Document:

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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") between Eastern Heating &
Cooling, Inc. (the "Company"), and Fred Giardenelli, Jr. ("Executive") is
entered into and effective as of the 1st day of June, 2003. This Agreement
supersedes any other employment agreements or understandings, written or oral,
between the Company and Executive.

                                 R E C I T A L S

         The following statements are true and correct:

                  As of the date of this Agreement, the Company, and its
         affiliates (collectively, the "Comfort Group") are engaged in the
         business of mechanical contracting services, including heating,
         ventilation and air conditioning, plumbing, fire protection, piping and
         electrical and related services ("Services").

                  Executive is employed by the Company in a confidential
         relationship wherein Executive, in the course of Executive's employment
         with the Company, will become familiar with and aware of information as
         to the Comfort Group's customers, specific manner of doing business,
         including the processes, techniques and trade secrets utilized by the
         Comfort Group, employees and future plans with respect thereto, all of
         which has been and will be established and maintained at great expense
         the Comfort Group. This information is a trade secret and constitutes
         the valuable goodwill of the Company and the Comfort Group.

                  Each of Company and Executive desire to establish Executive's
         employment by the Company pursuant to this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein, the Company and Executive hereby
agree as follows:

                               A G R E E M E N T S

         1.       Employment and Duties.

                  (a) The Company hereby employs Executive in an executive
         position and Executive hereby accepts this employment upon the terms
         and conditions herein contained. Executive agrees to devote
         substantially all of Executive's business time, attention and efforts
         to promote and further the business of the Company.

                  (b) Executive shall faithfully adhere to, execute and fulfill
         all lawful policies established by the Company and the Comfort Group,
         including the Comfort Systems USA ("Comfort") Corporate Compliance
         Policy.

                  (c) Executive shall not, during the term of Executive's
         employment hereunder, be engaged in any other business activity pursued
         for gain, profit or other pecuniary advantage if such activity
         interferes in any material respect with Executive's duties and
         responsibilities hereunder. The foregoing limitations shall not be
         construed as prohibiting

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         Executive from making personal investments in such form or manner as
         will neither require Executive's services in the operation or affairs
         of the companies or enterprises in which such investments are made nor
         violate the terms of Section 4.

         2. Compensation. For all services rendered by Executive, the Company
shall compensate Executive as follows:

                  (a) Base Salary. Effective the date hereof, the base salary
         payable to Executive is $180,000 per year, payable on a regular basis
         in accordance with the Company's standard payroll procedures, but not
         less often than monthly. On at least an annual basis, the Company will
         review Executive's performance and may make adjustments to such base
         salary if, in its discretion, any such adjustment is warranted.

                  (b) Executive Perquisites, Benefits and Other Compensation.
         Executive shall be entitled to receive additional benefits and
         compensation from the Company in such form and to the extent specified
         below:

                           (i) Coverage, subject to contributions required of
                  employees generally, for Executive and Executive's dependent
                  family members under health, hospitalization, disability,
                  dental, life and other insurance plans that the Company may
                  have in effect from time to time for the benefit of its
                  employees.

                           (ii) Reimbursement for all business travel and other
                  out-of-pocket expenses reasonably incurred by Executive in the
                  performance of Executive's services pursuant to this
                  Agreement. Reimbursable expenses shall be appropriately
                  documented in reasonable detail by Executive, and shall be in
                  a format consistent with the Company's expense reporting
                  policy.

         3.       Confidentiality.

                  (a) Confidential Information. As used herein, the term
         "Confidential Information" means any information, technical data or
         know-how of the Company and the other members of the Comfort Group,
         including, but not limited to, that which relates to customers,
         business affairs, business plans, financial matters, financial plans
         and projections, pending and proposed acquisitions, operational and
         hiring matters, contracts and agreements, marketing, sales and pricing,
         prospects of the Comfort Group, and any information, technical data or
         know-how that contain or reflect any of the foregoing, whether prepared
         by the Company, any other member of the Comfort Group, Executive or any
         other person or entity; provided, however, that the term "Confidential
         Information" shall not include information, technical data or know-how
         that Executive can demonstrate is generally available to the public not
         as a result of any breach of this Agreement by Executive.

                  (b) No Disclosure. Except in the performance of Executive's
         duties as an executive of the Company, Executive will not, during or
         after the term of Executive's engagement with the Company, disclose to
         any person or entity or use, for any reason whatsoever, any
         Confidential Information.

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         4. Non-Competition Agreement.

                  (a) Competition. Executive will not, during the period of
         Executive's employment by or with the Company, and for a period of one
         year immediately following the termination of Executive's employment,
         for any reason whatsoever, directly or indirectly, on behalf of
         Executive or on behalf of or in conjunction with any other person,
         company, partnership, corporation or business of whatever nature:

                           (i) engage, as an officer, director, shareholder,
                  owner, partner, joint venturer, or in a managerial capacity,
                  whether as an employee, independent contractor, consultant or
                  advisor, or as a sales representative, or make or guarantee
                  loans or invest, in or for any business engaged in Services in
                  competition with the Company Group or any other member of the
                  Comfort Group within seventy-five (75) miles of where any
                  Comfort Group operation or subsidiary conducts business if
                  within the preceding two years Executive has had
                  responsibility for, or material input or participation in, the
                  management or operation of such other operation or subsidiary
                  (the "Territory");

                           (ii) call upon any person who is, at that time, an
                  employee of the Company or any other member of the Comfort
                  Group in a technical, managerial or sales capacity for the
                  purpose or with the intent of enticing such employee away from
                  or out of the employ of the Company or such other member of
                  the Comfort Group;

                           (iii) call upon any person or entity which is at that
                  time, or which has been within ONE (1) years prior to that
                  time, a customer of the Company or any other member of the
                  Comfort Group for the purpose of soliciting or selling
                  Services;

                           (iv) call upon any prospective acquisition candidate,
                  on Executive's own behalf or on behalf of any competitor,
                  which acquisition candidate either was called upon by the
                  Executive on behalf of the Company or any other member of the
                  Comfort Group or was the subject of an acquisition analysis
                  made by Executive on behalf of the Company or any other member
                  of the Comfort Group for the purpose of acquiring such
                  acquisition candidate.

         Notwithstanding the above, the foregoing covenants shall not be deemed
         to prohibit Executive from acquiring as an investment not more than one
         percent (1%) of the capital stock of a competing business whose stock
         is traded on a national securities exchange or on an over-the-counter
         or similar market.

                  (b) No Violation. It is specifically agreed that the period
         during which the agreements and covenants of Executive made in this
         Section 4 shall be effective shall be computed by excluding from such
         computation any time during which Executive is in violation of any
         provision of this Section 4.

                  (c) Extension. Notwithstanding the foregoing provisions of
         this paragraph 4, if this Agreement is terminated pursuant to paragraph
         5, then, upon written notice to

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         Executive not later than 60 days following the date of such
         termination, the Company may at its option extend by up to twelve
         additional months the agreements and covenants contained in this
         paragraph 4 by paying to Executive a number of months of base salary
         equal to the length of the extension specified in such notice, any such
         amounts to be payable during such extension period in a manner
         consistent with the Company's standard pay practices.

         5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue for a term of two (2) years, unless
renewed or terminated under this Paragraph 5. At the end of the initial term
described in the preceding sentence, this Agreement shall automatically renew
for succeeding terms of one (1) year each (subject to termination under this
Paragraph), unless either party shall, at least 10 days prior to the expiration
of any term, give written notice of an intention not to renew this Agreement.
This Agreement and Executive's employment may be terminated in any one of the
following ways:

                  (a) Death. The death of Executive shall immediately terminate
         this Agreement with no severance compensation due to Executive's
         estate.

                  (b) Disability. If, as a result of incapacity due to physical
         or mental illness or injury, Executive shall have been absent from
         Executive's full-time duties hereunder for four (4) consecutive months,
         then thirty (30) days after receiving written notice (which notice may
         occur before or after the end of such four (4) month period, but which
         shall not be effective earlier than the last day of such four (4) month
         period), the Company may terminate Executive's employment hereunder,
         provided Executive is unable to resume Executive's full-time duties at
         the conclusion of such notice period. In the event this Agreement is
         terminated as a result of Executive's disability, Executive shall
         receive from the Company Executive's base salary at the rate then in
         effect for six (6) months, and such amount shall be payable during such
         period in a manner consistent with Company's standard pay practices.
         The amount payable hereunder shall be decreased by the amount of
         benefits otherwise actually paid by the Company to Executive or on
         Executive's behalf or under any insurance procured by the Company.

                  (c) Good Cause. The Company may terminate this Agreement ten
         (10) days after written notice to Executive for good cause, which shall
         include any of the following: (i) Executive's willful or material
         breach of this Agreement; (ii) Executive's failure to perform any of
         his material duties following notice by the Company to Executive of
         such improper performance and Executive's failure to correct the
         improper performance to the satisfaction of the Company within a
         reasonable time; (iii) Executive's gross negligence in the performance
         or intentional nonperformance of any of Executive's material duties and
         responsibilities hereunder; (iv) Executive's willful dishonesty, fraud
         or misconduct with respect to the business or affairs of the Company or
         any other member of the Comfort Group; (v) Executive's conviction of a
         felony crime; (vi) Executive's confirmed positive illegal drug test
         result; (vii) sexual harassment by Executive; or (viii) willful or
         material failure by Executive to comply with Comfort's Corporate
         Compliance Policy or other Company policies. In the event of a
         termination for good cause, as enumerated above, Executive shall have
         no right to any severance compensation.

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                  (d) Without Cause. At any time after the commencement of
         Executive's employment, Executive or the Company may, without cause,
         terminate this Agreement and Executive's employment, effective fifteen
         (15) days after receipt of written notice. Should Executive be
         terminated by the Company without cause, Executive shall receive from
         the Company Executive's base salary at the rate then in effect for one
         year, and such amount shall be payable during such period in a manner
         consistent with the Company's standard pay practices. If Executive
         resigns or otherwise terminates Executive's employment, Executive shall
         receive no severance compensation.

                  (e) Change of Control, Change of Duties, Change of
         Compensation or Change of Location.

                           (i) At any time during the SIX-MONTH period following
                  a change of control of Comfort Systems USA, Inc. and/or
                  Eastern Heating and Cooling, Inc., a change of duties of
                  Executive, a change of compensation of Executive or a change
                  of location of Executive (collectively "Change Events"),
                  Executive may elect by written notice to receive a lump-sum
                  payment equal to his annual base salary as of the date of such
                  Change Event, provided, however, if Executive receives such
                  Change Event payment, then for the remaining term of this
                  Agreement he shall not be entitled to receive separation
                  payments as otherwise provided under this Section 5.
                  Notwithstanding the preceding sentence, in the event that in
                  connection with a change of control of Comfort Systems USA,
                  Inc., any former owners of the twelve original founding
                  companies of Comfort Systems USA, Inc. receives a change of
                  control payment under his Employment Agreement dated July 2,
                  1997 that is more than his annual base salary, Executive may
                  instead elect to resign and receive the same multiple of his
                  base salary as such other founding company owner has received,
                  and such payment, if elected by Executive, shall be in lieu
                  of, and in cancellation of, all of Executive rights under this
                  and any preceding Employment Agreement.

                           (ii) For purposes of subparagraph (e)(i), the term
                  "change of control" shall include with respect to Comfort
                  Systems USA, Inc. and/or Eastern Heating and Cooling, Inc. a
                  sale of a majority of either corporation's capital stock, a
                  sale of substantially all of either corporation's assets, a
                  merger pursuant to which the ultimate shareholders of either
                  corporation do not hold a majority of voting interest
                  subsequent to said merger, or any other transaction of similar
                  effect.

                           (iii) For purposes of subparagraph (e)(i), the term
                  "change of duties" with respect to Executive shall include any
                  permanent and material adverse change, other than by the
                  Executive himself, in the nature or scope of Executive's
                  responsibilities and authorities from such responsibilities
                  and authorities immediately prior to such change of duty.

                           (iv) For purposes of subparagraph (e)(i), the term
                  "change of compensation" of Executive shall include a decrease
                  in the annual base salary in effect as of the date of the
                  change of compensation payable by the Company thereof to
                  Executive, other than as a result of the comparable change in
                  compensation payable to substantially all other executive
                  officers of the Company on the basis of the Company's or any
                  subsidiary's financial performance.

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                           (v) For purposes of subparagraph (e)(i), the term
                  "change of location" of Executive shall include a relocation,
                  other than by the Executive himself, of more than 25 miles
                  from Executive's work location immediately prior to the change
                  of location where such location is also more than 10
                  additional miles from Executive's home.

         6. Return of Company Property. All records, plans, manuals, "field
guides", memoranda, lists, documents, statements and other property delivered to
Executive by or on behalf of the Company or any other member of the Comfort
Group, by any customer of the Company or any other member of the Comfort Group
(including, but not limited to, any such customers obtained by Executive), by
any acquisition candidate of the Company or any other member of the Comfort
Group, and all records compiled by Executive which pertain to the business or
activities of the Company or any other member of the Comfort Group shall be and
remain the property of the Company and shall be subject at all times to its
discretion and control. Likewise, all correspondence with customers,
representatives or acquisition candidates, reports, records, charts, advertising
materials, and any data collected by Executive or by or on behalf of the Company
or any other member of the Comfort Group or any representative of any of them
shall be delivered promptly to the Company without request by it upon
termination of Executive's employment with the Company.

         7. Inventions. Executive shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of Executive's
employment with the Company or within one (1) year thereafter, and which are
directly related to the business or activities of the Company or which Executive
conceives as a result of Executive's employment by the Company. Executive hereby
assigns and agrees to assign all Executive's interests therein to the Company or
its nominee. Whenever requested to do so by the Company, Executive shall execute
any and all applications, assignments or other instruments that the Company
shall deem necessary to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect the Company's interest therein.

         8. Trade Secrets. Executive agrees that Executive will not, during or
after the Term, disclose the specific terms of the Company's or any other member
of the Comfort Group's relationships or agreements with significant vendors or
customers or any other significant and material trade secret of the Company or
any other member of the Comfort Group, whether in existence or proposed, to any
person, firm, partnership, corporation or business for any reason or purpose
whatsoever.

         9. Prior Agreements. This Agreement supercedes any prior documents or
understandings with respect to Executive's employment with the Company.
Executive warrants to the Company that the execution of this Agreement by
Executive and Executive's employment by the Company and the performance of
Executive's duties hereunder will not violate or be a breach of any agreement
with a former employer, client or any other person or entity.

         10. Assignment; Binding Effect. Executive understands that Executive
has been selected for employment by the Company on the basis of Executive's
personal qualifications, experience and skills. Executive agrees, therefore,
that Executive cannot assign all or any portion of Executive's performance under
this Agreement. Executive, Executive's spouse and the estate of

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each shall not have any right to encumber or dispose of any right to receive
payments hereunder, it being understood that such payments and the right thereto
are nonassignable and nontransferable; provided, however, that in the event of
the death of Executive, any payments that Executive is entitled to receive may
be assigned to the beneficiaries of Executive's estate. Subject to the preceding
three (3) sentences and the express provisions of Section 11, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.

         11. Complete Agreement. Executive has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements.

         12. Amendment; Waiver. This Agreement may not be modified except in a
writing signed by the parties, and no term of this Agreement may be waived
except by a writing signed by the party waiving the benefit of such term. No
waiver by the parties hereto of any default or breach of any term, condition or
covenant of this Agreement shall be deemed to be a waiver of any subsequent
default or breach of the same or any other term, condition or covenant contained
herein.

         13. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:

         To the Company:  Comfort Systems USA, Inc.
                          777 Post Oak, Suite 500
                          Houston, TX 77056
                          Attention: General Counsel

         To Executive:    Fred Giardenelli, Jr.
                          1240 Milton Keynes Dr.
                          Niskayuna, NY 12309

Notice shall be deemed given and effective on the earlier of five (5) days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party of
such change in accordance with this Section 13.

         14. Severability; Enforceability. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth in any
covenant contained herein are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and this Agreement shall thereby be reformed. Each of the
covenants contained in this Agreement shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Executive against the Company,

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whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.

         15. Survival. The provisions and covenants of Sections 3, 4, 6, 7 and 8
shall survive termination of this Agreement.

         16. Specific Performance Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the covenants
contained in Sections 3, 4, 6, 7 and 8 and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Executive agrees that the Company shall be entitled to
specific performance and that such covenants may be enforced by the Company in
the event of any breach or threatened breach by Executive, by injunctions,
restraining orders and other appropriate equitable relief. Executive further
agrees to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief.

         17. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

EXECUTIVE:                                  COMPANY:

                                            EASTERN HEATING & COOLING, INC.

/s/ Fred Giardenelli, Jr.                   /s/ William George
--------------------------                  ----------------------------------
Fred Giardenelli, Jr.                       Name:  William George
                                            Title:  Vice President

                                       8<PAGE>
                                                                    Exhibit 10.4

          Confidential portions of this Exhibit have been deleted and
          filed separately with the Securities and Exchange Commission
                 pursuant to a claim of confidential treatment.

                                  AMENDMENT TO

                        UNITED HEALTHCARE SERVICES, INC.

                                       AND

                           UNITEDHEALTH NETWORKS, INC.

                      PHARMACY BENEFIT MANAGEMENT AGREEMENT

         This Amendment is made to the agreement ("Agreement") between United
HealthCare Services, Inc. and UnitedHealth Networks, Inc., collectively referred
to as "United", and the entity named below ("MMMC"). The Agreement currently
sets forth the terms and conditions under which MMMC or an affiliate shall
provide or arrange for the provision of health care services to individuals
covered by a United's affiliated Health Plan pursuant to its Medicare contract
with the Health Care Financing Administration ("HCFA"). The parties understand
and agree that the Balanced Budget Act of 1997 ("BBA") established a new program
known as Medicare+Choice, which replaced Health Plan's existing Medicare risk
program. The purpose of this Amendment is to incorporate all provisions
necessary to meet the HCFA requirements for Medicare+Choice. This Amendment is
effective on August 1, 1999.

1.   The Agreement shall be amended by the addition of the attached Health Plan
     Medicare+Choice Requirements Addendum.

2.   All other provisions of the Agreement shall remain in full force and
     effect.

UNITED HEALTHCARE SERVICES, INC.      MERCK MEDCO MANAGED CARE, L.L.C.

Signature  Illegible                  Signature  Illegible
           --------------------                  -----------------------

Title      President                  Title      Senior Vice President-
                                                 Regulatory and Managed
                                                 Care Programs

Date       1/29/01                    Date       1/24/01

UNITEDHEALTH NETWORKS, INC.

Signature  /s/ Illegible
           --------------------

Title      Secretary

Date       1/26/01

<PAGE>

                                   HEALTH PLAN

                      MEDICARE+CHOICE REQUIREMENTS ADDENDUM

In addition to PBM's obligations under the Agreement, PBM agrees, and shall
require PBM Contracting Providers to agree, as participating providers under
aUnited affiliated Health Plan's contract with HCFA to be a Medicare+Choice
managed care organization (hereafter the "M divided by C Contract"), to abide by
all applicable provisions of the M+C Contract and to fulfill PBM's and PBM
Contracting Provider's obligations under the Agreement in a manner consistent
with a United affiliated Health Plan's (hereafter the "Health Plan") obligations
under the M divided by C Contract. For purposes of this Addendum, "Medicare
Member" means a Health Plan's Member who is enrolled in a Medicare+Choice plan
through Health Plan. PBM and PBM Contracting Provider compliance with the M+C
Contract specifically includes, but is not limited to, the following
requirements:

1.   Prompt Payment. Health Plan shall pay "clean" claims for Covered Services
     within forty- five (45) days of receipt and approve or deny all claims that
     are not "clean" claims within sixty (60) days from the date of the request.

2.   Medicare Compliance. PBM shall, and shall require PBM Contracting Providers
     to, comply with all applicable Medicare laws and regulations and HCFA
     instructions.

3.   Audits and Information. In addition to PBM's and PBM Contracting Provider's
     obligations under Section 5.3.2, PBM shall, and shall require PBM
     Contracting Providers to, permit audits and inspection by HCFA and/or its
     designees, and cooperate, assist and provide information to HCFA and/or its
     designees as requested from time to time. This provision shall survive
     termination of the Agreement.

4.   Maintenance of Records. In addition to PBM's and PBM Contracting Providers'
     obligations under Section 5.3.2, PBM shall, and shall require PBM
     Contracting Providers to, retain books, contracts, documents, papers and
     records, including without limitation, medical records, patient care
     documentation, and other records that pertain to any aspect of services
     performed, financial solvency, reconciliation of benefit liabilities and
     determination of amounts payable under Health Plan's M divided by C
     Contract for a minimum of six (6) years from the end of the applicable
     one-year contract period in the M divided by C Contract or the completion
     of an audit, or in certain instances described in applicable
     Medicare+Choice regulations, for periods in excess of six (6) years, if
     appropriate. PBM shall, and shall require PBM Contracting Providers to,
     maintain such records accurately and update them on a regular basis. PBM
     and PBM's employees and agents shall, and shall require PBM Contracting
     Providers to, maintain the confidentiality of all Medicare Member records
     in accordance with the applicable laws and regulations, and shall safeguard
     Medicare Members' privacy. This provision shall survive termination of the
     Agreement.

5.   Data Collection. PBM shall submit to Health Plan, upon request, all data
     necessary for Health Plan to fulfill its reporting obligations pursuant to
     42 C.F.R.SS.422.516. PBM

<PAGE>

     must submit to Health Plan all data, including medical records, necessary
     to characterize the content and purpose of each encounter with a Medicare
     Member. PBM must certify (based on best knowledge, information and belief)
     the accuracy, completeness and truthfulness of such data on certification
     forms provided by Health Plan. PBM shall hold harmless and indemnify Health
     Plan for any fines or penalties it may incur due to PBM's submission of
     inaccurate or incomplete data.

6.   Accountability. PBM acknowledges, and shall require PBM Contracting
     Providers to acknowledge, that Health Plan oversees and is responsible to
     HCFA for any functions or responsibilities provided or performed by PBM or
     PBM Contracting Providers pursuant to the M+C Contract, as applicable.

7.   Delegation. If any service or activity to be performed by PBM under this
     Agreement is delegated, to the extent permitted by and in accordance with
     this Agreement, to a downstream entity, such entity shall enter into a
     contract with PBM obligating such entity to perform such service or
     activity consistent with and in compliance with the terms of this Agreement
     and the M+C Contract.

8.   Continued Care. In addition to PBM's and PBM Contracting Providers'
     obligations pursuant to Section 3.8 of the Agreement, PBM shall, and shall
     require PBM Contracting Providers to, provide Covered Services to Medicare
     Members (i) for all Medicare Members, for the duration of the M+C Contract
     period for which HCFA payments have been made; and (ii) for Medicare
     Members who are hospitalized on the date the M+C Contract terminates or in
     the event of Health Plan's or PBM's insolvency, through discharge. This
     provision shall survive termination of the Agreement.

9.   Compliance with Pharmacy Services Manual. PBM shall require PBM Contracting
     Providers to comply with PMB's Pharmacy Services Manual, including, without
     limitation, the Medicare Plus Choice Requirements addendum (the "Pharmacy
     Attachment"). PBM shall comply with those requirements of the Pharmacy
     Attachment applicable to the performance of PBM's obligations under this
     Agreement, including, without limitation, where an obligation is placed
     upon PBM Contracting Providers but such obligation may be performed or
     could be violated by PBM. In the event of a conflict between any provision
     in this ADDENDUM and the Pharmacy Attachment, this ADDENDUM shall govern.

<PAGE>

                                  AMENDMENT TO

                        UNITED HEALTHCARE SERVICES, INC.

                      PHARMACY BENEFIT MANAGEMENT AGREEMENT

         This Amendment is made to the Pharmacy Benefit Management Agreement
("Agreement") between United HealthCare Services, Inc., UnitedHealth Networks,
Inc. (collectively "United") and Merck-Medco Managed Care, L.L.C. ("PBM") dated
November 11, 1998.

WHEREAS, the Agreement sets forth the obligations of the parties in order for
United to make available pharmacy benefit management and related services to
Health Plans and other non-Health Plan business and PBM agreed to provide such
services; and

WHEREAS, the parties desire to amend the Agreement in order to add PAID
Prescriptions, L.L.C. ("PAID") as a signatory to the Agreement.

NOW THEREFORE, in consideration of the terms and conditions set forth in this

Addendum, the parties agree as follows:

1. PAID is a subsidiary of PBM and acts as a Third Party Administrator ("TPA")
for PBM on behalf of United. PAID is licensed in certain states as a TPA as
required by applicable law.

2. The parties agree that PAID is added as a signatory to the Agreement shall
perform the TPA functions in the Agreement.

3. All other provisions of the Agreement shall remain in full force and effect.

United HealthCare Services, Inc.             Marck-Medco Managed Care, L.L.C.

Signature: Illegible                         Signature: Illegible
           --------------------                         -------------------

Title:     COO                               Title:     Vice President

Date:      3/28/01                           Date:      4/12/01

United HealthNetworks, Inc.                  PAID Prescriptions, L.L.C.

Signature: Illegible                         Signature: Illegible
           --------------------                         -------------------

Title:     Vice President                    Title:    Vice President

Date:      3/28/01                           Date:     4/12/01

<PAGE>

       Confidential portions of this Exhibit have been deleted and filed
       separately with the Securities and Exchange Commission pursuant to
                       a claim of confidential treatment.

Letter Agreement
----------------

United HealthCare Services, Inc.
9900 Bren Road East,
P.O. Box 1459 Minnetonka, MN 55343
Attention: William A. Munsell

          Re:  Pharmacy Benefit Management Agreement (the "Agreement") between
               United HealthCare Services, Inc., on behalf of itself and its
               affiliates from time to time, ("United HealthCare") and
               Merck-Medco Managed Care, LLC, ("PBM").

          United HealthCare and PBM agree to make the following changes to the
Agreement:

          1. ***

          2. ***

          3. Rebate Contracting.

            (a) PBM agrees to work with United HealthCare to negotiate new or
                amended rebate agreements with drug manufacturers by June 30,
                2002 that will result in United HealthCare earning *** of
                incremental rebates (from amounts that would have been earned
                from manufacturers absent such new or amended agreements) on an
                annualized basis. As a condition to PBM's guarantee of such
                incremental rebates, United HealthCare agrees to use its best
                efforts to coordinate its formulary initiatives with PBM's
                negotiations with drug manufacturers for PBM's book of business
                generally.

            (b) The *** included in (a) above shall be increased to *** in the
                event that United HealthCare *** in a preferred status by
                January 1, 2002 and maintains it on the PDL in a preferred
                status until at least June 30, 2003.

            (c) ***

            (d) If requested by United HealthCare, PBM will prepay the amounts
                set forth in (a) or (b) by December 31, 2001.

          4. ***

          5. Effect of this Letter Agreement.

               Except as specifically modified by this Letter Agreement, the
          Agreement and the letter agreement between the parties dated
          September 9, 1998 shall remain in effect.

          6. Defined Terms.

               Except as otherwise defined in this Letter Agreement, capitalized
          terms shall have the meanings set forth in the Agreement.

<PAGE>

          Except as otherwise defined in this Letter Agreement, capitalized
          terms shall have the meanings set forth in the Agreement.

ACCEPTED AND AGREED:

UNITED HEALTHCARE                           MERCK-MEDCO MANAGED
SERVICES, INC.                              CARE, LLC.

BY:     /s/ William A. Munsell              BY:    /s/ Glenn Taylor
       ---------------------------------           -----------------------------
           (signature)                                (signature)

NAME:  William A. Munsell                   NAME:  Glenn Taylor

TITLE: President, United Health Networks    TITLE: President -
                                                   United Health Group Division

DATE:  June 29, 2001                        DATE:  June 29, 2001

                                    EXHIBIT A

                                      ***

***  Represents text deleted pursuant to a confidentiality treatment request
     filed with the Securities and Exchange Commission.

<PAGE>

       Confidential portions of this Exhibit have been deleted and filed
       separately with the Securities and Exchange Commission pursuant to
                       a claim of confidential treatment.

                                    AMENDMENT

United HealthCare Services, Inc. ("United HealthCare") and Merck-Medco Managed
Care, LLC ("PBM") hereby agree to amend that certain letter agreement, executed
June 29, 2001 by and between the parties, a copy of which is attached to this
amendment as Attachment I (the "Letter Agreement"), as follows:

     1. United Healthcare shall not be required to reinstall Prescriber Panel
        Edits ***. Accordingly, PBM hereby waives section 2(c) of the Letter
        Agreement.

     2. The programs relating to *** (collectively, the "Programs") set forth on
        Exhibit A to the Letter Agreement are hereby deleted. Accordingly, the
        attached Exhibit A Restatement dated October 26, 2001 hereby replaces
        Exhibit A to the Letter Agreement.

     3. ***

     4. ***

     5. Except as otherwise defined in this Amendment, capitalized terms shall
        have the meanings set forth in the Pharmacy Benefit Management Agreement
        between United HealthCare and PBM that was executed by United HealthCare
        on November 11, 1998 (the "Agreement"). Except as specifically modified
        by this Amendment, the Agreement and the Letter Agreement shall remain
        in effect.

ACCEPTED AND AGREED as of the 26th day of October 2001.

United HealthCare Services, Inc.               Merck-Medco Managed Care, LLC

By:  Illegible                                 By: Glenn Taylor
     ---------                                     ------------
Title: Vice President                          Title: Sr. Vice President
       --------------                                -------------------

                              EXHIBIT A RESTATEMENT
                                OCTOBER 26, 2001

                                      ***

*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission.

<PAGE>

        Confidential portions of this Exhibit have been deleted and filed
       separately with the Securities and Exchange Commission pursuant to
                       a claim of confidential treatment.

                                    AMENDMENT

United HealthCare Services, Inc., on behalf of itself and its affiliates from
time to time (collectively, "United HealthCare") and Merck-Medco Managed Care,
LLC ("PBM") hereby agree to make the following changes to the Pharmacy Benefit
Management Agreement between United HealthCare and PBM that was executed by
United HealthCare on November 11, 1998 (the "Agreement"):

     1. Section 4.6 of the Agreement is hereby revised to read as follows:

        "4.6 Minimum PDL Enrollment. Effective as of December 11, 2001 and
        continuing throughout the term of this Agreement, United HealthCare
        agrees that it shall maintain a minimum of *** Covered Persons
        (including, as a subset thereof, at least *** non-Health Plan Covered
        Persons) receiving services under this Agreement including
        participating in United HealthCare's PDL. ***

     2. Section 3.15 is hereby deleted from the Agreement.

     3. Except as otherwise defined in this Amendment, capitalized terms shall
        have the meanings set forth in the Agreement. Except as specifically
        modified by this Amendment, the Agreement as heretofore amended shall
        remain in effect.

ACCEPTED AND AGREED as of the 19th day of December 2001.

United HealthCare Services, Inc.              Merck-Medco Managed Care, LLC

By:    /s/ William A. Munsell                 By:    /s/ Glenn Taylor
       -------------------------                     --------------------------

Name:  William A. Munsell                     Name:  Glenn Taylor

Title: Vice President                         Title: Sr. Vice President

*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission.

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