AGREEMENT
                                    ---------


             AGREEMENT  made as of the 1st day of January,  2000, by and between
Blue Cross & Blue Shield of Rhode Island  ("BCBSRI"),  a nonprofit  hospital and
medical  service  corporation  organized  under  the laws of the  State of Rhode
Island,  with an address at 444  Westminster  Street,  Providence,  Rhode Island
02903,  Coordinated  Health Partners,  Inc. d/b/a Blue CHiP  Coordinated  Health
Partners ("Blue CHiP"),  a corporation  organized under the laws of the State of
Rhode Island,  with an address at 15 LaSalle  Square,  Providence,  Rhode Island
02903 (BCBSRI and Blue CHiP collectively "Blue Cross"), and CareAdvantage Health
Systems,  Inc., a business corporation  organized under the laws of the State of
Delaware,  with an address at 485-C Route 1 South, Iselin, New Jersey 08830-3037
("CareAdvantage").

                              W I T N E S S E T H:
                               - - - - - - - - - -

             WHEREAS,  BCBSRI  is  a  nonprofit  hospital  and  medical  service
corporation  organized  for  the  purpose,   inter  alia,  of  underwriting  and
administering various hospital and medical service plans; and

             WHEREAS, Blue CHiP is licensed as a health maintenance organization
under the laws of the State of Rhode Island;

             WHEREAS,  CareAdvantage  is a business  corporation  which provides
various  health  care  management   services,   including   without   limitation
utilization  review and medical management  services,  to third party payors and
administrators of health benefit plans; and

             WHEREAS,  CareAdvantage  has  previously  provided  and  desires to
continue to provide  certain  medical  management  services  to Blue  Cross,  in
connection  with their existing and new health care plans and Blue Cross desires
to  enter  into  an  agreement  with  CareAdvantage  for the  provision  of such
services; and

             WHEREAS,  the  parties  hereto  desire  to set  forth the terms and
conditions of their  agreement for the provision to Blue Cross by  CareAdvantage
of certain health care management services;

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

    1.       Term and Termination.

             (a) Term.  This Agreement  shall commence on January 1, 2000,  and,
unless otherwise terminated as provided herein, shall continue in full force and
effect until December 31, 2002. Thereafter,  this Agreement shall renew annually
for successive one-year terms unless a party shall give one hundred eighty (180)
days' advance prior written notice of non-renewal to the other party.

             (b) Termination.

                    (i) This  Agreement may be  terminated  for cause by a party
hereto giving written  notice to the party whose action or inaction  constitutes
cause for termination, which cause for termination shall be as follows:


                       (A)    Any act of  fraud  or  material  misrepresentation
                              pertaining to the subject of this Agreement; or
<PAGE>

                       (B)    A material  breach of this Agreement  which is not
                              cured within thirty (30) days following receipt by
                              the  breaching  party  of a notice  of  deficiency
                              specifying the nature of the breach; or

                       (C)    Loss  or  suspension  of   licenses/certifications
                              necessary to allow  performance of the obligations
                              of a party under this Agreement; or

                       (D)    Material  failure to comply with applicable  state
                              and federal  rules and  regulations  pertaining to
                              the subject of this Agreement; or

                       (E)    A party hereto shall seek protection,  voluntarily
                              or  involuntarily,  under the  federal  bankruptcy
                              laws,  or  bankruptcy,  receivership,  insolvency,
                              reorganization, liquidation or similar proceedings
                              shall be instituted  by or against such party,  or
                              such party shall be dissolved, whether voluntarily
                              or involuntarily; or

                       (F)    CareAdvantage's  failure  to attain  the  "Minimum
                              Performance    Standards"   (as   that   term   is
                              hereinafter   defined)   in  any   contract   year
                              commencing on or after January 1, 2001, during the
                              term of this Agreement.

                    Upon  termination  of this  Agreement,  each party  shall be
obligated to pay or perform its  obligations  hereunder  which must  necessarily
survive such termination to give effect to the meaning


             (ii) This  Agreement  shall be  terminable  by either party without
cause in  accordance  with  Section  5 of this  Agreement  or with  Section 5 of
Attachment III.

    2.       Services and Use of Intellectual Property.

             (a)  Generally.  During the term of this  Agreement,  CareAdvantage
shall  provide  to  Blue  Cross  certain  care   management   services  as  more
particularly   specified   herein  and  in  Attachment  I  attached  hereto  and
incorporated  herein by reference for the purpose of assisting Blue Cross in the
proper and effective administration of its health benefit programs (underwritten
and administered) and in the reduction of inappropriate claims liability for its
underwritten  and  administered  health  benefit  plans.  In  addition,  as more
particularly  specified  herein  and in  Attachment  II-A  attached  hereto  and
incorporated  herein by reference,  CareAdvantage  will permit Blue Cross to use
certain of CareAdvantage's intellectual property.

             (b)  Staffing.

                  (i) In fulfilling its  responsibilities  under this Agreement,
CareAdvantage  shall provide five medical  management  physicians on a full-time
equivalent  basis,  each of which shall serve as Associate  Medical Director for
Blue Cross, and such other physicians (to provide the types of services provided
by this Agreement),  nurses,  experts,  and other personnel,  which  individuals
shall be employed by, or under contract to, CareAdvantage, as shall be necessary
for  CareAdvantage  to  perform  its  obligations  under  this  Agreement.   The
physicians  serving as Associate  Medical  Directors  shall be licensed by Rhode
Island.  CareAdvantage designates Augustine Mannochia, M.D., and Carla Sbardella
as co-administrators, at least one of whom shall be on site.

                  (ii) The  co-administrators,  Associate  Medical Directors and
other physicians,  individuals and/or entities employed by, or under contract to
CareAdvantage  to provide services under this Agreement shall in all respects be
satisfactory  to Blue Cross in its  reasonable  judgment,  including  in medical
education, training, experience,  judgment, and ability to effectively work with
and relate to Blue Cross  employees,  physicians under contract with Blue Cross,
and others in the medical community.  The number, quality and performance of the
physicians and other individuals  and/or entities employed by, or under contract
to,  CareAdvantage to perform  services  hereunder shall be satisfactory to Blue
Cross in its reasonable  judgment and shall be as required for  CareAdvantage to
effectively and efficiently  deliver such services.  In the event  CareAdvantage
desires to terminate and/or reassign a co-administrator,



                                       2
<PAGE>





except as otherwise  agreed it shall provide four (4) weeks'  advance  notice to
that effect to Blue Cross  advising of the  proposed  action and the  individual
proposed as a replacement;  prior to CareAdvantage's taking any such action, the
parties shall agree on a replacement on-site co-administrator.

                  (iii)  During  the  term of this  Agreement,  Blue  Cross  may
withdraw its approval of any physician providing  supervisory services hereunder
if Blue  Cross  reasonably  determines  that  the  supervisor  is not  providing
effective   supervision  in  a  manner  which  is  compatible  with  Blue  Cross
procedures,  whereupon CareAdvantage shall remedy the supervisory problem to the
satisfaction of Blue Cross or replace such supervisor with a supervisor approved
by Blue Cross, with such action to be taken within ninety (90) days of a written
request from Blue Cross

                  (iv)  CareAdvantage  shall ensure the timely  availability  of
appropriate physicians, nurses and other personnel to provide the services under
this Agreement, as well as the reasonable continuity of such physicians,  nurses
and personnel in order to provide stability to the medical  management  services
being performed and to maximize efficiency and productivity.

                  (v) Any services which  CareAdvantage  is obligated to perform
under  this  Agreement  may,  at Blue  Cross's  discretion  and  subject to this
paragraph,  be performed  by Blue Cross or a third party under  contract to Blue
Cross. In the event that  CareAdvantage  can demonstrate that the performance of
any of such  services by Blue Cross or by a third  party under  contract to Blue
Cross  may  negatively  affect  CareAdvantage's  ability  to  meet  the  Minimum
Performance  Standards,  at  CareAdvantage's   request,  Blue  Cross  agrees  to
negotiate  in good  faith to remove the  affected  Blue  Cross  membership  from
performance  incentive  calculations,  and any resulting adjustments shall be an
adjustment  which removes  certain  defined  members from  determination  of the
compliance with the Minimum Performance Standards.  Such negotiations must occur
prior to Blue Cross or a third  party  under  contract  to Blue  Cross  assuming
responsibility for the services,  and Blue Cross shall provide appropriate prior
notice to CareAdvantage of any such potential delegation.

             (c)     Utilization Review.

                  (i) In the performance of the  utilization  review services to
be  provided  by  CareAdvantage   pursuant  to  the  terms  of  this  Agreement,
CareAdvantage   shall  be  responsible  for  recommending  to  Blue  Cross  what
constitutes "medically necessary" treatment and services,  "medically indicated"
treatment and services,  "emergency"  treatment and services,  "urgent care" and
"experimental"  and/or  "investigational"  treatment and services, as such terms
are defined by Blue Cross pursuant to its contracts, administrative policies and
rules  and  regulations,  and  for  recommending  other  medical  determinations
required to properly perform  utilization  review and case management  functions
and the other  services,  and in order to allow Blue Cross to determine  whether
benefits are payable under health benefit plans  administered or underwritten by
Blue Cross,  including,  but not limited to review of  out-of-network  services.
Notwithstanding  anything to the contrary  contained in this  Section  2(c),  it
shall be Blue Cross'sdetermination, and not CareAdvantage's determination, as to
whether  benefits are payable under any Blue Cross  underwritten or administered
health  benefit  plans.  In making such  determination  of whether  benefits are
payable under health benefit plans  administered  or underwritten by Blue Cross,
Blue  Cross may rely upon  CareAdvantage's  determinations  of what  constitutes
"medically  necessary" treatment and services,  "medically  indicated" treatment
and  services,  "emergency"  treatment and  services,  and upon  CareAdvantage's
determinations  on other  matters  within the scope of its  responsibilities  to
provide services pursuant to and in accordance with the terms of this Agreement.

                  (ii)  As a  part  of the  utilization  review  services  to be
provided by CareAdvantage pursuant to the terms of this Agreement, CareAdvantage
is responsible for conducting a periodic  formal program for training,  on-going
monitoring,  and  evaluation  of  the  performance  of all  CareAdvantage  staff
physicians involved in all levels of the review process. Included as part of the
training  shall be  orientation  in the principles and procedures of utilization
review,  peer review,  Utilization  Review  Accreditation  Committee  Standards,
National Committee for Quality Assurance,  and adherence to all Rhode Island and
federal  requirements  regarding  utilization  review.  When a  party  schedules
training for its physicians, it shall advise the other party which may cause its
physicians to attend such training.


                                       3

<PAGE>





                  (iii)  CareAdvantage  shall meet regularly with the management
of the  Medical  Management  Division  of  Blue  Cross  and  appropriate  senior
management  to provide  guidance on the use of staff and resources of the Health
Benefits Management  Department to implement agreed upon utilization  management
strategies and to provide  proposals for  CareAdvantage to effect  reductions in
per member claims liability. The utilization management strategies and proposals
made  by  CareAdvantage  must be  reasonable  and  consistent  with  Blue  Cross
contracts, policies and procedures.

                  (iv)  CareAdvantage  acknowledges  that  all  its  utilization
review  decisions  shall be based  solely upon the  appropriateness  of the care
and/or  setting,  and that Blue Cross is not  rewarding or providing  financial;
incentives to CareAdvantage or CareAdvantage's physicians for issuing denials.

             (d)  Intellectual  Property;  Data  Hosting and  Related  Services.
Commencing  January 1, 2001, and  continuing  through the remaining term of this
Agreement,  CareAdvantage  will  provide  Blue  Cross  with  (i)  the use of the
intellectual  property described in Attachment II-A in accordance with the terms
of that attachment;  and (ii) the data hosting, data administration and training
services  described  in  Attachment  II-B in  accordance  with the terms of that
attachment.

             (e)     Hiring Employees.

                  (i) Except as provided in this  Subsection,  the parties agree
that they shall not, except with the prior written consent of the other,  employ
or contract  with any person  employed by the other then or within the preceding
twelve months who was directly or indirectly involved in the performance of this
Agreement.  This restriction  against hiring shall remain in effect for the life
of this Agreement and one (1) year thereafter.

                  (ii)  Notwithstanding  Paragraph (i) of this Subsection,  Blue
Cross may hire physicians  employed by  CareAdvantage in the event that (A) Blue
Cross  terminates  this Agreement with cause;  (B) either party  terminates this
Agreement without cause in accordance with Section 1(b)(ii); or (C) either party
gives notice of non- renewal of this Agreement in accordance  with Section 1(a);
provided,  however,  that where either party  terminates this Agreement  without
cause in  accordance  with Section  1(b)(ii) or where Blue Cross gives notice of
non-renewal of this Agreement in accordance  with Section 1(a), Blue Cross shall
pay CareAdvantage $200,000 for each such physician hired.

             (f) Utilization Review  Restrictions.  Notwithstanding  anything to
the contrary contained in this Agreement,  Blue Cross does not intend to utilize
CareAdvantage to provide first level utilization review services.  Rather,  Blue
Cross intends to contract with  individual  physicians to provide such services.
Accordingly,  CareAdvantage  shall not provide  first level  utilization  review
services  hereunder  unless  and until so  directed  by Blue  Cross in  writing,
whereupon  the parties  will adjust the  compensation  under this  Agreement  to
reflect the  termination  of the physicians  providing  first level review under
contract to Blue Cross.  All  physicians  performing  first level  reviews shall
enter into an agreement  with Blue Cross to perform such first level  reviews in
the form attached as Attachment IV if required by a government  regulatory  body
of competent jurisdiction.

    3.       Nature of Relationship.

             (a) Independent Contractors.  The parties hereto recognize that the
relationship established by this Agreement is purely contractual in nature, that
such  parties are  independent  contractors,  and that this  Agreement  does not
establish a joint venture,  partnership,  or other arrangement pursuant to which
such parties  shall share  profits or losses or shall be bound to pay or perform
the obligations of the other party.  Neither party hereto shall be authorized to
act as an agent or  representative  for the other party hereto unless  expressly
authorized  in  writing  for each such  purpose,  and then only to the extent so
authorized. Neither party hereto may bind the other party in any respect, except
as previously  authorized in writing signed by such party to be bound,  and then
only to the extent  expressly so  authorized,  and neither party hereto may hold
itself out to or  represent  to third  parties  that such party has the power or
authority to bind the party hereto, and any such purported representations shall
be null and void and of no further  force and effect.  Neither  party hereto may
represent to any third party that the subject of this Agreement constitutes


                                       4

<PAGE>


a partnership,  joint  venture,  or other  risk-sharing  arrangement or that any
party hereto is liable or  responsible  for the  obligations  of the other party
hereto. For all purposes hereof, Blue Cross and CareAdvantage shall be deemed to
be independent  contractors,  and neither party hereto shall be responsible  for
the acts or omissions of the other party.

             (b) No Representations  Regarding Health Care Providers. Each party
hereto recognizes and acknowledges  that it makes no  representation  regarding,
and assumes no responsibility  for, the quality of health care services provided
by providers under any health benefit plan  underwritten or administered by Blue
Cross,  and that neither  party hereto has any control over the kind and quality
of health care services  provided by providers  pursuant to health benefit plans
administered or underwritten by Blue Cross.

    4.       Compensation.  Effective  January 1, 2000, Blue  Cross  shall  pay
CareAdvantage   for  its  services  under  this  Agreement  in  accordance  with
Attachment  III,   attached  hereto  and   incorporated   herein  by  reference.


    5.      Adjustments to Services and  Compensation. The  parties  acknowledge
that the managed care  business is  continuously  changing,  and that during the
term  of  this  Agreement  it may be  desired  and/or  required  by  changes  in
applicable law or regulations  to  reconfigure  the services  provided by and to
adjust the  compensation  payable to  CareAdvantage  under this  Agreement.  The
parties agree to negotiate such matters in good faith,  provided,  however, that
in the event they are unable to agree, then  notwithstanding any other provision
of this  Agreement,  either party may  terminate  this  Agreement on one hundred
eighty  (180)  days'  prior  written  notice to the other.  Notwithstanding  the
foregoing,  if required changes in service under this Agreement can be performed
by  CareAdvantage  employees,  independent  contractors  and  agents  engaged to
provide services under this Agreement  (giving effect to the extent and scope of
such  changed  services and the  competencies  required to perform  them),  then
CareAdvantage shall not seek additional compensation under this Agreement.

    6.       Committees.

             (a)  Generally.  The  parties  hereby  establish  a Medical  Action
Committee and an Executive  Advisory  Committee.  The Medical  Action  Committee
shall develop an annual utilization management and case management work plan for
the following year by December 1 of each year. The Executive  Advisory Committee
shall review and approve the work plan by December 31 of each year.

             (b) Medical Action  Committee.  The Medical Action  Committee shall
coordinate  the  day-to-day  administration  of this  Agreement and the services
provided by  CareAdvantage  to Blue Cross.  The Medical Action  Committee  shall
consist  of  those  members  appointed  by each  party  that are  necessary  and
appropriate to administer  this  Agreement.  The Medical Action  Committee shall
meet as required, but no less frequently than monthly.

             (c) Executive Advisory Committee.  The Executive Advisory Committee
shall oversee the Medical Advisory  Committee.  The Executive Advisory Committee
shall  consist  of the four  members  appointed  by Blue  Cross and two  members
appointed by CareAdvantage.  The initial Blue Cross Members shall be BCBSRI Vice
President, Coordinated Care; BCBSRI Vice President, Contracting; Blue CHiP Chief
Financial  Officer;  and BCBSRI  Medical  Director.  The  initial  CareAdvantage
members  shall be its Chief  Operating  Officer  and/or his  designee  and Carla
Sbardella as co-on site  administrator.  The Executive  Advisory Committee shall
meet as required, but no less frequently than quarterly.

    7.       Warranties and Representations.

             (a) By CareAdvantage. CareAdvantage warrants and represents to Blue
Cross as follows,  such warranties and representations to be true as of the date
hereof and during the term of this Agreement and any extension thereof:


                  (i) CareAdvantage is duly organized,  validly existing, and in
                  good standing under the laws of its state of organization  and
                  incorporation,  and is  qualified to do business in all states
                  where  such  business  qualification  is  required,  including
                  without limitation, Rhode Island;

                                       5


<PAGE>


                  (ii)  CareAdvantage  is duly licensed as a utilization  review
                  agent in the State of Rhode Island,  such Rhode Island license
                  is valid, in full force and effect, and has not been suspended
                  or  revoked,  and  CareAdvantage  is not  the  subject  of any
                  pending disciplinary or administrative  proceedings pertaining
                  to  such  license  not  disclosed  to Blue  Cross,  and to its
                  knowledge,  CareAdvantage  has  otherwise  taken all action to
                  comply  with  all  applicable   laws,  rules  and  regulations
                  pertaining  to acting as a  utilization  review agent in Rhode
                  Island;

                  (iii)  CareAdvantage  is in  compliance  with  all  applicable
                  federal,  state and local laws, rules and regulations required
                  or  necessary in order to allow  CareAdvantage  to perform its
                  obligations pursuant to this Agreement.

                  (iv)  CareAdvantage  does not now have any material  lawsuits,
                  administrative  actions,  claims,  grievances,  or other legal
                  actions  pending  against it which,  if adversely  determined,
                  would materially impair its ability to perform its obligations
                  under this Agreement;

                  (v) There  are no  actions,  pending  or  threatened,  against
                  CareAdvantage,   and  there  are  no   conditions   which  are
                  threatened or, to its knowledge,  exist,  including actions by
                  regulatory   authorities,   relating  to  the  obligations  of
                  CareAdvantage set forth in this Agreement, which, if they came
                  to pass or continue  would  result in  CareAdvantage  being in
                  default hereunder or would materially  impair  CareAdvantage's
                  ability to perform its obligations under this Agreement; and

                  (vi)  CareAdvantage  is  adequately  capitalized  and  has the
                  financial and personnel  resources to perform its  obligations
                  under this Agreement, and all of its employees or parties with
                  whom it contracts who will provide services under the terms of
                  this Agreement are or shall be duly qualified,  licensed where
                  required,  and  otherwise  competent  and able to  effectively
                  perform the services and  responsibilities of CareAdvantage as
                  required under this Agreement.

             (b) By Blue Cross.  BCBSRI and Blue CHiP  warrant and  represent to
CareAdvantage  jointly,  except where the context  otherwise  indicates in which
case BCBSRI and Blue CHiP warrant and represent to CareAdvantage severally, that
the  following  are  true as of the  date  hereof  and  during  the term of this
Agreement and any extension thereof:

                  (i) Blue Cross is duly  organized,  validly  existing,  and in
                  good standing under the laws of its state of organization  and
                  incorporation,  and is  qualified to do business in all states
                  where  such  business  qualification  is  required,  including
                  without limitation, Rhode Island;

                  (ii)  BCBSRI is duly  licensed  as a  nonprofit  hospital  and
                  medical service  corporation and a dental  utilization  review
                  agent  in the  State of Rhode  Island,  and Blue  CHiP is duly
                  licensed as a health  maintenance  organization  and a medical
                  and surgical utilization review agent (but not a mental health
                  and substance abuse utilization  review agent) in the State of
                  Rhode Island all such  licenses  are valid,  in full force and
                  effect, and have not been suspended or revoked, and Blue Cross
                  is  not  the   subject   of  any   pending   disciplinary   or
                  administrative  proceeding  pertaining  to such  licenses  not
                  disclosed to CareAdvantage,  and to its knowledge,  Blue Cross
                  has otherwise  taken all action to comply with all  applicable
                  laws,  rules  and  regulations   pertaining  to  acting  as  a
                  nonprofit  hospital  and  medical  service  corporation  and a
                  utilization review agent in Rhode Island;

                  (iii) Blue Cross is in compliance with all applicable federal,
                  state  and  local  laws,  rules and  regulations  required  or
                  necessary  in  order  to  allow  Blue  Cross  to  perform  its
                  obligations pursuant to this Agreement;

                  (iv)  Blue  Cross  does not now have  any  material  lawsuits,
                  administrative  actions,  claims,  grievances,  or other legal
                  actions  pending  against it which,  if adversely  determined,
                  would materially impair its ability to perform its obligations
                  under this Agreement;

                                       6



<PAGE>


                  (v) There are no actions, pending or threatened,  against Blue
                  Cross, and there are no conditions which are threatened or, to
                  its  knowledge,   exist,   including   actions  by  regulatory
                  authorities,  relating  to the  obligations  of Blue Cross set
                  forth  in  this  Agreement,  which,  if  they  came to pass or
                  continue would result in Blue Cross being in default hereunder
                  or would materially impair Blue Cross's ability to perform its
                  obligations under this Agreement; and

                  (vi)  Blue  Cross  is  adequately   capitalized  and  has  the
                  financial and personnel  resources to perform its  obligations
                  under this Agreement.

    8.       Insurance.

             (a) Each party hereto shall obtain and maintain throughout the term
of this Agreement appropriate policies of insurance,  as shall protect the named
insured  and the other  party  hereto  from  claims of bodily  injury,  death or
property  damage that may arise from any  activities of either party hereto,  or
their respective agents,  servants or employees  associated with this Agreement.
Such policies shall provide  coverage for worker's  compensation,  comprehensive
general liability,  vehicular and all-risk property  insurance,  and "errors and
omissions"  liability  insurance,   and  in  the  case  of  CareAdvantage  only,
professional liability (i.e.,  malpractice) insurance, all such insurance having
such limits and deductibles,  and upon such terms and conditions,  as are common
and customary for comparable contracts,  and all such coverage and such carriers
providing  coverage  to be  mutually  acceptable  to the  parties.  A  duplicate
original of each policy and certificate of renewal of each policy required under
this Section 8 shall be given to the party upon request. Each of the policies of
insurance shall include provisions naming the other party as one of the insureds
and shall deny to the  insured  rights of  subrogation  against  the other party
(provided such provisions are reasonably  obtainable  without  invalidating  the
insurance so provided or disproportionately  increasing the premiums therefore);
provided,  however,  that in no event shall one party be required to maintain an
insurance  policy with a waiver of  subrogation  provision if the other party is
not able to procure such waiver of subrogation provision in its insurance policy
of the same type.  The  parties  hereto  each shall  exercise  good  faith,  and
diligent efforts, to ensure that such parties' policies of insurance as required
hereunder shall contain the aforesaid waiver of subrogation provisions.

             (b) The  policies of  insurance  required to be  maintained  by the
parties under this Agreement  shall be  noncancelable  and  nonamendable  unless
notice in writing is given to the other  party not less than ten (10) days prior
to the effective  date of any  cancellation  or amendment (but such notice shall
not limit the  continuing  obligations  to maintain  insurance  pursuant to this
Agreement).  If any such policy of  insurance is a claims made policy and not an
occurrence  policy,  either  appropriate  claims made or tail insurance shall be
maintained  in full force for that  period of time,  after  termination  of this
Agreement,  required  under  applicable  law to  continue  to provide  insurance
protection  to  both  parties  pursuant  to  this  Agreement,  with  respect  to
occurrences prior to the termination of this Agreement.

    9.       Indemnification.

             (a) By CareAdvantage.  CareAdvantage hereby indemnifies, exonerates
and holds harmless Blue Cross from and against any claim,  loss,  cost,  damage,
expense or other liability  arising out of the performance by  CareAdvantage  of
services under this  Agreement,  excepting only  liability  attributable  to the
willful misconduct or the willful, wanton or reckless failure by Blue Cross, its
agents,  servants,  employees or independent  contractors  engaged by Blue Cross
(but not  CareAdvantage)  to perform  their  respective  obligations  under this
Agreement or Blue Cross's  negligence or the negligence of Blue Cross's  agents,
servants,  employees or independent  contractors  engaged by Blue Cross (but not
CareAdvantage);  provided,  however,  that if such negligence is attributable in
part  to  CareAdvantage  or its  agents,  servants,  employees,  or  independent
contractors  engaged by  CareAdvantage  and in part to Blue Cross or its agents,
servants,  employees or independent  contractors  engaged by Blue Cross (but not
CareAdvantage), Blue Cross shall be entitled to indemnification by CareAdvantage
under this Section 9. If the attribution of negligence on a comparative basis is
not made by a court of competent jurisdiction for any reason,  including without
limitation,  because  such claim is settled by the  parties  involved,  then the
determination  of  respective  fault,  if any,  shall  be made by an  arbitrator
mutually  acceptable to Blue Cross and CareAdvantage.  This indemnity  agreement
shall include indemnity against all costs,  expenses and liabilities incurred in
and in connection  with any such claim or  liability,  and  proceedings  brought
thereunder,  and the reasonable  cost of the defense  thereof with legal counsel
reasonably acceptable


                                       7

<PAGE>


to Blue Cross. Notwithstanding anything herein to the contrary, this Section 9
is not intended to obligate CareAdvantage to compensate Blue Cross for claims
for medical services that Blue Cross is contractually obligated to pay.

             (b)     By Blue Cross.

                    (i) Blue  Cross  hereby  indemnifies,  exonerates  and holds
harmless  CareAdvantage from and against any claim, loss, cost, damage,  expense
or other  liability  arising  out of an act (or a failure  to act) by Blue Cross
contemplated  by or  arising  under this  Agreement,  excepting  only  liability
attributable  to the  willful  misconduct  or the  willful,  wanton or  reckless
failure  by  CareAdvantage,  its  agents,  servants,  employees  or  independent
contractors  engaged by  CareAdvantage  (but not Blue  Cross) to  perform  their
respective obligations under this Agreement or CareAdvantage's negligence or the
negligence  of  CareAdvantage's  agents,  servants,   employees  or  independent
contractors  engaged by CareAdvantage (but not Blue Cross);  provided,  however,
that if such  negligence  is  attributable  in part to Blue Cross or its agents,
servants,  employees,  or independent contractors engaged by Blue Cross (but not
CareAdvantage) and in part to CareAdvantage or its agents,  servants,  employees
or independent  contractors  engaged by  CareAdvantage,  CareAdvantage  shall be
entitled  to  indemnification  by  Blue  Cross  under  this  Section  9.  If the
attribution  of  negligence  on a  comparative  basis  is not made by a court of
competent  jurisdiction for any reason,  including without  limitation,  because
such  claim is  settled  by the  parties  involved,  then the  determination  of
respective fault, if any, shall be made by an arbitrator  mutually acceptable to
CareAdvantage and Blue Cross.  This indemnity  agreement shall include indemnity
against all costs,  expenses and liabilities  incurred in and in connection with
any  such  claim or  liability,  and  proceedings  brought  thereunder,  and the
reasonable cost of the defense thereof with legal counsel reasonably  acceptable
to CareAdvantage.

                    (ii) Unless such claim or liability results from the willful
misconduct  of or the willful,  wanton or reckless  failure by Blue Cross or its
agents,  servants,  employees or independent  contractors  engaged by Blue Cross
(and not by  CareAdvantage)  to perform their respective  obligations under this
Agreement (in which case no such maximum or aggregate  amount shall obtain) this
indemnity  agreement  shall in each  instance be limited by and shall not exceed
the aggregate amount equal to the amount of the proceeds of insurance  available
to satisfy the obligations of Blue Cross under this indemnity agreement.

             (c) No Lost Profits or Punitive  Damages.  In no event shall either
party  hereunder be liable to the other for lost profits or punitive  damages on
account of a default under this Agreement or otherwise;  provided, however, that
the scope of the  indemnification  provided by each party hereto may require the
indemnitor  hereunder to compensate the  indemnitee  hereunder for damages which
include  punitive  damages or lost  profits  awarded to or  incurred  by a third
party.

             (d) Procedure. An indemnitee entitled to indemnification under this
Section 9 shall give notice to the indemnitor of a claim or other  circumstances
likely  to  give  rise to a  request  for  indemnification  promptly  after  the
indemnitee  becomes  aware of the same.  An  indemnitor  shall be  afforded  the
opportunity to undertake the defense of and to settle by compromise or otherwise
any claim for which  indemnification  is  available  under this  Section 9, with
legal  counsel  approved  by  the  indemnitee   (which  approval  shall  not  be
unreasonably  withheld or delayed).  If an  indemnitor so assumes the defense of
any claim,  the indemnitee may participate in such defense with legal counsel of
the  indemnitee's  selection  and  at the  expense  of  the  indemnitee.  If the
indemnitor,  prior to the expiration of twenty (20) days after receipt of notice
of a claim by the  indemnitee  under this Section 9, has not assumed the defense
thereof,  the indemnitee may thereupon  undertake the defense  thereof on behalf
of, and at the risk and expense of, the  indemnitor,  with all reasonable  costs
and  expenses of such defense to be paid by the  indemnitor.  No  compromise  or
settlement  of any such claim shall be made without the prior consent in writing
of the indemnitee.

    10.      Notice  of Certain New Business. During the term of this Agreement,
CareAdvantage  shall  provide  Blue  Cross  with  prior  notice,  in the  manner
hereinafter provided,  before CareAdvantage provides any consulting services for
the benefit of any entity  engaged in the health care  industry (a "Health  Care
Entity").  In the event


                                       8
<PAGE>

that such Health  Care  Entity  engages or  conducts,  directly  or  indirectly,
business in the State of Rhode  Island (a  "Competitor  Entity"),  CareAdvantage
shall provide Blue Cross with one hundred (100) days' prior written notice prior
to providing  services to such Competitor  Entity. In the event that such entity
is not a Competitor Entity,  CareAdvantage shall provide Blue Cross with fifteen
(15)  business  days' prior written  notice prior to providing  services to such
entity.  It is the  intention  of  Blue  Cross  not to  continue  in a  business
relationship with CareAdvantage in the event CareAdvantage  provides services to
a  Competitor  Entity.  Accordingly,  within  ten (10)  business  days after the
receipt  of  either  of  the   aforesaid   notices,   Blue  Cross  shall  notify
CareAdvantage  whether it  considers  such Health Care Entity to be a Competitor
Entity,  whether or not designated a Competitor Entity by CareAdvantage,  and in
the event Blue Cross  determines  such  Health  Care  Entity to be a  Competitor
Entity,  whether or not Blue Cross intends to terminate this Agreement on ninety
(90) days' prior written  notice,  as allowed  under Section 1(b) hereof.  In no
event shall  CareAdvantage be required to give notice to Blue Cross in the event
it intends  to provide  services  to a  licensee  of the Blue Cross Blue  Shield
Association;  provided,  however,  that CareAdvantage  shall be required to give
notice in the manner  required  for a  Competitor  Entity in the event that such
Health Care Entity is a subsidiary  or  affiliate  of such  licensee of the Blue
Cross Blue Shield  Association,  and such  subsidiary  or affiliate  conducts or
engages in business,  directly or  indirectly,  in the States of Rhode Island or
Massachusetts.

    11.      Confidentiality.

             (a)  Nondisclosure  Agreement.  Blue Cross and  CareAdvantage  have
executed a  Nondisclosure  Agreement  governing  the  handling  of  "Proprietary
Information"  between the parties,  as such term is defined in the Nondisclosure
Agreement.  The Nondisclosure  Agreement between the parties, a copy of which is
attached  hereto as Attachment V and  incorporated  herein by  reference,  shall
continue to govern the  obligations  of the parties  with regard to  Proprietary
Information.

             (b) Nondisclosure  Agreements with Vendors. Should Blue Cross enter
into a  contract  with a vendor  other than  CareAdvantage  to manage a discrete
segment of its business that is not managed by CareAdvantage, then CareAdvantage
will enter into a  confidentiality  agreement  with that  vendor  similar to the
confidentiality agreement Blue Cross has with the vendor.

             (c) Nondisclosure of Certain Data and Materials.  Data and material
provided by Blue Cross to  CareAdvantage  may not be resold by  CareAdvantage to
third  parties,  either  individually  or in the  aggregate,  including  without
limitation in such a manner that the data would be "blind" (i.e., not identified
to Blue Cross, to Blue Cross members or to specifically identified members).

    12.      Third-Party Beneficiaries. No  individuals or entities are intended
by the parties hereto to be third-party  beneficiaries  to this  Agreement,  and
this  Agreement  shall not be  construed  or  interpreted  to  confer  rights or
benefits on any  third-party  and shall not be  enforceable  by any entity not a
party to this Agreement.

    13.      Further Contracts. The  decision  by  Blue Cross to enter into this
Agreement  with   CareAdvantage   shall  not  be  construed  or  interpreted  by
CareAdvantage  as the  intention of Blue Cross to enter into any other  contract
with  CareAdvantage  for any other  services,  during the term or following  the
termination of this Agreement, and the parties hereto expressly acknowledge that
Blue Cross has no  obligation  to enter into any further  contract or  agreement
with CareAdvantage for the provision of any services,  either during the term or
following the termination of this Agreement.  CareAdvantage is not authorized to
make  representation  to, and shall not make  representation to, any third party
that Blue  Cross  has any  obligation  to enter  into any  other  contract  with
CareAdvantage  either  during  the term or  following  the  termination  of this
Agreement.

    14.      Rights to Proprietary Data.

             (a) M&R Guidelines.  The parties hereto acknowledge that Blue Cross
has entered into a license  agreement  with Milliman & Robertson,  Inc.  ("M&R")
pursuant  to which  Blue  Cross  has  licensed  from  M&R  certain  Health  Care
Management  Guidelines  for use by medical  personnel  in  managing  health care
delivery systems (the "M&R  Guidelines").  The parties further  acknowledge that
CareAdvantage  has  provided  certain

                                       9
<PAGE>

services  to Blue  Cross  with  regard to  modification  of the M&R  Guidelines,
including  meeting with physicians and proposing and drafting  modifications  to
the M&R Guidelines.  CareAdvantage hereby agrees that it has no right, title, or
interest in the M&R Guidelines,  and that the M&R Guidelines are the property of
Blue  Cross,  subject to the rights of M&R under the license  agreement  between
Blue Cross and M&R for the M&R  Guidelines,  and  CareAdvantage  hereby  forever
remises,  releases, and relinquishes any interest, right, claim, or title in the
M&R  Guidelines,  in any form  whatsoever,  including as such M&R Guidelines may
have  been  modified  with  the  assistance  of  CareAdvantage.  Notwithstanding
anything to the contrary  contained in this Section 14, this Agreement shall not
limit CareAdvantage from entering into any separate licensing agreement with M &
R or with any other  licensor of health  care  delivery  products,  nor shall it
prevent  CareAdvantage  from  making  any  modification  to any such  separately
licensed  product,  whether with M & R or with any other licensor of health care
delivery products.

             (b) Blue Cross Property.  CareAdvantage further hereby acknowledges
and agrees that it has, and shall have, no right, title or interest in any other
manuals, instructions, treatment protocols, critical path guidelines, materials,
guidelines, studies, analysis, case management programs, processes,  procedures,
modifications,  operating codes,  methods of access,  or access codes,  owned by
Blue Cross  and/or its  subscribers  or  providers,  or produced or developed by
CareAdvantage  in  Rhode  Island  or  by  CareAdvantage  employees,   agents  or
contractors while engaged to provide services in Rhode Island for the benefit of
Blue  Cross  and  provided  for the use or  benefit  of Blue  Cross  and/or  its
subscribers or providers as part of the services provided by  CareAdvantage,  or
as part of any other  services  provided by  CareAdvantage  under this Agreement
(collectively,  the "Work Product"), and that all such Work Product shall be the
property of Blue Cross.  CareAdvantage shall have no right, title or interest in
such Work  Product,  unless (i)  CareAdvantage  has rights to such Work  Product
pursuant  to a  valid,  previously-existing  patent,  trademark,  copyright,  or
license, and then only to the extent of such patent,  trademark,  copyright,  or
license,  (ii) CareAdvantage  shall have notified Blue Cross in writing prior to
the creation of such Work Product  setting forth in detail the existence of such
patent, trademark, copyright, or license, and the proposed use of such patented,
trademarked,   copyrighted  or  licensed  material  (hereafter  referred  to  as
"CareAdvantage  Protected  Material") in any such Work  Product,  and (iii) Blue
Cross and  CareAdvantage  shall  have  agreed in  writing  in  advance as to the
respective  rights of Blue Cross and  CareAdvantage  to any Work  Product  which
would   or   could   contain   any  such   CareAdvantage   Protected   Material.
Notwithstanding  anything to the contrary contained in this Section 14(b), "Work
Product"  shall not be deemed to  include  (i)  information  (regardless  of the
medium in which  maintained),  which is or becomes  generally  available  to the
public,  other than as a result of the disclosure thereof by CareAdvantage,  its
agents or  representatives,  or (ii)  information  in any  medium  which is made
available  to  CareAdvantage  on a  non-confidential  basis by a third party not
bound  by  a   confidentiality   agreement   with  or  under  an  obligation  of
confidentiality to Blue Cross.

    15.     Interpretation and Amendments. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior representations and
understanding, whether oral or written. Any changes, amendments, or alterations
hereto shall not be effective unless agreed upon in writing signed by authorized
representatives of the parties hereto.

    16.     Notices.  Any  notices  required  to  be  given under this Agreement
shall be by certified mail, return receipt  requested.  Notice shall be directed
to the parties at the  addresses  listed below,  or such other  addresses as the
party may designate by written notice.


                                       10

<PAGE>

             If to Blue Cross:    Blue Cross & Blue Shield
                                    of Rhode Island
                                  444 Westminster Street
                                  Providence, RI 02903
                                  Attention: Richard P. Farias,
                                  Vice President, Coordinated Care

             With a copy to:      Judith A. Sullivan, Esq.
                                  General Counsel
                                  Blue Cross & Blue Shield
                                    of Rhode Island
                                  444 Westminster Street
                                  Providence, RI 02903

                     and          John M. Boehnert, Esq.
                                  Partridge, Snow & Hahn
                                  180 South Main Street
                                  Providence, RI 02903

             If to CareAdvantage: Daniel J. Potterton
                                  Chief Operating Officer
                                  CareAdvantage Health Systems, Inc.
                                  485-C Route 1 South
                                  Iselin, NJ 08830-3037


                                       11
<PAGE>



             With a copy to:      Dennis Mouras
                                  Chief Executive Officer
                                  CareAdvantage, Inc.
                                  485-C Route 1 South
                                  Iselin, NJ 08830-3037

                     and          George Neidich, Esq.
                                  9301 Morison Lane
                                  Great Falls, Virginia 22066


    17.      Binding Effect. This Agreement  shall  be  binding  upon  and inure
to the benefit of the parties hereto and their respective successors and assigns
(if  permitted),  and this  Agreement  shall  not be  assigned,  except by prior
written agreement of the other party hereto,  which agreement may be withheld in
such party's absolute and sole discretion. Any purported assignment in violation
of this Section 17 shall be null and void and of no further force and effect.

    18.      Waiver.  A waiver  of  any  breach  of  this Agreement by any party
hereto shall not be construed to be a continuing wavier for a similar breach.

    19.      Severability. In  the event that any provision of this Agreement is
found  by a court of  competent  jurisdiction  to be  unenforceable  because  it
extends for too long a period of time or over too broad a range of activities or
in too large a geographic  area,  such provision  shall be interpreted to extend
only after the maximum period of time,  range of activities or geographic  areas
to which it may be enforceable.

    20.      Governing Law. This  Agreement  has  been  negotiated,  entered and
delivered  in Rhode  Island,  is intended  to be  performed  primarily  in Rhode
Island,  and this  Agreement  shall be governed,  construed and  interpreted  in
accordance  with the laws of the  State of Rhode  Island.  CareAdvantage  hereby
irrevocably  consents to the jurisdiction of the state and federal courts in the
State of Rhode Island for the  adjudication of all rights and remedies  pursuant
to the terms of this Agreement.

    21.      Compliance with Laws.

             (a) Generally.  In fulfilling its obligations under this Agreement,
CareAdvantage  shall  comply with all  applicable  laws,  rules and  regulations
(including,  without limitation,  applicable  regulations  promulgated under the
Health Insurance Portability and Accountability Act of 1996 ("HIPAA")).

             (b) Security and Privacy.  During the term of this Agreement,  Blue
Cross  shall have the right to engage a  qualified  third  party  data  security
company to perform an audit on  CareAdvantage's  electronic  data  security  and
privacy  practices,  such audit to be  conducted  at Blue  Cross's  sole cost an
expense upon  reasonable  prior notice to  CareAdvantage  and at a time and in a
manner  reasonable under the  circumstances.  In the event the auditor concludes
that CareAdvantage is not complying with applicable federal or state laws, rules
or regulations  regarding  electronic data security and privacy practices,  Blue
Cross shall give notice to  CareAdvantage  specifying  the  particulars  of such
non-compliance.  Thereafter,  CareAdvantage  shall remedy such non-compliance as
soon as reasonably necessary to protect the status of confidential information.



                                       12
<PAGE>


             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by their representatives thereunto duly authorized on the day and date first
above written.

                                   Blue Cross & Blue Shield
                                     of Rhode Island


                                   By: /s/ Richard Farias
                                      ------------------------------------------


                                   CareAdvantage Health Systems, Inc.


                                   By: /s/ Daniel Potterton
                                      ------------------------------------------



                                       13

<PAGE>





                                                                    ATTACHMENT I

                            CARE MANAGEMENT SERVICES

The care management services to be provided commencing January 1, 2000, shall
include the following:

    A.       Health Care Management Services

             1.      CareAdvantage  will  provide  physician  and administrative
                     support to review and  assist  in  the  development of Blue
                     Cross medical  policies,  interpret  benefits, assist  with
                     general  provider relations, assist with Blue Cross quality
                     management,  and  assist  with  other  general  Blue  Cross
                     business.

             2.      CareAdvantage will  provide  physician  and  administrative
                     support to develop,  delineate the  use of,  credential and
                     provide  quality  control for different  levels of care.

             3.      CareAdvantage  will  provide  physician  and administrative
                     support   (but   not   nursing   support)   to   accomplish
                     preauthorization,  concurrent review, retrospective review,
                     and case management of medical  and surgical admissions and
                     inpatient days and outpatient  care  management (ambulatory
                     surgery,  individual   admissions,   and  durable   medical
                     equipment) within Blue Cross's service area.

             4.      CareAdvantage  will  analyze  out  of state utilization and
                     develop, along  with  Blue  Cross, strategies  for enhanced
                     utilization  management  of  these  cases. Blue  Cross will
                     support  CareAdvantage  data  requirements for analysis and
                     implementation of initiatives.

             5.      CareAdvantage  will  continue  to  develop,  in conjunction
                     with   Blue  Cross  Specialty   Advisory   Committees,  new
                     admission   and   length   of   stay   guidelines,   revise
                     previously    established   guidelines  as  necessary   and
                     assist   in   the   development   of   specific   treatment
                     guidelines  (e.g.,  for  community  acquired  pneumonia) as
                     indicated    by    ongoing    data    analysis    and   the
                     implementation   of  new   disease   management   programs.
                     CareAdvantage    shall   provide    support   and   medical
                     expertise   to   the   Blue   Cross    provider   relations
                     department  so  as  to  enable  that  department  to ensure
                     that  admission   and   length  of  stay   guidelines   are
                     appropriately    reviewed    by    community    physicians.
                     CareAdvantage  shall   ensure  Associate  Medical  Director
                     representation at each Special Advisory Committee  meeting.

             6.      CareAdvantage  will  conduct  periodic  audits  of specific
                     services  provided  by  Medical  Management Operations and,
                     collaboratively with the department, develop a work plan to
                     enhance the effectiveness of these services such as general
                     utilization management and case management for catastrophic
                     and high risk patients.

             7.      CareAdvantage  will  conduct continuing in-service programs
                     for   Blue  Cross  personnel  regarding  issues  concerning
                     utilization  and  case  management  including  treatment of
                     specific diseases, use  of  levels of care and as requested
                     by the client in conjunction  with  the  institution of new
                     programs.  CareAdvantage  will  also  participate with Blue
                     Cross  in  dissemination  of  new  information to hospitals
                     regarding these issues.

             8.      CareAdvantage will assist Blue Cross  in the development of
                     innovative approaches for physician education regarding new
                     programs  and  data  feedback  to physicians. CareAdvantage
                     shall meet with community physicians to solicit their input

                                       14
<PAGE>

                     and CareAdvantage  shall  conduct  training and educational
                     programs for individual physicians  as well as Blue Cross's
                     IPA, PSA and PHO partners.

             9.      CareAdvantage will  provide  the  necessary  physician  and
                     administrative support to assist Blue Cross in  contracting
                     and medically  managing  cases at out of  state  facilities
                     designated as Centers of Excellence.

             10.     CareAdvantage will  provide  the  necessary  physician  and
                     administrative   support   to   identify   and    implement
                     "infrastructure" changes  at  inpatient  facilities  (i.e.,
                     hospitals, rehab, and SNF).

             11.     CareAdvantage  will  develop   strategies  to  manage  care
                     delivered in patients' homes (including home health care
                     and infusion therapy) and skilled nursing facilities.

    B.       Case and Disease Management

             1.      CareAdvantage will analyze the need for Disease Management
                     Programs for specific diseases (populations) including but
                     not limited to cardiology, oncology, asthma, diabetes,
                     peptic ulcer disease, gastroesophageal reflux and high risk
                     pregnancies.

             2.      CareAdvantage will assist and support ongoing general and
                     specific Blue Cross data analyses and assist in the
                     development of new approaches to data evaluation for
                     disease/care management.

    C.       Other Initiatives

             1.      CareAdvantage will assist Blue Cross, based on data
                     analysis including incidence rates, specific inpatient and
                     outpatient surgical procedures and develop appropriateness
                     criteria for these procedures and tests based on
                     indications and levels of care. Initial focus will be in
                     the specialties of gynecology, general surgery,
                     gastroenterology and orthopedic surgery.

             2.      CareAdvantage  will  assist  Blue  Cross in identifying and
                     developing programs to reduce medical  costs across medical
                     specialties.

             3.      CareAdvantage  will  assist Blue Cross in identifying under
                     and over utilization by specific providers and in providing
                     provider education as appropriate.

    D.       Provider Reimbursement

             1.      CareAdvantage will assist and support Blue Cross in the
                     development of physician incentive and sharing programs
                     including analysis to establish specific targets,
                     implementation, and ongoing monitoring of outcomes.

             2.      CareAdvantage  will  assist Blue Cross in the designing and
                     implementing of a program to include  community  physicians
                     in the medical cost management process.



                                       15

<PAGE>





                                                                 ATTACHMENT II-A


                              INTELLECTUAL PROPERTY


1. License.  In  accordance  with the terms and  conditions of this  Attachment,
CareAdvantage  grants  to Blue  Cross  effective  as of  January  1,  2001,  the
non-exclusive  license to use the following  intellectual  property only at Blue
Cross's  offices in the State of Rhode Island,  and only in connection  with its
business of providing health care and managed care coverage ("License"):

                  RightPath(TM);
                  Case Management Screening; and
                  Health Status Measures.

Such properties shall collectively be referred to as "Intellectual Property"; to
the extent such  Intellectual  Property  consists of  computer  software  (i.e.,
RightPath(TM)),  it shall be  referred  to as  "Software";  to the  extent  that
documentation   accompanies   the   Software,   it  shall  be   referred  to  as
"Documentation";  updates  and/or  improvements  to the  Software  and/or  other
Intellectual  Property  shall be  referred  to as  "Updates";  and  Intellectual
Property  (including  Software and Updates) and  Documentation and any copies or
modifications thereto are referred to as the "Licensed Products."

All rights to and in the  Licensed  Products,  including,  but not  limited  to,
copyrights and trade secret rights, belong to CareAdvantage or its licensors and
CareAdvantage  or its  licensors  holds  title  to  each  copy  of the  Licensed
Products.  Blue Cross shall not transfer or distribute the Licensed  Products to
others, and the license granted hereunder shall  automatically  terminate in the
event of such a transfer  or  distribution.  Blue Cross shall not copy or modify
the Licensed Products, except that Blue Cross may copy the Licensed Products for
authorized  use and for backup so long as all  copyright  and other  notices are
reproduced and included on such copies.

2. Term of License;  Termination.  Except as provided herein,  the License shall
terminate upon  termination of the Agreement.  Upon termination of the Agreement
for any reason  other  than Blue  Cross's  non-payment  of  compensation  due to
CareAdvantage,  Blue Cross may extend the duration of the License for sixty (60)
users in perpetuity by paying CareAdvantage the sum of $250,000 on or before the
date of  termination of the Agreement and the additional sum of $250,000 on each
anniversary of the date of termination;  provided,  however, that Blue Cross may
extend  the  License  for any year for more  than  sixty  (60)  users by  paying
CareAdvantage  an additional  four thousand  ($4,000)  dollars for such year for
each user in excess of sixty.  Notwithstanding the foregoing,  CareAdvantage may
terminate the License (without terminating the Agreement if it remains in force)
in the event Blue Cross  breaches any of the terms and  conditions  contained in
this Attachment (including,  but not limited to, Blue Cross's failure to pay the
annual $250,000  License fee for extension),  upon which  termination Blue Cross
shall return all copies of the Licensed  Products  (including the source code if
such source code has been  delivered to Blue Cross in accordance  with Section 9
of this Attachment) to  CareAdvantage.  Upon termination of this License for any
reason,  Blue Cross shall return all copies of the Licensed Products  (including
the  source  code if such  source  code  has  been  delivered  to Blue  Cross in
accordance  with  Section  9 of this  Attachment)  to  CareAdvantage;  provided,
however,  that  prior to doing  so Blue  Cross  may  extract  from the  Licensed
Products any Blue Cross data. All provisions of this Attachment II-A relating to
disclaimers of warranties,  limitation of liability,  remedies,  or damages, and
CareAdvantage's  proprietary  rights shall  survive  termination  of the License
and/or the Agreement.

CareAdvantage  agrees  that if  during  the  term of this  License  it  licenses
commercially  the  Licensed  Products to a third- party for fees less than those
specified  in this  Section,  such  reduced  fees  shall  apply in lieu of those
specified in this Section.  The foregoing  sentence  shall not apply to licenses
made in conjunction  with the provision of professional  services or to licenses
for more than 60 users.



                                       16

<PAGE>

3.       Maintenance and Updates.

Without additional charge during the term of the Agreement, and in the event the
Agreement  has  terminated  and Blue Cross has  elected to extend the License in
accordance with Section 2 of this Attachment,  without  additional charge during
the term of such License extension,  CareAdvantage shall use its best efforts to
correct any reproducible errors in the Licensed Products reported by Blue Cross.

CareAdvantage  shall provide Blue Cross with copies of all Updates to the extent
that they become available for commercial use without  additional  charge during
the term of the  Agreement,  and in the event the Agreement has  terminated  and
Blue Cross has elected to extend the  License in  accordance  with  Section 2 of
this Attachment, during the term of such License extension.

4. Object  Code.  Except as provided by Section 9, the  Software is delivered in
object  code only.  Blue Cross shall not reverse  compile or  otherwise  reverse
engineer the Software.

5.  Warranty  of  Ownership.  CareAdvantage  warrants  that it is the  owner  or
authorized  distributor  of the  Licensed  Products  and that it has full power,
authority and right to license the Licensed  Products in the manner set forth in
this Agreement without violating the rights of any third party, and there are no
actual or  threatened  suits by any third party  asserting  a violation  of such
rights.

CareAdvantage  agrees  to  indemnify  and  hold  harmless  Blue  Cross  and  its
directors,   officers,  employees  and  agents,  against  any  and  all  losses,
liabilities,  judgments, awards (including legal fees) arising out of or related
to any claim  that Blue  Cross's  use or  possession  of the  Licensed  Products
infringes or violates the copyright,  trade secret or other proprietary right of
any third party.  CareAdvantage  shall defend and settle at its sole expense all
suits or proceedings arising out of the foregoing,  provided that the Blue Cross
gives  CareAdvantage  prompt notice of any such claim. Blue Cross shall have the
right to  participate  in the  defense  of any such suit or  proceeding  through
counsel of its own choosing at its sole expense.

If a third  party claim  causes  Blue  Cross's  quiet  enjoyment  and use of the
Licensed Products to be seriously  endangered or disrupted,  CareAdvantage shall
(a) replace the Licensed  Products,  without additional charge, by a compatible,
functionally  equivalent  and  non-infringing  product;  (b) modify the Licensed
Products to avoid the infringement; or (c) if none of the foregoing alternatives
is possible after the exercise of  CareAdvantage's  best efforts,  CareAdvantage
shall  return a pro rata  portion of any fee paid to  CareAdvantage  pursuant to
Section 2 of this Attachment II-A.

Notwithstanding the foregoing, CareAdvantage shall not be obligated to indemnify
Blue Cross,  and will not be liable,  with respect to any claims  resulting from
modifications,  enhancements or  improvements  to the Licensed  Products made by
Blue  Cross or use of the  Licensed  Products  in  combination  with  any  other
software or products where the infringement would not have occurred but for such
combination.

6. Limited Warranty. CareAdvantage does not warrant that the functions contained
in the  Licensed  Products  will  meet  Blue  Cross's  requirements  or that the
operation of the Software will be  uninterrupted  or  error-free.  CareAdvantage
does warrant that the media on which the Software is furnished will be free from
defects in  materials  and  workmanship  under normal use for a period of thirty
(30) days from the date of delivery ("Warranty Period").  Blue Cross's exclusive
remedy under this limited warranty is the replacement of any defective  physical
media on which the  Software  is  furnished,  as  provided  below.  To receive a
replacement  for  defective  media  under  this  limited  warranty,  return  the
defective media to CareAdvantage during the Warranty Period.

EXCEPT AS PROVIDED  ABOVE,  THE  LICENSED  PRODUCTS IS PROVIDED  "AS IS" WITHOUT
WARRANTY OF ANY KIND,  EITHER EXPRESSED OR IMPLIED,  INCLUDING,  BUT NOT LIMITED
TO, THE IMPLIED  WARRANTIES  OF  MERCHANTABILITY  AND  FITNESS FOR A  PARTICULAR
PURPOSE,  AND THE ENTIRE RISK AS TO THE QUALITY AND  PERFORMANCE OF THE LICENSED
PRODUCTS IS WITH BLUE CROSS.



                                       17

<PAGE>



7. Limitation of Liability.  CAREADVANTAGE'S  SOLE OBLIGATION OR LIABILITY UNDER
THIS AGREEMENT IS THE  REPLACEMENT OF DEFECTIVE  MEDIA  ACCORDING TO THE LIMITED
WARRANTY  ABOVE.  IN ANY STATE WHERE THE  FOREGOING  LIMITATION  OF LIABILITY IS
UNENFORCEABLE, CAREADVANTAGE'S SOLE OBLIGATION OR LIABILITY UNDER THIS AGREEMENT
SHALL BE  PAYMENT  OF $100.  IN NO EVENT  WILL  CAREADVANTAGE  BE LIABLE FOR ANY
CONSEQUENTIAL,  INCIDENTAL OR INDIRECT DAMAGES,  INCLUDING,  WITHOUT LIMITATION,
ANY LOSS OF DATA, OR LOSS OF PROFITS OR LOST  SAVINGS,  ARISING OUT OF USE OF OR
INABILITY TO USE THE SOFTWARE OR  DOCUMENTATION,  EVEN IF CAREADVANTAGE HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY.
IN NO EVENT SHALL CAREADVANTAGE BE LIABLE FOR ANY DAMAGES.

8. General.  Any attempt by Blue Cross to sublicense,  assign or transfer any of
the rights,  duties or obligations with respect to the Intellectual  Property is
void.

9. Source Code. The parties agree to select a mutually  satisfactory  commercial
escrow agent to which  CareAdvantage  would deliver a current copy of the source
code for  RightPath(TM),  as well the  source  code to any  existing  Update  to
RightPath(TM). The parties shall execute the standard form escrow agreement from
such escrow agent,  provided that such  agreement  provides (a) the costs of the
agent's  escrow  services  shall  be  shared  equally;  and (b) in the  event of
CareAdvantage's bankruptcy,  insolvency or similar event, the escrow agent shall
deliver  the source  code to Blue Cross in the event the  Agreement  is still in
force;  or in the event the Agreement has  terminated and Blue Cross has elected
to extend the License in accordance with Section 2 of this Attachment.


                                       18

<PAGE>

                                                                 ATTACHMENT II-B


             DATA HOSTING, DATA ADMINISTRATION SERVICES AND TRAINING



1. Generally.  During the term of the Agreement,  and in the event the Agreement
has  terminated  and Blue Cross has elected to extend the License in  accordance
with Section 2 of Attachment II-A, during the term of such License extension, at
no additional charge except to the extent provided herein,  CareAdvantage  shall
permit Blue Cross to  maintain  data  generated  in  connection  with its use of
RightPath(TM)  ("RightPath(TM)  Data") on  CareAdvantage's  Computer Servers (as
defined herein), shall provide Blue Cross with Data Administration Services, and
shall  provide Blue Cross with Training (as defined  herein),  all as more fully
set forth in this Attachment II-B.

2.  Data  Hosting.   CareAdvantage  shall  maintain  the   RightPath(TM)Data  on
CareAdvantage's  Computer  Servers  at its  offices  in Iselin,  New  Jersey.  A
description of the Computer Servers is as follows:

         a.   Hardware:
              --------

              IBM xSeries 340(R) (internet application server)
              IBM Netfinity 6000R(R) (database server)
              Cisco Pix 506 Firewall
              Cisco Pix 525 Firewall

         b.   Software:
              ---------

              Microsoft Internet Information Server 4.0
              Microsoft Transaction Server
              Microsoft SQL Server 7

3. Data Administration Services. CareAdvantage shall provide Blue Cross with the
following Data Administration Services:

         a.   System Availability.  CareAdvantage  shall  maintain  the Computer
Servers so that they are available at all times except 12:00 AM - 4:00AM Eastern
Standard Time ("EST") Monday through Saturday and 12:00 AM - 8:00AM EST Sunday.

         b.   Technical Support. CareAdvantage  shall  provide  Blue  Cross with
toll-free telephone support for real- time response for technical  problems from
7:00 AM - 7:00  PM  EST, Monday  through  Friday, except  on  national  holidays
observed  by CareAdvantage. In so doing, it shall provide the following response
times:

                    Priority  1:  1/2  hour  -  Substantially  prevents  routine
                    production tasks from being performed. Reproducible problems
                    only.

                    Priority  2: 2  hours  -  Substantially  impacts  production
                    tasks,  however  workarounds  are  available.   Reproducible
                    problems only.

                    Priority  3: 24 hours - Minor  impact on  production  tasks,
                    with  easily  employed  workarounds.  Reproducible  problems
                    only.

         c.   Report Production.  CareAdvantage  shall  provide  Blue Cross with
regular periodic reports to be mutually agreed as to content and frequency

         d.   Data Base Maintenance.  CareAdvantage  shall  adhere  to a regular
schedule to maintain and support the Internet and database  servers,  as well as
the  Microsoft  SQL Server 7 relation  database  management  system.

                                       19
<PAGE>

System and  database,  upgrades,  maintenance  and  performing  tuning  shall be
performed as required. Blue Cross shall be given adequate notice before any work
is performed. CareAdvantage shall use it best effort to perform such work at the
convenience of Blue Cross.  However,  there may be times when "emergency"  tasks
need to be performed that may interfere  with Blue Cross work schedule.  If such
an event  occurs,  CareAdvantage  shall  work with Blue  Cross to  minimize  any
adverse impact.

         e.    Back-up  and  Recovery. CareAdvantage  shall backup RightPath(TM)
Data daily  using  Breecehill  DLT 7000 Dual Tape  Library  (backup  device) and
Legato  Networker for NT, Business Suite Module for Microsoft SQL Server (backup
software). CareAdvantage shall store daily the back-up tapes off-site at Archive
Systems, Inc.

CareAdvantage  has  contracted  with  Sungard  Business  Continuity  Services to
provide disaster recovery services

         f.    Security.  CareAdvantage shall provide the following with respect
to security:

               i.    Hardware.  CareAdvantage  shall  provide hardware security
                     as follows:

                           A. All hardware is maintained within a sealed
                           computer room with its own temperature control
                           system, backed up by a stand alone air conditioning
                           unit in case of temperature control system failure.
                           The temperature control system and air conditioning
                           derive their power from separate power lines.

                           B. Access to CareAdvantage's premises is under swipe
                           card control; access to the computer room is under
                           double swipe card control. (After-hours access is
                           under triple swipe card control.) A security
                           administrator controls both types of access.

                ii.   Software.  Blue  Cross  shall  control  user access to the
                      RightPath(TM)system through its assignment of passwords.

                iii.  Data Encryption. All  transactions  between Blue Cross and
                      CareAdvantage shall be encrypted as follows:

                           A. Data will be tunneled through a Virtual Private
                              Network connection  using a Cisco Pix 506 Firewall
                              at  Blue  Cross  and  a  Cisco Pix 525 Firewall at
                              CareAdvantage; and
                           B. IPSec tunneling using 3DES - 168 bit  encryption
                              level.


4.       Training.

                    a. Training the Trainers.  CareAdvantage shall provide three
persons  designated  by Blue Cross  ("Key  Persons")  (1) with  training  in the
principles underlying  RightPath(TM) (i.e., the "Omaha System") for two days per
week for two weeks at Blue Cross's  offices;  and (2) with  on-line  training in
RightPath(TM) for two days per week for two weeks at CareAdvantage's  New Jersey
offices.  Thereafter,  the Key Persons, with the assistance of CareAdvantage and
appropriate Blue Cross staff,  shall develop work processes for Blue Cross's use
of RightPath(TM).

                    b.  Initial  Training.  Once  the  work  process  have  been
determined,   CareAdvantage   shall   provide  case  managers  in  Blue  Cross's
Collaborative  Care  Unit and  Blue  Cross's  Medicare  Unit  (approximately  40
persons) with four days of training in the use of RightPath(TM)  (including work
processes) at Blue Cross's offices.

                    c. Subsequent  Training.  After  CareAdvantage  provides the
initial  training in  accordance  with  Subsection  b of this  Section,  the Key
Persons  shall be  responsible  for  training  new Blue Cross case  managers  or
others. CareAdvantage shall provide incidental assistance in such training at no
additional charge. In the event,  however, that Blue Cross desires CareAdvantage
to provide additional training for such persons,  CareAdvantage  agrees to do so
at its usual and customary charge to other clients for such additional training.


                                       20

<PAGE>

                    d.  Miscellaneous.  All  training  shall  be  scheduled  for
mutually  convenient  times;  Blue Cross shall be responsible for the travel and
lodging expenses of its employees during training at CareAdvantage's  New Jersey
headquarters.

5.       Certain Blue Cross Obligations.

                    a. Communications.  Blue Cross shall access  CareAdvantage's
Computer  Servers via the internet and shall ensure that it provides at its sole
expense  sufficient  band width to support the  traffic  between its offices and
CareAdvantage's  Computer  Servers.  At Blue  Cross's  option and sole  expense,
CareAdvantage  agrees to  cooperate  with Blue  Cross in  providing  alternative
communications links.

                    b. Desktops.  Blue Cross shall ensure that desktop computers
running RightPath(TM)meet the following minimum requirements:

              PC with a Pentium 133Mhz Processor or Greater
              Operating System :
                  Windows 95/98/ME
                  Windows NT v4.0 (Service Pack 5+), Windows 2000
              RAM :
                  32 MB - Windows 95/98/ME
                  64 MB - Windows NT v4.0 (Service Pack 5+), Windows 2000
                  Disk Space - 25MB Total
                  Screen Resolution - 800x600
                  LAN Based Connectivity with appropriate security measures as
                  tested  and   mutually   agreed   upon  by  Blue  Cross  and
                  CareAdvantage

                    c. Backup.  Blue Cross is  responsible  for  maintaining  an
adequate backup of all desktop software,  including the  RightPath(TM)directory,
executable and supporting files.

6. Additional Services; Additional Compensation. CareAdvantage will provide Blue
Cross with such additional services as the parties may agree (including, but not
limited  to report  production  in excess of that  provided  by  Section  3c) in
exchange  for such  additional  compensation  (and  payment of  expenses) as the
parties may agree.


                                       21

<PAGE>






                                                                  Attachment III

                                  COMPENSATION



In  consideration  for the services  provided by CareAdvantage to Blue Cross and
for the use of  CareAdvantage's  intellectual  property,  Blue  Cross  shall pay
CareAdvantage  as  compensation  the Monthly  Service  Fees and the  Performance
Service Fees in Accordance with this Attachment III.

1.   Monthly Service Fees


         (a) Generally.  For each month during the term of this Agreement,  Blue
Cross shall pay CareAdvantage the following Monthly Service Fees:

              (i)For months occurring in 2000, $130,583.33;

              (ii)For months occurring in 2001, $148,083.33; and

              (iii)For months occurring in 2002, $148,166.67.

         (b)Years After 2002.  Monthly Service Fees for contract years occurring
after 2002 shall be mutually agreed upon by April 30th of the preceding year. In
the event the parties  fail to agree on Monthly  Service  Fees for any  contract
year,  then either party may terminate this Agreement in accordance with Section
5 of this Attachment III.

         (c)Payment.  The  Monthly  Service  Fee for a month shall be paid on or
before the tenth (10th) working day following the close of the month.

2.   Performance Service Fees

         (a)  Generally.  For years  2000,  2001 and 2002,  in  addition  to the
amounts  provided  by  Section  1 of  this  Attachment,  Blue  Cross  shall  pay
CareAdvantage  as  Performance  Service Fees the sum of the  Incentive  Payments
corresponding to the Performance Goals in accordance with this section.

         (b) CY 2000.  Performance  Service Fees for 2000 shall be determined in
accordance with the following:

              (i) For the period January 1, 2000 to August 31, 2000,  Blue Cross
shall pay  CareAdvantage  a  Performance  Service  Fee in the amount of $94,000,
which amount has previously been paid; and

              (ii) For the period  September 1, 2000 to December 31, 2000,  Blue
Cross shall pay Care-  Advantage a Performance  Service Fees in accordance  with
subclauses (A) and (B):

                   (A) For attaining the  requirements  in the Strategic Plan as
determined by Blue Cross in its reasonable judgment as follows:

                     Performance Goals                  Incentive Payments
                     -----------------                  ------------------

                     Case Management                         $23,000
                     Utilization Management                  $17,500
                     Network Management                      $ 7,000
                     Corporate Compliance                    $ 7,500




<PAGE>





                   (B) Performance in accordance with the following schedule:

                     Performance Goals                  Incentive Payments
                     -----------------                  ------------------

              BlueCHiP for Medicare
              ---------------------

                     Days/1000        (baseline = 1600)


                            1600 - 5% (80.0) = 1520              $55,000
                            1600 - 3% (49.8) = 1550              $25,000
                            1600 - 2% (32.0) = 1568              $12,500

                     Admits/1000      (baseline = 271.9)


                            271.9 - 5% (13.6) = 258.3            $20,000
                            271.9 - 3% (8.18) = 263.7            $17,500
                            271.9 - 2% (5.44) = 266.5            $10,000


                     SNF Days/1000    (baseline = 1090)


                            1090 - 5% (54.5) = 1035.5            $27,500
                            1090 - 3% (32.7) = 1057.3            $17,500
                            1090 - 2% (21.8) = 1068.2            $10,000


              BlueCHiP Commercial
              -------------------

                     Days/1000        (baseline = 183.6)


                            183.6 - 5% (9.2) = 174.4             $45,000
                            183.6 - 3% (5.5) = 178.0             $35,000
                            183.6 - 2% (3.7) = 180.0             $20,000


              HealthMate Coast to Coast
              -------------------------

                     Days/1000        (baseline = 183.9)


                            183.9 - 5% (9.2) = 174.7             $55,000
                            183.9 - 3% (5.5) = 178.4             $42,500
                            183.9  - 2% (3.7) = 180.2            $30,000

         (c) CY 2001.  Performance  Service Fees for 2001 shall be determined in
accordance with the clauses (i) and (ii):

              (i) Blue Cross shall pay  CareAdvantage a Performance  Service Fee
of $67,500 for successful  implementation  of the Strategic Plan (as approved by
EAC) as determined by Blue Cross in its reasonable judgment; and

              (ii) Blue Cross shall pay CareAdvantage  Performance  Service Fees
for performance in accordance with the following schedule:




<PAGE>


                     Performance Goals                  Incentive Payments
                     -----------------                  ------------------

              BlueCHiP for Medicare
              ---------------------

                     Days/1000 (baseline = 1600)


                            1600 - 7.5% = 1480                   $166,500
                            1600 - 5.0% = 1520                   $138,000
                            1600 - 2.5% = 1560                   $ 63,000


                     Admits/1000 (baseline = 282)


                           282 - 7.5% = 261                      $ 85,500
                           282 - 5.0% = 268                      $ 68,400
                           282 - 2.5% = 275                      $ 36,000


                     SNF Days/1000 (baseline = 1050)


                           1050 - 7.5% =   971                   $ 85,500
                           1050 - 5.0% =   997                   $ 68,400
                           1050 - 2.5% = 1024                    $ 36,000


              BlueCHiP Commercial
              -------------------

                     Days/1000 (baseline = 174)


                           174 - 7.5% = 161                      $103,500
                           174 - 5.0% = 165                      $ 76,140
                           174 - 2.5% = 170                      $ 40,500


              HealthMate Coast to Coast
              -------------------------

                     Days/1000 (baseline = 175)


                           175 - 7.5% = 162                      $166,500
                           175 - 5.0% = 166                      $138,500
                           175 - 2.5% = 171                      $ 63,000


         (d) CY 2002.  Performance  Service Fees for 2002 shall be determined in
accordance with the clauses (i) and (ii):

              (i) Blue Cross shall pay  CareAdvantage a Performance  Service Fee
of $78,000 for successful  implementation  of the Strategic Plan (as approved by
EAC) as determined by Blue Cross in its reasonable judgment; and

              (ii) Blue Cross shall pay CareAdvantage  Performance  Service Fees
for performance in accordance with the following schedule:


<PAGE>


                     Performance Goals                  Incentive Payments
                     -----------------                  ------------------


              BlueCHiP for Medicare

                     Days/1000        (baseline = 1520)


                           1520 - 4% = 1459                          $180,700
                           1520 - 3% = 1474                          $138,500
                           1520 - 2% = 1489                          $ 63,000


                     Admits/1000      (baseline = 268)


                           268 - 4% = 257                            $101,200
                           268 - 3% = 260                            $ 68,400
                           268 - 2% = 263                            $ 37,000


                     SNF Days/1000    (baseline = 997)


                           997 - 4% =  957                         $101,700
                           997 - 3% =  968                         $ 68,400
                           977 - 2% =  977                         $ 37,000


              BlueCHiP Commercial

                     Days/1000        (baseline = 165)


                           165 - 4% = 158                            $117,700
                           165 - 3% = 160                            $ 76,140
                           165 - 2% = 162                            $ 40,500

              HealthMate Coast to Coast

                     Days/1000        (baseline = 166)


                           166 - 4% =  159                           $180,700
                           166 - 3% =  161                           $138,500
                           166 - 2% =  163                           $ 63,000


         (e) Measurement of Performance Standards

              (i)   Days/1000   shall  be  defined  as  medical,   surgical  and
rehabilitation  days and shall  exclude  maternity,  mental health and substance
abuse days.

              (ii)  Determination of whether a Performance Goal was achieved for
a year shall be made by April 30 of the following  year and shall be based on an
analysis of Loran data for the Appropriate Period, paid through March 31 of such
following  year,  using programs  designed by the  Quantitative  Measurement and
Monitoring Department of Blue Cross & Blue Shield of Rhode Island.  "Appropriate
Period"  shall mean for 2000,  data  incurred  from  September 1, 2000,  through
December 31, 2000;  and for each of 2001 and 2002,  data incurred from January 1
through December 31 of each such year.




<PAGE>





         (f) Minimum Performance  Standard.  "Minimum Performance Standard" (for
purposes of Section  1(b)(i)(F) of this  Agreement) for each year of the term of
this Agreement  shall mean  CareAdvantage's  achieving for such year the highest
level of  performance  for three (3) of the five (5)  Performance  Goals and the
second highest level for the remaining two (2) Performance Goals.

         (g) Integral Nature of Performance Service Fees.

              (i)  Blue  Cross  acknowledges  that  the  opportunities  to  earn
Performance  Service  Fees  are an  integral  part  of  CareAdvantage's  overall
compensation,  without  which  CareAdvantage  would be  unwilling to provide its
services hereunder. Blue Cross further acknowledges that CareAdvantage's ability
to attain the Performance  Goals and hence earn the Performance  Service Fees is
dependent  upon  Blue  Cross's  cooperation  as set  forth in  Section 6 of this
Attachment III.

              (ii) Each  month  CareAdvantage  shall  provide  Blue Cross with a
statement in writing indicating  whether for such month in CareAdvantage's  good
faith judgment Blue Cross has taken all actions in accordance  with Section 6 of
this Appendix III, and if not, specifying the particulars in which CareAdvantage
maintains that Blue Cross has failed to take all such actions. In the event that
CareAdvantage  maintains that Blue Cross has not taken all such actions,  within
one  week  of  CareAdvantage's  delivery  of  the  statement  required  by  this
subsection,  CareAdvantage's  Chief Operating Officer or his designee shall meet
with BCBSRI's Vice President, Coordinated Care, or his designee, to negotiate in
good faith (A) whether  Blue Cross has taken all such  actions,  (B) if not, the
extent to which  such  failure  impeded  CareAdvantage's  ability  to attain any
Performance  Goal, and (C) an adjustment of any such  Performance  Goal (or such
other  mutually  agreeable  action)  to hold  CareAdvantage  harmless  from such
failure.

              (iii) In the event the  parties are unable to reach  agreement  in
accordance  with  Subsection  (ii) of this Section 2(g), to the extent that Blue
Cross  failed  to comply  with any of the  items set forth in  Section 6 of this
Attachment  III and such failure caused  CareAdvantage  to fail to attain to any
extent a Performance Goal, then  CareAdvantage  shall be deemed to have attained
such  Performance  Goal to the extent that Blue Cross's  failure  impeded it, as
determined  by  a  final   nonappealable   judgment  of  a  court  of  competent
jurisdiction.  In the event the  parties  are unable to agree upon Blue  Cross's
performance  of its  obligations  under  Section 6 of this Appendix III and such
disagreement  shall  persist  despite good faith efforts at  resolution,  either
party may terminate  this  Agreement  upon one hundred  eighty (180) days' prior
written  notice  (without  prejudice to any rights  accrued prior to the date of
termination).

3.       Bonus Pool.

         (a) Generally. For years 2000, 2001 and 2002, in addition to the
amounts provided by Sections 1 and 2 of this Attachment, Blue Cross shall pay
CareAdvantage Incentive Payments in accordance with this section. Determination
of whether an Incentive Payment was earned for a calendar year shall be based on
analysis of claims data from January 1st through December 31st of such year,
paid through March 31st of the following year, with the application of a
completion factor determined in good faith by the Statistical, Actuarial and
Underwriting Division of Blue Cross. The claims data shall exclude outpatient
prescription drugs.

         (b) CY 2000. $225,000 in the event  CareAdvantage  achieves the highest
level in four (4) out of the five (5)  Performance  Goals  for such  year as set
forth in Section 2(b)(ii)(B)of this Attachment.




<PAGE>






         (c)      CY 2001 to 2002
                  ---------------

<TABLE>
<CAPTION>


                                                                 2001                                      2002
                                                                 ----                                      ----

                                                                              Incentive                             Incentive
                                                  Savings        PMPM          Payment      Savings       PMPM       Payment
                                                  -------        ----          -------      -------       ----       -------


<S>                       <C>                        <C>         <C>         <C>               <C>         <C>       <C>
BlueCHiP for Medicare
                                                     12%         $341        $200,000          12%         $300      360,000
                          Starting Point*  $388      11%         $345        $150,000          11%         $303      225,000
                                                     10%         $349         $75,000          10%         $307      100,000
BlueCHiP Commercial
                                                     12%          $84        $150,000          12%          $74     $130,000
                          Starting Point*   $95      11%          $85        $100,000          11%          $75      $80,000
                                                     10%          $86         $50,000          10%          $76      $40,000
HealthMate C2C
                                                     12%          $91        $300,000          12%          $80     $280,000
                          Starting Point*  $103      11%          $92        $175,000          11%          $81     $175,000
                                                     10%          $93         $75,000          10%          $82      $75,000




                                                  * Starting point pmpm

</TABLE>



4.       Offsets

         (a) Blue Cross shall be entitled to a deduction  from the  compensation
otherwise  payable under this Agreement in an amount equal to Two Hundred ($200)
Dollars  per month  times  the  number  of full  time  equivalent  CareAdvantage
physicians  with  whom Blue  Cross has  contracted  for each such  month,  which
deductions shall reflect direct payment from Blue Cross to such physicians.

         (b) Blue Cross shall also be entitled to a deduction from  compensation
payable  under this  Agreement in an amount  equal to the cost of all  physician
consultant  services  provided  by  CareAdvantage  physicians  (other  than  the
CareAdvantage  Associate  Medical  Directors)  necessary to provide managed care
services  under  this  Agreement,   including   reviews  of  physical   therapy,
occupational  therapy,  speech/hearing  and chiropractic  services,  alternative
medicine services,  credentialing, and on-call replacement physician consultants
with whom Blue Cross has contracted individually.

5.       Termination

         Unless notice of  termination  of this  Agreement has been given by one
party to the  other,  the  parties  shall use their best  efforts  to  establish
Monthly  Service Fees and Performance  Goals and Incentive  Payments for 2003 by
January  1,  2002,  and for each year  subsequent  to 2003  that this  Agreement
remains in effect by January 1 of the  preceding  year. In the event the parties
fail to agree on Monthly  Service  Fees or  Performance  Standards  or Incentive
Payments for 2003 or any subsequent year by April 30 of the preceding year, then
notwithstanding  any  other  provision  of  this  Agreement,  either  party  may
terminate  this Agreement on one hundred eighty (180) days' prior written notice
to the other.

6.       Dependencies

Solely for purposes of this Attachment III, Blue Cross agrees that it shall take
the following actions:

(a)  Meet its obligations as outlined in the Strategic Plan (as approved by EAC)
     for years 2001 and beyond (including,  but not limited to (i) establishment
     and revision of episodic case management and disease  management  programs;
     and  (ii)   establishment   of  review   procedures  for  acute  rehab  and
     transitional facility utilization).




<PAGE>



(b)  Be  responsive  as outlined  in this  Section to  CareAdvantage's  concerns
     regarding the  performance  and  management of the  utilization  management
     staff, as follows: In the event that CareAdvantage identifies a performance
     issue regarding an individual,  CareAdvantage  will  immediately  relay the
     performance  issue  and the  measurable  impact  on  achieving  the  target
     performance  to  the  individual's  supervisor,  the  Director  of  Medical
     Management and the training department with appropriate recommendations for
     a corrective action.

     If Blue Cross  agrees that there is a  performance  issue with a measurable
     impact  on  CareAdvantage's  ability  to meet the  performance  goals,  the
     individual shall be subject to an intense  evaluation process for a minimum
     of five (5) business  days to a maximum of ten (10) business  days.  During
     this  process,  extensive  mentoring,  education  and  monitoring  will  be
     provided by Blue Cross.  If after at least 5 business  days,  CareAdvantage
     determines  that (i) the individual does not or will not meet the necessary
     requirements for improvement,  CareAdvantage  will make a recommendation to
     Blue Cross to reassign  the  individual  within the next five (5)  business
     days,  or (ii)  the  performance  of the  individual  may be  satisfactory,
     CareAdvantage,  the  training  department  of Blue Cross and the  immediate
     supervisor  will  draft  a  new  performance   improvement   plan  for  the
     individual.

(c)  Provide  CareAdvantage  with the  opportunity to provide prior comment upon
     matters that may affect  CareAdvantage's  performance and  responsibilities
     regarding provider contracting (including but not limited to contract terms
     with hospitals and providers), performance and training issues.

(d)  Provide  CareAdvantage  with the  opportunity  (subject to  confidentiality
     considerations  regarding  attorney-client  privilege  and  arising  out of
     non-disclosure  agreements  with third parties) to actively  participate in
     all administrative  meetings that may affect medical management  (including
     but not  limited to  Specialty  Advisory  Committees  ("SACS")  and Medical
     Directors).

(e)  Provide  CareAdvantage with the opportunity to actively  participate in all
     initiatives that affect medical  management that involve other  departments
     such as Quality Management Operations.

(f)  Provide  CareAdvantage with the opportunity to actively  participate in the
     establishment  and  revision  as  necessary,   of  the  utilization  review
     processes,  including  episodic  case  management  and  disease  management
     programs (including the use and selection of outside vendors).

(g)  Provide  CareAdvantage with the opportunity to actively  participate in the
     implementation, management and oversight of the hospitalist programs.

(h)  Provide  CareAdvantage with the opportunity to actively  participate in the
     establishment, oversight and management of a review process for acute rehab
     and transitional facility utilization (i.e., SNF).

(i)  Implement  and  integrate  RightPath(TM)  and  Loran  systems  and  provide
     dedicated  resources for  implementation and maintenance in accordance with
     mutually agreed business needs.

(j)  Provide  CareAdvantage with access to all reports set forth in Section 7 of
     this Attachment III by the due dates set forth therein.

         Nothing in this  Section 6 shall in any way be  construed to limit Blue
Cross's  final  authority,  subject to any rights  CareAdvantage  may have under
Section 5 of the Agreement.




<PAGE>


<TABLE>
<CAPTION>
7.       Reports



            Name                       Focus                 Data Elements                              Responsibility
            ----                       -----                 -------------                              --------------

<S>                             <C>                      <C>                                            <C>
Weekly
** notes that these reports     a.h. notes ad hoc
will become a monthly           reports will be
cumulative report.              pulled as needed

o **Medical Advisor             Managed rate =           By medical advisor team and by individual MA    CAI
  referred, managed             category of well         on monthly for performance                      Report can be pulled
  report                        managed health           o By request/service                            from Loran
                                  plan                   o By product
                                                         o Decision
                                                         o Event type
                                                         o Member ID
                                                         o Diagnosis & procedure
                                                         o Event service
                                                         o Priority

o Nurse review, managed         Referral rate            By case manager facility                        CAI
  and referred rate             affects the ability      o Cases approved                                Report can be pulled
                                to effectively           o Cases referred                                from Loran
                                manage days &
                                admits


o    Hospital census as       o    Analysis for          o  Run by facility & product                    CAI
     needed: weekly, bi-           downgrades,           o  Member Name                                  Report can be pulled
     weekly. Minimum               readmissions          o  Member ID #                                  from Loran
     of                            and ER to pre-        o  Attending Physician
     Weekly for                    cert                  o  PCP (if different)
     the high                      admissions.           o  Primary diagnosis code and narrative
     volume facilities.       o    Identifies            o  Secondary diagnosis code only
                                   priority for          o  Admission date
                                   discharge             o  Discharge date
                                   planning,             o  Anticipate discharge date
                              o    provides an           o  Use of nurse comments and nurse
                                   excellent                recommendation field
                                   performance
                                   management
                                   tool for onsite
                                   review.


<PAGE>

o SNF census                  Weekly                   o    By Product                                      CAI
                              for the high             o    By facility                                     Report can be pulled
                              volume facilities.       o    By level of care                                from Loran.
                              Analysis for             o    Member name, ID
                              downgrades,              o    Diagnosis (narrative)
                              readmissions and         o    GLOS
                              ALOS.                    o    Admit date
                                                       o    Review type
                                                       o    Service
                                                       o    Attending MD
                                                       o    Approved days
                                                       o    Requested days

o Weighted days/1000          CAI                      o    By product                                      CAI
  (part of the CAI            performance and          o    Actual days/1000                                Report can be run from
  performance report)         impact on peer to        o    Weighted days/1000                              Loran
                              peer as well as          o    Days
                              cumulative               o    Admits
                              contract                 o    SNF admits/1000 Medicare + Choice
                              information              o    SNF days/1000 Medicare + Choice

o    Appeals report           Review of                o    By product                                      CAI
     (part of the CAI         number, type,            o    By event type; (Inpatient (LOC) CM, AMB)        Report can be run from
     performance              specialty, and           o    Member name                                     Loran
     report)                  upheld %.                o    Member ID
                                                       o    Coverage
                                                       o    Notification ID
                                                       o    Review type
                                                       o    Total days :approved and not approved
                                                       o    Services
                                                       o    Admit/discharge date
                                                       o    Diagnosis
                                                       o    LOC

o    (a.h.) Medical           o    Review of           o    By Medical Advisor                              CAI
     Advisor Activity              physician           o    By product                                      Report can be run from
     report                        performance         o    Appeals                                         Loran
                              o    Percentage of       o    By level
                                   reviewed/mana       o    Upheld
                                   ged cases.          o    Diverted
                                                       o    Denied
                                                       o    Not covered
                                                       o    Canceled
                                                       o    overturned


o    Monthly
     -------
** notes that these
reports will become a l
cumulative part of the
report.
Hospital Census
Days/1000
SNF Census
Medical Advisor activity
Nurse referral rate

<PAGE>


o    1-2, > 7 day report      Identifies               As noted in the Hospital census above.              CAI
                              days that may            These are two separate reports that will need       Report can be pulled from
                              have been                to be run.                                          Loran
                              appropriate for
                              alternate settings
                              of care as well as
                              UM performance.

o    Days/1000 by             Provides                 o    By product also by risk group                   QMM will run
     product (Acute           target                   o    Days,                                           this report
     hospital and SNF)        performance              o    Percent of change from last month
                                                       o    Reference to targets/goals
                                                       o    Graph demonstrating 12 month trend


o    Admits/1000 by           Assists in               o    By product also by risk group                   QMM is
     product (Acute           identifying target       o    Days,                                           responsible for this
     hospital and SNF)        performance and          o    Percent of change from last month               report.  They will add
o    ** SNF admits is a       ratio of admits to       o    Reference to targets/goals                      weighted days as a
     new addition to the      LOS                      o    Graph demonstrating 12 month trend              comparison line on this
     report.                                                                                                report. Focus is on
                                                                                                            M+C, SNF for M+C,
                                                                                                            CHiP, Healthmate 2000

o    **Average LOS            Assists in               o    By product also by risk group                   QMM will run this
     (Acute hospital and      identifying areas        o    Days,                                           report. All products
     SNF)                     of concern and           o    Percent of change from last month               are done, target
o    SNF ALOS is new to       outliers.                o    Reference to targets/goals                      performance is on
     this report                                       o    Graph demonstrating 12 month trend              M+C., CHiP,
                                                                                                            Healthmate



o    Administrative           Identifies               o    Product type                                    CAI
     Approval ( for           areas of plan            o    Admission type                                  Report can be pulled
     Acute hospital and       override of              o    Patient name and Id Number                      from Loran
     SNF)                     standard                 o    Start and end Date
                              interpretations of       o    Setting
                              LOC.  These              o    LOC
                              should be                o    Service
                              deducted from            o    Total number of days
                              target
                              performance.

Quarterly

o    Frequent utilization     Identifies               o    By facility                                     QMM will
     report                   members with             o    By product                                      provide this report
     o    ER                  frequent utilization     o    Group member
     o    Inpatient           of ER, inpatient         o    Member ID
     o    combination         admissions or any        o    Member name
                              combination of           o    DOS
                              these who might          o    Diagnosis
                              benefit from a           o    Admission (needs to be added)
                              CM/DM program.

o    Focus in/Focus out       Identifies               o    By product:  Medicare + Choice, CHiP            QMM will
     report by product        priorities in UM              - HM2000                                        provide this report.
     and facility             review process for       o    Medicare DRG code
                              onsite, facility and     o    Medicare DRG description
                              MA.                      o    Days
                                                       o    Cases
                                                       o    Median LOS
                                                       o    Average LOS
                                                       o    Liability per day
                                                       o    Savings
                                                       o    Variation

<PAGE>


o    CHiP Management          Identifies               o    By facility                                     QMM will
     Report (includes         highest diagnoses        o    By product                                      provide the report.
     several key focus        by facility and          o    Admissions by diagnosis (CHF,
     areas: Dx, $             product to                    Diabetes, COPD, HTN, etc.)
     amount.                  individualize the        o    Member name
                              review process as        o    Member ID #
                              well as contract         o    $ spent
                              issues.                  o    acutal LOS
                                                       o    comparison to other facilities or
                                                            benchmarks



o    Top inpatient            Identifies               o    By product   Medicare + Choice, CHiP            QMM will
     diagnosis (part of       the top diagnoses             - HM2000                                        provide the report.
     the management           by facility to           o    Members
     report)                  individualize the        o    Treatment type summary
                              review .                 o    Treatment type summary by facility
                                                       o    Cost / patient  by specialty - volume and
                                                            cost
                                                       o    High volume specialty
                                                       o    Total admissions
                                                       o    Inpatient/outpatient (AMB) service
                                                       o    By product - top inpatient
                                                            surgical procedure        -top AMB
                                                            surgical procedure
                                                       o    top diagnosis AMB
                                                       o    top diagnosis inpt.

o    Opportunity Days.        Identifies/confirms      o    By product   Medicare + Choice, CHiP            QMM will
  o  By facility, product     areas of priorities           - HM2000                                        provide the  report.
  o  By disease specific      and/or                   o    Age bracket
  o  Potential savings        opportunities and        o    Sex
     summary                  where focus              o    # of cases
                              should be for            o    % of population
                              product type as          o    Increase or decrease in current or
                              well as disease               existing membership
                              specific                 o    Flag for increase in % of 3% or more in
                              management.                   an age bracket
                              Potential savings        o    Add premium choice to Medicare +
                              are identified as             Choice membership breakdown
                              well.

o    Membership               Provides                 o    By product   Medicare + Choice ,CHiP           QMM will
     Age/Sex reports for      early identification          - HM2000                                       provide the report. The
     the M+ C product         of the member            o    Drill down to                                  three facets have been
     (others can be run       population,              o    -inpatient pm/pm                               incorporated into one
     semi-annually)                                    o    outpatient pm/pm                               report.  (Includes the
                                                       o    pharmacy pm/pm                                 Maryland 10
                                                       o    Run by total pm/pm and disease                 benchmark potential
                                                            category pm/pm                                 savings summary by
                                                                                                           DRG)

o    Membership age           Provides                 As indicated by HEDIS guidelines                    QMM will report,
     bracket and              a complete               and mandate                                         question is where all of
     premium chosen to        analysis of the                                                              the information comes
     for M+C product          utilization and                                                              from, several sources
                              health status of                                                             and needs.
                              the individual
                              choosing a
                              specific premium

<PAGE>


o    High  utilization by     Identifies               As indicated by specific need for report and         QMM will
     product, diagnosis,      the high areas of        in agreement with QMM                                provide this report.
     (will evaluate if        need for members
     CHiP management          and costs for the
     report can fulfill this  plan. Used for
     need                     forecasting and
                              preventative
                              measures.

o    Service utilization      Identifies               o    Member                                          QMM will
     report                   what specialties         o    Name                                            provide the report.
                              represent the            o    Birth date
                              highest utilization      o    ER Visits
                              costs, frequency
                              and patient panel.

o    (a.h.)Professional       Provides                 o    TBD, QMM will adjust current models to          QMM provides
     provider summary         specific                      accommodate the reason for the                  this report.
                              information                   request.
                              regarding outliers
                              for inpatient,
                              outpatient,
                              specialty and
                              pharmacy
                              utilization.

Semi-annually

o    Utilization Costs for    Demonstrates the         o    TBD                                             QMM will run
     disease specific         cost of managing         o    Basics will include                             the report, requests
     programs.                a member with a          o    Member name, ID                                 will be submitted 30-60
                              specific diagnosis       o    Attending/PCP                                   days prior to need.
                              and subsequent           o    Diagnosis
                              costs after the          o    ER, Inpatient Outpatient services
                              program has been         o    $ amounts
                              in effect.               o    High utilizers both provider and member
                                                            will be identified

o    Cost pm/pm for           Identifies               o    By product                                      QMM  will
     admits, days,            total medical loss       o    By facility                                     produce this report, It
     disease category.        ratio for members        o    For admission/days                              is based on claims data.
                              by disease for           o    Disease category
                              utilization for
                              days, admits. Etc..

o    Membership by age        Identifies               o    Age categories                                  QMM to
     bracket, utilization     areas of                 o    By product type                                 provide the report.
     and cost for             opportunity for          o    Utilization pm/pm for each
     commercial               UM, CM, DM.              o    By premium choice for M+C
     products.                High risk
                              populations are
                              identified.


Annually

o    Hedis report             Identifies               o                                                    QMM will
                              areas of                                                                      provide this report.
                              concentration for
                              the Plan as well as
                              proficiency in
                              meeting the
                              requirements.
</TABLE>

<PAGE>


                           [CareAdvantage Letterhead]


                              As of January 1, 2000


Blue Cross & Blue Shield
         of Rhode Island
444 Westminster Street
Providence, Rhode Island  02903


Dear __________:


         This Letter  Agreement is intended to supplement the Agreement dated as
of today between our companies  that is being  executed  contemporaneously  with
this Letter Agreement.  Unless otherwise defined herein,  capitalized terms used
in this Letter Agreement shall have the same meaning as in the Agreement.

         In addition  to the  staffing  required by Section 2 of the  Agreement,
during  the  term of the  Agreement  CareAdvantage  shall  provide six-tenths of
one (0.6)  additional  medical   management   physician   full-time   equivalent
and  one  additional administrative assistant.

         In addition to the compensation provided by Section 4 of the Agreement,
during 2000 Blue Cross shall pay to CareAdvantage $16,500 per month ("Additional
Fee"). In the event that this Agreement  remains in effect for years after 2000,
Blue Cross shall pay  CareAdvantage  an Additional  Fee for each such year in an
amount that bears the same  percentage to the Additional Fee for the prior year,
as the Medical Care Services  component of the Consumer  Price  Index-All  Urban
Consumers  ("Index")  as of the first day of such year  after  2000 bears to the
Index as of the first day of such prior year.  The  Additional Fee shall be paid
in equal  monthly  installments  on or  before  the  tenth  (10th)  working  day
following the close of each month.

         This Letter  Agreement  shall remain in effect so long as the Agreement
remains in effect;  provided,  however,  that either  party may  terminate  this
Agreement on sixty (60) days' prior written notice to the other.

                                   Sincerely,



Agreed to:


Blue Cross & Blue Shield
    of Rhode Island

By: _____________________
Its: ____________________




<PAGE>