AGREEMENT AND PLAN OF MERGER
                                      among
                                ACCUHEALTH, INC.
                               ACH ACQUIRING CORP.
                               PROHEALTHCARE, INC.
                      PROHEALTHCARE INFUSION SERVICES, INC.
                                 THOMAS LAURITA
                                       and
                                DAVID BRIAN COHEN
                           Dated as of March 14, 1997


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                          AGREEMENT AND PLAN OF MERGER


     This  agreement  and plan of  merger  dated as of March  14,  1997 is among
Accuhealth,  Inc., a New York corporation ("Parent"), ACH Acquiring Corp., a New
Jersey corporation and wholly-owned subsidiary of Parent ("Sub"), ProHealthCare,
Inc., a Delaware corporation ("ProHealthCare"), ProHealthCare Infusion Services,
Inc., a New Jersey  corporation and a wholly-owned  subsidiary of  ProHealthCare
(the  "Company"),  and Thomas Laurita and David Brian Cohen  (collectively,  the
"Stockholders").

     Parent,  Sub,  ProHealthCare,  the Company and the Stockholders desire that
Parent  acquire  the  Company  pursuant  to the  merger of Sub with and into the
Company  in  accordance  with the  terms of this  agreement  and the New  Jersey
Business Corporation Act (the "NJBCA").

     The parties agree as follows:

1.   The Merger; The Surviving Corporation

     1.1 The Merger.  At the  Effective  Time (as defined in section  1.3),  Sub
shall be merged with and into the Company (the "Merger")  pursuant to the NJBCA,
and the  separate  existence  of Sub  shall  cease.  The  Company  shall  be the
surviving  corporation  (the "Surviving  Corporation")  and shall continue to be
governed by the NJBCA.

     1.2 Closing. The closing of the transactions contemplated by this agreement
(the  "Closing")  shall take  place at the  offices  of  Proskauer  Rose Goetz &
Mendelsohn  LLP,  at 10:00  a.m.,  local  time,  two  business  days  after  the
conditions specified in section 10 have been satisfied or on such other date and
at such other time and place as Parent and the Company shall agree (the "Closing
Date").

     1.3 Effective Time of the Merger. As soon as practicable after the Closing,
a properly  executed  certificate  of merger  providing  for the Merger shall be
filed with the  Secretary of State of the State of New Jersey.  The Merger shall
become  effective at the time of filing of the  certificate of merger or at such
later time specified in the certificate of merger (the "Effective Time").

     1.4 Certificate of Incorporation and By-Laws. The articles of incorporation
and by-laws of Sub in effect at the Effective  Time shall be the  certificate of
incorporation  and by-laws of the Surviving  Corporation  until amended,  except
that the name of the  Surviving  Corporation  shall be  "ProHealthCare  Infusion
Services, Inc."



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2.   Conversion of Shares; Options

     2.1 Treatment of Shares of the Company. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof:

          (a) All the shares of capital  stock,  no par value per share,  of the
     Company  ("Company Common Stock") issued and outstanding  immediately prior
     to the Effective Time (other than shares to be cancelled in accordance with
     section  2.1(b))  shall  automatically  be cancelled and shall be converted
     into the right to receive  an  aggregate  of  300,000  shares of the common
     stock,  par value $.01 per share, of Parent ("Parent Common Stock"),  which
     shall be  delivered  to  ProHealthCare  within one  business  day after the
     surrender of the certificate or  certificates  formerly  representing  such
     share of Company Common Stock in accordance with section 2.2.

          (b) Any shares of Company Common Stock that are held by the Company as
     treasury  shares shall be cancelled and retired and cease to exist,  and no
     securities of Parent or other  consideration shall be delivered in exchange
     therefor.

          (c) Each share of common stock, par value $.01 per share, of Sub ("Sub
     Common Stock") issued and  outstanding  immediately  prior to the Effective
     Time shall be  converted  into and become one fully paid and  nonassessable
     share  of  common  stock,  par  value  $.01  per  share,  of the  Surviving
     Corporation.

2.2  Exchange of Company Stock.

     (a) Promptly  after the  Effective  Time,  ProHealthCare  shall  present to
Parent for cancellation a certificate or certificates,  which  immediately prior
to the  Effective  Time  represented  all the issued and  outstanding  shares of
Company  Common Stock,  free and clear of all Liens (as defined in section 5.2),
and Parent  shall  thereupon  deliver to  ProHealthCare  in exchange  therefor a
certificate or certificates representing 300,000 shares of Parent Common Stock.

     (b) If Final  Incremental  Gross Profit (as defined in section 2.4) exceeds
$1.2 million,  then, promptly after the determination of Final Incremental Gross
Profit,  Parent shall deliver to  ProHealthCare  a number of shares equal to the
product of (i) the  amount,  if any, by which (x) the  quotient of $1.2  million
divided by the average of the per share closing price for Parent Common Stock on
the   NASDAQ  or  the   average  of  the  last  per  share  bid  prices  on  the
over-the-counter  Bulletin Board (as reported by the Nasdaq Stock Market, Inc.),
as the case may be,  for the 30 trading  days  immediately  preceding  the first
anniversary  of the  Closing  (the  "Average  Price")  exceeds (y) the number of
shares of Parent  Common stock  delivered to  ProHealthCare  pursuant to section
2.2(a)  multiplied  by (ii) a fraction,  the numerator of which is the number of
shares of Parent  Common Stock  delivered to  ProHealthCare  pursuant to section
2.2(a) that are held, on the first anniversary of the Closing,  by ProHealthCare
or by any person



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who is a stockholder of  ProHealthCare  on the date of this  agreement,  and the
denominator of which is the number of shares of Parent Common Stock delivered to
ProHealthCare pursuant to section 2.2(a);  provided that the aggregate number of
shares delivered to  ProHealthCare  pursuant to sections 2.2(a) and 2.2(b) shall
not exceed 500,000.  Notwithstanding  the preceding  sentence,  Parent shall not
deliver any share to  ProHealthCare  pursuant to this section  2.2(b) if (a) the
average of the per share  closing price for Parent Common Stock on the NASDAQ or
the  average of the last per share bid prices on the  over-the-counter  Bulletin
Board (as reported by the Nasdaq Stock  Market,  Inc.),  as the case may be, for
any ten consecutive  trading days prior to the first  anniversary of the Closing
is greater than or equal to $4.00 or (b) the Parent  Common Stock is  converted,
by merger or any similar  corporate event,  into  publicly-traded  securities of
which, on the date of conversion, the per share closing price is greater than or
equal to $4.00. Parent's obligation under this section 2.2(b) shall be expressly
assumed by any  successor  of Parent.  If Parent  shall pay a dividend in Parent
Common Stock,  subdivide the outstanding  Parent Stock,  combine the outstanding
Parent  Stock into a smaller  number of shares or issue by any  similar  capital
event other securities of the Company, the kind and number of shares deliverable
pursuant to this  section  2.2(b) and the $4.00  target  price shall be adjusted
appropriately.  Notwithstanding anything in this section 2.2(b) to the contrary,
no shares shall be delivered  pursuant to this section  2.2(b) if any shares are
delivered pursuant to section 2.2(c).

     (c) If,  prior to the  determination  of Final  Incremental  Gross  Profit,
Parent  consummates  a merger or similar  transaction  (a "Parent  Merger") as a
result of which,  on June 30,  1998,  Thomas  Laurita is no longer  employed  by
Parent or any  successor of Parent in a senior  management  position,  then,  on
September  30, 1998,  Parent shall deliver to  ProHealthCare  a number of shares
equal to the  product of (i) the amount,  if any,  by which (x) the  quotient of
$1.0 million divided by the Average Price exceeds (y) 300,000 multiplied by (ii)
a  fraction,  the  numerator  of which is the number of shares of Parent  Common
Stock  delivered to  ProHealthCare  pursuant to section 2.2(a) that are held, on
the first anniversary of the Closing, by ProHealthCare or by any person who is a
stockholder of ProHealthCare on the date of this agreement,  and the denominator
of which is  300,000;  provided  that the  aggregate  number of shares of Parent
Common Stock delivered to  ProHealthCare  pursuant to sections 2.2(a) and 2.2(c)
shall not exceed 500,000.  Notwithstanding the preceding sentence,  Parent shall
not deliver any share to  ProHealthCare  pursuant to this section  2.2(c) if (a)
the average of the per share closing price for Parent Common Stock on the NASDAQ
or a  national  securities  exchange  or the  average  of the last per share bid
prices on the  over-the-counter  Bulletin Board (as reported by the Nasdaq Stock
Market, Inc.), as the case may be, for any ten consecutive trading days prior to
the first  anniversary  of the Closing is greater  than or equal to $4.00 or (b)
the  Parent   Common  Stock  was   converted,   by  the  Parent   Merger,   into
publicly-traded  securities of which,  on the date of conversion,  the per share
closing price is greater than or equal to $4.00.  Parent's obligation under this
section 2.2(c) shall be expressly  assumed by any successor of Parent. If Parent
shall pay a dividend in Parent Common Stock,  subdivide the  outstanding  Parent
Stock,  combine the outstanding  Parent Stock into a smaller number of shares or
issue by any similar capital event other securities of the Company, the kind and
number of shares  deliverable  pursuant to this  section  2.2(c),  and the $4.00
target price, shall be adjusted appropriately. The number and kind



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of shares deliverable pursuant to this section 2.2(c) and the $4.00 target price
shall be deemed to refer to the  appropriate  number and kind, and price of, any
security  into which the  outstanding  Parent Common Stock may be converted as a
result of the Parent Merger.

     2.3  No  Fractional  Securities.  No  certificates  or  scrip  representing
fractional  shares of Parent Common Stock shall be issued upon the surrender for
exchange of  certificates of Company Common Stock or pursuant to section 2.2(b),
section 2.2(c) or section 4.2, and such  fractional  interests shall not entitle
the owner thereof to vote or to any rights of a security holder.  In lieu of any
such fractional  securities  ProHealthCare would otherwise have been entitled to
receive  pursuant  to  sections  2.2(b),  2.2(c) or 4.2,  ProHealthCare  will be
entitled  to  receive,  and Parent will timely  make,  a cash  payment  (without
interest)  determined  by  multiplying  (i) the  fractional  interest  to  which
ProHealthCare would otherwise be entitled and (ii) in the case of any fractional
security ProHealthCare would otherwise have been entitled to receive pursuant to
section  2.2(b) or  section  2.2(c),  the  Average  Price or, in the case of any
fractional security  ProHealthCare would otherwise have been entitled to receive
pursuant to section 4.2, $4.00.

2.4  Determination of Final Incremental Gross Profit.

     (a) Parent Calculation of Incremental Gross Profit.

          (i) Within 50 days after the end of each of Parent's  fiscal  quarters
     up to and including March 31, 1998,  Parent shall deliver to  ProHealthCare
     and each  Stockholder a statement of Parent's  calculation  of  Incremental
     Gross Profit for that quarter.

          (ii) Within 90 days after the end of Parent's  fiscal  quarter  ending
     June 30,  1998,  Parent shall  deliver to  ProHealthCare  a statement  (the
     "Parent's IGP Statement") in reasonable detail of the Parent's  calculation
     of Incremental  Gross Profit for any four  consecutive  fiscal  quarters of
     Parent ending on or prior to June 30, 1998.

     (b) For purposes of this  agreement,  "Incremental  Gross Profit" means the
Net  Sales  of the  Surviving  Corporation  and of  Parent  minus  all  costs of
medicines and supplies  sold,  field nursing,  freight and other direct,  out of
pocket expenses,  which are attributable to goods or services marketed under the
"Accuhealth"  or  "ProHealthCare"  name to  customers  referred by the  referral
sources  identified  on Schedule 2.4 hereto.  ProHealthCare  and Thomas  Laurita
represent and warrant to Parent that,  except as set forth on Schedule 2.4, each
customer and referral  source  identified on Schedule 2.4 has purchased goods or
services from, or referred customers to,  ProHealthCare or the Company on one or
more occasions  during the 12-month period  commencing March 11, 1996 and ending
March 14,  1997.  For purposes of this  agreement,  "Net Sales" shall mean sales
collected and sales that Parent expects to be collected.

     (c)  ProHealthCare's  Verification of Incremental  Gross Profit.  After the
delivery to ProHealthCare of the Parent's IGP Statement,  ProHealthCare  and its
representatives  shall have access at reasonable times and on reasonable notice,
at ProHealthCare's



<PAGE>

sole  expense,  to the books and records of the  Surviving  Corporation  for the
purpose of verifying the accuracy of the  Incremental  Gross Profit  calculation
set forth in the Parent's IGP  Statement.  If  ProHealthCare  disagrees with the
calculation of Incremental Gross Profit set forth in the Parent's IGP Statement,
ProHealthCare  shall  deliver  to  Parent,  prior  to the  end of the  90th  day
following the delivery of the Parent's Statement, a statement (the "Seller's IGP
Statement")  that  sets  forth  in  reasonable  detail  an  explanation  of such
disagreement  and a proposed  alternative  determination  of  Incremental  Gross
Profit.  If  ProHealthCare  does not deliver to Parent a Seller's IGP  Statement
within  such  90-day  period,  the  Incremental  Gross  Profit  set forth in the
Parent's IGP Statement  shall be deemed final,  binding and conclusive upon each
party hereto.

     (d) Dispute Resolution.

          (i) If  ProHealthCare  shall timely  deliver a Seller's IGP Statement,
     then  Parent and  ProHealthCare  will  attempt in good faith to resolve all
     differences with regard to their respective  determinations  of Incremental
     Gross  Profit  during the next 30 days or such longer  period as Parent and
     ProHealthCare may agree in writing.  If Parent and ProHealthCare are unable
     to resolve such differences and agree as to Incremental  Gross Profit prior
     to the  expiration  of such 30-day  period (or longer  period if so agreed)
     Incremental   Gross  Profit  shall  be   determined   pursuant  to  section
     2.4(d)(ii).

          (ii)  Promptly  following  the 30-day  period  referred  to in section
     2.4(d)(i),  Parent  and  ProHealthCare  shall  jointly  select  a  firm  of
     independent  public  accountants  of  national or  regional  prominence  to
     resolve any dispute  concerning the calculation of Incremental Gross Profit
     that  is  not  resolved  by  Parent  and   ProHealthCare.   If  Parent  and
     ProHealthCare  fail to select  such firm  within 30 days  after the  30-day
     period  referred  to in  section  2.4(d)(i),  such firm shall be Richard A.
     Eisner & Company or, if Richard A. Eisner & Company is or has been  engaged
     for any purpose by any party to this  agreement,  any "big six"  accounting
     firm selected by the President of the Association of the Bar of the City of
     New York (as long as it is not a firm that any party to this  agreement has
     engaged  for any  purpose  within  the  preceding  five  years).  Such firm
     selected pursuant to this section 2.4(d)(ii) is hereinafter  referred to as
     the "IGP  Accountants".  The IGP Accountants shall be instructed to deliver
     to  Parent  and  ProHealthCare  a written  report  (the  "Accountants'  IGP
     Report")  setting forth the IGP  Accountants'  calculation  of  Incremental
     Gross  Profit,  no  later  than  60 days  following  their  selection.  The
     determination of Incremental Gross Profit set forth in the Accountants' IGP
     Report  shall be deemed  final,  binding  and  conclusive  upon each  party
     hereto.  The  fees and  expenses  of the IGP  Accountants  shall be paid by
     ProHealthCare,   except  that  if  the  IGP  Accountant's   calculation  of
     Incremental  Gross  Profit  is  at  least  $50,000  greater  than  Parent's
     calculation  of  Incremental  Gross  Profit,  the fees and  expenses of the
     Accountants shall be paid by Parent.

     (e) Final  Incremental  Gross Profit.  Incremental Gross Profit as mutually
agreed to by Parent  and  ProHealthCare  pursuant  to section  2.4(d)(i),  or as
deemed final,  binding and conclusive  pursuant to section 2.4(c) or 2.4(d)(ii),
shall be deemed the "Final Incremental Gross Profit".



<PAGE>

3.   Determination   of  Final  Net   Liquid   Assets;   Adjustment   to  Merger
     Consideration

     3.1 Parent  Calculation of Net Liquid Assets.  Within 90 days after the end
of Parent's  fiscal  quarter ending  December 31, 1997,  Parent shall deliver to
ProHealthCare a statement (the "Parent's Statement") in reasonable detail of the
Parent's calculation of Net Liquid Assets as of December 31, 1997.

     (a)  For  purposes  of  this  agreement,  "Net  Liquid  Assets"  means  the
difference between (i) the sum of $__________, which represents the value of the
Company's  inventory as of the Closing Date that was purchased from Parent, plus
all payments  received after the Closing Date in respect of accounts  receivable
of the Company, including those accounts receivable assigned by ProHealthCare to
the Company  pursuant to Section  10.2(m),  that were outstanding on the Closing
Date  ("Accounts  Receivable"),  minus (ii) the sum of all payments  made by the
Company, the Surviving Corporation, Parent or any affiliate of any of them after
the Closing Date in respect of liabilities of the Company and ProHealthCare that
existed as of the Closing Date,  including  payments  pursuant to section 9.5 of
this  agreement,  and the value of all  unpaid  liabilities  (as  determined  in
accordance  with  generally  accepted  accounting  principles  ("GAAP"))  of the
Company  and  ProHealthCare  that  existed  as of the  Closing  Date,  plus  all
financing  charges and similar fees incurred,  after the Closing Date, by Parent
or the Surviving  Corporation in connection with the discharge of liabilities of
the  Company  or  ProHealthCare  that  existed as of the  Closing  Date less any
liabilities  that were reduced,  written off,  waived,  assumed by ProHealthCare
pursuant to an assignment and  assumption  agreement in the form of Exhibit E- 1
to this  agreement  or that  otherwise  will  not be  payable  by the  Surviving
Corporation.  It is understood that to the extent that Parent or Sub incurs debt
to satisfy accounts payable of the Company, interest, financing and other actual
costs  related to such debt will  reduce Net Liquid  Assets,  and,  as  Accounts
Receivable of the Company are  collected,  collected  amounts shall be deemed to
reduce the principal of such borrowed funds for purposes of calculating  ongoing
costs.

     (b) Within 45 days after the end of each calendar month up to and including
November 30, 1997,  Parent shall deliver to ProHealthCare and each Stockholder a
statement (a "Monthly  Statement") of Parent's  calculation of Net Liquid Assets
as of the end of that month. In addition, each Monthly Statement shall set forth
any amount  withdrawn  from the  Stratogen  Account  (as denied in section  9.5)
during  the month to which the  Monthly  Statement  relates  and the use of such
amount.

     3.2 ProHealthCare's  Verification of Net Liquid Assets.  After the delivery
to ProHealthCare  of each Monthly  Statement and after delivery to ProHealthCare
of the Parent's  Statement,  ProHealthCare  and its  representatives  shall have
access at reasonable times and on reasonable  notice,  at  ProHealthCare's  sole
expense,  to the books and records of the Surviving  Corporation for the purpose
of verifying the accuracy of the Net Liquid Assets  calculation set forth in the
Monthly Statement or in the Parent's Statement.



<PAGE>

3.3  Dispute Resolution.

     (a) If  ProHealthCare  disagrees with the  calculation of Net Liquid Assets
set forth in the  Parent's  Statement,  ProHealthCare  shall  deliver to Parent,
prior  to the  end of the  90th  day  following  the  delivery  of the  Parent's
Statement,  a statement  approved by  ProHealthCare's  board of  directors  (the
"Seller's  Statement")  that sets forth in reasonable  detail an  explanation of
such disagreement and a proposed alternative determination of Net Liquid Assets.
If  ProHealthCare  does not deliver to Parent a Seller's  Statement  within such
90-day period,  Net Liquid Assets set forth in the Parent's  Statement  shall be
deemed final, binding and conclusive upon each party hereto.

     (b) If ProHealthCare shall timely deliver a Seller's Statement, then Parent
and  ProHealthCare  will attempt in good faith to resolve all  differences  with
regard to their respective  determinations  of Net Liquid Assets during the next
30 days or such longer period as Parent and  ProHealthCare may agree in writing.
If Parent and  ProHealthCare are unable to resolve such differences and agree as
to Net Liquid  Assets prior to the  expiration  of such 30-day period (or longer
period if so agreed) Net Liquid Assets shall be  determined  pursuant to section
3.3(c).

     (c) Promptly  following  the 30-day period  referred to in section  3.3(b),
Parent and  ProHealthCare  shall  jointly  select a firm of  independent  public
accountants of national or regional prominence to resolve any dispute concerning
the  calculation  of Net  Liquid  Assets  that is not  resolved  by  Parent  and
ProHealthCare.  If Parent and  ProHealthCare  fail to select such firm within 30
days after the 30-day period referred to in section  3.3(b),  such firm shall be
Richard A.  Eisner & Company  or, if Richard A.  Eisner & Company is or has been
engaged for any purpose by any party to this agreement, any "big six" accounting
firm selected by the President of the  Association of the Bar of the City of New
York (as long as it is not a firm that any party to this  agreement  has engaged
for any purpose within the preceding five years). Such firm selected pursuant to
this  section  3.3(c)  is  hereinafter  referred  to as the  "Accountants".  The
Accountants shall be instructed to deliver to Parent and ProHealthCare a written
report (the "Accountants' Report") setting forth the Accountants' calculation of
Net  Liquid  Assets  no  later  than  60 days  following  their  selection.  The
determination of Net Liquid Assets set forth in the Accountants' Report shall be
deemed  final,  binding  and  conclusive  upon each party  hereto.  The fees and
expenses of the Accountants shall be paid by  ProHealthCare,  except that if the
Accountant's  calculation of Net Liquid Assets is at least $50,000  greater than
Parent's  calculation  of Net  Liquid  Assets,  the  fees  and  expenses  of the
Accountants shall be paid by Parent.

3.4  Final Net Liquid Assets.

     (a) Net Liquid  Assets as  mutually  agreed to by Parent and  ProHealthCare
pursuant to section 3.3(b), or as deemed final,  binding and conclusive pursuant
to such  section  or section  3.3(a) or  3.3(c),  shall be deemed the "Final Net
Liquid Assets".



<PAGE>

     (b) If Final Net Liquid Assets is a positive  number,  within 30 days after
the determination of Final Net Liquid Assets pursuant to section 3.4(a),  Parent
shall  deliver  to  ProHealthCare  an amount in cash  equal to Final Net  Liquid
Assets.

     (c) If Final Net Liquid Assets is a negative number,  immediately after the
determination  of Final Net Liquid Assets pursuant to Section 3.4(a),  (i) there
shall be deemed  repurchased  and  cancelled a number of shares of Parent Common
Stock  issued  pursuant  to section 2 equal to the  quotient of Final Net Liquid
Assets  divided by the greater of the Liquid  Assets  Average  Price (as defined
below) or $2.00 or (ii) ProHealthCare shall, at its option,  promptly deliver to
Parent  an amount  in cash  equal to the  product  of Final  Net  Liquid  Assets
multiplied by negative one.  Notwithstanding  anything in the preceding sentence
to the contrary,  the number of shares cancelled and deemed repurchased pursuant
to this section 3.4(c) shall not exceed 150,000.

     (d) For purposes of this agreement, the "Liquid Assets Average Price" means
average of the per share  closing price for Parent Common Stock on the NASDAQ or
the  average of the last per share bid prices on the  over-the-counter  Bulletin
Board (as reported by the Nasdaq Stock  Market,  Inc.),  as the case may be, for
the 30 trading  days  immediately  preceding  the date on which Final Net Liquid
Assets is determined pursuant to section 3.4(a).

     3.5 Treatment of  Intercompany  Advances.  For purposes of determining  Net
Liquid Assets and Final Net Liquid  Assets  pursuant to this section 3, advances
from ProHealthCare or any of its affiliates to the Company and advances from the
Company to ProHealthCare  (collectively,  "Intercompany  Advances") shall not be
given effect.

4.   Tangible Property; Adjustment to Merger Consideration.

     4.1  Calculation  of Tangible  Property.  For  purposes of this  agreement,
"Tangible  Property"  means  the book  value  of all  inventory,  furniture  and
fixtures,  vehicles,  computers,  equipment and leasehold  improvements,  net of
allowances for  depreciation  and amortization (as determined in accordance with
GAAP), of the Company as of March 14, 1997 minus $___________,  which represents
medications  and other  inventory of the Company as of the Closing Date that was
purchased from Parent, as set forth on Schedule 4.1.

     4.2 Adjustment to Merger  Consideration.  Within one business day after the
Closing,  Parent  shall  deliver to  ProHealthCare  a number of whole  shares of
Parent  Common Stock equal to the quotient of the Tangible  Property  divided by
$5.00.



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5.   Representations and Warranties of ProHealthCare

     ProHealthCare  and the  Stockholders  jointly and  severally  represent and
warrant to Parent and Sub as follows:

     5.1  Organization.  The Company is a corporation  duly  organized,  validly
existing and in good standing  under the laws of the state of its  incorporation
and  has the  corporate  power  to  carry  on its  business  as it is now  being
conducted or presently  proposed to be conducted.  The Company is duly qualified
as a  foreign  corporation  to do  business,  and is in good  standing,  in each
jurisdiction  where the character of its properties owned or held under lease or
the nature of its activities makes such  qualification  necessary,  except where
the failure to be so qualified will not have a Company Material Adverse Effect.

     For purposes of this agreement,  "Company  Material Adverse Effect" means a
material  adverse  effect,  individually  or in the aggregate,  on the financial
condition,  results of operations,  business, assets or prospects of the Company
or  the  ability  of  the  Company  to  consummate  the  Merger  and  the  other
transactions contemplated by this agreement.

5.2  Capitalization.

     (a) The  authorized  capital stock of the Company  consists of 50 shares of
Company Common Stock,  of which 50 shares of Company Common Stock are issued and
outstanding. ProHealthCare is, and immediately prior to the Closing will be, the
record and beneficial owner of all the issued and outstanding  shares of Company
Common Stock,  free and clear of liens,  pledges,  security  interests,  claims,
charges or other encumbrances of any kind whatsoever ("Liens").

     (b) There is not outstanding any security,  right,  subscription,  warrant,
call,  option  or other  agreement  or  arrangement  of any kind  (collectively,
"Rights") entitling any person to acquire any shares of the capital stock or any
other security of the Company,  and there is no outstanding security of any kind
convertible into or exchangeable for the capital stock of the Company.  There is
no voting  agreement,  voting  trust,  proxy or other  agreement,  instrument or
understanding  with respect to the voting of the capital stock of the Company or
any agreement with respect to the transferability, purchase or redemption of the
capital stock of the Company.

     5.3  Subsidiaries.  The  Company  does not own any  interest  in any  other
business or entity.

     5.4 Authority. ProHealthCare, the Company and each Stockholder has the full
legal  corporate  power or capacity,  as the case may be, to execute and deliver
each  Document  (as  defined  below)  to which  he,  she or it is a  party.  The
execution,  delivery and performance of each Document executed or to be executed
by ProHealthCare or the Company have been duly



<PAGE>

authorized by its respective board of directors and stockholder(s), and no other
corporate  proceedings on the part of ProHealthCare or the Company are necessary
to authorize this agreement or any other Documents or for  ProHealthCare and the
Company to  consummate  the  transactions  contemplated  hereby or thereby.  The
Documents  are,  or when  executed  and  delivered  will be,  valid and  binding
obligations  of  ProHealthCare,  the Company and each  Stockholder,  enforceable
against ProHealthCare, the Company and each Stockholder in accordance with their
terms, except as may be limited by bankruptcy,  insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to general
principles of equity  (regardless of whether  enforceability  is considered in a
proceeding in equity or at law).

     For  purposes of this  agreement,  "Documents"  means this  agreement,  the
Employment  Agreement  (as  defined in  section  10.2(d)),  the  Non-Competition
Agreement (as defined in section 10.2(e)), the Registration Rights Agreement (as
defined in section 10.3(c)), the Tax Provisions Agreement (as defined in section
10.2(h))  and each  other  document  or  agreement  executed  and  delivered  by
ProHealthCare, the Company and/or any Stockholder pursuant to this agreement.

     5.5 Consents and Approvals; No Violations.  Except as set forth on Schedule
5.5, the  execution,  delivery and  performance  of this agreement will not: (i)
conflict with or result in any breach of any  provisions of the  certificate  of
incorporation, by laws or other organizational documents of ProHealthCare or the
Company,  (ii) require a filing  with,  or a permit,  authorization,  consent or
approval of, any federal,  state,  local or foreign  court,  arbitral  tribunal,
administrative  agency or commission or other  governmental or other  regulatory
authority or  administrative  agency or  commission (a  "Governmental  Entity"),
except the filing of a certificate of merger,  (iii) conflict with, or result in
the breach,  termination or  acceleration  of, or constitute a default under, or
result in the  creation of a Lien on any property or asset of  ProHealthCare  or
the Company  pursuant  to any  written  lease,  agreement,  commitment  or other
instrument  (each,  a  "Contract")  to which  ProHealthCare,  the Company or any
Stockholder  is a party or by which  any of them or any of their  properties  or
assets are bound or (iv)  violate  any law,  order,  writ,  injunction,  decree,
statute,   rule  or  regulation  of  any  Governmental   Entity   applicable  to
ProHealthCare,  the  Company  or any  Stockholder  or any  of  their  respective
properties or assets.

     5.6 Financial  Statements.  The combined balance sheet of ProHealthCare and
the Company as of March 31,  1996,  the  statements  of  operations,  changes in
stockholders'  equity and cash flows of  ProHealthCare  and the  Company for the
year ended March 31, 1996,  and the balance  sheet of the Company (the  "Interim
Balance  Sheet") as of February 19, 1997 and the  statement of operations of the
Company  (together  with the  Interim  Balance  Sheet,  the  "Interim  Financial
Statements")  for the  period  from  April 1, 1997  through  February  19,  1997
(collectively,  the  "Financial  Statements")  are attached to this agreement as
Schedule 5.6A.  Except as described on Schedule  5.6B, the Financial  Statements
are true and correct in all material respects and fairly present in all material
respects the financial  position and the results of operations of  ProHealthCare
and the Company or the Company,  as the case may be, as of the dates and for the
periods  indicated,  except for, with respect to ProHealthCare,  any matter that
does not affect the



<PAGE>

Company or  represent  the  financial  position or results of  operation  of the
Company.  The Interim  Financial  Statements  do not  reflect  any  Intercompany
Advances or tax  adjustments.  Since March 31, 1996, there has been no change in
any of the significant accounting (including tax accounting) policies, practices
or  procedures  of the Company.  The Interim  Financial  Statements  reflect the
financial  position and the results of operations of the Company's  business and
do not reflect the separate operations of ProHealthCare.

     5.7 Absence of Undisclosed  Liabilities.  Except to the extent reflected or
reserved  for in the  Financial  Statements,  the  Company  does  not  have  any
liability or obligation of any kind,  whether accrued,  absolute,  contingent or
otherwise,  other than (a) as set forth on Schedule  5.7,  (b)  liabilities  and
obligations under agreements and other commitments  entered into in the ordinary
course of business and in amounts  substantially  consistent with past practices
and (c)  other  liabilities  that are  not,  individually  or in the  aggregate,
material in amount, and none of ProHealthCare,  the Company and the Stockholders
knows of any basis for the assertion  against the Company of any such  liability
that is not fully  disclosed or reserved for in the  Financial  Statements.  The
Company does not have any  indebtedness  to any  Stockholder or any affiliate of
any Stockholder.  All liabilities of the Company assigned to ProHealthCare as of
the Closing are set forth on Schedule 3.1.

     5.8 Absence of Certain  Changes or Events.  Except as set forth on Schedule
5.8, since December 31, 1996,

          (a) the Company has  conducted  its  business  and  operations  in the
     ordinary  course of business and consistent  with past practice,  and there
     has not been any material change in the Company's  outstanding  liabilities
     or the  level of  compensation  (including  Company  Plans (as  defined  in
     section 5.18)) paid to its employees;

          (b) the  Company  has not taken any  actions  that,  if it had been in
     effect,  would have violated or been  inconsistent  with the  provisions of
     section 7.1; and

          (c)  there  has not been  any  fact,  event,  circumstance  or  change
     affecting  or relating to the  Company,  which,  to the best  knowledge  of
     ProHealthCare,  the Company and the  Stockholders has had, or is reasonably
     likely to have, a material adverse effect on the Company.

     5.9  Material  Contracts.  Schedule  5.9 lists each  Contract  to which the
Company  is a  party  or is  bound  or  which  is  applicable  to the  Company's
businesses  that is material in nature or amount or that was entered  into other
than in the ordinary  course of business and  consistent  with past  practice (a
"Material Contract"), including, without limitation, the following:

          (a) each  Contract  for the  purchase of  products  or  services  that
     involves or will involve an expenditure  or series of related  expenditures
     of more than $5,000;



<PAGE>

          (b) each real or personal property lease that involves annual payments
     or receipts of more than $5,000;

          (c) each note or other Contract  relating to any  indebtedness  or any
     guaranty of indebtedness;

          (d)  each  employment  or  consulting   agreement  that  provides  for
     compensation  in excess of $2,500 per year and each  Contract that provides
     for severance or similar benefits;

          (e) each Contract between the Company, on the one hand, and any of its
     affiliates, associates or stockholders, on the other hand;

          (f) each  Contract  to which the  Company  is a party  containing  any
     provisions relating to a change in its control;

          (g) each Contract under which the Company is restricted  from engaging
     in any business or competing with any other person;

          (h) any Contract for the sale, lease, license, rental or disclosure of
     any lists or records, including customer lists, relating to the business of
     the Company; and

          (i) any other Contract  (written or oral) that requires  payment by or
     to the Company of more than $10,000 or cannot be  terminated by the Company
     on less than 30 days notice without liability.

True and complete  copies of all the Material  Contracts  have been delivered to
Parent.

     5.10 No  Default.  Except  as set forth on  Schedule  5.10,  each  Material
Contract is in full force and effect in accordance  with its terms,  and, to the
best knowledge of the Company and each Stockholder,  no party is in default (and
no event has occurred,  which,  with notice or the lapse of time or both,  would
constitute  a default)  of any term,  condition  or  provision  of any  Material
Contract,  except for any default that would not have a Company Material Adverse
Effect.

     5.11 Compliance with Law. The Company is not in violation (and no event has
occurred,  which,  with notice or the lapse of time or both,  would constitute a
violation) of any order, writ, injunction,  decree,  statute, rule or regulation
of any Governmental Entity applicable to the Company.



<PAGE>

5.12 Health Care Matters.

     (a) Schedule 5.12(a) lists the required cost reports and other  submissions
and filings  (other  than claims for  payments),  with  respect to Medicaid  and
Medicare or other third party  payments to the Company and  indicates  each cost
report or other  submission or filing that has been audited by the government or
other third party payor (and all  disallowances and retroactive rate adjustments
thereon  settled,  paid or otherwise  recouped).  All the cost reports and other
submissions and filings were complete and accurate in all material respects, and
were prepared in accordance with the requirements of the Medicaid  program,  the
Medicare program or the other third party payors, as applicable.

     (b) No  third-party  payor  (including,  without  limitation,  Medicare  or
Medicaid)  has  asserted  any  liability  against  the Company in respect of any
period through the date of this  agreement,  which has not been settled or paid.
To the best knowledge of ProHealthCare,  the Company and each Stockholder, there
is no pending audit or any pending or threatened audit assessment or retroactive
rate  adjustment  against the Company  and no basis  therefor,  and, if any such
audit  assessment or  retroactive  rate  adjustment  is so asserted,  it will be
promptly  paid or  otherwise  satisfied by the Company and will have no material
effect upon any of their rates, operations or financial performance.

     (c)  Schedule   5.12(c)  lists  all  agreements,   arrangements  and  other
relationships of the Company, which are in effect or were in effect at any prior
time,  with  individuals and entities who refer or have referred to or otherwise
generate  or  have  generated   business  for  the  Company  (including  without
limitation, sales representatives and referring health care providers).

     (d) None of  ProHealthCare,  the  Company  or the  Stockholders  has actual
knowledge that any referring physician, chiropractor, podiatrist, dentist, nurse
or other  licensed  health  professional  has,  or has ever  had,  an  ownership
interest in or otherwise has or had a financial relationship with the Company.

     5.13  Litigation,  etc.  Except as set forth on Schedule 5.13,  there is no
suit,  action,  proceeding,  investigation  or  review  pending  or, to the best
knowledge of ProHealthCare, the Company and each Stockholder, threatened against
or  affecting  the Company or any suit,  action or  proceeding  brought by or on
behalf of the Company, and, to the best knowledge of ProHealthCare,  the Company
and each Stockholder,  there is no basis for any such suit, action,  proceeding,
investigation or review.  There is no judgment,  decree,  injunction,  ruling or
order of any Governmental Entity outstanding against the Company.

     5.14 Permits.  The Company holds,  or, on the Closing Date,  will hold, all
permits, licenses, exemptions, orders and approvals of all Governmental Entities
necessary  for the  conduct of its  businesses  (collectively,  "Permits").  The
Company is in compliance  with the terms of all Permits,  and (i) no fact exists
or event has occurred, and no action or proceeding is pending



<PAGE>

or, to  ProHealthCare's,  the Company's and the  Stockholders'  best  knowledge,
threatened,  that is reasonably  likely to result in a  revocation,  nonrenewal,
termination, suspension or other material impairment of any material Permit.

     5.15 Taxes.  Except as set forth on Schedule  5.15,  ProHealthCare  and the
Company  have (a) filed with the  appropriate  federal,  state and local  taxing
authorities  all  tax  returns  required  to be  filed  by or with  respect  the
Company's business or operations, and those tax returns are correct and complete
in all material  respects,  and (b) paid in full or made adequate  provision for
the  payment  of all  taxes  shown  to be  due on  those  tax  returns.  Neither
ProHealthCare  nor  the  Company  has  received  any  notice  of  deficiency  or
assessment  from any federal,  state or local taxing  authority  with respect to
liabilities for taxes that have not been fully paid or finally settled.

     5.16 Title to Properties; Encumbrances. The Company has good and marketable
title to, or valid  leasehold  interests or licenses in, all its  properties and
assets of whatever kind (real or personal,  tangible or intangible),  including,
without  limitation,  all the Company's  properties and assets  reflected in the
Financial  Statements  (except  for  properties  and assets  disposed  of in the
ordinary  course of business and consistent  with past practices since March 31,
1996).  None of such  properties  or assets are  subject  to any Liens  (whether
absolute, accrued, contingent or otherwise),  except for liens for current taxes
and assessments not yet due and payable.  Such properties and assets include all
the  properties  and assets  necessary  to operate  the  Company's  business  as
presently  operated.  Except  as  set  forth  on  Schedule  5.16A,  none  of the
properties or assets,  including,  without limitation,  contract rights, used by
the Company in the conduct of its businesses as presently  conducted is owned or
leased by  ProHealthCare.  Schedule  5.16B  contains a complete list of all real
property  (including  buildings and  structures)  and all equipment,  computers,
furniture,  leasehold improvements,  vehicles and other personal property owned,
leased or used by the Company.

     5.17  Proprietary  Rights.  Schedule  5.17  lists all  patents  and  patent
applications, trademarks, trade names, registered copyrights, service marks, and
applications  therefor  owned,  used or  held  for use in  connection  with  the
businesses of the Company (collectively, "Proprietary Rights"), specifying as to
each,  as  applicable:  (i) the  owner  of the  Proprietary  Right  and (ii) all
licenses, sublicenses and other agreements,  including any amendments or addenda
thereto, to which  ProHealthCare,  the Company or any Stockholder is a party and
pursuant to which any person is authorized  to use the  Proprietary  Right.  The
Company  has no notice of any claim that the  Proprietary  Rights  infringe  any
other   party's   rights  and,  to   ProHealthCare's,   the  Company's  and  the
Stockholders'  best  knowledge,  the  Company  has used the  Proprietary  Rights
without infringing any other party's rights without infringement by others. None
of ProHealthCare,  the Company and the Stockholders is aware of any assertion or
any  reasonable  basis for asserting  that any  Proprietary  Right is invalid or
unenforceable.



<PAGE>

     5.18 Employee Benefit Plans; ERISA; Labor Matters.

     (a) Schedule 5.18 sets forth a true and complete list of all Company Plans.
For purposes of this agreement,  "Company Plan" shall mean any employee  benefit
plan,  arrangement  or  agreement  that  is  maintained,  or was  maintained  or
contributed  to by the Company or by any  Company  ERISA  Affiliate  (as defined
below) on behalf of employees  or former  employees or with respect to which the
Company  has or could incur  liability.  The Company has not taken any action to
modify, amend or alter any material benefit arrangement.

     For purposes of this agreement,  Company ERISA Affiliate means any trade or
business,  whether or not incorporated  which together with the Company would be
deemed a "single employer" within the meaning of Section 414(b), (c), (m) or (o)
of the Code or Section 4001 of the Employee  Retirement  Income  Security Act of
1974, as amended ("ERISA").

     (b) Each Company  Plan is and has been  operated  and  administered  in all
material  respects  in  accordance  with the  terms of the  Company  Plan and in
accordance with the requirements  prescribed by all applicable statutes,  orders
and governmental  rules and regulations,  including in compliance with ERISA and
the Code.  Each Company Plan  intended to be  "qualified"  within the meaning of
Section 401(a) of the Code is so qualified.

     (c)  Neither  the  Company  nor  any  Company   ERISA   Affiliate  nor  any
predecessors of the Company or any Company ERISA Affiliate  maintains,  has ever
maintained, contributes to or has ever contributed to a plan which is subject to
Section 412 of the Code or Title IV of ERISA. No Company Plan is a multiemployer
plan  (within the meaning of Sections  3(37) or  4001(a)(3)  of ERISA or Section
414(f) of the Code)  ("Multiemployer  Plan") and no  Company  Plan is a multiple
employer plan as defined in Section 413 of the Code ("Multiple  Employer Plan").
All  contributions  have been made for all employees and former employees of the
Company  under or with  respect to each Company Plan with respect to all periods
through  the  Effective  Time  except  as fully  accrued  and  reflected  in the
Financial Statements.  Neither the Company nor any Company ERISA Affiliate is or
was obligated to contribute to any Multiemployer Plan or Multiple Employer Plan.
To the best knowledge of ProHealthCare,  the Company and the Stockholders, there
are no material  pending,  threatened or anticipated  claims (other than routine
claims for benefits) by, on behalf of or against any of the Company Plans or any
trusts related thereto.

     (d) The Company is not a party to, or bound by, any  collective  bargaining
agreement,  contract  or  other  understanding  with  a  labor  union  or  labor
organization and, to the knowledge of ProHealthCare and the Company, there is no
activity  involving any employees of the Company seeking to certify a collective
bargaining unit or engaging in any other organizational activity.



<PAGE>

     5.19 Environmental Laws and Regulations.

     (a)  The  Company  is  and  has  been  in  compliance  with,  and  none  of
ProHealthCare,  the Company  and the  Stockholders  is aware of any  outstanding
allegations  by any person or entity  that the Company is not or has not been in
compliance with, all federal, state and local laws, rules,  regulations,  common
law,  ordinances,  administrative  orders or other  binding  legal  requirements
relating  to  employee  health and  safety,  air,  water or noise  pollution  or
otherwise  relating  to public  health  and safety or  environmental  protection
(including  the  protection  of  endangered  species),  or the use,  generation,
manufacture,    accumulation,   storage,   discharge,   release,   disposal   or
transportation  of  hazardous  materials  ("Environmental  Laws").  The  Company
currently  hold all  permits,  licenses,  registrations  and other  governmental
authorizations  (including  exemptions,  waivers,  and the like)  and  financial
assurance  required  under  Environmental  Laws for the  Company to operate  its
businesses.

     (b)  Without   conducting   any   investigation,   to  the   knowledge   of
ProHealthCare,   the  Company  and  the   Stockholders,   there  is  no  friable
asbestos-containing  material in or on any real property currently owned, leased
or operated by the Company,  and there are and have been no underground  storage
tanks  (whether or not  required to be  registered  under any  applicable  law),
dumps, landfills,  lagoons, surface impoundments,  injection wells or other land
disposal units in or on any property currently owned,  leased or operated by the
Company.

     (c) Neither  ProHealthCare  nor the Company  has  received  (i) any written
communication  from any person  stating or alleging that either of them may be a
potentially  responsible party under any  Environmental Law (including,  without
limitation, the Federal Comprehensive Environmental Response,  Compensation, and
Liability  Act of 1980,  as  amended)  with  respect  to any  actual or  alleged
environmental  contamination  or (ii) any  request  for  information  under  any
Environmental  Law from any  Governmental  Entity with  respect to any actual or
alleged material environmental  contamination;  and (iii) none of ProHealthCare,
the Company or any  Governmental  Entity is conducting or has conducted  (or, to
the knowledge of ProHealthCare  and the Company,  is threatening to conduct) any
environmental  remediation  or  investigation  which could  result in a material
liability of the Company under any Environmental Law.

     5.20  Brokers.  No broker,  finder or financial  advisor is entitled to any
brokerage,  finder's or other fee or commission in connection with the Merger or
the transactions  contemplated by this agreement based upon arrangements made by
or on behalf of ProHealthCare or the Company.



<PAGE>

6.   Representations and Warranties of Parent. Parent represents and warrants to
     the Company as follows:

     6.1 Organization.  Parent is a corporation duly organized, validly existing
and in good  standing  under  the  laws of the  state  of New  York  and has the
corporate  power  to carry  on its  business  as it is now  being  conducted  or
presently  proposed  to be  conducted.  Parent  is duly  qualified  as a foreign
corporation to do business,  and is in good standing, in each jurisdiction where
the character of its  properties  owned or held under lease or the nature of its
activities make such qualification necessary,  except where the failure to be so
qualified will not have a Parent Material  Adverse Effect.  For purposes of this
agreement,  "Parent  Material  Adverse Effect" means a material  adverse effect,
individually  or in  the  aggregate,  on the  financial  condition,  results  of
operations,  business,  assets or prospects of Parent and its subsidiaries taken
as a whole or the  ability  of Parent to  consummate  the  Merger  and the other
transactions   contemplated  by  this  agreement.  Sub  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
New Jersey.  Sub has not engaged in any business  (other than in connection with
this agreement and the transactions  contemplated  hereby) since the date of its
incorporation.

     6.2 Capitalization.

     (a) The authorized capital stock of Parent consists of 15,000,000 shares of
Parent Common Stock,  of which  1,375,085 are issued and outstanding and 308,004
are treasury shares, and 5,000,000 shares of preferred stock, of which 1,350,000
shares of 6%  cumulative  convertible  preferred  stock of Parent are issued and
outstanding.  Options and warrants to acquire an aggregate of 862,500  shares of
Parent Common Stock (collectively,  the "Parent Stock Options") are outstanding.
All the  outstanding  shares of capital  stock of Parent are,  and the shares of
Parent Common Stock  issuable in exchange for shares of Company  Common Stock at
the Effective  Time in accordance  with this  agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable.

     (b) The  authorized  capital  stock of Sub  consists of 1,000 shares of Sub
Common  Stock,  of  which  100  shares  are  issued  and  outstanding.  All  the
outstanding  shares of Sub  Common  Stock are  owned by Parent  and are  validly
issued, fully paid and nonassessable.

     6.3 Authority. Each of Parent and Sub has the full legal corporate power to
execute  and  deliver  each  Document  to which it is a  party.  The  execution,
delivery and  performance of each Document  executed or to be executed by Parent
or Sub have been duly authorized by its respective  boards of directors,  and no
other  corporate  proceedings  on the part of  Parent  or Sub are  necessary  to
authorize  this  agreement  or any  other  Document  or for  Parent  and  Sub to
consummate the  transactions  contemplated  hereby or thereby.  The Documents to
which  Parent or Sub are a party are, or when  executed and  delivered  will be,
valid and binding  obligations of Parent or Sub,  enforceable  against Parent or
Sub in  accordance  with their  terms,  except as may be limited by  bankruptcy,
insolvency or other similar laws affecting the



<PAGE>

enforcement of creditors' rights in general and subject to general principles of
equity  (regardless of whether  enforceability  is considered in a proceeding in
equity or at law).

     6.4 Consents and  Approvals;  No Violations.  The  execution,  delivery and
performance  of this  agreement by Parent and Sub will not: (i) conflict with or
result in any breach of any provisions of the  certificate of  incorporation  or
by-laws  of  Parent  or of  Sub,  (ii)  require  a  filing  with,  or a  permit,
authorization,  consent or  approval  of,  any  Governmental  Entity,  except in
connection  with or in order to comply  with the  applicable  provisions  of the
Securities  Exchange  Act of 1934  (the  "Exchange  Act")  and the  filing  of a
certificate of merger, (iii) except as set forth on Schedule 6.4, conflict with,
or result in the breach, termination or acceleration of, or constitute a default
under, or result in the creation of a Lien on any property or asset of Parent or
any of its  subsidiaries  pursuant to any term,  condition  or  provision of any
material  Contract to which  Parent or Sub is a party or by which either of them
or any of their  properties or assets are bound or (iv) violate any law,  order,
writ, injunction, decree, statute, rule or regulation of any Governmental Entity
applicable to Parent, Sub or any of their properties or assets.

     6.5 Reports and  Financial  Statements.  Since March 31,  1995,  Parent has
filed  all  reports  required  to be filed  with  the  Securities  and  Exchange
Commission ("SEC") pursuant to the Securities Act of 1933 (the "Securities Act")
(collectively,  the "SEC  Reports").  The SEC  Reports,  as of their  respective
dates, complied in all material respects with the applicable requirements of the
Securities  Act and the  Exchange  Act, as the case may be, and none of such SEC
Reports  contained any untrue statement of a material fact or omitted to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  The financial statements of Parent included in the SEC Reports have
been  prepared in  accordance  with  generally  accepted  accounting  principles
consistently applied throughout the periods indicated (except as otherwise noted
therein or, in the case of unaudited statements, as permitted by applicable law)
and fairly present  (subject,  in the case of unaudited  statements,  to normal,
recurring year-end  adjustments and any other adjustments  described therein) in
all material  respects  the  consolidated  financial  position of Parent and its
consolidated  subsidiaries as at the dates thereof and the consolidated  results
of operations and cash flows of Parent and its consolidated subsidiaries for the
periods then ended.  Since the date of Parent's last report on Form 10-Q,  there
has not been any fact,  event,  circumstance or change  affecting or relating to
the Company or any of its subsidiaries  which has had or is reasonably likely to
have a Parent Material Adverse Effect.

     6.6  Brokers.  No broker,  finder or  financial  advisor is entitled to any
brokerage  finder's or other fee or commission in connection  with the Merger or
the transactions  contemplated by this agreement based upon arrangements made by
or on behalf of Parent or Sub.

     6.7  Dispositions.  Parent  has  no  present  intention  to  dispose  of  a
substantial amount of the stock or assets of the Company.



<PAGE>

7.   Covenants of ProHealthCare, the Company and the Stockholders

     7.1 Conduct of  Business.  Prior to the  Effective  Time,  except as Parent
shall otherwise agree in writing or as otherwise expressly  contemplated by this
agreement,  the Company shall conduct, and ProHealthCare shall cause the Company
to conduct,  its business only in the ordinary and usual course  consistent with
past  practice,  and the Company  shall use its  reasonable  efforts to preserve
intact the present  business  organization,  keep  available the services of its
present  officers and key  employees,  and preserve the goodwill of those having
business relationships with it. Without limiting the generality of the foregoing
and except as  contemplated  by this  agreement,  prior to the  Effective  Time,
unless Parent shall otherwise agree in writing:

          (a) the  Company  shall not (i) amend its  charter,  by-laws  or other
     organizational  documents,  (ii) split, combine or reclassify any shares of
     its outstanding capital stock, (iii) declare, set aside or pay any dividend
     or other distribution payable in cash, stock or property,  or (iv) directly
     or indirectly redeem or otherwise acquire any shares of its capital stock;

          (b) the Company shall not (i) authorize for issuance, issue or sell or
     agree to issue or sell any shares of, or Rights to acquire  any  securities
     or  convertible  into any  shares  of,  its  capital  stock;  (ii) merge or
     consolidate  with  another  entity;  (iii)  acquire or  purchase  an equity
     interest in or a substantial portion of the assets of another  corporation,
     partnership or other business  organization or otherwise acquire any assets
     outside the ordinary and usual course of business and consistent  with past
     practice; (iv) enter into any material contract,  commitment or transaction
     outside the  ordinary  and usual  course of business  consistent  with past
     practice; (v) sell, lease, license, waive, release,  transfer,  encumber or
     otherwise  dispose  of any of its assets  outside  the  ordinary  and usual
     course of business and consistent with past practice; (vi) incur, assume or
     prepay any material  indebtedness or any other material  liabilities  other
     than in the ordinary  course of business and consistent with past practice;
     (vii) assume, guarantee,  endorse or otherwise become liable or responsible
     (whether  directly,  contingently  or otherwise) for the obligations of any
     other person;  (viii) make any loans, advances or capital contributions to,
     or  investments  in, any other person,  other than  extensions of credit to
     customers in the ordinary course of business consistent with past practice;
     (ix)  authorize  or make  capital  expenditures  other than in the ordinary
     course of business consistent with past practice; (x) change any accounting
     principle or practice used by it, except as required by generally  accepted
     accounting principles;  (xi) permit any insurance policy naming the Company
     as a beneficiary  or a loss payee to be cancelled or terminated  other than
     in the  ordinary  course of  business;  or (xii)  enter into any  contract,
     agreement,  commitment or arrangement with respect to any of the foregoing;
     and

          (c) the Company  shall not (i) adopt,  enter into,  terminate or amend
     (except as may be required  by  applicable  law) any Company  Plan or other
     arrangement  for the current or future  benefit or welfare of any director,
     officer or  current or former  employee,  (ii)  increase  in any manner the
     compensation  or fringe  benefits  of, or pay any bonus to,  any  director,
     officer or employee of the Company (except for normal increases in salaried
     compensation  in the  ordinary  course  of  business  consistent  with past
     practice), or (iii) take any action to fund or in any



<PAGE>

     other way secure,  or to accelerate or otherwise remove  restrictions  with
     respect to, the payment of  compensation  or  benefits  under any  employee
     plan, agreement, contract, arrangement or other Company Plan.

     7.2 No Solicitation. Prior to the Effective Time, ProHealthCare agrees that
neither it, any of its subsidiaries or any of their  affiliates,  nor any of the
respective  directors,  officers,  employees,  agents or  representatives of the
foregoing  will,  directly  or  indirectly,  solicit,  initiate,  facilitate  or
knowingly  encourage  (including by way of  furnishing or disclosing  non-public
information)  any  inquiries or the making of any  proposal  with respect to any
merger, consolidation or other business combination involving ProHealthCare, the
Company or any other  subsidiary  of  ProHealthCare  or the  acquisition  of any
securities  of,  or of all or any  significant  assets  of,  ProHealthCare,  the
Company  or any  other  subsidiary  of  ProHealthCare,  taken  as a  whole,  (an
"Acquisition  Transaction")  or  enter  into  or  continue  any  discussions  or
negotiations  with any person (other than Parent and its  representatives)  with
respect to any Acquisition Transaction or enter into any agreement,  arrangement
or understanding with respect to any such Acquisition Transaction or which would
require it to abandon,  terminate or fail to consummate  the Merger or any other
transaction contemplated by this agreement.  ProHealthCare and the Company agree
that as of the date of this  agreement,  they,  and  their  affiliates,  and the
respective  directors,  officers,  employees,  agents and representatives of the
foregoing,  shall  immediately  cease and cause to be  terminated  any  existing
activities,  discussions or negotiations  with any person (other than Parent and
its  representatives)  conducted  heretofore  with  respect  to any  Acquisition
Transaction. ProHealthCare and the Company agree to immediately advise Parent in
writing of any  inquiries or proposals  received by, any  information  requested
from, or any  negotiations  or  discussions  sought to be initiated or continued
with,  any of  ProHealthCare,  its  subsidiaries  or  affiliates,  or any of the
respective  directors,  officers,  employees,  agents or  representatives of the
foregoing,   in  each  case  from  a  person   (other   than   Parent   and  its
representatives)  with  respect  to an  Acquisition  Transaction,  and the terms
thereof, including the identity of such third party, and to update on an ongoing
basis or upon Parent's request, the status thereof.

     7.3 Access and Information.

     (a)  ProHealthCare  and the Company  shall (and shall cause its  respective
officers, directors, employees, auditors and agents to) afford to the Parent and
to  the  Parent's  officers,  employees,   financial  advisors,  legal  counsel,
accountants,  consultants  and other  representatives  reasonable  access during
normal  business hours  throughout the period prior to the Effective Time to all
books and records  (other than  privileged  documents)  relating to the Company,
properties  and  plants  used in  connection  with the  Company's  business  and
personnel who are familiar with the Company's business.

     (b) Unless  otherwise  required by law, Parent agrees that (i) prior to the
Effective  Time,  it (and its  representatives)  shall  hold in  confidence  all
non-public  information  acquired by it pursuant to this section 7.3 and (ii) it
(and its  representatives)  shall hold in confidence all non-public  information
acquired by it pursuant to this section 7.3 that relates solely



<PAGE>

to ProHealthCare,  including without limitation information relating to the sale
of  ProHealthCare  of Miami Beach,  Inc. d/b/a  Stratogen  Health of Miami Beach
("Stratogen").

8.   Covenant of Parent.

     Subject to section 9.7 of this  agreement,  Parent shall use all reasonable
efforts to collect in a timely  fashion all accounts  receivable  of the Company
outstanding as of the Closing Date, and Parent shall not  compromise,  reduce or
release any such accounts receivable without the consent of ProHealthCare, which
consent shall not be unreasonably withheld.  Subject to section 10.2(j),  Parent
shall not (in a manner that deviates from the Company's  past  practices)  delay
payment of any material  account  payable of the Company  outstanding  as of the
Closing Date.


9.   Additional Agreements.

     9.1  Reasonable  Best Efforts.  Subject to the terms and conditions of this
agreement,  each party agrees to use all reasonable efforts to take, or cause to
be taken,  all  action  and to do, or cause to be done,  all  things  necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions  contemplated by this agreement,  including,  without
limitation,  the obtaining of all necessary waivers,  consents and approvals and
the effecting of all necessary registrations and filings.

     9.2  Expenses.  Whether  or not the  Merger is  consummated,  all costs and
expenses  incurred  in  connection  with  this  agreement  and the  transactions
contemplated hereby shall be paid by the party incurring such expenses.

     9.3 Public  Announcements.  None of Parent,  ProHealthCare  or the  Company
shall  issue any press  release  or  otherwise  make any public  statement  with
respect to this agreement or the  transactions  contemplated  hereby without the
prior consent of the others, which consent shall not be unreasonably withheld or
delayed;  provided,  however, that such disclosure can be made without obtaining
such prior  consent if (a) the  disclosure  is required by law and (b) the party
making such disclosure has first used all reasonable efforts to consult with the
other party about the form and substance of such disclosure.

     9.4  Supplemental  Disclosure.  ProHealthCare  shall give prompt  notice to
Parent,  and  Parent  shall  give  prompt  notice to  ProHealthCare,  of (a) the
existence,   nonexistence,   occurrence,   or   non-occurrence,   of  any  fact,
circumstance or event the existence, nonexistence, occurrence, or non-occurrence
of which  would be likely to cause (i) any  representation  or  warranty  by any
party  contained  in this  agreement  to be  untrue  or  inaccurate  or (ii) any
covenant,  condition or agreement contained in this agreement not to be complied
with or satisfied and (b) any failure of  ProHealthCare,  the Company or Parent,
as the case may be,  to  comply  with or  satisfy  any  covenant,  condition  or
agreement to be complied with or satisfied by it hereunder;  provided,  however,
that the delivery of any notice pursuant to this section 9.4 shall not have any



<PAGE>

effect for the purpose of  determining  the  satisfaction  of the conditions set
forth in section 10 of this agreement or otherwise  limit or affect the remedies
available hereunder to any party.

     9.5 Deposits of Certain Payments.  After the Closing,  ProHealthCare  shall
deposit in a separate  account  established  by the Surviving  Corporation  (the
"Stratogen Account"),  as and when received by ProHealthCare,  the first $90,000
of the  payments  made by the  purchaser of  Stratogen  after the Closing  Date;
provided  that  ProHealthCare  shall not be required to deposit,  during any one
month,  an amount in excess of the product of the number of months elapsed since
the Closing Date multiplied by $15,000.  The amounts on hand in such account (i)
may be used by the Surviving Corporation to discharge the obligations assumed by
ProHealthCare  pursuant to section 10.2(j) of this  agreement,  (ii) after March
31, 1997, may be used by the Surviving Corporation,  at any time that Net Liquid
Assets  during a month  (without  giving  effect to prior  months) is a negative
number, to discharge  liabilities of the Company that were outstanding as of the
Closing  Date,  and,  (iii) to the extent  not used  pursuant  to the  preceding
clauses (i) and (ii), shall be paid to ProHealthCare  within five days after the
first  anniversary  of the  Closing  Date  or,  if  earlier,  the  date on which
ProHealthCare  certifies to Parent that the aggregate  liabilities (as determine
in accordance with GAAP) of ProHealthCare do not exceed $25,000. Upon request by
ProHealthCare,  Parent may, in its sole and  absolute  discretion,  from time to
time,  permit  ProHealthCare  to withdraw  from the  Stratogen  Account  amounts
required by ProHealthCare to satisfy obligations of ProHealthCare; provided that
ProHealthCare  shall agree to refund to the  Stratogen  Account,  within 30 days
from the date of withdrawal,  any amount withdrawn from the Stratogen Account by
ProHealthCare  pursuant to this sentence (it being understood that ProHealthCare
shall not be required to so refund the  Stratogen  Account  after all amounts in
the  Stratogen  Account  have  been  paid  to  ProHealthCare   pursuant  to  the
immediately preceding sentence).

     9.6 Leased  Property.  After the  Closing  and during the term of the lease
dated  June  26,  1995  between  ProHealthCare  and  Mario  Curiale  ("Lessor"),
ProHealthCare  shall  permit  Parent  and the  Surviving  Corporation  full  and
exclusive  use of the  property  subject to that lease  (the  "Premises")  for a
period  concurrent  with the term of such  lease;  provided  that the  Surviving
Corporation  shall,  during the term of such lease, (a) pay to Lessor, on behalf
of  ProHealthCare,  (i) when rent is due to Lessor, an amount equal to such rent
due under such lease and (ii) any other  amounts due under such lease that arise
out of the Surviving Corporation's use of the Premises after the Closing and (b)
satisfy any other  obligation  under such lease that arises out of the Surviving
Corporation's use of the Premises after the Closing.  The Surviving  Corporation
shall promptly  negotiate in good faith with Lessor for an agreement with Lessor
to lease the Premises. If, prior to June 30, 1997, the Surviving Corporation has
not entered into an agreement to lease the Premises,  the Surviving  Corporation
shall assume all  ProHealthCare's  rights and obligations under  ProHealthCare's
lease  of the  Premises;  provided  that  any  lease  assumed  by the  Surviving
Corporation  pursuant to this sentence  shall contain terms no less favorable to
the lessee than the terms of the lease dated June 26, 1995, and provided further
that Parent  shall not assume any  obligation  to pay any amounts due under such
lease  arising out of the  Company's  use of the  Premises  prior to the Closing
Date. ProHealthCare shall be entitled to maintain on the Premises,



<PAGE>

at no cost and for a period of one year or, if shorter, for as long as Parent is
using the Premises,  an office for administrative  purposes;  provided that such
office shall be for the  exclusive  use of the  president of  ProHealthCare  (it
being understood that Parent may exclude from such office any other person), and
provided  further  that  ProHealthCare's  right to  maintain  such office may be
terminated by Parent upon not less than 60 days' notice. Parent may, in its sole
and  absolute  discretion,  grant  access to such office to other  officers  and
directors  of   ProHealthCare   and  their  respective   agents,   advisors  and
representatives,  for the sole  purpose of  examining  the books and  records of
ProHealthCare.

     9.7 Accounts Receivable. If Parent determines, in its sole discretion, that
any Accounts  Receivable  are  uncollectable,  Parent shall,  or shall cause the
Surviving  Corporation to, assign to ProHealthCare,  those Accounts  Receivable.
Parent  shall,   or  shall  cause  the  Surviving   Corporation  to,  assign  to
ProHealthCare  all Accounts  Receivable  that are uncollected as of December 31,
1997.  For  purposes of  calculation  of Net Liquid  Assets and Final Net Liquid
Assets,  no  value  shall  be  given  to any  Accounts  Receivable  assigned  to
ProHealthCare pursuant to this section 9.7.

10.  Conditions to Consummation of the Merger

     10.1  Conditions  to Each  Party's  Obligation  to Effect the  Merger.  The
respective  obligations  of each party to effect the Merger  shall be subject to
the satisfaction at or prior to the Effective Time of the following  conditions,
unless waived in writing by each party:

          (a) No  Governmental  Action.  No  Governmental  Entity  (including  a
     federal or state  court) of  competent  jurisdiction  shall  have  enacted,
     issued,  promulgated,  enforced or entered any statute,  rule,  regulation,
     executive  order,  decree,  injunction or other order  (whether  temporary,
     preliminary  or  permanent)   which  is  in  effect  and  which  materially
     restricts,  prevents  or  prohibits  consummation  of  the  Merger  or  any
     transaction  contemplated by this agreement;  provided,  however,  that the
     parties  shall  use all  reasonable  efforts  to  cause  any  such  decree,
     judgment, injunction or other order to be vacated or lifted.

          (b) Board  Approval.  The Board of  Directors  of  Parent  shall  have
     approved  this  Agreement  and  the  transactions  contemplated  hereunder,
     including, without limitation, the Merger, and that approval shall not have
     been withdrawn.

     10.2 Conditions to Obligations of Parent and Sub to Effect the Merger.  The
obligations  of Parent  and Sub to effect  the  Merger  shall be  subject to the
satisfaction  at or  prior to the  Effective  Time of the  following  additional
conditions, unless waived in writing by Parent:

          (a) Representations and Warranties. The representations and warranties
     of ProHealthCare,  the Company and Stockholders set forth in this agreement
     shall be true and correct in all material respects,  as of the date of this
     agreement,  and, except to the extent such  representations  and warranties
     speak as of an earlier date, as of the Effective Time as though



<PAGE>

     made at and as of the  Effective  Time,  and Parent  shall have  received a
     certificate  signed  on  behalf of  ProHealthCare  by the  chief  executive
     officer or the chief financial officer of ProHealthCare to such effect.

          (b)  Performance  of Obligations  of the Company.  ProHealthCare,  the
     Company and each Stockholder  shall have performed in all material respects
     all  obligations  required to be performed by it under this agreement at or
     prior to the Effective Time.

          (c) Consent.  All notices to, and consents,  approvals and waivers set
     forth on Schedule 5.5, Schedule 5.10 and Schedule 6.4,  including,  without
     limitation,  the consents required pursuant to section 10.2(j),  shall have
     been obtained,  in each case without any condition or qualification adverse
     to Parent or Sub.

          (d)  Employment  Agreement.  Thomas Laurita shall have entered into an
     employment  agreement  with the Company  (the  "Employment  Agreement")  in
     substantially  the form  attached to this  agreement as Exhibit A; provided
     that the Employment  Agreement shall not contain terms  substantially  more
     favorable to Thomas  Laurita than the terms set forth in Exhibit A and that
     the  definition and  calculation  of Incremental  Gross Profit shall be the
     same in the Employment Agreement as in this agreement.

          (e) Non-Competition Agreement.  Thomas Laurita shall have entered into
     a  non-competition  agreement with Parent and the Company in  substantially
     the form  attached  to this  agreement  as Exhibit B (the  "Non-Competition
     Agreement").

          (f) Releases.  Each  Stockholder  shall have executed and delivered to
     the Company a general  release in the form  annexed  hereto as Exhibit C-1,
     and Susan Bauer and ProHealthCare Registered Nursing PC shall have executed
     and delivered a release in form and substance  reasonably  satisfactory  to
     Parent.

          (g) Permits.  ProHealthCare shall have caused to have been transferred
     or issued to the Company all Permits that are  transferrable or issuable to
     the Company and which were not theretofore originally issued in the name of
     the Company.

          (h) Tax Provisions Agreement.  ProHealthCare shall have entered into a
     tax provisions  agreement with Parent and the Company  substantially in the
     form  attached  to  this  agreement  as  Exhibit  D  (the  "Tax  Provisions
     Agreement").

          (i) Escrow Agreement. ProHealthCare shall have entered into the escrow
     agreement referred to in section 12.3 of this agreement.

          (j)  Assumption  of  Certain  Liabilities.  ProHealthCare  shall  have
     assumed,   pursuant  to  an   assignment   and   assumption   agreement  in
     substantially the form of Exhibit E-2 to this agreement,  those liabilities
     of the Company indicated on Schedule 3.1.



<PAGE>

          (k) Opinion of Counsel.  Parent shall have  received an opinion  dated
     the Closing  Date of Crummy,  Del Deo,  Dolan,  Griffinger  & Vecchione  in
     substantially the form attached to this agreement as Exhibit F.

          (l) Certifications.  Thomas Laurita shall have delivered to the Parent
     a certificate to the effect that he has not:

               (1) filed or had filed  against him a petition  under the Federal
          bankruptcy laws or any state insolvency law;

               (2) had a receiver,  fiscal agent or similar officer appointed by
          a court for his  business or property or any  partnership  in which he
          was a general  partner at, or any time  after,  January 1, 1994 or any
          corporation  or  business  association  of which  he was an  executive
          officer at, or any time after, January 1, 1994;

               (3) been convicted in a criminal proceeding or named subject of a
          pending criminal proceeding;

               (4) been the  subject  of any  order,  judgment  or  decree,  not
          subsequently reversed, suspended or vacated, of any court of competent
          jurisdiction,  permanently  or  temporarily  enjoining  him  from,  or
          otherwise limiting the following activities:

                    (i)  acting as a futures  commission  merchant,  introducing
               broker, commodity trading advisor, commodity pool operator, floor
               broker, leverage transaction merchant, any other person regulated
               by the Commodities Futures Trading  Commission,  or an associated
               person  of any of the  foregoing,  or as an  investment  adviser,
               underwriter,  broker or dealer in securities, or as an affiliated
               person,  director or employee of any  investment  company,  bank,
               savings and loan association or insurance company, or engaging in
               or  continuing  any conduct or practice in  connection  with such
               activity,

                    (ii) engaging in any type of business or practice or

                    (iii)  engaging  in any  activity  in  connection  with  the
               purchase  or sale  of any  security  or in  connection  with  any
               violation of Federal or state securities laws;

               (5) been the  subject  of any  order,  judgment  or  decree,  not
          subsequently  reversed,  suspended or vacated, of any Federal or state
          authority  barring,  suspending or otherwise limiting for more than 60
          days the right of such person to engage in any  activity  described in
          paragraph (d) above,  or to be associated  with persons engaged in any
          such activity;



<PAGE>

               (6) been found by a court of  competent  jurisdiction  in a civil
          action or by the Securities  Exchange  Commission to have violated any
          Federal or state securities law, and the judgment in such civil action
          or  finding  by  the  Securities  Exchange  Commission  has  not  been
          subsequently reversed, suspended or vacated;

               (7) been found by a court of  competent  jurisdiction  in a civil
          action or by the Commodity Futures Trading Commission to have violated
          any Federal  commodities law, and the judgment in such civil action or
          finding  by the  Commodity  Futures  Trading  Commission  has not been
          subsequently reversed, suspended or vacated;

               (8) failed to file any federal or state tax  returns  required to
          be filed by him,  filed any tax return that is incomplete or incorrect
          in any  material  respect,  failed  to pay in full  or  make  adequate
          provision  for the payment in full of all taxes shown to be due on his
          tax returns,  or received any notice of deficiency or assessment  from
          any federal or state taxing  authority with respect to liabilities for
          taxes that have not been fully paid or finally settled; or

               (9) except as set forth in Schedule 5.13,  performed services for
          ProHealthCare  or the Company in  violation  of any  contract or other
          obligation by which he is or was bound, including, but not limited to,
          any non-competition agreement.

          (m)  Assignment  of Assets.  ProHealthCare  shall have assigned to the
     Company,  pursuant  to  an  assignment  agreement  in  form  and  substance
     reasonably  satisfactory  to  Parent,  all the  inventory,  trade  accounts
     receivable  (other  than  trade  accounts  receivable  that  arose from the
     business of Stratogen prior to the date of this agreement) and fixed assets
     and equipment of ProHealthCare reflected on the Interim Balance Sheet.

     10.3  Conditions to Obligation of  ProHealthCare  and the Company to Effect
the Merger. The obligation of ProHealthCare, the Company and the Stockholders to
effect  the  Merger  shall be  subject  to the  satisfaction  at or prior to the
Effective Time of the following additional conditions,  unless waived in writing
by ProHealthCare:

          (a) Representations and Warranties. The representations and warranties
     of Parent  set forth in this  agreement  shall be true and  correct  in all
     material  respects  as of the date of this  agreement,  and,  except to the
     extent such  representations and warranties speak as of an earlier date, as
     of the Effective  Time as though made on and as of the Effective  Time, and
     ProHealthCare  shall have received a certificate signed on behalf of Parent
     by the chief executive  officer or the chief financial officer of Parent to
     such effect.

          (b)  Performance  of Obligations of Parent and Sub. Each of Parent and
     Sub shall have performed in all material respects all obligations  required
     to be  performed by it under this  agreement  at or prior to the  Effective
     Time.



<PAGE>

          (c) Registration  Rights  Agreement.  Parent shall have entered into a
     registration  rights  agreement with  ProHealthCare in the form attached to
     this agreement as Exhibit G (the "Registration Rights Agreement").

          (d)  Opinion of  Counsel.  The  Company  and  Stockholders  shall have
     received  the opinion of Proskauer  Rose Goetz &  Mendelsohn  LLP dated the
     Closing  Date in  substantially  the form  attached  to this  agreement  as
     Exhibit H.


11.  Termination

     11.1 Termination. This agreement may be terminated at any time prior to the
Effective Time:

          (a) by mutual consent of Parent and ProHealthCare;

          (b) by either  Parent or  ProHealthCare,  if the Merger shall not have
     been  consummated  before  April  1,  1997  (unless,  in  the  case  of any
     termination  pursuant to this section 11.1(b), the failure to so consummate
     the Merger by such date shall have been  caused by the action or failure to
     act of the party (or its subsidiaries) seeking to terminate this agreement,
     which action or failure to act constitutes a breach of this agreement);

          (c) by Parent,  if (i) there has been any material  breach of warranty
     or  material  misrepresentation  by  ProHealthCare,   the  Company  or  any
     Stockholder  set forth in this agreement or (ii) there has been a breach in
     any material  respect of any of the  covenants or  agreements  set forth in
     this  agreement  on  the  part  of   ProHealthCare,   the  Company  or  any
     Stockholder, in either case, which breach is not curable or, if curable, is
     not cured  within 30 days after  written  notice of such breach is given by
     Parent to ProHealthCare; or

          (d) by  ProHealthCare,  if (i)  there  has been a  material  breach of
     warranty  or  material  misrepresentation  by  Parent  set  forth  in  this
     agreement or (ii) there has been a breach in any material respect of any of
     the  covenants  or  agreements  set forth in this  agreement on the part of
     Parent, in either case, which breach is not curable or, if curable,  is not
     cured  within  30 days  after  written  notice  of such  breach is given by
     ProHealthCare to Parent.

     11.2 Effect of  Termination.  In the event of termination of this agreement
pursuant  to this  section  11, the Merger  shall be deemed  abandoned  and this
agreement  shall  forthwith  become void,  without  liability on the part of any
party  hereto,  except as provided in  sections  7.3(b),  9.2 and (to the extent
applicable to the foregoing sections) 13 and except that nothing in this section
11.2 shall relieve any party from liability for any breach of this agreement.



<PAGE>

12.  Indemnification

     12.1 Survival.  All representations and warranties  contained in sections 5
and 6 of this  agreement  shall  survive the  Closing,  subject to section  12.3
hereof,  notwithstanding  any  examination or  investigation  made by or for any
party.  Each  party  hereto  shall  be  deemed  to  have  waived  its  right  to
indemnification  hereunder  with respect to Losses (as defined in section  12.2)
other than Losses  involving a third party,  which arise out of or in connection
with any  misrepresentation,  breach of warranty or breach or  nonfulfillment of
any covenant or agreement known to such party on the Closing Date.

     12.2   Indemnification   by  the   Stockholders.   ProHealthCare   and  the
Stockholders  shall  jointly and severally  indemnify,  defend and hold harmless
Parent,  Sub and the  Surviving  Corporation  and their  respective  affiliates,
directors,  officers,  employees,  agents and  representatives  and all of their
successors and assigns (collectively,  "Parent Claimants"), promptly upon demand
at any  time  and  from  time to  time,  against  any and all  claims,  actions,
liabilities,  losses,  costs, damages or expenses whatsoever  (including without
limitation   reasonable   attorneys'  fees  and  disbursements)   (collectively,
"Losses")  whether  involving  a third  party or  between  the  parties  to this
agreement  that any Parent  Claimant  may suffer,  sustain or become  subject to
arising out of or in connection with (a) any  misrepresentation or breach of any
warranty of any  Stockholder,  ProHealthCare  or the Company  contained  in this
agreement) or; (b) any breach or  nonfulfillment of any covenant or agreement of
any  Stockholder,  ProHealthCare  or the Company  contained  in this  agreement.
Notwithstanding  anything  in this  section 12 to the  contrary,  but subject to
section  2.4 of the Tax  Provisions  Agreement,  the  Sellers'  and the  Buyer's
indemnification  obligations with respect to Income Taxes (as defined in the Tax
Provisions  Agreement)  shall  be  exclusively  governed  by the Tax  Provisions
Agreement.

     12.3  Limitation  on  Indemnification.   Subject  to  section  3.4(c),  but
notwithstanding anything else to the contrary contained in this agreement (a) no
party hereto shall be obligated to indemnify any party  pursuant to this section
12 with  respect  to any  claim  for  indemnification  asserted  after the first
anniversary  of the Closing Date unless such claim is based upon a breach of the
representations and warranties  contained in sections 5.1, 5.2, 5.4, 5.5., 5.11,
5.15,  6.1,  6.2,  6.3 or 6.4  hereof,  and (b) the sole  remedy  of any  Parent
Claimant  pursuant  to this  section  12 with  respect to  ProHealthCare  or any
Stockholder  shall  be to  obtain  from the  Indemnity  Escrow,  as  hereinafter
defined, shares of Parent Common Stock, as hereinafter provided. At the Closing,
the Stockholders  shall deposit into escrow with counsel for ProHealthCare  (the
"Indemnity Escrow Agent"),  and subject to the terms and conditions of an escrow
agreement to be entered into by  ProHealthCare,  Parent and the Indemnity Escrow
Agent in form and  substance  satisfactory  to such parties,  225,000  shares of
Parent Common Stock (the "Indemnity Escrow Shares"). The Indemnity Escrow Shares
shall be available  to satisfy the  indemnification  claims of Parent  Claimants
pursuant to this section 12 and for such purpose  shall be valued as of the date
such  shares are  released  to Parent at a price per share  equal to the average
closing  price for Parent  Common Stock on NASDAQ or the average of the last per
share bid prices for Parent Common Stock on the over-the-counter  Bulletin Board
(as reported by the



<PAGE>

Nasdaq Stock Market,  Inc.), as the case may be, in each case for the 30 trading
days  preceding such release.  Unless a claim or claims by Parent  Claimants are
then pending, in amounts in excess of the then value of 112,500 shares of Parent
Common Stock, 112,500 shares of Parent Common Stock shall be released six months
after the Closing and,  unless any claim or claims by Parent  Claimants are then
pending,  the balance shall be released on the later of the first anniversary of
the Closing Date and such date on which the aggregate liabilities (as determined
in accordance with GAAP) of ProHealthCare do not exceed $25,000.

     12.4  Indemnification  by Parent.  Parent shall indemnify,  defend and hold
harmless  ProHealthCare,  the Stockholders,  and their respective affiliates and
directors,  officers, employees, agents and representatives  (collectively,  the
"Company  Claimants"),  promptly  upon  demand at any time and from time to time
against any and all Losses  asserted  against,  imposed  upon or incurred by any
Company Claimant resulting from or arising out of (a) any  misrepresentation  or
breach of any warranty of Parent or Sub contained in this agreement,  or (b) any
breach or nonfulfillment of any covenant or agreement of Parent or Sub contained
in this agreement.

     12.5 Indemnification Procedures.

     (a)  An  indemnified  party  shall  promptly  give  written  notice  to the
indemnifying  party after the  indemnified  party has  knowledge  that any legal
proceeding  has been  instituted  or any claim has been  asserted  in respect of
which  indemnification  may be sought under the provisions of section 12. If the
indemnifying  party,  within 10 days after the indemnified  party has given such
notice (or within such shorter  period of time as an answer or other  responsive
motion  may  be  required),  shall  have  acknowledged  in  writing  his  or its
obligation  to indemnify  and shall have  furnished to the  indemnified  party a
bond, letter of credit,  escrow or similar arrangement in an amount equal to the
total amount demanded in such claim or proceeding,  then the indemnifying  party
shall have the right to control the defense of such claim or proceeding, and the
indemnified  party  shall not  settle or  compromise  such  claim or  proceeding
without the written consent of the indemnifying  party,  which consent shall not
unreasonably  be  withheld or delayed.  The  indemnified  party may in any event
participate  in any such  defense  with his or its own counsel and at his or its
own expense.

     (b) The indemnified  party shall be kept fully informed by the indemnifying
party of such action,  suit or proceeding at all stages thereof,  whether or not
the indemnified party is represented by counsel.  The indemnifying  party shall,
at its expense,  make available to the indemnified party and its representatives
all books and records of the indemnifying  party relating to such proceedings or
litigation, and the parties hereto agree to render to each other such assistance
as they may  reasonably  require of each other in order to ensure the proper and
adequate defense of any such action, suit or proceeding.  The indemnifying party
shall  make no  settlement  of any  claims  which  the  indemnifying  party  has
undertaken  to defend,  without  the  indemnified  party's  consent,  unless the
indemnifying party fully indemnifies the indemnified party for all losses, there
is no finding or admission of violation of law by, or effect on any other claims



<PAGE>

that may be made  against,  the  indemnified  party and the  relief  granted  in
connection  therewith requires no action on the part of and has no effect on the
indemnified party.

13.  Miscellaneous

     13.1  Amendment  and  Modification.  Prior  to  the  Effective  Time,  this
agreement may be amended or modified only by written  agreement of Parent,  Sub,
ProHealthCare, the Company and the Stockholders.

     13.2 Waiver.  Prior to the Effective Time, Parent and Sub, on the one hand,
and  ProHealthCare,  the Company and the  Stockholders,  on the other hand,  may
waive compliance by the other with any provision of this agreement. No waiver of
any  provision  shall be  construed  as a waiver  of any  other  breach  of that
provision  or of any other  provision of this  agreement.  Any waiver must be in
writing.

     13.3 Notices.  Any notice or other communication under this agreement shall
be in  writing  and  shall be  considered  given  upon  receipt,  if  personally
delivered  or  telecopied,  or one day after  delivery to a courier for next-day
delivery,  to the  parties at the  addresses  set forth  below (or at such other
address as a party may specify by notice to the others).

     If to Parent or Sub, to it at:

                           Accuhealth, Inc.
                           1575 Bronx River Avenue
                           Bronx, New York 10460
                           Facsimile number:  718-824-2432

                           Attention:  Glenn C. Davis

     with a copy to:

                           Proskauer Rose Goetz & Mendelsohn LLP
                           1585 Broadway
                           New York, New York 10036
                           Facsimile number:  212-969-2900

                           Attention:  Robert A. Cantone, Esq.



<PAGE>

     if to ProHealthCare, the Company or any Stockholder, to it, him or her at:

                           ProHealthCare, Inc.
                           30 Hillside Avenue
                           Springfield, New Jersey  07081

                           Attention: Thomas Laurita

     with copies to:

                           David Brian Cohen
                           c/o Bonnie Nelson
                           1000 Island Boulevard
                           Apartment 2509
                           North Miami, Florida  33160

                           and

                           Crummy, Del Deo, Dolan, Griffinger & Vecchione
                           One Riverfront Plaza
                           Newark, New Jersey  07102-5497
                           Facsimile number:  201-596-0545

                           Attention:  Jeffrey A. Baumel, Esq.

     13.4  Headings.  The section  headings of this  agreement are for reference
purposes only and shall not affect the  construction or  interpretation  of this
agreement.

     13.5 Entire Agreement;  Assignment. This agreement (including the schedules
and exhibits)  contains a complete statement of the understanding of the parties
with  respect  to its  subject  matter  and  supersedes  and  cancels  any prior
communications,  understandings  and  agreements  among  them  relating  to that
subject matter. This agreement shall be binding upon and inure to the benefit of
the  parties  hereto and their  respective  successors  and  permitted  assigns;
provided  that neither this  agreement  nor any right or  obligation  under this
agreement  may be  assigned  or  transferred,  except that (a) Parent or Sub may
assign its rights and obligations  hereunder to a direct or indirect  subsidiary
of Parent,  but no such assignment  shall relieve Parent or Sub, as the case may
be, of its obligations  hereunder,  and (b)  ProHealthCare may assign its rights
and obligations under sections 8.6 and 8.9 to its stockholders.  If Parent shall
issue by merger or any similar  corporate event other securities of Parent or of
any successor of Parent, each reference in this agreement to Parent Common Stock
shall be deemed to be a  reference  to such kind and number of shares into which
Parent Common Stock shall have been converted.



<PAGE>

     13.6 Governing  Law. This  agreement  shall be governed by and construed in
accordance  with  the  law of the  state  of New  York  excluding  choice-of-law
principles.

     13.7  Severability.  The parties agree that any provision of this agreement
that is  prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,  be  ineffective  only  to  the  extent  of  such  prohibition  or
unenforceability without invalidating the remaining provisions of this agreement
or  affecting  the  validity or  enforceability  of such  provision in any other
jurisdiction.

     13.8  Counterparts.   This  agreement  may  be  executed  in  two  or  more
counterparts,  each of which shall be deemed to be an original  but all of which
shall constitute one and the same agreement.



<PAGE>

     The parties have executed this agreement as of the date set forth above.

                                        ACCUHEALTH, INC.


                                        By:__________________________________
                                        Name:
                                        Title:


                                        ACH ACQUIRING CORP.


                                        By:__________________________________
                                        Name:
                                        Title:


                                        PROHEALTHCARE, INC.


                                        By:__________________________________
                                        Name:
                                        Title:


                                        PROHEALTHCARE INFUSION SERVICES, INC.


                                        By:__________________________________
                                        Name:
                                        Title:


                                        STOCKHOLDERS:

                                        -------------------------------------
                                        Thomas Laurita


                                        -------------------------------------
                                        David Brian Cohen



<PAGE>

<TABLE>
<CAPTION>
                                                            TABLE OF CONTENTS

<C>      <S>      <C>                                                                                                 <C>
1.       The Merger; The Surviving Corporation........................................................................1
         1.1      The Merger..........................................................................................1
         1.2      Closing.............................................................................................1
         1.3      Effective Time of the Merger........................................................................1
         1.4      Certificate of Incorporation and By-Laws............................................................1

2.       Conversion of Shares; Options................................................................................2
         2.1      Treatment of Shares of the Company..................................................................2
         2.2      Exchange of Company Stock...........................................................................2
         2.3      No Fractional Securities............................................................................4
         2.4      Determination of Final Incremental Gross Profit.....................................................4

3.       Determination of Final Net Liquid Assets; Adjustment to Merger Consideration.................................6
         3.1      Parent Calculation of Net Liquid Assets.............................................................6
         3.2      ProHealthCare's Verification of Net Liquid Assets...................................................6
         3.3      Dispute Resolution..................................................................................7
         3.4      Final Net Liquid Assets.............................................................................8
         3.5      Treatment of Intercompany Advances..................................................................8

4.       Tangible Property; Adjustment to Merger Consideration........................................................8
         4.1      Calculation of Tangible Property....................................................................8
         4.2      Adjustment to Merger Consideration..................................................................9

5.       Representations and Warranties of ProHealthCare..............................................................9
         5.1      Organization........................................................................................9
         5.2      Capitalization......................................................................................9
         5.3      Subsidiaries........................................................................................9
         5.4      Authority..........................................................................................10
         5.5      Consents and Approvals; No Violations..............................................................10
         5.6      Financial Statements...............................................................................10
         5.7      Absence of Undisclosed Liabilities.................................................................11
         5.8      Absence of Certain Changes or Events...............................................................11
         5.9      Material Contracts.................................................................................11
         5.10     No Default.........................................................................................12
         5.11     Compliance with Law................................................................................12
         5.12     Health Care Matters................................................................................13
         5.13     Litigation, etc....................................................................................13
         5.14     Permits.  .........................................................................................14
         5.15     Taxes..............................................................................................14
         5.16     Title to Properties; Encumbrances..................................................................14
</TABLE>



<PAGE>

<TABLE>
<C>      <S>      <C>                                                                                                 <C>
         5.17     Proprietary Rights.................................................................................14
         5.18     Employee Benefit Plans; ERISA; Labor Matters.......................................................15
         5.19     Environmental Laws and Regulations.................................................................16
         5.20     Brokers............................................................................................16

6.       Representations and Warranties of Parent....................................................................17
         6.1      Organization.......................................................................................17
         6.2      Capitalization.....................................................................................17
         6.3      Authority..........................................................................................17
         6.4      Consents and Approvals; No Violations..............................................................18
         6.5      Reports and Financial Statements...................................................................18
         6.6      Brokers............................................................................................18
         6.7      Dispositions.......................................................................................18

7.       Covenants of ProHealthCare, the Company and the Stockholders................................................19
         7.1      Conduct of Business................................................................................19
         7.2      No Solicitation....................................................................................20
         7.3      Access and Information.............................................................................20

8.       Covenant of Parent..........................................................................................21

9.       Additional Agreements.......................................................................................21
         9.1      Reasonable Best Efforts............................................................................21
         9.2      Expenses...........................................................................................21
         9.3      Public Announcements...............................................................................21
         9.4      Supplemental Disclosure............................................................................21
         9.5      Deposits of Certain Payments.......................................................................22
         9.6      Leased Property....................................................................................22
         9.7      Accounts Receivable................................................................................23

10.      Conditions to Consummation of the Merger....................................................................23
         10.1     Conditions to Each Party's Obligation to Effect the Merger.........................................23
         10.2     Conditions to Obligations of Parent and Sub to Effect the Merger. .................................23
         10.3     Conditions to Obligation of ProHealthCare and the Company to Effect the Merger. ...................26

11.      Termination.................................................................................................27
         11.1     Termination........................................................................................27
         11.2     Effect of Termination..............................................................................27

12.      Indemnification.............................................................................................28
         12.1     Survival...........................................................................................28
         12.2     Indemnification by the Stockholders................................................................28
         12.3     Limitation on Indemnification......................................................................28
</TABLE>



<PAGE>

<TABLE>
<C>      <S>      <C>                                                                                                 <C>
         12.4     Indemnification by Parent..........................................................................29
         12.5     Indemnification Procedures.........................................................................29

13.      Miscellaneous...............................................................................................30
         13.1     Amendment and Modification.........................................................................30
         13.2     Waiver.............................................................................................30
         13.3     Notices............................................................................................30
         13.4     Headings...........................................................................................31
         13.5     Entire Agreement; Assignment.......................................................................31
         13.6     Governing Law......................................................................................32
         13.7     Severability.......................................................................................32
         13.8     Counterparts.......................................................................................32
</TABLE>


SCHEDULES

Schedule 2.4            --   Referral Sources
Schedule 3.1            --   Pre-Closing Liabilities
Schedule 3.5            --   Certain Intercompany Advances
Schedule 4.1            --   Tangible Property
Schedule 5.5            --   Consents
Schedule 5.6A           --   Financial Statements
Schedule 5.6B           --   Financial Statements - Exceptions
Schedule 5.7            --   Liabilities
Schedule 5.8            --   Certain Changes and Events
Schedule 5.9            --   Material Contracts
Schedule 5.10           --   Defaults
Schedule 5.12(a)        --   Health Care Cost Reports,  Submissions and Filings
Schedule 5.12(c)        --   Agreements with Referral Sources, Etc.
Schedule 5.13           --   Litigation, Etc.
Schedule 5.15           --   Taxes
Schedule 5.16A          --   Title to Properties
Schedule 5.16B          --   Certain Property
Schedule 5.17           --   Proprietary Rights
Schedule 5.18           --   Employee Benefit Plans
Schedule 5.20           --   Brokers
Schedule 6.4            --   Consents



<PAGE>

EXHIBITS

Exhibit A        --     Employment Agreement
Exhibit B        --     Non-Competition Agreement
Exhibit C-1      --     Form of Release
Exhibit D        --     Tax Provisions Agreement
Exhibit E-1      --     Form of Assignment and Assumption Agreement
Exhibit E-2      --     Form of Assignment and Assumption Agreement
Exhibit F        --     Opinion of ProHealthCare's Counsel
Exhibit G        --     Registration Rights Agreement
Exhibit H        --     Opinion of Parent's Counsel