EXHIBIT 10.1

STOCK PURCHASE AGREEMENT

BY AND AMONG

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.,

PCN ACQUISITION CORP.,

PHARMACEUTICAL CARE NETWORK,

AND

CALIFORNIA PHARMACISTS ASSOCIATION

MARCH 7, 2005

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TABLE OF CONTENTS

      Page ARTICLE 1  Agreement to Sell and Purchase1    1.1  Purchase and
Sale1    1.2  Delivery and Endorsement of Certificates2    1.3  Further
Assurances2  ARTICLE 2  Closing and Payment2    2.1  Closing2    2.2  Closing
Date Payment2    2.3  Escrow Agreement2    2.4  Working Capital Adjustment to
Purchase Price2    2.5  Gross Profit Adjustment to Purchase Price4    2.6 
Earn-Out5  ARTICLE 3  Representations and Warranties of the Company7    3.1 
Organization, Good Standing and Qualification7    3.2  Subsidiaries8    3.3 
Capitalization; Voting Rights8    3.4  Authorization; Binding Obligations9 
  3.5  Financial Statements9    3.6  Internal Controls10    3.7  Absence of
Undisclosed Liabilities11    3.8  Agreements; Action12    3.9  Obligations to
Related Parties.13   3.10  Changes13   3.11  Title to Properties and Assets;
Liens, Etc.15   3.12  Intellectual Property15   3.13  No Violation17   3.14 
Approvals18   3.15  Litigation18   3.16  Taxes18   3.17  Employees/Salaries21 
 3.18  Obligations of Management22   3.19  Registration Rights and Voting
Rights22   3.20  Compliance with Laws Generally; Permits22   3.21  Licenses,
Authorizations and Provider Programs22   3.22  Inspections and Investigations23 
 3.23  Regulatory Compliance23   3.24  Rates and Reimbursement Policies24 
 3.25  Changes in Laws24   3.26  Customers and Suppliers25   3.27  Business
Relationships25   3.28  Absence of Certain Business Practices25   3.29 
Environmental and Safety Laws26   3.30  Employee Benefit Plans; ERISA26   3.31 
Company Books and Records28   3.32  Insurance; Insurance Policies28   3.33  No
Prebillings or Prepayments29   3.34  Power of Attorney29   3.35  Bank
Accounts29   3.36  Full Company Disclosure29  ARTICLE 4  Representations and
warranties of the stockholder30    4.1  Ownership30    4.2  Authorization30 
  4.3  No Violation30    4.4  Approvals31    4.5  Litigation31    4.6  Power of
Attorney31  ARTICLE 5  epresentations and Warranties of NMHC and Buyer31    5.1 
Organization and Good Standing of NMHC31    5.2  Organization and Good Standing
of Buyer31    5.3  Authorization; Binding Obligations31    5.4  No Violation32 
  5.5  Approvals32  ARTICLE 6  Pre-Closing Covenants of the Parties32    6.1 
General32    6.2  Notices and Consents32    6.3  Affirmative Covenants of the
Company32    6.4  Negative Covenants of the Company34    6.5  Access36    6.6 
Confidentiality36    6.7  No Other Offers36    6.8  Employee Matters37    6.9 
Non-Competition; Non-Solicitation37   6.10  Acceleration of Vesting of Awards
Under the LTIP41  ARTICLE 7  Conditions to Closing41    7.1  Conditions to
NMHC's and Buyer's Obligations at the Closing41    7.2  Conditions to
Obligations of the Company and the Stockholder43  ARTICLE 8  Post-Closing
Covenants of the Parties43    8.1  Further Actions43    8.2  Regulatory
Filings44    8.3  Tax Matters44    8.4  Tax Treatment of Indemnification
Payments45    8.5  Maintenance of Pre-Closing Insurance Coverage45    8.6 
Cooperation on Post-Closing Matters45  ARTICLE 9  Termination46    9.1 
Termination of Agreement46    9.2  Effect of Termination46  ARTICLE 10 
Indemnification46   10.1  General Indemnification by the Stockholder46   10.2 
General Indemnification by NMHC and Buyer47   10.3  Indemnification
Procedures47   10.4  Damages Net of Insurance Proceeds and Tax Benefits49 
 10.5  Exclusive Remedy49   10.6  Department of Labor Matter50  ARTICLE 11 
Miscellaneous50   11.1  Governing Law; Choice of Forum50   11.2  Assignment50 
 11.3  Successors and Assigns50   11.4  Entire Agreement50   11.5 
Severability50   11.6  Amendment and Waiver50   11.7  Delays or Omissions51 
 11.8  Notices51   11.9  Expenses52  11.10  Attorneys' Fees52  11.11  Titles and
Subtitles52  11.12  Counterparts52  11.13  Broker's Fees52  11.14  Press
Releases53  11.15  Pronouns53  11.16  Effect of Due Diligence53  ARTICLE 12 
Definitions53 

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STOCK PURCHASE AGREEMENT

        THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered
into as of March 7, 2005, by and among National Medical Health Card Systems,
Inc., a Delaware corporation (“NMHC”), PCN Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of NMHC (“Buyer”), Pharmaceutical Care
Network, a California corporation (“Company”), and California Pharmacists
Association, a California mutual benefit corporation (the “Stockholder”).

RECITALS

        WHEREAS, the Stockholder owns One Hundred (100) shares of the common
stock, One Hundred Dollars ($100) par value per share, of the Company (the
“Common Stock”);

        WHEREAS, the One Hundred (100) shares of the Common Stock referred to in
the previous recital (collectively, the “Company Shares,” and individually, a
“Company Share”) constitute all the issued and outstanding capital stock of the
Company;

        WHEREAS, the Stockholder desires to sell the Company Shares to Buyer,
and Buyer desires to purchase the Company Shares from the Stockholder, upon the
terms and conditions set forth herein;

        WHEREAS, the parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
execution and delivery of this Agreement, and to set forth certain additional
agreements related to the transactions contemplated hereby.

        NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, and covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1.      AGREEMENT TO SELL AND PURCHASE.

1.1 Purchase and Sale. Subject to the terms and conditions hereof, at the
Closing (as defined below), the Stockholder hereby agrees to sell, assign,
transfer and deliver to Buyer the Stockholder’s entire right, title and interest
in and to the Company Shares, free and clear of any Liens (as hereinafter
defined), and Buyer hereby agrees to purchase from the Stockholder its entire
right, title and interest in and to the Company Shares, free and clear of any
Liens, for an aggregate purchase price of Thirteen Million Dollars
($13,000,000), subject to adjustment as provided in Sections 2.4, 2.5 and 2.6 of
this Agreement (the “Purchase Price”). A portion of the Purchase Price shall be
held in escrow by Wachovia Bank (the “Escrow Agent”) pursuant to the terms of an
escrow agreement dated as of the Closing Date, substantially in the form
attached as Exhibit A hereto (the “Escrow Agreement”) to secure the
Stockholder’s obligations under Section 2.4(g) and indemnity obligations as
provided in Article 10 of this Agreement.

1.2 Delivery and Endorsement of Certificates. At the Closing, the Stockholder
shall deliver to Buyer certificates representing the Company Shares, duly
endorsed in blank by the Stockholder, or accompanied by stock powers duly
executed in blank by the Stockholder, and with all necessary stock transfer and
other documentary stamps attached, acquired at the Stockholder’s expense,
affixed and canceled. The Stockholder shall cure any deficiencies with respect
to the endorsements of the certificates representing the Company Shares or with
respect to the stock powers accompanying any such certificates.

1.3 Further Assurances. At the Closing and from time to time thereafter, the
Stockholder shall execute such additional instruments and take such other
actions as NMHC or Buyer may reasonably request in order to effectively sell,
transfer and assign the Company Shares to Buyer and confirm Buyer’s title
thereto.

ARTICLE 2.      CLOSING AND PAYMENT.

2.1 Closing.   The closing of the sale and purchase of the Company Shares under
this Agreement (the "Closing") shall take place at 10:00 a.m., Eastern Standard
Time, on March 7, 2005, at the offices of Fulbright&Jaworski L.L.P., 666 Fifth
Avenue, New York, N.Y. 10103 or at such other time or place as the parties may
mutually agree (the "Closing Date").

2.2 Closing Date Payment.   At the Closing, Buyer shall deliver the Purchase
Price as follows: (i) to the Stockholder, a wire transfer of immediately
available funds in the amount of Ten Million Five Hundred Thousand Dollars
($10,500,000), of which the Stockholder hereby directs Buyer to distribute
$1,522,529.35 in the aggregate to the LTIP Recipients (as defined below) listed
on Schedule 2.2 in the amounts listed opposite such LTIP Recipients’ name with
respect to such LTIP Recipients’ rights under the LTIP (as defined below) (the
“Closing Payment”), and (ii) to the Escrow Agent, a wire transfer of immediately
available funds in an amount equal to Two Million Five Hundred Thousand Dollars
($2,500,000) (the “Escrowed Cash”).

2.3    Escrow Agreement. Concurrently with the execution and delivery of this
Agreement, the parties are entering into the Escrow Agreement, pursuant to which
the Escrow Agent shall hold a portion of the Escrowed Cash in an escrow account
for a period of not less than two years following the Closing Date, as described
in the Escrow Agreement (the “Escrow”). On the Escrow Release Date (as defined
in the Escrow Agreement), all remaining Escrowed Cash, less the aggregate
amount, if any, of losses for which NMHC or Buyer has provided notice in
accordance with Section 10.3 (whether or not adjudicated or resolved) and which
were not withheld from a previous distribution from escrow, shall be released
from escrow, and delivered to the Stockholder and to the Buyer or NMHC for the
purpose of payment to the LTIP Recipients in accordance with the terms of the
Escrow Agreement. The amounts to be paid to the Buyer or NMHC on behalf of the
LTIP Recipients shall be calculated as set forth in Schedule 2.2.

2.4 WORKING CAPITAL ADJUSTMENT TO PURCHASE PRICE.

(a)     Prior to the Closing Date, the Company shall have prepared and delivered
to Buyer a good faith estimate (“Estimate Statement”), prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”) consistently applied
in a manner consistent with the preparation of the Financial Statements (as
defined in Section 3.5) delivered pursuant to this Agreement, estimating the
aggregate amount of the Company’s Working Capital (as defined below) as of the
Assumed Closing Date (as defined below) (“Estimated Closing Date Working
Capital”). If the Estimate Statement does not reflect a positive Estimated
Closing Date Working Capital (a “Deficit”), the Purchase Price shall be adjusted
on a dollar for dollar basis to reflect such Deficit, and the Closing Payment to
be paid on the Closing Date shall also be reduced by the amount of such Deficit.

(b)     Within 90 calendar days after the Closing Date, Buyer shall prepare and
deliver to a committee of four persons to be named by the Stockholder, the duly
appointed representatives of the Stockholder (the “Representative”), its written
determination (the “Determination”) of the Company’s Working Capital as of the
Closing Date (“Closing Date Working Capital”), to be prepared in a manner
consistent with the preparation of the Estimate Statement, including in
reasonable detail the basis and method for such Determination.

(c)     If Buyer fails to deliver the Determination to the Representative within
90 calendar days after the Closing Date, then the Estimated Closing Date Working
Capital shall conclusively be presumed to reflect the final Closing Date Working
Capital amount. If Buyer delivers the Determination to the Representative in a
timely matter and the Representative shall not have given written notice to
Buyer within 30 calendar days after delivery of the Determination to the
Stockholder, setting forth with particularity any objection of the
Representative to the Determination, as well as the Representative’s
determination of what the Closing Date Working Capital should be, then the
Closing Date Working Capital set forth in the Determination shall be deemed
final and binding upon the parties for all purposes of this Agreement (“Closing
Date Statement”).

(d)     In the event the Representative gives timely written notice of any
objection to such Determination (containing all of the information described in
paragraph (b) above) within such 30 calendar day period, Buyer and the
Representative shall use all reasonable efforts to resolve the dispute within 30
calendar days following the receipt by Buyer of such written notice from the
Representative. If a resolution is reached, such resolution shall be final and
binding on the parties and the Closing Date Working Capital shall be set forth
on a mutually acceptable statement and such statement shall be the Closing Date
Statement.

(e)     If Buyer and the Representative are unable to reach an agreement within
such 30 calendar day period, the matter shall be submitted to an independent
firm of certified public accountants mutually acceptable to Buyer and the
Representative (the “Independent Accountant”) for determination of the Closing
Date Working Capital to be prepared in a manner consistent with the preparation
of the Audited Financial Statements, which determination shall be deemed to be
the Closing Date Working Capital and shall be final and binding upon Buyer and
the Stockholder. The Closing Date Working Capital shall be set forth on a
mutually acceptable statement and such statement shall be the Closing Date
Statement.

(f)     The fees and expenses of the services of the Independent Accountant
shall be paid by the Stockholder if (1) the difference between (A) the Closing
Date Working Capital resulting from the determinations of the Independent
Accountant, and (B) the Closing Date Working Capital resulting from the
determinations of the Representative on behalf of the Stockholder, is greater
than (2) the difference between (A) the Closing Date Working Capital resulting
from the determinations of the Independent Accountant, and (B) the Closing Date
Working Capital set forth in the Determination delivered by Buyer hereunder;
otherwise, such costs and expenses of the Independent Accountant shall be borne
equally by the parties.

(g)     Upon completion of the Closing Date Statement, the Purchase Price shall
be adjusted as follows: If the Closing Date Working Capital as shown on the
Closing Date Statement is (A) not greater than zero and (B) is less than the
Estimated Closing Date Working Capital (i.e. the amount of negative Working
Capital as shown on the Closing Date Statement is greater than the amount of
negative Working Capital shown on the Estimate Statement), then the Stockholder
shall pay to Buyer directly, and not from Escrowed Cash, within three business
days following the date of completion of the Closing Date Statement the
difference between the Closing Date Working Capital as shown on the Closing Date
Statement and the Estimated Closing Date Working Capital (the “Closing Deficit”)
by wire transfer of immediately available funds. If the amount of the Closing
Deficit is not paid in a timely manner, Buyer shall have the right to have the
amount of the Closing Deficit paid from the Escrowed Cash, upon which the
Stockholder shall be obligated to deposit such amount with the Escrow Agent as
additional Escrowed Cash.

        The term “Assumed Closing Date” shall mean 11:59 p.m. on the day which
is five business days prior to the Closing Date.

        The term “Working Capital” as used in this Agreement shall mean, as of
the date measured, (a) the Company’s total current assets, including, but not
limited to, all impound cash and excluding (i) any amounts receivable from the
Stockholder, (ii) any deferred tax asset, (iii) deposits on leases, (iv)
manufacturers rebates receivable more than 180 days after the end of the quarter
in which such rebate receivable was properly recorded and (v) other accounts
receivable more than 90 days past due less (b) the Company’s total current
liabilities, including, but not limited to, (i) 100% of the liabilities
associated with the impound cash account (deposits and interest thereon), (ii)
bonuses that are payable by Buyer to employees described on Schedule 2.4(g)
hereto, (iii) all remaining deferred compensation payable to Dr. John Skhal,
(iv) liabilities corresponding to manufacturers rebates receivable, and (v) the
$250,000 corresponding to the D&O/E&O Insurance (defined below), and excluding
(x) the Company’s indebtedness for borrowed money, which at the Closing shall be
zero, (y) liabilities relating to the Company’s Long Term Incentive Plan
(“LTIP”), which shall be discharged in accordance with Sections 2.2, 2.3 and 2.6
and (z) expenses in connection with the preparation and delivery of this
Agreement, which shall be paid by the Stockholder on the Closing Date, prepared
in accordance with GAAP, applied in a manner consistent with the preparation of
the Financial Statements.

2.5 GROSS PROFIT ADJUSTMENT TO PURCHASE PRICE.

(a)     If the Gross Profit, as reflected in the Audited Financial Statements
delivered to Buyer pursuant to Section 7.1(o) hereof, is less than the Gross
Profit reflected in Unaudited Financial Statements (as defined in Section
3.5(a)), attached hereto as Exhibit D pursuant to Section 3.5 (a “Gross Profit
Shortfall”), and Buyer and NMHC have waived the closing condition set forth in
Section 7.1(o) and have elected to proceed with the Closing, the Purchase Price
and the Closing Payment shall be reduced by an amount equal to 4.4 times such
Gross Profit Shortfall (the “Gross Profit Deficit Amount”).

(b)     For the purposes of this Section 2.5, the term “Gross Profit” shall
mean, for the year ended December 31, 2004, Revenues less Cost of revenues
prepared and presented on a consistent basis as the audited statements of income
of the Company as of December 31, 2003 and December 31, 2002.

2.6 EARN-OUT.

(a)     The Stockholder shall be entitled to receive as additional Purchase
Price, earn-out payments (the “Earn Out”), calculated and paid in the manner
described below; provided, that (i) in no event shall the Earn Out exceed Thirty
Million Dollars ($30,000,000) in the aggregate; (ii) payment of any Earn Out
shall be subject to setoff and reduction for any claims that Buyer or its
Affiliates may have against the Stockholder, including any claims for
indemnification under Article 10 hereof and claims under Sections 2.4 and 2.5 to
the extent not satisfied; (iii) all calculations and determinations under this
Section 2.6 shall be made in good faith solely by Buyer, subject to the dispute
resolution provisions of Section 2.6(c); (iv) the Stockholder acknowledges that
Buyer is not providing any assurance that the achievement of the financial
targets that would result in the payment of an Earn Out can or will occur; (v)
Buyer shall market Med-Intelligence (defined below) in a manner to be determined
by Buyer in its sole discretion; and (vi) a portion of any Earn Out shall be
paid by Buyer to the LTIP Recipients as set forth opposite their respective
names pursuant to the calculations and maximum amounts set forth on Schedule 2.2
in settlement of their respective rights.

(b)     NMHC shall pay to the Stockholder the following Earn-Out:

1.         four (4) times the amount by which (a) the sum of Claims
Administration Fees, Rebate Revenue (excluding non-recurring rebate revenue from
terminated clients), Sales Returns and Allowances (which shall always be a
negative number) and Med-Intelligence Revenue (each item, as calculated in
accordance with GAAP consistently applied in a manner consistent with the
preparation of the Financial Statements (other than the January Financial
Statements) (collectively, “Adjusted Gross Profit”); provided, however, in no
event shall Adjusted Gross Profit include buying group revenue (including, but
not limited to, par fees, Buyer administration fees and wholesale administration
fees), interest income, grant revenue and other miscellaneous revenue) received
from the Company Existing Clients (defined below) and any of the Company
Potential Clients (defined below) exceeds (b) Ten Million Two Hundred and Fifty
Thousand Dollars ($10,250,000), for the 12-month period commencing on March 1,
2005 (or, if the Closing has not occurred by March 15, 2005, then April 1, 2005
(the “Start Date”)), to be paid 90 days following the last day of such period;
provided that any such payments pursuant to this Section 2.6(b)(1) shall in no
event exceed Fifteen Million Dollars ($15,000,000) in the aggregate. “Company
Existing Clients” and “Company Potential Clients” means, respectively, the
entities listed on Exhibit B and Exhibit C hereto; provided, that in no event
shall Potential Clients include any existing NMHC clients as of the date of this
Agreement; and

2.         50% of the difference between (a) revenue from sales of
Med-Intelligence to existing NMHC clients as of the date of this Agreement
(other than Company Existing Clients and Company Potential Clients), less (b)
amounts properly accruable with respect to, or payments related to, the
performance guarantee on Med-Intelligence, for each of the three consecutive
12-month periods commencing on the Start Date, without duplication, to be paid
90 days following the last day of each such 12-month period; provided that any
such payments pursuant to this Section 2.6(b)(2) shall not exceed Fifteen
Million Dollars ($15,000,000) in the aggregate. For purposes of this Agreement,
“Med-Intelligence” means any, in whole or in part, of the following three
clinical tools and services provided by the Company as of the date of this
Agreement to health benefit plans: Analytical Guide Pro, Prescriber Advisor and
Drug Therapy Advisor; provided that no Earn Out will be owed in respect of the
sale of any other distinct products or services.

    (c)        Earn-Outs shall be determined within 90 days after the first,
second and third anniversary of the Start Date, subject to the provisions
hereof, and shall be accompanied by a calculation, with reasonable detail, of
the Earn-Outs, and the Representative, on behalf of the Stockholder, shall have
60 days to dispute such calculation by written notice to Buyer (“Notice of
Dispute”). Buyer shall use its reasonable commercial efforts to provide
quarterly information relating to the calculations under paragraphs (b)(1) and
(b)(2) above to the Representative within 60 days after each calendar quarter
beginning with the quarter ending June 30, 2005. Buyer shall make its books and
records of account, budgets, forecasts and capital expense forecasts reasonably
available to the Representative solely for use in verifying and calculating the
Earn-Out. Failure by the Representative to provide Buyer a Notice of Dispute
within such 60 days shall be deemed acceptance by the Representative of Buyer’s
calculation. If the Representative does not dispute Buyer’s calculation or
earlier accepts Buyer’s calculation in writing, then Buyer shall promptly remit
the Earn-Out to the Stockholder. If the Representative disputes the calculation
by providing a Notice of Dispute to Buyer from the Representative within such 60
days, then Buyer and the Representative shall have 30 days to negotiate in good
faith to resolve the dispute. If such parties do not reach a mutual resolution
from such negotiations, then the dispute shall be submitted to a nationally
recognized independent public accounting firm agreeable to each such party and
with whom neither such party (or any of its Affiliates) has had a relationship
within the past 24 months. Such independent accounting firm shall be given
reasonable access to available records to calculate the Earn-Out, which
calculation shall be submitted by the independent accounting firm to Buyer and
the Representative within 30 days. Each of Buyer and the Representative shall
have 20 days thereafter to submit to each other and the independent accountant
written comments on such calculation and an additional 15 days to similarly
submit to each other and the independent accountant written rebuttal comments to
each other’s initial comments. The independent accountant shall be entitled to
receive only the records of Buyer related to the Earn-Out, and within 15 days
after the rebuttal comment period, the independent accountant shall submit its
final determination of the calculation solely related to the Earn-Out to each of
Buyer and the Representative, on behalf of the Stockholder, which shall be final
and binding on the parties hereto, and after which Buyer shall promptly remit to
the Stockholder the Earn-Out amount as so calculated. Buyer and the Stockholder
shall share equally the fees and expenses of such independent accounting firm.
Interest shall accrue on the Earn-Out amount commencing on the date the
Representative gives Notice of Dispute of the calculation, provided, however,
that Buyer may remit at that time such amount as Buyer deems not in dispute and
interest shall thereupon accrue only on the difference, if any, ultimately
determined in accordance with this Section 2.6. The rate of interest shall be
the rate of interest then published by JP Morgan Chase Bank, as its “prime”
lending rate for commercial borrowers.

ARTICLE 3.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

        In order to induce NMHC and Buyer to consummate the transaction
contemplated by this Agreement, the Company and the Stockholder hereby represent
and warrant to NMHC and Buyer that the statements contained in this Section 3
are correct and complete (for purposes of this Agreement, “knowledge” or words
of similar import, mean the actual knowledge of the Company, the Stockholder or
the directors and officers of the Company or the Stockholder, and facts of which
the directors and officers, in the reasonably prudent exercise of their duties,
should be aware), except as set forth in the disclosure schedule (the “Company
Disclosure Schedule”). Nothing in the Company Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or warranty made
herein, however, unless the Company Disclosure Schedule identifies the exception
with reasonable particularity and describes the relevant facts in reasonable
detail. The Company Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered sections contained in this Article 3.

3.1 Organization, Good Standing and Qualification. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of California. The Company has all requisite power and authority to
own and operate its properties and assets, to execute and deliver this Agreement
and the Escrow Agreement (collectively, the “Transaction Agreements”) and to
carry on its business as presently conducted. The Company is duly qualified and
is authorized to do business and is in good standing as a foreign entity in each
jurisdiction set forth in Section 3.1 of the Company Disclosure Schedule annexed
hereto, and all other jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so could not reasonably be
expected to have a material adverse effect on the business, prospects, results
of operations, condition (financial or otherwise) or assets of the Company
(“Material Adverse Effect”). The Company has heretofore delivered to Buyer true
and correct copies of its Articles of Incorporation and Bylaws as in effect on
the date hereof. The Company is not in violation of any provision of these
Articles of Incorporation or Bylaws.

3.2 Subsidiaries. The Company does not own or control directly or indirectly any
equity security or other interest of any other corporation, partnership, limited
liability company, joint venture, association or other business entity, and the
Company is not a participant in any joint venture, partnership or similar
arrangement.

3.3 CAPITALIZATION; VOTING RIGHTS.

(a)     The Stockholder owns beneficially and of record the Company Shares,
which constitute all of the issued and outstanding capital stock of the Company.
No person other than the persons listed in Section 3.3(a) of the Company
Disclosure Schedule are or will be entitled to receive any payment with respect
to any of the Company Shares.

(b)     As of the date hereof, there are no outstanding options, warrants,
convertible securities, calls, rights, commitments, preemptive rights or
agreements or instruments or understandings of any character to which the
Company is a party or by which the Company is bound, obligating the Company to
issue, deliver or sell, or cause to be issued, delivered or sold, contingently
or otherwise, additional shares of its capital stock or any securities or
obligations convertible into or exchangeable for such shares or to grant, extend
or enter into any such option, warrant, convertible security, call, right,
commitment, preemptive right or agreement. There are no outstanding obligations,
contingent or otherwise, of the Company to purchase, redeem or otherwise acquire
any shares of its capital stock.

(c)     All outstanding Company Shares have been duly authorized and validly
issued, are fully paid, non-assessable and free and clear of any pledge, claim,
lien, charge, mortgage, encumbrance, royalty obligation or security interest of
any kind or nature whatsoever (collectively, “Liens”), and were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.

(d)     The consummation of the transactions contemplated hereunder will not
result in any anti-dilution adjustment or other similar adjustment to any
outstanding Company Shares.

(e)     None of the outstanding Company Shares have been issued in violation of
any preemptive rights, rights of first refusal or similar rights.

(f)     There exists no option plan or other agreement or understanding between
the Company and any person to purchase equity securities of the Company or which
provides for acceleration or other changes in the vesting provisions or other
terms of the Company’s securities, whether as the result of any merger,
reorganization, consolidation, sale of the Company’s securities or assets,
change in control or any other transaction(s) by the Company.

(g)     Except with respect to the purchase of Company Shares as contemplated by
this Agreement, there are no voting trust agreements or other contracts,
agreements, arrangements, commitments, plans or understandings restricting or
otherwise relating to voting between or among the Company and the Stockholder.

(h)     There are no outstanding obligations, contingent or otherwise, of the
Company to purchase, redeem or otherwise acquire any shares of its capital
stock.

3.4 Authorization; Binding Obligations. All action on the part of the Company,
the Stockholder and their respective directors and officers, necessary for the
authorization of the Transaction Agreements, the performance of all obligations
of such parties hereunder and thereunder at the Closing and the sale and
delivery of the Company Shares pursuant hereto has been taken or will be taken
prior to the Closing. Each of the Transaction Agreements, when executed and
delivered, will be a valid and binding obligation of the Company and the
Stockholder, enforceable against them in accordance with its terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights,
and (b) general principles of equity that restrict the availability of equitable
remedies. The consummation of the transactions contemplated by this Agreement
are not and will not be subject to any preemptive rights, rights of first
refusal, anti-dilution rights or similar rights (collectively, “Preemptive
Rights”) in favor of any third party.

3.5 FINANCIAL STATEMENTS.

(a)     The following are attached hereto as Exhibit D:  the Company’s (a)
unaudited balance sheet (the “Balance Sheet”) as of December 31, 2004 (the
“Balance Sheet Date”) and unaudited statement of income and cash flows for the
twelve months ended December 31, 2004 (collectively, the “Unaudited Financial
Statements”), (b) unaudited balance sheet as of January 31, 2005 and unaudited
statement of income and cash flows for the one-month period ended January 31,
2005 (“January Financial Statements”), and (c) the Company’s audited balance
sheets as of December 31, 2003 and December 31, 2002 and audited statements of
income and cash flows for the twelve months ended December 31, 2003 and December
31, 2002 (together with the Unaudited Financial Statements and the January
Financial Statements, the “Financial Statements”). The Financial Statements have
been prepared in accordance with GAAP, consistently applied (except in the case
of the January Financial Statements for the absence of footnote disclosures and
year-end adjustments which shall not be material in aggregate) are complete and
correct in all material respects, and present fairly the financial condition and
position, results of operations, and statement of cash flows of the Company as
of the their respective dates and for their respective periods. The Audited
Financial Statements will be prepared in accordance with GAAP, consistently
applied, will be complete and correct in all material respects, and present
fairly the financial condition and position, results of operations, statement of
cash flows of the Company as of December 31, 2004 and for the year then ended.
Except as set forth in Section 3.5(a) of the Company Disclosure Schedule, the
statements of income included in the Financial Statements and in the Audited
Financial Statements do not and will not contain any material items of special
or non-recurring income or other income not earned, or omit any expenses
incurred, in the ordinary course of business or otherwise, except as expressly
specified therein. No portion of the business of the Company has been conducted
through any person or entity other than the Company.

(b)     All assets reflected in the Balance Sheet have a value determined in
accordance with GAAP.

(c)     The accounts receivable of the Company as set forth on the Balance Sheet
or arising since the date thereof are valid and genuine; have arisen solely out
of bona fide sales and deliveries of goods, performance of services and other
business transactions in the ordinary course of business consistent with past
practice; are not subject to valid defenses, contra, set-offs or counterclaims;
except as set forth in Section 3.5(c) of the Disclosure Schedule, to the
Company’s knowledge, are collectible or realizable at the full recorded amount
thereof (less, in the case of accounts receivable appearing on the Balance
Sheet, the recorded allowance for collection losses on the Balance Sheet, and
less, in the case of accounts receivable charged back to pharmacies, the
Company’s management fee), over the period of usual trade terms (by use of the
Company’s normal collection methods without resort to litigation or reference to
a collection agency); and, except as set forth in Section 3.5(c) of the Company
Disclosure Schedule, do not arise under agreements in which the Company
disclaims responsibility for forwarding payments to a “pharmacy provider” or
“member” in the event the other party to such agreement fails to make payment to
the Company with respect to a claim, or the other party acknowledges that it has
sole financial responsibility for the payment of claims for “covered services”
until such time as it has transmitted payment to the Company.

(d)     Except as set forth in Section 3.5(d) of the Company Disclosure
Schedule, the liabilities on the Balance Sheet consist solely of accrued
obligations and liabilities incurred by the Company in the ordinary course of
business to persons that are not affiliates of the Company.

(e)     The books, records and accounts of the Company accurately and fairly
reflect, in all material respects and in reasonable detail, the transactions and
the assets and liabilities of the Company. The Company has not used its impound
cash as a source or payment for any dividends or other distributions to itself
or the Stockholder. The Company has not engaged in any transaction, maintained
any bank account or used any of the funds of the Company except for
transactions, bank accounts and funds that have been and are reflected in the
normally maintained books and records of the Company.

3.6 INTERNAL CONTROLS.

(a)     The management of the Company has no knowledge of (A) any significant
deficiencies in the design, or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize and report
financial data, and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls. The Company maintains a system of internal accounting
controls sufficient in all material respects to provide reasonable assurance
that (i) material information relating to the Company is made known to
management of the Company, (ii) transactions are executed in accordance with
management’s general or specific authorizations, (iii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iv) access to assets is permitted
only in accordance with management’s general or specific authorization and (v)
the recorded accountability for assets is compared with the existing assets at
intervals the Company believes to be reasonable intervals and appropriate action
is taken with respect to any differences.

(b)     Since January 1, 2003, except as set forth in Section 3.6(b) of the
Company Disclosure Schedule, neither the Company nor, to the knowledge of the
Company or the Stockholder, any director, officer, employee, auditor, accountant
or representative of the Company has received or otherwise had or obtained
knowledge of any complaint, allegation, assertion or claim, whether written or
oral, regarding the accounting or auditing practices, procedures, methodologies
or methods of the Company’s internal accounting controls, including any
complaint, allegation, assertion or claim that the Company has engaged in
questionable accounting or auditing practices. No attorney representing the
Company, whether or not employed by the Company, has reported evidence of a
material violation of securities laws, breach of fiduciary duty or similar
violation by the Company or any of its officers, directors, employees or agents
to the Board of Directors or any committee thereof or to any director or officer
of the Company.

(c)     To the knowledge of the Company and the Stockholder, no employee of the
Company has provided or is providing information to any law enforcement agency
regarding the commission or possible commission of any crime or the violation or
possible violation of any law, rule, regulation, order, decree or injunction.
Neither the Company nor, to the knowledge of the Company, any contractor,
subcontractor or agent of the Company has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of
the Company in the terms and conditions of employment because of any act of such
employee described in 18 U.S.C. §1514A(a).

3.7 Absence of Undisclosed Liabilities. Except as disclosed in Section 3.7 of
the Company Disclosure Schedule, the Company has no debt, obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due, whether or not known to the Company), including
taxes with respect to or based upon the transactions occurring at or prior to
the Closing, and including, without limitation, unfunded past service
liabilities under any pension, profit sharing or similar plan, and there is no
act or omission or any state of facts that could reasonably be expected to give
rise to any such debt, obligation or liability, except (1) to the extent set
forth on or reserved against on the Financial Statements (other than the January
Financial Statements); and (2) current liabilities incurred and obligations
under agreements entered into, in the usual and ordinary course of business
consistent as to type and amount with past practice since the Balance Sheet
Date, none of which is a liability for a breach of contract or breach of
warranty, or will, individually or in the aggregate, have a Material Adverse
Effect.

3.8 AGREEMENTS; ACTION.

(a)     Except as set forth in Section 3.8(a) of the Company Disclosure
Schedule, there are no agreements, understandings or proposed transactions
between the Company and any of its directors, officers or affiliates.

(b)     Except as set forth in Section 3.8(b) of the Company Disclosure
Schedule, there are no agreements, understandings, instruments, contracts,
proposed transactions, judgments, orders, writs or decrees to which the Company
is a party or to its knowledge by which it is bound which may involve
(1) obligations (contingent or otherwise) of, or payments to, the Company, other
than obligations of, or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business and that do not
involve obligations of or payments to the Company in excess of $25,000 for each
customer individually, and $35,000 for each pharmacy or pharmaceutical
manufacturer individually, or (2) the transfer or license of any software,
technology, patent, copyright, trade secret or other proprietary right to or
from the Company (including without limitation any license forming part of or
relating to Med-Intelligence, and other than licenses arising from the purchase
of “off the shelf” or other standard, commercially available products), or (3) a
guaranty of any indebtedness or obligations of any person or entity, or (4) a
covenant not to compete or other restriction on the Company’s ability to conduct
a business or engage in any other activity, or (5) any agreement for employment
of any officer or other employee, or (6) any collective bargaining agreement or
other agreement with any labor union, employee representative or group of
employees, or (7) any agreement or lease under which the Company leases any real
or personal property, either as lessor or lessee, or (8)  provisions restricting
the development, manufacture or delivery/distribution of the Company’s products
or services, or (9) indemnification by the Company with respect to infringements
of proprietary rights (other than indemnification obligations arising from
purchase, sale or license agreements entered into in the ordinary course of
business), or (10) agreements providing product warranty or extended service
obligations to customers (all of the foregoing agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs and
decrees, together with those referred to in paragraph (b) above are collectively
referred to herein as the “Company Agreements”).

(c)     The Company has delivered to Buyer true and complete copies of all of
the Company Agreements. Except as indicated in Section 3.8(c) of the Company
Disclosure Schedule, the Company Agreements are legal, valid, binding and
enforceable on the Company, and to the knowledge of the Company, all other
parties thereto in accordance with their terms and in full force and effect, and
there is not under any of such Company Agreements (i) any existing or claimed
default by the Company or event which, with the notice or lapse of time, or
both, could constitute a default by the Company, or (ii) to the knowledge of the
Company, any existing or claimed default by any other party or event which with
notice or lapse of time, or both, could constitute a default by any such party.
Except as indicated in Section 3.8(c) of the Company Disclosure Schedule, the
transactions contemplated by this Agreement will not result in a breach of or
default under, or require the consent of any other party to, or give rise to a
right of termination or acceleration or the creation of a lien by any other
party to, any of the Company Agreements. Except as indicated in Section 3.8(c)
of the Company Disclosure Schedule, no Company Agreement (which, with respect to
the Company Agreements defined in Section 3.8(b)(1), shall refer only to the
customer and pharmacy agreements described in Section 3.27) is cancelable or
terminable by its terms within 60 days of the Closing Date. There is no actual
or, to the knowledge of the Company or the Stockholder, threatened termination,
cancellation, modification or limitation of any Company Agreements. Except in
the ordinary course of business, there are no negotiations pending or in
progress to revise any material terms of such Company Agreements. To the
knowledge of the Company, there is no pending or threatened bankruptcy,
insolvency or similar proceeding with respect to any other party to the Company
Agreements.

(d)     Except as set forth in Section 3.8(d) of the Company Disclosure
Schedule, since the Balance Sheet Date, the Company has not (1) authorized or
made any distribution upon or with respect to any equity securities,
(2) incurred any indebtedness for money borrowed or any other liabilities (other
than with respect to distributions, indebtedness and other obligations incurred
in the ordinary course of business or as disclosed in the Financial Statements)
individually in excess of $10,000 or, in the case of indebtedness for money
borrowed and/or liabilities individually less than $10,000, in excess of $50,000
in the aggregate, (3) made any loans or advances to any person, other than
ordinary advances for travel expenses, or (4) sold, exchanged or otherwise
disposed of any of its assets or rights, other than in the ordinary course of
business.

(e)     For the purposes of subsections (b) and (d) above, all indebtedness for
borrowed money, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

3.9 Obligations to Related Parties. Except as set forth in Section 3.9 of the
Company Disclosure Schedule, there are no obligations of the Company to
directors, officers, or employees of the Company or any of the Stockholder,
other than for (a) payment of salary for services rendered for the current pay
period and quarterly cash performance bonuses for employees for the current
calendar quarter that are, in each such instance, consistent with the salary and
cash performance bonuses paid by the Company in previous calendar quarters,
(b) reimbursement for reasonable expenses incurred on behalf of the Company and
(c) other standard employee benefits made generally available to all employees.
None of the directors, officers or employees of the Company or the Stockholder,
or any member of their immediate families, is indebted to the Company. Except as
set forth in Section 3.9 of the Company Disclosure Schedule, to the knowledge of
the Company or the Stockholder, none of the directors, officers or employees of
the Company or the Stockholder, or any member of their immediate families, has
any direct or indirect ownership interest in any firm or company with which the
Company is affiliated or with which the Company has a business relationship, or
any firm or company which competes with the Company, other than passive
investments in publicly traded companies (representing less than 1% of such
company) which may compete with the Company. To the knowledge of the Company or
the Stockholder, no director, officer or employee of the Company or Stockholder,
or any member of their immediate families, is, directly or indirectly,
interested in any material contract with the Company. The Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
company.

3.10 Changes. Except as set forth in Section 3.10 of the Company Disclosure
Schedule, since the Balance Sheet Date, there has not been:

(a)     Any change in the assets, liabilities, financial condition or operations
of the Company from that reflected in the Financial Statements, other than
changes in the ordinary course of business, none of which individually or in the
aggregate has had or is reasonably expected to have a Material Adverse Effect;

(b)     Any resignation or termination of any officer, key employee or group of
employees of the Company; and the Company and the Stockholder, to their
respective knowledge, do not know of the impending resignation or termination of
employment of any such officer, key employee or group of employees;

(c)     Any material change in the contingent obligations of the Company by way
of guaranty, endorsement, indemnity, warranty or otherwise;

(d)     Any damage, destruction or loss, with respect to the assets of the
Company, whether or not covered by insurance;

(e)     Any waiver by the Company of a valuable right or of a material debt owed
to it;

(f)     Any direct or indirect loans made by the Company to the Stockholder,
director, employee or officer of the Company, other than advances made in the
ordinary course of business and listed in Section 3.10(f) of the Company
Disclosure Schedule;

(g)     Any change in any compensation or benefit arrangement or agreement with
any director, officer or employee except for ordinary course promotions and step
salary increases, involving no more than $10,000 individually or $50,000 in the
aggregate;

(h)     Any authorization or payment of any distribution of any kind of the
assets of the Company, including bonus payments to any director, employee or
officer of the Company;

(i)     Any dividends on or other distributions (whether in cash (impound or
otherwise), stock or property or any combination thereof), directly or
indirectly, in respect of the Company Shares;

(j)     Any labor organization activity related to the Company;

(k)     Any debt, obligation or liability incurred, assumed or guaranteed by the
Company, except those for immaterial amounts and for current liabilities
incurred in the ordinary course of business;

(l)     Any failure to pay or discharge when due any liability or obligation;

(m)     Any delayed or postponed payment of accounts payable and other
liabilities outside the ordinary course of business;

(n)     Any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets;

(o)     Any material change in any method of accounting or accounting practice;

(p)     Any change in any material agreement to which the Company is a party or
by which it is bound;

(q)     Any claim asserted, action, suit or proceeding instituted, or
investigation commenced by any governmental or regulatory body;

(r)     Any other event or condition of any character that, either individually
or cumulatively, could reasonably be expected to have a Material Adverse Effect;
or

(s)     Any arrangement or commitment by the Company to do any of the acts
described in subsection (a) through (q) above.

3.11 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC.

(a)     Except as set forth in Section 3.11 of the Company Disclosure Schedule,
the Company has good and marketable title to its properties and assets,
including the properties and assets reflected in the most recent balance sheet
included in the Financial Statements, and good title to its leasehold estates,
in each case subject to no Liens other than (a) those resulting from taxes which
have not yet become delinquent, and (b)  purchase money liens or personal
property leases that have arisen in the ordinary course of business and that
secure indebtedness not in excess of the purchase price of the assets to which
such liens relate. To the knowledge of the Company, all facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company are in good operating condition and repair and are reasonably fit and
usable for the operation of the Business (as defined in Section 6.9) and as
currently conducted. The Company is in compliance with all material terms of
each lease to which it is a party or is otherwise bound and, to the knowledge of
the Company and the Stockholder, each of the other parties thereto is also in
compliance with all material terms thereof. There are no properties or assets
that are required to enable Buyer to operate the business of the Company on
substantially the same basis as such business has been operated prior to the
date hereof that are not owned, leased or licensed by the Company. Except as set
forth in Section 3.11 of the Company Disclosure Schedule, all assets of the
Company are located on the premises currently occupied by the Company and are in
the Company’s exclusive possession and control.

(b)     The Stockholder holds its Company Shares free and clear of any Liens;
and the sale and delivery of the Company Shares to Buyer will vest in Buyer all
right, title and interest in and to the Company Shares, free and clear of all
Liens.

3.12 INTELLECTUAL PROPERTY.

(a)     Except as set forth in Section 3.12 of the Company Disclosure Schedule,
the Company owns or possesses sufficient legal rights, free and clear of all
Liens, in and to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, license agreements, information, software
(including without limitation Med-Intelligence) and other proprietary rights and
processes currently utilized by the Company or necessary for its business as now
conducted and as presently proposed to be conducted, without any infringement of
the rights of others (“Company Intellectual Property”). The Company Intellectual
Property that is registered with the U.S. Patent and Trademark Office is
subsisting, in full force and effect, has not been cancelled or abandoned, has
not expired, and is valid and enforceable. Except as set forth in Section
3.12(a) of the Company Disclosure Schedule, there are no outstanding options,
inbound or outbound licenses or license agreements or agreements of any kind
relating to the foregoing proprietary rights (including without limitation
Med-Intelligence), nor is the Company bound by or a party to any options,
inbound or outbound licenses or license agreements or agreements of any kind
with respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, software and other proprietary rights and
processes of any other person or entity, other than such licenses or agreements
arising from the purchase of “off the shelf” or standard, commercially available
products. None of the license agreements of the Company grants any third party
exclusive rights to or under any Company Intellectual Property or the right to
sublicense any Company Intellectual Property. The Company is in compliance with,
and has not breached any material term of any of such license agreements and, to
the knowledge of the Company, all other parties to such license agreements are
in compliance with, and have not breached any material term of, such license
agreements. Following the Closing Date, the Company will be permitted to
exercise all of the rights of the Company under such license agreements to the
same extent the Company would have been able to had the Closing not occurred and
without the payment of any additional amounts or consideration other than
ongoing fees, royalties or payments which the Company would otherwise be
required to pay.

(b)     Neither the Company, nor the Stockholder, director or officer of the
Company has any notice or knowledge, or has received any communications
alleging, that the Company has violated or infringed or, by conducting its
business as presently conducted, could reasonably be expected to violate or
infringe any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity, nor
does the Company have any knowledge of any basis therefor.

(c)     Neither the Company, nor the Stockholder, director or officer of the
Company has any notice or knowledge, or has received any communications
alleging, that a person has infringed, misappropriated, or otherwise violated,
or is infringing, misappropriating, or otherwise violating, any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, software and other proprietary rights and processes currently
utilized by the Company.

(d)     The Company has no knowledge that any of the key employees of the
Company is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that could reasonably be
expected to interfere with their duties to the Company or that could reasonably
be expected to conflict with the Company’s business as presently conducted. It
is not, nor will it be, necessary for the Company in the conduct of its business
to utilize any inventions, trade secrets or proprietary information of any key
employees made prior to their employment by the Company, except for inventions,
trade secrets or proprietary information that have been assigned to the Company
and which are disclosed in Section 3.12(c) of the Company Disclosure Schedule.
The Company has obtained proprietary rights and confidentiality or similar
agreements from each of its employees, consultants and other independent
contractors, effectively conveying to the Company all copyrights, patents,
trademarks and other intellectual property rights of such employees with respect
to any work performed by, and ideas and inventions created by, such employees
during the term or in the course of their employment or retention by the Company
(including without limitation in connection with the development of
Med-Intelligence) in the form provided to Buyer by the Company.

(e)     To the extent that any intellectual property or technology has been
developed or created by a third party for the Company, the Company has a written
agreement with such third party with respect thereto, and the Company thereby
either (i) has obtained ownership of and is the exclusive owner of, or (ii) has
obtained a valid and unrestricted right to exploit, sufficient for the conduct
of its business as currently conducted or proposed to be conducted, all
intellectual property rights therein.

(f)     To the knowledge of the Company, all computer software and other
technology developed by the Company were created without infringing,
misappropriating or otherwise violating any intellectual property rights of any
third party. To the knowledge of the Company, the software and other technology
licensed by the Company from any third party were created without infringing,
misappropriating or otherwise violating any intellectual property rights of any
third party. No current or former director, officer or employee of the Company
will, after the Closing Date, own or retain any rights in, to, or under any of
the Company’s patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and other proprietary rights.

3.13 No Violation. The execution and delivery of the Transaction Agreements by
the Company and the Stockholder do not, and the consummation by the Company and
the Stockholder of the transactions contemplated hereby and thereby, and
compliance with the terms hereof and thereof, except as set forth in Section
3.13 to the Company Disclosure Schedule (i) conflict with, or result in any
violation of or default under, any provision of the Company’s Certificate of
Incorporation or Bylaws; (ii) except as set forth in Section 3.13 to the Company
Disclosure Schedule, conflict with, or result in any violation of or default or
loss of any benefit under, any contract or license, or any Law or any order,
writ, judgment, injunction, decrees, stipulation, determination or award entered
by or with any Governmental Entity (“Governmental Order”), to which the Company
or the Stockholder is a party or to which any of their respective properties are
subject; (iii) except as set forth in Section 3.13 to the Company Disclosure
Schedule accelerate, the performance required by any contract or license to
which the Company or the Stockholder is a party, or constitute a default or loss
of any right thereunder or an event which, with the lapse of time or notice or
both, will result in a default or loss of any right thereunder or the creation
of any Lien upon any of the assets of the Company or the Stockholder; (iv)
result in any suspension, revocation, impairment, forfeiture or non-renewal of
any license or (v) result in the Company being required to pay any material
amount or refund to any customer or licensee of the Company in respect of
amounts received by the Company in advance of the performance of services.

3.14 Approvals. Except as disclosed in Section 3.14 of the Company’s Disclosure
Schedule, the execution and delivery of this by the Company and the Stockholder
do not, and the performance of this Agreement by the Company and the Stockholder
will not, require any consent, approval, authorization or other action by, or
filing with or notification to, any United States federal, state or local or any
foreign government, governmental, regulatory or administrative authority, agency
or commission or court, tribunal or judicial or arbitral body or any private
arbitrator (“Governmental Authority”) or other person under any Law or contract,
other than such filings or registrations with, or authorizations, consents or
approvals of Governmental Authorities as have been obtained or made prior to the
date hereof.

3.15 Litigation. Except as set forth in Section 3.15 of the Company Disclosure
Schedule, there is no claim, action, suit, proceeding or investigation pending
or, to the Company’s knowledge, currently threatened against the Company or any
officers, directors or key employees of the Company with respect to business
activities on behalf of the Company, nor to the knowledge of the Company or the
Stockholder is there any basis for any of the foregoing. The foregoing includes,
without limitation, actions known by the Company to be pending or threatened, or
as to which the Company or the Stockholder, director or officer has knowledge of
a basis therefor, involving the prior employment of any of the employees of the
Company, their use in connection with the business of the Company of any
information or techniques proprietary to any of their former employers, or their
obligations under any agreements with prior employers. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. The Company has not
received any written opinion or memorandum of legal advice from legal counsel to
the effect that either of them is exposed to any liability which may be material
to the business, prospects, results of operations, financial condition or assets
of the Company. The Company is not engaged in any legal action to recover monies
due it or for damages sustained by it, and none of the assets of the Company and
none of its business practices is in any manner, directly or indirectly,
affected by injunction of any court or governmental, administrative or
regulatory agency, body or officer. There is no action, suit, proceeding or
investigation by the Company currently pending or which the Company currently
intends to initiate.

3.16 TAXES.

(a)     The Company has properly prepared and timely filed all Tax Returns (as
defined below) required to be filed by it relating to any and all Taxes (as
defined below) concerning or attributable to the Company or its operations for
any period ending on or before the Closing Date and such Tax Returns are true,
correct and complete in all material respects and have been completed in
accordance with applicable Laws (as defined below). The Company has made
available to Buyer copies of all Tax Returns filed for all periods since January
1, 1999.

(b)     All Taxes (whether or not shown on any Tax Return) payable by the
Company have been fully and timely paid or extensions for payment have been
properly obtained. The cash reserves or accruals for Taxes provided in the books
and records of the Company with respect to any period for which Tax Returns have
not yet been filed or for which Taxes are not yet due and owing have been
established in accordance with GAAP and as of the date hereof are, or prior to
the Closing Date, will be, sufficient for all such unpaid Taxes of the Company.

(c)     Neither the Company nor any person on behalf of or with respect to the
Company has executed or filed any agreements or waivers extending any statute of
limitations on or extending the period for the assessment or collection of any
Tax of the Company. No power of attorney on behalf of the Company with respect
to any Tax matter of the Company is currently in force.

(d)     The Company is not a party to any Tax-sharing agreement or similar
arrangement with any other party, except for an arrangement with Stockholder
described in Schedule 3.16(d) to the Company Disclosure Schedule and the Company
has not assumed any Tax obligations of any other Person or agreed to indemnify
any other Person with respect to any Tax.

(e)     Except as set forth in Section 3.16(e) of the Company Disclosure
Schedule, no Tax Return of the Company has been audited by the relevant taxing
authority (or the period for assessment of the Taxes in respect of which such
Tax Returns were required to be filed has expired), and the Company has not been
notified in writing of any request for such an audit or other examination. To
the Company’s knowledge, no claim has been made by a taxing authority in a
jurisdiction where Tax Returns of the Company have not been filed that it is or
may be subject to taxation by that jurisdiction.

(f)     The Company has never been included in any consolidated, combined, or
unitary Tax Return (other than consolidated, combined or unitary income Tax
Return in which the Stockholder is the parent).

(g)     The Company has complied in all material respects with all applicable
Laws relating to the payment and withholding of Taxes and has duly and timely
withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable laws.

(h)     Neither the Company nor any other Person on behalf of the Company has
done any of the following, as a result of such action or actions the Company
would be required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period ending after the Closing
Date: (i) agreed to or is required to make any adjustments pursuant to Section
481(a) of the Internal Revenue Code of 1986 (“Code”) or any similar provision of
state, local or foreign law by reason of a change in accounting method initiated
by the Company, and the Company and the Stockholder have no knowledge that the
Internal Revenue Service (“IRS”) has proposed any such adjustment or change in
accounting method, or has any application pending with any taxing authority
requesting permission for any changes in accounting methods that relate to the
business or operations of the Company or (ii) executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law with respect to
the Company. Neither the Company nor any other Person on behalf of the Company
has requested any extension of time within which to file any Tax Return of the
Company, which Tax Return has since not been filed.

(i)     No property owned by the Company is (i) “tax-exempt use property” within
the meaning of Section 168(h)(1) of the Code or (ii) is “tax-exempt bond
financed property” within the meaning of Section 168(g) of the Code.

(j)     Except as set forth in Section 3.16(j) of the Company Disclosure
Schedule, the Company is not subject to any private letter ruling of the IRS or
comparable rulings of other taxing authorities that relate to a Tax matter of
the Company.

(k)     The Company does not own any interest in any entity that is treated as a
partnership for U.S. federal income Tax purposes or would be treated as a
pass-through or disregarded entity for any Tax purposes.

(l)     The Stockholder is not a foreign person within the meaning of Section
1445 of the Code or any other laws requiring withholding of amounts paid to
foreign persons.

(m)     The Company has not constituted either a “distributing corporation” or a
“controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code
in a distribution qualifying for tax-free treatment under Section 355 of the
Code (i) in the two years prior to the date of this Agreement or (ii) in a
distribution that could otherwise constitute part of a “plan” or “series of
transactions” (within the meaning of Section 355(e) of the Code) in conjunction
with this Agreement.

(n)     The Company has no elections in effect for U.S. federal income Tax
purposes under Sections 108, 168, 441, 472, 1017, 1033 or 4977 of the Code.

        The term “Law” or “Laws” as used in this Agreement shall mean any
federal, state, local or foreign statue, law, ordinance, regulation, rule, code,
order or other requirement or rule of law.

        The term “Tax” or “Taxes” as used in this Agreement shall mean (i) all
income, excise, gross receipts, ad valorem, sales, use, employment, franchise,
profits, gains, property, transfer, payroll, withholding, severance, occupation,
social security, unemployment compensation, alternative minimum, value added,
intangibles or other taxes, fees, stamp taxes, duties, charges, levies or
assessments of any kind whatsoever (whether payable directly or by withholding),
together with any interest and any penalties, fines, additions to tax or
additional amounts imposed by any Governmental Authority with respect thereto,
(ii) any liability for the payment of any amounts of the type described in (i)
as a result of being a member of a consolidated, combined, unitary or aggregate
group for any Taxable period, and (3) any liability for the payment of any
amounts of the type described in (i) or (ii) as a result of being a transferee
or successor to any person or as a result of any express or implied obligation
to indemnify any other Person.

        The term “Tax Returns” as used in this Agreement shall mean returns,
declarations, reports, claims for refund, information returns or other documents
(including any related or supporting schedules, statements or information) filed
or required to be filed in connection with the determination, assessment or
collection of any Taxes of any party or the administration of any laws,
regulations or administrative requirements relating to any Taxes.

3.17 EMPLOYEES/SALARIES.

(a)     The Company does not have collective bargaining agreements with any of
its employees. There is no labor union organizing activity pending or, to the
Company’s knowledge, threatened with respect to the Company. Except as set forth
in Section 3.17(a) of the Company Disclosure Schedule, the Company is not a
party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation or benefit (including
severance) plan or agreement. To the Company’s knowledge, no employee of the
Company, nor any consultant with whom the Company has contracted, is in
violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company because of the nature of the
business to be conducted by the Company; and to the Company’s knowledge the
continued employment by the Company of its present employees, and the
performance of the contracts of the Company with its independent contractors,
will not result in any such violation. The Company has not received any notice
alleging that any such violation has occurred. Except as set forth in Section
3.17(a) of the Company Disclosure Schedule, no employee of the Company has been
granted the right to continued employment by the Company and no current or
former employee of the Company is entitled to receive any material compensation
or benefits following termination of employment. The Company does not have any
knowledge that any officer, key employee or group of employees intends to
terminate his, her or their employment with the Company, nor does the Company
have a present intention to terminate the employment of any officer, key
employee or group of employees.

(b)     Section 3.17(b) of the Company Disclosure Schedule contains a true,
complete and correct list setting forth (i) the names, job descriptions/titles,
current compensation rate (including but not limited to salary, commission and
bonus compensation), date of hire, vacation accrual rate and accrued vacation
time and other paid time off as of December 31, 2004 of all individuals
presently employed by the Company indicating whether they are employed on a
salaried, hourly or piecework basis, and (ii) the names and total annual
compensation for all independent contractors who render services on a regular
basis to the Company whose current annual compensation is or is expected to be
in excess of $20,000. Except as set forth in Section 3.17(b) of the Company
Disclosure Schedule, and for increases in the ordinary course of business
consistent with the Company’s past compensation practices, (i) there has been no
increase in the compensation of the foregoing individuals or independent
contractors since December 31, 2004, and (ii) there has not been any promise to
the employees orally or in writing of any bonus or increase in compensation,
whether or not legally binding. The Company has not made any prepayments of
salaries, bonuses or any other amounts due to any of its employees or former
employees. All obligations to employees, whether for salaries, commissions,
bonuses, vacation or otherwise, which are required to be accrued on the
Financial Statements in accordance with GAAP consistently applied have been
accrued on the Financials Statements in accordance with GAAP consistently
applied.

3.18 Obligations of Management. Except as set forth in Section 3.18 of the
Company Disclosure Schedule, each of David Keane, Jeanne Kleinsorg, Sandy
Connell, Philip Parastoon and Steve Goforth (collectively, the “Key Employees”),
is currently devoting substantially all of his or her business time to the
conduct of the business of the Company. Except as set forth in Section 3.18 of
the Company Disclosure Schedule, the Company has no knowledge that any of the
Key Employees or other significant employees of the Company is planning to work
less than full time at the Company in the future. None of the Key Employees or
other significant employees is currently working or, to the Company’s knowledge,
plans to work for a competitive enterprise, whether or not such Key Employee or
significant employee is or will be compensated by such enterprise.

3.19 Registration Rights and Voting Rights. The Company is presently not under
any obligation, and has not granted any rights, to register any of the Company’s
presently outstanding securities. The Company has not entered into any agreement
with respect to the voting of equity securities of the Company.

3.20 Compliance with Laws Generally; Permits. Compliance with (a) health care
laws are covered in Sections 3.21 and 3.24 of this Agreement, and (b)
environmental and safety laws are covered in Section 3.31 of this Agreement and
(c) compensation and benefit laws covered in Section 3.30. With respect to other
laws, the Company is not in violation of any applicable statute, rule,
regulation, order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its properties. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the consummation of the transaction contemplated
hereby, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the Closing, as will be filed in
a timely manner. The Company has all franchises, permits, licenses and any
similar authority necessary for the conduct of its business as now being
conducted by it.

3.21 LICENSES, AUTHORIZATIONS AND PROVIDER PROGRAMS.

(a)     The Company holds all valid licenses and other rights, accreditations,
permits and authorizations required by law, ordinance, regulation or ruling of
any governmental regulatory authority necessary to operate its business as
heretofore conducted. The Company has taken all necessary action to maintain
such licenses in full force and effect. Set forth in Section 3.21 of the Company
Disclosure Schedule is a correct and complete list of such licenses,
accreditations, permits and other authorizations, complete and correct copies of
which have been provided to Buyer. True, complete and correct copies of all
surveys of the Company or its predecessors in interest and conducted by any
Governmental Authority or licensing or accrediting body during the past two (2)
years have been provided to Buyer.

(b)     No violation, default, order or deficiency exists with respect to any of
the items listed in Section 3.21 of the Company Disclosure Schedule. The Company
has not received any notice of any action pending or recommended by any state or
federal agencies having jurisdiction over the items listed in Section 3.21 of
the Company Disclosure Schedule, either to revoke, withdraw or suspend any
license, right or authorization. No event has occurred which, with the giving of
notice, the passage of time, or both, could reasonably be expected to constitute
grounds for a material violation, order or deficiency with respect to any of the
items listed in Section 3.21 of the Company Disclosure Schedule or to revoke,
withdraw or suspend any such license, right or authorization. Except as listed
in Schedule 3.21 of the Company Disclosure Schedule, no consent or approval of,
prior filing with or notice to, or any action by, any governmental body or
agency or any other third party is required in connection with any such license,
right or authorization by reason of the acquisition contemplated by this
Agreement.

3.22 Inspections and Investigations. Except as set forth and described in
Section 3.22 of the Company Disclosure Schedule, (i) neither the Company, nor,
to the knowledge of the Company, any licensed professional or other individual
affiliated with the Company or who has provided services to the Company during
the past three (3) years, has been the subject of any inspection, investigation,
survey, audit, monitoring or other form of review by any Governmental Authority,
trade association, professional review organization, accrediting organization or
certifying agency based upon any alleged improper activity on the part of the
Company or such individual where such alleged improper activity related to the
operations of the Company, nor has any Company received any notice of deficiency
during the past three years in connection with the operations of its business,
(ii) there are not presently, and at the Closing Date there will not be, any
outstanding deficiencies or work orders of any Governmental Authority having
jurisdiction over the Company or any of its assets or properties, or requiring
conformity to any applicable agreement, statute, regulation, ordinance or bylaw,
and (iii) there is not any notice of any claim, requirement or demand of any
licensing or certifying agency or other third party supervising or having
authority over the Company or its assets or properties to rework or redesign any
part thereof or to provide additional furniture, fixtures, equipment, appliances
or inventory so as to conform to or comply with any existing law, code, rule,
regulation or standard. Attached as part of Section 3.22 of the Company
Disclosure Schedule are copies of all reports, correspondence, notices and other
documents relating to any matter described or referenced therein.

3.23 REGULATORY COMPLIANCE.

(a)     The Company has been operated at all times since January 1, 1999, and
currently is, in compliance in all material respects with all Laws applicable to
the Company or by which any property, business or asset of the Company is bound
or affected, relating to the operation of its business as heretofore conducted,
including without limitation: (i) Laws governing any Federal health care program
(as such term is defined by the Social Security Act), including without
limitation the Medicare and Medicaid programs and Laws relating to health care
fraud and abuse and referrals, including, without limitation: (A) the
Anti-Kickback Law, 42 U.S.C. § 1320a-7b, 42 C.F.R. § 1001.952, (B) the Civil
Monetary Penalties Law, 42 U.S.C. § 1320a-7a, (C) the physician self-referral
(“Stark”) prohibition, 42 U.S.C. § 1395nn, 42 C.F.R. § 411.351 et seq., (D) the
False Claims Act, 31 U.S.C. § 3729 et seq., (E) the CHAMPUS statute (10 U.S.C.
§ 1071 et seq.), (F) the False Statement Accountability Act (18 U.S.C. § 1001),
and (G) the Program Fraud Civil Penalties Act (31 U.S.C. § 3810 et seq.),; (ii)
state Laws relating to health care fraud and abuse and referrals; (iii) state
Laws relating to Medicaid or any other state health care or health insurance
programs; (iv) federal or state Laws relating to the manner of handling,
processing, and timely paying claims for payment for health care items or
services; and (v) other federal or state Laws relating to fraudulent, abusive or
unlawful practices connected in any way with the provision of health care items
or services or the billing or payment for such items or services.

(b)     Since January 1, 1999, neither the Company nor the Stockholder, nor to
the knowledge of the Company or the Stockholder, any director, officer, employee
or agent, of the Company, with respect to actions taken on behalf of the
Company, (i) has been assessed a civil money penalty under Section 1128A of the
Social Security Act (42 U.S.C. § 1320a-7a) or any regulations promulgated
thereunder, (ii) has been excluded from participation in any Federal health care
program or State health care program (as such terms are defined by the Social
Security Act), (iii) has been convicted of any criminal offense or has engaged
in any act or conduct that would be a grounds for mandatory or permissive
exclusion from participation in any Federal Health Care Program under Section
1128 of the Social Security Act (42 U.S.C. § 1320a-7), or (iv) is a party to or
subject to any action or proceeding concerning any of the matters described
above in clauses (i) through (iii).

(c)     The Company is in compliance in all material respects, to the extent
applicable, with the terms and provisions of all Laws relating to patient or
individual healthcare information, including, without limitation, the Health
Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, as
amended, and any rules or regulations promulgated thereunder (collectively, the
“Healthcare Information Laws”). The Company has (i) undertaken all necessary
surveys, audits, inventories, reviews, analyses, or assessments (including any
necessary risk assessments) on all areas required for material compliance under
all Healthcare Information Laws to the extent applicable to the Company’s
operations as heretofore conducted, (ii) developed a plan and time line for
coming into material compliance with all Healthcare Information Laws to the
extent applicable to the Company’s operations as heretofore conducted (the
“Compliance Plan”) and (iii) implemented those provisions of the Compliance Plan
to ensure that the Company is and will remain in material compliance with all
Healthcare Information Laws to the extent applicable to the Company’s operations
as heretofore conducted.

3.24 Rates and Reimbursement Policies. Except for ethical limitations, the
jurisdictions in which the Company conducts business do not currently impose any
restrictions or limitations on rates which may be charged to private pay
patients receiving services provided by the Company. The Company does not have
any rate appeal currently pending before any Governmental Authority. The Company
has no knowledge of any applicable law, which has been enacted, promulgated or
issued within the eighteen (18) months preceding the date of this Agreement of
any such legal requirement proposed or currently pending in the jurisdictions in
which the Company does business, which could reasonably be expected to have a
material adverse effect on the Company or may result in the imposition of
additional Medicaid, Medicare, charity, free care, welfare, or other discounted
or government assisted patients or require the Company to obtain any necessary
authorization which it does not currently possess.

3.25 Changes in Laws. To the knowledge of the Company, there are no pending
changes in applicable law or regulations that could prevent the Company from
conducting its business in substantially the same manner as its business has
been heretofore conducted.

3.26 CUSTOMERS AND SUPPLIERS.

(a)     Section 3.26 of the Company Disclosure Schedule lists (i) all suppliers
of the Company to which the Company made payments during the period beginning
January 1, 2004 through December 31, 2004, or expects to make payments during
the period beginning January 1, 2005 through December 31, 2005, in excess of
$15,000 in the aggregate, (ii) all customers of the Company during the period
beginning January 1, 2004 through December 31, 2004, or each customer that the
Company expects will pay to the Company during the period beginning January 1,
2005 through December 31, 2005 more than $25,000 aggregate net revenue (i.e.,
net of drug expenditures where applicable), (iii) all pharmacies that pay the
Company $35,000 in transaction fees annually and pharmaceutical manufacturers
that pay the Company administrative fees in excess of $35,000 annually, and (iv)
all other suppliers and customers the loss of any of which, individually or in
the aggregate with all other suppliers or customers affiliated with such
supplier or customer, could have a Material Adverse Effect on the Company.

(b)     To the Company’s or the Stockholder’s knowledge, none of the Company’s
customers or suppliers listed in Section 3.26 of the Company Disclosure Schedule
intend to cease purchasing from, selling to or dealing with the Company nor has
any information been brought to its attention which might lead them to believe
any such customer or supplier intends to alter in any material respect the
amount of such purchases, sales or the extent of dealings with the Company or to
materially alter such purchases, sales or dealings in the event of the
consummation of the actions contemplated by this Agreement. None of (i) the
Company’s customers have informed the Company that it intends to cancel
outstanding or currently anticipated contracts with the Company or (ii) the
Company’s customers listed in Section 3.26 of the Company Disclosure Schedules
have requested that the Company participate in a “request for proposal,” or
similar process.

3.27 BUSINESS RELATIONSHIPS.

(a)     Except as disclosed in Section 3.27 of the Company Disclosure Schedule,
the relationships between the Company and all customers, clients, third party
payors, employees and vendors who receive goods and services from or provide
goods and services to the Company are satisfactory, and neither the Company nor
the Stockholder have any knowledge of (i) any facts or circumstances which could
reasonably be expected to materially alter, negate, impair or in any way
adversely affect the continuity of any such relationships or (ii) any
complaints, claims, threats, plans or intentions to discontinue or curtail
relations under any such relationships. The Company has no obligation to obtain
the return of goods in the possession of customers.

(b)     Neither the Company nor the Stockholder have any knowledge of any
present or future condition or state of facts or circumstances which could
prevent the Company from carrying on its business after the Closing Date in the
same manner as it is presently being carried on.

3.28 Absence of Certain Business Practices. Except as set forth in Section 3.28
of the Company Disclosure Schedule, neither the Company nor any of its directors
or officers, employees or agents nor, to the knowledge of the Company or the
Stockholder, any other person or entity acting on behalf of the Company, acting
alone or together, have (i) received, directly or indirectly, any rebates,
payments, commissions, promotional allowances or any other economic benefits,
regardless of their nature or type, from any customer, governmental employee or
other person or entity with whom the Company has done business directly or
indirectly, or (ii) directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, governmental employee or other person or entity
who is or may be in a position to help or hinder the Company (or assist the
Company in connection with any actual or proposed transaction) which, in the
case of either clause (i) or clause (ii) above, could reasonably be expected to
subject the Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding. Neither the Company, nor, to the
knowledge of the Company, any director, or officer thereof, has used any funds
for unlawful contributions, gifts, entertainment or other expenses relating to
political activity or otherwise, or has made any direct or indirect unlawful
payment to governmental officials or employees from the entities’ funds or been
reimbursed from the entities’ funds for any such payment, or is aware that any
other person associated with or acting on behalf of the Company have engaged in
any such activities.

3.29 Environmental and Safety Laws. The Company is not in violation in any
material respect of any applicable statute, law or regulation relating to the
environment or occupational health and safety and no material expenditures are
or will be required in order to comply with any such existing statute, law or
regulation. No Hazardous Materials (as defined below) are used or have been
used, stored, or disposed of by the Company or, to the Company’s knowledge, by
any other person or entity on any property owned, leased or used by the Company.
For the purposes of the preceding sentence, “Hazardous Materials” shall mean
(a) materials which are listed or otherwise defined as “hazardous” or “toxic”
under any applicable local, state, federal and/or foreign laws and regulations
that govern the existence and/or remedy of contamination on property, the
protection of the environment from contamination, the control of hazardous
wastes, or other activities involving hazardous substances, including building
materials, or (b) any petroleum products or nuclear materials.

3.30 EMPLOYEE BENEFIT PLANS; ERISA.

(a)     Neither the Stockholder nor the Company maintains, participates in, has
any obligation under or contributes to (or has an obligation to contribute to)
on behalf of any current or former employee of the Company (or their
beneficiaries or dependents) (1) any incentive, bonus, commission, deferred
compensation, retention, change in control, severance or termination pay plan,
agreement or arrangement, whether formal or informal and whether legally binding
or not; (2) any pension, profit-sharing, stock purchase, stock option, group
life insurance, hospitalization insurance, disability, retirement or any other
employee benefit plan, agreement or arrangement, whether formal or informal and
whether legally binding or not; (3) any fringe or welfare benefit plan,
agreement or arrangement, whether formal or informal and whether legally binding
or not; or (4) any other “employee benefit plan” as such term is defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), except as disclosed in Section 3.30(a) of the Company Disclosure
Schedule (those arrangements disclosed in said schedule are herein collectively
referred to as the “Benefit Plans”). Each such Benefit Plan that is sponsored by
the Company is designated on Section 3.30(a) of the Company Disclosure Schedule
under the heading “Company-sponsored Benefit Plans.” Each of the Benefit Plans
is and has been maintained, operated and administered in all material respects
in compliance with its terms the provisions of federal laws, ERISA, the
applicable provisions of the Code, the regulations promulgated thereunder, the
rulings and announcements issued thereunder and all other applicable laws and
regulations. The Company has heretofore delivered or made available to Buyer
true, complete and correct copies of (1) the most recent actuarial reports, if
any, prepared with respect to each of the Benefit Plans; (2) the most recent
Form 5500 (including all schedules and attachments), if any, filed with respect
to each of the Benefit Plans; (3) the most recent determination letter from the
IRS (if applicable) for such each Benefit Plan; (4) each Benefit Plan (and, if
applicable, related trust agreements, funding arrangements and summary plan
descriptions) and any amendments thereto and (5) all material communications
with any Governmental entity or any current or former employees of the Company
relating to any Benefit Plan. Section 3.30(a) of the Company Disclosure Schedule
lists each participant in the Company’s Management Severance Plan (the
“Severance Plan”) and his or her applicable salary multiple, bonus payment
amount, and protection period following a change in control and each recipient
(an “LTIP Recipient” and collectively, the “LTIP Recipients”), whether or not
currently employed by the Company, of an outstanding award under the LTIP and
the number of appreciation rights units, his or her base amount per unit and the
number of full appreciation units held by each such LTIP Recipient. All amounts
paid or payable to each LTIP Recipient under the LTIP pursuant to Sections 2.2,
2.3 and 2.6 represent the entire amount payable under the LTIP. Except as listed
on Section 3.30(a) of the Company Disclosure Schedule, the Company has no other
liabilities or obligations under the Severance Plan.

(b)     The Company has not engaged in a transaction in connection with which it
could be subject either to a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code.

(c)     Neither the Company nor any entity that, together with the Company,
would be treated as a single employer under Section 414 of the Code (an “ERISA
Affiliate”) has ever maintained or been obligated to contribute to a plan
covered by Title IV of ERISA or Section 412 of the Code, and neither the Company
nor any ERISA Affiliate has incurred or could be reasonably expected to incur
any direct or indirect liability under Title IV of ERISA, contingent or
otherwise.

(d)     Except as set forth in Section 3.30(d) of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
conjunction with any other event, such as termination of employment or other
service) (i) result in or cause any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution or
increase in benefits with respect to any Benefit Plan or any current or former
director, officer, employee or other service provider of the Company, (ii) give
rise to any obligation to fund any payment or benefit, (iii) give rise to any
limitation on the ability of the Company to amend or terminate any Benefit Plan,
or (iv) result in any payment or benefit that will be characterized as an
“excess parachute payment,” within the meaning of Section 280G of the Code. All
contributions (including all premiums, employer contributions and employee
salary reduction contributions) required to made to each Benefit Plan have been
timely made and all contributions for all periods through the Closing will be
made to such Benefit Plan prior to the Closing Date. Except as set forth in
Section 3.30(d) of the Company Disclosure Schedule, the Company does not
maintain or contribute to, and is not obligated under any, plan, contract,
policy or arrangement providing health or death benefits (whether or not
insured) to current or former employees or other personnel beyond the
termination of their employment or other services, except for continuation
coverage provided pursuant to COBRA at no expense to the Company. Except as set
forth in Section 3.30(d) of the Company Disclosure Schedule, each Benefit Plan
designated as a “Company-sponsored Benefit Plan” on Section 3.30(a) of the
Company Disclosure Schedule may be unilaterally amended or terminated by the
Company (with respect to Company employees), without material damage or penalty,
subject to rights of existing participants under the plans (with respect to
Company employees).

(e)     The Company has received a favorable determination letter from the IRS
as to the qualification under Section 401(a) of the Code of each Benefit Plan
which is intended to meet the requirements of such Section 401(a) of the Code,
including all amendments thereto for which the applicable remedial amendment
period has lapsed, and the Company does not have any knowledge of amendments or
other developments since the date of any such determination letter which could
cause the loss of such qualified status.

(f)     None of the Benefit Plans’ assets include any Company Shares or other
securities issued by the Company.

(g)     The Company has not maintained or contributed to or been required to
contribute to a “multiemployer plan,” as such term is defined in Section 3(37)
of ERISA.

(h)     There are no pending or, to the Company’s knowledge, threatened or
anticipated claims by, against or on behalf of the Benefit Plans or related
trusts other than uncontested, routine claims by participants and beneficiaries
for benefits due and owing under such Benefit Plans.

(i)     Section 3.30(i) of the Company Disclosure Schedule lists each Benefit
Plan, and any other agreement method or arrangement under which the Company has
any liability, that is a “nonqualified deferred compensation plan” within the
meaning of Section 409A of the Code and the applicable Treasury guidance
thereunder (the “Company 409A Plans”). None of the Company 409A Plans have been
materially modified within the meaning of Notice 2005-1 and each Company 409A
Plan has been operated in good faith compliance with the provisions of Section
409A of the Code and the Notice 2005-1 during calendar year 2005.

3.31 Company Books and Records. The books and records of the Company relating to
organizational matters contain records of all material actions undertaken by
their respective directors and officers, or, if no separate record exists, such
actions were within the authority of the directors and officers taking such
action.

3.32 INSURANCE; INSURANCE POLICIES.

(a)     All of the assets, properties and operations of the Company of an
insurable nature and of a character usually insured by companies of similar size
and in similar businesses are insured by the Company in such amounts and against
such losses, casualties or risks as is (i) required by any Law applicable to the
Company, or (ii) required by any contract or agreement entered into by the
Company. Section 3.32 of the Company Disclosure Schedule contains a complete and
accurate list of all insurance policies held or owned by the Company and now in
force and such Schedule indicates the name of the insurer, the type of policy,
the risks covered thereby, the amount of the premiums, the term of each policy,
the policy number, the amounts of coverage, the deductible in each case and all
outstanding claims thereunder, which policies include all insurance (i) required
by any Law applicable to the Company, or (ii) required by any contract or
agreement entered into by the Company. Correct and complete copies of
certificates of insurance for all such policies have been delivered to Buyer by
the Company on or before the date of this Agreement. All such policies are in
full force and effect and enforceable in accordance with their terms. The
Company is not now in default regarding the provisions of any such policy,
including, without limitation, failure to make timely payment of all premiums
due thereon, and has failed to file any notice or present any claim thereunder
in due and timely fashion. The Company has not been refused, or denied renewal
of, any insurance coverage by insurance companies offering such insurance during
the past five (5) years. Section 3.32 of the Company Disclosure Schedule
contains copies of all insurance audit reports, loss prevention reports, all
claims made and loss history reports in respect of any insurance maintained by
the Company or any predecessor during the past five (5) years.

(b)     Since its incorporation, the Company has continuously maintained workers
compensation and employer liability, commercial property, errors and omissions,
general liability, umbrella liability and general professional liability,
insurance coverage on a claims made basis with tail coverage upon each change in
carrier.

3.33 No Prebillings or Prepayments. Except as set forth in Section 3.33 of the
Company Disclosure Schedule, the Company has not billed or received any payments
(in the form of retainers or otherwise) from any of its customers or potential
customers for services to be rendered or for expenses to be incurred subsequent
to the date hereof.

3.34 Power of Attorney. Except as set forth in Schedule 3.34, the Company has
not given to any person or entity for any purpose any power of attorney which is
currently in effect.

3.35 Bank Accounts. Section 3.35 of the Company Disclosure Schedule contains a
true, correct and complete list of the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which the Company maintains a bank account, investment account, lock box, safe
deposit box or other similar account, the number of each such account or box,
the names of all persons authorized to draw thereon or to have access thereto,
the amount on deposit in each such account and a description of the items in
each such box as of a date not more than seven days prior to the date hereof.

3.36 Full Company Disclosure. Neither the Agreement, the exhibits thereto, nor
any other document delivered by the Company to Buyer or its attorneys or agents
in connection herewith or therewith, contain any untrue statement of a material
fact nor omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading.

        EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE
3, THE PARTIES HEREBY AGREE THAT STOCKHOLDER AND THE COMPANY HAVE NOT MADE, AND
DO NOT MAKE ANY OTHER EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES, EITHER
WRITTEN OR ORAL, OF ANY NATURE WHATSOEVER, UNLESS EXPRESS OTHERWISE PROVIDED IN
THIS AGREEMENT.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER.

        In order to induce NMHC and Buyer to consummate the transaction
contemplated by this Agreement, the Stockholder hereby represents and warrants
to NMHC and Buyer that the statements contained in this Section 4 are correct
and complete, as follows:

4.1 Ownership. The Stockholder holds of record and owns beneficially the Company
Shares, free and clear of any Liens. There are no outstanding options, warrants,
convertible securities, calls, rights, commitments, court orders, proceedings,
preemptive rights or agreements or instruments or understandings of any
character to which the Stockholder is a party or by which it, is bound,
obligating it, to deliver or sell, or cause to be issued, delivered or sold,
contingently or otherwise, any Company Shares or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
preemptive right or agreement. The Stockholder is not a party to any voting
trust, proxy, or other agreement, commitment or understanding, or any court
order proceeding, with respect to the voting, dividend rights or disposition of
any Company Shares, except as otherwise disclosed on the Company Disclosure
Schedule. At the Closing, good and marketable title to the Company Shares being
sold by the Stockholder will pass to Buyer free and clear of all Liens.

4.2 Authorization. The Stockholder has all requisite power and authority to
enter into this Agreement and each of the other agreements contemplated hereby,
and to carry out its obligations under this Agreement and each of the other
agreements contemplated hereby and to consummate the transactions contemplated
hereby and thereby. Each of this Agreement and the other agreements contemplated
hereby have been duly executed and delivered by the Stockholder and (assuming
due authorization, execution and delivery of this Agreement by the other
parties) constitutes the legal, valid and binding obligation of the Stockholder,
enforceable against the Stockholder in accordance with their respective terms
(except as the enforceability hereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors’ rights generally or by
general principles of equity, regardless of whether such enforceability is
considered in equity or at law).

4.3 No Violation. The execution and delivery of this Agreement and each of the
other agreements contemplated hereby by the Stockholder does not, and the
consummation by the Stockholder of the transactions contemplated hereby and
thereby, and compliance with the terms hereof and thereof will not, conflict
with, or result in a breach or violation of or default under, or accelerate the
performance required by, the terms of any law, statute, regulation, order,
judgment or decree or any agreement, contract, indenture or other instrument to
which the Stockholder is a party or to which any of its properties are subject,
or constitute a default or loss of any right thereunder or an event which, with
the lapse of time or notice or both, might result in a default or loss of any
right thereunder or the creation of any Lien upon the Company Shares owned by,
or any consideration to be received by, the Stockholder pursuant to the
Agreement.

4.4 Approvals. The execution and delivery of this Agreement and each of the
other agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby by the Stockholder will not require the consent,
approval, order or authorization of any governmental entity or regulatory
authority or any other person under any statute, law, rule, regulation, permit,
license, agreement, indenture or other instrument to which the Stockholder is a
party or to which any of its properties are subject, and no declaration, filing
or registration with any governmental entity or regulatory authority is required
by the Stockholder in connection with the execution and delivery of this
Agreement and each of the other agreements contemplated hereby, the consummation
by the Stockholder of the transactions contemplated hereby and thereby or the
performance by the Stockholder of its obligations hereunder and thereunder.

4.5 Litigation. There is no claim, suit, action, proceeding or investigation
(whether at law or equity, before or by any federal, state, foreign, local or
municipal commission, court, tribunal, board, agency or instrumentality, or
before any arbitrator) pending or threatened against or affecting the
Stockholder, the outcome of which would in any manner impair the Stockholder’s
ability to perform its obligations hereunder or against the transactions
contemplated by this Agreement.

4.6 Power of Attorney. The Stockholder has not given to any person or entity for
any purpose any power of attorney which is currently in effect, other than the
appointment of the Representative pursuant to Section 2.4 hereof.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF NMHC AND BUYER.

        In order to induce the Company and the Stockholder to consummate the
transaction contemplated by this Agreement, NMHC and Buyer hereby represent and
warrant to the Company and the Stockholder as follows:

5.1 Organization and Good Standing of NMHC. NMHC is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
Delaware. NMHC has all requisite power and authority to own and operate its
properties and assets, to execute and deliver this Agreement and to carry on its
business as presently conducted.

5.2 Organization and Good Standing of Buyer. Buyer is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
Delaware. Buyer has all requisite power and authority to own and operate its
properties and assets, to execute and deliver this Agreement and to carry on its
business as presently conducted.

5.3 Authorization; Binding Obligations. All action on the part of NMHC, Buyer,
its directors and officers, necessary for the authorization of this Agreement,
the performance of all obligations of such parties hereunder and thereunder at
the Closing has been taken or will be taken prior to the Closing. This
Agreement, when executed and delivered, will be a valid and binding obligation
of NMHC and Buyer, enforceable in accordance with its terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights,
and (b) general principles of equity that restrict the availability of equitable
remedies.

5.4 No Violation. The execution, delivery, and performance of and compliance
with the Agreement, and the consummation of the transactions contemplated by
this Agreement will not, with or without the passage of time or giving of
notice, or both, result in any such material violation, or be in conflict with
or constitute a default under any such term or provision, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of NMHC or Buyer or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to NMHC or Buyer, their businesses or operations or any of their
assets or properties.

5.5 Approvals. The execution and delivery of this Agreement by NMHC and Buyer do
not, and the performance of this Agreement and the additional agreements by NMHC
and Buyer will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority or other
person under any Law or contract, other than such filings or registrations with,
or authorizations, consents or approvals of Governmental Authorities necessary
for Buyer to conduct the business of the Company after Closing.

ARTICLE 6. Pre-Closing Covenants of the Parties. The Company, NMHC, Buyer and
the Stockholder agree as follows with respect to the period between the
execution and delivery of this Agreement and the closing:

6.1 General. Each of the Company, NMHC, Buyer and the Stockholder shall use
their respective reasonable commercial efforts to take all action and to do all
things necessary, proper or advisable in order to consummate and make effective
the transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the conditions to closing set forth in Sections 6.1 and 6.2 of this
Agreement).

6.2 Notices and Consents. The Company and Buyer shall give any notices to, make
any filings with, and use their respective best efforts to obtain any
authorizations, consents and approvals of governments, governmental agencies and
third parties that which are required to be given, made or obtained in
connection with consummation of the transaction. Buyer shall keep the Company
fully apprised of its actions with respect to all filings and submissions and
shall promptly provide the Company, with copies of such filings and submissions,
as well as any responses or notices with respect thereto. The Company and Buyer
shall bear its own costs and expenses in preparing such filings and submissions;
provided, that, Buyer shall pay all filing fees in connection therewith.

6.3 Affirmative Covenants of the Company. From the date hereof until the earlier
of the Closing Date or the termination of this Agreement, unless the prior
written consent of Buyer shall have been obtained, and except as otherwise
expressly contemplated herein, the Company shall:

(a)     operate the business of the Company only in the usual, regular, and
ordinary course of business, consistent with past practices;

(b)     use reasonable commercial efforts to preserve intact its business
organization, licenses, permits, government programs, private programs and
customers;

(c)     use reasonable commercial efforts to retain the services of its
employees, agents and consultants on terms and conditions not less favorable
than those existing prior to the date hereof and to ensure that there are no
material or adverse changes to employee relations;

(d)     keep and maintain the Company’s assets in their present condition,
repair and working order, except for normal depreciation and wear and tear, and
use reasonable commercial efforts to maintain its insurance, rights and
licenses;

(e)     pay all accounts payable of the Company in accordance with past practice
and use reasonable commercial efforts to collect all accounts receivable in
accordance with past practice, but not less than in accordance with prudent
business practices;

(f)     confer on a regular and frequent basis with one or more designated
representatives of Buyer to report material operational matters and to report
the general status of ongoing business operations of the Company;

(g)     make available to Buyer true and correct copies of all internal
management and control reports (including aging of accounts receivable, listings
of accounts payable, and inventory control reports) and financial statements
related to the Company;

(h)     cause all tax returns that are due and have not been filed prior to the
date hereof or which become due prior to the Closing Date, to be prepared and
filed on or before the date such tax return is required to be filed (taking into
account any extensions of the filing deadlines granted); provided, however, that
any such tax return shall not be filed without a reasonable opportunity for
prior review and comment by Buyer;

(i)     as soon as reasonably practicable after they become available, but in no
event more than thirty (30) days following the end of each calendar month,
deliver to Buyer true and complete copies of monthly financial statements of the
Company for each calendar month ending subsequent to the date hereof in the
format historically utilized by the Company;

(j)     perform in all respects all obligations under agreements relating to or
affecting its assets, properties or rights, except for the failure of which
performance could not reasonably be expected to have a Material Adverse Effect
on the Company taken as a whole, financial or otherwise;

(k)     use reasonable efforts to keep in full force and effect present
insurance policies or other comparable insurance coverage; and

(l)     notify Buyer of (i) any event or circumstance which is reasonably likely
to have a material adverse effect on the Company or could reasonably be expected
to cause or constitute a breach of any of the Company’s representations,
warranties or covenants contained herein; or (ii) any unexpected change in the
normal course of business or in the operation of the assets of the Company, and
of any governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), adjudicatory proceedings, budget
meetings or submissions involving any material property. The Company shall keep
Buyer fully informed of such events and permit Buyer’s representatives prompt
access to all materials prepared in connection therewith.

6.4 Negative Covenants of the Company. From the date hereof until the earlier of
the Closing Date or the termination of this Agreement, the Company will not do
any of the following without the prior written consent of Buyer to the extent
any of the following relates to or in any way may affect the Company, its
assets, properties, operations, financial condition or prospects, or the
transactions contemplated hereby:

(a)     take any action that (i) would constitute or result in a breach of any
representation, warranty or covenant of the Company hereunder, or (ii) could
reasonably be expected to (x) adversely affect the ability of any party to
obtain any consents required for the transactions contemplated thereby, or (y)
adversely affect the ability of any party hereto to perform its covenants and
agreements under this Agreement or any of the other agreements, documents or
instruments to be executed and delivered pursuant hereto or in connection
herewith (collectively, the “Acquisition Documents”);

(b)     amend any of its organizational or governing documents, except as
provided herein or for the purpose of accomplishing the transactions
contemplated by this Agreement;

(c)     impose, or suffer the imposition, on any material asset of the Company
of any Lien or permit any such Lien to exist;

(d)     other than pursuant to the Acquisition Documents, sell, pledge or
encumber, or enter into any contract to sell, pledge or encumber, any interest
in the assets or properties of the Company, having an aggregate market value in
excess of $100,000 individually or $250,000 in the aggregate;

(e)     purchase or acquire any assets or properties of the Company, whether
real or personal, tangible or intangible, or sell or dispose of any assets or
properties, whether real or personal, tangible or intangible, except in the
ordinary course of business and consistent with past practices;

(f)     except for the employment agreements contemplated herein, grant any
increase in compensation or benefits to the employees or officers of the
Company; pay any severance or termination pay or any bonus other than pursuant
to written policies or written contracts in effect as of the date hereof and
disclosed on the Schedules hereto; enter into or amend any severance agreements
with officers of the Company; or grant any increase in fees or other increases
in compensation or other benefits;

(g)     except for the employment agreements contemplated herein, enter into or
amend any employment contract between the Company and any person or entity that
the Company does not have the unconditional right to terminate without liability
(other than liability for services already rendered), at any time on or after
the Closing Date; (h) adopt any new employee benefit plan or make any material
change in or to any existing employee benefit plans other than any such change
that is required by law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan;

(i)     make any significant change in any tax or accounting methods or systems
of internal accounting controls, except as may be appropriate to conform to
changes in tax laws or regulatory accounting requirements or GAAP;

(j)     commence any litigation other than in accordance with past practice,
settle any litigation involving any liability of the Company for material money
damages or restrictions upon the operations of their business;

(k)     except in the ordinary course of business and which is not material,
modify, amend or terminate any material contract or waive, release, compromise
or assign any material rights or claims;

(l)     except in the ordinary course of business and, even if in the ordinary
course of business, then not in an amount to exceed $5,000 in the aggregate,
make or commit to make any capital expenditure, or enter into any lease of
capital equipment as lessee or lessor, related to the Company;

(m)     take any action, or omit to take any action, which could reasonably be
expected to cause any of the representations and warranties of the Company
contained in this Agreement or in any of the other Acquisition Agreements to be
untrue or incorrect in any material respect;

(n)     make any loan to any person or increase the aggregate amount of any loan
currently outstanding to any person;

(o)     declare or pay any dividend on or make other distributions (whether in
cash, stock, property or any combination thereof), directly or indirectly in
respect of the Common Stock;

(p)     solicit, accept, entertain, or negotiate any agreement, offer or
indication of interest from any third-party or parties relating to the sale of
any Company Shares or assets of the Company, other than sales of less than a
material amount of assets in the ordinary course of business for fair value,
consistent with past practice; or

(q)     take any action in contemplation or furtherance of any of the foregoing.

6.5 Access. The Company shall permit representatives of Buyer to have reasonable
access, and in a manner so as not to interfere unreasonably with the normal
business operations of the Company, to the premises, properties, personnel,
books, records, contracts and documents of or pertaining to the Company. Within
15 calendar days after the end of each calendar month, the Representative shall
provide to Buyer a copy of the Company’s unaudited interim financial statements
for such month.

6.6 Confidentiality. Buyer acknowledges and agrees that Confidential Information
of the Company has been and will be made available to it in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. Buyer agrees that prior to the Closing,
neither it nor its affiliates will use, and that it will cause its advisors to
whom Confidential Information has been or is disclosed not to use Confidential
Information of the Company in any manner or for any purpose other than for the
purpose of effectuating the transactions contemplated by this Agreement. Buyer
further agrees that, prior to the Closing, it will not disclose any Confidential
Information to any person; provided, that Confidential Information may be
disclosed by Buyer (1) to any of its directors, officers, employees, agents or
advisors (including, without limitation, attorneys, accountants, consultants,
lenders and financial advisors) (collectively, the “Buyer Representatives”) who
need to know such information in connection with the actual performance of their
duties for Buyer; provided that Buyer shall inform each such Buyer
Representative of Buyer’s obligations pursuant to this Agreement and Buyer shall
be liable for any breach by any of Buyer’s Representatives of the provisions of
this Agreement; (2) to the extent required by applicable law, rule or
regulation; provided that Buyer shall (A) provide the Company, with prompt
written notice prior to any such disclosure, (B) will cooperate with the Company
in obtaining a protective order for such Confidential Information and (C) will
disclose no more information than is required pursuant to such law, rule or
regulation; or (3) if the prior written consent of the Company shall have been
obtained.

        The term “Confidential Information” as used in this Agreement shall mean
all information and documents which any director, officer of employee of the
Company furnishes or otherwise discloses to Buyer or any of Buyer’s
Representatives, together with all analyses, compilations, studies or other
documents, records or data prepared by Buyer or any of Buyer’s Representatives
that contain or otherwise reflect or are generated from such information and
documents, provided that all such material is clearly identified in writing as
Confidential Information at the time it is furnished by the Company. The term
“Confidential Information: does not include any information that (1) at the time
of disclosure or thereafter is generally available to and known by the public
(other than as a result of a disclosure by Buyer or any of Buyer’s
Representatives in violation of this Agreement); (2) was available to Buyer on a
nonconfidential basis from a source other than the Company who, insofar as is
known to Buyer after reasonable inquiry, is not prohibited from transmitting the
information to Buyer by a contractual, legal or fiduciary obligation to the
Company; or (3) has been independently acquired or developed by Buyer without
violation of any of its obligations pursuant to this Agreement.

6.7 No Other Offers. The Company shall not, nor shall the Company authorize or
permit any officer, director, employee or the Stockholder of, any investment
banker, attorney, accountant or other representative retained by, the Company or
the Stockholder to, (i) entertain, encourage, solicit or initiate any inquiries
or the making of any proposal that constitute, or may reasonably be expected to
lead to any takeover proposal or (ii) engage or participate in any discussions
or negotiations, or provide third parties with any information, relating to any
such inquiry or proposal or (iii) agree to, enter into, accept, approve or
recommend any takeover proposal. The Company shall promptly advise Buyer of any
such inquiries or proposals and shall provide Buyer with the terms of such
proposal. As used in this Section 6.7, “takeover proposal” shall mean any
proposal outside of the ordinary course of the Company’s business, for (i) a
merger or other business combination involving, directly or indirectly, the
Company or (ii) the acquisition of any equity interest in the Company, or a
substantial portion of the assets of the Company other than the transactions
contemplated hereby or (iii) any similar transaction which is intended by the
Stockholder to prohibit, restrict or delay consummation of the transactions
described herein or to materially reduce the remaining value of the Company.

6.8 EMPLOYEE MATTERS.

(a)     The Company does not and will not assume the sponsorship of, the
responsibility for contributions to, or any liability in connection with, any
Benefit Plan that is not designated as a “Company-sponsored Benefit Plan” on
Section 3.30(a) of the Company Disclosure Schedule. The Company shall make
available any continuation coverage with respect to any current or former
employee of the Company (or covered dependent of such employee) required by
Section 4980B of the Code due to qualifying events that occur before or on the
Closing Date under, and in accordance with the terms of, a group health plan
maintained by Buyer or the Company, provided that Stockholder shall be liable
for any contracted employer-paid premiums under the applicable group health plan
of Buyer or the Company (to the extent not reserved for on the Balance Sheet or
the Closing Date Balance Sheet) for the duration of such coverage. Stockholder
shall also be liable for any penalties, excise taxes or interest resulting from
the failure to provide continuation coverage with respect to any current or
former employee of the Company (or covered dependent thereof) required by
Section 4980B of the Code due to qualifying events that occur before or on the
Closing Date or any loss, liability or claim resulting from any other failure by
the Company to comply with the requirements of COBRA on or before the Closing
Date. Stockholder covenants and agrees to take all action necessary to fully
vest all employees of the Company under the Stockholder’s 401(k) Retirement
Plan.

(b)     No provision of this Agreement shall create any third party beneficiary
or other rights in any employee or former employee (including any beneficiary or
dependent thereof) of the Company in respect of employment with Buyer or the
Company in respect of any benefits that may be provided, directly or indirectly,
under any employee benefit plan, agreement, policy or arrangement that may be
established by Buyer. No provision of this Agreement shall constitute a
limitation on rights to amend, modify or terminate after the Closing Date any
such plans, agreements, policies or arrangements of Buyer.

6.9 NON-COMPETITION; NON-SOLICITATION.

  (a) The Stockholder acknowledges and agree that all Confidential Information
regarding the Company, the Business (as defined below) or the PBM Services (as
defined below) that the Stockholder may have heretofore acquired or may
hereafter acquire, including all technical, marketing, financial results and
other forecasts, plans, results, designs, ideas, developments, price lists,
existing and potential Customer (as defined below) and vendor sources and lists
(including without limitation the names and contact information for key
personnel within a Customer or vendor organization), existing and potential
supplier sources and lists, names, titles, duties and compensation information
with respect to officers, directors and employees, as well as sales
representatives and agents, promotional materials and other data and information
(“Business Information”), whether in tangible or intangible form constitutes the
exclusive property of the Company. The Stockholder further acknowledges that (i)
the Company derives actual and potential economic value from the Business
Information not being generally known to the public or to other persons who can
obtain economic value from its disclosure or use, and (ii) the Company has
expended and is currently expending substantial effort to acquire Business
Information, and expends substantial effort, and expects its executives to
expend substantial effort to maintain the secrecy of the Business Information.
The Stockholder agrees and covenants that from and after the date hereof, the
Stockholder will safeguard the Business Information from exposure to, or
appropriation by, unauthorized persons, and that the Stockholder will not,
directly or indirectly, without the prior written consent of the Buyer, at any
time divulge or make any use of the Business Information except in connection
with the consummation of the transactions contemplated by this Agreement and
except for required disclosure pursuant to applicable Law or Governmental Order;
provided, however, that Business Information shall not include information that
(i) is known generally by the public, (ii) shall otherwise have come into the
public domain without a breach by the Stockholder of any contractual or legal
duty owed to the Company or the Buyer, or (iii) is subsequently rightly received
by the Stockholder from a third party not in breach of any confidentiality or
other legal obligation owed to the Company, the Buyer or any other person. At
any time from and after the date hereof, upon request of the Buyer, the
Stockholder covenants to deliver to the Buyer all information and materials,
including all memoranda, notes, records, reports, manuals, drawings, designs,
computer files in any media and other documents (and all copies thereof),
relating to the Business Information, and the Company’s or Buyer’s Customers,
that the Stockholder may then possess or have under its control.

  (b) The Stockholder agrees that for a period of five years from the Closing
Date (the “Restricted Period”), the Stockholder, shall not, directly or
indirectly:

  1. engage or invest in, own, manage, operate, finance, control or participate
in the ownership, management, operation, financing, or control of, be employed
by, associated with, or in any manner connected with, lend its credit to, or
render services or advice to, any business, firm, corporation, partnership,
association, joint venture or other entity that engages anywhere within the
United State in any business that is competitive with the Business, the PBM
Services or any portion of either; provided, however, that the Stockholder may
(i) own less than 2% of the outstanding shares of any class of securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities Exchange
Act of 1934, as amended, and (ii) engage in an Unrelated Business (as defined
below).

  2. either for itself or any other person, solicit or hire any officer or
employee of the Company or the Buyer or any of their respective affiliates at
any time during the Restricted Period, without the prior written consent of the
Buyer, such consent not to be unreasonably withheld or delayed, or knowingly
solicit or induce any of such persons to leave the employ of the Company or the
Buyer or any of their respective affiliates; or

  3. except for the PPN Services (as defined below), seek to sell any products
or services to any Customer (as defined below), refer any sales of products or
services from any Customer to any enterprise or business, or be paid or receive
commissions or other consideration based upon or in consideration of sales of
any products or services to any Customer by any enterprise or business.

  (c) If the Stockholder engages in an Unrelated Business at any time within the
Restricted Period and, during such period, any customer or client of such
Unrelated Business shall require any of the PBM Services, then the Stockholder
shall refer such customer or client exclusively to the Buyer. If such customer
or client elects to have any person other than the Buyer provided such PBM
Services, or any portion thereof, then the Stockholder agrees that it shall not
receive or accept, directly or indirectly, any compensation, commissions,
finder’s fees or other consideration of any kind in connection with or as a
result of the referral of such customer or client to such other person or the
provision of such PBM Services by such other person to such customer or client.

  (d) The Stockholder acknowledges and agrees that the agreements and covenants
contained in this Section 6.9 are essential to protect the value of the Company
Shares being acquired by NMHC and the Buyer hereunder, that NMHC and the Buyer
would not consummate the transactions contemplated hereby but for such
agreements and covenants, and that legally sufficient consideration will be paid
to the Stockholder for the non-competition provisions of this Section 6.9, and
the Stockholder expressly waives any right to assert inadequacy of consideration
as a defense to enforcement of the non-competition provisions of this Section
6.9 should such enforcement ever become necessary. The Stockholder acknowledges
that a remedy at Law for any breach or attempted breach of this Section 6.9 will
be inadequate and further agrees that any breach of this Section 6.9 will result
in irreparable harm to the assets and the Business; and the Stockholder
covenants and agrees not to oppose any demand for specific performance and
injunctive and other equitable relief in case of any such breach or attempted
breach. Whenever possible, each provision of this Section 6.9 shall be
interpreted in such manner as to be effective and valid under applicable Law but
if any provision of this Section 6.9 shall be prohibited by or invalid under
applicable Law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Section 6.9. If any provision of this
Section 6.9 shall, for any reason, be judged by any court of competent
jurisdiction to be invalid or unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this Section 6.9 but shall be confined in
its operation to the provision of this Section 6.9 directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this Section 6.9 should ever be deemed to exceed the time or
geographic limitations permitted by applicable Law, then such provision shall be
reformed to the maximum time or geographic limitations permitted by applicable
Law. If the Stockholder violates any provisions of this Section 6.9, the
Stockholder agrees that the effective period of each such covenant so violated
shall be extended by a period of time equal to the period of such violation by
the Stockholder. It is the intent of this Section 6.9 that the running of the
effective period of each restrictive covenant shall be tolled during any period
of violation of such covenant so that the Buyer shall get the full and
reasonable protection for which it contracted and so that the Stockholder may
not profit by the Stockholder’s breach of any covenant.

        The term “Business” as used in this Agreement shall mean the pharmacy
benefit management business of (i) contracting with sponsors of pharmacy benefit
plans, pharmacies or pharmacists to provide pharmaceutical products and/or
services to sponsors of pharmacy benefit plans or individuals covered by
pharmacy benefit plans; (ii) managing a network of pharmacies or pharmacists;
(iii) processing the claims for such services; (iv) providing appropriate
consulting services to managers of pharmacy benefit plans and their clients; (v)
contracting directly with pharmaceutical manufacturers or third party rebate
aggregators for the provision of rebates; and (vi) all activities reasonably
related to the conduct of the foregoing activities, in each case as conducted by
the Company both prior and subsequent to the transactions contemplated by this
Agreement but shall not include the PPN Services offered by the Stockholder.

        For purposes of this Section 6.9, the term “Customer” means any person,
firm, corporation, partnership, association or other entity to which the Company
or Buyer or any of their respective affiliates provided goods or services during
the Restricted Period or within 12 months prior to the commencement of the
Restricted Period but does not include pharmacies in California.

        The term “PBM Services” as used in this Agreement shall mean services
associated with the prescription benefit management business, including but not
limited to: (i) claims administration; (ii) establishment and administration of
a pharmacy network and benefits; (iii) mail order pharmacy services (by phone,
fax or internet); (iv) drug utilization review; (v) disease state management and
delivery of specialty pharmacy benefits; (vi) formulary creation and
administration, (vii) rebate negotiation and administration; and (viii)
therapeutic substitution programs, but shall not include the PPN Services
offered by the Stockholder.

        The term “PPN Services” as used in this Agreement shall mean the Premier
Pharmacists Networks services offered by the Stockholder described in Exhibit E
hereto.

        The term “Unrelated Business” as used in this Agreement shall mean the
design, development, marketing and sale of the software and/or the conduct of a
prescription benefit management service bureau business, in either case, to the
extent marketed, offered or sold, directly or indirectly, only to persons who
are not Customers or vendors of the Company on the Closing Date and who were not
such at any time during the twelve months preceding the Closing Date.

6.10 Acceleration of Vesting of Awards Under the LTIP. On or prior to Closing,
the Company shall accelerate vesting of each outstanding award under the LTIP so
that each such award shall be 100% vested from and after the Closing and amend
the LTIP to eliminate any obligation of participants to remain in continuous
service with the Company following the Closing in order to receive payment on
his or her award, and the Stockholder shall satisfy any and all liabilities that
may arise thereunder (including, without limitation, all payments required to be
made under the LTIP to LTIP Recipients and other liabilities and obligations
arising thereunder as a result of the transactions contemplated by this
Agreement, other than any employment-related taxes required to be paid by an
employer (not including amounts required to be withheld)).

ARTICLE 7. CONDITIONS TO CLOSING.

7.1 Conditions to NMHC’s and Buyer’s Obligations at the Closing. NMHC’s and
Buyer’s obligations to consummate the transaction contemplated by this Agreement
are subject to the satisfaction, on or before the Closing Date, of the following
conditions:

(a) Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company and the Stockholder in
Article 3 and 4 hereof shall (i) have been true and correct in all material
respects as of the date hereof, and (ii) be true and correct in all material
respects as of the Closing Date with the same force and effect as if they had
been made as of the Closing Date, and the Company and the Stockholder shall have
performed all obligations and conditions herein required to be performed or
observed by them on or prior to the Closing.

(b) Performance of Obligations. The Company and the Stockholder shall have
performed and complied with all of the respective agreements and conditions
herein required to be performed or complied with by them on or before the
Closing.

(c) Consents, Permits, and Waivers. The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreement, including the consents listed on
Section 7.1(c) of the Company Disclosure Memorandum.

(d) Delivery of Stock Certificates. The Stockholder shall have delivered to
Buyer the certificates representing the Company Shares, duly endorsed (or
accompanied by duly executed assignments apart from the certificates). NMHC and
Buyer shall have no obligation to close on the purchase of any Company Shares
unless all of the Company Shares have been tendered for sale at the Closing.

(e) Payment of Company Indebtedness. Any outstanding interest-bearing
indebtedness of the Company shall have been paid in full and all credit
facilities pursuant to which the Company could incur interest-bearing
indebtedness shall have been terminated (collectively, “Indebtedness”).

(f) Secretary’s Certificate. Buyer shall have received from the Company’s
Secretary a certificate having attached thereto (1)  the Company’s Certificate
of Incorporation as in effect at the time of the Closing, (2) the Company’s
Bylaws as in effect immediately

prior to Closing, (3) resolutions approved by the Company’s Board of Directors
authorizing the transactions contemplated hereby, and (4) good standing
certificates (or certificate of fact) (including tax good standing) with respect
to the Company from the applicable authority(ies) in California and any other
jurisdiction in which the Company is qualified to do business, dated not more
than five business days prior to the Closing.

(g)     FIRPTA Certificate. A duly executed certificate of the Company in the
form specified by Treasury Regulations Section 1.1445-2(b)(2).

(h)     Legal Opinion. Buyer shall have received from legal counsel to the
Company an opinion addressed to Buyer, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit F.

(i)     Proceedings and Documents. All proceedings in connection with the
transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be satisfactory in substance and
form to Buyer and its counsel, and Buyer and its counsel shall have received all
such counterpart originals or certified or other copies of such documents as
they may reasonably request.

(j)     Incumbency Certificate. Buyer shall have received a certificate from the
Company as to the incumbency and signature of the officers of the Company,
executed by the president and secretary of the Company.

(k)     Escrow Agreement. Buyer shall have received a duly executed copy of the
Escrow Agreement.

(l)     Resignations. Buyer shall have received evidence of the resignations of
all the directors and officers of the Company, effective as of the Closing Date.

(m)     LTIP. Buyer shall have received evidence that the Company has satisfied
all of its obligations under Section 6.10 hereof in a manner satisfactory to
Buyer and its counsel.

(n)     Severance Plan. Buyer shall have received evidence that the amendment to
each individual’s awards under the Company’s Severance Plan in the form attached
as Exhibit G hereto has been duly executed and delivered by all of the parties
thereto.

(o)     Receipt of Audited Financials. The Company shall have delivered to Buyer
the Company’s audited balance sheet as of December 31, 2004 and audited
statements of income and cash flows for the twelve months ended December 31,
2004 prepared in accordance with GAAP applied on a consistent basis with the
Financial Statements and presenting fairly the consolidated financial position
of the Company at the respective dates thereof and the results of its operations
and its statement of cash flows for the periods indicated, accompanied by an
unqualified opinion of PricewaterhouseCoopers LLP, independent certified public
accounting firm, for such financial statements (the “Audited Financial
Statements”), which financial statements shall be identical to the Unaudited
Financial Statements.

(p)     Termination of Credit Agreement. The Credit Agreement by and between the
Company and Wells Fargo Bank, National Association, dated as of January 3, 2005
(the “Bank Credit Agreement”), shall have been terminated by the parties thereto
and any cash account securing such Bank Credit Agreement shall have been
released to the Company.

(q)     Other Documents. Buyer shall have received such other certificates and
documents as Buyer or its counsel may reasonably request.

7.2 Conditions to Obligations of the Company and the Stockholder. The Company’s
and the Stockholder’s respective obligations to consummate the transaction
contemplated by this Agreement is subject to the satisfaction, on or before the
Closing Date, of the following conditions:

(a)     Representations and Warranties True. The representations and warranties
in Article 5 made by NMHC and Buyer shall (i) have been true and correct in all
material respects as of the date hereof, and (ii) be true and correct in all
mature respects at the date of the Closing, with the same force and effect as if
they had been made on and as of said date.

(b)     Performance of Obligations. NMHC and Buyer shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by Buyer on or before the Closing.

(c)     Delivery of Purchase Price. NMHC shall have delivered the aggregate
purchase price specified by Section 1 hereof against receipt by NMHC of the
Company Shares specified in such section.

(d)     Proceedings and Documents. All proceedings in connection with the
transaction contemplated at the Closing hereby and all documents and instruments
incident to such transactions shall be reasonably satisfactory in substance and
form to the Company and their respective counsel, and the Company and their
respective counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.

(e)     Other Documents. The Company shall have received such other certificates
and documents as the Company or its counsel may reasonably request.

ARTICLE 8. POST-CLOSING COVENANTS OF THE PARTIES.

8.1 Further Actions. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, the parties hereto will
take such further action (including the execution, acknowledgment, delivery and
filing of such further instruments and documents) as any other party may
reasonably request, all at the sole cost and expense of the requesting party
(unless the requesting party is entitled to indemnification therefor under
Section 10 below).

8.2 Regulatory Filings. Buyer shall provide all necessary information and its
reasonable assistance to the Company in connection with any regulatory filings
required by the transactions contemplated hereunder.

8.3 TAX MATTERS.

(a)     Straddle Periods. The taxable period of the Company shall be closed as
of the close of the Closing Date; provided, that in any case where applicable
law does not permit the Company to close its taxable year on the Closing Date or
in any case in which a Tax is assessed with respect to a taxable period which
includes the Closing Date (but does not begin or end on that day), then Taxes,
if any, attributable to the taxable period of Company beginning before and
ending after the Closing Date shall be allocated (i) to the Stockholder for the
period up to and including the Closing Date (the “Pre-Closing Period”), and
(ii) to Buyer for the period subsequent to the Closing Date (the “Post-Closing
Period”). For purposes of allocating Taxes hereunder, (x) any allocation of
income or deductions required to determine any Taxes on income attributable to
any period beginning before and ending after the Closing Date shall be made by
means of a closing of the books and records of the Company as of the close of
the Closing Date, provided that exemptions, allowances or deductions that are
calculated on an annual basis (including, but not limited to, depreciation and
amortization deductions) shall be allocated between the period ending on the
Closing Date and the period after the Closing Date in proportion to the number
of days in each such period, and (y) with respect to Taxes other than Taxes on
income, such allocation shall be done by application of a fraction, the
numerator of which is the number of calendar days in the relevant Pre-Closing
Period or Post-Closing Period and the denominator of which is the number of
calendar days in the entire period.

(b)     Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by the
Stockholder when due, and the Stockholder will, at their expense, file all
necessary Tax Returns and other documentation required to be filed by the
Stockholder or the Company with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees. If required by
applicable law, Buyer will join in the execution of any such Tax Returns and
other documentation.

(c)     Tax Returns.

    (i)        Following the Closing, the Company or NMHC shall prepare (or
cause to be prepared) all Tax Returns for periods ending on or before the
Closing Date that are required to be filed after the Closing Date. Such Tax
Returns shall be true, correct and complete in all material respects and shall
be prepared on a basis consistent with similar Tax Returns for the immediately
preceding taxable period unless otherwise required by applicable law. NMHC shall
provide Stockholder with a copy of each such Tax Return at least 30 days prior
to the due date for the filing of such Tax Return, and not later than 5 days
before the due date for payment of Taxes with respect to such Tax Returns, NMHC
shall advise the Stockholder as to the amount of any Taxes owed pursuant to such
pre-Closing Date periods and the Stockholder shall pay to the Company or NMHC an
amount equal to that portion of the Taxes shown on such Tax Return for which the
Stockholder has an obligation to indemnify the Buyer Indemnified Parties
pursuant to Section 10.1, subject to the Stockholder’s right to dispute such
amount pursuant to Article 10.

    (ii)        Buyer shall prepare (or cause to be prepared) and file (or cause
to be filed) all other Tax Returns of the Company required to be filed after the
Closing Date. If any Taxes shown as due on such Tax Returns are indemnifiable by
the Stockholder in accordance with Section 10.1 hereof, (A) such Tax Returns
shall be prepared in a manner consistent with prior practice of the Company
unless otherwise required by applicable laws; (B) Buyer shall provide the
Stockholder with copies of each such Tax Return at least 30 days prior to the
due date for filing such Tax Return; and (C) the Stockholder shall have the
right to review the Tax Returns and reasonably agree as to their content. Not
later than 5 days before the due date for payment of Taxes with respect to any
such Tax Returns, the Stockholder shall pay to the Company an amount equal to
that portion of the Taxes shown on such Tax Return for which the Stockholder has
an obligation to indemnify the Buyer Indemnified Parties pursuant to Section
10.1, subject to the Stockholder’s right to dispute such amount pursuant to
Article 10.

(d)     No Section 338 Election. The Buyer shall not, in connection with the
transactions contemplated by this Agreement, make or cause to be made any actual
or deemed election under Section 338 of the Code or any corresponding provision
of state, local or foreign law.

8.4 Tax Treatment of Indemnification Payments. The Stockholder and Buyer agree
to treat any payment made pursuant to this Article VIII as an adjustment to the
Purchase Price for federal, state and local income Tax purposes.

8.5 Maintenance of Pre-Closing Insurance Coverage. Buyer shall maintain the same
types and amounts of insurance coverage regarding the operation of the Company’s
business after the Closing as the Company had prior to the Closing Date for such
period of time as will maintain the pre-closing insurance coverage of the
Company until claims against the Company arising from the Company’s operations
prior to the Closing Date have all been barred by the applicable statutes of
limitation.

8.6 Purchase of Director and Officer Insurance. Following the Closing, the
Company shall purchase “tail” directors and officers, for at least one year, and
errors and omissions, for at least three years, liability insurance coverage
(“D&O/E&O Insurance”) having an aggregate premium not to exceed $250,000. Upon
notice by NMHC to the Stockholder, the Stockholder shall pay NMHC (or, at NMHC’s
election, the insurance carrier identified by NMHC) one-half of the total
premium for the D&O/E&O Insurance.

8.7 Cooperation on Post-Closing Matters. Buyer and the Company shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of tax returns and any audit, litigation or other
proceeding with respect to taxes or any other matters for any periods prior to
the Closing Date. Such cooperation shall include the retention and (upon the
other party’s reasonable request) the providing of records and information that
are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Buyer agrees to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
another Party, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing authority.
Buyer further agrees, upon request, to use its reasonable best efforts to obtain
any certificate or other document from any governmental body of any other Person
as may be necessary to mitigate, reduce or eliminate any Tax that could be
imposed (including, but not limited to, with respect to the transactions
contemplated hereby).

ARTICLE 9. TERMINATION.

9.1 Termination of Agreement The Parties may terminate this Agreement as
provided below:

(a)     NMHC, Buyer and the Company may terminate this Agreement by mutual
written consent at any time prior to the Closing;

(b)     NMHC or Buyer may terminate this Agreement by giving written notice to
the Company (1) at any time prior to the Closing in the event that the Company
has breached any representation, warranty or covenant contained in this
Agreement in any material respect, NMHC or Buyer has notified the Company of the
breach, and, if the breach is capable of cure, such breach has continued without
cure for a period of 15 calendar days after the notice of breach; (2) if the
Closing shall not have occurred on or before March 31, 2005, by reason of the
failure of any condition precedent (other than failure to obtain any required
governmental consent) pursuant to Section 7.1 of this Agreement to have occurred
(unless the failure results directly and primarily from Buyer’s material breach
of any representation, warranty or covenant contained in this Agreement); or (3)
if the Closing shall not have occurred on or before March 31, 2005, by reason of
the failure to obtain any required governmental consent (unless the failure
results directly and primarily from Buyer’s material breach of any
representation, warranty or covenant contained in this Agreement); and

(c)     the Company may terminate this Agreement by giving written notice to
NMHC and Buyer (1) at any time prior to the Closing in the event NMHC or Buyer
have breached any representation, warranty or covenant contained in this
Agreement in any material respect, the Representative has notified NMHC and
Buyer of the breach, and, if the breach is capable of cure, such breach has
continued without cure for a period of 15 calendar days after the notice of
breach; (2) if the Closing shall not have occurred on or before March 31, 2005,
by reason of the failure of any condition precedent (other than failure to
obtain any required governmental consent) pursuant to Section 7.2 of this
Agreement to have occurred (unless the failure results directly and primarily
from the Company’s breach of any representation, warranty or covenant contained
in this Agreement); or (3) if the Closing shall not have occurred on or before
March 31, 2005, by reason of the failure to obtain any required governmental
consent (unless the failure results directly and primarily from the Company’s
breach of any representation, warranty or covenant contained in this Agreement).

9.2 Effect of Termination. If any party terminates this Agreement pursuant to
Section 9.1 of this Agreement, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to the other party
(except for any liability of any party then in breach).

ARTICLE 10. INDEMNIFICATION.

10.1 General Indemnification by the Stockholder. The Stockholder shall indemnify
and hold NMHC and Buyer, its successors and assigns, directors, officers, and
affiliates (as applicable, the “Buyer Indemnified Party”) harmless from and
against any and all demands, claims, actions or causes of actions, assessments,
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties and reasonable attorney fees and expenses (including without
limitation diminution in value, incidental or consequential damages, and
reasonable attorneys’ fees and expenses at both the trial and appellate level,
regardless of whether incurred in an action with a third-party or between the
parties, inter se) (hereinafter collectively called “Damages”), whether or not
involving a third party claim, which it may incur, directly or indirectly, as a
result of or arising from, (a) any inaccuracy in any representation or warranty
of the Company or the Stockholder under this Agreement or any of the other
Acquisition Agreements (without regard to any materiality qualifier contained in
such representation and warranty), (b) any breach by the Company or its
Affiliates of any covenant or other agreement in the Agreement or any of the
other Acquisition Agreements by any of them, (c) any Taxes for any taxable
periods, or portions thereof, ending on or prior to the Closing Date (as
allocated to such period pursuant to Section 8.3(a) of this Agreement); (d) any
and all Taxes of any member of a consolidated, combined or unitary group of
which the Company is or was a member on or prior to the Closing Date for which
the Company is liable pursuant to Treas. Reg. § 1.1502-6(a) or any analogous or
similar state, local or foreign law or regulation or by reason of being a
successor in interest or transferee of another Person; (e) any Indebtedness of
the Company; (f) any Damages arising from or relating to the Department of Labor
matters listed in Schedule 3.15 of the Company Disclosure Schedule (the “DOL
Matter”) or (g) any Damages arising from or relating to claims with respect to
the LTIP (including without limitation amounts owed to recipients of awards
under the LTIP); provided, however, that such indemnification to be provided in
respect of any matter referred to in clause (a) above (other than for breach of
any representation or warranty set forth in Sections 3.1, 3.3, 3.4, 3.11, 3.16,
3.30 and 3.33) shall not exceed the aggregate Purchase Price; and provided,
further that the Stockholder will have no liability for such indemnification
under clause (a) above (other than with respect to Sections 3.1, 3.3, 3.4, 3.11,
3.16, 3.30 and 3.33) until the total of all Damages with respect to such matters
exceeds $130,000 (“Basket”) at which time the Stockholder shall be obligated to
indemnify Buyer for all Damages (including the Damages subject to the Basket);
provided, however, that the Basket shall not be applicable to Damages involving
fraud, willful misconduct or intentional misrepresentation. All of the
representations and warranties in this Agreement by the Company shall survive
the Closing for a period of two (2) years after the Closing Date; provided,
however, that the representations and warranties set forth in Sections 3.1, 3.3,
3.4, 3.11, 3.12, 3.16, 3.20, 3.21, 3.23 and 3.29 of this Agreement, shall
survive the Closing until the expirations of the respective statutes of
limitations for such claims.

10.2 General Indemnification by NMHC and Buyer. NMHC and Buyer shall indemnify
and hold the Stockholder, its successors and assigns, directors and officers (as
applicable, the “Company Indemnified Party”), harmless from and against any and
all Damages that they may incur, directly or indirectly, as a result of or
arising from, (a) any inaccuracy in any representation or warranty of NMHC or
Buyer under the Agreement; and (b) any breach by NMHC or Buyer of any covenant
or other agreement in the Agreement.

10.3 Indemnification Procedures. Any claim or demand for indemnification under
this Section 10 (“Claim(s)”) shall be asserted and resolved as follows:

(a)     In the event that any Buyer Indemnified Party or any Company Indemnified
Party (as the case may be, “Indemnified Party”) has a Claim against,
respectively, the Stockholder on the one hand or Buyer or NMHC on the other hand
(as the case may be, “Indemnifying Party”) which does not involve a Claim being
asserted against or sought to be collected by a third party, the Indemnified
Party shall with reasonable promptness notify the Indemnifying Party of such
Claim, specifying the nature of such Claim and the amount or the estimated
amount thereof to the extent then feasible (the “Claim Notice”). If the
Indemnifying Party does not notify the Indemnified Party within thirty (30)
calendar days after the date of delivery of the Claim Notice that the
Indemnifying Party disputes such Claim, with a detailed statement of the basis
of such position, the amount of such Claim shall be conclusively deemed a
liability of the Indemnifying Party hereunder. In case an objection is made in
writing in accordance with this Section 10.3(a), the Indemnified Party shall
respond in a written statement to the objection within thirty (30) calendar days
and, for sixty (60) calendar days thereafter, attempt in good faith to agree
upon the rights of the respective parties with respect to each of such Claims
(and, if the parties should so agree, a memorandum setting forth such agreement
shall be prepared and signed by both parties).

(b)     (1) In the event that any Claim for which the Indemnifying Party could
be liable to an Indemnified Party hereunder is asserted against an Indemnified
Party by a third party (a “Third Party Claim”), the Indemnified Party shall
deliver a Claim Notice to the Indemnifying Party as promptly as practicable. The
Indemnifying Party shall have ten (10) calendar days from the date of delivery
of the Claim Notice to notify the Indemnified Party (A) whether the Indemnifying
Party disputes liability to the Indemnified Party hereunder with respect to the
Third Party Claim, and, if so, the basis for such a dispute, and (B) if such
party does not dispute liability, whether or not the Indemnifying Party desires
(other than in connection with the DOL Matter), at the sole cost and expense of
the Indemnifying Party, to defend against the Third Party Claim, provided that
the Indemnified Party is hereby authorized (but not obligated) to file any
motion, answer or other pleading and to take any other action which the
Indemnified Party shall deem necessary or appropriate to protect the Indemnified
Party’s interests.

(2)     In the event that the Indemnifying Party timely notifies the Indemnified
Party that the Indemnifying Party does not dispute the Indemnifying Party’s
obligation to indemnify with respect to the Third Party Claim, the Indemnifying
Party shall defend the Indemnified Party against such Third Party Claim by
appropriate proceedings, provided that such Third Party Claim shall not be
compromised or settled without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld. If the Indemnified Party
desires to participate in, but not control, any such defense or settlement the
Indemnified Party may do so at its sole cost and expense. If the Indemnifying
Party elects not to defend the Indemnified Party against a Third Party Claim, or
fails to undertake such defense in a timely manner, whether by failure of such
party to give the Indemnified Party timely notice as provided herein or
otherwise, then the Indemnified Party, without waiving any rights against such
party, may settle or defend against such Third Party Claim and the Indemnified
Party shall be entitled to recover from the Indemnifying Party the amount of any
settlement or judgment (subject to any rights of appeal) and, on an ongoing
basis, all indemnifiable costs and reasonable expenses of the Indemnified Party
with respect thereto, including interest from the date such costs and reasonable
expenses were incurred; provided that such Third Party Claim shall not be
compromised or settled without the written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld.

(c)     If at any time, in the reasonable opinion of the Indemnified Party,
notice of which shall be given in writing to the Indemnifying Party, any Third
Party Claim seeks material prospective relief which could have a materially
adverse effect on any Indemnified Party, the Indemnified Party shall have the
right to control or assume (as the case may be) the defense of any such Third
Party Claim and the amount of any judgment or settlement and the reasonable
costs and expenses of defense shall be included as part of the indemnification
obligations of the Indemnifying Party hereunder. If the Indemnified Party elects
to exercise such right, the Indemnifying Party shall have the right to
participate in, but not control, the defense of such Third Party Claim at the
sole cost and expense of the Indemnifying Party. Should the Indemnified Party
provide the Indemnifying Party notice pursuant to this Section 10.3(c), the
Indemnifying Party shall have ten (10) calendar days after receipt of said
notice to object in writing to the Indemnified Party’s control or assumption of
the defense of the Third Party Claim. Thereafter, any dispute between the
parties regarding the defense of the Third Party Claim will be resolved between
the parties, subject to the terms and conditions specified in this Section 10.3.
Nothing herein shall be deemed to prevent the Indemnified Party from making a
Claim, and an Indemnified Party may make a Claim hereunder, for potential or
contingent losses, liabilities, claims, damages, costs or expenses provided the
Claim Notice sets forth the specific basis for any such potential or contingent
claim or demand to the extent then feasible and the Indemnified Party has
reasonable grounds to believe that such Claim may be made. The Indemnifying
Party shall have ten (10) calendar days after receipt of a Claim Notice to
object in writing to the Indemnified Party’s Claim for potential or contingent
damages. Thereafter, any dispute between the parties regarding such matter will
be resolved between the parties, subject to the terms and conditions specified
in this Section 10.3.

(d)     The Indemnified Party’s failure to give reasonably prompt notice as
required by this Section 10.3 of any actual, threatened or possible claim or
demand which may give rise to a right of indemnification hereunder shall not
relieve the Indemnifying Party of any liability which the Indemnifying Party may
have to the Indemnified Party unless the failure to give such notice materially
and adversely prejudiced the Indemnifying Party.

10.4 Damages Net of Insurance Proceeds and Tax Benefits. The amount of any
Damages payable by the Stockholder to the Buyer Indemnified Party shall be net
of any (i) amounts recovered or recoverable (without resort to legal
proceedings) by the Buyer Indemnified Party under applicable insurance policies
and (ii) Tax benefit realized by the Buyer Indemnified Party arising from the
incurrence or payment of any such Damages, but only to the extent such Tax
benefit is actually realized in the year the loss giving rise to Damages is
incurred. For purposes hereof, a Tax benefit will be deemed to be “actually
realized” only if it actually reduces taxable income of the party to be
indemnified, rather than just creating or increasing a Tax loss carryforward,
and is not offset by a corresponding increase in Tax liability (or decrease in
Tax attributes) in a different Tax period. In computing the amount of any such
Tax benefit, the indemnified party shall be deemed to recognize all other items
of income, gain, loss, deduction or credit before recognizing any item arising
from the receipt of any indemnity payment hereunder or the incurrence or payment
of any indemnified Damages.

10.5 Exclusive Remedy. Notwithstanding any of the limitations contained in this
Article 11, no Indemnified Party shall be limited in its ability to bring a
claim for fraud, willful misconduct or intentional misrepresentation. In the
absence of fraud, willful misconduct or intentional misrepresentation (for which
liability shall be governed by applicable law), the indemnification provisions
of this Article 10 will be the sole and exclusive remedy of the Indemnified
Parties after the Closing for any damages suffered by the Indemnified Parties in
connection with this transaction.

10.6 Department of Labor Matter. Buyer and Stockholder agree that the response
to the DOL Matter described on Section 10.6 of the Company Disclosure Schedule
hereto must be handled in a cooperative and cost-effective manner. To further
that objective, Buyer agrees to consult with the Stockholder’s Representative
regarding the selection of counsel and strategies to be employed in connection
with the DOL Matter. Any settlement of the DOL Matter involving payments in
excess of $575,000 must be approved by the Stockholder’s Representative, which
approval shall not unreasonably be withheld.

ARTICLE 11. MISCELLANEOUS.

11.1 Governing Law; Choice of Forum. This Agreement shall be governed in all
respects by the laws of the State of New York, without regard to principles of
conflicts of law. In addition, the Company hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement (including without limitation a dispute under Article
10 of this Agreement) or any judgment entered by any court in respect thereof
brought in any state or federal court located in Nassau County, State of New
York, and hereby further irrevocably waives any claim that any suit, action or
proceedings brought in any such court has been brought in an inconvenient forum.

11.2 Assignment. No party to this Agreement may assign any of its rights or
delegate any of its duties under this Agreement without the prior consent of, in
the case of NMHC or Buyer, the Representative or, in the case of the Company or
the Stockholder, NMHC or Buyer, except that NMHC or Buyer may assign any of its
rights or delegate any of its duties pursuant to this Agreement to any affiliate
of Buyer.

11.3 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by the
Company, the Stockholder, NMHC or Buyer.

11.4 Entire Agreement. The Agreement, the exhibits and schedules thereto, and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.

11.5 Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

11.6 Amendment and Waiver. This Agreement may be amended or modified only upon
the written consent of Buyer, NMHC, the Stockholder and the Company.

11.7 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party, upon any breach, default or noncompliance by
another party under the Agreement or any other agreement or instrument delivered
pursuant hereto shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on any party’s part of any breach, default or noncompliance under the
Agreement or any other agreement or instrument delivered pursuant hereto, or any
waiver on such party’s part of any provisions or conditions thereunder, must be
in writing and shall be effective only to the extent specifically set forth in
such writing.

11.8 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed electronic mail or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, provided, in either case, that confirmation is delivered in accordance with
subsection (c) or (d) below; (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the address as set
forth below. Any of the following addresses may be changed by giving notice of
such change in the foregoing manner, except that notices for changes of address
shall be effective only upon receipt.

  If to the Company or Stockholder, to:

  California Pharmacists Association
4030 Lennane Drive
Sacramento, CA 95834
Attn.: Lynn Rolston
Telephone Number: (916) 779-1400
Telecopier Number: (916) 779-1401

  Copy to (which shall not constitute notice):

  Pillsbury Winthrop LLP
50 Fremont Street
San Francisco, CA 94105
Attn.: Linda C. Williams/Maureen E. Corcoran
Telephone Number: (415) 983-1000
Telecopier Number: (415) 983-1200

  If to NMHC or Buyer, to:

  National Medical Health Card Systems, Inc.
26 Harbor Park Drive
Port Washington, New York 11050
Attention: Jonathan Friedman, Esq.
Telephone Number: (516) 605-6758
Telecopier Number: (516) 605-6989

  Copy to (which shall not constitute notice):

  Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: Steven I. Suzzan, Esq.
Telephone Number: (212) 318-3092
Telecopier Number: (212) 318-3400

11.9 Expenses. The Stockholder shall bear all of the costs and expenses that it
and the Company incur with respect to the negotiation, execution, delivery and
performance of the Agreement excluding, however, attorneys fees paid or accrued
by the Company prior to the date of delivery of statement of Estimated Closing
Date Working Capital, and NMHC shall bear all of such costs or expenses incurred
by it and Buyer.

11.10 Attorneys’ Fees. In the event that any suit or action is instituted to
enforce any provision in the Agreement or the other agreements and instruments
delivered pursuant hereto, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party thereunder, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.

11.11 Titles and Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

11.13 Broker’s Fees. Each party hereto represents and warrants that no agent,
broker, investment banker, person or firm acting on behalf of or under the
authority of such party hereto is or will be entitled to any broker’s or
finder’s fee or any other commission directly or indirectly in connection with
the transactions contemplated herein, other than Morgan Keegan & Company, Inc.
and Rieches Bard, as a consultant, whose commission and expenses are the sole
responsibility of the Stockholder following the Closing, and Strategica Health
Partners, L.L.C., whose commission and expenses are the sole responsibility of
NMHC following the Closing. Each party hereto further agrees to indemnify each
other party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 11.13 being untrue.

11.14 Press Releases. As soon as practicable after the occurrence of the
Closing, a press release in form and substance mutually agreeable to NMHC, Buyer
and the Representative shall be issued announcing the consummation of the
transaction contemplated by this Agreement. None of the parties to this
Agreement shall make any other public disclosure or press release concerning
this Agreement or the transaction contemplated by this Agreement without the
prior consent of, in the case of NMHC or Buyer, the Representative or, in the
case of Company, NMHC or Buyer. In each such instance, such consent shall not be
unreasonably withheld. Notwithstanding the foregoing, NMHC and Buyer shall be
permitted to make such public disclosure without such consent to comply with
applicable federal and/or state laws, rules and regulations, and shall be
permitted to file this Agreement and the Acquisition Documents with the
Securities and Exchange Commission.

11.15 Pronouns. All pronouns contained herein, and any variations thereof, shall
be deemed to refer to the masculine, feminine or neutral, singular or plural, as
to the identity of the parties hereto may require.

11.16 EFFECT OF DUE DILIGENCE.

(a)     No investigation by or on behalf of the Buyer or NMHC into the business,
operations, prospects, assets or condition (financial or otherwise) of the
Company or the Stockholder shall diminish in any way the effect of any
representations or warranties made by the Stockholder or the Company in this
Agreement or shall relieve the Stockholder or the Company of any of its
obligations under this Agreement. Neither NMHC nor Buyer has any affirmative
obligation to provide the Stockholder or the Company with the results of any
review or investigation by NMHC or Buyer of the business, operations, prospects,
assets or condition (financial or otherwise) of the Company or the Stockholder.
Neither Buyer nor NMHC has any affirmative obligation to determine (i) the
accuracy of any representation or warranty of Company or the Stockholder
contained in this Agreement or (ii) whether there are any facts known to Buyer
or NMHC that are not known to the Stockholder or the Company with respect to the
subject matter of the representations and warranties of the Stockholder and the
Company contained in this Agreement.

(b)     No investigation by or on behalf of the Stockholder into the business,
operations, prospects, assets or condition (financial or otherwise) of NMHC or
Buyer shall diminish in any way the effect of any representations or warranties
made by NMHC or Buyer in this Agreement or shall relieve NMHC or Buyer of any of
their obligations under this Agreement. The Stockholder is under no affirmative
obligation to provide NMHC or the Buyer with the results of any review or
investigation by Stockholder of the business, operations, prospects, assets or
condition (financial or otherwise) of NMHC or Buyer. The Stockholder has no
affirmative obligation to determine (i) the accuracy of any representation or
warranty of NMHC or Buyer contained in this Agreement or (ii) whether there are
any facts known to the Stockholder that are not known to NMHC or Buyer with
respect to the subject matter of the representations and warranties of NMHC and
Buyer contained in this Agreement.

ARTICLE 12. DEFINITIONS.

        The meanings of terms defined in this Agreement are set forth in the
respective sections of this Agreement described below:

Acquisition Documents     as defined in Section 6.4     Adjusted Gross Profit  
as defined in Section 2.6   Agreement   as defined in the Preamble   Assumed
Closing Date   as defined in Section 2.4   Audited Financial Statements   as
defined in Section 7.1   Balance Sheet   as defined in Section 3.5   Balance
Sheet Date   as defined in Section 3.5   Basket   as defined in Section 10.1  
Benefit Plans   as defined in Section 3.30   Business   as defined in Section
6.9   Business Information   as defined in Section 6.9   Buyer   as defined in
the Preamble   Buyer Indemnified Party   as defined in Section 10.1   Buyer
Representatives   as defined in Section 6.6   Claim   as defined in Section
10.3   Claim Notice   as defined in Section 10.3   Closing   as defined in
Section 2.1   Closing Date   as defined in Section 2.1   Closing Date
Statement   as defined in Section 2.4   Closing Date Working Capital   as
defined in Section 2.4   Closing Deficit   as defined in Section 2.4   Closing
Payment   as defined in Section 2.2   Code   as defined in Section 3.16   Common
Stock   as defined in the Recitals   Company   as defined in the Preamble  
Company 409A Plan   as defined in Section 3.30   Company Agreements   as defined
in Section 3.8   Company Disclosure Schedule   as defined in Article 3   Company
Existing Clients   as defined in Section 2.6   Company Indemnified Party   as
defined in Section 10.2   Company Intellectual Property   as defined in Section
3.12   Company Potential Clients   as defined in Section 2.6   Company Share  
as defined in the Recitals   Compliance Plan   as defined in Section 3.23  
Confidential Information   as defined in Section 6.6   Customer   as defined in
Section 6.9   Damages   as defined in Section 10.1   Deficit   as defined in
Section 2.4   Determination   as defined in Section 2.4   D&O/E&O Insurance   as
defined in Section 8.6   DOL Matter   as defined in Section 10.1   Earn Out   as
defined in Section 2.6   ERISA   as defined in Section 3.30   ERISA Affiliate  
as defined in Section 3.30   Escrow   as defined in Section 2.3   Escrow Agent  
as defined in Section 1.1   Escrow Agreement   as defined in Section 1.1  
Escrow Release Date   as defined in Section 2.3   Escrowed Cash   as defined in
Section 2.2   Estimated Closing Date Working Capital   as defined in Section
2.4   Estimate Statement   as defined in Section 2.4   Financial Statements   as
defined in Section 3.5   GAAP   as defined in Section 2.4   Governmental
Authority   as defined in Section 3.14   Governmental Order   as defined in
Section 3.13   Gross Profit   as defined in Section 2.5   Gross Profit Deficit
Amount   as defined in Section 2.5   Gross Profit Shortfall   as defined in
Section 2.5   Hazardous Materials   as defined in Section 3.29   Healthcare
Information Laws   as defined in Section 3.23   Indebtedness   as defined in
Section 7.1   Indemnified Party   as defined in Section 10.3   Indemnifying
Party   as defined in Section 10.3   Independent Accountant   as defined in
Section 2.4   IRS   as defined in Section 3.16   January Financial Statements  
as defined in Section 3.5   Key Employees   as defined in Section 3.18  
knowledge   as defined in Article 3   Law   as defined in Section 3.16   Liens  
as defined in Section 3.3   LTIP   as defined in Section 2.4   LTIP Recipient  
as defined in Section 3.30   Material Adverse Effect   as defined in Section
3.1   Med-Intelligence   as defined in Section 2.6   NMHC   as defined in the
Preamble   Notice of Dispute   as defined in Section 2.6   PBM Services   as
defined in Section 6.9   Post-Closing Period   as defined in Section 8.3   PPN
Services   as defined in Section 6.9   Pre-Closing Period   as defined in
Section 8.3   Preemptive Rights   as defined in Section 3.4   Purchase Price  
as defined in Section 1.1   Representative   as defined in Section 2.4  
Restricted Period   as defined in Section 6.9   Severance Plan   as defined in
Section 3.30   Start Date   as defined in Section 2.6   Stockholder   as defined
in the Preamble   Tax   as defined in Section 3.16   Tax Returns   as defined in
Section 3.16   Third Party Claim   as defined in Section 10.3   Transaction
Agreements   as defined in Section 3.1   Unaudited Financial Statements   as
defined in Section 3.5   Unrelated Business   as defined in Section 6.9  
Working Capital   as defined in Section 2.4     

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        IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date set forth in the first paragraph hereof.

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

BY: /S/ James Smith
——————————————
James Smith
President and Chief Executive Officer

PCN ACQUISITION CORP.

BY: /s/ James Smith
——————————————
James Smith
President and Chief Executive Officer

PHARMACEUTICAL CARE NETWORK

BY: /s/ David J. Keane
——————————————
David J. Keane
Chief Executive Officer

CALIFORNIA PHARMACISTS ASSOCIATION

BY: /s/ Lynn Rolston
——————————————
Lynn Rolston
Chief Executive Officer

--------------------------------------------------------------------------------

LIST OF EXHIBITS

Form of Escrow Agreement   Exhibit A   List of Company Existing Clients  
Exhibit B   List of Company Potential Clients   Exhibit C   Financial
Statements   Exhibit D   Description of PPN Services   Exhibit E   Legal Opinion
of Company's Counsel   Exhibit F   Amendment to Management Severance Plan  
Exhibit G