Document:

exv10w3

 

Exhibit 10.3

	 	 	 
	

	 	GE

Healthcare Financial Services

	 	 	 
	CONFIDENTIAL

	 	500 West Monroe Street

Suite 1100

Chicago, IL 60661

USA

February 25, 2008

	 	 	 
	SXC Health Solutions Inc. 

2441 Warrenville Road, Suite 610 

Lisle, Illinois 60532 

Attn: Mr. Jeffrey Park 

          Chief Financial Officer

	 	T+1 312 441 7705

F+1 312 441 7770

Re:      Commitment Letter

Ladies and Gentlemen:

General Electric Capital Corporation (“GE Capital”) is pleased to commit to provide,
directly or through an affiliate, the Financing (as defined below) and to act as the sole
administrative agent for the Financing, all upon and subject to the general terms and conditions
set forth herein, in the Summary of Terms attached hereto as Exhibit A and incorporated
herein by reference (the “Term Sheet” and together with this letter, the “Commitment
Letter”) and in the Fee Letter (as defined below). GE Capital Markets, Inc. (“GECM”)
is pleased to advise you of its agreement to act as the sole lead arranger and book-running manager
for the Financing. Capitalized terms used in the text of this Commitment Letter without definition
have the meanings assigned such terms in the Term Sheet.

SXC Health Solutions Inc. (“you” or “Borrower”) have advised GE Capital and GECM
that you intend to acquire all of the issued and outstanding capital stock of National Medical
Health Card Systems, Inc. (the “Target”, and together with its subsidiaries, the
“Acquired Business”) pursuant to an Agreement and Plan of Merger to be entered into among
SXC Health Solutions Corp. (“Parent”), the Borrower, Merger Sub and Target (in the form
previously provided to GE Capital (for the avoidance of doubt, such form is the Sidley Draft
2/25/08), with such amendments, thereto, if any, as are permitted under Schedule I,
Conditions to Closing, of the Term Sheet, the “Merger Agreement”) (such transactions, the
“Transaction”). The Transaction will take the form of (a)(i) an exchange offer (the
“Exchange Offer”) by Merger Sub to acquire any and all of the outstanding shares of common
stock of Target in exchange for $7.70 in cash and a portion of a common share of Parent equal to
$3.30 (such portion to be determined based on the average of Parent’s common stock price as
reported on NASDAQ for the preceding 20 trading days) (as it may be adjusted pursuant to the Merger
Agreement, the “Consideration”) followed by (ii) a merger of Merger Sub with and into
Target with Target continuing as the surviving corporation (the “Second Step Merger”) and
each outstanding share of Target common stock not acquired in the Exchange Offer (other than
dissenting and excluded shares) being converted into the right to receive the Consideration and
each option to purchase Target common stock being converted as described in the Merger Agreement or
(b) a one step merger of Merger Sub with and into Target with Target continuing as the surviving
corporation (the “One Step Merger”) and each outstanding share of Target stock (including
the Convertible Preferred Stock) being converted into the right to receive the Consideration and
each option to purchase Target common stock being converted as described in the Merger Agreement.
The Exchange Offer and Second Step Merger are more fully described on Exhibit I. You have further
advised GE Capital that, in connection with the Transaction, you intend to obtain senior secured
financing in an amount equal to $58.0 million, which will be comprised of a $10.0 million Senior
Secured Revolving

 

 

Credit Facility and a $48.0 million Senior Secured Term Loan on the terms and conditions
described in the Term Sheet (collectively, the “Financing”).

Syndication.

GE Capital intends and reserves the right, prior to and after the execution of definitive
documentation for the Financing (the “Financing Documentation”), to syndicate a portion of
its commitments under this Commitment Letter or its loans and commitments under the Financing
Documentation, as the case may be, to one or more financial institutions pursuant to a syndication
to be managed by GECM (GE Capital and such financial institutions becoming parties to such
Financing Documentation being collectively referred to as the “Lenders”) in consultation
with the Borrower. The syndication of a portion of GE Capital’s commitments and/or loans under the
Financing is hereinafter referred to as the “Primary Syndication”. Notwithstanding the
foregoing or any other provision of the Commitment Letter, Term Sheet or Fee Letter, GE Capital and
GECM acknowledge and agree that completion of the Primary Syndication or any other syndication is
not a condition to their commitment and agreements hereunder nor shall it reduce their commitments
hereunder with respect to the Facilities.

GECM will commence the Primary Syndication promptly after your acceptance of this Commitment Letter
and the Fee Letter (as defined below). It is understood and agreed that GECM will, in consultation
with you, manage and control all aspects of the Primary Syndication, including selection of the
potential other Lenders, determination of when GECM will approach potential other Lenders and the
time of acceptance of the other Lenders’ commitments, any naming rights, titles or roles to be
awarded to the other Lenders, and the final allocations of the commitments among the other Lenders.
It is further understood and agreed that (i) no additional agents, co-agents, co-arrangers or
co-bookrunners shall be appointed, or other titles, names or roles conferred to any other Lender or
any other person or entity, by you in respect of the Financing, (ii) the amount and distribution of
fees among the other Lenders will be at GECM’s discretion, (iii) no other Lender will be offered
by, or receive from, you compensation of any kind for its participation in the Financing, except as
expressly provided for in this Commitment Letter or the Fee Letter or with the prior written
consent of GECM, (iv) there shall be no competing issuances of debt, securities or commercial bank
facilities of the Borrower, the Target or any subsidiary or affiliate thereof, being offered,
placed or arranged during or immediately prior to the syndication of the Financing.

You agree to actively assist and cooperate (and use your commercially reasonable efforts to cause
the Target, each of your and its respective affiliates and all other necessary persons to assist
and cooperate) with GE Capital and GECM in connection with the Primary Syndication. Such
assistance shall include, without limitation (a) promptly preparing and providing to GE Capital and
GECM all information with respect to Borrower and the Target and their respective subsidiaries, the
Transaction and the other transactions contemplated hereby, including all financial information and
projections (the “Projections”), as GE Capital and GECM may reasonably request in
connection with the Primary Syndication, (b) participating (and using your commercially reasonable
efforts to cause the Target to participate in) Lender and other relevant meetings (including
meetings with rating agencies) at mutually agreed upon times, (c) providing direct contact during
the Primary Syndication between the Borrower’s senior management, representatives and advisors (and
using your commercially reasonable efforts with respect to the Target’s senior management,
representatives and advisors), on the one hand, and potential Lenders, on the other hand at
mutually agreed upon times, (d) using your commercially reasonable efforts to ensure that GECM’s
syndication efforts benefit from Borrower’s and, to the extent practicable and in your view
appropriate, the Target’s existing banking relationships, and (e) assisting GECM in the preparation
of a confidential information memorandum, presentations and other information materials regarding
the Financing to be used in connection with the Primary Syndication and confirming (and using your

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commercially reasonable efforts to cause the Target to confirm), prior to such materials being made
available to potential Lenders, the completeness and accuracy of such materials in all material
respects.

Information

You hereby represent and covenant (and it is a condition to GE Capital’s commitment hereunder) that
(a) all information other than the Projections and information of a general economic or general
industry nature (the “Information”) that has been or will be made available to GE Capital
and GECM by you, the Target, the Acquired Business or any of your or their affiliates or
representatives is or will be, when furnished and when taken as a whole with all other Information,
complete and correct in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the circumstances under which
such statements are made and (b) the Projections that have been or will be made available to us by
the Borrower (including with respect to the Target and the Acquired Business) or any of the
Borrower’s or their affiliates or representatives have been or will be prepared in good faith based
upon reasonable assumptions believed by you to be reasonable (it being understood and acknowledged
that the Projections are as to future events and are not facts and are subject to significant
uncertainties and contingencies that may be beyond your control and actual results may differ
materially from the Projections). You agree that if at any time prior to the closing of the
Financing any of the representations in the preceding sentence would be incorrect if the
Information or Projections were being furnished, and such representations were being made, at such
time, then you will promptly supplement the Information or the Projections, as the case may be, so
that such representations will be correct under those circumstances. You understand that in
arranging and syndicating the Financing we may use and rely on the Information and Projections
without independent verification thereof.

You hereby authorize and agree, on behalf of yourself, the Target, and your and their respective
affiliates, that the Information, the Projections and all other information provided by or on
behalf of you, the Target and your and their affiliates to GE Capital and GECM regarding the
Borrower, the Target and their respective affiliates, the Transaction and the other transactions
contemplated hereby in connection with the Financing (collectively, “Evaluation Material”)
may be disseminated by or on behalf of GE Capital and GECM, and made available, to potential other
Lenders and other persons, who have agreed to be bound by customary confidentiality undertakings
(including, “click-through” agreements), all in accordance with GECM’s standard loan syndication
practices (whether transmitted electronically by means of a website, e-mail or otherwise, or made
available orally or in writing, including at potential Lender or other meetings). You hereby
further authorize GECM to download copies of Borrower’s and the Acquired Business’ logos from their
respective websites and post copies thereof on an Intralinks® or similar workspace and
use the logos on any confidential information memoranda, presentations and other marketing and
materials prepared in connection with the Primary Syndication.

At GECM’s request, you agree to assist (and shall use your commercially reasonable efforts to cause
the Target to assist) in the preparation of Evaluation Material, including a market version of the
confidential information memorandum, presentation and other information materials, consisting
exclusively of information that is either publicly available with respect to the Borrower, the
Target and the Borrower’s and Target’s subsidiaries and parent companies, or that is not material
with respect to Borrower, the Target, and their respective securities for purposes of United States
and Canadian federal and state securities laws. You also hereby agree that you will (a) identify
in writing (and use your commercially reasonable efforts to cause the Target to identify in
writing) and (b) clearly and conspicuously mark such Evaluation Material that does not contain any
such material non-public information referred to in the prior sentence as “PUBLIC”. You hereby
agree that by identifying such Evaluation Material pursuant to clause

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(a) of the preceding sentence and marking Evaluation Material as “PUBLIC” pursuant to clause (b) of
the preceding sentence and/or publicly filing any Evaluation Material with the U.S. Securities and
Exchange Commission or Canadian Securities Administrators, then GE Capital, GECM and the other
Lenders and potential Lenders shall be entitled to treat such Evaluation Material as not containing
any material non-public information with respect to the Borrower, the Target and the Borrower’s and
Target’s subsidiaries and parent companies for purposes of United States and Canadian federal and
state securities laws. You further acknowledge and agree that the following documents and
materials shall be deemed to be PUBLIC, whether or not so marked, and do not contain any material
non-public information: term sheets with respect to the Financing and the Transaction, and
administrative materials of a customary nature prepared by GE Capital and GECM for prospective
Lenders, such as a lender meeting invitation, bank allocation, if any, and funding and closing
memorandum. Before distribution of any Evaluation Material, you agree or agree to use your
commercially reasonable efforts to cause the Target to execute and deliver to us a letter in which
you authorize distribution of the Evaluation Material to prospective Lenders and their employees
willing to receive material non-public information, and a separate letter in which you authorize
distribution of Evaluation Material that does not contain material non-public information and
represent that no material non-public information is contained therein.

Fee Letter.

As consideration for GE Capital’s and GECM’s agreements hereunder you agree to pay GE Capital and
GECM the fees as set forth in the Term Sheet and in the Fee Letter dated the date hereof and
delivered herewith with respect to the Financing (the “Fee Letter”). Once paid, such fees
shall not be refundable under any circumstances.

Conditions.

The commitment and agreements of GE Capital hereunder, and the agreements of GECM to provide the
services described herein, are subject to the following: (a) the execution and delivery of the
Financing Documentation reasonably acceptable to GE Capital and its counsel, (b) GE Capital not
becoming aware after the date hereof of any information not previously disclosed to GE Capital
affecting Borrower, the Target, the Acquired Business or the Transaction that in GE Capital’s
reasonable judgment is inconsistent in a material and adverse manner with any such information
disclosed to GE Capital prior to the date hereof, (c) GECM having been afforded a reasonable
period of time (and in any event at least 30 days), following your and Target’s, as applicable,
written authorization for the release of the confidential information memorandum prepared as part
of the Evaluation Material and immediately prior to the date of closing of the Financing to
complete the Primary Syndication, (d) your compliance in all material respects with the terms and
provisions of this Commitment Letter and the Fee Letter and (e) the other conditions set forth in
the Term Sheet and the Fee Letter. The terms and conditions of the commitment and agreement
hereunder and of the Financing are not limited to those set forth herein and in the Term Sheet and
the Fee Letter. All terms used in this Commitment Letter and not otherwise defined herein shall
have the meanings ascribed to them in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet and Fee Letter are subject to the approval and agreement of
GE Capital and you and in a manner consistent with the Term Sheet.

Expenses.

By signing this Commitment Letter, regardless of whether the Financing closes, you agree
to pay upon demand to GE Capital and GECM all fees and expenses (including, but not limited to, all
reasonable costs and fees of external legal counsel) incurred in connection with this Commitment
Letter, the Fee Letter, the Transaction, the Financing and the transactions contemplated hereby
(and the negotiation, documentation, closing and syndication thereof).

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Revolving Credit Facility.

By signing this Commitment Letter, the Borrower agrees that on the Closing Date, no amount
(excluding issued Letters of Credit) will be drawn under the Revolving Credit Facility, and
Borrower shall have at least $20 million of cash on hand (after giving effect to the Acquisition),
of which $15,000,000 may be used to fund the AB Cash Collateral Account (as such term is defined in
the Term Sheet).

Confidentiality.

GE Capital is delivering this Commitment Letter to you with the understanding that the Borrower
will not disclose the contents of this Commitment Letter, the Fee Letter or GE Capital’s or GECM’s
involvement or interest in providing and arranging the Financing to any third party (including,
without limitation, any financial institution or intermediary) without GE Capital’s prior written
consent other than (a) to those individuals who are your directors, officers, employees, attorneys,
accountants or advisors in connection with the Financing; provided that this Commitment
Letter (but not the Fee Letter) may also be disclosed to the Target’s directors, officers,
employees or advisors, and (b) as may be compelled in a judicial or administrative proceeding or as
otherwise required by law or compulsory legal process (in which case you agree to inform GE Capital
promptly thereof). You, SXC and the Target may also disclose such matters in connection with any
public filing required to be made with or public document required to be delivered to your, SXC’s
or the Target’s stockholders in connection with the Transaction. Other than in any required public
filing or any required delivery described in the prior sentence, you agree to inform all such
persons who receive information concerning GE Capital, GECM, this Commitment Letter or the Fee
Letter that such information is confidential and may not be used for any purpose other than in
connection with the Transaction and may not be disclosed to any other person. GE Capital reserves
the right to review and approve, in advance, all materials, press releases, advertisements and
disclosures that you prepare or that is prepared on your behalf that contain GE Capital’s or any
affiliate’s name or describe GE Capital’s financing commitment or GECM’s role and activities with
respect to the Financing.

Indemnity.

Regardless of whether the Financing closes, you agree to (a) indemnify, defend and hold each of GE
Capital, GECM and their respective affiliates and the principals, directors, officers, employees,
representatives, agents and third party advisors of each of them (each, an “Indemnified
Person”), harmless from and against all losses, disputes, claims, expenses (including, but not
limited to, attorneys’ fees), damages, and liabilities of any kind (including, without limitation,
any environmental liabilities) which may be incurred by, or asserted against, any such Indemnified
Person in connection with, arising out of, or relating to, this Commitment Letter, the Fee Letter,
the Financing, the use or the proposed use of the proceeds thereof, the Transaction, any other
transaction contemplated by this Commitment Letter, any other transaction related thereto and any
claim, litigation, investigation or proceeding relating to any of the foregoing (each, a
“Claim”, and collectively, the “Claims”), regardless of whether such Indemnified
Person is a party thereto, and (b) reimburse each Indemnified Person upon demand for all legal and
other expenses incurred by it in connection with investigating, preparing to defend or defending,
or providing evidence in or preparing to serve or serving as a witness with respect to, any
lawsuit, investigation, claim or other proceeding relating to any of the foregoing (each, an
“Expense”); provided that no Indemnified Person shall be entitled to indemnity
hereunder in respect of any Claim or Expense to the extent that the same is found by a final,
non-appealable judgment of a court of competent jurisdiction to have resulted

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 directly from the bad faith, gross negligence or willful misconduct of, or breach of
agreements hereunder by, such Indemnified Person. Under no circumstances shall any party hereto or
any of their respective affiliates be liable for any punitive, exemplary, consequential or indirect
damages that may be alleged to result in connection with, arising out of, or relating to, any
Claims, this Commitment Letter, the Fee Letter, the Financing, the use or the proposed use of the
proceeds thereof, the Transaction, any other transaction contemplated by this Commitment Letter and
any other transaction related thereto. Furthermore, you hereby acknowledge and agree that the use
of electronic transmission is not necessarily secure and that there are risks associated with such
use, including risks of interception, disclosure and abuse. You agree to assume and accept such
risks by hereby authorizing the transmission of electronic transmissions, and you agree that each
of GE Capital, GECM or any of their respective affiliates will not have any liability for any
damages arising from the use of such electronic transmission systems.

Sharing Information; Absence of Fiduciary Relationship.

You acknowledge that GE Capital, GECM and their affiliates may be providing debt financing, equity
capital or other services to other companies in respect of which you may have conflicting interests
regarding the transactions described herein and otherwise. None of GE Capital, GECM or any of
their respective affiliates will furnish confidential information obtained from you, the Target,
and your and their respective officers, directors, employees, attorneys, accountants or other
advisors by virtue of the transactions contemplated by this Commitment Letter or its other
relationships with you to other companies. You also acknowledge that none of GE Capital, GECM or
any of their respective affiliates has any obligation to use in connection with the transactions
contemplated by this Commitment Letter, or furnish to you, the Target and your and their respective
officers, directors, employees, attorneys, accountants or other advisors, confidential information
obtained by GE Capital, GECM or any of their respective affiliates from other companies.

You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between
you, GE Capital or GECM has been or will be created in respect of any of the transactions
contemplated by this Commitment Letter, irrespective of whether GE Capital, GECM and/or their
respective affiliates have advised or are advising you on other matters and (b) you will not bring
or otherwise assert any claim against GE Capital or GECM for breach of fiduciary duty or alleged
breach of fiduciary duty and agree that neither GE Capital nor GECM shall have any liability
(whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of you, including your stockholders,
employees or creditors.

Assignments and Amendments.

This Commitment Letter shall not be assignable by any party hereto without the prior written
consent of all parties hereto (and any purported assignment without such consent shall be null and
void), is intended to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any person other than the parties hereto and
the Indemnified Persons; provided, that GE Capital may transfer and assign its commitment
hereunder, in whole or in part, to any of its affiliates but, upon such assignment, GE Capital
shall only be released from the portion of its commitment hereunder that has been so transferred
and assigned to the extent such assignee shall have (prior to such release) funded the portion of
the commitment so assigned.

This Commitment Letter may not be amended or waived except by an instrument in writing signed by
you and GE Capital. GE Capital and GECM may perform the duties and activities described hereunder
through any of their respective affiliates and the provisions of the paragraph entitled “Indemnity”
shall apply with equal force and effect to any of such affiliates so performing any such duties or
activities.

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Counterparts and Governing Law.

This Commitment Letter may be executed in counterparts, each of which shall be deemed an original
and all of which counterparts shall constitute one and the same document. Delivery of an executed
signature page of this Commitment Letter by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.

The laws of the State of New York shall govern all matters arising out of, in connection with or
relating to this Commitment Letter, including, without limitation, its validity, interpretation,
construction, performance and enforcement; provided that the definition of “Company Material
Adverse Effect” shall be governed by the laws of the State of Delaware.

Venue and Submission to Jurisdiction.

You consent and agree that the state or federal courts located in New York County, State of New
York, shall have exclusive jurisdiction to hear and determine any claims or disputes between or
among any of the parties hereto pertaining to this Commitment Letter, any transaction relating
hereto, any other financing related thereto, and any investigation, litigation, or proceeding in
connection with, related to or arising out of any such matters, provided, that you
acknowledge that any appeals from those courts may have to be heard by a court located outside of
such jurisdiction. You expressly submit and consent in advance to such jurisdiction in any action
or suit commenced in any such court, and hereby waive any objection, which either of them may have
based upon lack of personal jurisdiction, improper venue or inconvenient forum.

Waiver of Jury Trial.

THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS COMMITMENT LETTER, THE
FEE LETTER, THE FINANCING AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY. THIS WAIVER APPLIES TO
ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

Survival.

The provisions of this letter set forth under this heading and the headings “Syndication”,
“Information”, “Expenses”, “Confidentiality”, “Indemnity”, “Assignments and Amendments”,
“Counterparts and Governing Law”, “Venue and Submission to Jurisdiction” and “Waiver of Jury Trial”
shall survive the termination or expiration of this Commitment Letter and shall remain in full
force and effect regardless of whether the Financing closes or Financing Documentation shall be
executed and delivered; provided that in the event the Financing closes or the Financing
Documentation shall be executed and delivered, the provisions under the heading “Syndication” shall
survive only until the completion of the Primary Syndication (as determined by GECM) and the
reimbursement and indemnification contained in the Financing Documentation shall supersede such
provisions contained herein.

Integration.

This Commitment Letter and the Fee Letter supersede any and all discussions, negotiations,
understandings or agreements, written or oral, express or implied, between or among the parties
hereto and any other person as to the subject matter hereof.

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Patriot Act.

GE Capital hereby notifies you that pursuant to the requirements of the USA PATRIOT Act, Title III
of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each Lender may
be required to obtain, verify and record information that identifies Borrower, which information
includes the name, address, tax identification number and other information regarding Borrower that
will allow such Lender to identify Borrower in accordance with the PATRIOT Act. This notice is
given in accordance with the requirements of the PATRIOT Act and is effective as to each Lender.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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Please indicate your acceptance of the terms hereof and of the Fee Letter by signing in the
appropriate space below and in the Fee Letter and returning to GE Capital such signature pages to
this Commitment Letter and the Fee Letter by 5:00 p.m., New York City time on February 27, 2008.
Unless extended in writing by GE Capital (which extension may be granted or withheld by GE Capital
in its sole discretion), the commitments contained herein shall expire on the first to occur of (a)
the date and time referred to in the previous sentence unless you shall have executed and delivered
a copy of this Commitment Letter and the Fee Letter as provided above and (b) 5:00 p.m., New York
City time on August 1, 2008, unless the transactions contemplated and described by this Commitment
Letter are consummated on or before that date on the terms, and subject to the conditions,
contained herein.

Sincerely,

	 	 	 	 	 
	GENERAL ELECTRIC CAPITAL CORPORATION	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ John Dale
 

John Dale
	 	 
	Title:

	 	Duly Authorized Signatory	 	 
	 
	 	 	 	 
	AGREED AND ACCEPTED
	 	 
	THIS 25th DAY OF FEBRUARY, 2008.	 	 
	 
	 	 	 	 
	SXC HEALTH SOLUTIONS CORP.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jeffrey Park
 

	 	 
	Name:

	 	Jeffrey Park	 	 
	Title:

	 	Chief Financial Officer	 	 

 

 

Exhibit A to Commitment Letter

$58.0 Million Senior Secured Credit Facilities

Summary of Terms

February 25, 2008

This is the Term Sheet described as Exhibit A in that certain letter dated February 25, 2008.
Capitalized terms used herein without definition shall have the meanings assigned to them in the
letter referenced above.

	 	 	 
	Borrower:

	 	SXC Health Solutions Inc. (“Borrower”).
	 
	 	 
	Guarantors:

	 	SXC Health Solutions Corp. (“Parent”) and each of
Borrower’s existing and subsequently acquired or
formed direct and indirect material domestic
subsidiaries, including at the time of its
acquisition (which shall be the earlier of
consummation of the merger or acquisition of 90% of
its outstanding common stock) the Target and its
material domestic subsidiaries (each, a “Guarantor”
and collectively, the “Guarantors”; together with
the Borrower, the “Group Members”) (it being
understood that on the Closing Date, there are no
Canadian subsidiaries of Borrower or Target) .
	 
	 	 
	Administrative Agent:

	 	General Electric Capital Corporation (“GE Capital”)
	 
	 	 
	Sole Lead Arranger
	 	 
	and Book Runner:

	 	GE Capital Markets, Inc. (“GECM”)
	 
	 	 
	Lenders:

	 	A syndicate of financial institutions (including GE
Capital individually) arranged by GECM in
consultation with Borrower.
	 
	 	 
	Facilities:

	 	Up to $58.0 million in senior secured credit
facilities (the “Facilities”) consisting of the
following:
	 
	 	 
	 

	 	Term Loan: A term loan of up to $48.0 million
(“Term Loan”) will be advanced in one drawing on the
Closing Date (as defined below) and have a term of 6
years, and will be repayable in equal quarterly
installments commencing on the first day of the
first quarter after the Closing Date in accordance
with the following amortization schedule:

	 				
	 	 	Term Loan	 
	Loan Year 1:
	 	 	$480,000	 
	Loan Year 2:
	 	 	4,800,000	 
	Loan Year 3:
	 	 	4,800,000	 
	Loan Year 4:
	 	 	7,200,000	 
	Loan Year 5:
	 	 	7,200,000	 
	Loan Year 6:
	 	 	23,520,000	 

	 	 	 
	 

	 	Amounts repaid on the Term Loan may not be
reborrowed. Notwithstanding the foregoing, the
outstanding principal 

 

 

	 	 	 
	 

	 	 balance of the Term Loan
will be repayable in full on the date on the
6th anniversary of the Closing Date.
	 
	 	 
	 

	 	Revolving Credit Facility: A revolving credit
facility of up to $10.0 million (the “Revolving
Credit Facility”) under which borrowings may be
made from time to time during the period from
the Closing Date (as hereinafter defined) until
the 5th anniversary of the Closing
Date.

	 
	 	 
	 

	 	A. Letters of Credit. A to-be-determined
amount of the Revolving Credit Facility will be
available for the issuance of letters of credit
(“Letters of Credit”) for the account of
Borrower or any of its subsidiaries. No Letter
of Credit will have a termination date that is
later than (a) 7 days prior to the termination
date of the Revolving Credit Facility and (b)
other than through the operation of “evergreen
provisions” (which shall in no event extend
beyond the date referred to in clause (a)
above), 1 year after the date of issuance.

	 
	 	 
	 

	 	B. Swing Line Loans. A to-be-determined
amount of the Revolving Credit Facility will be
available to Borrower for swing line loans from
GE Capital.

	 
	 	 
	Use of Proceeds:

	 	The proceeds of the loans and advances under
the Facilities (collectively, the “Loans”) will
be used on or promptly after the date of the
consummation of the Exchange Offer and Second
Step Merger or the One Step Merger, as
applicable, solely to (a) pay a portion of the
consideration under the Acquisition Agreement
(as defined below), (b) repay all amounts owing
under the Acquired Businesses’ and Borrower’s
existing senior secured credit facilities and
all other indebtedness (other than indebtedness
to be agreed upon), (c) to pay fees and
expenses incurred in connection with the
foregoing and with the Facilities (the
“Transaction Costs”) and (d) in the case of the
Loans under the Revolving Credit Facility, for
working capital and general corporate and
similar purposes.

	 
	 	 
	Interest:

	 	Interest will be payable on the unpaid
principal amount of all Loans at a rate per
annum equal to, at the option of Borrower, (a)
the Base Rate (as defined below) plus the
Applicable Margin (as defined below), payable
quarterly in arrears or (b) so long as no event
of default then exists a per annum rate equal
to the Eurodollar Rate (as defined below) plus
the Applicable Margin, payable at the end of
the relevant interest period, but in any event,
at least quarterly.

	 
	 	 
	 

	 	“Base Rate” means a floating rate of interest
per annum equal to the higher of the rate
publicly quoted from time to time by The Wall
Street Journal as the “base rate on corporate
loans posted by at least 75% of the nation’s 30
largest banks” or the federal funds

2

 

	 	 	 
	 

	 	rate plus
50 basis points. “Eurodollar Rate” means, for
each interest period, the offered rate for
deposits in U.S. dollars in the London
interbank market for the relevant interest
period which is published by the British
Bankers’ Association, and currently appears on
Reuters Screen LIBOR01 Page, as of 11:00 a.m.
(London time) on the day which is 2 business
days prior to the first day of such interest
period adjusted for reserve requirements. When
selecting the Eurodollar Rate option, Borrower
will be entitled to choose 1, 2, 3 or 6 month
interest periods; provided that Borrower may
not select any interest period of more than 1
month until the date which is 90 days after the
Closing Date.

	 
	 	 
	 

	 	All interest will be calculated based on a
360-day year (or, in the case of Base Rate
loans calculated by reference to the prime
rate, a 365/366-day year) and actual days
elapsed. The Financing Documentation will set
forth appropriate detail describing the exact
method of calculation and relevant reserve
requirements for the interest rates referred to
above as well as Eurodollar Rate breakage
provisions, Eurodollar Rate borrowing mechanics
and other Eurodollar Rate definitions.

	 
	 	 
	 

	 	The “Applicable Margin” (on a per annum basis)
means 2.25% per annum, in the case of Base Rate
Loans, and 3.25% per annum, in the case of
Eurodollar Rate Loans.

	 
	 	 
	 

	 	Adjustments in the Applicable Margins will be
implemented quarterly, on a prospective basis,
from and after the date which is 180 days
following the Closing Date, on the 3rd business
day after the date of delivery of quarterly
financial statements (and related compliance
certificate) evidencing the need for such
adjustments in accordance with the pricing grid
set forth below (the “Pricing Grid”). Failure
to timely deliver such financial statements
shall, in addition to any other remedy provided
for in the Financing Documentation, result in
an increase of the Applicable Margins to the
highest level of such pricing grid until such
financial statements are delivered. Downward
adjustments will only take effect (and only
remain effective) provided no default has
occurred and is continuing.

	 	 	 	 	 	 	 	 	 
	Leverage Ratio	 	Base Rate:	 	Eurodollar Rate:
	Greater than
	 	 	2.50	%	 	 	3.50	%
	 3.00:1.00
	 	 	 	 	 	 	 	 
	Between 1.00:1.00 
	 	 	2.25	%	 	 	3.25	%
	 and 3.00:1.00
	 	 	 	 	 	 	 	 
	Less than 1.00:1.00
	 	 	2.00	%	 	 	3.00	%

	 	 	 
	Default Rate:

	 	From and after the occurrence
of a payment or bankruptcy
event of default, or, at the
election of the Administrative
Agent or the Required Lenders,
any other event of default,
all

3

 

	 	 	 
	 

	 	amounts under the
definitive documentation shall
bear interest at the
applicable interest rate
(including those obligations
which are determined by
reference to the rate
applicable to any other
obligation) plus 2% per annum
and the Letter of Credit Fee
(as defined below) shall be
increased by 2% per annum.

	 
	 	 
	Interest Rate Protection:

	 	Borrower shall obtain, within
a time period to be agreed
following the Closing Date,
interest rate protection
agreements on terms and with
counterparties reasonably
satisfactory to the
Administrative Agent in effect
for the three (3) years
following the Closing Date
covering a notional amount of
the Term Loan to be agreed.

	 
	 	 
	Fees:

	 	In addition to the fees
payable to GE Capital as
specified in the Fee Letter,
Borrower shall pay the
following fees:
	 
	 	 
	 

	 	A fee of 0.50% per annum of
the average daily balance of
the unused portion of the
Revolving Credit Facility will
be payable quarterly in
arrears (the “Unused Line Fee”).

	 
	 	 
	 

	 	A Letter of Credit fee (the
“Letter of Credit Fee”) equal
to the maximum undrawn face
amount of all outstanding
Letters of Credit multiplied
by an annual rate equal to the
Applicable Margin for Loans
under the Revolving Credit
Facility bearing interest
based on the Eurodollar Rate
will be due and payable
quarterly in arrears.
Borrower shall also pay
certain fees, documentary and
processing charges to an
issuer of Letters of Credit as
separately agreed with such
issuer or in accordance with
such issuer’s standard
schedule at the time of
determination thereof.

	 
	 	 
	 

	 	All fees will be calculated
based on a 360-day year and
actual days elapsed.
	 
	 	 
	Prepayments and Commitment
	 	 
	Reductions:

	 	Borrower shall make the
following mandatory
prepayments (subject to
certain basket amounts,
thresholds and exceptions to
be negotiated in the Financing
Documentation):

	 
	 	 
	 

	 	(a) Debt and Equity Issuances. Prepayments (i) in
an amount equal to 50% of the
net cash proceeds of issuances
of equity by Borrower and its
subsidiaries and (ii) in an
amount equal to 100% of the
net cash proceeds of issuances
of debt obligations of
Borrower and its subsidiaries.

	 
	 	 
	 

	 	(b) Asset Sales. Prepayments
in an amount equal to 100% of
the net cash proceeds of the
sale or other disposition of
any property or assets of
Borrower or its subsidiaries
(including insurance and
condemnation proceeds),
subject to thresholds and
reinvestment provisions to be
determined.

4

 

	 	 	 
	 

	 	Mandatory prepayments will be
applied to the outstanding
Loans: first, to the Term Loan
applied pro rata to the then
remaining scheduled
installments of the Term Loan,
next to the outstanding
principal balance of the
Revolving Credit Facility,
which shall not effect a
permanent reduction to the
Revolving Credit Facility, and
then to cash collateralize
Letters of Credit.

	 
	 	 
	 

	 	Voluntary prepayments of the Loans will be
permitted at any time provided that
Borrower pays breakage costs in connection
with any voluntary prepayments of
Eurodollar Rate Loans made on a date other
than the last day of an interest period.
Voluntary prepayments shall be applied to
the remaining installments of the Term
Loan as directed by Borrower.

	 
	 	 
	 

	 	All voluntary and mandatory prepayments
shall be accompanied by (A) accrued
interest on the amount prepaid to the date
of prepayment, and (B) in the case of a
borrowing bearing interest at the
Eurodollar Rate, breakage costs, if any.

	 
	 	 
	Collateral:

	 	All obligations of Borrower
under the Facilities and under
any interest rate protection
or other hedging arrangements
entered into with or supported
by a Lender (or any affiliate
of any Lender) and of the
Guarantors under the
guarantees will be secured by
a first priority perfected
security interests in 100% of
the outstanding equity
interests of Borrower (all of
which equity interests are
owned by Parent) and all
existing and after-acquired
real and personal property of
Borrower and each Guarantor
(other than Parent),
including, without limitation,
100% of the outstanding equity
interests (and together with
100% of the outstanding equity
interests of Borrower, the
“Pledged Stock”) in their
material domestic subsidiaries
(the “Collateral”).

	 
	 	 
	 

	 	Notwithstanding anything to
the contrary, the collateral
shall exclude the following:

	 

	 	(i) any fee owned real
property with a value of less
than an amount to be agreed
(with all required mortgages
being permitted to be
delivered post-closing;
provided that the Borrower
uses commercially reasonable
efforts to provide the
required mortgages on the
Closing Date) and all
leasehold interests, (ii)
motor vehicles and other
assets subject to certificates
of title, (iii) those assets
over which the granting of
security interests in such
assets would be prohibited by
contract, applicable law or
regulation or the
organizational documents of
any non-wholly owned
subsidiary (including
permitted liens, leases and
licenses), (iv) those assets
as to which the Administrative
Agent and the Borrower
reasonably determine that the
cost of obtaining such a
security interest or
perfection thereof are
excessive in relation to the
benefit to the Lenders of the
security to be afforded
thereby and (v) other
exceptions to be mutually
agreed upon.

5

 

	 	 	 
	 

	 	The Collateral will be free
and clear of other liens,
claims, and encumbrances,
except permitted liens and
encumbrances reasonably
acceptable to Administrative
Agent (to be set forth in the
Financing Documentation).

	 
	 	 
	 

	 	In addition, beginning on the
Closing Date and continuing
unless and until such time as
an Alternative AB Requirement
(as such term is defined
below) is satisfied, (i) the
full amount of all outstanding
payables owing to
AmerisourceBergen Drug
Corporation or any of its
affiliates (collectively,
“AmerisourceBergen”) shall
constitute indebtedness for
purposes of (x) the Leverage
Ratios set forth in the
Pricing Grid and (y) both the
minimum fixed charge coverage
ratio and the maximum total
leverage ratio set forth below
under the heading “Financial
Covenants” and both of such
ratios shall remain unchanged
from the levels set forth on
Exhibit II, (ii) the total
amount of all outstanding
payables to AmerisourceBergen
shall not exceed $5,000,000 at
any time and (iii) Borrower
shall be required to maintain
cash in a bank account with a
financial institution
satisfactory to Administrative
Agent in an amount equal to
$15,000,000 which cash shall
be subject to a first priority
lien in favor of
Administrative Agent and
Lenders pursuant to an account
control agreement in form and
substance satisfactory to
Administrative Agent (the “AB
Cash Collateral Account”).

	 
	 	 
	 

	 	Borrower shall be required to
report on a weekly basis, in a
manner satisfactory to
Administrative Agent, all then
outstanding payables owed to
AmerisourceBergen.

	 
	 	 
	 

	 	On, prior to or following the
Closing Date, Borrower may (i)
terminate, or cause the
termination of, any and all
liens, security interests and
encumbrances which
AmerisourceBergen may have
against any assets of
NMHCRxMail Order, Inc.
(“NMHCRxMail Order”) and
provide evidence of such
termination in form and
substance satisfactory to the
Administrative Agent (which
evidence may take the form of
official UCC search results
from the Delaware Department
of State) or (ii) cause any
and all liens, security
interests or encumbrances
which AmerisourceBergen may
have against any assets of
NMHCRxMail Order to be a
junior priority, second lien
which (a) shall only encumber
products purchased by
NMHCRxMail Order from
AmerisourceBergen and proceeds
thereof, (b) shall only secure
payment obligations of
NMHCRxMail Order for products
so purchased from
AmerisourceBergen that have
not yet been paid for, (c)
shall secure no more than
$7,500,000 of such unpaid
obligations described in
sub-clause (b) above and (d)
shall be subject to and
governed by an intercreditor
and subordination agreement in
favor of Administrative Agent
and Lenders, all in form and
substance satisfactory to the
Administrative Agent (the

6

 

	 	 	 
	 

	 	satisfaction of one of the two
sets of requirements set forth
in (i) or (ii) above being
referred to as satisfying an
“Alternative AB Requirement”).
In the event that the
Borrower satisfies the
Alternative AB Requirement by
meeting the requirements set
forth in clause (ii) above,
the full amount of all
outstanding payables owing to
AmerisourceBergen shall
constitute indebtedness for
purposes of (x) the Leverage
Ratios set forth in the
Pricing Grid and (y) both the
minimum fixed charge coverage
ratio and the maximum total
leverage ratio set forth below
under “Financial Covenants”
and both of such ratios shall
remain unchanged from the
levels set forth on Exhibit
II.

	 
	 	 
	Conditions Precedent to Closing:

	 	The availability of the
Facilities will be conditioned
upon the satisfaction on or
before the date of the
expiration of the commitment
letter of the conditions
precedent set forth in the
commitment letter, and the
conditions set forth in
Schedule I hereto (the date
upon which all such conditions
precedent shall be satisfied,
the “Closing Date”).

	 
	 	 
	Conditions Precedent to each
	 	 
	Borrowing under the
	 	 
	Facilities:

	 	All of the representations and
warranties in the Financing
Documentation shall be true
and correct in all material
respects; no default or event
of default shall be
continuing; and delivery of
any relevant borrowing notices
or letter of credit requests.

	 
	 	 
	Representations and Warranties:

	 	The Financing Documentation
will contain the following
representations and warranties
applicable to the Group
Members (with exceptions and
qualifications to be mutually
agreed upon):

	 
	 	 
	 

	 	Valid existence, compliance
with law, power to execute,
authorization, execution and
enforceability of the
Financing Documentation and
certain related documents (and
accuracy of representations
and warranties thereunder, and
no conflict thereof with
material agreements or
applicable law), ownership of
the Group Members, accuracy of
financial statements, absence
of material adverse effect,
solvency, absence of material
litigation, taxes, compliance
with margin regulations,
absence of burdensome
restrictions and defaults,
inapplicability of Investment
Company Act, insurance, labor
matters, ERISA, environmental
and healthcare matters,
necessary rights to
intellectual property, title
to and ownership of properties
and accuracy of all
information provided.

	 
	 	 
	Affirmative Covenants:

	 	The Financing Documentation
shall contain the following
affirmative covenants
applicable to the Group
Members (with exceptions and
qualifications to be mutually
agreed upon):

7

 

	 	 	 
	 

	 	Preservation of corporate
existence, compliance with
laws (including environmental
and healthcare laws), payment
of taxes and other claims
resulting in liens,
maintenance of properties,
permits, insurance and books
and records, and access to
books and records and
visitation rights, use of
proceeds, further assurances
(including provision of
additional collateral and
guaranties consistent with the
paragraph above entitled
“Collateral” and delivery of
landlord, mortgagee and bailee
waivers for locations
containing material Collateral
or information systems) and
maintenance of cash management
systems.

	 
	 	 
	Financial Covenants:

	 	The Financing Documentation shall contain the following financial covenants:
	 
	 	 
	 

	 	(a) minimum fixed charge coverage ratio as set forth on
Exhibit II
	 

	 	(b) maximum total leverage ratio as set forth on Exhibit II
	 

	 	(c) maximum capital expenditures as set forth on Exhibit II

	 	 	 
	Reporting Requirements:

	 	The Financing Documentation shall contain
the following financial and other
reporting requirements applicable to the
Group Members:

	 
	 	 
	 

	 	Delivery of quarterly financial statements
and of annual audited financial
statements; delivery of management
letters; delivery of projections and an
annual business plan; annual insurance
reports; quarterly schedules of
intercompany loan balances; copies of
certain reports sent to other parties and
with respect to defaults, mandatory
prepayment events, events that are
material and other information reasonably
requested by the Administrative Agent.

	 
	 	 
	Negative Covenants:

	 	The Financing Documentation shall contain
the following negative covenants
applicable to the Group Members (with
exceptions and baskets to be mutually
agreed upon):

	 
	 	 
	 

	 	Limitations on indebtedness (including
guaranties and speculative hedging
transactions), liens, investments
(including loans and joint ventures),
intercompany investments and loans from
Borrower and/or Guarantors to
non-Guarantor subsidiaries, capital
expenditures, asset dispositions
(including sale and leaseback
transactions), restricted payments
(consisting of dividends, redemptions and
repurchases with respect to capital stock,
cancellation of debt), prepayments of
indebtedness (including redemptions and
repurchases), fundamental corporate
changes (including mergers,
consolidations, acquisitions or creation
of subsidiaries), changes in nature of
business, transactions with affiliates,
third-party restrictions on indebtedness,
liens, investments or restricted payments,
modification of constituent documents and

8

 

	 	 	 
	 

	 	certain other agreements, changes in
accounting treatment, financial reporting
practices or fiscal year, activities of
Borrower and compliance with margin
regulations and ERISA, environmental and
healthcare laws.

	 
	 	 
	Events of Default:

	 	The Financing Documentation shall contain
the following events of default applicable
to the Group Members (with certain grace
periods and thresholds to be mutually
agreed upon):

	 
	 	 
	 

	 	Failure to pay principal, interest or any
other amount when due; representations and
warranties incorrect in any material
respect when made or deemed made; failure
to comply with covenants in the Financing
Documentation; cross-default to other
indebtedness; failure to satisfy or stay
execution of judgments; bankruptcy or
insolvency; actual or asserted by a Group
Member invalidity or impairment of any
part of the Financing Documentation
(including the failure of any lien to
remain perfected); and change of ownership
or control.

	 
	 	 
	Requisite Lenders:

	 	Lenders holding more than 50% of total
commitments and/or Loans.
	 
	 	 
	Miscellaneous:

	 	The Financing Documentation will include
(a) standard yield protection provisions
(including, without limitation, provisions
relating to compliance with risk-based
capital guidelines, increased costs,
withholding taxes, illegality and
Eurodollar Rate breakage fees), (b) a
waiver of consequential and punitive
damages and right to a jury trial, (c)
customary agency, set-off and sharing
language and (d) other miscellaneous
provisions as are usual and customary for
financings of this kind (including voting,
indemnity and expense provisions).

	 
	 	 
	Assignments and Participations:

	 	Lenders will be permitted to make
assignments in a minimum amount of $1
million (unless such assignment is of a
Lender’s entire interest in a Facility) to
other financial institutions acceptable to
Administrative Agent and, so long as no
event of default has occurred and is
continuing, Borrower, which acceptances
shall not be unreasonably withheld or
delayed; provided however, that the
approval of Borrower shall not be required
in connection with assignments to other
Lenders (or to affiliates or approved
funds of Lenders).

	 
	 	 
	Governing Law and Submission
	 	 
	to Jurisdiction:

	 	New York

9

 

SCHEDULE I

to

Summary of Terms

Conditions to Closing

The availability of each of the Facilities, in addition to the conditions set forth in the
Commitment Letter and Exhibit A thereto, shall be subject to the satisfaction of the
following conditions:

1. One Step Merger. If the Transaction is structured as a One Step Merger, the One Step
Merger shall have been or shall substantially concurrently be consummated in accordance with the
terms of the Merger Agreement, without giving effect to any modifications, amendments, express
waivers or consents thereto that are materially adverse to the Lenders (including without
limitation the definition of “Company Material Adverse Effect” therein) without the consent of GE
Capital (which consent shall not be unreasonably withheld, delayed or conditioned).

2. Exchange Offer. If the Transaction is structured as an Exchange Offer and Second Step
Merger, Merger Sub shall have accepted for payment the shares tendered and not withdrawn in the
Exchange Offer (the date of such acceptance, the “Acceptance Date”) and all the conditions
to the Exchange Offer shall have been satisfied in accordance with the terms of the Merger
Agreement, without giving effect to any modifications, amendments, express waivers or consents
thereto that are materially adverse to the Lenders (including without limitation the provisions of
Section 1.4, Top-Up Option, or definitions of “Minimum Contribution” and “Company Material Adverse
Effect” therein) without the consent of GE Capital (which consent shall not be unreasonably
withheld, delayed or conditioned).

3. Equity. The Exchange Ratio (as such term is defined in the Sidley Draft
2/25/08 of the Merger Agreement) shall be 0.217.

4. Receipt of Financial Statements. Administrative Agent and the Lenders shall have
received (a) as soon as available (and to the extent available), audited consolidated financial
statements of Borrower for the fiscal period ending December 31, 2007, which statements shall be
unqualified, (b) as soon as available, interim unaudited monthly consolidated financial statements
of Borrower for each fiscal month ended after December 31, 2007 and (c) as soon as available,
interim unaudited monthly consolidated financial statements of Target for each fiscal month ended
after October 31, 2007.

5. Receipt of Pro Forma Financial Statements and Business Plan. Administrative Agent and
the Lenders shall have received and be satisfied with (a) a pro forma estimated balance sheet of
Borrower and its subsidiaries at the Closing Date after giving effect to the Transaction and the
transactions contemplated thereby, and (b) Borrower’s business plan which shall include a financial
forecast on a quarterly basis for the first twelve months after the Closing Date and on an annual
basis thereafter through 2014 prepared by Borrower’s management. Administrative Agent acknowledges
that the pro forma balance sheet and business plan that it has received as of the date hereof are
satisfactory.

6. No Defaults. There shall not occur as a result of, and after giving effect to, the
consummation of the Transaction and the funding of the Facilities, a default (or any event which
with the giving of notice or lapse of time or both will be a default) under any of Borrower’s, the
Guarantors’ or their respective subsidiaries’ material debt instruments and other material
agreements.

 

 

7. Minimum EBITDA; Maximum Leverage. The consolidated adjusted EBITDA (with adjustments for
Borrower for loss on disposal of capital assets of $133,000 and severance costs of $719,000 and
adjustments for Target for impairment loss of $752,000, one-time termination benefits of
$2,941,000, consulting fees of $1,128,000, rebate error of $456,000 and non-recurring legal costs
of $1,051,000) of the Borrower and Target for the twelve fiscal month period most recently ended
prior to the Closing Date shall be no less than $28.0 million. The consolidated leverage ratio of
Borrower on the Closing Date after giving effect to the initial borrowing under the Facilities and
the other transactions described herein shall not exceed 1.80 to 1.00.

8. No Material Adverse Effect. There shall not have been any events, circumstances,
developments or other changes in facts that would, in the aggregate, have a Material Adverse
Effect. “Material Adverse Effect” means (a) a “Company Material Adverse Effect” (as defined
in the Acquisition Agreement), or (b) an effect that results in or causes, or could reasonably be
expected to result in or cause, a material adverse change in any of (i) since December 31, 2006,
the financial condition, business, performance, operations or property of Borrower and its
subsidiaries, taken as a whole, (ii) the ability of Borrower or any Guarantor to perform its
obligations under any Financing Documentation and (iii) the validity or enforceability of any
Financing Documentation or the rights and remedies of the Administrative Agent, the Lenders and the
other Secured Parties under any Financing Documentation.

9. Other Customary Conditions. Other customary closing conditions relating to delivery of
satisfactory legal opinions of counsel to the Group Members, solvency certificate from the chief
financial officer of Borrower, creation and perfection of liens on the Collateral as provided for
in each paragraph entitled “Collateral” above, cash management system for Borrower and each
Guarantor (including springing blocked account agreements for all deposit accounts of Borrower and
its subsidiaries), which may be put in place within 60 days after closing, receipt of mortgage
supporting documents for all properties subject to mortgage (including, without limitation, title
insurance policies, current certified surveys, evidence of zoning and other legal compliance,
environmental reports, certificates of occupancy, legal opinions), which may be put in place within
60 days after closing, no conflict with applicable law or other material agreements, obtaining all
necessary governmental approval and third party consents, evidence of payment of certain existing
debt and liens, if any, except as otherwise mutually agreed, evidence of corporate authority, copy
of organizational documents, insurance reasonably satisfactory to the Administrative Agent (and
receipt of additional insured and loss payee insurance certificates) and payment of all fees and
expenses then due and owing under the Commitment Letter, Term Sheet and the Fee Letter.

2

 

Exhibit I

Summary Description of Exchange Offer and Second Step Merger

1. Parent, Borrower and/or Merger Sub commence the Exchange Offer and file the
applicable information with the Securities and Exchange Commission.

2. At least 5 business days prior to the Acceptance Date, Borrower and the Lenders
would execute and deliver to each other the Credit Agreement.

3. (a) At the expiration of the Exchange Offer (which shall be no earlier than 20
business days after it is commenced), if all of the conditions to the closing of the
Exchange Offer have been satisfied or waived, Merger Sub will accept
for payment the shares of Target stock properly tendered in the Exchange Offer and not withdrawn and
(b) simultaneously with the acceptance described in clause 3(a), the Lenders
would provide the Financing in immediately available funds to Borrower.

4. If the shares accepted for payment in the Exchange Offer constitute less than
90% of the outstanding common stock of Target, on or promptly following the Acceptance
Date (A) Merger Sub exercises the Top Up Option (as defined in the Merger Agreement),
delivers to Target (i) cash in an amount equal to the number of shares of Target common
stock issues pursuant to the Top Up Option multiplied by an amount equal to the par
value of a share of Target Common Stock and (ii) a promissory note for an aggregate
principal amount equal to $11.00 multiplied by the number of shares of Target common
stock issued pursuant to the Top Up Option, less the amount described in clause
(i) and (B) Target will issue to Merger Sub the shares to be issued pursuant to the
Top Up Option.

5. On the date Merger Sub acquires the shares of Target common stock issued
pursuant to the Top Up Option or promptly thereafter, Merger Sub and the Company will
consummate the Second Step Merger.

3exv4w1

 

Exhibit 4.1

STOCKHOLDER AGREEMENT

BY AND AMONG

SXC HEALTH SOLUTIONS CORP.,

NEW MOUNTAIN PARTNERS, L.P.,

AND

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

DATED AS OF FEBRUARY 25, 2008

 

 

INDEX OF DEFINED TERMS

	 	 	 	 	 
	 	 	Page
	Agreement
	 	 	1	 
	Beneficial Ownership
	 	 	2	 
	Beneficially Own
	 	 	2	 
	Beneficially Owned
	 	 	2	 
	Claims
	 	 	11	 
	Company
	 	 	1	 
	Company Common Stock
	 	 	1	 
	Company Convertible Preferred Stock
	 	 	1	 
	Company Stock
	 	 	1	 
	Covered Shares
	 	 	2	 
	Depositary
	 	 	3	 
	Encumbrance
	 	 	2	 
	Existing Shares
	 	 	2	 
	Fundamental Amendment
	 	 	13	 
	Grantees
	 	 	5	 
	Lock-Up Period
	 	 	8	 
	Meeting Right
	 	 	12	 
	Merger
	 	 	1	 
	Merger Agreement
	 	 	1	 
	Merger Sub
	 	 	1	 
	Offer
	 	 	1	 
	Operative Date
	 	 	2	 
	Other Stockholder
	 	 	2	 
	Parent
	 	 	1	 
	Prohibited Activity
	 	 	11	 
	Registration Rights Agreement
	 	 	8	 
	Releasees
	 	 	11	 
	Section 3.1(a) Matters
	 	 	5	 
	Stockholder
	 	 	1	 
	Tender Documents
	 	 	3	 
	Traded Securities
	 	 	11	 
	Transfer
	 	 	2	 
	US Corp.
	 	 	1	 
	Valuation Period
	 	 	11	 

ii

 

STOCKHOLDER AGREEMENT

          STOCKHOLDER AGREEMENT, dated as of February 25, 2008 (this “Agreement”), by and among
SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada
(“Parent”), New Mountain Partners, L.P., a Delaware limited partnership (the
“Stockholder”), and National Medical Health Card Systems, Inc., a Delaware corporation (the
“Company”).

W I T N E S S E T H:

          WHEREAS, concurrently with the execution of this Agreement, Parent, SXC Health Solutions,
Inc., a Texas corporation (“US Corp.”), Comet Merger Corporation, a newly-formed Delaware
corporation that is wholly-owned by US Corp. and an indirect wholly-owned subsidiary of Parent
(“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger, dated as
of the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the
“Merger Agreement”) pursuant to which, among other things, Merger Sub will commence an
exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par
value $0.001 per share, of the Company (“Company Common Stock”), and following the
consummation of the Offer (or, subject to certain conditions, in lieu thereof), Merger Sub will
merge with and into the Company (the “Merger”) and each outstanding share of Company Common
Stock and each outstanding share, if any, of the Company’s Series A 7% Convertible Preferred Stock,
par value $0.10 per share (“Company Convertible Preferred Stock”, and together with the
Company Common Stock, “Company Stock”), will be converted into the right to receive the
merger consideration specified therein.

          WHEREAS, as of the date hereof, the Stockholder is the record and beneficial owner, in the
aggregate, of 6,790,797 outstanding shares of the Company Convertible Preferred Stock;

          WHEREAS, as a material inducement to Parent entering into the Merger Agreement, Parent has
required that the Stockholder agree, and the Stockholder has agreed, to enter into this agreement
and abide by the covenants and obligations with respect to the Covered Shares (as hereinafter
defined) set forth herein.

          NOW THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:

ARTICLE I

GENERAL

     1.1. Defined Terms . The following capitalized terms, as used in this Agreement, shall have the meanings set forth
below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Merger Agreement.

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          “Beneficial Ownership” by a Person of any securities includes ownership by any Person
who, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares (i) voting power which includes the power to vote, or to direct the voting
of, such security; and/or (ii) investment power which includes the power to dispose, or to direct
the disposition, of such security; and shall otherwise be interpreted in accordance with the term
“beneficial ownership” as defined in Rule 13d-3 adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended; provided that for purposes of
determining Beneficial Ownership, a Person shall be deemed to be the Beneficial Owner of any
securities which such Person has, at any time during the term of this Agreement, the right to
acquire pursuant to any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to
acquire such securities is exercisable immediately or only after the passage of time, including the
passage of time in excess of 60 days, the satisfaction of any conditions, the occurrence of any
event or any combination of the foregoing). The terms “Beneficially Own” and
“Beneficially Owned” shall have a correlative meaning.

          “Covered Shares” means, with respect to the Stockholder, the Stockholder’s Existing
Shares, together with any shares of Company Stock or other voting capital stock of the Company and
any securities convertible into or exercisable or exchangeable for shares of Company Stock or other
voting capital stock of the Company, in each case, that the Stockholder acquires Beneficial
Ownership of on or after the date hereof.

          “Encumbrance” means any security interest, pledge, mortgage, lien (statutory or
other), charge, option to purchase, lease or other right to acquire any interest or any claim,
restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other
encumbrance of any kind or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or other title
retention agreement), excluding restrictions under securities laws and excluding any Encumbrance
set forth in the Certificate of Designations.

          “Existing Shares” means, with respect to the Stockholder, the number of shares of
Company Stock Beneficially Owned and owned of record by the Stockholder, as set forth in the
recitals.

          “Operative Date” means the Acceptance Date, if the transactions contemplated by the
Merger Agreement are effected by means of the Offer followed by the Second Step Merger, and means
the Closing, if the transactions contemplated by the Merger Agreement are effected as a One Step
Merger.

          “Other Stockholder” means New Mountain Affiliated Investors, L.P., a Delaware limited
partnership and the holder of the outstanding shares of Company Convertible Preferred Stock not
held by the Stockholder.

          “Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of (by merger (including by conversion into securities or other
consideration), by tendering into any tender or exchange offer, by operation of law or otherwise),
either voluntarily or involuntarily, or to enter into any contract, option or other

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arrangement or
understanding with respect to the voting of or sale, transfer, assignment, pledge, encumbrance,
hypothecation or similar disposition of (by merger, by tendering into any tender or exchange offer,
by operation of law or otherwise) (but does not include any conversion of the Company Convertible
Preferred Stock into Company Common Stock after the Certificate of Amendment has become effective).

ARTICLE II

TENDERING

     2.1.  Agreement to Tender.

          (a) The Stockholder hereby agrees that, within five business days after commencement of the
Offer, the Stockholder shall validly tender or cause to be tendered in the Offer all of the shares
of Company Stock represented by the Stockholder’s Covered Shares pursuant to and in accordance with
the terms of the Offer, by delivering to the depositary designated in the Offer (the
“Depositary”) (i) an executed letter of transmittal with respect to the Covered Shares,
(ii) a certificate or certificates representing the Covered Shares, (iii) all other documents or
instruments required to be delivered pursuant to the terms of the Offer, and (iv) a letter of
instruction signed by the Stockholder instructing the Company to convert the Covered Shares into
Company Common Stock effective upon receipt of a certificate from an executive officer of Parent
stating that (1) all of the conditions to the Offer (other than the Minimum Condition) have been
satisfied or waived, (2) upon the conversion by the Stockholder of its Covered Shares into Company
Common Stock and the conversion by the Other Stockholder of the shares of Company Stock owned by it
into Company Common Stock, the Minimum Condition will have been satisfied, and (3) Merger Sub
stands ready to, and will, immediately following such conversion by the Stockholder and the Other
Stockholder, accept for payment all shares of Company Common Stock validly tendered in the Offer
and not theretofore withdrawn (all of the foregoing documents, the “Tender Documents”).

          (b) The Stockholder hereby agrees that once the Tender Documents shall have been delivered to
the Depositary, the Stockholder will not withdraw, nor permit the withdrawal of, any Tender
Documents from the Offer, unless and until (i) the Offer shall have been terminated by Merger Sub
in accordance with the terms of the Merger Agreement, or (ii) this Agreement shall have been
terminated in accordance with Section 6.1.

          (c) Notwithstanding the provisions of Sections 2.1(a) and 2.1(b), in the event of a Change in
Recommendation made in compliance with the Merger Agreement, the obligation of the Stockholder to
tender and not withdraw its Covered Shares in the manner set forth in this Section 2.1 shall only
apply to an aggregate number of Covered Shares that is equal to 30% of the total number of shares
of Company Stock outstanding on the Acceptance Date, and the Stockholder may or may not tender the
balance of its Covered Shares in the Offer, and may
withdraw from the Offer all or any portion of such balance of its Covered Shares that it may
previously have tendered, as the Stockholder, in its sole discretion, determines.

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ARTICLE III

VOTING

     3.1. Agreement to Vote.

          (a) The Stockholder hereby irrevocably and unconditionally agrees that during the period
beginning on the date hereof and ending on the earliest of (x) the Operative Date, (y) the
termination of the Merger Agreement in accordance with its terms or (z) the termination of this
Agreement in accordance with its terms, at the Company Stockholders Meeting and at any other
meeting of the stockholders of the Company, however called, including any adjournment or
postponement thereof, and in connection with any written consent of the stockholders of the
Company, the Stockholder shall, in each case, to the fullest extent that such matters are submitted
for the vote or written consent of the Stockholder and that the Covered Shares are entitled to vote
thereon or consent thereto:

          (i) appear at each such meeting or otherwise cause the Covered Shares as to which the
Stockholder controls the right to vote to be counted as present thereat for purposes of
calculating a quorum; and

          (ii) vote (or cause to be voted), in person or by proxy, or deliver (or cause to be
delivered) a written consent covering, all of the Covered Shares as to which the Stockholder
controls the right to vote (or, if applicable, only such portion of the Covered Shares as is
provided in Section 3.1(b)) (i) in favor of the adoption of the Merger Agreement and any
related proposal in furtherance thereof, as reasonably requested by Parent, submitted for
the vote or written consent of stockholders; (ii) against any action or agreement submitted
for the vote or written consent of stockholders that the Stockholder knows is in opposition
to, or competitive or materially inconsistent with, the Offer or the Merger or that the
Stockholder knows would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of the Company contained in the Merger Agreement, or of
the Stockholder contained in this Agreement; and (iii) against any Acquisition Proposal and
against any other action, agreement or transaction submitted for the vote or written consent
of stockholders that the Stockholder knows would impede, interfere with, delay, postpone,
discourage, frustrate the purposes of or adversely affect the Offer, the Merger or the other
transactions contemplated by the Merger Agreement or this Agreement or the performance by
the Company of its obligations under the Merger Agreement or by the Stockholder of its
obligations under this Agreement, including, but not limited to: (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business combination
involving the Company or any subsidiary of the Company; (B) any sale, lease or transfer of a
material amount of assets of the Company (including capital stock or other equity interest
in its Subsidiaries) or any subsidiary of the Company; (C) any reorganization,
recapitalization, dissolution or liquidation of the Company or any
subsidiary of the Company; (D) any change in a majority of the board of directors of
the Company; (E) any amendment to the Company’s certificate of incorporation or bylaws
(except for any amendment to increase the authorized capital stock); and (F) any change in
the capitalization of the Company or the Company’s corporate structure.

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The obligations of the Stockholder specified in this Section 3.1(a) shall apply whether or not the
Offer, the Merger or any action described above is recommended by the Board of Directors of the
Company. Any such vote shall be cast (or consent shall be given) by the Stockholder in accordance
with such procedures relating thereto so as to ensure that it is duly counted, including for
purposes of determining whether a quorum is present.

          (b) Notwithstanding the provisions of Section 3.1(a), in the event of a Change in
Recommendation made in compliance with the Merger Agreement, the obligation of the Stockholder to
vote (or cause to be voted), or to deliver (or cause to be delivered) a written consent with
respect to, the Covered Shares in the manner set forth in this Section 3.1 shall, with respect to
any combined vote of holders of Company Common Stock and Company Convertible Preferred Stock, only
apply to an aggregate number of Covered Shares entitled to vote in respect of such matter that is
equal to 30% of the total vote of the shares of Company Stock entitled to vote in respect of such
matter, and shall terminate, together with the authority of each of the proxies set forth in
Section 3.3, with respect to the balance of the Covered Shares, and the Stockholder may vote (or
cause to be voted), or deliver (or cause to be delivered) a written consent with respect to, such
balance of its Covered Shares as the Stockholder, in its sole discretion, determines.

     3.2. No Inconsistent Agreements. The Stockholder hereby covenants and agrees that,
except for this Agreement or as set forth in Section 7 of the Certificate of Designations, and
except as may be permitted by Section 5.4(b), it (a) has not entered into, and shall not enter into
at any time while this Agreement remains in effect, any voting agreement or voting trust with
respect to the Covered Shares with respect to any of the matters described in Section 3.1(a)(ii)
(the “Section 3.1(a) Matters”), (b) has not granted, and shall not grant at any time while
this Agreement remains in effect (except pursuant to Section 3.3), a proxy, consent or power of
attorney with respect to the Covered Shares with respect to any of the Section 3.1(a) Matters and
(c) has not knowingly taken and shall not knowingly take any action that would make any
representation or warranty of the Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling the Stockholder from performing any of its obligations under this
Agreement.

     3.3. Proxy. Without in any way limiting the Stockholder’s right to vote the Covered Shares
in its sole discretion on any matters other than the Section 3.1(a) Matters that may be submitted
to a stockholder vote, consent or other approval, the Stockholder hereby irrevocably appoints as
its proxy and attorney-in-fact, Gordon Glenn and Jeffrey Park, pursuant to a proxy to be delivered
to Parent substantially in the form attached hereto as Annex A, in their respective capacities as
officers of Parent, and any individual who shall hereafter succeed to any such officer of Parent,
and any other Person designated in writing by Parent (collectively, the “Grantees”), each
of them individually, with full power of substitution, to vote or execute written consents
with respect to the Covered Shares as to which the Stockholder controls the right to vote in
accordance with Section 3.1 (or, if applicable, only such portion of the Covered Shares as is
provided in Section 3.1(b)) and, in the discretion of the Grantees, with respect to any proposed
postponements or adjournments of any annual or special meeting of the stockholders of the Company
at which any of the Section 3.1(a) Matters was to be considered. This proxy is coupled with an
interest and shall be irrevocable until the earliest of (i) the Operative Date, (ii) the
termination of the Merger Agreement in accordance with its terms, or (iii) the termination of

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this
Agreement in accordance with its terms, in which event this proxy shall automatically be revoked
without any further action by any party. The Stockholder will take such further action or execute
such other instruments as may be necessary to effectuate the intent of this proxy and hereby
revokes any proxy previously granted by it with respect to the Covered Shares with respect to any
of the Section 3.1(a) Matters. So long as the proxy granted under this Section 3.3 is a valid
uncontested proxy that is effective to deliver the votes of the Covered Shares (or, if applicable,
only such portion of the Covered Shares as is provided in Section 3.1(b)), the Stockholder shall be
deemed to be fulfilling its obligations under Section 3.1. If Parent believes that such proxy is
not a valid proxy or if Parent otherwise does not wish to utilize the proxy, Parent will so notify
the Stockholder in writing so that the Stockholder will be able to perform its obligations under
Section 3.1.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     4.1. Representations and Warranties of the Stockholder. The Stockholder hereby represents
and warrants to Parent as follows:

          (a) Organization; Authorization; Validity of Agreement; Necessary Action . The
Stockholder is duly organized and is validly existing and in good standing under the laws of the
jurisdiction of its formation. The Stockholder has full power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by the Stockholder of this Agreement, the
performance by it of its obligations hereunder and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by the Stockholder and no other actions
or proceedings on the part of the Stockholder or any stockholder thereof are necessary to authorize
the execution and delivery by it of this Agreement, the performance by it of its obligations
hereunder or the consummation by it of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of the other parties hereto, constitutes a legal, valid and binding
obligation of the Stockholder, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws affecting
the rights of creditors generally and the availability of equitable remedies (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

          (b) Ownership. The Stockholder’s Existing Shares are, and all of the Covered Shares
owned by the Stockholder from the date hereof through and on the Operative Date will be,
Beneficially Owned and owned of record by the Stockholder, except that, in the case of the
Offer, the Company Convertible Preferred Stock will have been converted into Company Common
Stock in accordance with the terms of this Agreement. The Stockholder has good and marketable
title to the Stockholder’s Existing Shares, free and clear of any Encumbrances. As of the date
hereof, the Stockholder’s Existing Shares constitute all of the shares of Company Stock
Beneficially Owned or owned of record by the Stockholder. Except for the rights granted to Parent
hereby, the Stockholder has and will have at all times through the Operative Date sole voting power
(including the right to control such vote as contemplated herein)
with respect to the Section
3.1(a) Matters, sole power of disposition, sole power to issue instructions with respect to

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the Section
3.1(a) Matters, and sole power to agree to all of the matters set forth in this Agreement,
in each case, with respect to all of the Stockholder’s Existing Shares and with respect to all of
the Covered Shares owned by the Stockholder at all times through the Operative Date.

          (c) No Violation. The execution, delivery and performance of this Agreement by the
Stockholder does not and will not (whether with or without notice or lapse of time, or both) (i)
violate any provision of the certificate of formation or bylaws or other comparable governing
documents, as applicable, of the Stockholder, (ii) violate, conflict with or result in the breach
of any of the terms or conditions of, result in any (or the right to make any) modification of or
the cancellation or loss of a benefit under, require any notice, consent or action under, or
otherwise give any Person the right to terminate, accelerate obligations under or receive payment
or additional rights under, or constitute a default under, any Contract to which the Stockholder is
a party or by which it is bound or (iii) violate any Law applicable to the Stockholder or by which
any of the Stockholder’s assets or properties is bound, except for any of the foregoing as would
not, either individually or in the aggregate, impair the ability of the Stockholder to perform its
obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

          (d) Consents and Approvals. Other than compliance with applicable securities laws and
Laws relating to competition (including any filing under the HSR Act), the execution and delivery
of this Agreement by the Stockholder does not, and the performance by the Stockholder of its
obligations under this Agreement and the consummation by it of the transactions contemplated hereby
will not, require the Stockholder to obtain any consent, approval, authorization or permit of, or
to make any filing with or notification to, any Governmental Entity, except where the failure to
obtain such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, either individually or in the aggregate, prevent or delay the performance
by the Stockholder of any of its obligations under this Agreement.

          (e) Absence of Litigation. As of the date hereof, there is no Action pending or, to
the knowledge of the Stockholder, threatened against the Stockholder or any of its Affiliates
before or by any Governmental Entity that would impair the ability of the Stockholder to perform
its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

          (f) Finder’s Fees. Except as disclosed pursuant to the Merger Agreement, no
investment banker, broker, finder or other intermediary is entitled to a fee or commission from
Parent, US Corp., Merger Sub or the Company in respect of this Agreement based upon any arrangement
or agreement made by or at the direction of the Stockholder.

          (g) Reliance by Parent, US Corp. and Merger Sub. The Stockholder understands and
acknowledges that Parent, US Corp. and Merger Sub are entering into the Merger Agreement in
reliance upon the Stockholder’s execution and delivery of this Agreement and the representations
and warranties of the Stockholder contained herein.

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ARTICLE V

OTHER COVENANTS

     5.1. Prohibition on Transfers, Other Actions.

          (a) Except as permitted by Section 5.4(b), the Stockholder hereby agrees not to (i) Transfer
any of the Covered Shares, Beneficial Ownership thereof or any other interest specifically therein
(including by tendering into another tender or exchange offer), except to participate in the Offer
or the Merger; (ii) enter into any agreement, arrangement or understanding with any Person (other
than Parent, US Corp. or Merger Sub), or knowingly take any other action, that violates or
conflicts with the Stockholder’s representations, warranties, covenants and obligations under this
Agreement; or (iii) knowingly take any action that could restrict or otherwise affect the
Stockholder’s legal power, authority and right to comply with and perform its covenants and
obligations under this Agreement. Any Transfer in violation of this provision shall be void.

          (b) The Stockholder hereby covenants and agrees that for a period of one year following the
Operative Date (the “Lock-Up Period”), the Stockholder shall not Transfer, or consent to
any Transfer of, any shares of Parent Common Stock, or any interest therein, or enter into any
Contract, option or other arrangement (including any profit sharing or other derivative
arrangement) with respect to the Transfer of, any shares of Parent Common Stock or any interest
therein to any person; provided that the Stockholder may participate during the Lock-Up
Period with respect to its shares of Parent Common Stock in any merger, tender offer or other
business combination or other transaction, in each case, which the Board of Directors of Parent has
recommended to Parent’s stockholders. The Stockholder hereby agrees that, in order to ensure
compliance with the restrictions referred to herein, Parent may issue appropriate “stop transfer”
instructions to its transfer agent in respect of the Stockholder’s Parent Common Stock. Parent
agrees that it will cause any stop transfer instructions imposed pursuant to this Section 5.1(b) to
be lifted, and any legended certificates of Parent Common Stock delivered to the Stockholder
pursuant to the Merger Agreement to be replaced with certificates not bearing such legend, promptly
following the termination of the Lock-Up Period. The restrictions on transfer provided in this
Section 5.1(b) shall be in addition to any restrictions on transfer of the Parent Common Stock
imposed by any applicable Laws.

     5.2. Registration Rights Agreement. Concurrently with the execution of this
Agreement, Parent and the Stockholder are entering into a Registration Rights Agreement (the
“Registration Rights Agreement”).

     5.3. Stock Dividends, etc. In the event of a stock split, stock dividend or distribution, or any change in the Company
Stock by reason of any split-up, reverse stock split, recapitalization, combination,
reclassification, exchange of shares or the like, the terms “Existing Shares” and “Covered Shares”
shall be deemed to refer to and include such shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of such shares may be changed
or exchanged or which are received in such transaction.

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     5.4. No Solicitation.

          (a) The Stockholder hereby agrees that during the term of this Agreement, except as permitted
by Section 5.4(b), it shall not, and shall use its reasonable best efforts to ensure that any of
its Affiliates or Representatives do not, directly or indirectly, (i) solicit, initiate, knowingly
encourage or facilitate (including by way of furnishing non-public information) the submission of
an Acquisition Proposal or any proposal, offer or inquiry that may reasonably be expected to lead
to an Acquisition Proposal, (ii) participate or enter into or engage in negotiations or discussions
with, or provide any non-public information or data to, any person (other than Parent or any of its
affiliates or representatives) relating to any Acquisition Proposal or any proposal, offer or
inquiry that may reasonably be expected to lead to an Acquisition Proposal, (iii) make or
participate in, directly or indirectly, a “solicitation” of “proxies” (as such terms are used in
the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or
influence any Person with respect to the voting of, any shares of Company Stock in connection with
any vote or other action on any of the Section 3.1(a) Matters, other than to recommend that
stockholders of the Company vote in favor of the adoption of the Merger Agreement and as otherwise
expressly provided in this Agreement or to otherwise vote or consent with respect to Covered Shares
in a manner that would not violate Section 3.1, (iv) vote, approve, adopt or recommend, or publicly
propose to approve, adopt or recommend, any letter of intent, memorandum of understanding,
agreement, option agreement or other agreement relating to an Acquisition Proposal or any proposal,
offer or inquiry that may reasonably be expected to lead to an Acquisition Proposal, or (v) agree
to do any of the foregoing. The Stockholder hereby agrees immediately to cease and cause to be
terminated all existing solicitations, discussions or negotiations with any Person with respect to
any Acquisition Proposal or any offer, proposal or inquiry that may reasonably be expected to lead
to an Acquisition Proposal, and will inform its Affiliates and Representatives of the obligations
undertaken by the Stockholder pursuant to this Agreement, including this Section 5.4(a). If any of
the Stockholder’s Affiliates or Representatives takes any action that the Stockholder is not
permitted to take under this Section 5.4, it shall be deemed to be a breach of this Section 5.4 by
the Stockholder. Notwithstanding anything in this Agreement (including the immediately preceding
sentence) to the contrary, no action taken by the Company or any of its Affiliates or
Representatives in compliance with Section 6.2 of the Merger Agreement shall be a violation by the
Stockholder of this Section 5.4(a).

          (b) Notwithstanding anything contained in this Agreement to the contrary, in the event that
the Company Board of Directors exercises its rights under Section 6.2 of the Merger Agreement to
(i) furnish information concerning, and provide access to, the Company’s business, properties,
employees and assets to any Person or Persons (and their Representatives
acting in such capacity), and/or (ii) participate, engage or assist in discussions and
negotiations with any Person or Persons (and their Representatives acting in such capacity), in
each case, in compliance with Section 6.2 of the Merger Agreement, then (x) the Stockholder and its
Representatives likewise may furnish any such information to such Person or Persons, provide such
Person or Persons with any such access, and/or participate, engage or assist in any such
discussions and negotiations with such Person or Persons; provided that any action taken by
the Stockholder shall be taken only in coordination with the Company Board of Directors, and (y) in
connection with the Company’s termination of the Merger Agreement pursuant to Section 9.1(f)
thereof in order to enter into a transaction which is a Superior Proposal, the Stockholder shall be

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entitled to enter into a voting or other support agreement with the Person making the Superior
Proposal, provided that the effectiveness of such agreement shall be conditioned on the
termination of the Merger Agreement in compliance with Section 6.2(c) thereof.

     5.5. Notice of Acquisitions; Proposals Regarding Prohibited Transactions. The Stockholder
hereby agrees to notify Parent in writing (a) as promptly as practicable (and in any event within
one business day following such acquisition by the Stockholder) of the number of any additional
shares of Company Stock or other securities of the Company of which the Stockholder acquires
Beneficial Ownership on or after the date hereof and (b) as promptly as practicable (and in any
event within the earlier of (i) one business day or (ii) 48 hours) after receipt by the Stockholder
of any Acquisition Proposal or any offer, proposal or inquiry that may reasonably be expected to
lead to an Acquisition Proposal or after any request for information is sought from or initiated
with the Stockholder, and shall disclose the material terms of such Acquisition Proposal, proposal,
offer or inquiry, including the identity of the Person or Persons making such Acquisition Proposal,
proposal, offer or inquiry (unless prohibited by the confidentiality agreement with such Person)
and provide a copy thereof if in writing and any related available material documentation or
correspondence. The Stockholder will keep Parent informed on a prompt basis of the status and any
material discussions or negotiations (including material amendments and proposed material
amendments) relating to any Acquisition Proposal or any such offer, proposal or inquiry.

     5.6. Stockholder Profit.

          (a) In the event that the Merger Agreement shall have been terminated under circumstances in
which a Termination Fee is payable or may be payable by the Company to Parent with respect to such
termination upon the occurrence of certain events specified in the Merger Agreement, but in each
case, subject to such Termination Fee actually becoming payable under the Merger Agreement, the
Stockholder shall pay to Parent an amount equal to 50% of the Stockholder’s profit (determined in
accordance with Section 5.6(b) below) from the sale or other Transfer of any Covered Shares
pursuant to an Acquisition Proposal (including a Superior Proposal) so long as the agreement with
respect to such Acquisition Proposal is entered into or such Acquisition Proposal is consummated
within 12 months of the termination of this Agreement. Payment shall be made promptly upon the
receipt by the Stockholder of the proceeds from such sale or other disposition and shall only be
required to be paid if such sale or other disposition is completed or, if later, when the
Termination Fee is paid.

          (b) For purposes of this Section 5.6, the profit of the Stockholder shall equal (A) the
aggregate consideration for or on account of the Covered Shares that were sold or otherwise
Transferred as described in Section 5.6(a) including extraordinary distributions directly or
indirectly made in connection with any Acquisition Proposal, valuing any non-cash consideration
(including any residual interest in the Company) at its fair market value on the date of such
consummation, less (B) the product of (x) $11.50 and (y) the number of Covered Shares so sold or
otherwise Transferred by the Stockholder.

          (c) For purposes of this Section 5.6, the fair market value of any non-cash consideration
consisting of:

10

 

          (i) securities listed on a national securities exchange or traded or quoted on the
Nasdaq (“Traded Securities”) shall be equal to the average closing price per share
of such security as reported on the composite trading system of such exchange or by Nasdaq
for the five trading days ending on the trading day immediately prior to the date of the
value determination (the “Valuation Period”); and

          (ii) consideration which is other than cash or Traded Securities shall be determined by
a nationally recognized independent investment banking firm mutually agreed upon by Parent
and the Stockholder within ten business days of the event requiring selection of such
banking firm; provided, however, that if the parties are unable to agree
within two business days after the date of such event as to the investment banking firm,
then the parties shall each select one firm, and those firms shall select a third investment
banking firm, which third firm shall make such determination; provided,
further, that the fees and expenses of such investment banking firm shall be borne
equally by Parent and the Stockholder. The determination of the investment-banking firm
shall be binding upon the parties.

          (d) Any payment of profit under this Section 5.6 shall be paid in the same proportion of cash
and non-cash consideration as the aggregate consideration received by the Stockholder in the
Acquisition Proposal or other disposition.

          (e) In the event that the Merger Agreement shall have been terminated under circumstances in
which a Termination Fee is payable or may be payable by the Company to Parent with respect to such
termination upon the occurrence of certain events specified in the Merger Agreement, then the
Stockholder shall not, until the 12-month anniversary of the termination of this Agreement,
Transfer any of the Covered Shares (i) to its limited partners or (ii) to any of its Affiliates
unless such Affiliate agrees in writing to be bound by the provisions of this Section 5.6.

          (f) Neither the Stockholder nor Parent shall, and each shall use its reasonable best efforts
to ensure that its respective Affiliates do not, engage in any Prohibited Activity with respect to
any subject Traded Securities during an applicable Valuation Period. “Prohibited Activity”
means any acquisition or disposition, in open market transactions, private transactions or
otherwise, during the Valuation Period of any of the subject Traded Securities or any securities
convertible into or exchangeable for or derivative of the subject Traded Securities or
any other action, in the case of any of the foregoing, taken intentionally for the purpose of
manipulating the price of the subject Traded Securities during the Valuation Period.

     5.7. Release. From and after the Effective Time, the Stockholder finally and forever
releases Parent and the Company, and their respective successors, assigns, officers, directors,
employees and all affiliates and Subsidiaries, past and present, of Parent and the Company (the
“Releasees”) from each and every agreement, commitment, indebtedness, obligation and claim
of every nature and kind whatsoever, known or unknown, suspected or unsuspected (each, a
“Claim” and collectively, the “Claims”) that (A) the Stockholder may have had in
the past, may have as of the date hereof or, to the extent arising from or in connection with any
act, omission or state of facts taken or existing on or prior to the date hereof, may have after
the date hereof against any of the Releasees and (B) has arisen or arises directly out of the
Stockholder’s interest

11

 

as a stockholder of the Company or any of its Subsidiaries; except with
respect to any such Claims arising under this Agreement, the Merger Agreement, the Registration
Rights Agreement and the transactions contemplated hereby and thereby, and any Claim by the
Stockholder for failure by the Company to pay all accrued and unpaid dividends on the Company
Convertible Preferred Stock prior to the Operative Date.

     5.8. Waiver of Appraisal Rights. The Stockholder agrees not to exercise any rights of
appraisal or any dissenters’ rights that the Stockholder may have (whether under applicable Law or
otherwise) or could potentially have or acquire in connection with the Merger.

     5.9. Further Assurances. From time to time, at Parent’s request and without further
consideration, the Stockholder shall execute and deliver such additional documents and take all
such further action as may be reasonably necessary to effect the actions and consummate the
transactions contemplated by this Agreement.

     5.10. Disclosure. Neither Parent, the Company nor the Stockholder will issue any
press release or make any other public statement, and shall not authorize or permit any of its
Subsidiaries or Affiliates or any of its or their Representatives to issue any press release or
make any other public statement with respect to the Merger Agreement, this Agreement, the
Registration Rights Agreement or any of the transactions contemplated by the Merger Agreement, this
Agreement or the Registration Rights Agreement without the prior written consent of the other
parties hereto (such consent not to be unreasonably withheld, conditioned or delayed), except as
may be required by Law or by any listing requirement with the Nasdaq or the Toronto Stock Exchange,
including any filings required under the Securities Act or the Exchange Act.

     5.11. Meeting Rights. During the Lock-Up Period, the Stockholder shall be entitled to
meet one time in each calendar quarter with the Chief Executive Officer and the Chief Financial
Officer of Parent (the “Meeting Right”). The Stockholder may exercise the Meeting Right by
providing written notice to Parent at least ten business days in advance of any such meeting. The
time, place and method of each meeting shall be as reasonably agreed by the parties. The
Other Stockholder shall be entitled to attend any such meeting.

     5.12. Rule 144. Parent agrees to use its reasonable best efforts to file all reports
required to be filed by it under the Exchange Act to the extent required to enable the Stockholder,
after the expiration of the Lock-Up Period, to sell the Parent Common Stock pursuant to and in
accordance with Rule 144.

     5.13. Affiliate Agreements. The Stockholder shall take all actions necessary to cause
(a) the Registration Rights Agreement, dated as of March 19, 2004, by and among the Company, the
Stockholder, the Other Stockholder, and such other persons who became signatories thereto as
provided therein and (b) the Management Rights Letter, dated as of March 19, 2004, by and between
the Stockholder and the Company to be terminated (without any payment), effective as of and
contingent upon the earlier to occur of the Acceptance Date and the Effective Time, such that such
agreements shall be of no further force or effect immediately thereafter. The Stockholder has
approved the Certificate of Amendment. The Stockholder hereby waives its right of first offer
under the Amended and Restated Preferred Stock Purchase Agreement, dated

12

 

as of November 26, 2003,
by and between the Company and the Stockholder, in connection with the Merger Agreement and the
transactions contemplated thereby.

ARTICLE VI

MISCELLANEOUS

     6.1. Termination. This Agreement shall remain in effect until the earliest to occur of
(i) the termination of the Merger Agreement in accordance with its terms, and (ii) the delivery of
written notice of termination by the Stockholder to Parent following any Fundamental Amendment
effected without the prior written consent of the Stockholder, and upon the occurrence of the
earliest of such events this Agreement shall terminate and be of no further force;
provided, however, that the provisions of Section 5.6, this Section 6.1, the last
sentence of Section 6.2(a) and Sections 6.4 through 6.13 shall survive any termination of this
Agreement. Nothing in this Section 6.1 and no termination of this Agreement shall relieve or
otherwise limit any party of liability for willful breach of this Agreement. “Fundamental
Amendment” means the execution by the Company, Parent, US Corp. and Merger Sub of an amendment
to, or waiver by the Company, Parent, US Corp. or Merger Sub of any provision of, the Offer or the
Merger Agreement that reduces the amount of the Offer Price or the Merger Consideration, changes
the form of the Offer Price or the Merger Consideration to include or substitute therefor a form
other than cash and Parent Common Stock, or decreases the ratio of cash to Parent Common Stock
included in the Offer Price or the Merger Consideration. If the Stockholder does not exercise the
termination right described above within five business days following the date the Stockholder is
notified that such Fundamental Amendment is effected, then this Agreement shall give effect to any
modified terms incorporated from the Merger Agreement and, except as so modified, shall continue in
full force and effect.

     6.2. Legends; Stop Transfer Order.

          (a) In furtherance of this Agreement, the Stockholder hereby authorizes and instructs the
Company to instruct its transfer agent to enter a stop transfer order with respect to all of the
Covered Shares held of record by the Stockholder and to legend the share certificates. The Company
agrees that as promptly as practicable after the date of this Agreement it shall give such stop
transfer instructions to the transfer agent for the Company Stock and to legend the share
certificates. The Company agrees that, (i) if this Agreement is terminated in accordance with
Section 6.1, then, promptly following the termination of this Agreement, (ii) if Merger Sub accepts
the Covered Shares for payment pursuant to the terms of the Offer, then, concurrently with such
acceptance (and in any event within such time as would not delay receipt by the Stockholder of the
Offer Price), or (iii) if the transactions contemplated by the Merger Agreement are effected as a
One Step Merger, then, immediately following the Closing (and in any event within such time as
would not delay receipt by the Stockholder of the Merger Consideration), the Company will cause any
stop transfer instructions imposed pursuant to this Section 6.2 to be lifted and any legended
certificates delivered pursuant to this Section 6.2 to be replaced with certificates not bearing
such legend.

          (b) Each certificate representing Covered Shares held of record by the Stockholder shall bear
the following legend on the face thereof:

13

 

          “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING,
TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN THAT CERTAIN STOCKHOLDER AGREEMENT DATED AS OF
FEBRUARY 25, 2008, AMONG SXC HEALTH SOLUTIONS CORP., NEW MOUNTAIN PARTNERS, L.P. AND NATIONAL
MEDICAL HEALTH CARD SYSTEMS, INC., AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH
STOCKHOLDER AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF NATIONAL MEDICAL HEALTH CARD SYSTEMS,
INC.”

          The Stockholder will cause all of its Existing Shares held of record by the Stockholder and
any securities that become Covered Shares held of record by the Stockholder after the date hereof
to be delivered to the Company for the purpose of applying such legend (if not so endorsed upon
issuance). The Company shall return to the delivering party, as promptly as possible, any
securities so delivered. The delivery of such securities by the delivering party shall not in any
way affect such party’s rights with respect to such securities.

     6.3. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in
Parent any direct or indirect ownership or incidence of ownership of or with respect to any Covered
Shares, except as otherwise provided herein. All rights, ownership and economic benefits of and
relating to the Covered Shares shall remain vested in and belong to the Stockholder, and Parent
shall have no
authority to direct the Stockholder in the voting or disposition of any of the Covered Shares,
except as otherwise provided herein.

     6.4. Notices.

          (a) All notices and other communications hereunder shall be in writing and shall be deemed
given if delivered personally, by facsimile (upon telephonic confirmation of receipt), on the first
business day following the date of dispatch if delivered by a recognized next day courier service
or on the third business day following the date of mailing if delivered by registered or certified
mail, return receipt requested, post prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in writing in accordance
with this Section 6.4 by the party to receive such notice.

	 	(i)	 	if to Parent, to:

SXC Health Solutions Corp.

2441 Warrenville Road, Suite 610

Lisle, IL 60532-3246

Fax: (630) 328-2190

Attention: Chief Financial Officer

	 	 	 	with a copy to:

Sidley Austin LLP

1 South Dearborn Street

Chicago, IL 60603

Fax: (312) 853-7036

14

 

Attention: Gary D. Gerstman

          
      
Scott R. Williams

	 	(ii)	 	if to the Company, to:

National Medical Health Card Systems, Inc.

26 Harbor Park Drive

Port Washington, NY 11050

Fax: (516) 605-6989

Attention: George McGinn, Esq.

	 	 	 	with a copy to:

Bass, Berry & Sims PLC

315 Deaderick Street, Suite 2700

Nashville, TN 37238

Fax: (615) 742-6293

Attention: J. Allen Overby, Esq.

          
      Jennifer H. Noonan, Esq.

	 	(iii)	 	if to the Stockholder, to:

New Mountain Partners, L.P.

787 Seventh Avenue, 49th Floor

New York, NY 10019

Fax: (212) 582-2277

Attention: Mr. Michael B. Ajouz

	 	 	 	with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

Fax: (212) 859-4000

Attention: Aviva F. Diamant, Esq.

          (b) A copy of all notices and other communications from Parent or Merger Sub to the Company
(and vice versa) under the Merger Agreement shall be sent at the same time to the Stockholder at
the above address, with a copy to its counsel at the above address, and the provisions of this
Section 6.4 shall apply to such notices and communications; provided that no failure to
provide such notice to the Stockholder shall relieve the Stockholder of its obligations under this
Agreement.

     6.5. Interpretation. The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section references are to this Agreement unless
otherwise specified. Whenever the words “include,” “includes” or “including” are used in this

15

 

Agreement, they shall be deemed to be followed by the words “without limitation.” The meanings
given to terms defined herein shall be equally applicable to both the singular and plural forms of
such terms. The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This
Agreement is the product of negotiation by the parties having the assistance of counsel and other
advisers. It is the intention of the parties that this Agreement not be construed more strictly
with regard to one party than with regard to the others.

     6.6. Counterparts. This Agreement may be executed by facsimile and in counterparts, all of
which shall be considered one and the same agreement and shall become effective when counterparts
have been signed by each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.

     6.7. Entire Agreement. This Agreement, the Registration Rights Agreement and, to the extent referenced herein, the
Merger Agreement, together with the several agreements and other documents and instruments referred
to herein or therein or annexed hereto or thereto, embody the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and supersede and preempt any
prior understandings, agreements or representations by or among the parties, written and oral, that
may have related to the subject matter hereof in any way.

     6.8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. (a) This
Agreement, and all claims or causes of action (whether at law, in contract or in tort) that may be
based upon, arise out of or relate to this Agreement or the negotiation, execution or performance
hereof, shall be governed by and construed in accordance with the Laws of the State of Delaware,
without giving effect to any choice or conflict of Law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of Delaware. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Court of Chancery of the State of Delaware (and any appellate
court of the State of Delaware) and the Federal courts of the United States of America located in
the State of Delaware, this being in addition to any other remedy to which they are entitled at law
or in equity. Each of the parties hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any Action with respect to this Agreement, (a)
any claim that it is not personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by
applicable Law, that (i) the Action in any such court is brought in an inconvenient forum, (ii) the
venue of such Action is improper or (iii) this Agreement, or the subject matter hereof, may not be
enforced in or by such courts.

16

 

          (b) Each party hereto hereby waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any Action arising out of or relating to this
Agreement. Each party hereto (i) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such party would not, in the event of any
Action, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement, by, among other things, the mutual waiver
and certifications in this Section 6.8.

     6.9. Amendment; Waiver; Expenses.

          (a) This Agreement may not be amended except by an instrument in writing signed by each of the
parties hereto. Each party may waive any right of such party hereunder by
an instrument in writing signed by such party and delivered to Parent, the Company and the
Stockholder.

          (b) The Stockholder agrees that it is solely responsible (without reimbursement from the
Company) for all costs and expenses (including all fees and expenses of counsel) incurred by the
Stockholder in connection with this Agreement and the Registration Rights Agreement.

     6.10. Remedies. All rights, powers and remedies provided under this Agreement or otherwise
available in respect hereof at law or in equity shall be cumulative and not alternative, and the
exercise or beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such party.

     6.11. Severability. Any term or provision of this Agreement which is determined by a court
of competent jurisdiction to be invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction, and if any provision of this Agreement is determined to be so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is enforceable, in all
cases so long as neither the economic nor legal substance of the transactions contemplated hereby
is affected in any manner adverse to any party or its stockholders or partners, as applicable.
Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a
suitable and equitable substitute provision to effect the original intent of the parties as closely
as possible and to the end that the transactions contemplated hereby shall be fulfilled to the
maximum extent possible.

     6.12. Successors and Assigns; Third Party Beneficiaries. Neither this Agreement nor any of
the rights or obligations of any party under this Agreement shall be assigned, in whole or in part
(by operation of law or otherwise), by any party without the prior written consent of the other
parties hereto. Subject to the foregoing, this Agreement shall bind and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer on any Person other than the
parties hereto or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

17

 

     6.13. Stockholder Capacity. The restrictions and covenants of the Stockholder hereunder
shall not be binding, and shall have no effect, in any way with respect to any director or officer
of the Company or any of its Subsidiaries in such Person’s capacity as such a director or officer,
nor shall any action taken by any such director or officer in his or her capacity as such be deemed
a breach by the Stockholder of this Agreement.

[Remainder of this page intentionally left blank]

18

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed (where
applicable, by their respective officers or other authorized Person thereunto duly authorized) as
of the date first written above.

	 	 	 	 	 	 	 
	 	 	SXC HEALTH SOLUTIONS CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey Park
 

	 	 
	 

	 	Name:
	 	Jeffrey Park	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	NEW MOUNTAIN PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	New Mountain Investments, L.P.,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	New Mountain GP, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven B. Klinsky	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Steven B. Klinsky	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ George McGinn	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	George McGinn	 	 
	 

	 	Title:
	 	General Counsel and Secretary	 	 

 

 

ANNEX A

IRREVOCABLE PROXY

Dated as of February 25, 2008

     The undersigned Stockholder (the “Stockholder”) of National Medical Health Card
Systems, Inc., a Delaware corporation (the “Company”), hereby irrevocably (to the fullest
extent permitted by law) appoints Gordon Glenn and Jeffrey Park, as the sole and exclusive
attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to
vote and exercise all voting and related rights (to the full extent that the undersigned is
entitled to do so) with respect to all of the shares of capital stock of the Company that now are
or hereafter may be beneficially owned by the undersigned, and any and all other shares or
securities of the Company issued or issuable in respect thereof on or after the date hereof
(collectively, the “Covered Shares”), in accordance with the terms of this Proxy. The
Covered Shares beneficially owned by the Stockholder as of the date of this Proxy are listed on the
signature page of this Proxy, along with the number(s) of the stock certificate(s) representing
such Covered Shares. Upon the Stockholder’s execution of this Proxy, any and all prior proxies
given by the undersigned with respect to any Covered Shares are hereby revoked and terminated, and
the Stockholder agrees not to grant any subsequent proxies with respect to the Covered Shares, with
respect to any of the matters referred to in any of clauses (a) through (c) below until after the
Expiration Time (as defined below).

     This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an
interest and is granted pursuant to that certain Stockholder Agreement of even date herewith (the
“Stockholder Agreement”) by and among SXC Health Solutions Corp., a corporation organized
under the laws of Yukon Territory, Canada (“Parent”), the Company and the undersigned
Stockholder of the Company, and is granted in consideration of Parent entering into that certain
Agreement and Plan of Merger of even date herewith (as it may hereafter be amended from time to
time in accordance with the provisions thereof, the “Merger Agreement”) by and among
Parent, SXC Health Solutions, Inc., a Texas corporation (“US Corp.”), Comet Merger
Corporation, a newly-formed Delaware corporation that is wholly-owned by US Corp. and an indirect
wholly-owned subsidiary of Parent (“Merger Sub”), and the Company. The Merger Agreement
provides that Merger Sub will commence an exchange offer (the “Offer”) to acquire all of
the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company
Common Stock”), and following the consummation of the Offer (or, subject to certain conditions,
in lieu thereof), Merger Sub will merge with and into the Company (the “Merger”) and the
Stockholder will be entitled to receive the merger consideration specified therein. The term
“Expiration Time”, as used in this Proxy, shall mean the earliest to occur of (i) the
Operative Date, (ii) the termination of the Merger Agreement in accordance with its terms, and
(iii) the termination of the Stockholder Agreement in accordance with its terms.

     The attorneys and proxies named above, and each of them, are hereby authorized and empowered
by the Stockholder, at any time prior to the Expiration Time, to act as the Stockholder’s attorney
and proxy to vote all of the Covered Shares (or, if applicable, only such portion of the Covered
Shares as is provided in Section 3.1(b) of the Stockholder Agreement), and to exercise all voting,
consent and similar rights of the undersigned with respect to all of the

 

 

Covered Shares (or, if applicable, only such portion of the Covered Shares as is provided in
Section 3.1(b) of the Stockholder Agreement) (including, without limitation, the power to execute
and deliver written consents) at every annual or special meeting of stockholders of the Company
(and at every adjournment or postponement thereof), and in every written consent in lieu of such
meeting:

     (a) in favor of the adoption of the Merger Agreement and any related proposal in furtherance
thereof, as reasonably requested by Parent, submitted for the vote or written consent of
stockholders;

     (b) against any action or agreement submitted for the vote or written consent of stockholders
that the Stockholder knows is in opposition to, or competitive or materially inconsistent with, the
Offer or the Merger or that the Stockholder knows would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company contained in the
Merger Agreement, or of the Stockholder contained in the Stockholder Agreement; and

     (c) against any Acquisition Proposal (as defined in the Merger Agreement) and against any
other action, agreement or transaction submitted for the vote or written consent of stockholders
that the Stockholder knows would impede, interfere with, delay, postpone, discourage, frustrate the
purposes of or adversely affect the Offer or the Merger or the other transactions contemplated by
the Merger Agreement or the Stockholder Agreement or the performance by the Company of its
obligations under the Merger Agreement or by the Stockholder of its obligations under the
Stockholder Agreement, including, but not limited to: (A) any extraordinary corporate transaction,
such as a merger, consolidation or other business combination involving the Company or any
subsidiary of the Company; (B) any sale, lease or transfer of a material amount of assets of the
Company (including capital stock or other equity interests in its Subsidiaries) or any subsidiary
of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company
or any subsidiary of the Company; (D) any change in a majority of the board of directors of the
Company; (E) any amendment to the Company’s certificate of incorporation or bylaws (except for any
amendment to increase the authorized capital stock); and (F) any change in the capitalization of
the Company or the Company’s corporate structure.

     Any term or provision of this Proxy that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in any other situation
or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares
that any term or provision hereof is invalid or unenforceable, the Stockholder agrees that the
court making such determination shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision, and this Proxy shall be enforceable as so modified.
In the event such court does not exercise the power granted to it in the prior sentence, the
Stockholder agrees to replace such invalid or unenforceable term or provision with

 

 

a valid and enforceable term or provision that will achieve, to the extent possible, the economic,
business and other purposes of such invalid or unenforceable term.

     The restrictions and covenants of the Stockholder hereunder shall not be binding, and shall
have no effect, in any way with respect to any director or officer of the Company or any of its
Subsidiaries in such Person’s capacity as such a director or officer, nor shall any action taken by
any such director or officer in his or her capacity as such be deemed a breach by the Stockholder
of this Proxy.

     Any obligation of the Stockholder hereunder shall be binding upon the successors and assigns
of the Stockholder.

     This Proxy shall terminate, and be of no further force and effect, automatically upon the
Expiration Time.

[signature page follows]

 

 

COUNTERPART SIGNATURE PAGE

     IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy to be duly executed as
of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	NEW MOUNTAIN PARTNERS, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	New Mountain Investments, L.P.,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	New Mountain GP, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Steven B. Klinsky
 

 Steven B. Klinsky
	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 

NUMBER OF OUTSTANDING SHARES OF COMPANY STOCK BENEFICIALLY OWNED BY THE
STOCKHOLDER:

	 	 	 
	SERIES A 7% CONVERTIBLE PREFERRED STOCK

	 	 6,790,797
	 
	 	 
	COMMON STOCK

	 	 6,790,797 (upon conversion)

Stockholder Address:

New Mountain Partners, L.P.

787 Seventh Avenue, 49th Floor

New York, NY 10019

Attention: Mr. Michael B. Ajouz

Fax: (212) 582-2277

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004

Attention: Aviva F. Diamant, Esq.

Fax: (212) 859-4000

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