CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Consulting and Advisory Arrangements

      A number of our executive officers currently provide services to Aveta Health, a related company controlled by Daniel E. Straus, and other related companies that are managed by members of TSG, or by Daniel E. Straus, one of our principal stockholders and chairman of our board of directors, with costs allocated between Aveta Health and us based on an agreed upon allocation of the time spent by such executive officers on various matters. We have entered into a services agreement with Aveta Health for one year following the closing of the private placement offering on December 29, 2005 pursuant to which we make Messrs. Dunn, Kamins and Malton and their staff available to provide Aveta Health with support as requested by it for business development, tax, legal, treasury and other corporate services in exchange for reimbursement by Aveta Health of our costs for such services.

Lease for Corporate Office

      On December 1, 2005, we entered into a lease for approximately 10,000 square feet of office space in an office building located in Fort Lee, New Jersey, owned by a company controlled by Daniel E. Straus, one of our principal stockholders and Chairman of our board of directors. The lease has a 10-year term that expires on November 30, 2015 and provides for a base rent of $27,533.33 per month that commenced on December 1, 2005 and will increase on an annual basis to $35,924.66 per month during the last year of the lease scheduled to commence on December 1, 2014, plus a proportionate share of taxes, insurance, common area charges and other operating costs. In addition, we have agreed to pay approximately $450,000 for tenant improvements to the office, including office space to be used by Mr. Straus in his capacity as Chairman of our board of directors and in his capacities for other companies. After the third anniversary of the commencement of the lease, the landlord has the power to terminate the lease upon 180 days written notice to us.

Transfer of Service Mark

      In December 2005, Aveta Health, a related company controlled by Daniel E. Straus, transferred to us all of its interests in the federally registered service marks Aveta ^® and North American Medical Management ^® without payment for such transfer. We have agreed that Aveta Health may continue to use “Aveta” in its corporate name and that of its subsidiaries without any payment to us.

Acquisition of NAMM

      On August 22, 2005, we entered into a stock purchase agreement under which we acquired the stock of NAMM from Aveta Health, a related company. Certain of our stockholders, directors and executive officers are stockholders in Aveta Health. The purchase price of the acquisition was $95.8 million, subject to a purchase price adjustment based on the working capital and tangible net worth of the acquired business at closing. We and Aveta Health agreed that this purchase price adjustment obligation will be satisfied by our payment of approximately $4.5 million to Aveta Health. Timothy O’Donnell, our Chief Executive Officer, received a $1.4 million payment from Aveta Health in December 2005 in consideration for the discharge of his contractual right with respect to equity interests of NAMM.

      A subsidiary of NAMM extended non-interest bearing loans to Aveta Health with a balance of $7.5 million as of December 31, 2004. These loans were forgiven in connection with the acquisition.

Senior Credit Facility

      Two of our stockholders, AG MMM, L.L.C. (through Northwood Capital IV, V, and VI) and Redwood Master Fund, Ltd., are members of the bank syndicate under our senior credit facility and held approximately $12.95 million and $6.48 million, respectively, of this indebtedness as of December 31, 2005. The net proceeds of the private placement offering on December 29, 2005 were used to repay $148.0 million of the term loan under our senior credit facility, including indebtedness held by AG MMM, L.L.C. and Redwood Master Fund, Ltd., respectively.

Management Services Agreement of Care Enterprises

      On November 30, 2004, MMM Holdings entered into a management services agreement with Care Enterprises I, Inc., pursuant to which Care Enterprises I, Inc. agreed to provide MMM Holdings with investment, strategic, financial, accounting and administrative consulting services. Messrs. Straus and Mark, our chairman and the chairman of our executive committee, respectively, control Care Enterprises I. During the year ended December 31, 2005, we paid or accrued management fees to Care Enterprises I of $1.5 million. This agreement was terminated on December 29, 2005.

PrimeCare of Chino Valley

      Richard Shinto, M.D., the President and Chief Executive Officer of NAMM and a licensed physician, holds 50% of the equity interests of PrimeCare of Chino Valley. Under the contractual arrangements between NAMM and PrimeCare of Chino Valley, the profits and gains realized by that entity are distributed 50% to the unaffiliated physicians and 50% to NAMM and, in most circumstances, there are no economic returns to any stockholders in their capacity as stockholders. In addition, if Dr. Shinto resigns or is terminated he must transfer his 50% equity interest back to NAMM or its designee.

Aveta Health Illinois Administrative Purchase and Delegation Agreement

      Aveta Health Illinois has entered into an administrative purchase and delegation agreement with MMM Healthcare pursuant to which MMM Healthcare has agreed to provide Aveta Health Illinois with accounting and marketing services and assistance with the implementation of a prescription drug benefit plan. In consideration for these services, MMM Healthcare will receive a fee equal to 125% of its costs incurred under the agreement.

Relationships with Aveta Health

      Members of our management team have relationships with Aveta Health, a related company. Daniel Straus, our chairman, and Joseph Mark, the chairman of our executive committee, have the following related party interests with Aveta Health:

      In addition, members of management of Aveta Health have historically provided us managerial and administrative services. Aveta Health allocated a portion of salaries and related benefits to us for the estimated time and efforts of these individuals, and we reimbursed Aveta Health for these amounts. As of August 22, 2005, these employees of Aveta Health became our employees and we allocate a portion of their salaries and related benefits to Aveta Health for which Aveta Health reimburses us. For the year ended December 31, 2005 and for the three month period ended March 31, 2006, we reimbursed Aveta Health for $553,000 and $0, respectively, of employee costs and Aveta Health reimbursed us for $652,000 and $273,000, respectively, of employee costs.

Purchase of Shares from our Management

      Several of our executive officers and directors, including Messrs. Dunn, Kamins, Malton, Mark, O’Donnell and Straus and entities related to Messrs. Kolatch and Roberts, directly and/or indirectly, hold shares of our common stock. We used a portion of the net proceeds from the sale of shares of our common stock in the private placement offering on December 29, 2005 and the overallotment option in connection with the private placement exercised by the FBR in January 2006, to purchase and retire shares of our common stock from certain of our existing stockholders, including such members of management, at a price per share

equal to the net proceeds per share that we receive from the private placement offering, after giving effect to the initial purchaser’s return to us of a portion of the initial purchaser’s discount. Messrs. Dunn, Kamins, Malton, Mark, O’Donnell and Straus received approximately $109,055, $327,165, $436,219, $17,880,661 $6,096,546 and $81,104,676, respectively, upon such repurchase. The amount repurchased from Messrs. Straus and Mark include amounts held through their interests in family trusts. Each of Messrs. Straus and Mark disclaims beneficial ownership of the shares of common stock held by such trusts.