SATISFACTION OF DEBT AGREEMENT

 SATISFACTION OF DEBT AGREEMENT

         THIS  SATISFACTION  OF  DEBT  AGREEMENT  is  made  as of the 1st day of
November,  2000  ("Effective  Date") among Horizon Blue Cross Blue Shield of New
Jersey,  f/k/a Blue Cross and Blue Shield of New Jersey,  Inc.  ("BCBS"),  a New
Jersey corporation, Horizon Healthcare of New Jersey, Inc. ("Healthcare"), a New
Jersey  corporation  (BCBS and  Healthcare  are  hereinafter  sometimes  jointly
referred to as  "Horizon"),  and  CareAdvantage,  Inc.,  a Delaware  corporation
("CAI"),  CareAdvantage Health Systems,  Inc. ("CAHS"), a Delaware  corporation,
and Contemporary HealthCare Management,  Inc. ("CHCM"), a New Jersey corporation
(CAI,  CAHS  and  CHCM  are  hereinafter   sometimes   jointly  referred  to  as
"CareAdvantage").

                                    Recitals

         CareAdvantage is indebted to Horizon as following:

               (i) to BCBS pursuant to a promissory  note by CHCM dated April 1,
               1997 in the face  amount  of  $1,862,823  (the  "BCBS  Promissory
               Note"),  which as of the  Effective  Date  hereof  has an  unpaid
               principal  balance of $692,571 and accrued and unpaid interest of
               $40,139, for a total indebtedness of $732,710; and

               (ii) to  Healthcare  in the amount of $839,000  plus  accrued and
               unpaid  interest on account of the Healthcare  Promissory Note as
               defined herein (the  "Healthcare  Debt") in respect of settlement
               of litigation also involving Allied Specialty Care Services, Inc.
               which is  described  in Item 3(b) of CAI's  Form 10KSB of for its
               fiscal year ended December 31, 1999 filed with the Securities and
               Exchange  Commission  ("SEC"),  $419,500 of which,  together with
               accrued  and unpaid  interest as of the date hereof in the amount
               of $6,030,  is evidenced by a promissory note by CAI dated August
               9, 2000 ("Healthcare Promissory Note").

The combined  indebtedness of CareAdvantage to Horizon described in (i) and (ii)
above is hereinafter jointly referred to as the "Horizon Debt".

         The parties have agreed on the terms of payment and satisfaction of the
Horizon  Debt by the  issuance by CAI to Horizon of shares of its common  stock,
$.001 par value.

         NOW,  THEREFOR,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         Section 1.   Satisfaction of Horizon Debt.
                      ----------------------------

                  1.1.  At  the  Closing   referred  to  in  Section  2  hereof,
CareAdvantage  shall  pay  and  will  satisfy  the  Horizon  Debt in full by the
issuance and delivery to Horizon of that number of shares of CAI's common stock,
$.001 par value ("Common Stock"), determined in Section 1.2 hereof.

                  1.2.  The  number  of  shares  of  Common  Stock to be  issued
pursuant  to  Section  1.1  shall be equal to the sum of (A) the  amount  of the
Horizon  Debt divided by the greater of (i) the average mean between the closing
bid and asked prices per share of Common Stock on the over-the-counter  bulletin
board market for the twenty (20)  trading days ending on the fifth  business day
preceding  Closing,  as  hereinafter  defined,  or (ii) twelve cents ($.12) (the
"Basic Shares"), plus (B) that number of additional shares of Common Stock equal
to twenty percent (20%) of the number of Basic Shares ( the "Additional  Shares"
and the sum of Basic Shares and Additional Shares, the "Shares").

         Section 2.   Closing.
                      -------

                  2.1. The closing  ("Closing")  of the  transactions  described
herein  shall  occur on (i) the tenth day after the latest of (A) the consent to
this  Agreement by CW Ventures II, L.P.; (B) the filing of Articles of Amendment
to CAI's Certificate of Incorporation increasing the number of authorized shares
of Common  Stock,  (C)  approval by the boards of directors  of  Healthcare  and
Horizon  Healthcare  Plan  Holding  Company,  Inc.  ("Holdco")  of the  dividend
contemplated by Section 2.3 hereof and (D) Horizon's  receipt of approval of the
transactions  contemplated  by this Agreement from the New Jersey  Department of
Banking  and  Insurance  and the New  Jersey  Department  of Health  and  Senior
Services (collectively, the "Departments") as provided by Section 3.7 hereof; or
(ii) such other date as the  parties  may agree.  Unless the  parties  otherwise
agree,  in the event that the Closing has not occurred by March 31,  2001,  then
this Agreement shall be null and void.

                  2.2. At the Closing, (i) CAI shall deliver to BCBS CAI's stock
certificate for 46.44% of the Shares; (ii) CAI shall deliver to Healthcare CAI's
stock  certificate  for 53.56% of the  Shares;  (iii) CAI shall pay an amount of
cash to BCBS as is equal to the  accrued  interest on the BCBS  Promissory  Note
computed from the Effective Date to the Closing; (iv) CAI shall pay an amount of
cash to  Healthcare  as is  equal  to the  accrued  interest  on the  Healthcare
Promissory note computed from the Effective Date to the Closing;  (v) BCBS shall
deliver  the  BCBS  Promissory  Note to CAI  marked  "Paid  in  Full";  and (vi)
Healthcare  shall deliver the Healthcare  Promissory Note to CAI marked "Paid in
Full".

                  2.3 Promptly following the Closing,  Healthcare shall transfer
by dividend to Holdco and Holdco  shall  transfer by dividend to BCBS the Shares
represented by the stock certificate described in Section 2.2(ii) hereof.

                  2.4.  Subject  to the  performance  by CAI of the  obligations
contained  in  clauses  (i) and (ii) of  Section  2.2  hereof,  each of BCBS and
Healthcare hereby releases and forever discharges CareAdvantage from any and all
debts,  liabilities,  claims  and other  obligations  of any  nature  whatsoever
arising from or in connection  with the Healthcare  Debt and the BCBS Promissory
Note and the Healthcare Promissory Note.

         Section 3.   Representations of Healthcare and BCBS.
                      --------------------------------------

                  Each of Healthcare  and BCBS hereby  represents as of the date
hereof and as of the Closing date that:

                  3.1.  It is  acquiring  the  Shares  for its own  account  for
investment  only and not with a view toward,  or in connection  with, the public
sale or  distribution  thereof,  except  pursuant to sales  registered  under or
exempt from the Securities Act of 1933, as amended (the  "Securities  Act"), and
applicable state securities laws.

                  3.2. It is an "accredited investor" as that term is defined in
Rule 501(a) of  Regulation  D.  Horizon has such  knowledge  and  experience  in
financial and business  matters that it is capable of evaluating  the merits and
risks of  ownership  of the Shares.  Horizon is aware that it may be required to
bear the economic  risk of ownership of the Shares for an  indefinite  period of
time, and is able to bear such risk for such period.

                  3.3. It has been furnished with such  information  relating to
the business,  finances and operations of CAI as it has considered  necessary to
make an  informed  investment  decision  with  respect to the  ownership  of the
Shares.

                  3.4. It understands  that the Shares have not been and are not
being  registered under the Securities Act or any state securities laws, and may
not be  offered  for sale,  sold,  assigned  or  transferred  unless  either (i)
subsequently  registered  thereunder,  or (ii) it shall have delivered to CAI an
opinion of counsel reasonably  satisfactory to CAI, in form, scope and substance
reasonably  satisfactory  to CAI,  to the  effect  that the  Shares  to be sold,

assigned or  transferred  may be sold,  assigned or  transferred  pursuant to an
exemption from such registration, including, but not limited to, reliance on SEC
Rule 144.

                  3.5. It  understands  that the Shares will bear CAI's standard
restrictive  legend to the effect that the Shares may not be sold or transferred
in the absence of an effective  registration  statement or an opinion of counsel
reasonably acceptable to CAI that registration is not required.

                  3.6.  This  Agreement  has been duly and  validly  authorized,
executed and  delivered  by each and is the valid and binding  agreement of each
enforceable in accordance with its terms,  except as such  enforceability may be
limited by applicable bankruptcy, insolvency, or other similar laws relating to,
or affecting generally, the enforcement of creditors' rights and remedies and by
other general principles of equity.

                  3.7 As to each  of  Healthcare  and  BCBS,  respectively,  the
execution,  delivery and performance of all terms of this Agreement does not and
will not conflict  with or violate any  provision of its charter or bylaws,  any
law, regulation, rule or order binding upon it or any agreement,  arrangement or
plan to which it is a party or by which it is bound;  and does not  require  any
consent,  authorization  or  approval  of any  governmental  agency,  regulatory
authority or any other  organization  or any other  person or, if required,  the
same has been obtained and is in full force and effect; provided,  however, that
Horizon's  obligations  to perform this Agreement  shall be contingent  upon its
obtaining the approvals of (i) the boards of directors of Healthcare  and Holdco
of the dividend contemplated by Section 2.3 hereof and (ii) the Departments.

         Section 4.   Representations of CAI.
                      -----------------------

                  CAI  hereby  represents  as of the date  hereof  and as of the
Closing date that:

                  4.1.  This  Agreement  has been duly and  validly  authorized,
executed  and  delivered  by CAI and is the valid and binding  agreement  of CAI
enforceable in accordance with its terms,  except as such  enforceability may be
limited by applicable bankruptcy, insolvency, or other similar laws relating to,
or affecting generally, the enforcement of creditors' rights and remedies and by
other general principles of equity.

                  4.2.  The issuance of the Shares has been duly  authorized  by
the Board of Directors of CAI and the Shares will be, upon  delivery to BCBS and
Healthcare, respectively, validly issued, fully paid and non-assessable.

                  4.3.  CAI  is  issuing  the  Shares  to  BCBS  and  Healthcare
hereunder in reliance upon  exemptions from  securities  registration  under the
Securities  Act  afforded  by the  provisions  of  Section  4(2)  of the Act for
issuances not involving any public offering.

                  4.4 The  execution,  delivery and  performance of all terms of
this  Agreement  does not and will not conflict with or violate any provision of
its charter or bylaws, any law, regulation, rule or order binding upon it or any
agreement,  arrangement  or plan to which it is a party or by which it is bound;
and does not require any consent,  authorization or approval of any governmental
agency,  regulatory  authority or any other organization or any other person or,
if  required,  the same has  been  obtained  and is in full  force  and  effect;
provided,  however,  that CAI's  obligations to perform this agreement  shall be
contingent upon its obtaining the approval of CW Ventures II, L.P.

                  4.5 The issuance of the Shares  contemplated by this Agreement
shall not  constitute a change of control or similar event under any  agreement,
arrangement  or plan to which CAI, CAHS or CHCM is a party or by which CAI, CAHS
or CHCM is bound,  including,  without limitation,  any employment  agreement or
stock option between CareAdvantage and a CareAdvantage  employee,  except to the
extent that any such  change of control or similar  event would not give rise to

any additional  obligations on CAI, CAHS or CHCM or any additional rights in any
third party under any such agreement, arrangement or plan.

         Section 5. Further  Assurances.  Each party hereto covenants and agrees
to take any and all  actions,  and shall  execute  and  deliver  all such  other
agreements,  certificates,  instruments  and  documents,  as may be necessary or
appropriate and as any other party may reasonably  request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the  transactions  contemplated  hereby.  Without limiting the generality of the
foregoing, Horizon agrees to file with the Departments, on or before December 8,
2000,  the Prior Notice of a  Transaction  on Form D required in order to obtain
the approval described in Section 2.1(i)(D) hereof.

         Section 6. General  Matters.  This  Agreement  shall be governed by and
interpreted in accordance with the laws of the State of Delaware  without regard
to its  principles  of  conflict of laws.  This  Agreement  contains  the entire
understanding  of the parties with  respect to the matters  covered  herein.  No
provision of this Agreement may be waived or amended other than by an instrument
in writing signed by the parties  hereto.  This Agreement  shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and assigns.

            [The remainder of this page is intentionally left blank.]

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal as of the date first above written.

                              HORIZON  BLUE CROSS AND BLUE  SHIELD OF NEW JERSEY
                              f/k/a  BLUE CROSS AND BLUE  SHIELD OF NEW  JERSEY,
                              INC.

                              By: /s/ Robert Pures
                                  ---------------------------------
                              Name: Robert Pures
                              Title:

                              HORIZON HEALTHCARE OF NEW JERSEY, INC.

                              By: /s/ William Frantel
                                 -----------------------------------
                              Name: William Frantel
                              Title:

                              CAREADVANTAGE, INC.

                              By: /s/ David G. Noone
                                 ----------------------------------
                              Name: David G. Noone
                              Title: Chief Executive Officer

                                    CONSENT

         CW Ventures  II, L.P.  hereby  consents to the  execution  of the above
Agreement  by CAI,  its  issuance  of  shares  of its  common  stock to BCBS and
Healthcare  and the transfer of shares of common stock from  Healthcare  to BCBS
pursuant thereto.

                              CW VENTURES II, L.P.

                              By:    CW PARTNERS III, L.P., its General Partner

                                     By: /s/ Barry Weinberg
                                         --------------------------------------
                                     Name: Barry Weinberg
                                     Title:  General Partner

 

Basic Info X:

Name: SATISFACTION OF DEBT AGREEMENT
Type: Satisfaction of Debt Agreement
Date: Dec. 13, 2000
Company: CAREADVANTAGE INC
State:

Other info:

Date:

  • 1st day of November , 2000
  • April 1 , 1997
  • December 31 , 1999
  • August 9 , 2000
  • March 31 , 2001
  • December 8 , 2000

Organization:

  • Horizon Blue Cross Blue Shield of New Jersey
  • Blue Shield of New Jersey , Inc.
  • Horizon Healthcare of New Jersey , Inc.
  • CareAdvantage , Inc.
  • CareAdvantage Health Systems , Inc.
  • Contemporary HealthCare Management , Inc.
  • Effective Date hereof
  • Allied Specialty Care Services , Inc.
  • Securities and Exchange Commission
  • CareAdvantage to Horizon
  • Horizon Healthcare Plan Holding Company , Inc.
  • New Jersey Department of Banking and Insurance
  • New Jersey Department of Health and Senior Services
  • BCBS Promissory Note
  • Healthcare Promissory Note
  • Regulation D. Horizon
  • Board of Directors of CAI
  • the State of Delaware

Location:

  • Delaware
  • CAHS
  • NEW JERSEY
  • L.P.

Money:

  • $ 1,862,823
  • $ 692,571
  • $ 40,139
  • $ 732,710
  • $ 839,000
  • $ 419,500
  • $ 6,030
  • $ .001
  • twelve cents
  • $ .12

Person:

  • Robert Pures
  • William Frantel
  • David G. Noone
  • Barry Weinberg

Percent:

  • twenty percent
  • 20 %
  • 46.44 %
  • 53.56 %