Indemnification

        Millstream has agreed to indemnify the preferred member representatives of NationsHealth, from and after completion of the merger, to the fullest extent permitted by law, for acts or omissions occurred at or prior to the consummation of the merger and to purchase a directors' and officers' insurance (or equivalent insurance) and indemnification policy as would be customary for a public company with a valuation equal to or greater than the valuation of Millstream immediately after the consummation of the merger, to cover all persons who are directors and officers of Millstream on and after the consummation of the merger. Millstream will maintain such insurance for a period of not less than six years after the consummation of the merger. If this insurance expires, is terminated or canceled during such six-year period, Millstream will use all reasonable efforts to cause to be obtained a new directors' and officers' insurance (or equivalent insurance) and indemnification policy comparable to the previous insurance for the remaining time period in such six-year period.

Fees and Expenses

        Except as provided in the merger agreement, all fees and expenses incurred in connection with the merger and the other transactions contemplated by the merger agreement will be paid by the party incurring such expenses, whether or not the merger is consummated.

        Millstream has agreed to pay to NationsHealth a fee of $1,000,000 under the following circumstances:

•

if NationsHealth terminates the merger agreement for those reasons set forth below in the third, fourth, fifth and sixth bullet points under the heading "The Merger Agreement—Termination, Amendment and Waiver—Termination by NationsHealth only" ;



•

any person makes a parent takeover proposal that was pending on the date of an event giving rise to termination by NationsHealth for the reasons set forth in the first bullet point under the heading " The Merger Agreement—Termination, Amendment and Waiver—Termination by NationsHealth "; or



•

any person makes a parent takeover proposal:



•

that was publicly disclosed prior to the Millstream stockholders' meeting but not publicly and irrevocably withdrawn more than 20 business days prior to the date of the Millstream stockholders' meeting and thereafter the merger agreement is terminated for any reason set forth in the fourth bullet point under the heading "The Merger Agreement—Termination, Amendment and Waiver—Termination by either NationsHealth or Millstream" ; or



•

that was not irrevocably withdrawn on July 2, 2004 and the Millstream stockholder approval is not obtained prior to termination of the merger agreement.

        Millstream will pay the $1,000,000 fee only upon the occurrence of a release event. A release event is the earlier to occur of:

•

the date on which Millstream consummates a business combination, other than the merger, that results in the trust funds being released to Millstream; or



•

the date the funds held in the trust account are released to Millstream.

        Millstream paid to NationsHealth the sum of $250,000 upon execution of the merger agreement. NationsHealth will reimburse Millstream the sum of $250,000 if the merger agreement is terminated for the reason set forth under the heading "The Merger Agreement—Termination, Amendment and Waiver—Termination by Millstream" .

53

        NationsHealth further agreed that unless and until a release event occurs:

•

it has no right to assert any claim against Millstream or any of its affiliates or



•

it will not otherwise seek to recover against Millstream or any of its affiliates any losses related to the merger agreement or any other transaction agreement contemplated by the merger agreement.

The above restrictions also apply to NationsHealth's officers, directors, members and affiliates.

        In addition, each of Millstream and N Merger agreed that:

•

unless and until the merger is effective,



•

it will have no right to assert any claim against NationsHealth or any of its members or affiliates and



•

it will not otherwise seek to recover against NationsHealth or any of its members or affiliates any damages or losses related to the merger agreement or any other transaction agreement contemplated by the merger agreement in excess of $250,000 in the aggregate, (not including for such purposes any amount received according to the third paragraph above in this section), and



•

from and after the time that the merger becomes effective, the sole and exclusive remedy of Millstream, N Merger and any and all of their respective officers, directors and affiliates for any damages or losses related to the merger agreement, as amended, or any other transaction agreement contemplated by the merger will be as specifically provided for in the indemnification and escrow agreement. See "The Indemnification and Escrow Agreement."

The above restrictions also apply to Millstream's officers, directors and affiliates.

Public Announcements

        Millstream and N Merger, on the one hand, and NationsHealth, on the other hand, have agreed:

•

to consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the merger and the other transactions contemplated by the merger agreement; and



•

not to issue any press release or make any public statement prior to this consultation, except as may be required by applicable laws or court process.

Transfer Taxes

        All stock transfer, real estate transfer, documentary, stamp, recording and other similar taxes (including interest, penalties and additions to any such taxes) incurred in connection with the transactions contemplated by the merger agreement will be paid by either N Merger or NationsHealth. NationsHealth will cooperate with N Merger and Millstream in preparing, executing and filing any tax returns with respect to these transfer taxes.

Quotation or Listing

        Millstream will use its best efforts to cause the following to be approved for quotation by the Nasdaq Stock Market:

•

its shares of common stock to be issued in the merger,



•

all shares of its common stock outstanding as of the date of the merger agreement; and

54

•

the warrants outstanding as of the date of the merger agreement.

        If any of the securities are not eligible to be quoted on Nasdaq, Millstream will use its best efforts to cause the non-eligible securities to be approved for listing on The American Stock Exchange, subject to official notice of issuance. Millstream will attempt to effect this quotation or listing as promptly as practicable after the date of the merger agreement.

Tax Treatment

        Millstream and NationsHealth intend the merger to qualify as an exchange under Section 351 of the Internal Revenue Code. Each of Millstream and NationsHealth and its affiliates will use reasonable efforts to cause the merger to so qualify and to obtain the opinion of McDermott Will & Emery LLP to NationsHealth and its members to the effect that the merger should be treated for U.S. Federal income tax purposes as an exchange as described in Section 351 of the Internal Revenue Code. Each of Millstream, N Merger and NationsHealth and each of their respective affiliates will not take any action and will not fail to take any action or suffer to exist any condition which action or failure to act or condition would prevent, or would be reasonably likely to prevent, the merger from qualifying as an exchange within the meaning of Section 351 of the Internal Revenue Code. It is possible that RGGPLS may convert to a limited liability company in connection with the merger. This registration statement does not address the differing tax treatment which would arise for RGGPLS if it engages in such a separate transaction. However, such a transaction would not affect the tax treatment to the other NationsHealth members described herein.

Pre-Closing Confirmation

        Promptly after the date of the merger agreement, Millstream gave notice of the merger to the trustee holding in trust the proceeds of Millstream's initial public offering. Not later than 48 hours prior to the closing:

•

Millstream is required to give the trustee advance notice of the completion of the merger;



•

Millstream will cause the trustee to provide a written confirmation to NationsHealth confirming the dollar amount of the account balance held by the trustee in the trust account that will be released to Millstream upon consummation of the merger; and



•

Millstream will provide NationsHealth a written schedule of all liabilities and expenses owed by Millstream to any person as of the date of consummation of the merger which remain unpaid as of such time. This written schedule will be accompanied by a certificate from the chairman of the board of directors, chief executive officer and president of Millstream to the effect that to the best of his knowledge the schedule is a true and correct estimation of Millstream's unpaid liabilities and expenses as of the date of consummation of the merger.

Conditions to the Completion of the Merger

        Each of Millstream's and NationsHealth's obligations to effect the merger is subject to the satisfaction or waiver of specified conditions before completion of the merger, including the following:

Conditions to Millstream's and NationsHealth's obligations

•

The receipt of the Millstream stockholder approval;



•

the absence of any order or injunction preventing consummation of the merger, though each of Millstream and NationsHealth must have used reasonable efforts to prevent the entry of any order or injunction before this condition can be asserted;

55

•

the absence of any suit or proceeding by any governmental entity or any other person challenging the merger or seeking to obtain from NationsHealth or Millstream or N Merger any damages that are material in relation to Millstream and N Merger taken as a whole;



•

The registration statement to which this document relates must have become effective under the Securities Act and must not be the subject of any stop order or proceeding seeking a stop order;



•

Millstream must have received all state securities or "blue sky" authorizations necessary to issue the shares of Millstream's common stock contemplated by the merger agreement;



•

at Millstream's stockholders' meeting, holders of less than 20% of the shares offered in Millstream's initial public offering will have demanded that Millstream convert their shares into cash; and



•

at the time of consummation of the merger, the board of directors of Millstream must determine that the fair market value of NationsHealth, including US Pharmaceutical Group, is at least 80% of the net assets of Millstream. The board of directors will make this determination based on the historical and projected revenues of NationsHealth as well as other market factors determined using its business judgment.

Conditions to Millstream's obligations

        The obligations of Millstream and N Merger to effect the merger are further subject to the following conditions:

        NationsHealth's representations and warranties that are qualified as to materiality must be true and correct and those not qualified as to materiality must be true and correct in all material respects, as of the date of completion of the merger, except representations and warranties that address matters as of another date, which must be true and correct as of that other date and Millstream must have received an officer's certificate from NationsHealth to that effect;

•

NationsHealth must have performed in all material respects all obligations (except as set forth in the bullet point immediately below);



•

NationsHealth must have performed in all respects its obligation to use reasonable efforts to cause US Pharmaceutical Group to be operated in substantial compliance with the conditions and standards of participation in, and the rules and regulations of, the Medicare and Medicaid programs, and Millstream must have received a certificate signed on behalf of NationsHealth by the chief executive officer and the chief financial officer of NationsHealth to such effect;



•

there must not have occurred since the date of the merger agreement, any material effect adverse on NationsHealth; and



•

Each of RGGPLS Holding and Continental Stock Transfer & Trust Company must have executed and delivered the indemnification and escrow agreement.

Conditions to NationsHealth's obligations

        The obligation of NationsHealth to effect the merger is further subject to the following conditions:

•

Millstream's and N Merger's representations and warranties that are qualified as to materiality must be true and correct and those not qualified as to materiality must be true and correct in all material respects, as of the date of completion of the merger, except representations and warranties that address matters as of another date, which must be true and correct as of that date (except as set forth in the immediately following two bullet points) and NationsHealth must have received an officer's certificate from Millstream to that effect;

56

•

the representation regarding the compliance of the merger agreement and the agreements contemplated by the merger agreement with Millstream's certificate of incorporation and the underwriting agreement it executed in its initial public offering and the determination of the Millstream board of directors that the fair market value of NationsHealth (including US Pharmaceutical Group) is at least 80% of net assets of Millstream, must be true and correct in all respects, as of the date of completion of the merger and NationsHealth must have received an officer's certificate by Millstream to that effect;



•

the representation that at least $20,000,000 must be in the trust account must be true and correct in all respects and NationsHealth must have received an officer's certificate by Millstream to that effect;



•

Millstream and N Merger must have performed in all material respects all obligations required to be performed by them under the merger agreement (except as set forth in the bullet point immediately below), and NationsHealth must have received an officer's certificate by Millstream to that effect; and



•

Millstream and N Merger must have performed in all respects the obligations set forth in the section "The Merger Agreement—Pre Closing Confirmation" .



•

NationsHealth and its members must have received a written opinion, dated as of the closing date, from McDermott, Will & Emery, counsel to NationsHealth, to the effect that the merger should be treated for federal income tax purposes as an exchange described in Section 351 of the Internal Revenue Code (and another non-recognition transaction).



•

there will not have occurred since the date of the merger agreement any material adverse effect on Millstream;



•

Millstream, Spector, Continental Stock Transfer & Trust Company and the other signatories must have executed and delivered:



•

the amendment to the registration rights agreement among the stockholders of Millstream existing prior to the initial public offering and Millstream;



•

the indemnification and escrow agreement; and



•

NationsHealth must have received an officer's certificate of Millstream to the effect that the Millstream board of directors has independently determined, as of the date of consummation of the merger, that the fair market value of NationsHealth, including US Pharmaceutical Group, is at least 80% of the net assets of Millstream.

Termination, Amendment and Waiver

        The merger agreement may be terminated at any time prior to the consummation of the merger, whether before or after receipt of Millstream's stockholder approval to the merger, by mutual written consent of Millstream, N Merger and NationsHealth.

Termination by either NationsHealth or Millstream

        Either NationsHealth or Millstream may terminate the merger agreement if:

•

the merger is not consummated on or before August 31, 2004, unless the failure to consummate the merger is the result of a material breach of the merger agreement by the party seeking to terminate it;



•

any governmental entity issues an order, decree or ruling or takes any other action permanently enjoining, restraining or otherwise prohibiting the merger and such order, decree, ruling or other action will have become final and nonappealable;

57

•

any condition to the obligation of such party to consummate the merger becomes incapable of satisfaction prior to August 31, 2004 (however, the terminating party must not then be in material breach of any representation, warranty or covenant contained in the merger agreement); or



•

either:



•

at the special meeting, the Millstream stockholder approval is not obtained; or



•

the holders of 20% or more of the shares of Millstream common stock issued in its initial public offering shall have demanded that Millstream convert their shares into cash.

Termination by Millstream

        Millstream may terminate the merger agreement if:

•

NationsHealth breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the merger agreement, as amended, which breach or failure:



•

would give rise to the failure of any condition set forth under the headings "The Merger Agreement—Conditions to the Completion of the Merger—Conditions to Millstream's and NationsHealth's obligations" and "The Merger Agreement—Conditions to the Completion of the Merger—Conditions to Millstream's obligations" ; and



•

cannot be or has not been cured within 30 days after the giving of written notice to NationsHealth of such breach or August 31, 2004, if earlier (provided that Millstream is not then in material breach of any representation, warranty or covenant).

Termination by NationsHealth only

        NationsHealth may terminate the merger agreement if:

•

Millstream breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the merger agreement which breach or failure to perform:



•

would give rise to the failure of a condition set forth under the headings "The Merger Agreement—Conditions to the Completion of the Merger—Conditions to Millstream's and NationsHealth's obligations" and "The Merger Agreement—Conditions to the Completion of the Merger—Conditions to NationsHealth's obligations" ; and



•

cannot be or has not been cured within 30 days after the giving of written notice to Millstream of such breach or August 31, 2004, if earlier (provided that NationsHealth is not then in material breach of any representation, warranty or covenant in the merger agreement); or



•

any of the following occur;



•

Millstream's board of directors or any committee thereof:



•

withdraws or modifies, in a manner adverse to NationsHealth, or proposes to withdraw or modify, in a manner adverse to NationsHealth, its approval of the merger agreement, the merger or any of the other transactions contemplated by the merger agreements;



•

fails to recommend to Millstream's stockholders that they give their approval to the merger;



•

or approves or recommends, or proposes to approve or recommend, any parent takeover proposal.

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•

Millstream's board of directors fails to reaffirm publicly and unconditionally its recommendation to Millstream's stockholders that they give their approval to the merger within 2 days after receiving NationsHealth's written request to do so, which public reaffirmation must also include the unconditional rejection of the parent takeover proposal. NationsHealth may make this request at any time that a parent takeover proposal is pending or is about to be commenced; or



•

Millstream or any of its officers, directors, employees, representatives or agents takes any of the actions that would be proscribed by the provision described above in the section "The Merger Agreement—No Solicitation by Millstream," except for the specified exceptions in the provision.

Effect of Termination

        In the event of termination by either NationsHealth or Millstream, the merger agreement will become void and have no effect, without any liability or obligation on the part of Millstream, N Merger or NationsHealth, except in connection with:

•

the confidentiality obligations set forth in a confidentiality agreement signed among the parties to the merger agreement and described in the section below called "The Confidentiality Agreement";



•

the representations and warranties by each of NationsHealth and Millstream regarding the absence of brokers;



•

the provisions described under "Fees and Expenses" to be paid upon termination; and



•

the general provisions of the agreement.

        These provisions will survive termination, except to the extent that the termination results from the willful and material breach by a party of any representation, warranty or covenant set forth in the merger agreement.

Assignment; Conversion

        The merger agreement may not be assigned by any party without prior written consent. However, the parties agreed that RGGPLS Holding and GRH Holdings may convert into a limited liability company the equity interests of which are beneficially owned in the same proportion and by the same persons as the capital stock or membership interests of the converting entity. From the time of such conversion, the new entity would succeed to all of the rights and obligations of its respective converting entity under the merger agreement.

Amendment

        The merger agreement may be amended by the parties at any time before or after receipt of the approval from Millstream's stockholders. However, after receipt of the approval from Millstream's stockholders, the parties will not, without further stockholders' approval, amend the merger agreement, in a manner that by law requires further approval by the stockholders of Millstream. In addition, no amendment will be binding on NationsHealth or its members unless such amendment is approved by all of its preferred member representatives. The merger agreement may not be amended except by an instrument in writing signed on behalf of each of NationsHealth and Millstream.

Extension; Waiver

        At any time prior to the consummation of the merger, NationsHealth and Millstream may extend the time for the performance of any of the obligations or other acts, waive any inaccuracies in the representations and warranties or waive compliance with any of the conditions. Any agreement on the part of either NationsHealth and Millstream to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of it. The failure of NationsHealth or Millstream to assert any of its rights will not constitute a waiver.

59

INDEMNIFICATION AND ESCROW AGREEMENT

        Pursuant to the merger agreement, on [    ], 2004, Millstream, RGGPLS Holding, Arthur Spector and Continental Stock Transfer & Trust Company, as escrow agent, entered into an indemnification and escrow agreement in the form attached to the merger agreement. The following description of the indemnification and escrow agreement describes the material terms of the indemnification and escrow agreement but does not purport to describe all the terms of the agreement. In the event the merger agreement is terminated the indemnification and escrow agreement will automatically terminate. The complete text of the indemnification and escrow agreement is attached as Annex B to this document and is incorporated by reference into this document. We encourage all stockholders to read the indemnification and escrow agreement in its entirety.

Creation of Escrow

        At the completion of the merger, $2,000,000 of the funds presently held in the trust account will not be released to the combined company but will instead be transferred to the escrow agent.

Release of Escrowed Funds

        In the event of a breach by NationsHealth of any representations or warranties contained in the merger agreement or any of its covenants requiring performance prior to completion of the merger, and subject to specific limitations contained in the indemnification and escrow agreement, the escrow agent will pay to Millstream stockholders on the record date of the special meeting and who did not exercise their conversion rights an amount equal to the losses resulting from NationsHealth's breach. The indemnification and escrow agreement provides that:

•

no escrowed funds shall be paid until amount of losses exceeds $250,000 on a cumulative basis;



•

any individual loss must exceed $1,000 to be included in the calculation of cumulative losses; and



•

the maximum amount that may be paid out of the escrow account is $2,000,000 in the aggregate.

Exclusive Remedy

        The escrowed funds represent the exclusive remedy of Millstream stockholders for losses incurred in connection with the breach by NationsHealth of any of its representations and warranties or its covenants requiring performance prior to the merger contained in the merger agreement.

Survival Period

        For the purpose of the indemnification and escrow agreement, the representations and warranties and covenants requiring performance prior to the merger contained in the merger agreement will survive the merger and remain in force for one year. Any claim must be made prior to the one-year period in order for the escrowed funds to be paid with respect to any losses.

EMPLOYMENT AGREEMENTS

        Each of Dr. Parker and Messrs. Gregg and Stone entered into employment agreements concurrently with the execution of the merger agreement. The following description of the employment agreements describes the material terms of the employment agreements but does not purport to describe all the terms of the employment agreements. In the event the merger agreement is terminated, the employment agreements will automatically terminate. The complete text of the form of employment agreement for each of Dr. Parker and Messrs. Gregg and Stone is attached as Annex C to this document and is incorporated by reference into this document. We encourage all stockholders to read the form of employment agreement in its entirety.

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Scope of Employment

        The employment agreements provide that Dr. Parker will be employed as the chief executive officer, Mr. Gregg as the chief operating officer and Mr. Stone as the president of the combined company. Each of Dr. Parker and Messrs. Gregg and Stone is sometimes referred to as the executive. Other than these differences in offices, the employment agreements are substantially identical.

Compensation

        Each executive:

•

is entitled to a minimum base salary of $500,000 per annum, for a term of 5 years;



•

is eligible for an annual bonus based on achievement goals established by the company (any bonus up to $500,000 requires the approval of Mr. Spector and another specified executive, while any bonus resulting in total compensation in excess of $1,000,000 requires approval of the independent directors who are members of the compensation committee); and



•

is eligible for additional incentive compensation as determined by the independent directors on the compensation committee acting in their discretion.

Fringe Benefits, Reimbursement of Expenses

        Each executive is entitled, among other things, to:

•

medical and disability insurance from the Millstream in accordance with Millstream's policies, except that, if the employment agreement is terminated by the executive for good reason or disability, or by the combined company other than for cause, coverage is continued for the period during which the executive is eligible to receive benefits under COBRA; and



•

up to $10,000 per year toward premiums for life or disability insurance, as directed by the executive.

Termination Benefits

        If the agreement is terminated by the combined company for cause, or by the executive other than for good reason or upon the executive's death, the combined company shall pay the executive the amount of accrued base salary and any bonus earned but not paid.

        If the agreement is terminated by the combined company for reasons other than cause or by the executive for good reason or disability, then the executive is entitled to:

•

an amount equal to base salary for twenty-four months;



•

in the event of the executive's disability, medical insurance during the period the executive's spouse or the executive is eligible to receive benefits under COBRA;



•

immediately vest all stock options or restricted stock previously granted to the executive; and



•

require the combined company to purchase from the executive up to $3,000,000 worth of shares of Millstream common stock. In lieu of a cash payment, Millstream may arrange the sale of the shares to a third party or register the resale of the shares, in which case the executive shall receive at least $3,000,000. If Millstream decides to purchase the shares from the executive and one or both of the other executives exercises its put rights at the same time then Millstream may pay the funds to the executives over two or three years, as appropriate, in equal amounts pro-rata among the executives.

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        Cause means:

•

the executive's willful commission of acts of dishonesty in his position;



•

the executive's willful failure or refusal to perform the essential duties of his position;



•

the conviction of the executive of a felony; or



•

the engagement by the executive in illegal conduct.

        Good reason means:

•

the assignment to executive of duties materially inconsistent with his office or a material change in the nature or scope of executive's authority;



•

conduct on the part of Millstream or its representatives intended to force the resignation of the executive;



•

a material breach by Millstream of the employment agreement, and failure to cure the same within 30 days of receiving notice of the breach; or



•

after a change of control of Millstream, requiring executive to be principally based at any office more than 45 miles from the current office.

GOVERNANCE AGREEMENT

        Concurrently with the execution of the merger agreement, Mr. Spector and RGGPLS Holding, the holder of the majority of the outstanding membership interests in NationsHealth, signed a governance agreement. The following description of the governance agreement describes the material terms of the governance agreement but does not purport to describe all the terms of the governance agreement. In the event the merger agreement is terminated, the governance agreement will automatically terminate. The complete text of the governance agreement is attached as Annex D to this document and is incorporated by reference into this document. We encourage all stockholders to read the governance agreement in its entirety.

Composition of Board

        The board of directors of the combined company will initially be comprised of eleven directors, with nine designated by RGGPLS Holding and two designated by Arthur Spector. If the size of the board of directors is increased or decreased, the number of RGGPLS Holding nominees and Mr. Spector nominees that RGGPLS Holding or Mr. Spector respectively, is entitled to include in the combined company's proxy statement will increase or decrease proportionately. However, Mr. Spector's directors shall not represent greater than 20% of the entire board of directors as increased or decreased.

        RGGPLS Holding and Mr. Spector have agreed that prior to the later to occur of the date on which Mr. Spector owns less than 1% of the combined company's issued and outstanding common stock and August 25, 2006, Mr. Spector shall have the right to include at least one nominee in the combined company's proxy statement.

62

Company Proxy Statement

        With respect to each meeting for the election of directors, RGGPLS Holding and Mr. Spector shall have the right to include in the combined company proxy statement the following nominees:

Rights of RGGPLS Holding

•

if RGGPLS Holding owns at least 20% of the issued and outstanding shares of the combined company common stock, then RGGPLS Holding will have the right to appoint three nominees for each class that is standing for election to the board of directors.



•

Prior to a triggering event, one RGGPLS Holding nominee in each of Class I, Class II and Class III must be an independent director.



•

After a triggering event, two RGGPLS Holding nominees must be independent directors in each of Class I and Class III and one RGGPLS Holding nominee must be an independent director for Class II. However, after a Spector termination event, only one RGGPLS Holding nominee for Class I must be an independent director;



•

if RGGPLS Holding owns less than 20% and more than 5% of the issued and outstanding shares of Millstream the combined company's common stock, then RGGPLS Holding will have the right to appoint one nominee in each of Class I and Class II and two nominees in Class III, none of whom are required to be independent directors; and



•

if RGGPLS Holding owns less than 5% of the issued and outstanding shares of the combined company's common stock, then RGGPLS Holding will have the right to appoint one nominee in each of Class I, Class II and Class III, none of whom are required to be independent directors.

Rights of Mr. Spector

•

if Mr. Spector owns at least 1% of the issued and outstanding shares of the combined company's common stock, then Mr. Spector will have the right to appoint one nominee for each of Class II and III, but no nominees in Class I.



•

Prior to a triggering event, these nominees are not required to be independent directors; and



•

but after a triggering event Mr. Spector's nominee in Class II must be an independent director.



•

if, Mr. Spector owns less than 1% of the issued and outstanding shares of the combined company's common stock prior to August 25, 2006, then Mr. Spector will have the right to appoint one nominee in Class III, but no nominees in Class I or Class II. After August 25, 2006, Mr. Spector will have no right appoint any nominees to the board of directors.



•

Arthur Spector will be the non-executive chairman of the board until a Spector termination event.

        A triggering event occurs when:

•

if the combined company common stock is listed or quoted on Nasdaq, the American Stock Exchange or any other national securities exchange, and the combined company fails to be controlled by a person or group owning at least 50% of the combined voting power of the company or otherwise fails to constitute a "controlled company" for purposes of the rules and regulations of the applicable exchange.

63

        A Spector termination event occurs on the later of the date:

•

Mr. Spector owns less than 1% of the combined company outstanding common stock; or



•

August 25, 2006.

Resignation of Non-Independent Directors Upon Occurrence of a Triggering Event

        If a triggering event occurs:

•

RGGPLS Holding shall cause two of its nominated directors who are not independent directors to resign as promptly as practicable and shall designate two independent directors to fill the positions; and



•

Spector shall cause his nominated director to resign and shall designate one independent director to fill the position.

Solicitation of Proxies and Voting

        The combined company is required to use reasonable best efforts to solicit from the stockholders eligible to vote for the election of directors proxies in favor of the nominees indicated by RGGPLS Holding and Mr. Spector.

        Each of RGGPLS Holding and Mr. Spector agrees that, at any annual or special meeting of the stockholders, or any action by written consent, each will vote its respective shares:

•

in the favor of the RGGPLS Holding and Spector nominees included within the company proxy statement; and



•

against the election of any person nominated in opposition to the RGGPLS Holding and Spector nominees or the removal of the RGGPLS Holding and Spector nominees.

Officers of the Combined Company

        After the consummation of the merger the board of directors will appoint the following executive officers:

•

Glenn M. Parker, M.D., as Chief Executive Officer,



•

Robert Gregg, as Chief Operating Officer,



•

Lewis Stone, as President and Chief Information Officer, and



•

Timothy Fairbanks, as Chief Financial Officer.

Termination

        The governance agreement terminates:

•

with respect to RGGPLS Holding at the later of:



•

the date when RGGPLS Holding owns less that 1% of the combined company's outstanding common stock; or



•

August 25, 2006

•

with respect to Spector:

•

upon the occurrence of a Spector termination event;

•

whenever RGGPLS Holding delivers notice stating that it terminates the agreement; and

64

•

if not terminated earlier, then upon the sixth anniversary of the date of the governance agreement.

STOCKHOLDERS AGREEMENT

        Concurrently with the execution of the merger agreement, Millstream and RGGPLS Holding and GRH Holdings, currently members of NationsHealth executed a stockholders agreement which was amended on June 2, 2004. The following description of the stockholders agreement, as amended, describes the material terms of the stockholders agreement, as amended, but does not purport to describe all the terms of the stockholders agreement, as amended. In the event the merger agreement is terminated, the stockholders agreement will automatically terminate. The complete text of the stockholders agreement, as amended, is attached as Annex E to this document and is incorporated by reference into this document. We encourage all stockholders to read the stockholders agreement, as amended, in its entirety.

Agreement to Vote

        At all stockholders meetings held by, or action by written consent of, the combined company after the merger, GRH Holdings will vote the covered shares:

        in favor of:

•

all of the RGGPLS Holding nominees if directors are to be elected at the stockholders meeting;



•

any matter submitted for approval by RGGPLS Holding; and/or



•

any other matter as directed by RGGPLS Holding; and

        against:

•

the election of any person or persons nominated in opposition to the RGGPLS Holding nominees (if directors are to be elected at the stockholders meeting);



•

any matter brought before the stockholders meeting to be acted upon by the stockholders of the combined company that is in opposition to matter submitted for approval by RGGPLS Holding; and/or



•

any other matter as directed by RGGPLS Holding.

        The covered shares are:

•

the shares of Millstream common stock issuable upon conversion of GRH Holdings' class B member interests in NationsHealth; and



•

2,400,000 shares out of the shares of Millstream common stock issuable upon conversion of GRH Holdings' preferred member interests in NationsHealth.

Irrevocable Proxy

        GRH Holdings has irrevocably appointed RGGPLS Holding as GRH Holdings' proxy and attorney. The proxy will have full power of substitution to vote and act in the event that GRH Holdings fails at any time to vote or act by written consent with respect to any of its shares as agreed in the stockholders agreement, as amended.

Restrictions on Transfer

        GRH Holdings has agreed that, without the prior written consent of RGGPLS Holding, it will not, at any time after the date of the stockholders agreement, as amended and prior to March 8, 2010, sell,

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dispose of, or grant any option or enter into any swap or other arrangement with respect to, the covered shares until GRH Holdings has sold to a non-affiliated third party all of the shares of Millstream common stock that do not constitute covered shares for purposes of the Stockholders Agreement.

Tag-along Rights

        If either RGGPLS Holding or GRH Holdings intends to sell all or part of its securities of Millstream, the other will have the right to sell the same portion of the same securities on the same terms to the same buyer or to another financially reputable buyer.

REGISTRATION RIGHTS AGREEMENT

        Concurrently with the execution of the merger agreement, Millstream, RGGPLS Holding, GRH Holdings and Becton, Dickinson and Company entered into a registration rights agreement which was amended on June 2, 2004. The following description of the registration rights agreement, as amended, describes the material terms of the registration rights agreement, as amended, but does not purport to describe all the terms of the registration rights agreement, as amended. In the event the merger agreement is terminated, the registration rights agreement, as amended, will automatically terminate. The complete text of the registration rights agreement, as amended, is attached as Annex F to this document and is incorporated by reference into this document. We encourage all stockholders to read the registration rights agreement, as amended, in its entirety.

        Millstream has agreed to grant registration rights to RGGPLS Holding, GRH Holdings and Becton, Dickinson and Company with respect to the securities of Millstream to be issued to them upon completion of the merger.

Demand Registration Rights

        RGGPLS Holding may require up to four occasions, and GRH Holdings may require one occasion, that the combined company register the shares of common stock held by it issued in the merger.

•

The securities covered by the registration must have an aggregate price to the public of at least $1,000,000; and



•

The combined company is not required to effect any registration within three months after the effective date of a registration statement relating to any underwritten offering of common stock, including any such offering effected pursuant to the registration rights agreement, as amended.

Piggy-back Registration Rights

        If at any time after the merger, the combined company proposes to file a registration statement under the Securities Act with respect to an offering of equity securities, either for its own account or the account of other stockholders, then RGGPLS Holding, GRH Holdings and Becton, Dickinson and Company will have the right to include their shares in the registration statement, subject to specific limitations set forth in the registration rights agreement, as amended.

Form S-3 Registration Rights

        Each of RGGPLS Holding, GRH Holdings and Becton, Dickinson and Company have the right, to require on an unlimited number of occasions, that the combined company register their shares on a "Form S-3" or other short-form registration statement that may be available. In addition to other limitations set forth in the registration rights agreement, as amended, the aggregate offering to the public must be at least $500,000.

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Lock-up

        RGGPLS Holding, GRH Holdings and Becton, Dickinson and Company have agreed,

•

until the expiration of a 180-day period following the consummation of the merger, not to sell or otherwise dispose of the shares of Millstream common stock received by them in the merger (we refer to these shares of common stock as the merger securities); and



•

in each of the next three succeeding 180-day periods each of them may, at any time during the 180-day period, sell up to 25% its merger securities; and

        This restriction on transfer terminates on the earlier of the second anniversary of the effective date of the merger or the consummation of a business combination involving the combined company in which the merger securities are converted into cash, other securities or property.

        The table below indicates the maximum number of shares of common stock that could be released from the lock-up, assuming that the holders of 804,999, which is one share fewer than 20% of the shares of Millstream common stock issued in its initial public offering voted against the merger and demanded that Millstream convert their shares of common stock into a pro rata portion of the trust account.

NATIONSHEALTH, INC. 2004 STOCK OPTION PLAN

Background

        Effective as of April 9, 2004, the board of directors unanimously approved the stock option plan, subject to stockholder approval, to reserve 1,900,000 shares. The purpose of the stock option plan is to enable the combined company to offer non-employee directors, officers and other key employees and consultants of the combined company and its subsidiaries and affiliates stock options in the combined company, thereby attracting, retaining, and rewarding these participants and strengthening the mutuality of interests between these participants and the combined company's stockholders. The proposed stock option plan will permit the combined company to keep pace with changing developments in management compensation and make the combined company competitive with those companies that offer stock incentives to attract and keep non-employee directors and key employees. Stockholder approval of the stock option plan also will permit stock options to qualify for deductibility under Section 162(m) of the Internal Revenue Code.

         A summary of the principal features of the stock option plan is provided below, but is qualified in its entirety by reference to the full text of the stock option plan that is attached to this document under Annex I.

Adoption of the Stock Option Plan

        The affirmative vote of holders of a majority of the shares represented and entitled to vote at the meeting is required for approval of the amendment to the stock option plan. Abstentions will count as a vote against the proposal, but broker non-votes will have no effect.

        The stock option plan will not be effected if the merger proposal is not adopted. However, the merger proposal is not conditioned upon the approval of the stock option plan.

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        The board of directors unanimously recommends a vote " FOR " adoption of the NationsHealth, Inc. 2004 Stock Option Plan.

Shares Available

        The stock option plan reserves 1,900,000 shares of common stock for awards. If Millstream's stockholders approve this proposal, the total number of shares of common stock available for issuance under the stock option plan will be subject to the adjustments described below. All available shares may, but need not, be issued pursuant to the exercise of incentive stock options. If there is a lapse, expiration, termination, or cancellation of any option or right prior to the issuance of shares or the payment of the equivalent thereunder, or if shares are issued and thereafter are reacquired by the combined company pursuant to rights reserved upon issuance thereof, with respect the stock option plan, those shares may again be used for new awards under the stock option plan. The combined company will add any shares exchanged by an optionee in payment of the exercise price of any stock option, any shares retained by the combined company pursuant to a participant's tax withholding election, to the shares available under the stock option plan.

Administration

        The stock option plan will be administered by either the compensation committee of the board of directors or another committee designated by the board. Members of this committee will satisfy requirements under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, the Nasdaq Stock Market and the Internal Revenue Service with respect to plans intending to be qualified under Section 162(m) of the Internal Revenue Code. Among this committee's powers are the authority to interpret the stock option plan, establish rules and regulations for its operation, select non-employee directors, consultants, officers and other key employees of the combined company and its subsidiaries to receive awards, and determine the form, amount, and other terms and conditions of awards. The committee also has the power to modify or waive restrictions on awards, to amend awards, and to grant extensions and accelerations of awards.

Eligibility of Participation

        Non-employee directors, consultants, officers and other key employees of the combined company or any of its subsidiaries are eligible to participate in the stock option plan. The selection of eligible participants is within the discretion of the compensation committee. The estimated number of individuals who are eligible to participate in the stock option plan is approximately 200, among directors, officers, other employees and consultants of the combined company and its subsidiaries.

Types of Awards

        The stock option plan provides for the grant of stock options, including incentive stock options and non-qualified stock options.

        Awards may be granted singly, in combination, or in tandem, as determined by the compensation committee. The board of directors may amend, suspend or modify the stock option plan at any time, except as limited by the terms of the stock option plan.

Stock Option Grants

        The compensation committee may grant options qualifying as incentive stock options under the Internal Revenue Code and nonqualified stock options. The term of an option will be fixed by the compensation committee, but will not exceed ten years. The option price for any option, whether an incentive stock option or a nonqualified stock option, will not be less than the fair market value of common stock on the date of grant. Generally, the fair market value will be the closing price of the

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common stock on the applicable trading market. Payment for shares purchased upon exercise of a stock option must be made in full at the time of purchase. Payment may be made in cash, by the transfer to the combined company of shares owned by the participant for at least six months on the date of transfer (or certification of this ownership) or as may alternatively be authorized by the compensation committee. An award recipient would not be permitted to exercise his or her option for a period of no less than six (6) months after the grant of such option.

Maximum Awards

        No non-employee director may receive in any calendar year stock options relating to more than 150,000 shares.

Adjustments

        The number and class of shares available under the stock option plan and the terms of outstanding awards may be adjusted by the compensation committee to prevent dilution or enlargement of rights in the event of various changes in the capitalization of the combined company. The compensation committee will, as it deems appropriate and equitable, have the right to:

•

proportionately adjust the number and types of shares of common stock (or other securities), exercise price, or performance standards of any or all benefits; and



•

make provision for a cash payment or for substitution or exchange of any or all stock options, in connection with any extraordinary dividend or distribution, reclassification, recapitalization, stock split, reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, combination, repurchase or exchange of common stock or securities of the combined company, or similar, unusual or extraordinary corporate transaction or a sale of substantially all of the assets of the combined company.

Amendment of the Stock Option Plan

        The board of directors has the right and power to amend the stock option plan. However, the board of directors may not amend the stock option plan in a manner which would impair or adversely affect the rights of the holder of stock options without the holder's consent. The combined company will obtain stockholder approval if the amendment increases the number of shares reserved under the stock option plan, if the amendment increases the maximum amount of shares that may be subject to awards to a participant in a year or if the Internal Revenue Code or any other applicable statute, rule or regulation, including, but not limited to, those of any securities exchange, requires shareholder approval with respect to the stock option plan or the amendment.

Termination of the Stock Option Plan

        The stock option plan may be terminated at any time by the board. Termination will not in any manner impair or adversely affect any benefit outstanding at the time of termination. The stock option plan will expire on the tenth anniversary of its approval by the stockholders.

Compensation Committee's Right to Modify Benefits

        Any stock option granted may be converted, modified, forfeited, or canceled, in whole or in part, by the compensation committee if and to the extent permitted in the stock option plan, or applicable agreement entered into in connection with a stock option grant or with the consent of the participant to whom the stock option was granted.

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Accounting

        The combined company presently intends to account for the stock-based compensation following Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations, in accounting for the stock options to be issued under the stock option plan, rather than the alternative fair value accounting allowed by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation (SFAS No. 123)." Accounting Principles Board Opinion No. 25 provides that the compensation expense relative to the stock options be measured based on the intrinsic value of the stock option. Statement of Financial Accounting Standards No. 123 requires companies that continue to follow Accounting Principles Board Opinion No.25 to provide a pro forma disclosure of the impact of applying the fair value method of SFAS No. 123; the combined company intends to provide such pro forma disclosure. Options granted to non-employees will be reported as compensation expense as required by SFAS No. 123.

        The Financial Accounting Standards board recently issued a Proposed Statement of Financial Accounting Standards entitled "Share-Based Payment." This Proposed Statement would eliminate the ability to account for share-based compensation transactions using Accounting Principles Board Opinion No. 25, and generally would require instead that such transactions be accounted for using a fair-value-based method. The combined company intends to monitor developments in the process of adoption of the Proposed Statement, and intends to implement such changes in its accounting for stock-based compensation as may be required upon the adoption of the final statement.

Federal Tax Treatment

        Under current law, the following are U.S. federal income tax consequences generally arising with respect to awards under the stock option plan.

        A participant who is granted an incentive stock option does not recognize any taxable income at the time of the grant or at the time of exercise. Similarly, the combined company is not entitled to any deduction at the time of grant or at the time of exercise. If the participant makes no disposition of the shares acquired pursuant to an incentive stock option before the later of two years from the date of grant and one year from the date of exercise, any gain or loss realized on a subsequent disposition of the shares will be treated as a long-term capital gain or loss. Under these circumstances, the combined company will not be entitled to any deduction for federal income tax purposes.

        A participant who is granted a non-qualified stock option will not have taxable income at the time of grant but will have taxable income at the time of exercise equal to the difference between the exercise price of the shares and the market value of the shares on the date of exercise. The combined company is entitled to a tax deduction for the same amount.

Limitation on the Combined Company's Deduction

        Under Section 162(m) of the Internal Revenue Code, the combined company may not deduct otherwise deductible compensation paid to covered employees (i.e., generally, the chief executive officer and the four highest compensated officers of the combined company) to the extent that the compensation exceeds $1 million. An exception applies, however, for performance-based compensation if the terms under which the compensation is paid are approved by the combined company's shareholders and certain other requirements are satisfied. Although the combined company intends that awards under the stock option plan (other than awards not based on Performance Criteria) will satisfy the requirements to be considered performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code, there is no assurance awards will satisfy these requirements, and, accordingly, Section 162(m) of the Internal Revenue Code may limit the amount of deductions otherwise available to the combined company with respect to awards to covered employees under the stock option plan. The inclusion of the limits on individual awards satisfy the requirements of

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Section 162(m) by establishing a maximum number of shares that may be represented by awards granted to any employee and by specifying the factors that may be used by the compensation committee with respect to awards made under the stock option plan.

Other Information

        As the administration of the stock option plan involves discretionary choices by the compensation committee, awards to be granted under the stock option plan in 2004 are not now determinable.

Effect of Approval of the Stock Option Plan

        Approval by the stockholders of the stock option plan will permit the compensation committee the ability to make equity compensation awards in the form of stock options to non-employee directors, consultants, officers and other key employees. If the stock option plan is not approved with additional shares, the compensation committee will not have sufficient shares to make grants of equity compensation settled in stock to key employees for 2004.

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INFORMATION ABOUT NATIONSHEALTH