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 June 30, 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 Vision, Inc.
and Seller agreed, inter alia, to sell all the issued and outstanding Shares of
Health Net Vision, 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 2.15 of the Purchase and Sale Agreement is amended to read in its
entirety as follows:
Section 2.15 Purchase Price Allocation. If the Purchaser elects to make
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the 338 Elections pursuant to Section 9.5, the parties agree that the Purchase
Price shall be allocated among the Transactions in accordance with the
allocation agreed upon by Purchaser and Seller. If a Purchase Price allocation
is developed, Purchaser and Seller shall file such forms as are necessary or
appropriate with the Internal Revenue Service in accordance with the Code
reflecting such allocation. All Tax Returns filed and positions taken with
respect to an allocation of the Purchase Price by the Seller and Purchaser shall
be on a basis consistent with any allocation agreed upon by the parties.
Section 5.19 of the Purchase and Sale Agreement is amended to read in its
entirety as follows:
Section 5.19 Employment Matters; Severance.
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(a) Purchaser shall offer or cause an Affiliate of Purchaser to offer
to hire as of the Closing Date each Employee listed on Schedule 3.16(a) who is
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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 5.19 contains a summary of the benefit plans and
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arrangements Purchaser intends to 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
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with individual Retained Employees and Interim Employees for the purpose of
offering such Retained 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
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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
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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
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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
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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
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D hereto is deleted in its entirety.
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(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.
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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
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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]
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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. Xxxxxx Xxxxxx
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Name: B. Xxxxxx Xxxxxx
Title: Senior Vice President, General
Counsel and Secretary
SAFEGUARD HEALTH ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President, General
Counsel and Secretary
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