2007 year end audit, such ten (10) Business Day period shall not start until the date the Company’s independent auditors deliver their report. Any item or amount to which no
dispute is raised in the Dispute Notice will be final, conclusive and binding on the Parties. 
  
 2.9.4 Resolution of Disputes. 
  

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 (a) The Members will attempt to resolve the matters raised in a Dispute Notice in good faith. Twenty
(20) Business Days after delivery of the Dispute Notice, either Genzyme or BioMarin may provide written notice (an “Arbitration Notice”) to the other that it elects to submit the disputed items to a mutually agreeable
nationally recognized accounting firm which does not have a conflict serving in such capacity with respect to either BioMarin or Genzyme (the “Arbitrator”). On the fifth (5th) Business Day following appointment of an
Arbitrator, Genzyme will submit the Final Balance Sheet and Distribution Statement to the Arbitrator (if applicable, as amended following discussions with BioMarin) and BioMarin will submit the Dispute Notice (if applicable, as amended following
discussions with Genzyme) to the Arbitrator. Promptly following receipt of both submissions, the Arbitrator will provide copies of the opposing Member’s submission to Genzyme and to BioMarin. 
  
 (b) The Arbitrator will promptly review only those items and amounts
specifically set forth and objected to in the Dispute Notice submitted to it and resolve the dispute by selecting either the Final Distribution reflected on the Distribution Statement, as submitted to it, or the Final Distribution reflected on the
Dispute Notice, as submitted to it as the calculation that is closest to the correct determination in accordance with GAAP. The Arbitrator will resolve the dispute pursuant to such procedures that it establishes and deems fair and equitable,
provided that Genzyme and BioMarin must each be afforded an opportunity to provide a written submission in support of its position and to advocate for its position personally before the Arbitrator. Each of Genzyme and BioMarin agrees to use its
commercially reasonable efforts to cooperate with the Arbitrator and to cause the Arbitrator to resolve any dispute no later than thirty (30) Business Days after selection of the Arbitrator. The decision of the Arbitrator with respect to any
such dispute will be final, conclusive and binding on the Parties. 
  
 (c) The fees and expenses of the Arbitrator will be borne by (a) BioMarin, if the Arbitrator selects the Final Distribution reflected on the Distribution Statement submitted to it, or (b) Genzyme, if the Arbitrator selects the
Final Distribution reflected on the Dispute Notice submitted to it. 
  
 2.9.5 Cash Distribution and Insufficient Cash. Promptly after the final determination of the Final Distribution in accordance with this Section 2.9 (the “Final Determination”), the Company
shall distribute the Cash Distribution to the applicable Member(s). If the Company’s available cash less the Retained Cash is less than the amount required for the Cash Distribution, then the Company will establish on its books an amount
payable to Genzyme, BioMarin and/or BioMarin Subsidiary, as applicable (each, a “Payee”), equal to the difference. The Members shall each make a capital contribution to the Company within thirty (30) days after the Final
Determination, in proportion to the Members’ respective Percentage Interests and in accordance with the terms of the Operating Agreement, such that the total capital contribution is sufficient to discharge the payable described above in this
Section 2.9.5; provided that, a Payee may offset its capital contribution obligation under this Section 2.9.5 against the amount of any such payable. 
  

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 3. REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants to each other Party as follows
(except with respect to Sections 3.6 and 3.7 below in which case only the Company is making such representations and warranties to the other Parties): 
  
 3.1. Organization. It is a corporation (or limited liability company as the case may be) duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation (or organization as the case may be), is qualified to do business and is in good standing as a foreign corporation (or limited liability company as the case may be) in each
jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent it from performing its obligations under this Agreement and has all requisite corporate power (or
limited liability power as the case may be) and authority to conduct its business as now being conducted, to own, lease and operate its properties and to execute, deliver and perform this Agreement. 
  
 3.2. Authorization. It is duly authorized to execute
and deliver this Agreement and to perform its obligations hereunder. It has taken all action (corporate or otherwise) necessary to execute, deliver and perform its obligations under this Agreement. The person executing this Agreement on its behalf
has been duly authorized to do so by all requisite corporate action. 
  
 3.3. No Third Party Approval. No authorization, consent, approval, license, exemption of, or filing or registration with, any court or governmental authority or regulatory body (other than health regulatory
authorities) is required for the due execution, delivery or performance by it of this Agreement. 
  
 3.4. Enforceable Agreement. This Agreement has been duly and validly executed and delivered, and assuming it is a legally
enforceable agreement of the other Parties hereto, constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity. 
  
 3.5. No Violation. None of the execution, delivery or performance of this Agreement by such Party, nor the consummation by such
Party of the transactions contemplated hereby will (i) result in a violation of any provision of such Party’s charter documents, by-laws or operating agreement; or (ii) with or without the giving of notice or the lapse of time, or
both, result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any material
agreement to which such Party is a party or by which such Party or any of its assets or properties are bound or which is applicable to such Party or any of its assets or properties, other than any of the foregoing which does not materially impair
the ability of the Party to perform its obligations hereunder. 
  
 3.6. Title to Acquired Assets. The Company owns all right, title and interest in the Acquired Assets free and clear of all liens, claims, licenses, pledges and encumbrances. 
  
 3.7. Solvency. After consummation of the transactions
contemplated by this Agreement, the Company will be solvent and able to pay its debts as they become due. 
  

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 4. COVENANTS. 
  

4.1. Payment of Amounts Due from Genzyme. Promptly after the Final Determination, and concurrently with the making of the Cash
Distribution pursuant to Section 2.9.5, Genzyme will pay to the Company (netted against the Genzyme Cash Distribution, if applicable) the amounts identified on the Final Balance Sheet (as finally determined pursuant to Section 2.9), if
any, as due from Genzyme or any Genzyme subsidiary. 
  
 4.2. Payment of Amounts Due from BioMarin and BioMarin Subsidiary. Promptly after the Final Determination, and concurrently with the making of the Cash Distribution pursuant to Section 2.9.5, BioMarin will pay to the Company
(netted against the BioMarin Cash Distribution or BioMarin Subsidiary Cash Distribution, if applicable) the amounts identified on the Final Balance Sheet (as finally determined pursuant to Section 2.9), if any, as due from BioMarin or any
BioMarin subsidiary. 
  
 4.3. Transfer of
Certain Funds Received Post-Closing. With respect to any and all amounts received or collected by the Company from and after the date hereof attributable to, or in respect of, any Genzyme Acquired Asset, the Company will provide notice of such
receipt or collection to Genzyme and pay promptly (and in any event within five (5) Business Days of its receipt or collection) to Genzyme any and all such amounts so received or collected by wire transfer of immediately available funds to an
account specified by Genzyme or by other means acceptable to Genzyme. 
  
 4.4. Indemnification. Each Party hereby agrees to indemnify, defend and hold each other Party harmless from and against any expenses, Liabilities or losses of any kind or nature (including reasonable
attorney’s fees incurred in the investigation or defense thereof) suffered by such other Party arising out of or directly or indirectly related to (a) a breach of or inaccuracy in such Party’s representations and warranties contained
in this Agreement or (b) any failure of such Party to discharge any Liability assumed or retained (as applicable) by such Party hereunder. 
  
 4.5. Further Assurances. From and after the date hereof, upon the request of any Party, each of the Parties hereto will do,
execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the transactions contemplated by this
Agreement. The Company will provide all cooperation reasonably requested by any Member in connection with any effort by the Member to establish, perfect, defend, or enforce its rights in or to the Acquired Assets. 
  
 4.6. Continuation of Operating Agreement, Amendment to
Operating Agreement. The Parties hereby acknowledge and agree that the transactions contemplated by this Agreement do not constitute the sale or disposition of all or substantially all of the Company’s property for the purposes of
Section 9.1(a) of the Operating Agreement and accordingly shall not be an event of dissolution of the Company for the purposes of Section 9.1 of the Operating Agreement, and that the Parties intend that the Company will continue in
existence hereafter until an event of dissolution described in Section 9.1 of the Operating Agreement occurs. Further, to the extent that the Operating Agreement or any of the Related Agreements prohibits or is inconsistent with the
transactions contemplated hereby, each such agreement is hereby amended to permit the 

  

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transactions contemplated hereby. Section 1.3 of the Operating Agreement is hereby amended to provide that the transactions contemplated by this
Agreement may be approved by the Members rather than the Steering Committee, and each Member hereby approves the transactions contemplated by this Agreement. In compliance with Section 18-607 of the Delaware Limited Liability Company Act, the
Parties acknowledge and agree that upon the completion of the transactions contemplated by this Agreement, the fair market value of the Company’s right, title and interest in and to all of the Company’s assets, properties and rights
(including the Retained Cash) shall exceed the value of all of the liabilities of the Company. 
  
 5. MISCELLANEOUS. 
  
 5.1. Assignment. This Agreement may not be assigned or otherwise transferred by any Party without the consent of the other Parties other than to an assignee of a Member’s membership interest in the Company effected in compliance
with the Related Agreements. Any permitted assignee shall assume all obligations of its assignor under this Agreement; accordingly, all references herein to the assigning Party shall be deemed references to the assignee to whom the Agreement is so
assigned. Any purported assignment in violation of this Section 5.1 shall be void. 
  
 5.2. Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties
hereto to any other Party shall be in writing, delivered personally or by facsimile (and promptly confirmed by personal delivery or courier), by a next Business Day delivery service of a nationally recognized overnight courier service or by courier,
return receipt requested and postage prepaid (where applicable), addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor in accordance with this
Section 5.2 and shall be effective upon receipt by the addressee. 
  

			
	 If to BioMarin,
 BioMarin Subsidiary
 or the Company (if
 such notice is sent by
 Genzyme):
	  	 BioMarin Pharmaceutical Inc.
 105 Digital
Drive
 Novato, California 94949
 Attention: Chief Executive
Officer
 Facsimile: (415) 382-7889

		
	with a copy to:	  	 BioMarin Pharmaceutical Inc.
 105 Digital
Drive
 Novato, California 94949
 Attention: General
Counsel
 Facsimile: (415) 382-7889

		
	 If to Genzyme or to the
 Company (if such
 notice is sent by
 BioMarin or BioMarin
 Subsidiary):
	  	 Genzyme Corporation
 500 Kendall Street
 Cambridge, Massachusetts 02142
 Attention: President, LSD
Therapeutics
 Facsimile: (617) 768-6419

		
	with a copy to:	  	 Genzyme Corporation
 500 Kendall Street
 Cambridge, Massachusetts 02142
 Attention: General Counsel
 Facsimile: (617) 252-7553

  

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 5.3. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction. 
  

 5.4. Entire Agreement. This Agreement, together with the Related Agreements, contains the entire understanding of
the Parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly merged in and made a part of this Agreement. This Agreement may be amended, or any
term hereof modified, only by a written instrument duly executed by all Parties hereto. Each of the Parties hereby acknowledges that this Agreement is the result of mutual negotiation and therefore any ambiguity in its terms shall not be construed
against the drafting Party. 
  
 5.5.
Headings. The headings contained in this Agreement are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Sections hereof. 
  
 5.6. Waiver. Except as expressly provided herein, the waiver by any Party hereto of any right
hereunder or of any failure to perform or any breach by any other Party shall not be deemed a waiver of any other right hereunder or of any other failure to perform or breach by said other Party, whether of a similar nature or otherwise, nor shall
any singular or partial exercise of such right preclude any further exercise thereof or the exercise of any other such right. 
  
 5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Signature pages may be exchanged by facsimile. 
  
 [Remainder of Page Intentionally Left Blank] 
  

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 IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first set forth
above. 
  

			
	GENZYME CORPORATION
		
	By:	 	/s/ David P. Meeker
	Print Name:	 	David P. Meeker
	Title:	 	President LSD Therapeutics
	Date:	 	12/31/07
	
	BIOMARIN PHARMACEUTICAL INC.
		
	By:	 	/s/ G. Eric Davis
	Print Name:	 	G. Eric Davis
	Title:	 	Vice President, General Counsel
	Date:	 	12/31/07
	
	BIOMARIN GENETICS, INC.
		
	By:	 	/s/ G. Eric Davis
	Print Name:	 	G. Eric Davis
	Title:	 	Vice President, General Counsel
	Date:	 	12/31/07

  
 [SIGNATURE PAGE TO MEMBERS AGREEMENT] 

			
	BIOMARIN/GENZYME LLC
	
	By: BIOMARIN PHARMACEUTICAL INC.
		
	By:	 	/s/ G. Eric Davis
	Print Name:	 	G. Eric Davis
	Title:	 	Vice President, General Counsel
	Date:	 	12/31/07
	
	By: BIOMARIN GENETICS, INC.
		
	By:	 	/s/ G. Eric Davis
	Print Name:	 	G. Eric Davis
	Title:	 	Vice President, General Counsel
	Date:	 	12/31/07
	
	By: GENZYME CORPORATION
		
	By:	 	/s/ David P. Meeker
	Print Name:	 	David P. Meeker
	Title:	 	President LSD Therapeutics
	Date:	 	12/31/07

  
 [SIGNATURE PAGE TO MEMBERS AGREEMENT] 

 Exhibit 1 
  

Distribution and Assignment Agreement 

 Distribution and Assignment Agreement 
  
 This Distribution and Assignment Agreement (the “Agreement”) is made, executed and delivered as of January 1,
2008, by and between BioMarin/Genzyme LLC, a Delaware limited liability company (the “LLC”), on the one hand, and BioMarin Pharmaceutical Inc., a Delaware corporation and member of the LLC (“BioMarin”), and BioMarin
Genetics, Inc., a Delaware corporation, subsidiary of BioMarin and a member of the LLC (“BioMarin Genetics” and together with BioMarin and the LLC, the “Parties”). 
  
 WITNESSETH: 
  
 WHEREAS, the LLC and BioMarin are parties to that certain Members Agreement, dated January 1, 2008, by and among the LLC, BioMarin, Genzyme
Corporation and BioMarin Genetics, Inc. (the “Members Agreement”), providing for, among other things, the distribution and assignment of specified assets of the LLC to BioMarin and BioMarin Genetics, Inc, on the one hand, and
Genzyme, on the other hand. 
  
 NOW, THEREFORE, in connection with
the Members Agreement, for and in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt, adequacy, and legal sufficiency of which are hereby acknowledged, the Parties do
hereby agree as follows: 
  
 1. Definitions. Capitalized terms used
but not defined herein shall have the meanings for such terms that are set forth in the Members Agreement. 
  
 2. Distribution and Assignment.
  
 (a) The LLC hereby distributes, conveys, transfers, assigns and delivers to BioMarin and its successors and assigns forever all right, title and interest in and to the BioMarin Acquired Assets free and clear of
all liens, claims, licenses, pledges and encumbrances other than those created by BioMarin. All transfers to BioMarin’s custody and control of the BioMarin Acquired Assets shall be effected in compliance with all applicable
laws.
  
 (b) The LLC hereby distributes, conveys,
transfers, assigns and delivers to BioMarin Genetics and its successors and assigns forever all right, title and interest in and to the BioMarin Subsidiary Acquired Assets free and clear of all liens, claims, licenses, pledges
and encumbrances other than those created by BioMarin Genetics.
  
 3.
Representations and Warranties. Each Party represents and warrants to each other Party as follows (except with respect to Sections 3(f) and 3(g) below in which case only the LLC is making such representations and warranties to the other
Parties): 
  
 (a) Organization. It is a
corporation (or limited liability company as the case may be) duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation (or organization as the case may be), is qualified to do business and is in
good standing as a foreign corporation (or limited liability company as the case may be) in each jurisdiction in which the conduct of its business or the 

 
ownership of its properties requires such qualification and failure to have such would prevent it from performing its obligations under this Agreement and
has all requisite corporate power (or limited liability power as the case may be) and authority to conduct its business as now being conducted, to own, lease and operate its properties and to execute, deliver and perform this Agreement. 

 
 (b) Authorization. It is duly authorized to
execute and deliver this Agreement and to perform its obligations hereunder. It has taken all action (corporate or otherwise) necessary to execute, deliver and perform its obligations under this Agreement. The person executing this Agreement on its
behalf has been duly authorized to do so by all requisite corporate action. 
  
 (c) No Third Party Approval. No authorization, consent, approval, license, exemption of, or filing or registration with, any court or governmental authority or regulatory body (other than health regulatory
authorities) is required for the due execution, delivery or performance by it of this Agreement. 
  
 (d) Enforceable Agreement. This Agreement has been duly and validly executed and delivered, and assuming it is a legally
enforceable agreement of the other Parties hereto, constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity. 
  
 (e) No Violation. None of the execution, delivery or performance of this Agreement by such Party, nor the consummation by such
Party of the transactions contemplated hereby will (i) result in a violation of any provision of such Party’s charter documents, by-laws or operating agreement; or (ii) with or without the giving of notice or the lapse of time, or
both, result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any material
agreement to which such Party is a party or by which such Party or any of its assets or properties are bound or which is applicable to such Party or any of its assets or properties, other than any of the foregoing which does not materially impair
the ability of the Party to perform its obligations hereunder. 
  
 (f) Title to Acquired Assets. The LLC owns all right, title and interest in the BioMarin Acquired Assets and the BioMarin Subsidiary Acquired Assets free and clear of all liens, claims, licenses, pledges and
encumbrances and upon receipt of the BioMarin Acquired Assets from the LLC BioMarin will receive good and marketable title to such assets. 
  

	 	(g)	Solvency. After consummation of the transactions contemplated by this Agreement, the LLC will be solvent and able to pay its debts as they become due.

 4. Entire Agreement. This Agreement, together with the Members Agreement and the Related Agreements,
constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof and is not intended to and shall not be construed to confer upon any persons
other than the Parties any rights or remedies hereunder. 
  
 5. Amendment and
Modification. This Agreement and any of the terms contained herein may be amended or modified by the Parties only in writing signed by each Party. 
  
 6. Succession and Assignment. This Agreement may not be assigned or otherwise transferred by any Party without the consent of the other Parties hereto other
than by BioMarin or BioMarin Genetics to an assignee of its respective membership interest in the LLC effected in compliance with the Members Agreement and Related Agreements or any successor of all or substantially all of its business whether by
merger, acquisition of stock or assets or otherwise. Any purported assignment in violation of this Section 6 shall be void. 
  
 7. Further Assurances. The LLC shall enter into such other documents, instruments or agreements as may be necessary or appropriate to further evidence the
transfer of the BioMarin Acquired Assets to BioMarin and the BioMarin Subsidiary Acquired Assets to BioMarin Genetics as may reasonably be requested by BioMarin or BioMarin Genetics. 
  
 8. Notices. All notices shall be given as provided in the Members Agreement. 
  
 9. Governing Law. This Agreement shall be governed by, and construed and enforced
in accordance with, the substantive laws of the State of Delaware without regard to its principles of conflicts of laws that would result in the application of the law of any other jurisdiction. 
  
 10. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 [Remainder of Page Intentionally Left Blank.] 

 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be signed by its duly authorized
officer as of the date first written above. 
  

			
	BIOMARIN/GENZYME LLC
	
	By: BIOMARIN PHARMACEUTICAL INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 
	
	By: BIOMARIN GENETICS, INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 
	
	By: GENZYME CORPORATION
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 

			
	
	BIOMARIN PHARMACEUTICAL INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 
	
	BIOMARIN GENETICS, INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 

 Execution Version 
  
 Exhibit 2 
  
 Assignment and Assumption Agreement 
  

 19 

 ASSIGNMENT AND ASSUMPTION AGREEMENT 
  
 This Assignment and Assumption Agreement (the “Agreement”) is made, executed and delivered as of
January 1, 2008, by and among BioMarin/Genzyme LLC, a Delaware limited liability company (“Assignor”) and Genzyme Corporation, a Massachusetts corporation (“Assignee”, and together with Assignor, the
“Parties”). 
  
 WITNESSETH: 
  
 WHEREAS, Assignor and Assignee are parties to a Members Agreement, dated
January 1, 2008, by and among Assignor, Assignee, BioMarin Pharmaceutical Inc. and BioMarin Genetics, Inc. (the “Members Agreement”), providing for, among other things, the assignment by Assignor and the assumption by Assignee
of certain rights, liabilities, and obligations of Assignor, all as more fully described in the Members Agreement, on the terms and conditions provided in the Members Agreement; 
  
 NOW, THEREFORE, in connection with the Members Agreement, for and in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt, adequacy, and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows: 
  
 1. Definitions. Capitalized terms used but not defined herein shall have the meanings for such terms that are set
forth in the Members Agreement. 
  
 2. Assignment and
Assumption. Assignor hereby assigns, distributes, transfers, and sets over to Assignee all of such Assignor’s right, title, benefit, privileges, and interest in and to, and all of such Assignor’s burdens, obligations, and liabilities
in connection with, the Genzyme Acquired Assets and the Genzyme Assumed Liabilities, free and clear of all liens, claims, licenses, pledges and encumbrances (other than those created by Assignee) in the case of the Genzyme Acquired Assets. Assignee
hereby accepts and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions, and covenants of the Genzyme Acquired Assets and the Genzyme Assumed Liabilities, and to pay and discharge all of the Genzyme Assumed
Liabilities. All transfers to Assignee’s custody and control of the Genzyme Acquired Assets shall be effected in compliance with all applicable laws. 
  
 3. Representations and Warranties. Each Party represents and warrants to the other Party as follows (except with respect to Sections 3(f) and
3(g) below in which case only Assignor is making such representations and warranties to Assignee): 
  
 (a) Organization. It is a corporation (or limited liability company as the case may be) duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation (or organization as the case may be), is qualified to do business and is in good standing as a foreign corporation (or limited liability company as the case may be) in each
jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent it from performing its 

  

 -8- 

 
obligations under this Agreement and has all requisite corporate power (or limited liability power as the case may be) and authority to conduct its business
as now being conducted, to own, lease and operate its properties and to execute, deliver and perform this Agreement. 
  
 (b) Authorization. It is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder. It has
taken all action (corporate or otherwise) necessary to execute, deliver and perform its obligations under this Agreement. The person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action.

  
 (c) No Third Party Approval. No
authorization, consent, approval, license, exemption of, or filing or registration with, any court or governmental authority or regulatory body (other than health regulatory authorities) is required for the due execution, delivery or performance by
it of this Agreement. 
  
 (d) Enforceable
Agreement. This Agreement has been duly and validly executed and delivered, and assuming it is a legally enforceable agreement of the other Party hereto, constitutes the legal, valid and binding obligation of such Party, enforceable against it
in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity.

  
 (e) No Violation. None of the
execution, delivery or performance of this Agreement by such Party, nor the consummation by such Party of the transactions contemplated hereby will (i) result in a violation of any provision of such Party’s charter documents, by-laws or
operating agreement; or (ii) with or without the giving of notice or the lapse of time, or both, result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien,
charge or encumbrance pursuant to, or right of termination under, any provision of any material agreement to which such Party is a party or by which such Party or any of its assets or properties are bound or which is applicable to such Party or any
of its assets or properties, other than any of the foregoing which does not materially impair the ability of the Party to perform its obligations hereunder. 
  
 (f) Title to Acquired Assets. Assignor owns all right, title and interest in the Genzyme Acquired Assets free and clear of all
liens, claims, licenses, pledges and encumbrances and upon receipt of the Genzyme Acquired Assets from Assignor, Assignee will receive good and marketable title to such assets. 
  
 (g) Solvency. After consummation of the transactions contemplated by this Agreement, Assignor will be
solvent and able to pay its debts as they become due. 
  

 -9- 

 4. Entire Agreement. This Agreement, together with the Members Agreement and the Related
Agreements, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof and is not intended to and shall not be construed to confer
upon any persons other than the Parties any rights or remedies hereunder. 
  
 5. Amendment and Modification. This Agreement and any of the terms contained herein may be amended or modified by the Parties only in writing signed by each Party. 
  
 6. Succession and Assignment. This Agreement may not be assigned or
otherwise transferred by either Party without the consent of the other Party other than by Assignee to an assignee of its membership interest in Assignor effected in compliance with the Members Agreement and Related Agreements or any successor of
all or substantially all of its business whether by merger, acquisition of stock or assets or otherwise. Any permitted assignee shall assume all obligations of its assignor under this Agreement; accordingly, all references herein to the assigning
Party shall be deemed references to the assignee to whom the Agreement is so assigned. Any purported assignment in violation of this Section 6 shall be void. 
  
 7. Further Assurances. Assignor shall enter into such other documents, instruments or agreements as may be necessary
or appropriate to further evidence the transfer of the Genzyme Acquired Assets to Assignee as may reasonably be requested by Assignee. 
  
 8. Notices. All notices shall be given as provided in the Members Agreement. 
  
 9. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive
laws of the State of Delaware without regard to its principles of conflicts of laws that would result in the application of the law of any other jurisdiction. 
  

10. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. 
  
 [Remainder of Page Intentionally Left Blank.] 
  

 -10- 

 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be signed by its duly authorized
officer as of the date first written above. 
  

			
	BIOMARIN/GENZYME LLC
	
	By: BIOMARIN PHARMACEUTICAL INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 
	
	By: BIOMARIN GENETICS, INC.
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 
	
	By: GENZYME CORPORATION
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 

			
	GENZYME CORPORATION
		
	By:	 	 
	Print Name:	 	 
	Title:	 	 
	Date:	 	 

 Exhibit 3 
  

Final Balance Sheet and Distribution Statement (as of November 30, 2007) 
  
 [****]Amended and Restated Employment Agreement

 Exhibit 10.5 
 JAMES E. WOYS 
 EMPLOYMENT AGREEMENT 
 This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of November 30, 2007 (the “Effective
Date”), by and between Health Net, Inc., a Delaware corporation (the “Company”), with its principal place of business located at 21650 Oxnard Street, Woodland Hills, California 91367, and James E. Woys (“Executive”).

 RECITALS 
 WHEREAS, the
Company and Executive are party to an Employment Letter Agreement, dated January 30, 2006, as amended on January 24, 2007 (as amended, the “Prior Agreement”); 
 WHEREAS, the Company and Executive desire to amend and restate the Prior Agreement to reflect Executive’s new role with the Company as Executive
Vice President and Chief Operating Officer and to make certain changes to the Prior Agreement as a result of Executive’s new role; and 
 WHEREAS, the Company and Executive are entering into this Agreement to establish the terms and conditions of the employment relationship. 
 NOW, THEREFORE, in consideration of the following covenants, conditions and promises contained herein, and other good and valuable consideration, the Company and Executive hereby agree as follows: 
 1. Duties and Salary. 
 A.
Duties. Executive’s title is Executive Vice President and Chief Operating Officer, but may be changed at the discretion of the Company to a title that reflects a similarly situated senior executive position. Executive shall report
directly to Jay Gellert, President and Chief Executive Officer of the Company, but Executive’s reporting relationship may be changed from time to time at the discretion of the Company. Executive’s duties and responsibilities include
executive leadership of claims, customer service, information technology, health care analytics and pharmacy, and oversight of the Federal Services and MHN business units, but the Company reserves the right to assign Executive other duties as needed
and to change Executive’s duties from time to time on reasonable notice, based on Executive’s skills and the needs of the Company. 
 B. Salary. Executive will be paid a base salary at the annual rate of $700,000, which salary will be paid on a pro-rated bi-weekly basis, less applicable withholdings (“Base Salary”), covering all hours worked. Generally,
Executive’s Base Salary will be reviewed annually, but the Company reserves the right to change Executive’s compensation from time-to-time. Executive will not be eligible for a merit increase in 2008. Pursuant to the charter of the
Compensation Committee of the Company’s Board of Directors (the “Committee”), any 

  

 - 1 - 

 
adjustment to Executive’s compensation must be made with the approval of the Committee and, in the event that Executive constitutes one of the top two
(2) highest paid executive officers of the Company, with the ratification of the Company’s Board of Directors. 
 C. Disclosure
of Personal Compensation Information. As an “executive officer” of the Company (as such term is defined in the rules and regulations of the Securities and Exchange Commission (“SEC”)), information regarding Executive’s
employment arrangements with the Company, including, among other things, the terms of this Agreement and any stock option agreement, restricted stock agreement, restricted stock unit agreement, performance share agreement and/or severance agreement
Executive enters into with the Company from time to time (collectively, “Personal Compensation Information”), may be disclosed in filings with the SEC, the New York Stock Exchange (“NYSE”) and/or other regulatory organizations
upon the occurrence of certain triggering events. Such triggering events include, but are not limited to, the execution of this Agreement and any amendments thereto, changes in Executive’s Base Salary, any annual incentive payment (whether in
the form of cash or equity) awarded to Executive (in the past or after the date hereof), and the establishment of performance goals under the Company’s incentive plans. Executive’s execution of this Agreement will serve as Executive’s
acknowledgement that Executive’s Personal Compensation Information may be publicly disclosed from time to time in filings with the SEC, NYSE or otherwise as required by applicable law. 
 2. Adjustments and Changes in Employment Status. Executive understands that the Company reserves the right to make personnel decisions regarding
Executive’s employment, including, but not limited to, decisions regarding any promotion, salary adjustment, transfer or disciplinary action, up to and including Termination (as defined below), consistent with the needs of the business of the
Company. 
 For purposes of this Agreement, the capitalized terms “Termination” and “Terminate,” shall mean
Executive’s Separation from Service (as defined below) from the Company. A “Separation from Service” shall have the meaning ascribed to such term in Treasury Regulations promulgated under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), from time to time and other publications of the Internal Revenue Service published in the Internal Revenue Bulletin from time to time. 
 3. Protection of Proprietary and Confidential Information. Executive agrees that Executive’s employment creates a relationship of confidence
and trust with the Company with respect to Proprietary and Confidential Information (as defined below) of the Company learned by Executive during Executive’s employment. 
 A. Executive agrees not to directly or indirectly use or disclose any of the Proprietary and Confidential Information of the Company or any of its
affiliates at any time except in connection with the services Executive provides to such entities. “Proprietary and Confidential Information” shall mean trade secrets, confidential knowledge, data or any other proprietary or
confidential information of the Company or any of its affiliates, or of any customers, members, employees or directors of any of such entities, but shall not include any information that (i) was publicly known and made generally available in
the public domain prior to the time of disclosure to Executive by the Company or (ii) becomes publicly known and made generally available after disclosure to Executive by the Company other than as a result of a 

  

 - 2 - 

 
disclosure by Executive in violation of this Agreement. By way of illustration but not limitation, “Proprietary and Confidential Information”
includes: (i) trade secrets, documents, memoranda, reports, files, correspondence, lists and other written and graphic records affecting or relating to any such entity’s business; (ii) confidential marketing information including
without limitation marketing strategies, customer and client names and requirements, services, prices, margins and costs; (iii) confidential financial information; (iv) personnel information (including without limitation employee
compensation); and (v) other confidential business information. 
 B. Executive further agrees that at all times during Executive’s
employment and thereafter, Executive will keep in confidence and trust all Proprietary and Confidential Information, and that Executive will not use or disclose any Proprietary and Confidential Information or anything related to such information
without the written consent of the Company, except as may be necessary in the ordinary course of performing Executive’s duties to the Company. 
 C. All Company property, including, but not limited to, Proprietary and Confidential Information, documents, data, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary and Confidential
Information, provided to Executive by the Company or any of its affiliates or produced by Executive or others in connection with Executive’s providing services to the Company or any of its affiliates shall be and remain the sole property of the
Company or its affiliates (as the case may be) and shall be returned promptly to such appropriate entity as and when requested by such entity. Executive shall return and deliver all such property upon termination of Executive’s employment, and
Executive may not take any such property or any reproduction of such property upon such termination. 
 D. Executive recognizes that the
Company and its affiliates have received and in the future will receive information from third parties which is private, proprietary or confidential information subject to a duty on such entity’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Executive agrees that during Executive’s employment, and thereafter, Executive owes such entities and such third parties a duty to hold all such private, proprietary or confidential
information received from third parties in the strictest confidence and not to disclose it, except as necessary in carrying out Executive’s work for such entities consistent with such entities’ agreements with such third parties, and not
to use it for the benefit of anyone other than for such entities or such third parties consistent with such entities’ agreements with such third parties. 
 E. Executive’s obligations under this Section 3 shall continue after the Termination of Executive’s employment and any breach of this Section 3 shall be a material breach of this Agreement.

 4. Physical Exam. Executive shall be required, on an annual basis, to undergo a physical examination and to send evidence that
Executive has undergone such exam (but in no case the results of such exam) to the Senior Vice President of Organizational Effectiveness. The Company shall reimburse Executive for any out-of-pocket expenses relating to the physical examination that
are not otherwise covered by Executive’s health insurance plan. 
  

 - 3 - 

 5. Representations and Warranties of Executive. 
 A. No Violation; No Conflicts. Executive represents and warrants to the Company that the entering into of this Agreement and Executive’s
performance of Executive’s duties hereunder, will not violate any agreements with, or trade secrets of, any other person or entity. Executive further represents and warrants that Executive does not have any relationship or commitment to any
other person or entity that might be in conflict with Executive’s obligations to the Company under this Agreement, including but not limited to outside employment, sales broker relationships, investments or business activities. Executive
understands and agrees that while employed by the Company Executive is expected to refrain from engaging in any outside activities that might be in conflict with the business interests of the Company. In addition, Executive represents and warrants
to the Company that Executive has not shared with or disclosed to, and will not share with or disclose to, the Company any proprietary or confidential information of Executive’s previous employers or any other third party. 
 B. Legal Proceedings. Executive represents and warrants to the Company that Executive has not been arrested, indicted, convicted or otherwise
involved in any criminal or civil action or legal matter that could affect Executive’s ability to perform Executive’s duties hereunder or that may have a negative impact on the Company, its reputation or its operations. Executive agrees,
to the extent permitted by applicable law, to notify the Company’s Senior Vice President of Organizational Effectiveness immediately in the event that Executive becomes party to any criminal or civil action or other legal matter in the future
that could have an affect on the foregoing representation. 
 6. Executive Benefits. 
 A. Employee Benefit Programs. Executive shall be eligible to participate in the Company’s various employee benefit programs and plans in place
from time to time as long as Executive remains employed by the Company and Executive meets the applicable participation requirements. These benefit programs and plans include paid time off (“PTO”), holidays, group medical, dental, vision,
term life, and short and long term disability insurance and participation in the Company’s 401(k) plan, tuition reimbursement plan, deferred compensation plan and Supplemental Executive Retirement Plan (“SERP”). Executive is 100%
vested in the SERP based on his current tenure with the Company. This benefit is designed to provide participants 50% of their base and cash bonus compensation calculated as an average from their last five years of employment with the Company. This
SERP benefit is then reduced by Executive’s social security and 401(k) benefits. The Company or its subsidiaries or affiliates may modify, terminate or amend any benefit or plan in its discretion, retroactively or prospectively, subject only to
applicable law. 
 B. Required Insurance. Executive will be covered by workers’ compensation insurance and state disability
insurance, as required by state law. 
 C. Financial Counseling Allowance. Executive will be entitled to be reimbursed up to the
amount of $5,000 per year for documented costs incurred for personal financial counseling services provided to Executive, including tax preparation, as long as Executive remains employed by the Company. 
 D. Car Allowance. Executive will be entitled to a car allowance of $1,000 per month. 
  

 - 4 - 

 E. Corporate Housing. From January 1, 2008 through June 30, 2008, in lieu of hotel
accommodations, the Company will provide Executive with a furnished corporate apartment in Woodland Hills, CA. All expenses associated with such corporate housing will be deemed to be imputed income to Executive and will be “grossed-up”
for income tax purposes at the applicable federal and state income tax level. 
 F. Incentive Bonus. Executive will be eligible to
participate in the Health Net, Inc. Executive Incentive Plan (“EIP”) in accordance with the terms of the EIP, which provides Executive with a target opportunity to earn each plan year up to 100% of Executive’s Base Salary as
additional compensation according to the terms of the EIP. The bonus payment will range from 0% to 200% of target depending upon the actual results achieved, and specific, individually tailored measures will be established by the Company that must
be achieved by Executive in order for Executive to be eligible to receive bonus payments for a given plan year. It is understood that the Committee and the Company will award bonus amounts, if any, as it deems appropriate consistent with the EIP.

 G. Relocation Benefits. Executive’s relocation will be covered under the Company’s Relocation Policy currently in effect.
All relocation expenses not deductible under IRS regulations, except the miscellaneous spending allowance, will be “grossed up” for income tax purposes at the supplemental federal tax rate and applicable state tax liability. 
 H. Expenses. Subject to and in accordance with the Company’s written policies for business and travel expenses, Executive will receive
reimbursement for all business travel and other out-of-pocket expenses reasonably incurred by Executive in the performance of Executive’s duties pursuant to this Agreement. 
 7. Equity Grants. 
 A. Future
Equity Grants. Any future equity grants made to Executive will be granted under one of the Company’s Long-Term Incentive Plans, and will be subject to the terms of such plan and of the agreement executed in connection with such grant. Any
future equity grants to Executive will be made at the discretion of the Committee. 
 B. Company Stock Ownership Requirement. In
accordance with the Executive Officer Stock Ownership Policy adopted by the Board of Directors of the Company (the “Executive Stock Ownership Policy”), Executive is required to own shares of Common Stock of the Company having a value of
three times (3x) Executive’s Base Salary in effect from time to time pursuant to this Agreement (the “Stock Ownership Requirement”). The number of shares of Common Stock Executive is required to own will be calculated based on
the average NYSE closing price per share of the Company’s Common Stock (as adjusted for stock splits and similar changes to the Common Stock) for the most recently completed fiscal year of the Company. 
 Using Executive’s current salary of $700,000 and a stock price of $45.34, which is the average closing price per share of the Company’s Common
Stock as of December 31, 2006, Executive’s current stock ownership requirement is 46,316 shares (“Target Amount”). The Target Amount is subject to change from time to time based on (1) changes in the average closing sales
price of the Company’s Common Stock on an annual basis and (2) any changes in Executive’s Base Salary made pursuant to and in accordance with Section 1(B) of this 

  

 - 5 - 

 
Agreement. Any shares of Company Common Stock that Executive owns, and any restricted stock units, shares of restricted stock or performance shares of the
Company that Executive owns and have vested count toward the Target Amount. Stock options, unvested restricted stock units, unvested shares of restricted stock, unvested performance shares and shares of Common Stock gifted to others do not count
toward the Target Amount. Under the Executive Stock Ownership Policy, Executive will have until four years from the Effective Date to comply with the Stock Ownership Requirement. 
 The Committee expects that Executive will make reasonable progress toward Executive’s Stock Ownership Requirement. Executive will be notified on an
annual basis of any changes in Executive’s Target Amount. 
 8. Term of Employment. Executive’s employment with the Company
is at the mutual consent of Executive and the Company. Nothing in this Agreement is intended to guarantee Executive’s continuing employment with the Company or employment for any specific length of time. Accordingly, either Executive or the
Company may terminate the employment relationship at any time, with or without advance notice and with or without “Cause” (as defined below). Upon Termination of Executive’s employment for any reason, in addition to any other payments
that may be payable to Executive hereunder, Executive (or Executive’s beneficiaries or estate) shall be paid (in each case to the extent not theretofore paid) within thirty (30) days following Executive’s date of Termination (or such
shorter period that may be required by applicable law): (a) Executive’s annual Base Salary through such date, (b) accrued but unused PTO, (c) reimbursable expenses incurred by Executive prior to the Termination date and
(d) amounts under any other compensatory plan, arrangement or program payment to which Executive may then be entitled. This Agreement constitutes a final and fully binding integrated agreement with respect to the at-will nature of the
employment relationship. 
 9. Termination of Employment/Severance Pay. 
 A. Termination Without Cause Not Following Change in Control. If Executive’s employment is Terminated by the Company without “Cause”
(as defined in Section 9(D) below) at any time that is not within two (2) years after a “Change in Control” (as defined below) of Health Net, Inc., Executive will be entitled to receive, within thirty (30) days following the
Termination of Executive’s employment, provided that Executive signs, prior to the expiration of such (30) day period, a Separation Agreement, Waiver and Release of Claims substantially in the form attached hereto as Exhibit
A, which is incorporated into this Agreement by reference, (i) a lump sum cash payment equal to twenty-four months of Executive’s Base Salary in effect immediately prior to the date of Executive’s Termination, and (ii) the
continuation of Executive’s medical, dental and vision benefits (as maintained for Executive’s benefit immediately prior to the date of Executive’s Termination) (the “Benefits”) for Executive and Executive’s dependents
for a period of six months following the effective date of Executive’s Termination, and (iii) the continuation, under COBRA, of Executive’s Benefits for Executive and Executive’s dependents for a period of eighteen months, with
premium payments paid by the Company on Executive’s behalf, provided, that Executive properly elects to continue those benefits under COBRA. 
 For purposes of this Agreement, “Change in Control” is defined as any of the following which occurs subsequent to the effective date of Executive’s employment: 
  

 - 6 - 

 (i) Any person (as such term is defined under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), corporation or other entity (other than Health Net, Inc. or any of its subsidiaries, or any employee benefit plan sponsored by Health Net, Inc. or any of its subsidiaries) is or
becomes the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act) of securities of Health Net, Inc. representing twenty percent (20%) or more of the combined voting power of the outstanding securities of Health Net,
Inc. which ordinarily (and apart from rights accruing under special circumstances) have the right to vote in the election of directors (calculated as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire Health Net,
Inc.’s securities) (the “Securities”); 
 (ii) As a result of a tender offer, merger, sale of assets or other
major transaction, the persons who are directors of Health Net, Inc. immediately prior to such transaction cease to constitute a majority of the Board of Directors of Health Net, Inc. (or any successor corporations) immediately after such
transaction; 
 (iii) Health Net, Inc. is merged or consolidated with any other person, firm, corporation or other entity and,
as a result, the shareholders of Health Net, Inc., as determined immediately before such transaction, own less than eighty percent (80%) of the outstanding Securities of the surviving or resulting entity immediately after such transaction:

 (iv) A tender offer or exchange offer is made and consummated for the ownership of twenty percent (20%) or more of the
outstanding Securities of Health Net, Inc.; 
 (v) Health Net, Inc. transfers substantially all of its assets to another
person, firm, corporation or other entity that is not a wholly-owned subsidiary of Health Net, Inc.; or 
 (vi) Health Net,
Inc. enters into a management agreement with another person, firm, corporation or other entity that is not a wholly-owned subsidiary of Health Net, Inc. and such management agreement extends hiring and firing authority over Executive to an
individual or organization other than Health Net, Inc. 
 B. Termination Without Cause or For Good Reason Following Change in Control.
If at any time within two (2) years after a Change in Control of Health Net, Inc. Executive’s employment is Terminated by the Company without Cause or Executive Terminates Executive’s employment for “Good Reason” (as defined
below) (by giving the Company at least fourteen (14) days prior written notice of the effective date of Termination), then Executive will be entitled to receive, within thirty (30) days following the Termination of Executive’s
employment, provided that Executive signs, prior to the expiration of such thirty (30) day period, a Separation Agreement, Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is incorporated
into this Agreement by reference, (i) a lump sum payment equal to thirty-six months of Executive’s Base Salary in effect immediately prior to the date of Executive’s Termination, and (ii) the continuation of Executive’s
Benefits for eighteen months following Executive’s date of Termination, and (iii) and after expiration of such eighteen months Benefits continuation period, the continuation, under COBRA, of Benefits for Executive and 

  

 - 7 - 

 
Executive’s dependents for a period of eighteen months following the effective date of Executive’s Termination with premium payments made by the
Company on Executive’s behalf, provided, that Executive properly elects to continue those benefits under COBRA, and provided, further, that in the event the Company requests, in writing, prior to such voluntary Termination
by Executive for Good Reason that Executive continue in the employ of the Company for a period of time up to 90 days following such Change in Control, then Executive shall forfeit such severance allowance if Executive voluntarily leaves the employ
of the Company prior to the expiration of such period of time. 
 For purposes of this Agreement, the term “Good Reason”
means any of the following which occurs, without Executive’s consent, subsequent to the effective date of a Change in Control as defined above: 
 (i) A demotion or a substantial reduction in the scope of Executive’s position, duties, responsibilities or status with the Company, or any removal of Executive from or any failure to reelect Executive to any of
the positions (or functional equivalent of such positions) referred to in the introductory paragraphs hereof, except in connection with the Termination of Executive’s employment for Disability (as defined below), normal retirement or Cause or
by Executive voluntarily other than for Good Reason; 
 (ii) A reduction by the Company in Executive’s Base Salary or a
material reduction in the benefits or perquisites available to Executive as in effect immediately prior to any such reduction; 
 (iii) A relocation of Executive to a work location more than fifty (50) miles from Executive’s work location immediately prior to such proposed relocation; provided that such proposed relocation results in a materially greater
commute for Executive based on Executive’s residence immediately prior to such relocation; or 
 (iv) The failure of the
Company to obtain an assumption agreement from any successor contemplated under Section 12 of this Agreement. 
 C. Voluntary
Termination. Notwithstanding anything to the contrary in this Agreement, whether express or implied, Executive may at any time Terminate Executive’s employment for any reason by giving the Company fourteen (14) days prior written
notice of the effective date of Termination. In the event that Executive voluntarily Terminates employment with the Company (except for Good Reason within two (2) years after a Change in Control of Health Net, Inc.), then Executive shall not be
eligible to receive any payments or continuation of Benefits set forth in this Section 9). 
 D. Termination by the Company for Cause.
The Company may Terminate Executive’s employment for Cause at any time with or without advance notice. In the event of such Termination, Executive will not be eligible to receive any of the payments set forth in Section 9(A) or 9(B) above.
For purposes of this Agreement, a Termination for “Cause” is defined as: (i) an act of dishonesty causing harm to the Company or any of its affiliates, (ii) the material breach of either the Company’s Code of Business
Conduct and Ethics (the “Code of Conduct”) or any policy or procedure developed and published by the Company regarding compliance or ethics related to the Code of Conduct, (iii) habitual drunkenness or narcotic drug 

  

 - 8 - 

 
addiction, (iv) conviction of a felony or a misdemeanor involving moral turpitude, (v) willful refusal to perform or gross neglect of the duties
assigned to Executive, (vi) the willful breach of any law that, directly or indirectly, affects the Company or any of its affiliates, (vii) a material breach by Executive following a Change in Control of those duties and responsibilities
of Executive that do not differ in any material respect from Executive’s duties and responsibilities during the 90-day period immediately prior to such Change in Control (other than as a result of incapacity due to physical or mental illness)
which is demonstrably willful and deliberate on Executive’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company or any of its affiliates and which is not remedied in a
reasonable period of time after receipt of written notice from the Company specifying such breach, or (viii) breach of Executive’s obligations hereunder (or under any Company policy) to protect the proprietary and confidential information
of the Company or any of its affiliates. 
 E. Termination Due to Death or Disability. In the event that Executive’s employment
is Terminated at any time due to Executive’s death or “Disability” (as defined below), Executive (or Executive’s beneficiaries or estate) shall be entitled to receive, provided Executive (or Executive’s beneficiaries or
estate, as applicable) signs a Separation Agreement, Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is incorporated into this Agreement by reference, (i) continuation of Executive’s
Benefits for a period of twelve months from the date of Termination and (ii) a lump sum payment equal to one times Executive’s Base Salary in effect immediately prior to the date of Executive’s Termination, to be paid within thirty
(30) days following Executive’s Termination of employment. For purposes of this Agreement, a Termination for “Disability” shall mean a Termination of Executive’s employment due to Executive’s absence from
Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of Executive’s incapacity due to physical or mental illness. 
 10. Withholding. All payments required to be made by the Company hereunder to Executive or Executive’s estate or beneficiaries shall be
subject to the withholding of such amounts relating to taxes as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation. 
 11. Potential Tax Consequences for “Parachute” Payments. 
 A. Tax Gross-Up.
Notwithstanding any other provisions of this Agreement, in the event that (i) any payment or distribution by the Company to or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a Change in Control or any person affiliated with the Company or such person) (all such payments and distributions, including the severance
payments and benefits provided for in Section 9 hereof (the “Severance Payments”), being hereinafter called (“Total Payments”) would be subject (in whole or part) to the excise tax imposed under Section 4999 of the
Code, or any successor provision enacted under the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”) and (ii) the amount of such Total Payments subject to such Excise Tax exceeds $50,000, then the Company shall pay to Executive an additional cash payment (the “Tax Gross-Up”) so that after receipt of
such Tax Gross-Up, the 

  

 - 9 - 

 
payment of any additional federal, state and local income taxes on such Tax Gross-Up amount and the payment of any Excise Taxes, Executive shall receive such
net amount of Total Payments equal to the amount that Executive would have received if no Excise Tax was due. If the amount of Total Payments subject to the Excise Tax does not exceed $50,000, then the Tax-Gross-Up shall not be paid and the
Severance Payments shall be reduced (if necessary, to zero) to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax. 
 B. Accounting Firm Determination. All determinations required to be made under this Section 11, including whether and when a Tax Gross-Up is required and the amount of such Tax Gross-Up and the assumptions
to be utilized in arriving at such determination, shall be made by the public accounting firm that, immediately prior to the Change in Control, was the Company’s independent auditor (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that Executive has received Total Payments, or such earlier time as is requested by the Company. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any Tax Gross-Up, as determined pursuant to this Section 11, shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s
determination, but in no event later than the end of Executive’s taxable year next following Executive’s taxable year in which Executive pays the Excise Tax. If the Accounting Firm determines that no Excise Tax is payable by Executive,
then the Accounting Firm shall furnish to Executive a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of any tax assessment or a negligence or similar
penalty. As a result of any uncertainty in the application of Section 4999 of the Code at the time of the determination by the Accounting Firm hereunder, it is possible that Tax Gross-Up which will not have been made by the Company should have
been made (“Underpayment”), or that amount of the Tax Gross-Up will exceed the amount required under Section 11(A) (“Overpayment”). In the event that the Accounting Firm shall determine that an Underpayment or Overpayment
has occurred, either Executive or the Company, as applicable, shall promptly reimburse the other for the amount of such Underpayment or Overpayment that has occurred. 
 C. Notifications. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Tax Gross-Up. Such notification
shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be
paid. Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to Total Payments. 

D. Payment Calculator. At the time that payments are made under this Section 11, the Company shall provide Executive with a written
statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from tax counsel, the Accounting Firm or other
advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 
  

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 12. Restrictive Covenants. 
 A. Non-Competition. Executive hereby agrees that, during (i) the six (6)-month period following a Termination of Executive’s employment
with the Company that entitles Executive to receive severance benefits under this Agreement or a written agreement with or policy of the Company or (ii) the twelve (12)-month period following a Termination of Executive’s employment with
the Company that does not entitle Executive to receive such severance benefits (the period referred to in either clause (i) or (ii), the “Restricted Period”), Executive shall not undertake any employment or activity (including, but
not limited to, consulting services) with a Competitor (as defined below) in any geographic area in which the Company or any of its affiliates operate (the “Market Area”), where the loyal and complete fulfillment of the duties of the
competitive employment or activity would call upon Executive to reveal, to make judgments on or otherwise use or disclose any confidential business information or trade secrets of the business of the Company or any of its affiliates to which
Executive had access during Executive’s employment with the Company. For purposes of this Section, “Competitor” shall refer to any health maintenance organization or insurance company that provides managed health care or related
services similar to those provided by the Company or any of its affiliates. 
 B. Non-Solicitation. In addition, Executive agrees
that, during the applicable Restricted Period following Termination of Executive’s employment with the Company, Executive shall not, directly or indirectly, (i) solicit, interfere with, hire, offer to hire or induce any person, who is or
was an employee of the Company or any of its affiliates at the time of such solicitation, interference, hiring, offering to hire or inducement, to discontinue his/her relationship with the Company or any of its affiliates or to accept employment by,
or enter into a business relationship with, Executive or any other entity or person or (ii) solicit, interfere with or otherwise contact any customer or client of the Company or any of its affiliates. 
 C. Modification of Restrictions. It is hereby further agreed that if any court of competent jurisdiction shall determine that the restrictions
imposed in this Section 12 are unreasonable (including, but not limited to, the definition of Market Area or Competitor or the time period during which this provision is applicable), the parties hereto hereby agree to any restrictions that such
court would find to be reasonable under the circumstances. 
 D. Injunction Rights. Executive also acknowledges that the services to
be rendered by Executive to the Company are of a special and unique character, which gives this Agreement a peculiar value to the Company or any of its affiliates, the loss of which may not be reasonably or adequately compensated for by damages in
an action at law, and that a material breach or threatened breach by Executive of any of the provisions contained in this Section 12 will cause the Company or any of its affiliates irreparable injury. Executive therefore agrees that the Company
may be entitled, in addition to the remedies set forth above in this Section 12 and any other right or remedy, to a temporary, preliminary and permanent injunction, without the necessity of proving the inadequacy of monetary damages or the
posting of any bond or security, enjoining or restraining Executive from any such violation or threatened violations. 
  

 - 11 - 

 13. Successors; Binding Agreement. 
 A. Survival Following Merger, Consolidation or Asset Transfer. This Agreement shall not be terminated by any merger or consolidation of the Company
whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of
this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred. 
 B. Survivor’s Assumption of Agreement. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 13, it will cause any successor or transferee to unconditionally
assume, by written instrument delivered to Executive (or Executive’s beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive’s employment were Terminated without
Cause. For purposes of implementing the foregoing, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the date of Termination. 
 C. Enforceability. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate. 
 14. Section 409(A) of the Internal Revenue Code. It is the intention of the Company and Executive that this Agreement not result in unfavorable tax consequences to Executive under Section 409A of the Code, and the
regulations and guidance promulgated thereunder (“Section 409A”) and the Agreement shall be interpreted as to so comply. Notwithstanding anything to the contrary herein, the Company and Executive agree to the provisions set forth in this
Section 14 in order to comply with the requirements of Section 409A. 
 A. If Executive is a “specified employee” (within
the meaning of Section 409A) with respect to the Company, any non-qualified deferred compensation otherwise payable to or in respect of Executive in connection with Executive’s Termination pursuant to this Agreement shall be delayed until
the earliest date upon which such amounts may be paid without being subject to taxation under Section 409A. Any amount, the payment of benefit of which is delayed by application of the preceding sentence, shall be paid as soon as possible
following the expiration of such period. 
 B. All incentive bonus payments described in Section 6(F) shall be paid to Executive, to the
extent earned, in no event later than the last day of the “applicable 2-1/2 month period”, as such term is defined in Treasury Regulation Section 1.409A-1(b)(4)(i)(A) with respect to such payment’s treatment as a “short-term
deferral” for purposes of Section 409A. 
 C. With respect to the Company’s reimbursement and tax gross-up obligations under
Sections 6(C), 6(D), 6(E), 6(G) and 11(A) hereof, in no event shall any such 

  

 - 12 - 

 
reimbursements or gross-up payments be made later than the last day of Executive’s taxable year following the taxable year in which the fee or expense
was incurred or the tax payment was made, as applicable. 
 D. The provision of Benefits to Executive following Termination hereunder shall
be subject to the provisions of Treasury Regulation 1.409A-3(i)1(iv)(A) and (B). 
 E. The Company and Executive agree to cooperate in good
faith in an effort to comply with Section 409A. Under no circumstances shall the Company be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Executive due to any failure to comply with
Section 409A. 
 15. Company Policies. Executive’s employment with the Company is subject to the terms and conditions
contained in the Company’s Associate Policy Manual (the “Policy Manual”), the content of which is incorporated by reference herein. Executive shall be required to read, understand and comply with the policies contained in the Policy
Manual. 
 16. Severability. If any term of this Agreement is held to be invalid, void or unenforceable, the remainder of this
Agreement shall remain in full force and effect and shall in no way be affected and the parties shall use their best efforts to find an alternative way to achieve the same result. 
 17. Integrated Agreement. This Agreement supersedes any prior agreements, representations or promises of any kind, whether written, oral, express
or implied between the parties hereto with respect to the subject matters herein. It constitutes the full, complete and exclusive agreement between Executive and the Company with respect to the subject matters herein. This Agreement cannot be
changed unless in writing, signed by Executive and the Chief Executive Officer of the Company and approved by the Board of Directors of the Company (or the Committee, if permitted by the Committee’s charter). The Company acknowledges and agrees
that nothing contained herein shall be deemed to supercede, amend or otherwise modify the terms of the Indemnification Agreement dated December 17, 2004 between Executive and the Company. 
 18. Waiver. No waiver of any default hereunder shall operate as a waiver of any subsequent default. Failure by either party to enforce any of the
terms or conditions of this Agreement, for any length of time or from time to time, shall not be deemed to waive or decrease the rights of such party to insist thereafter upon strict performance by the other party. 
 19. Notices. All notices and communications required or permitted hereunder shall be in writing and shall be deemed given (a) if delivered
personally, (b) one (1) business day after being sent by Federal Express or a similar commercial overnight service, or (c) three (3) business days after being mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: 
  

					
	If to the Company:	 		  	Health Net, Inc.
		 		  	21650 Oxnard Street, 22nd Floor
		 		  	Woodland Hills, CA 91367
		 		  	Attention: General Counsel

  

 - 13 - 

					
	If to the Executive:	 		  	James E. Woys
		 		  	[ADDRESS]
		 		  	[ADDRESS]

 20. Governing Law. The interpretation, construction and performance of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect. 
 21.
Survival and Enforcement. Sections 3, 8, 9, 11, 12 and 13 of this Agreement and any rights and remedies arising out of this Agreement shall survive and continue in full force and effect in accordance with the respective terms thereof,
notwithstanding any termination of this Agreement or a Termination of Executive’s employment. The parties agree that the Company would be damaged irreparably in the event any provision of Sections 3, 12 and 13 of this Agreement were not
performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach. Therefore, the Company or its successors or assigns shall be entitled in addition to other
rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). 
 22. Acknowledgement. Executive acknowledges that Executive has had the opportunity to discuss the content of this Agreement with and obtain advice
from Executive’s attorney, have had sufficient time to and have carefully read and fully understood all of the provisions of this Agreement, and Executive is knowingly and voluntarily entering into this Agreement. Executive further acknowledges
that Executive is obligated to become familiar with and comply at all times with all written policies of the Company. 
 [Signature Page to
Follow] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date set forth
above. 
  

									
	Executive	 		 	Health Net, Inc.
					
	By:	 	 /s/ James E. Woys
	 		 	By:	 	 /s/ Jay M. Gellert

	Name:	 	James E. Woys	 		 	Name:	 	Jay M. Gellert
	Title:	 	Executive Vice President and Chief Operating Officer	 		 	Title:	 	President and Chief Executive Officer

  

			
	cc:	  	Linda V. Tiano
		  	Karin Mayhew
		  	Debbie J. Colia/James E. Woys Personnel File

 EXHIBIT A 
 [FORM OF SEPARATION AGREEMENT, WAIVER AND RELEASE OF CLAIMS] 
 This SEPARATION AGREEMENT, WAIVER AND
RELEASE OF CLAIMS (this “Separation Agreement and Release”) is made and entered into as of the dates set forth on the signature pages hereto by and between Health Net, Inc. and its affiliates and subsidiaries (hereinafter referred
to as the “Company”) and [EXECUTIVE NAME] (hereinafter referred to as the “Executive”). 
 WHEREAS,
the Company and Executive are parties to an Employment Agreement dated as of [DATE] (the “Employment Agreement”) and are entering into this Separation Agreement and Release as a condition to Executive’s receipt of a severance
payment thereunder (capitalized terms used but not defined herein shall have the meanings set forth in the Employment Agreement). 
 NOW,
THEREFORE, the Company and Executive agree as follows: 
  

	1.	Executive’s employment with the Company will terminate on [TERM DATE ] (the “Termination Date”). Upon termination of employment, Executive will not represent
to anyone that he is an employee of the Company and will not say or do anything purporting to bind the Company. Upon Executive’s termination of employment, Executive shall be deemed to have resigned from all other positions with the Company, if
any, held by Executive. 

  

	2.	Executive’s termination of employment with the Company shall be considered a [DESCRIBE TYPE OF TERMINATION] under the Employment Agreement, and Executive is therefore
eligible to receive [DESCRIBE PAYMENTS AND OTHER BENEFITS TO BE RECEIVED (SEVERANCE, BENEFIT CONTINUATION/COBRA, ETC.]. 

  

	3.	Executive acknowledges that all unused accrued vacation and unused personal absence time will be paid in Executive’s final regular paycheck in keeping with the Company’s
policy and practice or such shorter time as may be required by applicable law. Executive further acknowledges that no further vacation/paid-time-off or other benefits will accrue after the Termination Date. 

  

	4.	Executive’s participation in all Company employee benefit plans as an active employee shall cease on the Termination Date, and Executive shall not be eligible to make
contributions to or to receive Company matching contributions under the Health Net, Inc. 401(k) Associate Savings Plan, or to make any deferrals pursuant to any deferred compensation plan of the Company after the Termination Date (it being
understood that Executive shall be entitled to all vested benefits accrued as of the date hereof under the Company’s 401(k) Savings Plan and any deferred compensation plan). If, immediately prior to the Termination Date, Executive participates
in any Company employee welfare benefit plan, Executive’s participation in such plan shall continue on the same terms and conditions, including the same co-payment terms, until 11:59 p.m. (Pacific Time) on the last day of the month in which the
Termination Date occurs. 

  

 A - 1 

	5.	In partial consideration of the Company providing Executive the payments and benefits set forth above and as a condition to receive such payments and benefits, which Executive
acknowledges he is not otherwise entitled to receive, Executive freely and voluntarily enters into this Separation Agreement and Release and, by signing this Separation Agreement and Release, Executive, on his own behalf and on behalf of his heirs,
beneficiaries, successors, representatives, trustees, administrators and assigns, hereby waives and releases the Company, and each of its past, present and future officers, directors, shareholders, employees, consultants, accountants, attorneys,
agents, managers, insurers, sureties, parent and sister corporations, divisions, subsidiary corporations and entities, partners, joint venturers, affiliates, beneficiaries, successors, representatives and assigns, from any and all claims, demands,
damages, debts, liabilities, controversies, obligations, actions or causes of action of any nature whatsoever, whether based on tort, statute, contract, indemnity, rescission or any other theory of recovery, including but not limited to claims
arising under federal, state or local laws prohibiting discrimination in employment, including Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1870, as amended, claims of disability discrimination under the Americans
with Disabilities Act, the Age Discrimination in Employment Act, as amended (“ADEA”), the Worker Adjustment and Retraining Notification Act (“WARN”), or claims growing out of any legal restrictions on the
Company’s right to terminate its employees and whether for compensatory, punitive, equitable or other relief, whether known, unknown, suspected or unsuspected, against the Company, including without limitation claims which may have arisen or
may in the future arise in connection with any event which occurred on or before the date of Executive’s execution of this Separation Agreement and Release. The provisions in this paragraph do not extend to any rights Executive may have to
enforce the terms of this Agreement and are not intended to prohibit Executive from filing a claim for unemployment insurance. 

  

	6.	Executive expressly waives any right or claim of right to assert hereafter that any claim, demand, obligation and/or cause of action has, through ignorance, oversight or error, been
omitted from the terms of this Separation Agreement and Release. Executive makes this waiver with full knowledge of his rights and with specific intent to release both his known and unknown claims, and therefore specifically waives the provisions of
Section 1542 of the Civil Code of California or other similar provisions of any other applicable law, which reads as follows: 

 “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the
debtor.” 
 Executive understands and acknowledges the significance and consequence of this Separation Agreement and Release and of such
specific waiver of Section 1542, and expressly agrees that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands,
obligations and causes of action herein above specified. 
  

	7.	 Executive shall not initiate or cause to be initiated against the Company any compliance review, suit, action, investigation or proceeding of any kind, or
voluntarily participate in same, individually or as a representative, witness or member of a class, under contract, 

  

 A - 2 

	 	 
law or regulation, federal, state or local, pertaining to any matter related to his employment with the Company, unless Executive first cooperates in making
his allegations known to the Company for the Company to take corrective action at a time and place designated by the Company. Executive represents and warrants that he has not, to date, initiated (or caused to be initiated) any such review, suit,
action, investigation or proceeding; provided, however, that nothing in this Section 7 shall restrict Executive’s ability to challenge the validity of any release herein of ADEA claims nor to any suit or action brought by
Executive to assert such a challenge. In addition, Executive shall, without further compensation, cooperate with and assist the Company in the investigation of, preparation for or defense of any actual or threatened third party claim, investigation
or proceeding involving the Company or its predecessors or affiliates and arising from or relating to, in whole or in part, Executive’s employment with the Company or its predecessors or affiliates for which the Company requests
Executive’s assistance, which cooperation and assistance shall include, but not be limited to, providing testimony and assisting in information and document gathering efforts. In this connection, it is agreed that the Company will use its
reasonable best efforts to assure that any request for such cooperation will not unduly interfere with Executive’s other material business and personal obligations and commitments. 

  

	8.	Executive agrees he will return to the Company immediately upon termination any building keys, security passes or other access or identification cards and any Company property that
was in his possession, including but not limited to any documents, credit cards, computer equipment, mobile phones or data files. Executive agrees to clear all expense accounts and pay all amounts owed on any corporate credit cards which the Company
previously issued to Executive, subject to the Company’s obligation to reimburse Executive for any properly reimbursable business expenses in accordance with the Company’s expense policies and procedures then in effect.

  

	9.	Executive shall not, without the Company’s written consent by an authorized representative, at any time prior or subsequent to the execution of this Separation Agreement and
Release, disclose, use, remove or copy any confidential, trade secret or proprietary information he acquired during the course of his employment by the Company, including without limitation, any technical, actuarial, economic, financial,
procurement, provider, customer, underwriting, contractual, managerial, marketing or other information of any type that has economic value in the business in which the Company is engaged, but not including any previously published information or
other information generally in the public domain. 

  

	10.	 In addition to any other part or term of this Separation Agreement and Release or the Employment Agreement, Executive agrees that he will not, (a) for a period
of one (1) year from the date of this Agreement, irrespective of the reason for the termination, either directly or indirectly, on his own behalf or on behalf of any other person: (1) make known to any person, firm, corporation or other
entity of any type, the names and addresses of any of the Company’s customers, enrollees or providers or any other information pertaining to them; or (2) disrupt, solicit or influence or attempt to solicit, disrupt or influence any of the
Company’s customers, providers, vendors, agents or independent contractors with whom the Executive became acquainted during the course of employment or service for the purpose of terminating such a person’s or entity’s 

  

 A - 3 

	 	 
relationship with the Company or causing such a person or entity to associate with a competitor of the Company, and (b) for [a period of one
(1) year] [the six (6) month period] following the Termination Date undertake any employment or activity prohibited by the Employment Agreement. The prohibitions of this paragraph are not intended to deny employment opportunities
within the Executive’s field of employment but are limited only to those prohibitions necessary to protect the Company from unfair competition. In addition, Executive agrees that, for [a period of one (1) year] [the six (6) month
period] following the Termination Date, he shall not, directly or indirectly solicit, interfere with, hire, offer to hire or induce any person, who is or was an employee of the Company or any of its affiliates at the time of such solicitation,
interference, hiring, offering to hire or inducement, to discontinue his/her relationship with the Company or any of its affiliates or to accept employment by, or enter into a business relationship with, Executive or any other entity or person.

  

	11.	Executive further agrees that, in exchange for the consideration set forth in Section 2 hereof, Executive shall not make any disparaging comments and/or statements to anyone
either orally or in writing about the Company and/or its employees. 

  

	12.	Nothing contained herein shall be construed as an admission of any wrongful act, including but not limited to violation of any contract, express or implied, or any federal, state or
local employment laws or regulations, and nothing contained herein shall be used for any purpose except in proceedings related to the enforcement of this Separation Agreement and Release. 

  

	13.	If any part or term of this Separation Agreement and Release is held invalid or unenforceable by any court or arbitrator, such invalidity or unenforceability shall not affect in any
way the validity or enforceability of any other part or term of this Separation Agreement and Release. In addition, if any court of competent jurisdiction construes the covenants contained in Section 10 hereof, or any part thereof, to be
unenforceable in any respect, the court may reduce the duration or scope to the extent necessary so that the provision is enforceable, and the provision, as reduced, shall then be enforceable. 

  

	14.	Executive agrees and acknowledges that this Separation Agreement and Release recites all payments and benefits Executive is entitled to receive hereunder and under the Employment
Agreement, and that no other payments or benefits will be asserted or requested by Executive. 

  

	15.	The Executive acknowledges that he has had an opportunity to consult and be represented by counsel of his own choosing in the review of this Separation Agreement and Release, and
that he has been advised by the Company to do so, that the Executive is fully aware of this Separation Agreement and Release and of its legal effect, that the preceding paragraphs recite the sole consideration for this Separation Agreement and
Release, and that Executive enters into this Separation Agreement and Release freely, without coercion, and based on the Executive’s own judgment and not in reliance upon any representation or promise made by the other party, other than those
contained herein. There may be no modification of the terms of this Separation Agreement and Release except in writing signed by the parties hereto including an appropriately authorized officer of the Company. 

  

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	16.	This Separation Agreement and Release constitutes the full, complete and exclusive agreement between Executive and the Company with respect to the subject matters herein and
supersedes any prior agreements, representations or promises of any kind, whether written, oral, express or implied, with respect to the subject matters herein. This Separation Agreement and Release cannot be changed unless in writing, signed by
Executive and an authorized officer of the Company. 

  

	17.	If there is any dispute between the Company and Executive over the terms or obligations under this Separation Agreement and Release, that dispute shall be resolved by binding
arbitration before a single neutral arbitrator who shall be a retired judge. The arbitration shall proceed in accordance with the then-current rules of the Commercial American Arbitration Association to the extent not inconsistent with this
Separation Agreement and Release. The judgment of the arbitrator shall be final, binding and nonappealable, and may be entered in any state or federal court having jurisdiction thereafter. The arbitrator shall be bound to apply and follow the
applicable state or federal laws in reaching a decision in this matter. Any disagreement regarding whether a dispute is required to be arbitrated pursuant to this Separation Agreement and Release shall be decided by the arbitrator. The Federal
Arbitration Act, 9 U.S.C. Sections 1-16, shall govern the interpretation and enforcement of this Section 17. The prevailing party will be entitled to recover reasonable attorney’s fees and costs incurred in any action to enforce or defend
this Separation Agreement and Release. 

  

	18.	This Separation Agreement and Release shall be construed and governed by the laws of the State of Delaware. 

 EXECUTIVE ACKNOWLEDGES BY SIGNING BELOW that (i) Executive has not relied upon any representations, written or oral, not set forth in this
Separation Agreement and Release; (ii) at the time Executive was given this Separation Agreement and Release Executive was informed in writing by the Company that (a) Executive had at least 21 days in which to consider whether Executive
would sign the Separation Agreement and Release and (b) Executive should consult with an attorney before signing the Separation Agreement and Release; and (iii) Executive had an opportunity to consult with an attorney and either had such
consultations or has freely decided to sign this Separation Agreement and Release without consulting an attorney. 
 Executive further
acknowledges that he may revoke acceptance of this Separation Agreement and Release by delivering a letter of revocation within seven (7) days after the later of the dates set forth below addressed to: Health Net, Inc., Organization
Effectiveness Department, 21650 Oxnard Street, Woodland Hills, California 91367, Attention: Karin Mayhew. 
 Finally, Executive acknowledges
that he understands that this Separation Agreement and Release will not become effective until the eighth (8th) day following his signing this Separation Agreement and Release and that if Executive does not revoke his acceptance of the terms of
this Separation Agreement and Release within the seven (7) day period following the date on which Executive signs this Separation Agreement and Release as set forth above, this Separation Agreement and Release will be binding and enforceable.

 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement and Release as of the
dates set forth below. 
  

									
	Executive	 		 	Health Net, Inc.
					
	By:	 	 [EXHIBIT COPY]
	 		 	By:	 	 [EXHIBIT COPY]

	Name:	 		 		 	Name:	 	
	Title:	 		 		 	Title:	 	
	Dated:	 	 [TO BE INSERTED]
	 		 	Dated:	 	 [TO BE INSERTED]

  

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