THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Computer Programs and Systems, Inc. (CPSI)

4/10/2006 Proxy Information

Dennis P. Wilkins co-founded Computer Programs and Systems, Inc. in 1979 and from 1979 until his retirement in June 1999, he served as President.

Mr. Muscat co-founded Computer Programs and Systems, Inc. in 1979 and from 1979 until his retirement in June 1999, he served as Executive Vice President.

Mr. Morrissey was appointed as Chairman of Computer Programs and Systems, Inc. in February 2002. He served as Vice President, Sales and Marketing from January 1985 until his retirement in June 1999.

We lease our corporate headquarters campus from C.P. Investments, Inc., an Alabama corporation, the stockholders of which include John Morrissey and the children of Dennis Wilkins and M. Kenny Muscat. Prior to January 31, 2003, Mr. Muscat and Mr. Wilkins were officers and directors of C.P. Investments, Inc. In 2005, we paid total lease payments in the amount of $1,471,005 to C.P. Investments, Inc. During 2003, we entered into one new lease with C.P. Investments, Inc., which expires in 2013. During 2005, we entered into three new leases with C.P. Investments, Inc., all of which expire in 2015.

Prior to July 1, 2005, we leased the building that houses our dedicated research and development staff from DJK, LLC, a limited liability company owned by Dennis Wilkins. In 2005, we paid total lease payments in the amount of $20,691 to DJK, LLC. On June 30, 2005, DJK, LLC sold this building to C.P. Investments, Inc., and our lease with DJK, LLC was assumed by C.P. Investments, Inc.

Under our lease agreements, we make annual lease payments to C.P. Investments, Inc. in the aggregate amount of $1,649,040, subject to annual adjustment based on the Consumer Price Index. The annual rents payable under these leases have been determined by an independent, third-party appraisal firm. The lease agreements provide for a subsequent third-party appraisal of the rental amounts at the conclusion of the fifth year of each lease.

During 2005, we engaged the law firm of Frazer, Greene, Upchurch & Baker, LLC in connection with certain litigation matters. One of our directors, W. Austin Mulherin, III, is a partner of this firm. Total payments to this firm did not exceed 5% of the firmÕs gross revenues in 2005. We expect to continue to use the legal services of this firm in the future.

Michael Muscat, the son of M. Kenny Muscat, is employed by the Company as director of outsourcing services, and Matt Cole, the brother-in-law of W. Austin Mulherin, is employed by the Company as a sales manager. Michael Muscat and Matt Cole collectively received total compensation of $217,219 from the Company during 2005.