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                                                                    EXHIBIT 10.3

                      PHARMACY BENEFIT MANAGEMENT AGREEMENT
                      -------------------------------------

         This PHARMACY BENEFIT MANAGEMENT AGREEMENT (this "Agreement") is
between UNITED HEALTHCARE SERVICES, INC., on behalf of itself and its affiliates
from time to time, located at 9900 Bren Road East, Minnetonka, Minnesota 55343
(hereinafter "United HealthCare"), and MERCK MEDCO MANAGED CARE, L.L.C. located
at 100 Summit Avenue, Montvale, New Jersey 07645-1753 (hereinafter "PBM"). This
Agreement is effective on the date the parties have each executed it (the
"Effective Date"). It concerns services provided as of the "Commencement Date,"
as hereinafter defined. This Agreement supersedes and replaces any existing
agreements between the parties related to the same subject matter.

                              W I T N E S S E T H:

         WHEREAS, United HealthCare desires to contract with a pharmaceutical
benefits management entity for pharmaceutical benefit management and related
services that United HealthCare will make available, together with other United
HealthCare services, to Health Plans, as hereinafter defined, and other
non-Health Plan business (affiliated with United HealthCare or to which United
HealthCare provides services) through contracts with United HealthCare; and

         WHEREAS, PBM provides pharmaceutical benefits management and related
services and desires to contract with United HealthCare to provide such
management and services.

         NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Agreement, the undersigned parties agree as follows:

SECTION 1. DEFINITIONS
           -----------

         1.1. Definitions. In addition to the capitalized terms defined
elsewhere in this Agreement, the following terms shall have the following
meanings:

         (a) "Average Wholesale Price" or "AWP" means the average wholesale
         price of the Covered Prescription Drug Services dispensed, utilizing
         the current price list in the Blue Book and its supplements. If PBM
         ceases to use the Blue Book and its supplements, PBM shall use such
         other nationally recognized pricing source as PBM uses for all of its
         remaining customers; or, if PBM uses more than one source, then the
         source used for United HealthCare shall be the source mutually agreed
         to by the parties. Under the Retail Pharmacy Program, AWP is based on
         the package size submitted. Under the Mail Service Program, AWP is
         based on package sizes of 100 units or 16 oz. quantities, or smaller
         quantities if such quantities are not commercially available.

         (b) "Benefit Contract" means a benefit plan that: (i) is sponsored,
         purchased, issued or administered by Payor and (ii) contains the terms
         and conditions of a Covered Person's coverage. A Benefit Contract is
         also known as a certificate of coverage, summary plan description,
         evidence of coverage, or group services agreement.

         (c) "Commencement Date" means June 1, 2000 or such earlier date on
         which PBM begins to provide services under this Agreement in accordance
         with Section 3.24.

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         (d) "Copayment or Coinsurance or Deductible or Other Charge"
         collectively known as "Copayment" means the charge, in addition to the
         premium, which a Covered Person is required to pay for certain covered
         services provided under the Benefit Contract and Pharmacy Rider.
         Copayment or Coinsurance or Deductible or Other Charge may be either a
         defined dollar amount or a percentage of eligible expenses. A Covered
         Person is responsible for the payment of any Copayment directly to the
         pharmacy at the time the prescription is dispensed.

         (e) "Covered Person" means an individual eligible to receive coverage
         for outpatient prescription pharmacy benefits who is currently enrolled
         under a United HealthCare or Payor Benefit Contract that includes a
         Pharmacy Rider.

         (f) "Covered Prescription Drug Services" means those covered outpatient
         prescription drugs and covered pharmacy products, services and supplies
         pursuant to a Covered Person's Benefit Contract and/or Pharmacy Rider.

         (g) "Health Plan" means a licensed health maintenance organization
         ("HMO") or other similar organization that is either (i) owned by
         United HealthCare where "Owned" means that United HealthCare owns not
         less than a majority of the voting securities; or (ii) managed by
         United HealthCare, where "Managed" means that United HealthCare manages
         the pharmacy program or provides other management or administrative
         services such as claims processing services, where the local managed
         health plan assumes medical risk other than as defined below. Health
         Plan includes an HMO or other similar organization Owned or Managed
         that offers an array of products including but not limited to
         fully-insured, self-insured products (where such self-insured products
         use the provider networks, medical management and other similar
         services used by the HMO or similar organization), commercial HMO
         products, Medicare risk products (Medicare+ Choice), Medicaid, EPO
         products, PPO products, and all combination products that include an
         in-network and out-of-network component such as point-of-service
         ("POS") products. When such organization is Managed by United
         HealthCare, not Owned by United HealthCare, Health Plan includes such
         organization only to the extent it has elected to receive services
         pursuant to this Agreement. The term Health Plan is not intended to
         include: (i) United HealthCare Insurance Company (UHI) products unless:
         (A) such products use provider networks, medical management and other
         similar services in a manner comparable to the HMOs or similar
         organization; and (B) United HealthCare is responsible for medical
         underwriting risk; or (ii) fully insured or self-funded products sold
         through United HealthCare's Strategic Business Services division; or
         (iii) Medicare supplemental products (MediGap); or (iv) *** of this
         Agreement.

         (h) "Intellectual Property" means all patents, patents pending,
         trademarks, service marks, trade names, service names, slogans,
         registered copyrights, commercially significant unregistered
         copyrights, technology rights and licenses, computer software
         (including, without limitation, any source or object codes or related
         documentation), trade secrets, franchises, know-how, and inventions and
         all improvements to such intellectual property.

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.


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         (i) "Mail Service Program" means a program contemplated by this
         Agreement in which Covered Persons may mail a prescription together
         with the applicable Copayment to PBM for dispensing of a 90 day maximum
         supply of a covered drug via mail service.

         (j) "Maximum Allowable Cost" or "MAC" means a list established by PBM
         for its book of business showing the maximum allowable cost for a list
         of prescription drug ingredients. Any generic or branded generic drug
         on the MAC list dispensed at retail will be reimbursed at the maximum
         allowed by such list.

         (k) "Participating Pharmacy" means a pharmacy, including a retail or
         mail service pharmacy, which has entered into an agreement with PBM
         under which pharmacy has agreed to provide Covered Prescription Drug
         Services to Covered Persons and to comply with (i) contractual
         requirements pursuant to this Agreement; and (ii) regulatory
         requirements.

         (l) "Payor" means United HealthCare or the entity or person that has
         the financial responsibility to United HealthCare for payment for
         services covered by a Benefit Contract and/or Pharmacy Rider.

         (m) "Pharmacy Rider" means that rider to the Covered Person's Benefit
         Contract that in addition to the Benefit Contract, states the details
         of Covered Person's prescription drug coverage. The Benefit Contract
         and Pharmacy Rider are used by PBM in processing outpatient
         prescription drug claims in connection with this Agreement.

         (n) "Pharmacy & Therapeutics Committee" or "P&T Committee" means that
         United HealthCare committee that: (i) reviews a prescription drug for
         inclusion on the United HealthCare Preferred Drug List or other
         comparable formularies; and, (ii) develops other criteria, procedures
         and rules for the Program including but not limited to quantity level
         and prior authorization.

         (o) "Preferred Drug List" or "PDL" means a list that identifies those
         Federal Drug Administration ("FDA") approved prescription drug products
         that are preferred by United HealthCare for dispensing to Covered
         Persons.

         (p) "Program" means all pharmacy services provided under the Benefit
         Contract and Pharmacy Rider to Covered Persons, including days supply
         limitation, Copayment, Preferred Drug List and other program
         specifications set forth in this Agreement or otherwise agreed to, in
         writing, between or among the parties.

         (q) "PDL Rebate(s)" means ***

         (r) "Retail Pharmacy Program" means that part of the pharmacy program
         where Covered Persons may purchase a maximum of a 34 day supply (except
         as otherwise mutually agreed) of Covered Prescription Drug Services
         from a retail Participating Pharmacy upon providing verification of
         eligibility and payment of the applicable Copayment.

         (s) "Substantial Change" means a change in law or regulation applicable
         to a party to this Agreement that materially adversely affects the
         benefits such party reasonably expected to receive under this
         Agreement.

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.

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         (t) "United HealthCare" means the party to this Agreement or another
         wholly owned affiliate, subsidiary or business division to whom United
         HealthCare may assign this Agreement.

SECTION 2.  REPRESENTATIONS AND WARRANTIES
            ------------------------------

         2.1. Representations and Warranties of PBM.

              2.1.1. Organization and Qualification. PBM represents and warrants
              to United HealthCare that it is a limited liability company duly
              organized, validly existing and in good standing under the laws of
              New Jersey. PBM has the corporate power and authority necessary to
              own and operate its properties and to carry on its business as now
              conducted. PBM is qualified to do business as a foreign
              corporation in every jurisdiction in which the nature of its
              business and/or its ownership of property requires it to be so
              qualified.

              2.1.2. Corporate Authorization. PBM represents and warrants to
              United HealthCare that the execution, delivery, and performance of
              this Agreement and the provision of the services contemplated
              hereby are within its corporate powers. All requisite authority
              necessary to enter into this Agreement has been obtained, and PBM
              has duly and validly executed and delivered this Agreement.
              Assuming this Agreement constitutes the valid and binding
              agreement of United HealthCare, this Agreement constitutes a valid
              and binding agreement of PBM enforceable against PBM in accordance
              with its terms.

              2.1.3. No Conflict; Required Filings and Consents. PBM represents
              and warrants to United HealthCare that the execution, delivery and
              performance of this Agreement does not, and the provision of the
              services contemplated hereby will not: (a) conflict with the
              Articles of Organization or Bylaws of PBM; (b) conflict with or
              violate any laws applicable to PBM or by which any of its
              properties is bound or affected; or (c) result in any breach of or
              constitute a default (or an event that with

              notice or lapse of time or both would become a default) under, or
              give to others any rights of termination, amendment, acceleration
              or cancellation of, or result in the creation of a lien or
              encumbrance on any of the properties or assets of PBM pursuant to
              any note, bond, mortgage, indenture, contract, agreement, lease,
              license, permit, franchise or other instrument or obligation to
              which PBM is a party, or by which PBM or any of its properties is
              bound or affected. The execution and delivery of this Agreement by
              PBM does not, and the performance of this Agreement by PBM and the
              provision of the services contemplated hereby by PBM will not,
              require any consent, approval, authorization or permit of, or
              filing with or notification to, any third party, except for
              certain filings required by certain state governmental entities.

         2.2. Representations and Warranties of United HealthCare.


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              2.2.1. Organization and Qualification. United HealthCare
              represents and warrants to PBM that it is a corporation duly
              incorporated, validly existing and in good standing under the laws
              of Minnesota. United HealthCare has the corporate power and
              authority necessary to own and operate its properties and to carry
              on its business as now conducted. United HealthCare is qualified
              to do business as a foreign corporation in every jurisdiction in
              which the nature of its business or its ownership of property
              requires it to be so qualified.

              2.2.2. Corporate Authorization. United HealthCare represents and
              warrants to PBM that the execution, delivery, and performance of
              this Agreement are within its corporate powers. All requisite
              authority necessary to enter into this Agreement has been
              obtained, and United HealthCare has duly and validly executed and
              delivered this Agreement. Assuming this Agreement constitutes the
              valid and binding agreement of PBM, this Agreement constitutes a
              valid and binding agreement of United HealthCare enforceable
              against United HealthCare in accordance with its terms.

              2.2.3. No Conflict; Required Filings and Consents. United
              HealthCare represents and warrants to PBM that the execution,
              delivery and performance of this Agreement does not, and the
              performance of this Agreement by United HealthCare will not: (a)
              conflict with the Articles of Incorporation or Bylaws of United
              HealthCare; (b) conflict with or violate any laws applicable to
              United HealthCare or by which any of its properties is bound or
              affected; or (c) result in any breach of or constitute a default
              (or an event that with notice or lapse of time or both would
              become a default) under, or give to others any rights of
              termination, amendment, acceleration or cancellation of, or result
              in the creation of a lien or encumbrance on any of the properties
              or assets of United HealthCare pursuant to any note, bond,
              mortgage, indenture, contract, agreement, lease, license, permit,
              franchise or other instrument or obligation to which United
              HealthCare is a party, or by which United HealthCare or any of its
              properties is bound or affected. The execution and delivery of
              this Agreement by United HealthCare does not, and the performance
              of this Agreement by United HealthCare will not, require any
              consent, approval, authorization or permit of, or filing with or
              notification to any third party, except for certain filings
              required by certain state governmental entities.

SECTION 3. OBLIGATIONS OF PBM: PHARMACY MANAGEMENT AND SERVICES
           ----------------------------------------------------

         3.1. General PBM Services. PBM shall provide to United HealthCare the
         services described in this Agreement and in Exhibit A. PBM acknowledges
         that its position as a premier company capable and desirous of
         providing industry leading products and services is an inducement on
         which United HealthCare is relying in entering into this Agreement.

         3.2. Laws, Regulations and Licenses. PBM, at its own cost, shall: (a)
         maintain all federal, state, and local licenses that are materially
         necessary to provide services under this Agreement and the lack of
         which could adversely affect United HealthCare; (b) shall comply with
         all applicable statutes and regulations in providing all services
         pursuant to this Agreement; and (c) require all Participating
         Pharmacies employed by or under contract with PBM to comply with (a)
         and (b).

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         3.3. Personnel and Other Resources. PBM shall provide sufficient,
         dedicated personnel, information systems support and other resources,
         as reasonably required to successfully administer a high quality,
         cost-effective Program for United HealthCare pursuant to this
         Agreement. PBM and United HealthCare shall review the appropriateness
         of resource allocation on a regular basis, no less often than
         quarterly. United HealthCare has the right to interview and approve of
         any recommended new hires for the Dedicated Pharmacy Management Unit
         discussed below. United HealthCare also has the right to have a PBM
         employee removed from providing services for United HealthCare. PBM
         shall be responsible for all compensation, benefits and taxes of PBM's
         employees. If the parties agree to locate any PBM employees at a United
         HealthCare location, United HealthCare shall be responsible to provide
         workspace, supplies and equipment to PBM within a mutually agreed upon
         reasonable time frame and at a mutually agreed upon cost.

              3.3.1. PBM agrees to have a Dedicated Pharmacy Management Unit
              located in Minneapolis as part of the pharmacy management services
              provided for United HealthCare. PBM agrees to have this unit fully
              operational prior to the Commencement Date. United HealthCare will
              designate the name of this dedicated unit, subject to the approval
              of PBM.

              3.3.2. PBM agrees that the senior management team dedicated to
              United HealthCare shall be located in Minneapolis and shall
              consist of a senior level employee who has decision-making
              authority. In addition to general PBM management expertise, PBM
              shall have individuals located in the Dedicated Pharmacy
              Management Unit with expertise in: (a) clinical and analytical
              services, (b) customer account services, (c) marketing and sales
              support, (d) pharmacists to work with the Health Plans, and (e)
              account management for Health Plan and non-Health Plan business.
              PBM shall also provide the following support to the Dedicated
              Pharmacy Management Unit's activities for United HealthCare from
              PBM's corporate or other offices: customer service, legal and
              regulatory compliance, information systems, network management,
              operational support, underwriting, manufacturer activity and
              clinical programs.

              3.3.3. PBM agrees that the services provided by PBM's dedicated
              pharmacy management services include: (a) work with United
              HealthCare to position United HealthCare's prescription drug
              Programs for economic and service success in a changing
              competitive market place; (b) formulate appropriate pharmacy goals
              with and for United HealthCare; (c) develop and execute a pharmacy
              marketing plan that will enable United HealthCare to meet its
              sales and growth goals; and (d) help with pharmacy cost management
              including United HealthCare's trend management and per member per
              month (pmpm) cost management.

              3.3.4. PBM agrees to provide dedicated management and sales
              support as reasonably requested to optimize the value of United
              HealthCare's Program and to attain United HealthCare's identified
              goals. PBM's marketing and sales support shall include but not be
              limited as the market changes from time to time, to the following:
              (a) strategic consultation, training and education; (b) advanced
              training modules for sales representatives; (c) continuing
              education programs; (d) site visits and video presentations; (e)
              focus groups and related consulting; (f) press release development
              and recommendations; (g) strategies to successfully market against

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              competitors; (h) presentation and reference materials for use by
              sales representatives; (i) client sales support during finalist
              presentations; (j) professionally designed marketing literature
              that effectively positions United HealthCare and communicates the
              clients' prescription benefit programs; and (k) customized
              communication programs to motivate and inform selected audiences.

              3.3.5. PBM agrees that different marketing strategies will be
              provided to United HealthCare for growth goals based on revenue,
              profit, and membership.

         3.4. Retail Participating Pharmacy Network. PBM agrees to provide
         national networks of retail Participating Pharmacies under contract
         with PBM to provide dispensing services to Covered Persons under the
         Retail Pharmacy Program. PBM agrees that United HealthCare may require
         the termination of a specific retail pharmacy for good cause including
         quality of care issues. PBM shall notify United HealthCare of any
         terminations in the Participating Pharmacy network. PBM shall send
         letters to Covered Persons, who have utilized a Participating Pharmacy
         in the prior twelve months, notifying them of the termination of such
         Participating Pharmacy, after receiving from United HealthCare: (a) the
         addresses of the affected Covered Persons; and (b) the approval of the
         letters by United HealthCare. United HealthCare shall be responsible
         for the postage costs of any mailings to Covered Persons when a
         Participating Pharmacy is terminated at United HealthCare's request.
         PBM shall be responsible for the postage costs of any mailings to
         Covered Persons when Participating Pharmacy is terminated at PBM's
         request.

              3.4.1. PBM will provide United HealthCare with at least three
              network alternatives by the Commencement Date as described in the
              Financial Appendix:

                     3.4.1.1. PBM shall provide and maintain a
                     Participating Provider network that is taken as a
                     whole no less favorable in terms of number, location,
                     and quality of providers than the network available
                     to United HealthCare as of the period just prior to
                     the Commencement Date and PBM shall guarantee no
                     deterioration in reimbursement during the term of
                     this Agreement as compared to the period just prior
                     to the Commence Date. This network may upon parties'
                     mutual written consent be contracted through United
                     HealthCare.

                     3.4.1.2.  PBM shall make available its CCNIII network.

                     3.4.1.3.  PBM shall make available its CCN+ network.

              3.4.2. PBM agrees to use reasonable commercial efforts to create
              alternative retail networks for any new products or other
              offerings that may be developed by United HealthCare from time to
              time.

              3.4.3. For the network described in Section 3.4.1.1, PBM agrees
              that during the term of this Agreement all PBM customized pharmacy
              provider agreements for such retail pharmacy network shall be
              assignable to United HealthCare. Such assignment shall be made at
              United HealthCare's sole discretion and at a time determined by
              United HealthCare.

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         3.5. Mail Service. PBM shall provide to United HealthCare and Health
         Plans shall use PBM's mail service program as its exclusive mail
         service program, as more fully described in the Financial Appendix.
         United HealthCare shall use its reasonable commercial efforts to
         encourage non-Health Plan business to use PBM's mail service. PBM
         agrees to interface with other mail service vendors utilized by
         non-Health Plan business as reasonably requested using PBM's
         specifications.

         3.6. Customized Installation Materials. PBM agrees to provide to United
         HealthCare customized installation materials for United HealthCare that
         are accurate and support the specific language in the Benefit Contract
         and Pharmacy Rider. PBM is responsible for administering the Benefit
         Contract and Pharmacy Rider accurately and in accordance with all
         regulatory requirements. At United HealthCare's option and approval,
         PBM shall produce brochures, and other Covered Person materials for
         Covered Persons specific to Covered Prescription Drug Services. PBM
         agrees to provide an accompanying explanatory brochure and direct
         reimbursement claim forms for use by Covered Persons who have not
         received or who have lost their Identification Cards. PBM agrees that
         any Covered Person materials must be approved by United HealthCare.
         United HealthCare shall be responsible for all postage costs related to
         mailings to Covered Persons except as otherwise provided in this
         Agreement.

         3.7. Eligibility. PBM agrees to administer eligibility of Covered
         Persons according to eligibility information provided by United
         HealthCare via tape or telecommunication or such other reasonably
         practicable method in a mutually agreeable acceptable format. PBM
         agrees to provide toll-free access for Covered Persons to PBM's
         Customer Service Department for eligibility and claims processing
         assistance. PBM may rely on eligibility information provided by United
         HealthCare for all purposes related to this Agreement.

         3.8. Covered Person Protection Provision. PBM hereby agrees that it
         shall not seek payment, other than Copayments, from any Covered Person
         for Covered Prescription Drug Services under any circumstances. This
         Section shall survive the Agreement.

         3.9. Communications. PBM agrees that all written communications sent to
         United HealthCare Covered Persons, participating providers or
         facilities that relate in any way to United HealthCare's Benefit
         Contract or Pharmacy Rider must be reviewed and approved by United
         HealthCare before such communications are sent out to any such
         individuals or groups. PBM agrees that all program communication
         protocols to be used with United HealthCare participating physician
         providers will be reviewed and approved by United HealthCare prior to
         use. United HealthCare shall approve or disapprove all such materials
         within a reasonable time after submission by PBM.

         3.10. Claims Processing.

               3.10.1. PBM shall process Covered Persons' Covered Prescription
               Drug Services claims in accordance with regulatory requirements,
               the Benefit Contract and Pharmacy Rider, and PBM's standard
               operating procedure.

               3.10.2. At the end of each bi-weekly claims cycle, or other
               processing time period as mutually agreed to by the parties, PBM
               shall provide claims reports and written notice to United
               HealthCare of the amount necessary to pay claims processed and
               fees due to PBM for claims processed.

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               3.10.3. Any disputes over claims shall be resolved prior to
               payment by PBM. If PBM makes an error or omission in claims
               processing, PBM shall be solely responsible for any related
               costs.

               3.10.4. All postage costs related to payment or denial of direct
               reimbursement claims is the responsibility of PBM.

         3.11. Claim Appeals. In the event of a claim denial by PBM, PBM shall
         promptly communicate to the Covered Person the right to appeal
         according to the Covered Person's Benefit Contract and Pharmacy Rider
         and applicable law.

         3.12. Claims and Pharmacy Auditing. PBM shall regularly audit its
         electronic and on-site claim processing activities and shall regularly
         audit its retail pharmacies, in accordance with PBM's standard audit
         procedures. PBM shall provide United HealthCare with a report on such
         audits containing specific audit information and containing such other
         information as United HealthCare reasonably requests. United HealthCare
         shall receive one hundred percent of any such audit recoveries that
         were incorrectly paid pursuant to the United HealthCare Program. When
         any such overpayment was the result of errors or omissions by PBM,
         payment of such audit recovery shall include interest at the prevailing
         prime rate of interest as determined by the Wall Street Journal for the
         period of time from the payment of the claim to receiving recovery from
         PBM.

         3.13. Reports. PBM agrees to provide aggregate reports and
         Payor-specific reports in a format and containing such information as
         United HealthCare reasonably requests; provided in no event shall PBM
         be required to incur costs substantially in excess of expenses incurred
         by the PBM industry generally to provide such reports. This reporting
         shall include PBM's EXPERxT and Standard PLUS Reports and reports
         pursuant to Exhibit A.

         3.14. Coordination of Benefits. When United HealthCare provides
         required information, PBM agrees to process Level I and II coordination
         of benefits in accordance with PBM's coordination of benefits rules.

         3.15. Health Management Program. PBM agrees to provide Health
         Management Programs to Covered Persons at United HealthCare's option.
         Health Management Programs developed during the term of this Agreement
         by PBM shall be made available to United HealthCare. ***

         3.16. Physician-based Pharmaceutical Care Application Information
         System. *** This systems program shall be a knowledge-based system for
         physicians which includes but is not limited to PDL compliance and drug
         compatibility capabilities.

         3.17. Demand Management Services. PBM agrees to utilize reasonable
         efforts to contract exclusively with United HealthCare for Demand
         Management Services by the Commencement Date.***

         3.18.    ***

         3.19. National Accounts. The parties agree to use reasonable commercial
         efforts to work together to increase joint pharmacy National Account
         business. United HealthCare

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.


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<PAGE>

         agrees to utilize PBM as United HealthCare's exclusive PBM for National
         Accounts to the extent required under Section 9. ***

         3.20. Service Performance Standards. United HealthCare and PBM shall
         each use good faith and reasonable commercial efforts to perform their
         respective duties and obligations in a diligent, professionally
         responsible and efficient manner. The parties agree to cooperate with
         and assist each other as reasonably necessary in the performance of
         their respective duties and in developing timely responses to the needs
         of United HealthCare's business. Notwithstanding the general and
         specific Service Performance Standards and Guarantees applicable to PBM
         identified in Exhibit B, PBM shall perform the services for which it is
         responsible under this Agreement using the same degree of skill and
         care in such performance as a prudent person engaged in pharmacy
         benefit management services would use under substantially similar
         circumstances in the management of a similar pharmacy benefit
         management business of United HealthCare's magnitude. PBM agrees to
         accept the Service Performance Standards and Guarantees set forth in
         Exhibit B, including the dollars which shall be at risk should PBM's
         aggregate performance or guarantees be below the indicated targets. PBM
         shall provide to United HealthCare: (a) monthly or quarterly reports as
         applicable of PBM's performance; and (b) annual statistics, within
         ninety (90) days of the end of the calendar year, demonstrating whether
         PBM met the Service Performance Standards and Guarantees described in
         Exhibit B. At the same time PBM provides such statistics to United
         HealthCare, PBM shall reimburse United HealthCare any monies owed
         because of PBM's failure to meet such Service Performance Standards and
         Guarantees.

         3.21. Insurance. PBM shall procure by the Effective Date and shall
         maintain, at its own expense: (a) professional liability insurance in
         the amount of $5,000,000.00 per occurrence and $10,000,000.00 annual
         aggregate including coverage for errors and omissions; (b) general
         liability insurance in the amount of $1,000,000.00 per each occurrence
         and $3,000,000.00 annual aggregate; and (c) umbrella/excess liability
         insurance in the amount of $10,000,000.00 each occurrence and
         aggregate. United HealthCare must be named as an "additional insured"
         on the policies referenced above for claims affecting United
         HealthCare's interests.

         3.22. Guaranty. PBM's and United HealthCare's parent corporations will
         guaranty the fulfillment of all of the parties' financial and other
         obligations by the delivery of a fully executed Guaranty Agreement in
         the form set forth at Attachment 1 and Attachment 2.

         3.23. Claims and Regulatory Inquiries. PBM shall promptly, within ten
         (10) days, provide information to United HealthCare about all
         non-routine inquiries by regulatory departments, pharmaceutical
         manufacturers, attorneys, Covered Persons, or other individuals or
         entities with respect to PBM's services pursuant to this Agreement
         including but not limited to the denial of any claims or any causes of
         action.

         3.24.    ***

SECTION 4. OBLIGATIONS OF UNITED HEALTHCARE
           --------------------------------

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.


                                       10

<PAGE>


         4.1. Obligations of United HealthCare.

              4.1.1. United HealthCare will be the entity that contracts with
              Health Plans and non-Health Plans related to the services provided
              under this Agreement. Non-Health Plans include but are not limited
              to entities, groups, competitors and individuals. Such agreements
              between United HealthCare and Health Plans and non-HealthPlans may
              provide for additional services by United HealthCare and shall
              make provision for fees and other terms that United HealthCare, in
              its discretion, determines to establish.

              4.1.2. United HealthCare agrees to provide information reasonably
              needed by PBM to administer its responsibilities under this
              Agreement including (a) Benefit Contract and Pharmacy Rider
              documents; (b) timely eligibility and enrollment data on Covered
              Persons; (c) specific United HealthCare customer information and
              needs; (d) participating pharmacy information when PBM's pharmacy
              network is not utilized or is used in addition to another
              participating pharmacy network; (e) patient identifiable
              prescription drug claims (including prescription drug claims from
              prior pharmacy benefit management vendors); and (f) patient
              identifiable medical claims reasonably necessary for PBM to
              implement and operate its clinical management programs for United
              HealthCare. Information shall be provided in a mutually agreeable
              format.

              4.1.3. United HealthCare or Payor shall be solely responsible for
              drafting United HealthCare's Benefit Contract and Pharmacy Rider.

              4.1.4. United HealthCare shall identify its targeted pharmacy
              growth and benefit objectives on at least an annual basis and
              provide such objectives to PBM.

         4.2. Claims Payment. United HealthCare shall establish a bank
         account(s) (the "Program Account") from which PBM will make claims
         payments as set forth below, using United HealthCare check stock.
         United HealthCare will pay PBM Administrative Fee payments, as set
         forth below through Automated Clearing House transfer. Banking
         arrangements may change from time to time subject to the mutual
         agreement of the parties.

              4.2.1. Claims. PBM shall provide United HealthCare with a
              bi-weekly consolidated statement of expected payments to be made
              from the Program Account for services provided by PBM under the
              Program during such claim cycle ***

              4.2.2. Administrative Fees. PBM will provide United HealthCare
              with an Administrative Fee statement in accordance with PBM's four
              (4) week administrative fee cycle *** Within two (2) days after
              receipt of each statement from PBM as set forth in this Section
              4.2.2 above, United HealthCare shall transfer such funds via
              Automated Clearing House transfer.

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.


                                       11


<PAGE>

     4.3. Regulatory Compliance. United HealthCare shall (a) maintain all
     material federal, state, and local licenses that are reasonably required to
     operate its business; (b) comply with all material applicable statutes and
     regulations; and, (c) make reasonable commercial efforts to cause Health
     Plans to comply with (a) and (b).

     4.4. Insurance. United HealthCare agrees to maintain adequate insurance
     related to the operation of its business and its obligations under the
     Agreement.

     4.5. Claims and Regulatory Inquiries. United HealthCare shall promptly
     provide information to PBM within ten days about all non-routine inquiries
     by regulatory departments, pharmaceutical manufacturers, Covered Persons,
     or other individuals or entities with respect to the services provided by
     PBM under this Agreement.

     4.6. Minimum PDL Enrollment. United HealthCare agrees that it shall
     maintain a minimum of *** Health Plan Covered Persons and *** non-Health
     Plan Covered Persons receiving services under this Agreement including
     participating in United HealthCare's PDL by January 1, 2001 and throughout
     the term of this Agreement. ***

SECTION 5. MUTUAL OBLIGATIONS
           ------------------

5.1. Pharmacy Strategic Council. United HealthCare and PBM shall create a
Pharmacy Strategic Council ("Strategic Council"), the members of which shall be
three or four representatives from and designated by each of United HealthCare
and PBM. The Strategic Council shall meet no less frequently than quarterly
throughout the term of this Agreement and shall be responsible for (a)
overseeing the performance of the parties under this Agreement; (b) enhancing
communication of decisions made by the parties or the Strategic Council, (c)
resolving disputes as directed by this Agreement; and (d) establishing a forum
for the discussion of common strategic objectives of United HealthCare and PBM.
United HealthCare shall be responsible to convene meetings of the Strategic
Council.

5.2. Expenses. Except as expressly set forth in this Agreement, each of the
parties shall bear the expenses incurred by it in connection with its
performance under this Agreement.

         5.3. Audits.

              5.3.1. United HealthCare shall keep reasonable documentation of
              all Covered Persons related to this Agreement. PBM shall have the
              right to review such data at reasonable times upon reasonable
              notice

              5.3.2. PBM shall maintain adequate medical, financial and
              administrative records related to Program services in a manner
              consistent with the standards of the community and in accordance
              with all applicable statutes and regulations including, but not
              limited to, reasonable documentation of all the data of Covered
              Persons related to PBM's services under this Agreement to
              determine that PBM is performing its obligation under the
              Agreement and correctly billing United

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.



                                       12

<PAGE>

              HealthCare. United HealthCare shall have the right to review such
              data at reasonable times and upon reasonable notice. If any audit
              reveals an underpayment or overpayment by United HealthCare to PBM
              such discrepancy will be reported to PBM and PBM will respond
              within forty-five (45) days. Any amounts PBM deemed payable as a
              result thereof shall be promptly repaid to the appropriate party
              with accrued interest (whether or not this Agreement has
              terminated). If the parties disagree on the amount to be repaid,
              the matter shall be sent to the Strategic Council. This obligation
              shall survive the expiration or earlier termination of this
              Agreement.

              5.3.3. PBM's agreements with pharmaceutical manufacturers are
              subject to confidentiality agreements. Any audit of PBM's
              agreements with pharmaceutical manufacturers conducted pursuant to
              this Agreement, shall be conducted by a third party public
              accounting firm reasonably acceptable to PBM whose audit
              department is a separate stand alone function of its business,
              subject to execution of a confidentiality agreement, and shall
              include only those portions of such pharmaceutical manufacturer
              agreements as necessary to determine PBM's compliance with Section
              5.5.2 in respect to PDL Rebates.

         5.4. Preferred Drug List. Beginning on the Commencement Date and
         continuing through the term of this Agreement, PBM shall administer the
         United HealthCare PDL or other formularies as developed by United
         HealthCare from time to time pursuant to the Benefit Contract, Pharmacy
         Rider and this Agreement. All Health Plans shall participate in the PDL
         unless otherwise agreed, in writing, by United HealthCare and PBM.
         United HealthCare agrees to make reasonable commercial efforts to have
         non-Health Plan business utilize this PDL.

              5.4.1. United HealthCare Preferred Drug List. The Preferred Drug
              List ("PDL") is a list that identifies those Federal Drug
              Administration ("FDA") approved prescription drug products that
              are preferred by United HealthCare for dispensing to Covered
              Persons.

                     5.4.1.1. United HealthCare and its P&T Committee have
                     complete control in deciding what prescription drugs are
                     placed on the PDL from time to time.

                     5.4.1.2 PBM shall have the right to present clinical data
                     and rationale to the P&T Committee in conjunction with its
                     evaluation of prescription drugs, but shall not be a voting
                     member of the P&T Committee.

              5.4.2. Preferred Drug List Compliance. United HealthCare has in
              effect certain Program features designed to promote prescribing of
              PDL drugs by participating providers, dispensing of PDL drugs by
              Participating Pharmacies, and awareness of the advantages of the
              PDL by Covered Persons. Such features include, but are not limited
              to, incented benefit plan designs and corresponding levels of
              Copayments. United HealthCare shall notify PBM, in advance, of any
              proposed Program modifications that are reasonably anticipated to
              have a material effect on PDL compliance. Additionally, United
              HealthCare shall participate in PBM's formulary communications
              programs, which may include communications with United HealthCare
              Covered Persons, Participating Pharmacies and/or physicians, and
              financial incentives to Participating

                                       13

<PAGE>

              Pharmacies for their participation in the PDL. PBM shall notify
              United HealthCare, in advance, of all PDL communications programs.
              United HealthCare shall approve and may make reasonable changes to
              the content of such PDL communication programs before they are
              provided to the above United HealthCare groups and individuals.

              5.4.3. Exclusive PDL Administration. Beginning on the Commencement
              Date, United HealthCare agrees that PBM will be the exclusive
              administrator of the United HealthCare PDL for those entities
              covered by the exclusivity requirements of Section 9 of this
              Agreement. After the Commencement Date, United HealthCare agrees
              not to accept any funds the receipt of which would influence the
              selection of prescription drugs for inclusion on United
              HealthCare's PDL without the express written consent of PBM.

         5.5. PDL Rebate Program. Pursuant to agreements entered into between
         PBM and certain pharmaceutical manufacturers ("Manufacturer
         Agreements"), PBM receives PDL Rebates from certain drug manufacturers
         as a result of the inclusion of such manufacturer's branded products on
         the PDL ("PDL Rebates"). *** United HealthCare acknowledges that PBM
         also receives and retains additional rebates and/or fees from certain
         manufacturers which may take into account various factors including the
         utilization of certain drugs within their respective therapeutic
         categories for PBM's book of business in aggregate as a result of
         various commitments, services and programs including, but not limited
         to, formularies, e.g. cost effective, incentive, volume, and
         market-share rebates.

              5.5.1. ***

              5.5.2. Good Faith Rebate Negotiations and Distribution. ***

              5.5.3. Customer ERISA Requirements. As part of the standard
              Administrative Fee, PBM agrees to provide a report to United
              HealthCare, which discloses ERISA required information about
              rebates for United HealthCare customers. PBM agrees to assist
              United HealthCare as reasonably requested in providing disclosure
              information to each of its self-insured customers. PBM
              acknowledges that as required by ERISA, United HealthCare's
              self-insured customers retain the right to terminate use of the
              PDL if customer does not agree with a PDL selection.

              5.5.4. Drug Formulary Only Administration. PBM shall, at United
              HealthCare's request, provide drug formulary only rebate
              administration for no additional fee for pharmacy claims processed
              by other entities, if such business qualifies for PDL Rebates.
              Such entities shall comply with PBM's data format requirements and
              processes. The PDL Rebate Guarantee shall not apply to Drug
              Formulary Only accounts.

              5.5.5. Government and Other Actions. In the event any government
              action, including a change in statute or regulation or a change in
              the interpretation of

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.



                                       14

<PAGE>

              statute or regulation that has a material adverse affect on the
              availability of PDL Rebates, parties shall negotiate in good faith
              *** to reflect the effect of such event.

         5.6. Conversion Costs and Services. It is the intent of this Agreement
         that PBM shall provide the majority of services required to convert
         United HealthCare's present pharmacy benefit management service from
         its current vendor to PBM. The parties agree that such costs for
         conversion services are included in the Administrative Fee. The
         conversion services provided by PBM shall include, but are not limited
         to: (a) communications to Covered Persons, physicians, pharmacies; (b)
         group training of United HealthCare pharmacy, sales and other staff;
         (c) development of Covered Person materials; (d) required modification
         of PBM's information systems; (e) development of the Minnesota
         Dedicated Pharmacy Management Unit; (f) analytical support for the
         conversion of models and tools for rebates, networks and guarantees;
         and (g) printing of physician and Covered Person PDLs. United
         HealthCare's only responsibility for conversion costs and services is
         limited to postage, pharmacy management implementation leadership,
         internal United HealthCare communications, limited internal United
         HealthCare information system programming, state filings, and servicing
         of customer calls coming directly into United HealthCare. The parties
         agree that if the conversion to PBM services results in unanticipated
         problems, the parties shall commit such additional resources, as
         mutually agreed, in order to implement this program in accordance with
         the terms of this Agreement.


SECTION 6. CONFIDENTIALITY
           ---------------

         6.1. Confidential and Proprietary Information. In fulfilling the
         objectives of this Agreement, United HealthCare and PBM may provide to
         each other or learn (directly or indirectly) certain information which
         a party considers to be confidential or proprietary ("Confidential
         Information"). Confidential Information shall include, without
         limitation, information relating to Covered Person and provider
         identities; reimbursement procedures; claims adjudication procedures;
         software and financial systems; the specific financial sections and
         provisions, specific operational aspects, financial guarantees
         contained in this Agreement, and other information relating to each
         party's business which is not generally available to the public. Each
         party's Confidential Information shall also include confidential,
         proprietary information which a third party has disclosed to a party,
         and which such party is obligated to maintain as confidential.
         Notwithstanding the foregoing, PBM and United HealthCare acknowledge
         the other party's obligation to provide its pharmaceutical
         manufacturers and customers with information generally regarding this
         Agreement and consistent with the foregoing agrees that such parties
         may disclose generally the terms of this Agreement.

              6.1.1. Neither party shall have any obligation to disclose its
              Confidential Information to the other party, unless such an
              obligation is set forth elsewhere in this Agreement.

              6.1.2. Each party agrees to maintain the secrecy of and not to use
              or disclose the other party's Confidential Information, except as
              required in order for a party

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.


                                       15

<PAGE>

              to perform under this Agreement. A party may disclose the other
              party's Confidential Information only to the receiving party's
              directors, officer, employees, agents and representatives
              (collectively, the "Representatives"), but only if a
              Representative needs to know the Confidential Information in order
              for the receiving party to perform under this Agreement. The
              parties agree to inform their Representatives of the confidential
              nature of the disclosing party's Confidential Information, and
              each party shall require any Representative, who is not an
              employee of the receiving party to sign an appropriate
              confidentiality agreement to protect the disclosing party's
              Confidential Information from unauthorized use or disclosure. Each
              party shall direct its Representatives to treat the other party's
              Confidential Information confidentially, and not to use it, other
              than to perform under this Agreement. Each party shall be
              responsible for its Representatives' use and disclosure of the
              other party's Confidential Information.

              6.1.3. The restrictions in this Section 6.1 shall not apply to:
              (a) information which is or becomes generally available to the
              public, other than as a result of a disclosure by the receiving
              party; (b) information a party obtains from a third party which
              has no obligation to keep the information confidential; (c)
              information which a party had in its possession prior to receiving
              Confidential Information from the disclosing party; (d)
              information which is independently developed by a party without
              reference to the Confidential Information disclosed by the other
              party; or (e) information required to be disclosed by law, subject
              to compliance with Section 6.1.4.

              6.1.4. The parties agree that if a party is required (by subpoena,
              civil investigative demand or similar process) to disclose the
              other party's Confidential Information, the disclosing party shall
              notify the other party of the request or requirement so that the
              other party may seek an appropriate protective order or waive
              compliance with the sections or provisions of this Agreement. The
              parties agree to exercise their commercially reasonable efforts to
              assist each other in obtaining a protective order or other
              reliable assurance that confidential treatment will be accorded
              the Confidential Information.

              6.1.5. Upon termination of this Agreement each party will
              immediately discontinue use of the other party's Confidential
              Information, and shall return the other party's Confidential
              Information to it, or destroy the other party's Confidential
              Information in its possession or control. However, each party may
              retain the other party's Confidential Information to the extent
              such Confidential Information has been used in or integrated into
              reports, studies, analyses, compilations or other documents in the
              receiving party's possession or control. Any oral Information will
              continue to be subject to the terms of this letter agreement. The
              parties agree that the Confidentiality obligations of this Section
              6 shall survive termination of this Agreement.

         6.2. Privacy of Individually Identifiable Health Information. United
         HealthCare and PBM will maintain the privacy and confidentiality of all
         individually identifiable information regarding Covered Persons and
         non-Covered Persons in accordance with all applicable statutes and
         regulations. PBM and United HealthCare shall require all employees to
         comply with this section. PBM agrees that all Covered Person
         information provided to PBM by United HealthCare belongs exclusively to
         United HealthCare.

                                       16

<PAGE>

         6.3. United HealthCare's Database. Subject to Section 6.4 below, PBM
         agrees that all data of United HealthCare and its affiliates, including
         but not limited to Covered Person, customer, and provider related data,
         which is in PBM's possession, whether obtained by PBM in the course of
         providing services for United HealthCare or as a result of a data
         transfer between United HealthCare and PBM, belongs solely to United
         HealthCare. PBM has the right to possess and use such data only to the
         extent permitted by contracts between the parties or as otherwise
         provided in this Agreement subject to applicable legal restrictions.
         All information contained in United HealthCare's database and systems
         belongs exclusively to United HealthCare. PBM shall not have direct
         access to United HealthCare's database and systems without signing a
         separate agreement with United HealthCare. PBM and United HealthCare
         recognize and agree that only information necessary for PBM performance
         under the Agreement shall be supplied by United HealthCare to PBM and
         PBM agrees that such data belongs exclusively to United HealthCare.

         6.4 PBM Use of Data. Notwithstanding the foregoing provisions of this
         Section 6, PBM may incorporate prescription data into PBM's
         prescription database when that database is used by PBM or provided to
         others for research, statistical, marketing, sales tracking or similar
         purposes. PBM agrees that if such prescription data is identifiable as
         to (a) Covered Persons, (b) employers and/or customers, and/or (d)
         United HealthCare, such identifiable information will be deleted or
         encrypted before it is provided to others. This section only applies to
         PBM's use of prescription data and does not apply to medical data.

SECTION 7. INTELLECTUAL PROPERTY
           ---------------------

         7.1. Any Intellectual Property developed solely by PBM without using
         United HealthCare's Confidential Information shall remain the property
         of PBM. United HealthCare's right to use such PBM Intellectual Property
         shall be limited to those permitted by this Agreement or as otherwise
         agreed to in writing by the parties.

         7.2. Any Intellectual Property developed solely by United HealthCare,
         without utilizing PBM's Confidential Information shall remain the
         property of United HealthCare. PBM's right to use such Intellectual
         Property shall be limited to those permitted by this Agreement or as
         otherwise agreed to in writing by the parties.

         7.3. The parties agree that any Intellectual Property or work product:
         (a) created jointly by the parties; or (b) created by PBM under this
         Agreement; or (c) created by PBM upon United HealthCare's request (the
         "Work Product"), shall be the joint property of PBM and United
         HealthCare.

SECTION 8. YEAR 2000 WARRANTY
           ------------------

PBM and United HealthCare warrant that (a) the goods and services to be provided
under this Agreement are in a state of Year 2000 Compliance, (b) the delivery of
the goods or services provided under this Agreement to parties will not be
adversely affected by Year 2000 Compliance (including without limitation the
Year 2000 Compliance of parties' information and/or operating systems or those
of any third parties that assist parties in the fulfillment of its

                                       17

<PAGE>


obligations under this Agreement); (c) the goods or services provided under this
Agreement to the parties will not affect or impair the Year 2000 Compliance of
the parties or any third party that has a business relationship with parties;
and (d) The parties have taken all necessary or appropriate steps to insure that
it is in compliance with the foregoing warranties. "Year 2000 Compliance" means
the ability of information or other systems to: (x) record, store, process,
provide, and insert true and accurate dates and calculations for dates including
and following January 1, 2000; and (y) process records containing dates after
January 1, 2000; and (z) be interoperable in such respects with other systems
used by the parties PBM, the PBM's parties' vendors of any kind, or the parties
, including without limitation those which may deliver records to, receive
records from or otherwise interact with the goods or services provided by the
parties.

SECTION 9. EXCLUSIVITY
           -----------

         9.1 Except as defined in Section 9 and its subparts, United HealthCare
         Services, Inc. agrees that it shall not enter into a contract, or any
         other similar arrangement, for pharmacy benefit management services
         with a third party other than PBM with respect to services beginning
         with the Commencement Date and continuing until the term of this
         Agreement expires or until the Agreement is terminated.

         9.2 This exclusivity section does not apply to any entities who: (a)
         are acquired by or merged with United HealthCare Services, Inc. and its
         affiliates and subsidiaries after this Agreement is executed; and (b)
         have a contractual relationship with another pharmacy benefit
         management company, at the time this Agreement is executed. The parties
         agree that in no event will United HealthCare be required to terminate
         another pharmacy benefit management vendor prior to the expiration of
         such vendor's contract. United HealthCare agrees to convert any such
         entity to coverage under this Agreement as soon as said entity's
         contract with such other pharmacy benefit manager expires or can be
         reasonably terminated without the payment of any additional fees,
         fines, penalties, or damages. United HealthCare shall use its
         reasonable commercial efforts to include such entities under this
         Agreement. Within sixty (60) days after execution of this Agreement,
         United HealthCare shall provide PBM with the name of any such entity
         that has a contractual relationship in effect with another pharmacy
         benefit manager, the termination date of said contract and the
         approximate number of persons covered under such contract.

         9.3 Notwithstanding the foregoing, United HealthCare shall not be
         required to include government-defined benefit programs or any entity
         for which United HealthCare provides management or administrative
         services but does not own a controlling interest unless such entity
         agrees to utilize the services contemplated by this Agreement.

         9.4 The parties acknowledge and agree that United HealthCare may not be
         able to transition all Covered Persons and participating Health Plans
         to PBM: (a) on the Commencement Date; and/or (b) immediately in the
         event of an acquisition, merger or similar transaction that occurs
         prior to or during the term of this Agreement. The parties agree that a
         reasonable transition of Covered Persons and participating Health Plans
         related to (a) and (b) of this section shall not be considered a breach
         of this Section 9 or of this Agreement. Notwithstanding the foregoing,
         United HealthCare shall transition all existing Health Plans that will
         be covered under this Agreement within a six (6) month period of the
         Commencement Date unless otherwise mutually agreed to by the parties.
         This is not meant to restrict United HealthCare's ability to add other
         Health Plans and non-Health Plans during the term of this Agreement.

                                       18

<PAGE>


SECTION 10. RENEGOTIATION DUE TO SUBSTANTIAL CHANGE
            ---------------------------------------

In the event of a Substantial Change the parties agree to renegotiate in good
faith so as to reflect as nearly as possible the economic factors that were the
basis for this Agreement prior to the Substantial Change. In the event such
renegotiations do not result in a mutually agreeable economic solution or the
parties are not able to agree as to whether a Substantial Change has occurred,
such issue shall be submitted pursuant to the dispute resolution procedure set
forth in Section 13. 6.

SECTION 11. INDEMNIFICATION
            ---------------

         11.1. United HealthCare agrees to indemnify and hold PBM, its
         subsidiaries and affiliates, and their respective officers, directors,
         agents and employees harmless from and against any and all liabilities,
         losses, proceedings, actions, damages, claims or expenses of any kind,
         including reasonable attorneys' fees, which result from (a) a breach by
         United HealthCare of any of its obligations under this Agreement or (b)
         the negligence or willful acts or omissions by United HealthCare, its
         agents, directors, officers, or employees, in connection with the
         representations, duties and obligations of United HealthCare under this
         Agreement.

         11.2. PBM agrees to indemnify and hold United HealthCare, its
         subsidiaries and affiliates, and their respective officers, directors,
         agents and employees harmless from and against any and all liabilities,
         losses, proceedings, actions, damages, claims or expenses of any kind,
         including reasonable attorneys' fees, which result from (a) a breach by
         PBM of any of its obligations under this Agreement or (b) the
         negligence or willful acts or omissions by PBM, its agents, directors,
         officers, or employees, in connection with the representations, duties
         and obligations of PBM under this Agreement.

SECTION 12. TERM AND TERMINATION
            --------------------

         12.1. Term. The term of this Agreement is for the period commencing on
         the Effective Date and ending December 31, 2005, with performance
         beginning on the Commencement Date, unless terminated earlier as
         outlined in Section 12.2.

         12.2. Termination.  This Agreement may be terminated as follows:

               12.2.1. By either party, after a ten day notice period, in the
               event of a payment default, unless such default is cured within
               such notice period, unless the defaulting party is able to give
               assurances to the other party's reasonable satisfaction.

               12.2.2. By either party, effective 30 days after not less than 60
               days written notice and cure period in the event of a material
               breach other than a payment default of this Agreement by the
               other party.

                                       19

<PAGE>


               12.2.3. By either party, effective immediately upon provision of
               written notice to the other party, if the other party has become
               insolvent or has been dissolved or liquidated, or makes a general
               assignment for the benefit of creditors or has a receiver
               appointed for a substantial portion of its assets.

               12.2.4. Automatically and without any notice or other action on
               the part of either party if either party files, or has filed
               against it, a petition in bankruptcy and such petition is not
               dismissed within 60 days of the filing unless the party which is
               not subject to such petition elects to waive such termination
               prior to the expiration of such 60 day period.

               12.2.5. By either party immediately due to loss of insurance or
               inability to self-insure as required under this Agreement.

               12.2.6. By United HealthCare, effective at a time reasonable to
               transferring the pharmacy management services to a new vendor but
               no later than 180 days after notice to PBM, if a change of
               control of PBM occurs. For purposes of this Section, "Change of
               Control" means: (a) any transaction or series of transactions
               that cause 50% or more of the stock of PBM or United HealthCare,
               as the case may be, to be held by individuals or entities who are
               not stockholders of PBM or United HealthCare, as the case may be,
               on the date hereof; or (b) any sale of PBM assets or United
               HealthCare, as the case may be, that are essential to the
               business of PBM or United HealthCare, as the case may be; or (c)
               any merger where PBM or United HealthCare, as the case may be, is
               not the surviving entity.

         12.3. United HealthCare Change of Control. If during the term of the
         Agreement, there is a Change of Control of United HealthCare, as
         defined above, United HealthCare has the option to terminate the
         Agreement by providing PBM with ninety (90) days prior written notice
         and by paying to PBM within sixty days of termination date an amount
         equal to the aggregate payments that have been made to United
         HealthCare by PBM under Trend Guarantee and PDL Rebate Guarantee as
         addressed in the Financial Appendix. If any such termination occurs
         prior to payment by PBM of any Trend Guarantee or PDL Rebate Guarantee,
         United HealthCare shall pay to PBM within 60 days after such
         termination date an amount equal to the transition costs paid by PBM to
         United HealthCare pursuant to Provision 8 of the Financial Appendix.

         12.4. Information to Covered Persons. PBM acknowledges the right of
         United HealthCare to inform Covered Persons of PBM's termination.

         12.5. End of Term or Termination. In the event this Agreement is
         terminated for any reason prior to its expiration or upon the end of
         the term, PBM and United HealthCare shall cooperate reasonably with
         each other for up to a six month period following such termination or
         expiration to effect a quality, cost-effective and smooth transition of
         United HealthCare's business previously operated or managed by PBM to
         United HealthCare or United HealthCare's designee. ***

               12.5.1. ***

               12.5.2. ***

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.

                                       20

<PAGE>


                        12.5.2.1        ***

                        12.5.2.2.       ***

                        12.5.2.3.       ***

                        12.5.2.4.       ***

               12.5.3.  ***

SECTION 13. GENERAL PROVISIONS
            ------------------

         13.1. Notices. All notices or other communications required or
         permitted hereunder shall be in writing and shall be delivered
         personally, by commercial overnight delivery service, by facsimile or
         sent by certified, registered or express air mail, postage prepaid, and
         shall be deemed given when so delivered personally, by overnight
         delivery service or by facsimile, or if mailed, five days after the
         date of mailing, addressed as follows:

        ------------------------------------------------------------------------
        If to PBM:                            If to United HealthCare:
        ------------------------------------------------------------------------
        Merck Medco Managed Care, L.L.C.      United HealthCare Services, Inc.
        100 Summit Avenue                     9900 Bren Road East, P.O. Box 1459
        Montvale, New Jersey  07645-1753      Minnetonka, Minnesota 55343
        Attention: Jim Cooper, Esq.           Attention:  David Lubben, Esq.
        General Counsel                       General Counsel
        Facsimile No. (201) 782-7878          Facsimile No. (612) 936-0044
        ------------------------------------------------------------------------

         or to such other address or to such other person as may be designated
         by written notice given from time to time during the term of the
         Agreement by one party to the other.

         13.2. Right of First Offer. Subject to such confidentiality
         arrangements as PBM may reasonably propose, PBM agrees to provide
         United HealthCare with reasonable prior notice of any event that might
         lead to a change of control of PBM (which shall include any sale of
         more than 10% of the voting securities to an entity not wholly owned by
         Parent. Any notice herein contemplated shall be given to the Chief
         Executive Officer or General Counsel of United HealthCare. Such advance
         notification shall be maintained strictly confidential to the Chief
         Executive Officer and General Counsel, except with the written consent
         of the person giving notification.

         13.3. Force Majeure. Noncompliance with the obligations of this
         Agreement due to force majeure, laws or regulations of any government,
         war, civil commotion, destruction of production facilities and
         materials, fire, earthquake or storm, labor disturbances, shortage of
         materials, failure of public utilities or common carriers, and any
         other causes beyond the reasonable control of the applicable party,
         shall not constitute breach of contract.

***      Represents text deleted pursuant to a confidentiality treatment claim
         filed with the Securities and Exchange Commission pursuant to Rule
         406 under the Securities Act of 1933, as amended.




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<PAGE>


         13.4. Assignment. United HealthCare may assign all or any of its rights
         and responsibilities under this Agreement to any entity controlling,
         controlled by or under common control with United HealthCare. United
         HealthCare may make such an assignment that is effective only after the
         party to which such rights or responsibilities are assigned (the
         "Assignee") no longer controls, is controlled by or is under common
         control of such party; provided, however, that any such entity is
         reasonably able to perform any responsibilities which it assumes.
         United HealthCare may assign its rights and responsibilities in such a
         way that both United HealthCare and Assignee share in the rights and
         responsibilities that, prior to such assignment, were solely those of
         United HealthCare. PBM may assign all or any of its rights and
         responsibilities under this Agreement to any entity controlling,
         controlled by, or under common control with such party. PBM and United
         HealthCare each acknowledge that persons and entities under contract
         with such party or in the case of United HealthCare, a Participating
         Plan, may perform certain administrative services under this Agreement.
         Other than above, United HealthCare and PBM agree that they shall not
         assign any of the rights and responsibilities under this Agreement
         without the prior written consent of the other party.

         13.5. Amendment. Any amendments to this Agreement shall require written
         approval of the parties.

         13.6. Dispute Resolution. Any controversy or claim arising out of or
         relating to this Agreement or a breach of the Agreement shall initially
         be submitted to the Strategic Council for resolution. The Strategic
         Council shall have the authority to: (a) waive the controversy, claim
         or breach; (b) designate specific corrective or alternative action; (c)
         set a time period for certain performance; (d) submit the matter to
         mediation; or (e) allow a party to litigate the issue. Any action taken
         by the Strategic Council shall be evidenced by a written notice to both
         parties. During the period of time in which such issues are being
         examined by the Strategic Council or are under mediation or litigation,
         the parties shall proceed diligently with the performance of their
         duties under this Agreement in a businesslike and efficient manner. In
         the event the Strategic Council cannot resolve the matter within sixty
         days or the matter is not one which must be submitted to the Strategic
         Council, then within a reasonable time, a party or the Strategic
         Council may submit the matter to mediation or litigation in
         Minneapolis, Minnesota.

         13.7. Relationship Between United HealthCare and PBM. The relationship
         between United HealthCare and PBM is solely that of independent
         contractors and nothing in this Agreement or otherwise will be
         construed or deemed to create any other relationship, including one of
         employment, agency or joint venture.

         13.8. Invalidity/Governing Law. If any section or provision of this
         Agreement is finally declared or found to be illegal or unenforceable
         by a court of competent jurisdiction, both parties shall be relieved of
         all obligations arising under such section or provision, but if capable
         of performance, the remainder of this Agreement shall not be affected
         by such declaration or finding.

         13.9. Accreditation Compliance. PBM agrees to provide United HealthCare
         with reasonable assistance and cooperation in meeting all accreditation
         standards, including but not limited to National Committee for Quality
         Assurance and Joint Commission, applicable to the services provided
         pursuant to this Agreement.


                                       22

<PAGE>



         13.10. Name, Symbol and Service Mark. During the term of this
         Agreement, PBM and United HealthCare agree that they shall not use each
         other's name, symbol or logo, or service mark for any purpose
         whatsoever including without limitation in connection with marketing or
         publications describing, explaining, or otherwise discussing the
         Program without the prior approval of the other party.

         13.11. Headings. The headings of the various sections herein are for
         convenience of reference only and shall not define, limit or otherwise
         affect any of the terms or sections or provisions hereof.

         13.12. Original Agreement. The parties agree that they shall execute
         two identical originals of this Agreement. Each party shall retain one
         of the originals. Each identical original shall serve as an original of
         the Agreement but all such originals together shall constitute a single
         original contract.

         13.13. Governing Law. This Agreement shall be governed by and construed
         in accordance with applicable Minnesota law without giving effect to
         conflict of law principle.

         13.14. Entire Agreement. This Agreement and its Financial Appendix,
         Exhibits A and B, and Attachments 1 and 2 constitute the entire
         Agreement between the parties in regard to its subject matter.

         13.15. Regulatory Approval. The parties agree and acknowledge that the
         terms of this Agreement may be subject to review by state regulators.

         13.16. Approvals. Approvals required under this agreement shall not be
         unreasonably delayed or withheld.

         13.17. Additional Agreements. Upon request, PBM agrees to enter into an
         additional separate agreement with any United HealthCare affiliate
         receiving services hereunder reflecting the services received and
         obligations of such affiliate.

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


UNITED HEALTHCARE SERVICES, INC.            MERCK MEDCO MANAGED CARE, L.L.C.
9900 Bren Road East                         100 Summit Avenue
Minnetonka, Minnesota  55343                Montvale, New Jersey  07645-1753

By: /s/ Steve Hemsley                       By: /s/ James Cooper
    -------------------                         -------------------

Date: November 11, 1998                     Date: November 10, 1998
      -----------------                           -----------------



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