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EXECUTION COPY  CONFIDENTIAL
 Management Rights Letter
  
  Company Investor Preferred Stock Purchase Agreement Management
Rights
 1.
    
    Investor shall be entitled to routinely consult with and advise management of the Company
with respect to operations of the Company and its direct and indirect subsidiaries, including
all the Companys business and financial matters and managements proposed annual operating
plans, and management will, upon Investors request, meet with representatives of Investor
(the Representatives) at reasonable intervals at the Companys facilities at mutually
agreeable times for such consultation and advice, including to review progress in achieving
said plans. The Company shall give Investor reasonable advance written notice of any
significant new initiatives or material changes to existing operating plans of the Company and
its direct and indirect subsidiaries and shall afford Investor adequate time to meet with
management to consult on such initiatives or changes prior to implementation. The Company
agrees to give due consideration to the advice given and any proposals made by Investor.2.
    
    Investor may, upon notice during normal business hours, inspect all documents, contracts,
books, records, personnel, offices and other facilities and properties of the Company and its
direct and indirect subsidiaries and, to the extent available to the Company after the Company
uses reasonable efforts to obtain them, the records of its legal advisors and accountants,
including the accountants work papers, and Investor may make such copies and inspections
thereof as Investor may reasonably request. The Company shall furnish Investor with such
financial and operating data and other information with respect to the business and properties
of the Company and its direct and indirect subsidiaries as the Investor may reasonably
request. The Company shall permit the Representatives to discuss the affairs, finances and
accounts of the Company and its direct and indirect subsidiaries with the principal officers
of the Company and to make proposals and furnish advice with respect thereto to such persons.




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3.
    
    At any time during which Investor does not have a right pursuant to the certificate of
designations setting forth the designation, powers and preferences of the Companys Series A
Convertible Preferred Stock to designate at least one member to the Companys board of
directors (the Board), the Company shall, after receiving notice from Investor as to
the identity of such person (a Board Observer),
(i) permit a Board Observer to attend all
meetings of the Board and all committees thereof as a non-voting observer; (ii) provide the
Board Observer advance notice of each such meeting, including such meetings time and place,
at the same time and in the same manner as such notice is provided to the members of the
Board (or such committee thereof); (iii) provide the Board Observer with copies of all
materials, including notices, minutes and consents, distributed to the members of the Board
(or such committee thereof) at the same time as such materials are distributed to such Board
(or such committee thereof) and permit the Board Observer to have the same access to
information concerning the business and operations of the Company and its direct and
indirect subsidiaries as is provided to the members of the Board; and (iv) permit the Board
Observer to discuss the affairs, finances and accounts of the Company and its direct and
indirect subsidiaries with, and to make proposals and furnish advice with respect thereto
to, the Board, without voting, and the Board and the Companys officers shall give due
consideration to such proposals or advice; provided, however that the Board Observer may be
excluded from access to any materials or attendance at any meeting or portion thereof or
upon advice of counsel (which may be the Companys general counsel) that such exclusion is
reasonably necessary to preserve the attorney-client privilege or to comply with applicable
law. Reasonable documented costs and expenses incurred by the Board Observer for the
purposes of attending Board (or committee) meetings and conducting other Company business
will be paid by the Company.4.
    
    The Company shall deliver to Investor:
 (a)
    
    for so long as the Company or any direct or indirect subsidiary is required by
law or pursuant to the terms of any outstanding indebtedness of the Company or any
direct or indirect subsidiary to prepare such reports, any annual reports; quarterly
reports and other periodic reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, prepared by the Company or any direct or indirect
subsidiary as soon as available; and(b)
    
    in the event that the Company is no longer required by law or pursuant to the
terms of any outstanding indebtedness to prepare annual reports, quarterly reports or
other periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended:
 (i)
    
    as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year of the
Company, consolidated balance sheets of the Company and its direct and indirect
subsidiaries as of the end of such period then ended, and consolidated
statements of income and cash flows of the Company and its direct and indirect
subsidiaries for
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the period then ended, in each case prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis, except as otherwise noted therein and subject to the absence of
footnotes and to year-end adjustments; and(ii)
    
    as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, a consolidated balance sheet
of the Company and its direct and indirect subsidiaries as of the end of such
year, and consolidated statements of income and cash flows of the Company and
its direct and indirect subsidiaries for the year then ended, in each case
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis, except as otherwise noted therein,
together with an auditors report thereon of a firm of established national
reputation.
  Confidential
Information
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Very truly yours, 
NATIONAL MEDICAL HEALTH CARD
     SYSTEMS, INC.By:
    /s/ James J. BiglJames J. BiglChief Executive Officer AGREED AND ACCEPTED THIS
19th day of March, 2004NEW MOUNTAIN PARTNERS, L.P.By:
    
    New Mountain Investments, L.P.,
its general partnerBy:
    
    New Mountain GP, LLC,its general partnerBy:
    
    /s/ Steven B. KlinskySteven B. Klinsky
Chief Executive Officer