Document:

AMENDMENT TO PURCHASE AND SALE AGREEMENT

     This  Amendment  to Purchase and Sale Agreement is made and entered into as
of  October  31,  2003  by  and  between  SafeGuard  Health Enterprises, Inc., a
Delaware  corporation ("Purchaser") and Health Net, Inc., a Delaware corporation
("Seller").

     WHEREAS,  the  parties  to  this  Amendment  to Purchase and Sale Agreement
entered  into  a  Purchase  and  Sale  Agreement  dated as of April 7, 2003 (the
"Purchase  and  Sale Agreement") pursuant to which Purchaser agreed, inter alia,
to purchase from Seller all of the outstanding Shares of Health Net Dental, Inc.
and  Seller agreed, inter alia, to sell all the issued and outstanding Shares of
Health  Net  Dental,  Inc.  to  Purchaser;

     WHEREAS,  the  parties  desire  to  amend  the Purchase and Sale Agreement.
Defined  terms used herein and not otherwise defined shall have the same meaning
as  in  the  Purchase  and  Sale  Agreement.

     NOW, THEREFORE, the parties agree as follows:

     Section  5.16  of the Purchase and Sale Agreement is amended to read in its
entirety  as  follows:

     Section  5.16  Employment  Matters;  Severance.
                    -------------------------------

     (a)     Purchaser shall offer to hire or cause an Affiliate of Purchaser to
continue  to  employ  as  of  the  Closing Date each Employee listed on Schedule
                                                                        --------
3.16(a)  who  is actively employed by the Company or Health Net Vision, Inc., an
-------
Affiliate of the Company, as of the Closing Date.  Purchaser shall pay all costs
associated  with the continued employment of any Employee, including all salary,
benefits, relocation expenses, and other compensation to Employees accruing from
and  after  the  Closing  Date.  Schedule 5.16 contains a summary of the benefit
                                 -------------
plans  and  arrangements  Purchaser  shall  provide Employees retained after the
Closing.

     (b)     Prior  to the Closing Date, Purchaser shall provide Seller with (i)
a  list  of those Employees it intends to retain after the Closing on an interim
basis to provide transitional services to Purchaser or the Company (the "Interim
Employees");  (ii)  a  list  of  Employees  Purchaser  intends  to retain for an
indefinite period after the Closing (the "Retained Employees"); and (iii) a list
of  Employees  the  Purchaser intends to terminate immediately after the Closing
Date  ("Terminated  Employees")  (the  list  of  Interim  Employees, the list of
Retained  Employees and the list of Terminated Employees are jointly referred to
herein as the "Employee Lists").  The Employee Lists may be amended by Purchaser
prior  to  Closing  unless  any  proposed  amendment  would  result in any cost,
liability  or  prejudice  to  Seller  or  any  Employee.

     (c)     Purchaser  shall  offer  or cause the Company to offer (i) Retained
Employees  cash  compensation  for  a period of six (6) months after the Closing
equivalent  to  their  most  recent  base compensation immediately preceding the
Closing  Date,  and  (ii)  Interim  Employees  and  Terminated  Employees  cash
compensation  for  the  period  of  their employment by Purchaser or the Company
equivalent  to  their  most  recent  base compensation immediately preceding the
Closing  Date,  provided,  however,  Purchaser shall have the right to negotiate
                --------   -------
with  individual  Retained  Employees  and  Interim Employees for the purpose of
offering  such  Retained

<PAGE>
Employees  and  Interim  Employees  alternative positions with cash compensation
appropriate  for  such  positions  which may be less than their most recent base
compensation  immediately  preceding  the  Closing  Date.

     (d)     Purchaser  or  an Affiliate of Purchaser may terminate any Employee
after the Closing Date, provided, however, neither Purchaser or any Affiliate of
                        --------  -------
Purchaser  shall terminate any Employees until each Employee becomes an employee
of Purchaser or any Affiliate of Purchaser such that each Employee qualifies for
the benefit plans and arrangements of Purchaser specified in Schedule 5.16.  Any
                                                             -------------
Retained  and  Terminated  Employee  terminated  by Purchaser or an Affiliate of
Purchaser pursuant to this Section 5.16 shall be provided severance by Purchaser
(i) according to Seller's severance policy set forth as Exhibit E hereto, if any
                                                        ---------
such  Retained or Terminated Employee is terminated at Closing or within the six
(6)  month  period  following the Closing; or (ii) according to Purchaser's then
current  severance  policy,  if  any  such  Retained  or  Terminated Employee is
terminated after expiration of such six (6) month period.  Each Interim Employee
shall  be provided severance by Purchaser according to Seller's severance policy
set  forth as Exhibit E regardless of when such Interim Employees are terminated
              ---------
by  Purchaser  or  any Affiliate of Purchaser.  If, however, an Interim Employee
accepts  a  permanent  position  with  the  Purchaser  or  any  Affiliate of the
Purchaser,  such Employee shall be provided severance by Purchaser as a Retained
Employee.  Any  Interim  Employee  that declines to accept a comparable position
for  an indefinite term with the Purchaser or an Affiliate of Purchaser shall be
deemed  to  have  resigned  and  no  severance  shall  be due any such Employee.
Calculation  of  all  employee  benefits  provided  to  Employees  by Purchaser,
including  but  not  limited  to,  severance  for  any  Terminated  Employee and
severance  for Retained Employee and Interim Employee terminated by Purchaser or
any  Affiliate  of  Purchaser  shall  include credit for such Employee's time of
service  as an employee of the Company or any Affiliate of the Company.  Exhibit
                                                                         -------
D  hereto  is  deleted  in  its  entirety.
-

     (e)     Subject  to  the  terms  and  conditions  of  Article  VIII hereof,
Purchaser  shall  indemnify and hold harmless Seller and its Affiliates from any
and all liabilities and obligations arising from or in connection with any claim
for  severance  or other benefits resulting from the termination of any Employee
after  the  Closing  Date.

     (f)     Seller shall provide any notice required by WARN resulting from the
termination  of Employees prior to the Closing Date, and Purchaser shall provide
any  notice  required  by  WARN  resulting from the termination of any Employees
after  the  Closing  Date.

     Section  9.5  of  the  Purchase  and  Sale  Agreement is amended to read as
follows:

     Section  9.5  Section 338(h)(10) Election.     (a)     Purchaser shall have
                   ---------------------------
the  right,  but  not  the  obligation,  to  require Seller upon written request
delivered  to  Seller within one hundred and eighty (180) days after the Closing
Date,  to  join  with  Purchaser in making the elections provided for in section
338(g)  and  section 338(h)(10) of the Code (the "338 Elections").  If Purchaser
exercises  its  right to make the 338 Elections, Purchaser and Seller shall also
make such other similar elections as may be necessary for state and local income
tax purposes provided that such elections achieve substantially the same results
to  Purchaser,  Seller  and the Company as the 338 Elections achieve for federal
income  tax  purposes  and,  for  purposes  of  this  Agreement,  the  term "338
Elections"  shall  be  deemed  to  include  any  such state and local income

                                      -2-
<PAGE>
tax  elections.  Purchaser  and  Seller  shall comply fully with all filings and
other  requirements  necessary to effectuate the 338 Elections on a timely basis
and  agree  to  cooperate  in  good faith with each other in the preparation and
timely  filing  of  all  Tax Returns required to be filed in connection with the
making of the 338 Elections, including the exchange of information and the joint
preparation and filing of Form 8023 (including related schedules).

     (b)     The  fair  market  value,  "aggregate  deemed  sales  price,"  and
"adjusted  grossed-up  basis"  (as  those  terms  are  defined  in  the Treasury
Regulations  promulgated  under  section  338  of the Code) of each asset of the
Company shall be determined in accordance with the allocation (the "Allocation")
mutually agreed upon, in writing, by Purchaser and Seller.  Purchaser and Seller
shall  (i) assist each other in the preparation of the Allocation; (ii) agree to
act  in  accordance with the Allocation in the preparation and filing of all Tax
Returns  and  in  the  course of any tax audits, appeals, or litigation relating
thereto;  and  (iii)  each notify the other as soon as reasonably practicable of
any  audit  adjustment or proposed audit adjustment by any taxing authority that
affects  or  may  affect  the  Allocation.

     (c)     If  Purchaser  and  Seller  make  the  338  Elections,  the  Tax
attributable  to  the  gain  realized  by  the Company on the deemed sale of its
assets  pursuant to the 338 Elections shall be allocated and paid (i) by Seller,
to the extent of the amount of Tax that, if the 338 Elections had not been made,
would have been imposed on the gain realized by Seller on the sale of the Shares
pursuant  to  this  Agreement,  and  (ii)  by  Purchaser,  to  the extent of the
remaining portion of such Tax.  Any Tax imposed upon Seller that is attributable
to the 338 Elections and that is in excess of the amount described in clause (i)
of  the  immediately  preceding sentence shall be paid by Purchaser to Seller at
least  five (5) Business Days prior to the due date for payment of such Tax (the
"Additional  Tax  Reimbursement")

     (d)     For purposes of Section 9.5(c), the "amount of the Tax that, if the
338 Elections had not been made, would have been imposed on the gain realized by
Seller on the sale of the Shares pursuant to this Agreement" shall be the excess
of  (i)  the  aggregate amount of Tax that would have been imposed on Seller (or
the  consolidated,  combined,  or unitary group of which Seller is a member) for
the  taxable  period that includes the Closing Date if the 338 Elections had not
been  made over (ii) the aggregate amount of Tax that would have been imposed on
Seller  (or  the  consolidated,  combined, or unitary group of which Seller is a
member)  for  such  taxable  period  if  the 338 Elections had not been made and
Seller recognized no gain on the sale of the Shares; and (iii) the amount if any
of  any  additional Taxes, both state and federal, owed by Seller as a result of
the  receipt  of  the  Additional  Tax  Reimbursement.  Within  sixty  (60) days
following the Closing Date, Seller shall provide Purchaser a calculation of such
excess,  showing  all  information necessary to the computation, and which shall
include  a  schedule  that  sets  forth the determination (including any and all
adjustments  made  pursuant  to  the  federal  consolidated  tax return rules as
provided  in  sections  1502  and  1503 of the Code and the Treasury Regulations
promulgated  pursuant  to  such  sections) of Seller's adjusted tax basis in the
Shares  as  of  the  Closing  Date.

     (e)     The  Tax described in Sections 9.5(c) and 9.5(d) shall be increased
or  decreased,  as  the  case  may be, by any adjustments to such Tax that occur
after  the  Closing  Date.

                                      -3-
<PAGE>
     (f)     Each  party  shall use its best efforts to minimize the amount of
any Tax allocable to the other pursuant to Section 9.5(c).

     (g)     Notwithstanding  anything  in  this  Article IX to the contrary, if
Purchaser  and Seller make the 338 Elections, Purchaser shall pay or cause to be
paid all Tax allocable to Purchaser pursuant to Section 9.2(c).

     (i)     In  the  event  Purchaser  and  Seller  consummate  the sale of Gem
Insurance  Company,  a  Utah domiciled insurer and an indirect Subsidiary of the
Seller,  from  Gem  Holdings,  Inc.  to Purchaser or its Designee, the Purchaser
shall  have  no  obligation  to  pay  to  Seller  any  additional  Tax  that  is
attributable  to  the 338 Elections that is in excess of the amount described in
clause  (i)  of  subsection  (c)  hereof.

     Section  11.11  is  added to the Purchase and Sale Agreement to read in its
entirety  as  follows:

     Section  11.11  Access  to  Records  After  Closing.  Seller  and  its
                     -----------------------------------
representatives  shall  have  reasonable  access to all of the Books and Records
after the Closing Date to the extent that such access may reasonably be required
by  Seller  in connection with matters relating to or affected by the operations
of  the  Company or HNL prior to the Closing Date. Such access shall be afforded
by  Purchaser  upon  receipt  of  reasonable  advance  notice  and during normal
business  hours.  Seller  shall  be solely responsible for any costs or expenses
incurred by it pursuant to this Section 11.11. If Purchaser or the Company shall
desire  to  dispose  of  any of the Books and Records, Purchaser shall, prior to
such  disposition, provide Seller a reasonable opportunity, at Seller's expense,
to segregate and remove such Books and Records as Seller may select.

     Except  as  otherwise expressly amended herein, all terms and conditions of
the Purchase and Sale Agreement shall remain in full force and effect.

     This  Amendment  to  Purchase  and  Sale  Agreement  may  be  executed  in
counterparts.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -4-
<PAGE>
     IN  WITNESS  WHEREOF,  the parties have executed this Amendment to Purchase
and  Sale  Agreement  as  of  the  date  first  set  forth  above.

                                  HEALTH NET, INC.

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

                                  SAFEGUARD HEALTH ENTERPRISES, INC.

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

                                      -5-
<PAGE>AMENDMENT TO ASSUMPTION AND
                         INDEMNITY REINSURANCE AGREEMENT

     This  Amendment  to  Assumption  and  Indemnity Reinsurance Agreement (this
"Amendment")  is  made  as  of  October 31, 2003, by and between Health Net Life
Insurance  Company, a California domiciled life and disability insurance company
(the  "Company"),  and SafeHealth Life Insurance Company, a California domiciled
life  and  disability  insurance  company  ("Reinsurer").

     WHEREAS, the Company and Reinsurer entered into an Assumption and Indemnity
Reinsurance  Agreement  dated  as of April 7, 2003 (the "Reinsurance Agreement")
pursuant  to which the Company shall transfer to Reinsurer at the Effective Time
assets  equal  to  the value of certain of the Company's reserves as part of the
consideration  due  thereunder;

     WHEREAS,  as  of  the  Effective  Time  the Company will have accurate data
reflecting  the  balance of its reserves relating to the Dental Policies subject
to  the  Reinsurance  Agreement  only  as  of September 30, 2003 and the parties
desire  to  amend the Reinsurance Agreement to provide a mechanism to adjust, if
necessary, the reserves transferred from the Company to the Reinsurer to reflect
the  value  of  the  reserves  relating  to  the  Dental Policies subject to the
Reinsurance  Agreement  as  of  the  Effective  Time;  and

     WHEREAS,  the  parties desire to amend the Reinsurance Agreement to clarify
the  definition  of  "Dental  Policies"  therein.

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and agreements
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the  parties hereto agree as
follows:

     1.     Capitalized  terms  used in this Amendment and not otherwise defined
shall  have  the  meanings  given  such  terms  in  the  Reinsurance  Agreement.

     2.     Section  6.08 is added to Article VI of the Reinsurance Agreement to
read  in  its  entirety  as  follows:

     Section  6.08.     Final  Reserves.  The value of the assets transferred to
                        ---------------
Reinsurer  pursuant to Sections 5.03(i) and 5.04(i) (the "Transferred Reserves")
on  the  Effective  Time shall be calculated based upon the financial accounting
records  of the Company as of September 30, 2003.  Within one hundred and eighty
(180)  days  after  the Effective Time, the Company shall calculate the reserves
described  in  Sections  5.03(i) and 5.04(i) based upon the financial accounting
records  of the Company as of the Effective Time (the "Final Reserves"), and (i)
if  the  value the Final Reserves exceeds the value of the Transferred Reserves,
then  the  Company  shall  pay  to  Reinsurer  in  cash  the  difference between
Transferred  Reserves and the Final Reserves, and (ii) if the value of the Final
Reserves  is  less  than  the  value of the Transferred Reserves, then Reinsurer
shall pay to the Company in cash the difference between the Transferred Reserves
and  the  Final  Reserves.

     3.     The  definition of "Dental Policies" in Article I of the Reinsurance
Agreement  is  amended  to  read  as  follows:

<PAGE>
     "Dental  Policies"  means  all  policies or other agreements (including all
      ----------------
supplements,  endorsements,  riders  and  ancillary  agreements  in  connection
therewith) with individuals, employers or other group sponsors that obligate the
Company  to  provide, arrange for the provision of, or indemnify for the cost of
dental care services and dental supplies as specified therein, which policies or
other  agreements  (i)  are  in  effect  as of the Effective Time or (ii) become
effective  after  the Effective Time, including through (A) the reinstatement of
lapsed  policies pursuant to provisions therein or of applicable law, or (B) the
issuance  or  renewal  thereof  by the Company after the Effective Time to honor
quotes  outstanding  as  of  May  1,  2004,  or  to  satisfy  renewal  rights of
individuals,  employers  or other group sponsors under contractual provisions or
applicable law, or (C) modifications agreed to by the Reinsurer on behalf of the
Company pursuant to the authority granted to the Reinsurer under Section 7.01 of
this  Agreement,  provided,  however,  Dental Policies shall not include (i) any
                  --------   -------
policy  or other agreements (including all supplements, endorsements, riders and
ancillary  agreements  in  connection  therewith) with individuals, employers or
other  group  sponsors  that  obligate  the  Company to provide, arrange for the
provision  of,  or  indemnify  for  the  cost of dental care services and dental
supplies  as  a  Medicare  +  Choice Preferred Provider Organization pursuant to
Contract  Number  P01239 by and between the Company and the Centers for Medicare
and  Medicaid  Services,  and  (ii)  any  policy  or  other  contract  form with
individuals,  employers  or  other  group sponsors that obligates the Company to
provide,  arrange for the provision of, or indemnify for the cost of dental care
services  and  dental  supplies  and  medical services and medical supplies in a
single  policy  or  contract  form  issued  by  the  Company.

     4.     Except  as expressly amended hereby, the Reinsurance Agreement shall
remain  in  full force and effect.  To the extent of any inconsistencies between
the  Reinsurance Agreement and this Amendment, the terms of this Amendment shall
supersede  the  Reinsurance  Agreement.

     5.     This  Amendment  may  be  executed  in  counterparts.

     IN  WITNESS  WHEREOF, the parties have signed this Amendment as of the date
first  written  above.

     /s/ Douglas King                     /s/ Ronald I. Brendzel
     ---------------------------------    --------------------------------------
     Health Net Life Insurance Company    SafeHealth Life Insurance Company
     By:  Douglas King                    By:  Ronald I. Brendzel
     President                            Senior Vice President, General Counsel
                                          and Secretary

                                      -2-
<PAGE>

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