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                                                                   EXHIBIT 10.17





                         CCPN and HMO MEDICAID AGREEMENT






                                 By and Between




              Americaid Texas Inc., d/b/a Americaid Community Care





                                       and





                        Cook Children's Physician Network
                     A Texas 5.01(a) Non-profit Corporation


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                         CCPN AND HMO MEDICAID AGREEMENT
                (STAR Program in the Tarrant County Service Area)


This Agreement ("Agreement") is entered into this_______day of ______________,
1996, (the "Execution Date") to become effective October 1, 1996 (the "Effective
Date"), by and between Americaid Texas, Inc. d/b/a Americaid Community Care, a
health maintenance organization certified under Article 20A of the Insurance
Code of the State of Texas (hereinafter referred to as "HMO"), and Cook
Children's Physician Network, a Texas non-profit corporation certified under
Section 5.01(a) of the Texas Medical Practice Act (hereinafter referred to as
"CCPN").


                                    RECITALS

WHEREAS, HMO has been selected by the Texas Department of Health ("TDH") as one
of the health-care plans that will participate in the TDH LoneStar Health
Initiative ("STAR") in the Tarrant County Service Area ("Service Area"); and

WHEREAS, HMO desires that CCPN be the exclusive provider of all pediatric health
care services listed in Attachment A, Exhibit 2 (the "Covered Health Services")
to Medicaid STAR Program beneficiaries in the age group of birth through fifteen
(15) years of age enrolled with HMO ("Members") and CCPN desires to be the
exclusive provider of Covered Health Services to HMO's Members; and

WHEREAS, the parties desire to set forth in this Agreement the terms and
conditions under which CCPN will supply and arrange for the Covered Health
Services to Members and to specify the responsibilities of the parties in
connection with this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual promises,
covenants, and agreements set forth herein, the parties agree to the following
terms:


                                   DEFINITIONS

For purposes of this Agreement, the following terms shall have the meaning set
out beside such term. In the event any of the following definitions conflict
with any of the definitions in the Exhibits, the definitions herein delineated
shall govern the

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interpretation of the term. The additional definitions delineated in the
Exhibits shall be given broad construction in the event they conflict or limit
that term as it may be defined in any other Exhibits.

1.     Agreement. Means this contract including all attachments appended hereto
       and any written amendments subsequently executed by the parties.

2.     Capitation. Means a payment system which allocates a fixed actuarially
       determined amount per month for each Member based on the appropriate STAR
       Program aid category for the provision of Covered Health Services.

3.     Clean Claim. Means a record of or a claim for Covered Health Services
       provided to Members which is accurate, complete (ie: includes all
       information necessary for a payor to determine liability), not a claim on
       appeal, and not contested (ie: not reasonably believed to be fraudulent,
       and not subject to a necessary release, consent, or assignment).

4.     CCPN Physician. Means a duly licensed Primary Care Physician or
       Specialist Physician who is employed by or has contracted with CCPN,
       either directly or indirectly, and who has agreed to treat Members.

5.     CCPN Participating Provider. Means a health care facility, or Health Care
       Professional, other than a physician, who is employed by or has
       contracted with CCPN, either directly or indirectly, and who has agreed
       to treat Members.

6.     Contract Anniversary Date. Means September 1st of each year of this
       Agreement.

7.     Contract Term. Means the term of this Agreement as specified in Section 8
       hereof.

8.     Covered Health Services. Means the professional, institutional, and
       ancillary services listed in the State Contract, Appendix C, as the
       services which are included under the HMO capitation payment for Members
       15 years of age and under.

9.     Emergency Care. Means bona fide emergency services provided after the
       sudden onset of a medical condition (including emergency labor and deliv-

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       ery) manifesting itself by acute symptoms of sufficient severity,
       including severe pain, such that the absence of immediate medical
       attention could reasonably be expected to result in (1) placing the
       patient's health in serious jeopardy; or (2) serious impairment to bodily
       function; or (3) serious dysfunction of any bodily organ or part.

10.    Exclusive Provider. Means that CCPN shall be the sole provider, either
       directly or through contracted Health Care Professionals or institutions
       for Institutional Services, of all pediatric health services for HMO in
       the STAR Program in the Service Area.

11.    Health Care Professional. Means any physician, nurse, audiologist,
       physician assistant, clinical psychologist, occupational therapist,
       physical therapist, speech and language pathologist, or other
       professional engaged in the delivery of health services who are licensed,
       practice under an institutional license, certified, or practice under
       authority of a physician, legally constituted professional association or
       other authority consistent with state law to provide services to such
       patients.

12.    Institutional Services. Means those non-professional Covered Health
       Services provided by or through a state licensed facility. Such services
       include, but are not limited to, inpatient or outpatient hospital
       services, skilled nursing facility services and emergency room services.

13.    Medical Director. Means a physician designated by HMO who is responsible
       for monitoring the provision of Covered Health Services to Members.

14.    Medically Necessary. Means those services or supplies necessary for the
       diagnosis, prevention, care and/or treatment of a Member's illness,
       disease, injury or bodily malfunction which are provided in accordance
       with and are consistent with generally accepted standards of medical
       practice within the Service Area.

15.    Member. Means any individual age 0 through 15 years residing in the
       service enrollment area who is (1) in a Medicaid eligibility category
       included in the STAR Program, and (2) enrolled in the STAR Program as a
       Member of Americaid Texas, Inc. d/b/a Americaid Community Care.

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16.    Participating Physician. Means a duly licensed primary care physician or
       specialist physician who has entered into a contract with HMO to provide
       or arrange for Covered Health Services to Members.

17.    Participating Provider. Means any health care facility, or Health Care
       Professional, other than a physician, that provides medical services to
       HMO Members pursuant to an agreement with HMO for purposes of the STAR
       Program in the Service Area.

18.    Primary Care Physician or Provider (PCP). Means a CCPN Physician or other
       Health Care Professional who has an agreement with CCPN, who is
       responsible for providing primary care services and who agrees to
       coordinate and manage delivery of Covered Health Services to Members
       assigned to such Primary Care Physician or Provider. CCPN's network of
       Primary Care Physicians or Providers (PCPs) may include General
       Practitioners; Family Practitioners; Internists; Pediatricians;
       Obstetricians/Gynecologists ("Ob/Gyn"); Pediatric and Family Advanced
       Nurse Practitioners ("ANPs"); Certified Nurse Midwives ("CNMs");
       Physician Assistants ("PAs") specializing in Family Medicine, Internal
       Medicine, Pediatric and Obstetric/Gynecology; Federally Qualified Health
       Centers ("FQHCs"); Rural Health Clinics ("RHCs") and similar community
       clinics. The Primary Care Physician or Provider for a Member with
       disabilities or chronic or complex conditions may be a specialist who
       also provides PCP services.

19.    Service Area. Means the Texas counties of Tarrant, Hood, Johnson, Denton,
       Parker, and Wise.

20.    Specialist Physician. Means a CCPN Physician who provides specialist care
       or consultative services to Members upon referral by Primary Care
       Physicians or Providers.

21.    State Contract. Means the agreement between HMO and TDH specifying the
       terms and conditions under which Covered Health Services are to be
       provided to Members.

22.    State of Texas Access Reform ("STAR") Program. Means the name of the
       State of Texas Medicaid Managed Care Program.

23.    TDH. Means the Texas Department of Health.

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24.    TDI. Means the Texas Department of Insurance.



                               GENERAL PROVISIONS:

1.     Obligations Of HMO.

       1.1    As of the Effective Date of this Agreement, HMO has entered into
              certain provider contracts with pediatric Medicaid providers,
              which contacts are described on Attachment D, attached hereto and
              made apart hereof (the "HMO Contracts"). As more particularly
              described below, CCPN will be the Exclusive Provider of Covered
              Health Services to Members, either providing services directly or
              arranging for the provided services. HMO will use its best efforts
              to assist CCPN in establishing CCPN's network of providers to
              allow CCPN to effectively and efficiently manage the care provided
              to HMO's Members.

              Within ninety (90) days of the Effective Date of this Agreement,
              HMO (with the assistance and input from CCPN) will use its best
              efforts to (1) assign all HMO Contracts to CCPN or (2) assist CCPN
              in contracting directly with all Participating Physicians and
              Participating Providers who are parties to the HMO Contracts.

              At the end of the above referenced ninety (90) day period for
              assignment or direct contracting, any HMO Contracts that have not
              been assigned to CCPN or replaced with a direct CCPN contract will
              be managed by HMO until September 1, 1997, when CCPN shall become
              the Exclusive Provider of Covered Health Services to Members. HMO
              shall inform CCPN of any action taken or decisions made regarding
              the HMO Contracts. HMO agrees that it will not amend, revise, or
              change any term, provision or agreement (unless required by state
              or federal law or regulation) in the HMO Contracts without the
              prior written approval of CCPN insofar as any amendment, revision
              or change would impact the provision of or payment of any Covered
              Health Services to Members under this Agreement. Furthermore,
              except as otherwise mutually agreed in writing, HMO agrees to take
              reasonable action necessary with respect to the HMO Contracts to
              transition them to CCPN. HMO understands and agrees that on

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              September 1, 1997, CCPN will be HMO's Exclusive Provider of
              Covered Health Services to Members.

       1.2    HMO shall be responsible for certain administrative activities
              necessary or required for the operation of a health maintenance
              organization unless otherwise agreed to by the parties. Such
              activities shall include, but are not limited to, utilization
              management, capital financing, marketing, advertising, customer
              service, issuance of identification cards, accounting, maintenance
              of a suitable medical management information system, claims
              processing and provider relations. HMO acknowledges and agrees
              that CCPN is currently developing an infrastructure to handle
              administrative activities. HMO, its successors, designees or
              assigns, expressly covenant and agree to transfer to CCPN all
              administrative activities mutually agreed to by CCPN and HMO.
              Additionally, HMO agrees to amend this Agreement to provide that
              CCPN shall be paid directly from the Monthly TDH Payment the
              percentage mutually agreed to be allocated for the administrative
              activities transferred to CCPN.

       1.3    HMO will provide to CCPN a provider manual, to be periodically up
              dated, which includes, but is not limited to HMO policies and
              procedures developed for the STAR Program in the Service Area.

       1.4    CCPN shall be entitled to representation on selected HMO Medicaid
              committees which oversee the HMO State Contract including
              administrative and/or operational committees involved in the STAR
              Program in the Service Area.

       1.5    Subject to applicable confidentiality laws and regulations, HMO
              and CCPN will allow each other access to any and all information
              and documents necessary to conduct audits deemed necessary by
              such party to evaluate the other party's performance under this
              Agreement.

       1.6    HMO will develop, distribute, and periodically update a Member
              hand book which will detail a Member's rights and
              responsibilities, how to access the HMO delivery system, how to
              obtain emergency services and how to file grievances. HMO will
              provide CCPN with a copy of the original and any updates to the
              Member Handbook con-

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              currently with distribution to Members, but in no event later than
              seven (7) days after distribution.

       1.7    HMO will establish and maintain a Member complaint and grievance
              process as required by the STAR Program. Accordingly, HMO shall
              implement and maintain a member complaint system which provides
              for the resolution of Member complaints and implement and maintain
              a Members grievance process which provides for the resolution of
              Member grievances. Once this Member complaint and grievance
              process is established, HMO will provide a copy of the original
              prior to the Effective Date and provide CCPN reasonable prior
              written notice of any modifications and/or amendments. HMO agrees
              to provide to CCPN information related to Member complaints
              involving CCPN.

       1.8    HMO agrees to delegate credentialing to CCPN for CCPN Physicians
              and CCPN Participating Providers pursuant to the Delegation of
              Credentialing Agreement in Attachment A, Exhibit 5.

       1.9    HMO agrees to develop utilization review, peer review and quality
              assurance programs and policies with the support of CCPN. Once
              these programs and policies are established, HMO will provide to
              CCPN a copy of the original prior to the Effective Date and
              provide CCPN reason able prior written notice of any modifications
              and/or amendments.

       1.10   HMO will provide monthly Enrollment Reports to CCPN and to all
              Primary Care Physicians or Providers within five (5) business days
              after receipt of Enrollment Reports from TDH each month covered by
              this Agreement. Upon request of CCPN, its Physicians and/or
              Participating Providers, HMO or TDH shall confirm the enrollment
              status of any individual at any time during normal business
              hours. If CCPN, its Physician and/or Participating Providers,
              obtains Member verification, HMO shall not retroactively deny
              payment from the Pediatric Risk Fund to such provider if HMO later
              determines that a Member verified as eligible was not in fact a
              Member or that the service authorized and provided was not a
              Covered Health Service. Financial responsibility for the provision
              of such services is subject to Section II.A.3 of Attachment A to
              this Agreement.

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       1.11   HMO shall provide utilization management services including
              pre-certification, referral management, concurrent review,
              discharge planning and case management for all Members, except for
              those Members admitted to Cook Children's Medical Center ("CMC").
              For those Members admitted to CMC, CMC shall perform concurrent
              review, discharge planning and case management while HMO will
              continue to provide pre-certification and referral management
              services.

       1.12   HMO shall provide claims processing services as may be necessary
              for the appropriate adjudication and payment of all claims
              submitted to HMO by CCPN Physicians and CCPN Participating
              Providers.

       1.13   HMO shall provide reports to CCPN, which include but are not
              limited to (1) membership and eligibility, (2) cost of referrals,
              (3) financial status of program, (4) utilization of benefits, (5)
              members satisfaction with delivery of program benefits, (6) member
              and provider utilization, and (7) daily and weekly inpatient
              admissions. The reports will be prepared in a format mutually
              agreed upon by CCPN and HMO and are subject to modification
              during the duration of this Agreement. Reporting frequency will be
              mutually determined by CCPN and HMO. Proforma reports are included
              in Attachment A, Exhibit 4 of this Agreement and are provided for
              illustrative purposes only. The proforma reports are not to be
              construed as the final agreement between CCPN and HMO regarding
              report format and distribution frequency. CCPN and HMO agree to
              finalize the format, data elements, and frequency of the reports
              needed within ninety (90) days after the Effective Date.
              Additionally, HMO will provide CCPN access to reports required
              under the State Contract and by TDH, and copies of those requested
              by CCPN.

2.     Obligations of CCPN.

       2.1    CCPN agrees to provide, arrange for, and manage the delivery of
              all Medically Necessary Covered Health Services to HMO Members who
              have selected or been assigned to a CCPN Physician or a CCPN
              Participating Provider.

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       2.2    CCPN agrees to provide Covered Health Services to Members in the
              same manner, in accordance with the same standards, and within the
              same time availability as offered to their other patients of CCPN
              Physicians and CCPN Participating Providers.

       2.3    Subject to the terms of the State Contract, a CCPN Physician
              and/or CCPN Participating Provider may refuse to continue to treat
              a Member if there has been a failure to establish or maintain a
              satisfactory physician- patient and/or provider-patient
              relationship. In such instances CCPN Physician and/or CCPN
              Participating Provider shall be obligated to abide by the
              standards of medical ethics with respect to the transfer of
              responsibility for patient care. CCPN and HMO Medical Director
              shall determine an alternate CCPN Physician and/or CCPN
              Participating Provider to assume care for the affected Member.

       2.4    CCPN, in its provider contracts, will require CCPN Physicians and
              CCPN Participating Providers to comply with HMO service
              authorization and eligibility verification procedures as jointly
              reviewed and/or approved by HMO and CCPN. These procedures will be
              set forth in the provider manual.

       2.5    CCPN shall make necessary and appropriate arrangements in
              accordance with TDH requirements to ensure the availability and
              accessibility of Covered Health Services to Members on a
              twenty-four (24) hour per day, seven (7) day per week basis.

       2.6    CCPN agrees that in the event of HMO's insolvency or other
              cessation of operations, CCPN will continue providing Covered
              Health Services to Members through the period for which payment
              has been made or, for Members in an inpatient facility, until the
              date of discharge from the inpatient facility.

       2.7    CCPN agrees to abide by utilization review, peer review and
              quality assurance programs and policies developed by HMO with the
              support of CCPN. HMO and CCPN will meet jointly to review and
              approve such policies and programs prior to the Effective Date.

       2.8    CCPN agrees to comply with the member complaint procedure estab-
              lished by HMO in accordance with State Contract and to cooperate

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              with HMO in resolving any Member complaints related to providing
              Covered Health Services. HMO and CCPN shall use their best efforts
              to notify each other of all Member complaints involving CCPN
              within a reasonable time. CCPN shall investigate such complaints
              and use its best efforts to resolve them in a fair and equitable
              manner. CCPN agrees to notify HMO promptly of any action taken or
              proposed with respect to such complaints.

       2.9    This Agreement will not be construed to limit HMO's authority or
              responsibility to comply with TDI and TDH requirements. CCPN
              acknowledges that HMO is responsible for complying with all
              regulatory requirements, that the role of CCPN is subject to
              monitoring by HMO, and that HMO may take necessary action assure
              that any functions delegated to CCPN are in compliance with state
              regulatory requirements.

       2.10   CCPN agrees to make available its contracts with physicians and
              providers to HMO to ensure compliance with Section 11.1604 of the
              Texas Administrative Code.

       2.11   CCPN agrees to provide HMO with evidence of financial solvency and
              financial performance, such as a financial audit.

       2.12   CCPN agrees to provide to HMO, on at least a monthly basis, with
              the data necessary for HMO to comply with the TDI and TDH
              reporting requirements with respect to any Covered Health Services
              provided pursuant to this Agreement, including, but not limited
              to, the following data: (i) utilization data; (ii) amounts paid by
              CCPN for administrative services relating to HMO; (iii) amounts
              paid by CCPN to physicians and participating providers; (iv)
              methods by which physicians and participating providers were paid
              by CCPN (capitation, fee-for-service, or other risk sharing
              arrangements); (v) time period that claims and debts related to
              claims owed by CCPN have been pending; (vi) information required
              for HMO to be able to file claims for reinsurance, coordination of
              benefits and subrogation; (vii) provider-enrollee satisfaction
              data; (viii) inquiries and investigations of CCPN made by
              regulatory agencies; and (ix) any other data necessary to assure
              proper monitoring and control of HMO delivery network by HMO.


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       2.13   CCPN agrees to have in place, to the extent required by federal
              and state law, an affirmative action program. CCPN further agrees
              to comply with:

       1.     Title VI of the Civil Rights Act of 1964 (Public Law 88-352),

       2.     Section 504 of the Rehabilitation Act of 1973 (Public Law 93-112),

       3.     The Americans with Disabilities Act of 1990 (Public Law 101-336),

       4.     Title 40, Chapter 73, of the Texas Administrative Code, providing
              in part that no persons in the United States shall, on the grounds
              of race, color, national origin, sex, age, disability, political
              beliefs or religion be excluded from participation in, or denied,
              any aid, care, service or other benefits provided by federal
              and/or state funding, or otherwise be subjected to discrimination.

       5.     Texas Health and Safety Code Section 85.113 (relating to workplace
              and confidentiality guidelines regarding AIDS and HIV).

       6.     42 CFR 493 1809 regarding the Clinical Laboratory Improvement
              Amendment.

and all amendments to each, and all requirements imposed by the regulations
issued pursuant to these acts, and all other applicable federal, state and local
laws, rules and regulations.

3.     CCPN Compensation

       3.1    Payment for Healthcare Services. During the term of this
              Agreement, HMO shall pay CCPN, CCPN Physicians and CCPN
              Participating Providers monthly capitation and fee-for-service
              payments in accordance with the provisions set forth in Attachment
              A for all Covered Health Services arranged for or provided to
              Members.

       3.2    In the event that a claim for a Covered Health Service is validly
              denied, CCPN will not attempt to collect payment for such claim
              from the affected Member or Member's family.

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       3.3    Payment for Administrative Activities. HMO shall pay CCPN within
              five (5) business days of receipt of the TDH Payment (described in
              Attachment A) $0.25 per Member per month for each Member enrolled
              with HMO. This monthly payment is made to CCPN as compensation for
              the administrative services performed by CMC in accordance with
              Article 1, Section 1.11. Additionally, HMO will pay to CCPN
              $10.00 for each specialist physician credentialed and $20.00 for
              each primary care physician credentialed and $8.00 for each
              specialist physician re-credentialed and $15.00 for each primary
              care physician re-credentialed. CCPN shall invoice HMO monthly for
              the number and type of physicians credentialed. HMO will not pay
              CCPN to credential physicians previously credentialed by HMO until
              such physicians are due to be re-credentialed.

4.     Third Party Provider Agreements. In the event HMO utilizes a third party
       provider to provide the carved-out services, HMO shall use its best
       efforts to structure its agreement with the third party provider to allow
       the inclusion of CCPN as a participating provider through such
       arrangements.

5.     Hold-Harmless.

       5.1    CCPN hereby agrees that in no event, including, but not limited to
              nonpayment by HMO, HMO insolvency or breach of this Agreement,
              shall CCPN bill, charge, collect a deposit from, seek
              compensation, remuneration or reimbursement from, or have any
              recourse against Member or persons other than HMO acting on their
              behalf for Covered Health Services provided. This provision shall
              not prohibit collection of charges for services provided by CCPN
              but which are not covered under the STAR Program.

       5.2    CCPN agrees to hold harmless the State of Texas, all state
              officers and employees, and all Members in the event of nonpayment
              by HMO to CCPN. CCPN further agrees to indemnify and hold harmless
              the State of Texas and its agents, officers and employees against
              all injuries, death, losses, damages, claims, lawsuits,
              liabilities, judgments, costs and expenses which may in any manner
              accrue against the State or its agents, officers or employees,
              through the intentional conduct, negligence or omission of CCPN,
              any shareholder, partner or

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              any other individual or entity holding an equitable interest in
              CCPN, his agents, officers, employees.

       5.3    CCPN further agrees that (1) this provision shall survive the
              termination of this Agreement regardless of the cause giving rise
              to termination and shall be construed to be for the benefit of the
              Member, and that (2) this provision supersedes any oral or written
              contrary agreement now existing or hereafter entered into between
              CCPN and Member or persons acting on their behalf insofar as such
              contrary agreement relates to liability for payment for
              continuation of Covered Health Services provided under the terms
              and conditions of this continuation of benefits provision.

6.     Insurance

       6.1    CCPN agrees to maintain policies of general and professional
              liability insurance as are necessary to reasonably insure itself
              and its employees against any claim or claims for damages arising
              by reason of personal injuries or death occasioned directly or
              indirectly in connection with the performance of any Covered
              Health Services. The amounts and extent of such insurance coverage
              shall be acceptable to HMO, but in no event shall professional
              liability insurance be less than $100,000.00 per claim,
              $300,000.00 annual aggregate, for CCPN Physicians, unless a lesser
              amount is determined by HMO, in writing, to be acceptable for a
              particular class or group of CCPN Physicians.

       6.2    Certificates of insurance or other evidence indicating the term
              and extent of professional liability insurance shall be provided
              by CCPN to HMO upon request by HMO and upon execution of the final
              agreement. CCPN shall require of its professional liability
              carrier that HMO be named as a party entitled to a thirty (30) day
              prior written notice of an intent to cancel or terminate.

       6.3    HMO shall maintain, in the minimum amount of One Million Dollars
              ($1,000,000) per occurrence and Five Million Dollars ($5,000,000)
              in the aggregate, policies of general liability, professional
              liability, and directors and officers liability insurance to
              insure itself and its employees against any claim or claims for
              damages arising out of this Agreement. Documentary evidence of
              such insurance policy or

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              policies shall be provided to CCPN upon request. HMO agrees to
              keep and maintain said insurance coverage in full force and effect
              during the Initial Term of this Agreement and any renewal term
              this Agreement. HMO or its insurance carriers will provide CCPN
              with thirty (30) days advance written notice of a material
              modification or cancellation of said policies. All liability
              coverage shall be "occurrence based", provided, however, that in
              any instance where the coverage required can openly be acquired by
              means of a "claims made" policy, that policy shall provide for a
              "buy-out at the tail" provision, which HMO agrees to exercise or
              cause to be exercised in the event of change, cancellation or
              termination of said policy.

7.     Records

       7.1    CCPN and HMO shall keep all administrative and financial records
              and CCPN Physicians and CCPN Participating Providers shall keep
              all medical records pertaining to this Agreement and furnish such
              records to the appropriate party at a time and in a manner and
              mode as may be required. CCPN and HMO shall make all records
              available for inspection during normal business hours; provided,
              however, that CCPN shall have no obligation to disclose
              confidential information without proper authorization from
              patients, patient representative, and/or providers. CCPN and HMO
              agree that a Member's records will be treated as confidential, and
              in the same manner, as any other patient records. HMO and CCPN
              agree to comply with all state and federal laws and regulations
              regarding the confidentiality of patient records. CCPN shall
              maintain such records and provide such information to HMO as may
              be necessary for HMO's quality and utilization programs to remain
              in compliance with state and federal law and to meet the TDH
              requirements for the STAR Program. Such maintenance of records and
              information shall survive the expiration or earlier termination of
              this Agreement for a period of not to exceed six (6) years or such
              other period as may be required by record retention policies of
              the State of Texas or HCFA.

8.     Term and Termination

       8.1    This Agreement shall be effective as of October 1, 1996, (the
              "Effective Date"), and shall remain in effect through the end of
              STAR

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              Program in the Service Area, unless otherwise terminated in
              accordance with this Agreement.

       8.2    This Agreement shall terminate immediately upon:

              (1)    revocation or suspension of HMO's certificate of authority
                     to operate a health maintenance organization; or

              (2)    revocation or suspension of HMO's participation in the STAR
                     Program in Service Area; or

              (3)    any petition of bankruptcy or any insolvency process that
                     is filed by or against HMO or CCPN; or

              (4)    revocation of CCPN's 5.01(a) status pursuant to the Texas
                     Medical Practice Act.

              (5)    revocation of Cook Children's Medical Center's hospital
                     license as issued by the Texas Department of Health.

              (6)    failure of Cook Children's Health Care Network and
                     Americaid, Inc. to execute a mutually satisfactory
                     agreement detailing the terms of sharing pre-operational
                     costs and other business arrangements by November 1, 1996.

       8.3    CCPN shall immediately suspend a CCPN Physician or a CCPN
              Participating Provider from participation in the STAR Program in
              Service Area if, in CCPN's or HMO's opinion, failure to take
              immediate action has the potential to result in danger to the
              health of any Member receiving Covered Health Services from such
              provider under this Agreement. CCPN shall immediately confer in
              good faith with HMO regarding such suspension. If CCPN PCP, CCPN
              Specialist Physician or a CCPN Participating Provider has not, in
              CCPN's or HMO's opinion, remedied the concerns which caused
              suspension within thirty (30) days of such suspension notice, such
              provider shall be terminated as a CCPN PCP, CCPN Specialist
              Physician or a CCPN Participating Provider from participation in
              the STAR Program in Service Area in accordance with such
              provider's agreement with CCPN.

                                       15

<PAGE>   17

       8.4    In the event of termination of this Agreement, or a CCPN agreement
              with an individual CCPN Physician or CCPN Participating Provider,
              CCPN and its providers shall continue to arrange for the provision
              of Covered Health Services to affected Members in accordance with
              this Agreement, and HMO shall continue to compensate such
              providers under the reimbursement provisions set forth in this
              Agreement as of the date of termination until HMO or CCPN
              notifies the other party that alternative coverage arrangements
              have been made with respect to the affected Members. Upon
              termination of this Agreement, or a CCPN agreement with an
              individual CCPN Physician or CCPN Participating Provider, HMO
              shall notify Members of such termination and use its best efforts
              to assign Members to, or require Members to select, another
              provider with sixty (60) days (or other such time as may be
              required under state or federal law.) If HMO fails to transfer
              Member within applicable time frame, the treating provider shall
              thereafter be reimbursed at his or her usual and customary rates,
              but the Pediatric Risk Fund will be charged at the lesser of the
              then current Medicaid allowable rate or the lowest reimbursement
              rate agreed to between provider and CCPN or HMO. HMO and CCPN
              agree that nothing in this provision and/or Agreement authorizes
              any provider to abandon any patient.

       8.5    Dispute Resolution.

              1.     The parties to this Agreement agree to meet and confer in
                     good faith to resolve any controversy, dispute or claim
                     arising out of or relating to this Agreement through
                     informal discussions between the parties. If the parties
                     are unable to resolve the dispute through such discussions,
                     either party may initiate mediation.

              2.     Mediation Procedure.

                     a.     Initiation Procedure. The initiating party shall
                            give written notice to the other party, describing
                            the nature of the dispute, its claim for relief and
                            identifying one or more individuals with authority
                            to resolve the dispute on such party's behalf. The
                            other party shall have five (5) business days

                                       16

<PAGE>   18

                            within which to designate in writing one or more
                            individuals with authority to resolve the dispute on
                            such party's behalf.

                     b.     Selection of Mediator. Within ten (10) business days
                            from the date of designation, the parties shall make
                            a good faith effort to select a person to mediate
                            the Dispute. If no mediator has been selected under
                            this procedure, the parties shall jointly request a
                            state district judge in Tarrant County, Texas to
                            supply within ten (10) business days a list of
                            potential qualified mediators. Within five (5)
                            business days of receipt of the list, the parties
                            shall rank the proposed mediators in numerical order
                            of preference, simultaneously exchange such list,
                            and select as the mediator the individual receiving
                            the highest combined ranking. If such a mediator is
                            not available to serve, they shall proceed to
                            contact the mediator who was next highest in ranking
                            until they select a mediator.

                     c.     Time and Place for Mediation: Parties Represented.
                            In consultation with the mediator selected, the
                            parties shall promptly designate a mutually
                            convenient time and place for the mediation, such
                            time to be no later than thirty (30) days after
                            selection of the mediator. In the mediation, each
                            party shall be represented by a person with
                            authority and discretion to negotiate a resolution
                            of the dispute and may be represented by counsel.

                     d      Conduct of Mediation. The mediator shall determine
                            the format for the meetings, and the mediation
                            session shall be private. The mediator will keep
                            confidential all information learned in private
                            caucus with any party unless specifically authorized
                            by such part to make disclosure of the information
                            to the other party. The parties agree that the
                            mediation shall be governed by the provisions of
                            Chapter 154 of the Texas Remedies and Practice Code
                            and such other rules as the mediator shall
                            prescribe.

                                       17

<PAGE>   19

                     e.     Fees of Mediator: Disqualification. The fees and
                            expenses of the mediator shall be shared equally by
                            the parties. The mediator shall be disqualified as
                            a witness, consultant, expert or counsel for nay
                            party with respect to the dispute and any related
                            matters.

                     f.     Confidentiality. Mediation is a compromise
                            negotiation for purposes of Federal and State Rules
                            of Evidence and constitutes privileged
                            communication under Texas law. The entire mediation
                            process is confidential, and such conduct,
                            statements, promises, offers, views and opinions
                            shall not be discoverable or admissible in any legal
                            proceeding for any purpose.

9.     Relationship of Parties

       9.1    This Agreement is not intended to create, nor should it be
              construed to create, any relationship between the parties other
              than that of independent contractors contracting with each other
              solely for the purpose of effecting the provisions of this
              Agreement. Neither of the parties hereto, nor any of their
              respective employees, shall be construed to be the agent,
              employee, partner or representative of the other.

       9.2    Each party will be responsible for its own acts or omissions that
              result in injury or damage to individuals or property that arise
              as a consequence of the party's performance of this Agreement
              whether or not as a result of negligence. This provision shall
              survive the termination of this Agreement.

       9.3    HMO agrees not to restrict or interfere in any manner with the
              provision of Covered Health Services by CCPN, CCPN Primary Care
              Physicians, CCPN Specialist Physicians and CCPN Participating
              Providers. Accordingly, HMO agrees CCPN, CCPN Physicians and CCPN
              Participating Providers shall have the sole responsibility in
              connection with the provision of Covered Health Services and that
              nothing in this Agreement shall interfere with the professional
              relationship between a Member and CCPN, CCPN Physician and CCPN
              Participating Provider. HMO and CCPN further agree that this
              clause

                                       18

<PAGE>   20

              does not purport to indemnify HMO for any tort liability resulting
              from HMO's acts or omissions.

10.    Miscellaneous

       10.1   The waiver by either party of a breach or violation of any
              provisions of this Agreement shall not operate as or be construed
              to be a waiver of any subsequent breach thereof.

       10.2   This Agreement shall comply and observe with all federal and state
              laws in effect at Effective Date or which may come into effect
              during the term of this Agreement, except where waiver of said
              laws are granted by the applicable federal or state authority.

       10.3   This Agreement shall be governed by and construed in accordance
              with laws of the State of Texas.

       10.4   The invalidity or unenforceability of any terms or conditions
              hereof shall in no way effect the validity or enforceability of
              any other terms or provisions hereof.

       10.5   Neither party to the Agreement shall encumber, assign or otherwise
              transfer the Agreement or any interest in this Agreement to any
              other party; provided, however, CCPN may contract for the
              provision of management and administrative services.

       10.6   CCPN agrees that HMO may use CCPN Physicians' or CCPN
              Participating Providers' name, address, phone number, and types of
              services offered in HMO's roster of Participating Physicians and
              in other HMO materials upon prior written notice to CCPN and with
              prior approval by CCPN.

       10.7   CCPN agrees to cooperate with HMO in programs relating to
              coordination of benefits and third party liability coverage and to
              execute any further documents that ' reasonably may be required or
              appropriate for this purpose.

       10.8   As used herein, the masculine gender includes the feminine, and
              the singular includes the plural.

                                       19

<PAGE>   21

       10.9   Any notice, approval, waiver, objection or other communication
              (for convenience, "notice") required or permitted to be given
              hereunder or given in regard to this Agreement by one party to the
              other shall be in writing and the same shall be given and be
              deemed to have been served and given (a) if hand delivered, when
              delivered in person to the address set forth hereinafter of the
              party to whom notice is given, or (b) if mailed, when placed in
              the United States mail, postage prepaid, by Certified Mail, Return
              Receipt Requested, addressed to the party at the address
              hereinafter specified. Any party may change its address for
              notices by notice theretofore given in accordance with this
              Section 10.9 and shall be deemed effective only when actually
              received by the other party.

<TABLE>
<S>                                                                                 <C>
              If to CCPN:                                                           Alan K. Lassiter, M.D.
                                                                                    President, C.E.O.
                                                                                    Cook Children's Physician
                                                                                      Network
                                                                                    801 Seventh Avenue
                                                                                    Fort Worth, Texas 76104


                                                                                    Russell K. Tolman
                                                                                    President
                                                                                    Cook Children's Medical Center
                                                                                    801 Seventh Avenue
                                                                                    Fort Worth, Texas 76104

                                                                                    John Grigson
                                                                                    Chief Financial Officer
                                                                                    Cook Children's Medical Center
                                                                                    801 Seventh Avenue
                                                                                    Fort Worth, Texas 76104

              with copy to counsel for CCPN:                                        General Counsel
                                                                                    Cook Children's Medical Center
                                                                                    801 Seventh Avenue
                                                                                    Fort Worth, Texas 76104
</TABLE>

                                       20

<PAGE>   22

<TABLE>
<S>                                                                                 <C>
              If to HMO:                                                            James D. Donovan, Jr.
                                                                                    President & CEO
                                                                                    AMERICAID - Texas, Inc.
                                                                                    617 Seventh Avenue, 2nd Floor
                                                                                    Fort Worth, Texas 76104

              with copy to counsel for HMO:                                         General Counsel
                                                                                    AMERICAID Community Care
                                                                                    4425 Corporation Lane
                                                                                    Suite 100
                                                                                    Virginia Beach, Virginia  23462
</TABLE>

       10.10  CCPN and HMO shall maintain in confidence all pricing and
              financial information related to this Agreement and shall use
              their best efforts to protect such information from being used by
              any of their employees or agents in any way that is detrimental to
              CCPN or HMO.

       10.11  CCPN and HMO agree not to use the name, symbol, trademark or
              service mark of the other party in any advertising or promotional
              material or literature without the express prior and written
              consent of either party and will cease any and all use previously
              consented to upon termination of this Agreement. This excludes the
              names and demographic information of providers for use in the
              provider directories.

       10.12  CCPN shall not be precluded from participation in other local,
              state or national managed care networks.

       10.13  At least ninety (90) days prior to each Contract Anniversary Date,
              either CCPN or HMO may request that the reimbursement
              methodologies and/or mechanisms set forth in Attachments B and C
              be adjusted. Each party shall negotiate in good faith to amend
              Attachments B and C to preserve the economic expectations of the
              parties to the greatest extent possible in a manner consistent
              with such changes. If the parties cannot reach agreement, this
              Agreement shall continue in force without change for the following
              year until either party can again request a change ninety (90)
              days before a Contract Anniversary Date. Notwithstanding the
              foregoing, if TDH changes the amount of premium paid by aid
              category for the STAR Program, CCPN and

                                       21

<PAGE>   23

              HMO shall mutually agree to amend Attachments B and C. In the
              event the parties cannot reach agreement, the payments
              contemplated in Attachment B and C shall be amended by the
              percentage increase or decrease in the premium of each affected
              aid category. In the event that payment for a particular aid
              category is modified by TDH, the revised reimbursement schedule
              shall be actuarially determined by a mutually acceptable actuary.

       10.14  This Agreement may be modified at any time by written mutual
              consent of HMO and CCPN or when modifications are mandated by
              changes in Federal or State laws.

       10.15  Except for the agreement between Cook Children's Health Care
              Network and Americaid, Inc. described in Section 8.2 hereof, this
              Agreement constitutes the sole and only agreement of the parties
              hereto and supersedes any prior understandings or written or oral
              agreements between the parties respecting the within subject
              matter.

       10.16  The remedies provided to the parties by this Agreement are not
              exclusive or exhaustive, but are cumulative of each other and in
              addition to any other remedies the parties may have.


HISTORICALLY UNDERUTILIZED BUSINESSES

Americaid Texas, Inc. d/b/a Americaid Community Care is strongly committed to
ensuring that Historically Underutilized Businesses (HUBS) are afforded the same
opportunities as other businesses when competing as potential subcontractors
under State government contracts and that their products and services are
examined and judged objectively on their competitive merit. This corporate
commitment applies particularly to the products and services procured through
the Texas Department of Health (TDH) LoneSTAR Health Initiative. The TDH has
established goals for procuring LoneSTAR Health Initiative contract value
through HUBS, including health care providers and suppliers. Americaid Community
Care intends to exceed these goals. Accordingly, Americaid Community Care
expressly encourages the party to the Agreement to support and expand use of
HUBs and to document and report HUB procurement dollars to the TDH so that they
may be appropriately credited towards the LoneSTAR Health Initiatives goals.

                                       22

<PAGE>   24

       IN WITNESS WHEREWOF, the undersigned have executed this Agreement to be
effective on October 1, 1996.

<TABLE>
<CAPTION>
CCPN:                                                       HMO:


<S>                                                         <C>
By:   /s/ Alan Kent Lassiter, MD                            By:   /s/ James D. Donovan, Jr.
      -----------------------------------                         ----------------------------------
      Alan Kent Lassiter                                          James D. Donovan, Jr.
      President & Chief Executive Officer                         President & Ceo
      Cook Children's Physician Network                           AMERICAID Texas, Inc.

Date: 10/1/96                                               Date: 10/1/96
      -----------------------------------                         ----------------------------------
</TABLE>

                                       23

<PAGE>   25



                                  ATTACHMENT A
                             FINANCIAL ARRANGEMENTS


I.     Additional Definitions. The following additional definitions shall apply
       to this Attachment A.

       A.     Adult Enrollees means any individual 16 years of age and above
              residing in the Service Area who is (1) in a Medicaid eligibility
              category included in the STAR Program, and (2) enrolled in the
              STAR Program as a member of Americaid Texas, Inc.

       B.     Adult Pool means a Risk Fund established by HMO and used for the
              payment of all professional, hospital, ancillary and other medical
              claim expenses attributable to Adult Enrollees. Expenses charged
              to the Adult Pool shall include, but not be limited to, inpatient
              facility fees, fees for alternative inpatient care (e.g., skilled
              nursing, extended care and home care), outpatient surgery fees,
              professional fees for primary and specialty care, and ancillary
              service fees.

       C.     Pediatric Pool means a Risk Fund established by HMO and used for
              payment of all monthly capitation payments and valid
              fee-for-service claims for Covered Health Services attributable to
              Members.

       D.     Profit Product Pool means a Risk Fund established by HMO to track
              the payment of (1) all medical claim expenses, (2) administration
              and marketing costs, (3) licensing fees and (4) profit sharing
              payment made to TDH pursuant to the State Contract out of the
              Total TDH Payment.

       E.     Risk Fund is a defined report to which revenues and expenses are
              posted for the purpose of sharing actual and expected claim
              liabilities and funding required to support the claim liability.

       F.     Total TDH Payment means all revenues and payments received by HMO
              from TDH for each aid category of the STAR Program.

                                       24

<PAGE>   26

II.    Pediatric Capitation Allocation

       A.     HMO will receive a monthly TDH Payment (as defined below) paid
              directly to HMO by TDH for Members enrolled or assigned to HMO.
              "Monthly TDH Payment" means all revenue and payments received by
              HMO each month of this Agreement from TDH for Members. The Monthly
              TDH Payment shall be based on the eligibility category, as
              determined by TDH, of Members. From this Monthly TDH Payment, HMO
              shall make a monthly CCPN Capitation Payment. This CCPN Capitation
              Payment shall be seventy-five percent (75%) of the total Monthly
              TDH Payment received by HMO from TDH for Members, which amount
              will be posted to the Pediatric Pool.

              1.     The monthly TDH Payment will be paid to HMO by the tenth
                     (10th) State working day of each month pursuant to the
                     contract between HMO and TDH. HMO shall post the CCPN
                     Capitation Payment to the Pediatric Pool within five (5)
                     business days of receipt of the payment from TDH, but in no
                     event later than the twelfth (12th) State working day.

              2.     Each month's CCPN Capitation Payment will be computed on
                     the basis of the current monthly Enrollment Report, which
                     is generated by TDH and sent to HMO. This current
                     Enrollment Report will be sent to CCPN by HMO
                     simultaneously with the posting of the CCPN Capitation
                     Payment to the Pediatric Pool. It shall include the names
                     and aid categories of Members included in the CCPN
                     Capitation Payment and shall be subject to CCPN review and
                     audit.

              3.     HMO will handle retroactive recoupment of capitated
                     payments from CCPN and CCPN Physicians as follows:

                     a.     If the retroactive recoupment is a result of action
                            taken by TDH, then the retroactive recoupment will
                            follow the procedure applied to the HMO by TDH.
                            Under this procedure, TDH will not recoup, through
                            HMO, the Capitation Payment for a Member when CCPN
                            Physicians or CCPN Participating Providers have
                            actually provided a service or due to a subsequent
                            ineligibility determination unless 1) a

                                       25
<PAGE>   27

                            Member cannot use CCPN facilities (e.g., move to a
                            different county, correction of computer or human
                            error, including, but not limited to, instances
                            where more than one plan was paid a premium for the
                            same Member, the Member dies prior to the first day
                            for the month covered by the payment, etc.) in which
                            case, TDH, through HMO, will recoup the Capitation
                            Payment for such Member; or 2) if a Member's type of
                            program designation needs to be retroactively
                            corrected in which case, TDH will recoup, through
                            HMO, the Capitation Payment for such Member under
                            the previous type program and retroactively make a
                            Capitation Payment to CCPN or CCPN Physicians,
                            through HMO, under the revised type program
                            designation, if appropriate; or 3) TDH notifies HMO
                            in writing of a valid determination by TDH of the
                            need to retroactively recoup the capitation payment
                            made for a Member.

                     b.     Additionally, if CCPN, CCPN Physicians or CCPN
                            Participating Providers comply with the verification
                            of eligibility and benefits procedures provided to
                            CCPN by the Effective Date, HMO shall be financially
                            responsible to CCPN and CCPN Physicians for the CCPN
                            Capitation Payment for all care provided by CCPN
                            Physicians and/or CCPN Participating Providers to an
                            ineligible person or retroactively canceled Member
                            due to erroneous, incomplete or delayed HMO
                            eligibility listings.

              4.     If HMO is notified that it will be assessed a penalty by
                     TDH for failure to perform administrative functions, as
                     described in the State Contract, HMO and CCPN shall
                     immediately meet to discuss the cause of the TDH penalty.
                     If the failure to perform administrative functions is the
                     result of HMO's action, HMO shall be responsible for making
                     the monthly TDH Payment whole. If CCPN caused the failure
                     of HMO to provide an administrative function, then CCPN
                     shall be responsible for making the monthly TDH Payment
                     whole.


       B.     The Pediatric Pool shall be used by HMO for the payment and
              adjudication of monthly capitation payments and valid claims
              submitted by

                                       26

<PAGE>   28

              CCPN Physicians and CCPN Participating Providers for the Covered
              Health Services.

III.   Deductions

       A.     HMO will deduct and retain sixteen percent (16%) of the Monthly
              TDH Payment for its administration and marketing activities and
              any payments to Value Behavioral Health for administrative
              services.

       B.     HMO will deduct and retain two percent (2%) of the Monthly TDH
              Payment to maintain a Texas HMO license.

IV.    Reimbursement of CCPN Physicians and Providers. CCPN Physicians and
       Providers shall be compensated by HMO out of Pediatric Risk Fund for
       Covered Health Services provided to Members as set forth below:

       A.     Payment to Primary Care Physicians or Providers. As compensation
              for services provided or arranged for by PCP to Members under the
              STAR Program in the Service Area, HMO shall make a monthly
              Capitation payment from the Pediatric Risk Fund based on the
              age/sex adjusted Capitation rates referenced in Attachment B of
              this Agreement. This monthly PCP Capitation payment shall include
              all retroactive additions and deletions as referenced in II.B.3.a
              and II.B.3.b above. Monthly PCP Capitation payment is due to PCP
              five (5) business days after receipt of Monthly TDH Payment by
              HMO. PCP will be reimbursed for non-capitated services provided to
              Members from the Pediatric Risk Fund on a fee-for-service basis at
              the reimbursement rate agreed to between such provider and CCPN.
              If PCP and CCPN have not agreed to a reimbursement rate, then PCP
              will be reimbursed at the then current Medicaid allowable rate for
              non-capitated services. Primary Care Physicians or Providers shall
              submit itemized statements on current HCFA 1500 claim forms with
              current HCPCS coding, current ICD9 coding and current CPT4 coding
              for all capitated services and non-capitated Covered Health
              Services provided by Primary Care Physicians or Providers to HMO
              at the address set forth below within sixty (60) days of the date
              the Covered Health Service was provided. PCP shall be paid by HMO
              no later than forty-five (45) days after receipt by HMO of a
              completed Clean Claim for non-capitated Covered Health Services.
              If Clean Claims are not paid

                                       27
<PAGE>   29

              within forty-five (45) days of submission, HMO shall be subject to
              Section IV.D. below.

       B.     Payments to Specialist Physicians. Specialist Physicians will be
              reimbursed from the Pediatric Risk Fund for Covered Health
              Services provided to Members on a fee-for-service basis at the
              reimbursement rate agreed to between such physician and CCPN. If
              Specialist Physicians and CCPN have not agreed to a reimbursement
              rate, then Specialist Physician will be reimbursed at the then
              current Medicaid allowable rate. Itemized statements on current
              HCFA 1500 claim forms with current HCPC coding, current ICD9
              coding and current CPT4 coding for all Covered Health Services
              provided by Specialist Physicians must be submitted by Specialist
              Physician to HMO at the address set forth below within sixty (60)
              days of the date the Covered Health Service was provided. If the
              claim form is not timely filed with HMO within sixty (60) days
              from the date the Covered Health Service was provided, the right
              to payment will be deemed waived by the Specialist Physician
              unless Specialist Physician establishes to the reasonable
              satisfaction of CCPN that there was reason able justification for
              a delay in billing or that delay was caused by circumstances
              beyond Specialist Physician's control. Specialist Physician shall
              be paid by HMO no later than forty-five (45) days after receipt by
              HMO of a completed Clean Claim for Covered Health Services. If
              Clean Claims are not paid within forty-five (45) days of
              submission, HMO shall be subject to Section IV:D. below. HMO will
              notify Specialist Physician within thirty (30) days of HMO's
              receipt of any claim(s) that is not a Clean Claim(s).

       C.     Payments to CCPN Participating Provider. CCPN Participating
              Providers will be reimbursed for Covered Health Services provided
              to Members on a fee-for-service basis as listed in Attachment C of
              this Agreement. These fee-for-service rates will be the
              reimbursement rate agreed to between such Participating Provider
              and CCPN. If Participating Provider and CCPN have not agreed to a
              reimbursement rate, then Participating Provider will be reimbursed
              at the then current Medicaid allowable rate. Itemized statements
              on current HCFA 1500 claim forms with current HCPC coding, current
              ICD9 coding and current CPT4 coding for all Covered Health
              Services provided by CCPN Participating Providers must be
              submitted by CCPN Participat-

                                       28
<PAGE>   30

              ing Provider to HMO at the address set forth below within sixty
              (60) days of the date the Covered Health Service was provided. If
              the claim form is not filed with HMO within sixty (60) days from
              the date the Covered Health Service was provided, the right to
              payment will be deemed waived by the CCPN Participating Provider
              unless CCPN Participating Provider establishes to the reasonable
              satisfaction of CCPN that there was reasonable justification for a
              delay in billing or that delay was caused by circumstances beyond
              CCPN Participating Provider' s control. CCPN Participating
              Provider shall be paid by HMO within forty-five (45) days after
              receipt by HMO of a completed Clean Claim for Covered Health
              Services. If Clean Claims are not paid within forty-five (45) days
              of submission, HMO shall be subject to Section IV.D. below. HMO
              will notify CCPN Participating Provider within thirty (30) days of
              HMO's receipt of any claim(s) that is not a Clean Claim(s).

       D.     Claims Reimbursement. All Clean Claims submitted to HMO for
              payment will be paid within forty-five (45) days of the date of
              HMO's receipt of such Clean Claim. Claims paid after this
              forty-five (45) day period will bear interest at the current prime
              rate published by the Wall Street Journal ("WSJ") until paid.
              Claims paid incorrectly or not paid in full will be reprocessed
              and paid within thirty (30) days of the date HMO is notified in
              writing of incorrect or underpayment. Claims not corrected and
              paid in full within this thirty (30) day period will bear interest
              at the current prime rate published by WSJ until paid.

       E.     Overpayment. CCPN, CCPN Physicians and/or CCPN Participating
              Providers shall promptly report overpayments to HMO. HMO shall,
              upon notice to HMO or upon its discovery, deduct such overpayment
              from future payments with an explanation of the action taken.

       F.     In-house Pediatric Service. CCPN and HMO jointly will develop a
              program for PCPs to elect to use the CMC In-house Pediatric
              Service for Members admitted to CMC.

       G.     Reinsurance. Each party will purchase or obtain its own
              reinsurance policy or program and each will retain any recoveries
              from their program.


                                       29
<PAGE>   31

V.     Risk Funds.

       A.     General Provisions. HMO and CCPN shall establish an Adult Pool, a
              Pediatric Pool, and a Profit Product Pool to serve as risk sharing
              incentive arrangements to monitor utilization goals while
              maintaining quality of care. The budget for each pool is set forth
              below. Each pool shall be age/sex/benefit adjusted for Members or
              Adult Enrollees covered by the applicable pool.

              1.     Pediatric Pool. HMO will allocate seventy-five percent
                     (75%) of the Total TDH Payment attributable to Members (the
                     "Pediatric Target Amount") to the Pediatric Pool.

                     a.     If less than the Pediatric Target Amount is spent
                            for payment of Covered Health Services, then all (or
                            100%) of such surplus below the Pediatric Target
                            Amount (the "CCPN Surplus") shall be paid directly
                            to CCPN by HMO in accordance with the Settlements
                            described in Section VI below.

                     b.     If more than the Pediatric Target Amount but not
                            more than eighty percent (80%) of the Total TDH
                            Payment attributable to Members is spent for the
                            payment of Covered Health Services, then the excess
                            over the Target Amount, up to, and including, eighty
                            percent (80%) (the "CCPN Deficit"), shall be the
                            financial responsibility of CCPN in accordance with
                            the Settlements described in Section VI below. CCPN
                            shall be given credit for any funds paid by CCPN to
                            cover deficits in the Pediatric Pool during each
                            year of this Agreement ("Net CCPN Deficit").

                     c.     If more than eighty percent (80%) of the Total TDH
                            Payment attributable to Members is spent for the
                            payment of Covered Health Services, then the excess
                            costs over eighty percent (80%) (the "Pediatric
                            Deficit") shall be allocated twenty-five percent
                            (25%) to CCPN and seventy-five percent (75%) to HMO
                            in accordance with the Settlements described in
                            Section VI below. CCPN shall be given credit for any
                            funds paid by CCPN to cover deficits in the
                            Pediat-

                                       30
<PAGE>   32

                            ric Pool during each year of this Agreement ("Net
                            CCPN Deficit").

              2.     Adult Pool. HMO will allocate seventy-five percent (75%) of
                     the Total TDH Payment attributable to Adult Enrollees (the
                     "Adult Target Amount") to the Adult Pool. Twenty-five
                     percent (25%) of any surpluses or deficits in the Adult
                     Pool under or over the Adult Target Amount will be
                     allocated to CCPN and seventy-five percent (75%) of any
                     surpluses and deficits in the Adult Pool under or over the
                     Adult Target Amount will be allocated to HMO in accordance
                     with the Settlements described in Section VI below.

              3.     Profit Product Pool. CCPN and HMO agree to share profits as
                     detailed in the agreement between Cook Children's Health
                     Care Network and Americaid, Inc.

VI.    Reviews and Settlement. The Pediatric Pool and Adult Pool shall be
       subject to quarterly year-to-date reviews and each Risk Fund shall have
       an annual final settlement at the Contract Anniversary Date.

       A.     Reviews. At the end of the first three (3) months of this
              Agreement, a quarterly year-to-date review of the Pediatric Pool
              and the Adult Pool will be performed. This review will be
              completed by the last day of the next quarter with subsequent
              quarterly year-to-date reviews to take place every three (3)
              months thereafter, except for the first year of this Agreement
              where the fourth quarter will be two (2) months (July and August).
              For each quarterly review, HMO will calculate the cumulative
              monthly TDH Payment made to the Pediatric Pool and the Adult Pool.
              HMO shall also calculate the cumulative monthly claims and
              Capitation Amounts paid for the provision of Covered Health
              Services to Members and the cumulative monthly claims and
              capitation amounts paid for medical claims expenses of Adult
              Enrollees. HMO will also report total incurred but not reported
              (IBNR) claims. HMO shall provide copies of lag schedules and other
              data used to determine IBNR.

       B.     Settlements. Reconciliation for surpluses and deficits in each
              Risk Fund shall occur at the end of each year of this Agreement.
              At each

                                       31
<PAGE>   33

              Contract Anniversary Date, final settlements of the Pediatric
              Pool, the Adult Pool, and the Profit Product Pool will be
              performed within ninety (90) days of the Contract Anniversary
              Date. CCPN must approve the final settlement report for each Risk
              Fund or HMO shall be in default of this Agreement. The CCPN
              Surplus in the Pediatric Pool, if any, shall be paid by HMO to
              CCPN within thirty (30) days after receipt by CCPN of the
              approved, final settlement report for the Pediatric Pool.
              Additionally, CCPN's percentage share of the Net CCPN Deficit and
              the Net Pediatric Deficit in the Pediatric Pool, CCPN's percentage
              share of the surpluses or deficits in the Adult Pool and CCPN's
              percentage share of the surplus in the Profit Product Pool
              calculated in accordance with Section V above, will then be
              aggregated together. If a net surplus exists, CCPN will be paid
              its surplus within thirty (30) days after receipt of a final
              settlement report approved by CCPN. If a net deficit exists, CCPN
              will pay HMO the net deficit within thirty (30) days after receipt
              of a final settlement report approved by CCPN.

       C.     Settlement in the Event of Termination. After termination of this
              Agreement, HMO and CCPN agree to reconcile payments to and
              amounts owed from all Risk Funds in accordance with this Section
              VI.

VII.   Provider Quality Incentive Pool and Preventive Health Performance
       Incentive.

       A.     HMO has developed a Provider Quality Incentive Pool ("PQIP") to
              provide incentives to physicians in reaching preventive health
              performance objectives. HMO and CCPN will jointly determine how to
              administer the PQIP and pay physicians who qualify for the PQIP.

       B.     Additionally TDH has retained a performance objective Capitation
              Amount of two dollars ($2.00) per Member per month that is
              available to be paid to the HMO after the end of the each contract
              year and after appropriate encounter data is reviewed and
              confirmed by the Texas Department of Health. TDH will determine
              the performance of HMO against the objectives described in the
              State Contract. To the extent that the HMO receives incentive
              payments from the TDH for meeting the preventive health
              performance objectives, HMO will

                                       32
<PAGE>   34

              distribute to CCPN seventy-five percent (75%) of those funds
              attributable to CCPN Members within five (5) days of receipt of
              such payment from TDH.

VIII.  Adult Enrollees Needing Pediatric Services. CCPN agrees that CCPN
       Physicians and CCPN Participating Providers will provide pediatric
       services to Adult Enrollees provided that; (1) HMO will pay CCPN
       Physician and CCPN Participat ing Provider directly for such services at
       the reimbursement rate agreed to by such CCPN Physician and CCPN
       Participating Provider and (2) the Pediatric Pool will not be used for
       payment of any health care services provided to Adult Enrollees.

                                       33
<PAGE>   35

                                  ATTACHMENT A
                                    EXHIBIT 1

                            INTENTIONALLY LEFT BLANK


                                       34
<PAGE>   36


                                  ATTACHMENT A
                                    EXHIBIT 2

                            INTENTIONALLY LEFT BLANK


                                       35
<PAGE>   37


                                  ATTACHMENT A
                                    EXHIBIT 3

                            INTENTIONALLY LEFT BLANK


                                       36
<PAGE>   38


                                  ATTACHMENT A
                                    EXHIBIT 4
                       Managed Care Reporting Requirements
                         Cook Children's Medical Center

As referenced in Section 1.13 of this Agreement, these reports are for
illustrative purposes only.

<TABLE>
<S>         <C>         <C>                        <C>
[_]         Report:                                Financial Summary

                                  Data Elements
                                  -                PMPM Age/Gender Capitation Payments
                                                   -        Participating Provider
                                                   -        Member
                                  -                Member Months
                                                   -        Participating Provider - Detail
                                                   -        CCMC - Summary
                                  -                Participating Provider Billed Charges
                                  -                Participating Provider Allowed Charges
                                  -                Participating Provider Withholds
                                  -                Charges Not Covered
                                  -                Recoveries/Refunds

                        Frequency:                 Monthly

                        Distribution:              Network (finance)


[_]         Report:                                Analysis Of Stop Loss/Reinsurance

                                  Data Elements
                                  -                PMPM Age/Gender Capitation Payments
                                                   -        Participating Provider
                                                   -        Member
                                  -                Member Months
                                                   -        Participating Provider - Detail
                                                   -        CCMC - Summary
                                  -                Participating Provider Billed Charges
                                  -                Participating Provider Allowed Charges
</TABLE>


                                       37
<PAGE>   39


<TABLE>
<S>         <C>         <C>                        <C>
                                  -                Participating Provider Withholds
                                  -                Charges Not Covered
                                  -                Recoveries/Refunds

                        Frequency:                 Monthly

                        Distribution:              Network (finance)


[_]         Report:                                Retroactive Reporting/Calculation

                                  Data Elements
                                  -                capitation
                                  -                enrollment

                        Frequency:                 Monthly

                        Distribution:              Network (finance)


[_]         Report:                                Pre-Authorization/Authorization

                                  Data Elements
                                  -                Member/Subscriber Name
                                  -                Subscriber/Number/Medicaid Number (both)
                                  -                Expected date of service
                                  -                Diagnosis
                                  -                Service/Procedure
                                  -                PCP
                                  -                Service Participating Provider
                                  -                Authorization Number
                                  -                Authorizer Name/Phone
                                  -                Out-Of-Area Flag
                                  -                Referring Participating Provider
                                  -                Override decision flag
                                  -                Number of visits authorized
                                  -                Expected cost of service

                        Frequency:                 Weekly
</TABLE>


                                       38
<PAGE>   40

<TABLE>
<S>         <C>         <C>                        <C>
                        Distribution:              Network (finance)


[_]         Report:                                Incurred But Not Reported Charges by major category,
                                                   i.e., SCP, Hospital, other medical

                                  Data Elements
                                  -                Month of Service
                                  -                Month Paid
                                  -                Lag Schedules
                                  -                Reconciliation of IBNR adjustments

                        Frequency:                 Monthly

                        Distribution:              Network (finance)


[_]         Report:                                Status of Encounter/Claims Processing

                                  Data Elements
                                  -                Medicaid Number/Member Number
                                  -                Participating Provider Number
                                  -                Claim Number
                                  -                Service Code
                                  -                Date(s) of Service
                                  -                Diagnosis/CPT Code
                                  -                PCP
                                  -                Total Charge
                                  -                Date of Service
                                  -                Date of Receipt
                                  -                Amount Charged
                                  -                Amount Paid

                        Frequency:                 Daily Summary
                                                   Weekly Detail

                        Distribution:              Network (finance)
</TABLE>


                                       39
<PAGE>   41


<TABLE>
<S>         <C>         <C>                        <C>
[_]         Report:                                Pended Claims

                                  Data Elements
                                  -                Member Name
                                  -                Member Number
                                  -                Claim Number
                                  -                Service Code
                                  -                Date(s) of Service
                                  -                Diagnosis/CPT Code
                                  -                Reason for Pended
                                  -                PCP
                                  -                Total Charge
                                  -                Expected Review Date

                        Frequency:                 Weekly

                        Distribution:              Network


[_]         Report:                                Daily Inpatient Census Report

                                  Data Elements
                                  -                Member Name
                                  -                Member Number
                                  -                Authorization Number
                                  -                Referring Physician
                                  -                Admitting Physician
                                  -                Diagnosis Code, Procedure Code
                                  -                Admission Date
                                  -                Days Authorized
                                  -                Discharge Date
                                  -                Hospital Name
</TABLE>


                                       40
<PAGE>   42


<TABLE>
<S>         <C>         <C>                        <C>
[_]         Report:                                Member Service

                                  Data Elements
                                  -                Participating Provider, claim, referral information from
                                                   Customer Services module
                                  -                predefined codes to track problems and complaints
                                  -                complaint tracking
                                  -                tracking of formal grievances
                                  -                tracking of inquiries from Participating Providers and
                                                   prospects as well as members

                        Frequency:                 Monthly

                        Distribution:              Network (finance)

[_]         Report:                                Terminated Members Outstanding Claims

                                  -                Member Name/Address
                                  -                Member Number
                                  -                Eligibility Date
                                  -                Medicaid ID Number/Subscriber Number
                                  -                Guarantor/Guardian Name
                                  -                Date of Birth
                                  -                PCP
                                  -                Sex
                                  -                Group Name

                        Frequency:                 Ad Hoc

                        Distribution:              CCMC

[_]         Report:                                Utilization Management Tracking

                                  Data Elements
                                  -                Medicaid Number/Member Number
                                  -                Participating Provider
                                  -                PCP, specialist
</TABLE>


                                       41
<PAGE>   43

<TABLE>
<S>         <C>         <C>                        <C>
                                  -                Claim Number
                                  -                Service Code
                                  -                Date(s) of Service
                                  -                Diagnosis/CPT Code
                                  -                Total Charge
                                  -                Date of Service
                                  -                Date of Receipt
                                  -                Amount Charged
                                  -                Amount Paid

                        Frequency:                 Monthly

                        Distribution:              Network (finance)


[_]         Report:                                Participating Provider Reports

                                  Data Elements
                                  -                Member Name
                                  -                Subscriber Name
                                  -                Service Type (Inpatient/Outpatient, Etc.)
                                                           Detail
                                                           Summary
                                  -                Primary Care Physician or Provider
                                  -                Dates of Service (To/From)
                                  -                Service/Procedure
                                  -                Authorization Code
                                  -                Charge

                        Frequency:                 Ad Hoc

                        Distribution:              CCMC


[_]         Report:                                Primary Care Physician or Provider Analysis Report

                                  Data Elements
                                  -                Member Name
                                  -                Subscriber Name
</TABLE>


                                       42
<PAGE>   44

<TABLE>
<S>         <C>         <C>                        <C>
                                  -                Service Type (Inpatient/Outpatient, Etc.)
                                                           Detail
                                                           Summary
                                  -                Referrals
                                  -                Dates of Service (To/From)
                                  -                Service/Procedure
                                  -                Authorization Code
                                  -                Charge/Cost
                                  -                Summary:
                                                           Total PMPM
                                                           Total Members Treated
                                                           Total Charges by Service Type
                                                           Capitation
                                                           Denied Encounter

                        Frequency:                 Ad Hoc

                        Distribution:              CCMC
</TABLE>


                                       43
<PAGE>   45


                                  ATTACHMENT A
                                    EXHIBIT 5

                      DELEGATION OF CREDENTIALING AGREEMENT


THIS EXHIBIT 5 to that certain CCPN and HMO Medicaid Agreement (the "Agreement")
by and between HMO and CCPN sets forth certain additional terms governing the
relationship between the parties.

RECITALS

1.     HMO maintains credentialing programs designed to periodically review and
       monitor the credentials of physicians and providers who render Covered
       Services to Members. HMO has established policies and procedures for
       delegating certain of its administrative functions to CCPN where CCPN's
       credentialing and re- credentialing standards are consistent with HMO's
       standards and the standards of the NCQA, the Federal Medicaid Quality
       Assurance Reform Initiative (QARI), and JCAHO.

2.     CCPN desires to facilitate the credentialing review of all CCPN
       Physicians and CCPN Participating Providers by performing certain
       delegated functions on behalf of HMO, and HMO is willing to delegate such
       functions, on the terms and conditions set forth below:

NOW THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, the parties do hereby agree as follows:

1.     A.     Capitalized terms used herein and not defined herein shall have
              the mean ing ascribed to those terms in the CCPN and HMO
              Agreement.

       B.     Except as modified below, the provisions of the CCPN and HMO
              Agreement shall remain in full force and effect.

2.     CCPN will provide a copy of its credentialing policies and procedures
       before or with the execution of the Agreement which shall be based on
       current NCQA, QARI and JCAHO standards. CCPN has the power and authority
       under applicable state law to accept the delegation of credentialing
       functions.


                                       44
<PAGE>   46

3.     HMO hereby delegates to CCPN, and CCPN hereby agrees to provide, the
       following credentialing and re-credentialing functions for all CCPN
       Physicians and CCPN Participating Providers in accordance with CCPN's
       credentialing policies and procedures, as these policies have been
       approved by HMO, provided that in any circumstance where CCPN's
       credentialing policies and procedures are less stringent than HMO's
       credentialing policies and procedures, HMO's policies and procedures
       shall apply:

       [_]    verification of Board certification for any and all specialties in
              which each provider represents he/she/it is certified;

       [_]    verification of completion of residency and reported performance;

       [_]    review of CV/work history and confirmation that during the last
              five (5) years there are no unexplained gaps of more than six
              months;

       [_]    verification of hospital privileges and good standing;

       [_]    verification of license from a primary source;

       [_]    verification of valid and current DEA Certificate;

       [_]    verification of current malpractice insurance satisfying HMO
              standards and collection of documentation in support thereof;

       [_]    research regarding any malpractice claims;

       [_]    confirmation that provider's record is clear of any
              Medicare/Medicaid sanctions;

       [_]    confirmation that all credentialing questions on the application
              have been answered and that no answer raises an issue;

       [_]    Confirmation that NPDB search is clean;

       [_]    confirmation that search of Federation files is clear;


                                       45
<PAGE>   47

       [_]    obtain affidavit from provider that, pursuant to NCQA CR6. 1 and
              CR6.2, he or she is fit to practice and has reviewed his or her
              application and verifies its correctness/completeness;

       [_]    (PCP's/OB/GYNs only) performance of a site visit evaluation and
              confirmation that evaluation is favorable;

       [_]    PCP's/OB/GYNs only) performance of medical record review and
              confirmation that evaluation is favorable;

       [_]    (for Texas only) verification of DPS certification;

       [_]    obtain all necessary attestations and relations with respect to
              information needed to perform credentialing;

       [_]    Re-credential each provider within two years.

4.     HMO shall make available to CCPN its credentialing policies and
       procedures and shall notify CCPN in writing of all substantive changes to
       such credentialing policies and criteria.

5.     CCPN shall at all times (a) be accountable to HMO for the credentialing
       functions delegated herein (b) obtain HMO's prior written approval of any
       revision to CCPN's credentialing policies and procedures used in
       connection with the performance of the functions delegated hereunder, (c)
       comply with the credentialing and re-credentialing standards of HMO, the
       NCQA, QARA and the JCAHO, (d) abide by, and cause its Physicians and
       Participating Providers to abide by, the results of any decision of HMO's
       credentialing committee, and (e) take appropriate steps to implement
       corrective action if HMO notifies CCPN that it has failed to perform or
       comply with the terms of this Addendum.

6.     HMO reserves the right, in its sole discretion, to disapprove any CCPN
       Physician and/or CCPN Participating Provider, regardless of the initial
       credentialing or re- credentialing decision, and CCPN's Physicians and
       Participating Providers who are disapproved by HMO shall not provide
       services to Members pursuant to the CCPN Agreement.


                                       46
<PAGE>   48

7.     CCPN shall, on a quarterly basis or more frequently if necessary for HMO
       to comply with the reporting requirements of its state Medicaid contract,
       provide HMO with a written report in a format reasonably acceptable to
       HMO which addresses summary results of its credentialing activities. This
       report should summarize process indicators, improvement activities, and
       status of credentialing and re- credentialing activities.

8.     HMO may review periodically CCPN's credentialing policies and criteria
       and shall, from time to time, be granted access to CCPN's files, on an
       unscheduled basis, to ensure compliance by CCPN with HMO's credentialing
       standards. HMO may review the greater of five percent (5%) or fifty (50)
       of CCPN's credentialing files in connection with each such audit.

9.     HMO shall have the option to revoke its delegation of some or all of the
       functions delegated hereunder if: (a) HMO, in its sole discretion, after
       giving CCPN a reasonable chance to cure, is dissatisfied with the
       arrangement, (b) the delegation is jeopardizing HMO's eligibility for
       NCQA accreditation or its compliance with the terms of its state Medicaid
       contract, or (c) HMO determines through an audit proves that CCPN has not
       complied with HMO's credentialing policies and procedures and, if within
       a period of time required by HMO as set forth in a notice of
       noncompliance, CCPN fails to respond with a corrective action plan and
       effect such plan. Any revocation made pursuant to Sections (a) or (b)
       herein shall be effective immediately upon HMO notifying CCPN. If HMO
       revokes the delegation of any function, HMO will resume performing that
       function.

10.    In the event that any of CCPN's Physicians and/or CCPN Participating
       Providers ceases to meet HMO's credentialing criteria, or is disapproved
       by CCPN or HMO in accordance with Section 9 above, CCPN shall promptly
       notify HMO, and if such CCPN Physician and/or CCPN Participating Provider
       is a Primary Care Physician and/or providing an active course of
       treatment to a Member, make alternate arrangements for the provision of
       Covered Services.

11.    CCPN shall immediately notify HMO if any information comes to its
       attention regarding any adverse action taken with respect to the
       licensure of any CCPN Physician and/or CCPN Participating Provider,
       suspension or termination (in whole or in part) of a CCPN Physician's
       hospital staff privileges or clinical privileges, suspension or
       termination of CCPN, or a CCPN Physi-


                                       47
<PAGE>   49

       ian's, Medicare or Medicaid privileges, a lawsuit is filed against a CCPN
       Physician alleging professional negligence, or any other information
       that adversely reflects on the ability or capacity of a CCPN Physician to
       provide medically appropriate care consistent with appropriate standards
       of professional competence and conduct.

12.    CCPN agrees to require its Physicians and Participating Providers to
       cooperate with and abide by the results of HMO's credentialing policies
       and procedures whether implemented through CCPN or directly by HMO.

13.    CCPN shall permit HMO to conduct an initial due diligence audit to
       confirm that CCPN is in compliance with each of the provisions of this
       Addendum. Information disclosed shall be protected by any and all
       applicable peer review legal protection.

14.    CCPN's credentialing activities shall be coordinated with HMO's quality
       improvement program and utilize information derived from HMO's programs,
       whether delegated or not, related to member services, utilization
       management and quality assurance.

15.    CCPN shall comply with all state requirements (including applicable
       licensure, State Medicaid and Star Healthplan) and requirements of other
       applicable regulatory authorities in the performance of the
       administrative functions delegated hereunder. CCPN shall, upon written
       request, provide HMO with documentation of the satisfaction of these
       requirements.

16.    CCPN shall obtain errors and omissions insurance related to its
       credentialing activities, or self-insure at its own expense, in the
       minimum coverage amount of $1,000,000.

17.    Upon the revocation of the functions delegated hereunder or the
       termination of the Agreement, CCPN shall assist HMO in the transfer of
       records related to the information requested as part of the Credentialing
       Program.


                                       48
<PAGE>   50

                                  Attachment B

                          CCPN Physician Reimbursement

Physician reimbursement effective October 1, 1996, shall be governed by the
following reimbursement terms:

I.     Primary Care Capitation Payments. HMO shall compensate Primary Care
       Physicians or Providers from the Pediatric Risk Pool through
       age/sex/benefit adjusted capitation rates for Primary Care Services. A
       listing of Primary Care Services included in the capitation rate is
       attached.

       A.     Capitation Payments - Primary Care Physicians or Providers

              PMPM capitation rate cells by age/sex factor:


<TABLE>
<CAPTION>
====================================================================================================================================
                           <500 Member Average                     500-750 Member Average                    >750 Member Average
------------------------------------------------------------------------------------------------------------------------------------
       Age
     Category           Female               Male                Female               Male                Female               Male
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                 <C>                  <C>                 <C>                  <C>                 <C>
      Age <2            $39.59              $39.59               $41.67              $41.67               $43.75              $43.75
------------------------------------------------------------------------------------------------------------------------------------
     Age 2-4            $13.31              $13.31               $14.01              $14.01               $14.71              $14.71
------------------------------------------------------------------------------------------------------------------------------------
     Age 5-14            $8.08               $8.08                $8.51               $8.51                $8.94               $8.94
------------------------------------------------------------------------------------------------------------------------------------
    Age 15-19            $7.70               $5.81                $8.10               $6.12                $8.51               $6.43
------------------------------------------------------------------------------------------------------------------------------------
    Age 20-24            $8.66               $6.05                $9.12               $6.37                $9.58               $6.69
====================================================================================================================================
</TABLE>

For PCP's with <250 members, there will be an annual true-up of 100% of the
Medicaid fee-for-service equivalent in the event capitation payments are less
than this amount.

Rates are adjusted quarterly on a prospective basis, once a membership level has
been maintained during the prior quarter.


                                       49
<PAGE>   51

       B.     Primary Care Fee-For-Service Payments - Primary Care Physicians or
              Providers. HMO shall compensate Primary Care Physicians or
              Providers for CPT codes not listed on the attached listing of
              Primary Care Services on a fee-for-service basis for non-capitated
              services provided to Members at the reimbursement rate agreed to
              between such provider and CCPN. If PCP and CCPN have not agreed to
              a reimbursement rate, then PCP will be reimbursed at the then
              current Medicaid allowable rate for non-capitated services with
              the exception of the following: 1) Immunizations will be
              reimbursed at 90% of the prevailing Medicaid maximum allowable fee
              schedule. 2) Injectable drugs will be reimbursed based upon the
              cost of the injectable drugs at the average wholesale price (AWP).

III    Specialist Reimbursement. HMO shall compensate Specialist Physicians from
       the Pediatric Risk Fund for Covered Health Services on a fee for service
       basis at the reimbursement rate agreed to between such physician and
       CCPN. If Specialist Physicians and CCPN have not agreed to a
       reimbursement rate, then Specialist Physician will be reimbursed at the
       then current Medicaid allowable rate.

IV     Risk Sharing/Incentive Program. Each CCPN Physician will be eligible to
       participate in a risk sharing/incentive program to be developed by CCPN.
       HMO and CCPN will jointly determine how to integrate the Hospital and
       Referral Pool ("HARP") developed by HMO and the Risk Sharing Incentive
       Program developed by CCPN.

V      Other Reimbursement Schedules. To be completed within fifteen (15) days
       of the Effective Date.


                                       50
<PAGE>   52

                                  ATTACHMENT C

                 CCPN Participating Provider Reimbursement Rates


           To be completed within fifteen (15) days of Effective Date.


                                       51
<PAGE>   53


                                  ATTACHMENT C
   Reimbursement Rates for Services Provided at Cook Children's Medical Center



Inpatient Services:

All inpatient services will be reimbursed at 60% of billed charges.


Emergency Services - excluding physician charges:

<TABLE>
<S>                                                        <C>
            Level 1 (highest intensity)                    60% of total charges
            Level 2                                        $500 per case
            Level 3                                        $250 per case
            Level 4                                                N/A
            Level 5                                                N/A
</TABLE>


Outpatient Surgery:

The Ambulatory Surgery Categories (ASCs) are the Medicare groupings. The
following are all inclusive global fees covering all pre-op admission and lab
services, medications, equipment usage, operating and recovery rooms, and all
other normal supplies and services required for the procedure. Implants and
prosthetics are excluded from these fees and will be reimbursed at current
Medicaid maximum allowable fee schedule. Physician fees are excluded from these
fees.

<TABLE>
<S>                                         <C>
     Group 1                                      $361
     Group 2                                      $510
     Group 3                                      $585
     Group 4                                      $750
     Group 5                                      $900
     Group 6                                    $1,125
     Group 7                                    $1,300
     Group 8                                    $1,350

     Others                                  60% of charges
</TABLE>


                                       52
<PAGE>   54

When multiple procedures are performed during the same operative session, the
following hierarchy applies:

       First procedure @ 100% of highest ASC rate.
       Second procedure @ 50% of next highest ASC rate.
       Third procedure @ 35% of next highest ASC rate.
       Fourth or more procedure @ 15% of applicable ASC rate.


                                       53
<PAGE>   55

                                  ATTACHMENT D

                               Americaid Contracts

         To be completed within fifteen (15) days of the Effective Date.


                                       54
<PAGE>   56

Home Health

Private Duty Nursing (RN/LVN) @ $33/hr
Skilled Nursing Visit @ $110/hr
Rehab @ $150/visit
Speech @ $120/visit
Occupational @ $120 per visit

Other Home Health services @ Current medicaid allowables



Other:

Any service not listed will be reimbursed at 60% of billed charges.





                                       55


<PAGE>   57
                             AMERICAID Texas, Inc.

                    PARTICIPATING GROUP PHYSICIANS AGREEMENT

         THIS PARTICIPATING GROUP PHYSICIAN AGREEMENT ("Agreement") effective
9/1, 1995 (the "Effective Date"), is made and entered into by and between
AMERICAID Texas, Inc. ("AMERICAID") and Group for which the authorized
signature appears below.

                                   WITNESSETH

         WHEREAS, AMERICAID is a health maintenance organization which will
arrange for the provision of certain health care services to Covered Persons
through a cost-effective, coordinated health care delivery system (sometimes
referred to as the "Provider Network" or "Network");

         WHEREAS, Group is comprised of Providers duly licensed to practice
medicine in the state(s) identified in the AMERICAID Physician Application and
meets AMERICAID's physician credentialing criteria;

         WHEREAS, AMERICAID desires that Group provide and Group agree to
provide services to Covered Persons under the terms and conditions of this
Agreement; and

         WHEREAS, AMERICAID and Group, in order to comply with all applicable
regulatory requirements, agree to be bound by the provisions of this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and condi
tions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, AMERICAID and Group
agree as follows:

                       ARTICLE I. AMERICAID'S OBLIGATIONS

1.1      General. AMERICAID shall be solely responsible for all payment and
         administrative activities necessary or required for the operation of a
         sound


<PAGE>   58

         health maintenance organization. Such activities shall include, but
         are not limited to, making Covered Persons available to the Network,
         capital financ ing, marketing, advertising, customer service, claims
         processing, collection, maintenance of Network directory and records,
         accounting, management, and development of contracts with Providers of
         Covered Services.

1.2      Provider Manuals. AMERICAID shall provide Group with a Provider
         Manual, to be periodically updated, which details policies and
         procedures of AMERICAID, and the terms of which are incorporated
         herein by reference.

1.3      Procedures. AMERICAID shall develop and implement grievance, utiliza
         tion review, drug utilization, quality assurance and other procedures
         required by law or regulation.

1.4      Professional Relationship: Responsibility and Non Exclusivity.
         Participating Physicians in the Group shall be solely responsible for
         all medical advice and services Participating Physicians in the Group
         perform or prescribe with regard to Covered Persons. This Agreement
         will not be deemed in any way to limit or restrict the Group from
         entering into other arrangements or pro grams of a similar nature with
         other managed care entities.

1.5      Provider Listing. Payor(s) shall have the right to use Group's name
         and the names of the Group's Participating Providers, business
         addresses, phone numbers, hospital affiliations, educational
         background, certifications, and specialties for purposes of marketing,
         informing Covered Persons of the identity of the Group and the names
         of the Group's Participating Providers, and otherwise to carry out the
         terms of this Agreement and the payor(s) Agreement.

1.6      Volume. AMERICAID does not, by this Agreement or otherwise, promise,
         warrant or guarantee Group any minimum number of Covered persons on
         Participating Physicians' panel or as referrals to Group's Providers.

                        ARTICLE II. GROUP'S OBLIGATIONS

2.1      Coordinated and Managed Care. Group shall participate in the systems
         established by AMERICAID and Payor(s) designed to facilitate the
         coordina tion of health care services received by Covered Persons.
         Subject to medical


                                       2

<PAGE>   59


         judgment, patient care interests, and the patient's express
         instructions, and recognizing that a level of a Covered Person's
         Covered Services may be affected by the Group Participating Physicians
         rendering services, Group and its Participating Providers shall abide
         by the rules and regulations of Payor(s) and AMERICAID governing
         referrals of Covered Persons and reporting of clinical encounter data.
         If Group Participating Physicians determine that a Covered Person
         requires hospitalization, Group Participating Physicians shall abide
         by the applicable utilization review process established or adopted by
         AMERICAID and Payors.

2.2      Covered Person Verification. Pursuant to the procedures established by
         Payor(s), Group Participating Providers shall establish Covered
         Person's eligibility for the services requested prior to the rendering
         of such services.

2.3      Compliance with Utilization Management, Quality Assurance, Rules and
         Regulations, and Policies and Procedures. Group Participating
         Providers shall comply and cooperate with all requirements of
         AMERICAID and payor(s) set forth in this Agreement and in the
         AMERICAID Provider Manual, and all amendments thereto, governing
         credentialing, utilization management, quality assurance program,
         grievances, rules and regulations and policies and procedures of
         AMERICAID or governing state and federal laws and regulations,
         including without limitation policies and procedures concerning
         coordination of benefits and third party liability.

2.4      Availability of Services. Group Participating Providers shall provide
         all Covered Services in the same manner, in accordance with the same
         accepted medical standards, and within the same time availability,
         offered to all of Group Participating Providers' patients. Group
         Participating Providers or Group's delegates shall be available to
         provide Covered Services to Covered Persons seven (7) days per week,
         twenty-four (24) hours per day.

2.5      Non-Discrimination. Group Providers shall not discriminate in the
         rendering of services under this Agreement on the basis of a Covered
         Person's race, color, national origin, sex, sexual orientation, age,
         religion, place of resi dence, health status, handicap, or source of
         payment.

2.6      Provision of Non-Covered Services. In the event that Group
         Participating Providers provide any services other than Covered
         Services to any Covered Person, prior to the provision of such
         services, Group Participating Providers


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<PAGE>   60

         will advise the Covered Person, in writing, (a) of the nature of the
         service; (b) that the service is not a Covered Service for which
         payor(s) will pay; and (c) that the Covered Person will be responsible
         for paying for the service.

2.7      Primary Care Physician Services. For each Group Provider credentialed
         by AMERICAID as a Participating Primary Care Physician, Group
         Participating Physician agrees to accept as patients all Covered
         Persons who are eligible to select Group Physician and who have
         selected him or her as their Participating Primary Care Physician,
         and to provide or arrange for the provision of appropriate Covered
         Services within the scope of each Group Physician's practice, to such
         Covered Persons. Participating Physician will refer Covered Persons to
         Specialist Physicians only in accordance with procedures estab lished
         by AMERICAID, which procedures may include, without limitation, use of
         a prescribed referral form.

2.8      Specialist Physician Services. For each Group Provider credentialed by
         AMERICAID as a Specialist Physician. Group Participating Provider
         agrees to accept as patients all Covered Persons who are referred by
         Primary Care Physicians participating in the AMERICAID Network, and to
         provide or arrange for the provision of appropriate Covered Services
         within the scope of each Group Provider's practice, to such Covered
         Persons. Participating Provider will refer Covered Persons to other
         Specialist Physicians only in accordance with procedures established
         by AMERICAID, which procedures may include, without limitation, use of
         a prescribed referral form.

2.9      Hospital Affiliation and Privileges. Each Group Participating
         Physician shall maintain in effect privileges to practice at one or
         more Participating Hospitals and shall immediately notify AMERICAID in
         the event Participating Physicians' privileges are revoked, limited,
         surrendered, or suspended at any hospital or health care facility
         including any Participating Hospital.

2.10     Insurance Coverage. Each Group Participating Provider shall purchase
         and maintain professional liability insurance, general comprehensive
         liability insurance, and workers' compensation insurance in amounts as
         may be required by AMERICAID, but in no event, less than the amount
         required by law. Professional liability insurance limits shall be, at
         a minimum, $1,000,000 per occurrence/$3,000,000 aggregate.

                                       4

<PAGE>   61
         Group shall provide AMERICAID with whatever documentation may be
         requested by AMERICAID to evidence compliance with all the foregoing
         insurance requirements. Group shall provide AMERICAID with at least
         thirty (30) days notification prior to: any reduction in the amount of
         coverage, any adverse changes in policy terms, or cancellation or
         non-renewal of any required coverage. Group warrants that any
         associated health professional Group employ or with whom Group contract
         shall purchase and maintain whatever type and amount of professional
         liability insurance as may be required by AMERICAID for that class of
         provider.

2.11     Indemnification. Group hereby agrees that in no event, including, but
         not limited to nonpayment by the HMO, HMO insolvency, or breach of
         this agreement, shall Group bill, charge, collect a deposit from, seek
         compensation, remuneration, or reimbursement from, or have any
         recourse against subscriber, enrollee, or persons other than HMO
         acting on their behalf for services provided pursuant to this
         agreement. This provision shall not prohibit collection of
         supplemental charges or copayments on HMO's behalf made in accordance
         with the terms between HMO and subscriber enrollee. Group further
         agrees that (1) this provision shall survive the termination of this
         agreement regardless of the cause giving rise to termination and shall
         be construed to be for the benefit of the HMO subscriber/enrollee, and
         that (2) this provision supersedes any oral or written contrary
         agreement not existing or hereafter entered into between the Group and
         subscriber, enrollee, or persons acting on their behalf. Any
         modifications, addition, or deletion to the provisions of this clause
         shall become effective on a date no earlier than 15 days after the
         commissioner of insurance has received written notice of such proposed
         changes.

2.12     Obligation to Continue Care. In the event that AMERICAID becomes
         insolvent, AMERICAID's obligations to pay compensation for Covered
         Services under this Agreement may be assumed by Payor(s). Such
         assumption by payor(s) notwithstanding, if Payor(s) becomes insolvent
         or fails for any reason to pay compensation for Covered Services as
         required by this Agreement, or if Payor(s) Agreement is terminated,
         but Payor(s) so requests, Group Participating Providers nevertheless
         agree that, at Payor'(s) request, Group Physicians shall continue to
         treat Covered Persons then under a course of active treatment, under
         the terms of this Agreement, until provision has been made for their
         assignment to another physician or until such treatment has been
         completed, whichever occurs first, or for such longer period as may

                                       5

<PAGE>   62

         be required by law. Such period shall not exceed the period for which
         a Covered Person's premiums have been paid, except that treatment of
         any Covered Person confined to an inpatient facility shall continue
         until such Covered Person is discharged or another physician has
         assumed care of such Covered Person. Group Providers shall not bill
         Covered Persons or persons acting on their behalf for Covered Services
         rendered during such period.

2.13     Billing.

         a.       Group Participating Provider shall submit claims on the
         appropriate claim form for all Covered Services within sixty (60) days
         of the date those services are rendered. Claims received after this
         sixty (60) day period may be denied for payment. Group Participating
         Provider shall submit claims to the location described in the
         applicable Program Requirements.

         b.       Any amount owing under this Agreement, (i) if owed by
         AMERICAID, shall be paid within thirty (30) days unless, (ii) if owed
         by a Payor, shall be paid within sixty (60) days after receipt of a
         Clean Claim, or the claim involves coordination of benefits, except as
         otherwise provided in the applicable Payor(s) Agreements.

2.14     In the event that AMERICAID contracts with any state Medicaid program,
         and Physicians are Participating Providers for that product, the
         following shall apply:

         a.       Laboratory Compliance. Group shall comply with all
         requirements of the Clinical Laboratory Improvement Act ("CLIA"), and
         implementing regulations. Upon execution of this Agreement, Group
         agrees to furnish written verification to AMERICAID that its own
         laboratory(ies), if any, and those with which it conducts business
         related to Covered Persons, has (have) a CLIA certificate of
         registration or a waiver, and a CLIA identification number. Group also
         shall furnish annually to AMERICAID a written list of diagnostic tests
         performed in its laboratory(ies), if any, and those with which it
         conducts business related to Covered Persons. Group shall notify
         AMERICAID of changes in the CLIA status of its laboratory(ies), and
         those with which it conducts business related to Covered Persons, in
         writing within five (5) days of such changes.

                                       6

<PAGE>   63

         b.       Americans with Disabilities Act Compliance. Group shall
         comply with all requirements of the Americans with Disabilities Act
         ("ADA"), and implementing regulations. Group shall not discriminate
         against any qualified disabled individual covered by the ADA. Group
         Participating Providers shall provide physical access for Covered
         Persons, including, at a minimum, street level access or accessibility
         ramp into office; wheelchair access to lavatory; and an elevator, if
         Group Participating Provider's office is more than one story. Group's
         provision of services, notices and other materials shall be
         appropriate for all Covered Persons, including the blind, hearing
         impaired and individuals who do not speak English.

         c.       Exhaustion of Benefits. For Medicaid services furnished to a
         Covered Person in excess of the New Jersey Medicaid benefit
         limitations, Group Provider shall bill Medicaid directly and not
         AMERICAID, upon receipt from AMERICAID of an Exhaustion of Benefits
         letter.

         d.       Financial Disclosure.  Group shall provide necessary
         financial disclosure required by 42 C.F.R. 434,42 U.S.C. Sections
         1903(m), and applicable state laws.

         e.       Compliance with Other Laws. Group agrees to comply with
         applicable requirements of Title XIX of the Social Security Act. 42
         U.S.C. 1396b(m) and Title XIII of the Federal Public Health Services
         Act, regulations promul gated thereunder, and all other applicable
         state and Federal legal and regula tory requirements.

2.15     Representations and Warranties. Group hereby represents that all of
         the information and documentation provided by Group to AMERICAID prior
         to and during the term of this Agreement, including but not limited to
         that set forth in an application to become Participating Group and in
         credentialing materials, is true and correct and Group hereby agrees
         to update any such information and documentation within three (3)
         business days if any change should occur regarding any such
         information or documentation previously provided to AMERICAID.

2.16     Participation of Group Providers. Participating Group Providers must
         comply with criteria and the terms of this agreement. However,
         AMERICAID is not obligated to accept all members of the Group as
         Participating Providers.

                                       7

<PAGE>   64

2.17     Agreement Governs. To the extent of any conflict between the terms of
         this Agreement and any ancillary obligation created, or documentation
         including the Provider Manual provided to the Group, the terms of this
         Agreement shall govern.

                       ARTICLE III. PAYMENT FOR SERVICES

3.1      Payment for Group Services. Group's compensation is described in
         Attachment A.

3.2      Coverage Verification. Except in an Emergency, prior to providing
         services to any patient who presents himself or herself as a Covered
         Person, Group shall verify such patient's coverage with the patient's
         Payor(s) as required by AMERICAID or the applicable Payor(s) Health
         Plan. Payor(s) will also notify Group of the appropriate method by
         which to verify a Covered Person's coverage.

3.3      No Recourse Against Covered Persons. Except as otherwise provided in
         this Agreement, Group shall not bill, charge or attempt to collect
         from any Covered Person for any services provided under this
         Agreement, including the difference between the amount of
         reimbursement payable under this Agreement and the Group's Normal
         Charges for the services rendered. For all Covered Services delivered
         pursuant to this Agreement to Covered Persons, Group shall not, under
         any circumstances, including insolvency of AMERICAID: (1) bill, charge
         or attempt to collect any money from any Covered Person; (2) maintain
         any action at law against any Covered Person to collect money owed to
         Group by AMERICAID; or (3) hold any Covered Person liable in any other
         way for Covered Services provided to such Covered Person. Whenever
         AMERICAID fails to meet its obligation to pay fees under this
         Agreement for Covered Services already rendered to a Covered Person,
         AMERICAID, rather than the Covered Person, shall be liable for such
         fees. Solely for purposes of this Section 3.3, "Covered Person" shall
         include a Covered Person and any person acting on behalf of such
         Covered Person, except AMERICAID. However, Group may bill Covered
         Person for non-Covered Services. This provision shall survive the
         termination of this Agreement.


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<PAGE>   65

3.4      Insolvency of AMERICAID. In the event that AMERICAID becomes insolvent
         or unable to pay Group, Group will not seek compensation for services
         rendered from any Payor(s), its officers, agents, or employees, or the
         Covered Persons or their eligible dependents.

                              ARTICLE IV. RECORDS

4.1      Records. Group Participating Providers shall maintain the medical,
         financial and administrative records concerning services provided to
         Covered Persons that Group Providers would maintain in the normal
         course of business. Such records shall be retained by Group Providers
         for the period of time required by all applicable laws or regulations
         but in no event less than five (5) years from the date the service was
         rendered or termination of this Agreement, whichever first occurs.
         Group agrees that AMERICAID and the applicable Payor(s), as well as
         state and Federal agencies, have the right to review records directly
         related to services rendered to Covered Persons, upon reason able
         notice, during regular business hours. Group further agrees to obtain
         any necessary releases from Covered Persons with respect to their
         records and the information contained therein to permit Payor(s), or
         state and Federal agencies, access to such records. AMERICAID and
         Group Participating Providers agree that each Covered Person's medical
         records shall be treated as confidential so as to comply with all
         state and federal laws and regulations regarding the confidentiality
         of patient records. Subject to the foregoing, Group shall supply
         AMERICAID and state and Federal agencies, at no charge, with copies of
         Covered Persons' medical records upon request Group Participating
         Providers shall participate in any system established by AMERICAID to
         facilitate the sharing of records, subject to applicable
         confidentiality require ments. Notwithstanding termination of this
         Agreement or termination of Group participation in any Payor(s) Health
         Plan for any reason, the access to records granted hereunder shall
         survive the termination of both this Agreement and any Payor(s)
         Health Plan.

4.2      Transfer and Confidentiality. Group Participating Providers agree to
         cooperate in the transfer of Covered Persons' medical records to
         other Participating Providers, to assume any cost associated
         therewith, and to transfer any medical records in Group's Providers
         custody within ten (10) days of a Covered Person's request. Group
         further agrees to cooperate with AMERICAID and any state or federal
         agency in making available, and in arranging or allowing inspection
         of, such records as may be required under

                                       9

<PAGE>   66

         state or federal law or regulation or as may be appropriate to
         disclose to such authorities in connection with their assessment of
         quality of care or investiga tion of Covered Person's grievances or
         complaints. AMERICAID and Group Providers agree that Covered Persons'
         medical records shall be treated as confidential so as to comply with
         all state and federal laws and regulations regarding the
         confidentiality of patient records

4.3      Other Records. During the term of this Agreement, Group Provider
         shall, upon request of Payor(s), furnish any other record related to
         services fur nished pursuant to this Agreement, or a copy thereof.
         Upon termination or expiration of this Agreement, Group Provider shall
         provide copies of all such records to AMERICAID prior to final
         settlement of all claims and outstand ing contract issues.

4.4      Production of Records Notwithstanding Termination. Notwithstanding
         termination of this Agreement, the access to records granted hereunder
         in this Article IV shall survive the termination of this Agreement.

                 ARTICLE V. TERM, TERMINATION AND MODIFICATION

5.1      Initial Term and Renewal: Termination.  This Agreement shall have an
         initial term of one (1) year, commencing as of the Effective Date, and
         shall renew automatically for successive terms of one (1) year unless
         either party gives the other at least one hundred twenty (120) days'
         prior written notice that the Agreement shall not renew.  In addition
         to the other termination provisions, AMERICAID and Group shall each
         have the right to terminate this Agreement, without cause, upon one
         hundred twenty (120) days' prior written notice to the other party.

5.2      Termination; Cause. Either party may terminate this Agreement for
         cause (defined as a material default or breath by such other party)
         upon sixty (60) days prior written notice, which notice shall set
         forth the grounds for termination, if the grounds for termination
         continue for the sixty (60) day period after written notice, the
         nonbreaching party shall have the right to immediately terminate this
         Agreement Notwithstanding any provision in this Agreement to the
         contrary, Group Providers shall continue to provide Covered Services
         to Covered Persons during the sixty (60) day period.


                                       10

<PAGE>   67


5.3      Termination; Automatic. This Agreement shall automatically and
         immediately terminate upon the expiration, surrender, revocation,
         restriction or suspension of Group's participation in Medicare or
         Medicaid.

5.4      Amendment by Notification. Notwithstanding any other provision to the
         contrary, this Agreement may be amended in any respect by AMERICAID at
         any time by giving thirty (30) days written notice to Group
         accompanied by a description of the amendment. With the sole exception
         of amendments to Attachment C, hereto, the amendment is not acceptable
         to Group. Group may object to the amendment, in writing, within thirty
         (30) days of receiving said notice. If no objection is received by
         AMERICAID within thirty (30) days, Group shall be deemed to have
         accepted the amendment as of its effective date (which shall be no
         earlier than the expiration of said thirty (30) day period). If such
         an objection is received by AMERICAID within such thirty (30) day
         period, then the amendment shall not take effect, and the Agreement
         shall otherwise remain in full force and effect

                           ARTICLE VI. MISCELLANEOUS

6.1      Acceptance and Regulatory Approval. The obligations of AMERICAID and
         Participating provider to perform any of the duties or obligations
         contained in this Agreement are made specifically and expressly
         contingent upon the issuance of a Certificate of Authority to
         AMERICAID by the appropriate state agency(ies). Upon execution of this
         Agreement, and providing that issuance of a Certificate of Authority
         has been accomplished, Provider agrees to become a Participating
         Provider with respect to AMERICAID. Until such time as a certificate
         of Authority has been issued to AMERICAID, this Agreement shall be
         deemed to be a binding letter of intent.

6.2      Amendment. Except as stated in Article V, this Agreement may be
         amended or modified only by a written agreement executed by both
         parties.

6.3      Waivers. The waiver by either party of a breach or violation of any
         provision of this Agreement shall not operate as or be continued to be
         a waiver of any subsequent breath of this Agreement.

6.4      Severability. The invalidity or unenforceability of any terms or
         conditions shall in no way affect the validity or enforceability of
         any other term or provision.

                                       11

<PAGE>   68

6.5      Assignment. Except as otherwise provided, neither this Agreement nor
         any of the rights or obligations under this Agreement may be assigned
         or transferred without the prior written consent of the non-assigning
         party, and in the case of an assign ment by Group, this Agreement may
         not be assigned without the prior written consent of Payor. AMERICAID
         shall have the right to assign this Agreement to a wholly-owned or
         controlled entity or to Payor(s) (upon AMERICAID's becoming insolvent)
         and Payor(s) may assign its interests herein to successors-in-interest,
         without the consent of, but upon written notice to, Group.

6.6      Conformance with Law. Each party shall carry out all activities
         undertaken by it pursuant to this Agreement in conformance with all
         applicable federal, state and local laws, rules and regulations. The
         relationships and transactions contemplated by this Agreement may be
         subject to regulation by state or federal governmental authorities. In
         the event that any action of a governmental authority impairs, limits,
         or delays AMERICAID's performance of any obligation hereunder,
         AMERICAID shall be excused from such performance, and AMERICAID's
         failure to perform such obligation for such reason shall not
         constitute a breach of this Agreement.

6.7      Notice. Any notice required to be given pursuant to the terms and
         provisions of this Agreement shall be sent by certified mail, return
         receipt requested, postage prepaid, hand delivery; overnight prepaid
         delivery; or confirmed facsimile, to the parties at the addresses set
         forth in the Participating Provider Application.

6.8      Independent Contractor Status. This Agreement is not intended to
         create nor shall it be deemed or construed to create any relationship
         between the parties other than that of independent contractors.
         Neither of the parties to this Agreement, nor any of their respective
         employees, shall be construed to be the agent, employer or
         representative of the other.

6.9      Entire Agreement. This Agreement, including the AMERICA1D Provider
         Manual and any amendments, riders, attachments, or appendices,
         constitutes the entire understanding between the parties and
         supersedes any prior understandings and agreements between the parties
         or between Group and any Covered Person or other person on behalf of
         any Covered Person, whether written or oral, respecting the subject
         matter of this Agreement.

                                       12

<PAGE>   69

6.10     Coordination of Defense of Claims. The parties shall make all
         reasonable efforts, consistent with advice of counsel and the
         requirements of the respective insurance policies and carriers to
         coordinate the defense of all claims in which the other party is
         either a named defendant or has a substantial possibility of being
         named.

6.11     Governing Law. This Agreement has been executed and delivered and
         shall be construed and enforced in accordance with the laws of the
         state of identified in the AMERICAID Participating Provider
         Application, excluding and without application of any choice of law
         principles.

                            ARTICLE VII. DEFINITIONS

         For purposes of this Agreement, the following terms have the ascribed
meaning:

7.1      Associated Health Professional.  A nurse practitioner, midwife, or
         physician's assistant who is an employee of, or independent contractor
         to, a Participating Physician or Group.

7.2      Clean Claim. Means a request for payment for Covered Services
         submitted by Group which is accurate, complete, in the format required
         by the applicable Payor(s) and as to which there is no issue (such as
         coordination of benefits) regarding a Payor's responsibility for
         payment.

7.3      Covered Person. Any person who has entered into, or on whose behalf
         there has been entered into, an agreement with a Payor(s) for the
         provision of Covered Services to such person.

7.4      Covered Services.  Those health care services Covered Persons are
         entitled to receive pursuant to a Payor(s) Agreement.

7.5      Emergency Services.  Those health care services within or outside of
         AMERICAID's enrollment area, required to be provided to an enrollee as
         a result of an injury or the sudden onset of an illness having the
         potential of causing immediate disability or death, or requiring the
         immediate alleviation of severe pain, or the time required to reach
         facilities of a provider with

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<PAGE>   70

         which AMERICAID has arrangements, would have meant risk of permanent
         damage to the recipient's health.

7.6      Normal Charge.  Physician's usual and customary charge per individual
         unit of service.

7.7      Participating Hospital. A facility licensed under applicable state law
         as a general acute care hospital and which has contracted as an
         independent contractor with AMERICAID to provide certain Covered
         Services to Covered Persons.

7.8      Participating Physician. A physician who has contracted, directly or
         indirectly, as an independent contractor with AMERICAID to provide
         certain Covered Services to Covered Persons and who is duly licensed
         under applicable state law.

7.9      Participating Provider. A Participating Physician, Participating
         Hospital and any other licensed health care facility or professional,
         who or which has entered into a written agreement to provide services
         to Covered Persons is duly licensed under applicable state law, and
         who or which is currently so credentialed and designated as such by
         AMERICAID.

7.10     Payor. Either AMERICAID or any third-party payor(s) including, but not
         limited to, an employer, multiple employer trust or union trust, or
         state agency or entity that contracts on behalf of a state's Medicaid
         beneficiaries, or other similar managed care plan that has entered
         into an agreement with AMERICAID for the provision of Covered Services
         to Covered Persons through Participating Providers.

7.11     Payor Agreement. The agreement by and between Payor's and AMERICAID
         under which AMERICAID either provides directly or arranges for the
         provision of certain Covered Services to Covered Persons.

7.12     Primary Care Physician. A Participating Physician who has been
         credentialed by AMERICAID as a Primary Care Physician, and who engages
         in the practice of medicine, supervises, coordinates and provides
         initial and basic care to patients, initiates patient referrals for
         Specialist Care Services, and maintains continuity of patient care;
         and who practices in the fields of general practice, internal
         medicine, pediatrics, or family medicine.

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<PAGE>   71

7.13     Specialist Physician. A Participating Physician who is Board-certified
         or who has completed an approved residency program in a medical
         specialty and is credentialed by AMERICAID as a specialist; who
         provides Covered Services to Covered Persons within the range of that
         specialty; and who meets the requirements established by AMERICAID
         for Specialist Physicians.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed personally or by their duly authorized officers or agents.

         GROUP PHYSICIAN                             AMERICAID Texas, Inc.

       /s/ John A. Grigson                            /s/ Robert Westcott
---------------------------------               -------------------------------
            Signature                                      Signature

         John A. Grigson                             Robert Westcott   AVP
---------------------------------               -------------------------------
            Print Name                                Print Name and Title

       9/7/1995                                       1/4/1996
---------------------------------               -------------------------------
               Date                                           Date

                                       15


<PAGE>   72
                              SETTLEMENT AGREEMENT

       This settlement agreement is entered into by AMERICAID Texas, Inc., d/b/a
AMERICAID Community Care ("AMERICAID") and Cook Children's Physician Network
("Network").

       WHEREAS, AMERICAID and Network entered into an Agreement, effective
October 1, 1996 ("the 1996 Agreement"), whereby Network agreed to provide or
arrange to provide Covered Health Services to Members in the Medicaid STAR
Program (the "Program");

       WHEREAS, AMERICAID and Network subsequently entered into a Second
Amendment to the 1996 Agreement, dated to be effective March 1, 1998, whereby
AMERICAID and Network attempted to clarify and define the claims processing
procedures for certain emergency room and outpatient surgery services under the
Program;

       WHEREAS, the 1996 Agreement and the Second Amendment contain provisions
describing reimbursement amounts and claims processing procedures for emergency
room services, emergency room physician services, inpatient services, pediatric
inpatient physician services, outpatient services, outpatient clinic and
recurring visits and outpatient surgeries ("Services") under the Program;

       WHEREAS, a dispute has arisen regarding the amount owed by AMERICAID for
certain Services provided by or at Cook Children's Medical Center with discharge
dates between October 1, 1996, through August 31, 1997 ("CCMC Claims") pursuant
to the reimbursement and claims processing provisions of the 1996 Agreement and
the Second Amendment;

       WHEREAS, AMERICAID and Network agree that CCMC Claims that have
previously been processed pursuant to the reimbursement and claims processing
provisions of the 1996 Agreement and the Second Amendment totalled $603,179.78;

       WHEREAS, AMERICAID and Network agree that AMERICAID re-processed a
portion of the CCMC Claims described in the previous paragraph and paid Network
the amount of $271,308.78 for such re-processed claims;


<PAGE>   73


       WHEREAS, AMERICAID and Network agree to a contractual adjustment of
$51,871.00 relating to CCMC Claims;

       WHEREAS, AMERICAID and Network agree that the CCMC Claims totalling
$603,179.78 have been reduced by the payment of $271,308.78 for the re-processed
claims and by the contractual adjustment of $51,871.00 leaving the outstanding
balance of $280,000.00 for such CCMC Claims;

       WHEREAS, AMERICAID and Network wish to settle this outstanding balance
related to the CCMC Claims in lieu of attempting to continue to re-process the
CCMC Claims;

       NOW, THEREFORE, AMERICAID and Network agree to compromise and settle this
outstanding balance of the CCMC Claims as follows:

       1.     AMERICAID will pay Network the amount of Two Hundred Eighty
              Thousand Dollars ($280,000.00) upon execution of this settlement
              agreement by the parties hereto;

       2.     Network agrees to accept this $280,000.00 amount as full and final
              payment for the balance of the CCMC Claims for discharge dates
              between October 1, 1996 through August 31, 1997;

       3.     One Hundred Percent (100%) of this $280,000.00 amount shall be
              paid from the Pediatric Pool (as defined in the 1996 Agreement)
              for the contract year ending August 31, 1997;

       4.     AMERICAID and Network agree that this $280,000.00 amount will be
              calculated as part of any overall risk settlement entered into
              between the parties for the contract year ending August 31, 1997;


                                       2
<PAGE>   74


       5.     AMERICAID and Network agree that any payments received by Network
              for CCMC Claims in excess of this $280,000.00 amount shall be
              refunded by Network to AMERICAID within sixty (60) days of receipt
              by Network.

AMERICAID TEXAS, INC.                       COOK CHILDREN'S PHYSICIAN NETWORK

By:  /s/ Jim Donovan                        By:  /s/ John A. Grigson
   -------------------------------             ---------------------------------
   Jim Donovan, President                      John A. Grigson
                                               Senior Vice President/CFO

Date:  5/21/98                              Date:  5/21/98
     -----------------------------               -------------------------------



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<PAGE>   75


                              MEDICAID MANAGED CARE
                        CCPN ANCILLARY PROVIDER AGREEMENT

THIS CCPN ANCILLARY AGREEMENT ("Agreement") is entered into this 11th day of
November, 1998, but to be effective the 1st day of March, 1998 (the "Effective
Date"), by and between Cook Children's Physician Network, a Texas non-profit
corporation certified under Section 5.01(a) of the Texas Medical Practice Act
("CCPN") and Pecan Valley Mental Health Mental Retardation Region ("Ancillary
Provide").

                                   WITNESSETH

WHEREAS, CCPN is a non-profit health care corporation licensed as a 5.01(a)
which has entered into exclusive agreements with Rio Grande HMO, Inc. d/b/a HMO
Blue(R), DFW Metroplex, Harris Methodist Texas Health Plan, Inc. and Americaid
Texas, Inc., d/b/a Americaid Community Care (collectively "Payor") to provide
and arrange to provide a pediatric provider network to deliver Covered Health
Services to Covered Persons in the Service Area who enroll in or who are
assigned to the STAR Program.

WHEREAS, Ancillary Provider provides Early Childhood Intervention Services to
all eligible children under the age of three (3) in Hoodd Parker County Texas,
who qualify ("EQ Children"), such services being more particularly described
below;

WHEREAS, CCPN desires that Ancillary Provider provide and Ancillary Provider
agrees to provide Covered Health Services to Covered Persons residing in the
Service Area who enroll in or who are assigned to the STAR Program under the
terms and conditions of this Agreement;

WHEREAS, Ancillary Provider agrees to accept the applicable reimbursement and
applicable terms and conditions set forth in this Agreement and the applicable
HMO Agreement.

WHEREAS, CCPN and Ancillary Provider, in order to comply with all applicable
regulatory requirements, including but not limited to IDEA, Part H, agree to be
bound by the provisions of this Agreement and the provisions of the applicable
HMO Agreement.


<PAGE>   76


NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, CCPN and Ancillary Provider agree
as follows:

1.     DEFINITIONS

For purposes of this Agreement, the following terms have the ascribed meaning:

1.1    Agreement. Means this contract, including all attachments appended hereto
       and any written amendments subsequently executed by the parties.

1.2    Annual Reviews. Full review of the IFSP (defined below) conducted
       annually by the interdisciplinary team to establish continued eligibility
       and to revise the contents of the IFSP if necessary.

1.3    Clean Claim. Means a record of or a claim for Covered Health Services
       provided to Members which is accurate, complete (i.e. includes all
       information necessary to determine liability), not a claim on appeal, and
       not contested (i.e. not reasonably believed to be fraudulent, and not
       subject to a necessary release, consent, or assignment).

1.4    Covered Health Services. Means those ancillary services covered under the
       Medicaid Star Program.

1.5    Covered Person. For Early Childhood Intervention Services, means any
       individual age 0 through 2 years of age residing in the Service Area who
       is (1) entitled to benefits under Title XIX of the Social Security Act
       and the Texas Medical Assistance Plan, (2) in a Medicaid eligibility
       category included in the STAR Program, and (3) enrolled in the STAR
       Program as a member of Payor, and (4) is documented as developmentally
       delayed, has a diagnosed physical or mental condition that has a high
       probability of resulting in a developmental delay or who exhibits
       atypical development as determined by the ECI interdisciplinary team.

1.6    Early Childhood Intervention. A federally mandated program which serves
       children from birth through age two with developmental delays, or the
       likelihood of developmental delays, and their families through programs


                                       2
<PAGE>   77


       authorized under part H of the Individuals With Disabilities Education
       Act (20 United States Code 1471, et seq.).

1.7    Early Childhood Intervention Services. Means the following rehabilitation
       services:

       1.7.1  administer physical therapy, occupational therapy, speech and
              audiology services, nutrition services and psychological services
              as related to each ECI Child, except for PACT eligible services;

       1.7.2  develop Individual Family Service Plans ("IFSP") for each ECI
              Child relating to ECI assessments;

       1.7.3  provide written reports to HMO which will include: IFSP, Six Month
              Review, Annual Reviews, and regular progress notes every three
              months for each ECI Child.

1.8    Emergency Care. Means bona fide emergency services provided after the
       sudden onset of a medical condition (including emergency labor and
       delivery) manifesting itself by acute symptoms of sufficient severity,
       including severe pain, such that the absence of immediate medical
       attention could reasonably be expected to result in (1) placing the
       patient's health in serious jeopardy; or (2) serious impairment to bodily
       function; or (3) serious dysfunction of any bodily organ or part.

1.9    Evaluation and Assessment. The ongoing procedures used by appropriate
       qualified personnel throughout the period of a child's eligibility to
       identify:

       1.9.1  The child's unique needs and strengths;

       1.9.2  The resources, priorities, and concerns of the family and
              identification of supports and services necessary to enhance
              developmental needs of the children; and

       1.9.3  The nature and extent of intervention services needed by the child
              and the family.

1.10   Health Care Professional. Means any physician, nurse, audiologist,
       physician assistant, clinical psychologist, occupational therapist,
       physical therapist,


                                       3
<PAGE>   78


       speech and language pathologist, or other professional engaged in the
       delivery of health services who are licensed, practice under an
       institutional license, certified, or practice under authority of a
       physician, legally constituted professional association or other
       authority consistent with state law to provide services to such patients.

1.11   HMO Agreement. The agreements by and between Rio Grande HMO d/b/a HMO
       Blue(R), DFW Metroplex, Harris Methodist Texas Health Plans, Inc.,
       Americaid Texas, Inc., d/b/a Americaid Community Care and CCPN through
       which CCPN is the exclusive provider of all Covered Health Services to
       Covered Persons in the STAR Program in the Service Area.

1.12   IFSP Review. Review of the IFSP conducted at least every six months.

1.13   Individualized Family Service Plan (IFSP). A written plan developed by
       the interdisciplinary team in accordance with criteria established in at
       25 TAC* 621 .21 et seq. based on all assessment and evaluation
       information, including the family's description of their strengths and
       needs, which outlines the early intervention services for the child and
       the child's family.

1.14   Interdisciplinary Team. The child's parent(s) and a minimum of two
       professionals from different disciplines who meet to share evaluation
       information, determine eligibility, assess needs, and develop the IFSP.

1.15   Medically Necessary. Means the physical medicine/health services other
       than behavioral health services which are identified by the IFSP
       interdisciplinary team and approved, recommended, or prescribed by the
       child's physician and are:

       1.15.1 reasonable and necessary to prevent illnesses or medical
              conditions, or provide early screening, interventions and/or
              treatments for conditions that cause suffering or pain, cause
              suffering or pain, cause physical deformity or limitations in
              function, threaten to cause or worsen a handicap, cause illness or
              infirmity of a Covered Person, or endanger life;

       1.15.2 provided in the child's natural environment, unless the early
              intervention can not be achieved satisfactorily in the natural
              environment and


                                       4
<PAGE>   79


              at appropriate levels of care or the treatment of a Covered
              Persons medical conditions;

       1.15.3 consistent in type, frequency and duration of care/treatment with
              health/medical practice guidelines that are references to
              professionally recognized health care organizations or
              governmental agencies, including the Texas Interagency Council on
              Early Childhood Intervention;

       1.15.4 consistent with the diagnoses of the conditions; and

       1.15.5 no more intrusive or restrictive than necessary to provide a
              proper balance of safety, effectiveness, and efficiency.

       1.15.6 not modified or altered by CCPN or applicable HMO in the amount,
              duration and scope of services established for the Covered Person
              by the IFSP team and approved by the PCP.

1.16   Medically Necessary Behavioral Health Services means those behavioral
       health services which:

       1.16.1 are reasonable and necessary for the diagnosis or treatment of a
              mental health or chemical dependency disorder or to improve or
              maintain or to prevent deterioration of functioning resulting from
              such a disorder;

       1.16.2 are in accordance with professionally accepted clinical guidelines
              and standards of practice in behavioral health care;

       1.16.3 are furnished in the child's natural environment, unless the early
              intervention can not be achieved satisfactorily in the natural
              environment

       1.16.4 are the most appropriate level or supply of service which can
              safely be provided;

       1.16.5 could not have been omitted without adversely affecting the
              Member's mental and/or physical health or the quality of care
              rendered; and


                                       5
<PAGE>   80


       1.16.6 not modified or altered by the Payor in the amount, duration and
              scope of services established for the Member by the IFSP team and
              approved by the PCP.

1.17   Natural Environments. Settings that individual families identify as
       natural or normal for their family, including the home, neighborhood and
       community settings in which children without disabilities participate. To
       the maximum extent appropriate to meet the needs of the child, early
       intervention services must be provided in natural environments, including
       the home and community settings in which children without disabilities
       participate.

1.18   Program for Application for Children of Texas (PACT).

1.19   Participating Physician. Means a duly licensed Primary Care Physician or
       Specialist Physician who is employed by or has contracted with CCPN, and
       who has agreed to provide professional services to Covered Persons.

1.20   Participating Hospital. Means any health care facility who has contracted
       directly or by assignment with CCPN to provide pediatric institutional
       and/or ancillary services to Covered Persons.

1.21   Participating Provider. Means any health care facility, or Health Care
       Professional, other than a physician, that provides medical services to a
       Covered Person pursuant to an agreement with a Payor for purposes of the
       STAR Program in the Service Area.

1.22   Payor Plan. Means the Medicaid STAR Program.

1.23   Payor. Means Americaid Texas, Inc., d/b/a Americaid Community Care,
       Harris Methodist Texas Health Plan, Inc. and Rio Grande HMO d/b/a HMO
       Blue(R), DFW Metroplex.

1.24   Primary Care Physician. Means a physician in the field of general
       practice, family practice, internal medicine, pediatrics, or
       obstetrics/gynecology who is responsible for providing primary care
       services and who agrees to coordinate and manage delivery of Covered
       Health Services to Covered Persons assigned to such Primary Care
       Physician.


                                       6
<PAGE>   81


1.25   Procedural Safeguards. The rights provided children and families in the
       Individuals with Disabilities Education Act (IDEA) and the Federal
       Educational Rights and Privacy Act (FERPA) (20 USC 1232 et seq.) that
       protect the family from intrusion and coercion, including at least four
       considerations: privacy, confidentiality, full disclosure of information,
       and the family's right to decide about all aspects of the IFSP.

1.26   Service Area. Means the Texas counties of Tarrant, Hood, Johnson, Denton,
       Parker, and Wise.

1.27   Specialist Physician. Means a physician who provides specialist care or
       consultative services to Covered Persons upon referral by Primary Care
       Physicians.

2.     DUTIES AND OBLIGATIONS OF CCPN

2.1    Payment for Services.

       2.1.1  Ancillary Provider shall be compensated in accordance with the
              provisions set forth in Exhibit "C."

       2.1.2  The Payor payments shall be payment-in-full for rendering Covered
              Health Services to Covered Persons on a fee for service basis at a
              rate equal to the then current Medicaid allowable rate. If the
              Medicaid allowable rate is not available, reimbursement will be at
              the then current Medicare rate: If a Medicare rate is not
              available, reimbursement will be at 65% of Ancillary Provider's
              usual and customary billed charge.

       2.1.3  CCPN agrees to compensate or arrange with payor to compensate
              Ancillary Provider either directly or through Payors at the rate
              described in Exhibit "C,' within thirty (30) days of receipt by
              HMO.

2.2    Utilization Management and Quality Improvement Plan. CCPN shall provide,
       upon request, to Ancillary Provider a copy of any utilization management
       and quality improvement plan adopted or administered by CCPN and/or
       Payor, and any modifications thereto, applicable to Provider.


                                       7
<PAGE>   82


2.3    Medical Records. CCPN shall maintain any medical records to which it has
       access under this Agreement in confidence and in accordance with
       applicable law.

2.4    Eligibility Verification. CCPN will provide Ancillary Provider with
       access to all eligibility information available from Payor regarding
       current Covered Persons.

3.     ANCILLARY PROVIDER OBLIGATIONS

3.1    Services. Ancillary Provider shall make available and provide Medically
       Necessary Covered Health Services to Covered Persons on a twenty-four
       (24) hour per day seven (7) days per week basis pursuant to the terms of
       the Payor Plan in the same manner, in accordance with the same standards,
       and within the same time availability as offered to Ancillary Provider's
       other patients.

3.2    Pre-Certification/Pre-Authorization. CCPN will provide Ancillary Provider
       with access to all eligibility information available from Payor regarding
       current Covered Persons. Unless a Medical Emergency exists, Ancillary
       Provider shall verify coverage of a patient and obtain the required
       Pre-certification/Pre-Authorization prior to commencement of treatment in
       accordance with procedures developed by CCPN and/or Payor and set forth
       in the Payor provider manuals, which shall be delivered to Ancillary
       Provider upon the full execution of this Agreement. Any changes or
       amendments to a provider manual will be provided to Ancillary Provider in
       writing at least thirty (30) days prior to the effective date of such
       change or amendment, unless a shorter time for implementation is required
       by the State of Texas/Texas Department of Health.

3.3    Compliance with Utilization Management, Quality Assurance Rules and
       Regulations and Policies and Procedures. Ancillary Provider shall follow
       and adhere to all CCPN and/or Payor standards, policies, procedures,
       programs, rules and regulations (including but not limited to any CCPN
       and/or Payor utilization management and quality assurance programs), any
       or all of which CCPN and/or Payor may amend in its own discretion from
       time-to-time. CCPN and/or Payor will provide to Ancillary Provider
       amendments and/or modifications to such standards, policies, procedures,
       programs, rules and regulations at least thirty (30) days prior to the
       effective date of such amendments and/or modifications, unless a shorter
       time for implementation is


                                       8
<PAGE>   83


       required by the State of Texas/Texas Department of Health. Further,
       Ancillary Provider agrees to be bound by all of the standards, policies,
       rules, and regulations adopted or utilized by CCPN and/or Payor from
       time-to-time in connection with applicable Payor Agreement. Copies of
       such standards, policies, procedures, programs, rules and regulations
       shall be made available for examination by Ancillary Provider upon
       request.

3.4    Compliance with CCPN Participation Criteria. Ancillary Provider warrants
       and represents that it currently complies with all and shall continue to
       meet and remain in compliance with the CCPN Participation Criteria set
       forth on Exhibit "B" which is attached and hereby incorporated by
       reference and made part of this Agreement.

3.5    No Guarantee of Selection or Utilization. Ancillary Provider acknowledges
       that CCPN does not warrant, promise, or guarantee (1) that Ancillary
       Provider will be selected by CCPN and/or Payor to participate as a
       Participating Physician in accordance with the HMO Agreements or (2)
       that, if selected, Ancillary Provider will either be utilized by any
       minimum number of Covered Persons or remain a member of the provider
       panel.

3.6    Insolvency. In the event of CCPN or Payor's insolvency or other cessation
       of operation, Ancillary Provider will continue providing Medically
       Necessary Covered Health Services to Covered Persons through the period
       for which payment has been made or, for Covered Persons in an inpatient
       setting, until the date of discharge.

3.7    Referrals. Consistent with sound medical practice and in accordance with
       accepted community professional standards for rendering quality medical
       care, Ancillary Provider covenants that it will use its best effort to
       make referrals of Covered Persons to other Participating Physicians,
       Participating Providers and/or Participating Hospitals.

3.8    Nondisclosure. Unless required by law or unless consulting with Ancillary
       Provider's attorney, Ancillary Provider shall not disclose the terms of
       this Agreement or any HMO Agreement, including but not limited to any fee
       schedule, without the prior written consent of CCPN. This paragraph shall
       survive the termination of this Agreement.


                                       9
<PAGE>   84


3.9    Marketing. Ancillary Provider shall permit CCPN to designate and make
       public reference to Ancillary Provider as a Participating Provider.
       Ancillary Provider shall not use the name or trademark of CCPN or Payor
       without the prior approval in writing by CCPN. Ancillary Provider agrees
       that CCPN and Payor may use its name, address, telephone number and a
       description of specialty in any roster of Participating Providers
       published by CCPN or Payor. The roster may be inspected by, and is
       intended for the use of, prospective and existing Covered Persons as well
       as for advertising purposes.


3.10   Reporting Duty. Ancillary Provider agrees to report to CCPN within
       fourteen (14) calendar days whenever it becomes aware of any of the
       following as permitted by law:

       3.10.1 Any cancellation or material modification of Ancillary Provider's
              liability coverage; or

       3.10.2 Any malpractice claim against Ancillary Provider; or

       3.10.3 Any criminal action filed or brought against Ancillary Provider.

       CCPN shall only use the information described in this section for its
       described purpose and shall keep such information confidential unless
       required by law or the applicable HMO Agreement.

3.11   Reporting Requirements. Ancillary Provider covenants and agrees that it
       will provide to CCPN or Payor, as appropriate, the data necessary for
       CCPN or Payor to comply with the TDI and TDH reporting requirements with
       respect to any Covered Health Services provided pursuant to this
       Agreement.

3.12   Reporting Changes Ancillary Provider Information. Ancillary Provider
       shall notify CCPN in writing at least thirty (30) calendar days prior to
       any change in Ancillary Provider's business address, business telephone
       number, office hours, tax identification number, malpractice insurance
       carrier or coverage, State of Texas license number, or Drug Enforcement
       Agency registration number.

3.13   Non-Discrimination. To the extent required by State or federal law,
       Ancillary Provider agrees to have in place an affirmative action program.
       Provider further covenants and agrees that they will comply with (a)
       Title VI of the


                                       10
<PAGE>   85



       Civil Rights Act of 1964 (P.L. 88-352); (b) Section 504 of the
       Rehabilitation Act of 1973 (P.L. 93-112); (c) The Americans with
       Disabilities Act of 1990 (P.L. 101-336); (d) Title 40, Chapter 73, of the
       Texas Administrative Code, providing in pertinent part that no persons in
       the United States shall on the basis of race, color, national origin,
       sex, age, disability, political beliefs or religion be excluded from
       participation in, or denied, any aid, care, service or other benefits
       provided by federal and/or state funding, or otherwise subject to
       discrimination; and (e) Texas Health and Safety Code Section 85.113
       (relating to workplace and confidentiality guidelines regarding AIDS and
       HIV), and all amendments to each, and all requirements imposed by the
       regulations issued pursuant to these acts.

4.     ANCILLARY PROVIDER CHARGES, REIMBURSEMENT PROCEDURE AND BILLINGS

4.1    Provider Charges and Confidentiality. This Agreement shall cover only
       those individual HMO Agreements and their respective individual Payor as
       specified by Ancillary Provider on Exhibit "A," which is attached hereto
       and made a part hereof. Ancillary Provider agrees to accept payment in
       accordance with the applicable schedules contained in Exhibit "C" for
       Covered Health Services furnished to Covered Persons enrolled with Payors
       which are specified in Exhibit "A." Ancillary Provider shall maintain the
       confidentiality of such reimbursement schedule and shall not disclose
       such reimbursement schedule to any third party unless required by law or
       authorized in writing by CCPN.

4.2    Payment in Full. Ancillary Provider shall accept as payment in full, for
       Covered Health Services provided, the compensation specified in Exhibit
       "C." Ancillary Provider agrees that in no event, including but not
       limited to nonpayment by the Payor and/or CCPN, or Payor and/or CCPN
       insolvency, or breach of this Agreement, shall Ancillary Provider bill,
       charge, collect a deposit from, seek compensation, remuneration, or
       reimbursement from, or have any recourse against any Covered Person or
       any person other than Payor and/or CCPN pursuant to this Agreement,
       except insofar as what is permitted by Section 4.3 below; further, that
       (1) this provision shall survive the termination of this Agreement
       regardless of the cause giving rise to termination and shall be construed
       to be for the benefit of the Covered Person and (2) this provision
       supersedes any oral or written contrary agreement now existing or


                                       11
<PAGE>   86


       hereafter entered into between Ancillary Provider and Covered Persons or
       other persons acting on their behalf.

4.3    Copayments and Deductibles. Ancillary Provider understands and agrees
       that the Payor (or, if applicable, CCPN) has no responsibility to pay any
       amount except as described in Paragraph 4.2 above and Ancillary Provider
       shall, unless prohibited by state or federal law, bill and attempt to
       collect copayments, deductibles and any other fees which are the Covered
       Person's responsibility under the Covered Person's Payor Plan. For
       medical services not covered by this Agreement and for so long as not
       prohibited by CCPN and/or Payor or by state or federal law, Ancillary
       Provider may bill a Covered Person or other responsible party.

4.4    Reimbursement and Billing Procedures. Unless otherwise specified in
       writing by CCPN and/or Payor, Ancillary Provider shall submit all claims
       directly to Payor. Ancillary Provider shall comply with the reimbursement
       and billing procedures required by CCPN and/or Payor. Ancillary Provider
       will use the standard HCFA 1500 or such other claim form furnished by
       Payor or CCPN to bill for services rendered. CCPN reserves the right to
       review all bills submitted by Ancillary Provider to the Payor.

4.5    Timeliness of Claim Submission. Ancillary Provider shall submit claims
       for Covered Services within sixty (60) days from the date such Covered
       Services were provided, unless an exception has been issued by HMO in
       writing, and then bill shall be submitted within one hundred eighty (180)
       days.

4.6    Payor's Responsibility. Unless otherwise specified in writing by CCPN,
       Ancillary Provider specifically acknowledges and agrees that (1) the
       Payor shall have the full and final responsibility for payment of claims,
       and (2) CCPN is not responsible for, does not guarantee, and does not
       assume responsibility for payment of any claim. Unless otherwise provided
       for in this Agreement or specified in writing by CCPN, all final claims
       decisions will be the responsibility of the Payor. Ancillary Provider
       acknowledges and agrees that if CCPN specifies in writing to Ancillary
       Provider that CCPN and not Payor has full and final responsibility for
       payment of claims or Ancillary Provider's reimbursement, then under no
       circumstances will Ancillary Provider seek or claim payment from such
       Payor.


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<PAGE>   87


4.7    Coordination of Benefits. Ancillary Provider will (a) cooperate with CCPN
       and Payor in coordination of benefits, (b) provide CCPN and Payor
       relevant information relating to any other coverage held by a Covered
       Person, and (c) abide by the coordination of benefits, subrogation and
       duplicate coverage policies and procedures of CCPN and/or Payor as set
       forth in the Payor provider manuals. Ancillary Provider shall consent to
       the release of medical information by CCPN or Payor to other group health
       plans necessary and lawful to accomplish coordination of benefits. If the
       Payor (or, if applicable, CCPN) is the primary carrier, then Ancillary
       Provider compensation will be on the basis specified in this Agreement
       and the applicable HMO Agreement. If the Payor (or, if applicable, CCPN)
       is other than the primary carrier and Ancillary Provider's bill to the
       primary carrier(s) was not computed on the basis specified in this
       Agreement, then, unless the Payor Agreement specifies otherwise, any
       further reimbursement to Physician from the Payor (or, if applicable,
       CCPN) may not exceed an amount which, when added to amounts shown on the
       explanation of benefits from the primary carrier(s), equals the amount
       specified in this Agreement.

5.     MEDICAL RECORDS AND CONFIDENTIALITY

5.1    Maintenance of Medical Records. Ancillary Provider shall maintain for at
       least a three year period of time or if the Covered Person was younger
       than 18 years of age when treated, seventy-five days after the date of
       the Covered Person's 20th birthday or seventy-five days after the 10th
       anniversary of the date on which the Covered Person was last treated,
       whichever date is later, or for any longer period of time specified by
       state law or the Payor Plan, and make readily available to CCPN, Payor,
       and governmental agencies with regulatory authority, all medical and
       related administrative records of Covered Persons that receive Covered
       Services, as required by CCPN in accordance with this Agreement or
       pursuant to applicable law.

5.2    Maintenance of Financial Records. Ancillary Provider shall maintain for
       at least a three year period of time from the date a Covered Person was
       last treated, or for any longer period of time specified by state law,
       all financial records relating to the payment for medical services
       provided to a Covered Person.

5.3    Transferability. Ancillary Provider, upon request of the Covered Person
       or other Participating Physician, and subject to applicable disclosure
       and


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<PAGE>   88


       confidentiality laws, will transfer the medical records of the
       Covered Person to such other Participating Physician, Provider and/or
       Hospital. This obligation shall survive any subsequent termination or
       expiration of this Agreement.

5.4    Access to Medical Records. Subject to applicable disclosure and
       confidentiality laws, Ancillary Provider shall provide CCPN, Payor, or
       any duly designated third party with reasonable access to medical
       records, books, and other records of such Provider relating to Covered
       Health Services (including the cost thereof) provided to Covered Persons
       during the term of this Agreement and thereafter for a period in
       conformance with Section 10.5 and state and federal law. CCPN and Payor
       shall be entitled to obtain copies of Covered Person's medical records.
       In addition, Ancillary Provider, at its expense, will provide CCPN with
       all records reasonably necessary to carry out CCPN's and Payor's
       utilization management and quality improvement programs. The provisions
       of this paragraph shall not operate to waive or limit any restriction on
       release or disclosure of patient records established in any other
       provisions of this Agreement or as otherwise required by law.

5.5    Confidentiality of Medical Records. Ancillary Provider covenants that
       information concerning Covered Persons shall be kept confidential and
       shall not be disclosed to any person except as authorized by state and
       federal law. This confidentiality provision shall remain in effect
       notwithstanding any subsequent termination or expiration of this
       Agreement.

5.6    Proprietary CCPN Information. Ancillary Provider may, from time to time,
       receive proprietary information from CCPN. Provider agrees that such
       information shall be kept confidential and, unless otherwise required by
       law, shall not be disclosed to any person except as authorized in writing
       by CCPN.

6.     INDEPENDENT RELATIONSHIP

       None of the provisions of this Agreement are intended to create nor shall
       be deemed or construed to create any relationship between CCPN and
       Ancillary Provider other than that of independent parties contracting
       with each other. Neither of the parties hereto, nor any of their
       respective officers, directors or employees, or agents shall be construed
       to be the agent, employee or representative of the other. Neither party
       is authorized to represent the other for any purpose whatsoever without
       the prior consent of the other. CCPN shall


                                       14
<PAGE>   89


       not have nor shall it exercise any control or direction over the
       Ancillary Provider.

7.     INSURANCE

       Ancillary Provider shall maintain at least the minimum amount of One
       Million Dollars ($1,000,000) per occurrence and Three Million Dollars
       ($3,000,000) in the aggregate, policies of general liability,
       professional liability, and directors and officers liability insurance to
       insure itself and its employees against any claim or claims for damages
       arising pursuant to this Agreement. Documentary evidence of such
       insurance policy or policies shall be provided to CCPN upon request.
       Ancillary Provider agrees to keep and maintain said insurance coverage in
       full force and effect during this Agreement. Ancillary Provider or its
       insurance carriers will provide CCPN with thirty (30) days advance
       written notice of a material modification or cancellation of said
       policies. All liability coverage shall be "occurrence based", provided,
       however, that in any instance where the coverage required can openly be
       acquired by means of a "claims made" policy, that policy shall provide
       for a "buy-out at the tail" provision, which Ancillary Provider agrees to
       exercise or cause to be exercised in the event of change, cancellation or
       termination of said policy.

       Certificates of insurance or other evidence indicating the term and
       extent of professional liability insurance shall be provided by Ancillary
       Provider to CCPN upon execution of this Agreement. Ancillary Provider
       shall require its professional liability carrier to name CCPN as a party
       entitled to a thirty (30) day prior written notice of an intent to cancel
       or terminate Ancillary Provider's coverage.

8.     NON-EXCLUSIVITY

       Nothing contained in this Agreement shall preclude Ancillary Provider
       from participating in or contracting with any other health care provider
       organization, managed care plan, health maintenance organization,
       insurer, employer, or any other third party payor.

                                       15
<PAGE>   90

9.     CONDITION PRECEDENT

       This Agreement shall not be effective unless and until Ancillary Provider
       has been successfully credentialed by CCPN. The failure of Ancillary
       Provider to become successfully credentialed by CCPN will result in this
       Agreement being null, void and of no force or effect.

10.    TERM AND TERMINATION

10.1   This Agreement shall have an initial term which shall expire on September
       1, 1998. Unless earlier terminated hereunder, the Agreement shall
       automatically renew for successive terms of one (1) year each.

10.2   This Agreement may be terminated by CCPN upon the occurrence of any of
       the following:

       10.2.1 CCPN may terminate this Agreement, with or without cause, by
              giving the Ancillary Provider ninety (90) days written notice.

       10.2.2 Suspension, restriction, revocation or surrender of Ancillary
              Provider's license to render services in any state.

       10.2.3 CCPN shall have the right, but not the obligation, to terminate
              this Agreement immediately if that certain agreement between CCPN
              and Payor dated effective October 1, 1996 is terminated.

       10.2.4 Conduct which is detrimental to patient welfare and care.

       10.2.5 Extreme misconduct on the part of Ancillary Provider or its
              employees detrimental to the interests to CCPN.

       10.2.6 Failure to maintain the insurance coverage required by this
              Agreement.

       10.2.7 Failure to comply with CCPN and/or Payor guidelines, credentialing
              criteria, policies and procedures.

                                       16
<PAGE>   91

10.3   This Agreement may be terminated by Ancillary Provider by giving written
       notice to CCPN, with cause upon sixty (60) days and without cause upon
       one hundred twenty (120) days written notice.

10.4   Either party may terminate this Agreement upon thirty (30) days prior
       notice if the other party fails to perform any material covenant,
       undertaking, obligation or condition as set forth in this Agreement.

10.5   No Limitation of Rights. Nothing contained herein shall be construed to
       limit either party's lawful remedies in the event of a material breach of
       this Agreement.

10.6   Access to Records. Notwithstanding termination of this Agreement,
       Ancillary Provider, CCPN and Payor shall continue to have access to the
       records maintained by Ancillary Provider in accordance with Section 5.1,
       5.2 and 5.4 for a period of three (3) years from the date of the
       provision of the Covered Services to Covered Persons to which the records
       refer for purposes consistent with the rights, duties and obligations
       under this Agreement and Payor Agreements.

10.7   Post Termination. Following termination of this Agreement, Ancillary
       Provider shall continue to provide Covered Services to any Covered Person
       who is under active treatment either until such treatment is completed or
       responsibility is assumed by another Participating Provider. Ancillary
       Provider shall be compensated for such Covered Services in accordance
       with the terms of the applicable Payor Agreement.

11.    GENERAL PROVISIONS

11.1   Amendments. This Agreement may be amended in writing as mutually agreed
       upon by the parties.

11.2   Assignment. This Agreement, being intended to be personal to these
       parties shall not be assigned, sublet, delegated or transferred by CCPN
       or Provider to any other party without the prior written consent of the
       other party which shall not be unreasonably withheld.

11.3   Notice. Any notice required to be given pursuant to the terms and
       provisions hereof shall be in writing and sent by hand delivery or by
       certified mail,

                                       17
<PAGE>   92

       return receipt requested, postage prepaid, to CCPN or to the Provider at
       the respective addresses indicated herein. Notice shall be deemed to be
       effective when mailed or hand delivered, but notice of change of address
       shall be effective upon receipt.

11.4   Governing Law and Venue. This Agreement shall be governed in all respects
       by the laws of the State of Texas. The venue of any legal action arising
       from the Agreement shall be in Tarrant County, Texas, and CCPN and
       Provider specifically waive any right of venue that either might
       otherwise have.

11.5   Severance of Invalid Provisions. If any provision of this Agreement is
       held to be illegal, invalid or unenforceable under present or future laws
       effective during the term hereof, such provision shall be fully
       severable. This Agreement shall be construed and enforced as if such
       illegal, invalid or unenforceable provision had never comprised a part
       hereof, and the remaining provisions shall remain in full force and
       effect unaffected by such severance, provided that the invalid provision
       is not material to the overall purpose and operation of this Agreement

11.6   Waiver. The waiver by either party of any breach of any provision of this
       Agreement or warranty representation herein set forth shall not be
       construed as a waiver of any subsequent breach of the same or any other
       provision. The failure to exercise any right hereunder shall not operate
       as a waiver of such right. All rights and remedies provided herein are
       cumulative.

11.7   Entire Agreement. This Agreement contains all the terms and conditions
       agreed upon by the parties hereto regarding the subject matter of this
       Agreement. Any prior agreements, promises, negotiations or
       representations, either oral or written, relating to the subject matter
       of this Agreement not expressly set forth in this Agreement are of no
       force or effect.

11.8   Force Majeure. If either party fails to perform its obligations hereunder
       because of strikes, accidents, acts of God, or action or inaction of any
       government body or other proper authority or other causes beyond its
       control then such failure to perform shall not be deemed a default
       hereunder and shall be excused without penalty until such time as said
       part is capable of performing.

11.9   Mediation. Except as otherwise specifically provided for herein, in the
       event of any dispute, controversy or claim between the parties arising
       out of or

                                       18
<PAGE>   93


       relating to this Agreement either during or after the term hereof, the
       parties hereby agree that, unless waived by the parties, they shall first
       submit such dispute, controversy or claim to non-binding mediation in
       Tarrant County, Texas. The parties shall use reasonable efforts to reach
       a mutually agreed to resolution of the dispute, controversy or claim
       through such mediation process and shall reasonably cooperate with each
       other and the mediator in attempting to resolve such dispute,
       controversy, or claim. In the event such dispute, controversy or claim is
       not resolved through the use of the mediation process, the parties shall
       be free to pursue any rights or remedies they may have in another forum.
       Each party shall bear its own costs and expenses in pursuing any rights
       or remedies associated with this Agreement, unless otherwise agreed to by
       the parties or unless otherwise ordered by a court of competent
       jurisdiction. The cost of employing a mediator shall be equally shared by
       the parties.

12.    SPECIAL PROVISIONS

12.1   With regard to Early Childhood Intervention services outlined under Part
       H of the Individual With Disabilities Education Act, (20 USC 1471 , et
       seq.) CCPN shall provide or arrange for the provision of all federally
       mandated services contained at 34 CFR 303.1 et seq., and 25 TAC 621.21 et
       seq. relating to identification, evaluation, assessment and referral and
       delivery of health care services contained in a Covered Person's IFSP.

12.2   CCPN shall ensure that network providers are educated regarding the
       identification of Members under age 3 who have or are at risk for having
       disabilities and/or developmental delays. CCPN shall ensure that all
       providers refer identified Members in the service area to Ancillary
       Provider within two working days from the day the Member is identified.

12.3   An interdisciplinary team convened by Ancillary Provider that includes
       the parent must meet to determine a child's eligibility for ECI services.
       The team, under the authority of the Ancillary Provider, shall determine
       eligibility for ECI services in accordance with criteria contained at 25
       TAC * 621.21 et seq. The IFSP is to be developed by the interdisciplinary
       team under the authority of Ancillary Provider in accordance with
       criteria contained at 25 TAC * 621.21 et seq.

                                       19
<PAGE>   94

12.4   CCPN shall reimburse Ancillary Provider for all health related
       assessments performed by Ancillary Provider for a child who has gone
       through an initial ECI intake and screening process regardless of the
       origin of the initial referral. CCPN shall not require any prior
       authorization for assessments or evaluations. All assessment and
       evaluation data including but not limited to test protocols and/or
       assessment reports must be maintained as part of the child's main records
       at the Ancillary Provider. Psychological services will be coordinated
       through a behavioral health provider designated by HMO.

12.5   CCPN shall coordinate and cooperate with Ancillary Provider to ensure
       that all medical diagnostic procedures are conducted and medical records
       are provided to perform developmental assessments and develop the IFSP
       within the timeliness established at 34 CFR 303.1 et seq.

12.6   CCPN shall reimburse Ancillary Provider for all health related
       assessments performed by Ancillary Provider for a child to go through an
       annual review. CCPN shall not require any prior authorization for
       assessment or evaluations required for annual reviews. All assessment and
       evaluation data including but not limited to test protocols and/or
       assessment reports must be maintained as part of the child's main records
       at Ancillary Provider.

12.7   Health and behavior health-related services that are determined necessary
       by the interdisciplinary team, identified in the IFSP and, approved,
       recommended or prescribed by the child's PCP will be provided by
       qualified providers employed by or contracted with Ancillary Provider and
       provided in natural settings to the maximum extent appropriate and are to
       be reimbursed by CCPN. CCPN shall approve all health and behavioral
       health related services identified in the IFSP that are approved,
       recommended or prescribed by the child's PCP and shall not modify the
       IFSP or alter the amount, duration and scope of services established by
       the Member's IFSP. Behavioral health services make up only a small
       fraction of all rendered ECI services and are rarely required. TDH
       acknowledges the STAR Health Plan contract with the provider of
       behavioral health services. TDH supports collaboration between ECI and
       the behavioral health services provider to more effectively serve the ECI
       eligible STAR Members. TDH supports the STAR Health Plan's position to
       require pre-authorization for behavioral health services called for by
       the IFSP and that all claims for behavioral health services be billed to
       behavioral health services provider.

                                       20
<PAGE>   95

12.8   CCPN will assure that no unnecessary barriers are created for Member to
       obtain IFSP services, including requiring prior authorizations for the
       ECI assessment and insufficient authorization periods for prior
       authorized services. CCPN will approve therapy and other necessary health
       related services for time frames called for the IFSP, not to exceed 6
       months. If ECI subcontracts health related services to another entity,
       then subcontractor must obtain recertification every thirty (30) days.
       ECI must notify CCPN/HMO of subcontractor's arrangements within
       seventy-two (72) hours of referral. ECI must refer only to participants
       of Medicaid Program.

12.9   All post-assessment Ancillary Services must be prior authorized.
       Ancillary Provider understands and agrees that Ancillary Provider is
       responsible for obtaining confirmation of eligibility at the first of
       every month, for each ECI Child. Ancillary Provider understands and
       agrees that CCPN nor Payor will not be liable for services rendered to an
       ineligible member and will to another payor source. Children receiving
       therapy services who have chronic conditions require on-going medical
       supervision. To establish medical necessity the PCP's prescription and
       revised IFSP are needed at least every six months.

12.10  The initial therapy treatment plan must include the PCP's prescription, a
       current IFSP, a copy of the current evaluation, documentation indicting
       treatment goals, and anticipated measurable progress. To request an
       extension of services after the six (6) month review, the treatment plan
       should include the current PCP's prescription, a summary of measurable
       progress made during the treatment period and documentation indicating
       new treatment goals and anticipated measurable progress for the next
       treatment period.

12.11  Ancillary Provider understands and agrees to coordinate all
       therapy/nutrition services with Payor. Ancillary Provider will provide a
       summary of assessment results to the client's Primary Care Physician and
       the Payor Medical Case manager upon completion as soon as possible. A
       Payor Case Manager will be invited to the IFSP meeting to be included on
       the interdisciplinary team responsible for the development of the IFSP.
       Ancillary Provider will provide advance notice of the IFSP meeting to the
       client's Primary Care Physician and Payor's Case Manager to facilitate
       their attendance at the IFSP meeting. A copy of the IFSP must be provided
       to Payor's Case Management prior to the issuance of and authorization for
       services set forth in the IFSP. If Ancillary Provider finds that a
       Payor's Case Manager has not been made aware of the requested ECI
       services, Ancillary Provider will take steps to


                                       21
<PAGE>   96

       include the Payor's Case Manager in the development and/or continued
       maintenance of the IFSP.

12.12  Ancillary Provider understands and agrees that upon checking eligibility
       at the first of the month it is found that an in-process IFSP or
       authorization of an IFSP exists from traditional Medicaid or another HMO
       for a newly eligible Payor member, Ancillary Provider will contact
       Payor's Case Manager. Ancillary Provider will provide to Payor a copy of
       the IFSP and any benchmark report information which has been completed.
       If the PCP has changed from the PCP of record on the existing IFSP due to
       plan change, Ancillary Provider and Payor Case Management will coordinate
       with the new PCP the status of the existing IFSP. After review of the
       IFSP, Payor's Case Management will provide to Ancillary Provider a new
       authorization applicable to the member's eligibility with Payor. The
       current PCP and Payor's Case Manager will become members of the
       interdisciplinary team for the IFSP.

12.13  Clean claims will be paid within thirty (30) days. CCPN shall ensure that
       payments to providers for services rendered are made within thirty (30)
       days of receipt of a clean claim, that records are retained for a period
       of five (5) years and the confidentiality of the records is maintained.

12.14  CCPN shall ensure that the rights provided to children and families in
       Part H of IDEA (20 USC 1480 et seq.) and FERPA, which protect the family
       from intrusion and coercion, and incorporates rights of privacy,
       complaint resolution, confidentiality, full disclosure of information and
       the family's right to decide about all aspects of the IFSP are preserved.

12.15  In those instances where CCPN utilizes provider of health or behavior
       health services for early intervention services other than currently
       approved and funded ECI providers, CCPN shall ensure that such providers
       meet all the requirements imposed upon current ECI providers as contained
       in 20 USC 1471 et seq., 34 CFR 303.1 et seq., Chapter 73, Human Resources
       Code, Vernon's Texas Codes Annotated, and 25 TAC 621.21 et seq. CCPN
       shall be approved by the Texas Interagency Council on Early Childhood
       Intervention to provide early intervention services through network
       providers outside existing ECI program and its subcontractors. Approval
       by the Interagency Council will be contingent upon an acceptable
       agreement between CCPN and Ancillary Provider regarding coordination and
       cooperation regarding all aspects of the delivery of early intervention
       services to ECI eligible children.

                                       22
<PAGE>   97

12.16  Ancillary Provider will notify CCPN or HMO case manager immediately upon
       learning of a Covered Person who has been referred to ECI or that is
       being served by ECI.

12.17  Ancillary Provider will provide a summary of the assessment results to
       the medical case manager and PCP within ten (10) working days. Ancillary
       Provider will provide as much advance notice as possible, but at least
       forty-eight (48) hours notice prior to the IFSP meeting to the medical
       case manager and PCP.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the 11 day of November, 1998.

COOK CHILDREN'S                     PECAN VALLEY MENTAL
PHYSICIAN NETWORK                   HEALTH AND MENTAL
                                    RETARDATION REGION

By:/s/ Alan Kent Lassiter, M.D.
------------------------------------
       Alan Kent Lassiter, M.D.           By:/s/ Theresa Mulloy, Ed.D.
       President and CEO                     ------------------------------


                                          Title: Executive Director
                                                 ---------------------------
                                          Printed Name: Theresa Mulloy
                                                         -------------------


Address for Notice:                       Address for Notice:

Cook Children's Physician Network         P.O. Box 973
801 Seventh Avenue                        ------------------------
Fort Worth, Texas 76104
Atm:     President                        650 W. Green Street
                                          ------------------------

                                          Stephenville, TX 76401
                                          ------------------------


                                       23
<PAGE>   98




                                   EXHIBIT "A"

                             PROVIDER SELECTION PAGE

Indicate the Payor(s) with which you choose to participate:

   X     Rio Grande HMO, Inc., d/b/a HMO Blue(R), DFW Metroplex
-----
   X     Americaid Texas, Inc., d/b/a Americaid Community Care
-----
   X     Harris Methodist Texas Health Plan, Inc.
-----


                                       24
<PAGE>   99


                                   EXHIBIT "B"

                           CCPN PARTICIPATION CRITERIA

                  PARTICIPATION CRITERIA FOR ANCILLARY PROVIDER

1.     Attested and completed application.

2.     Current and unrestricted Texas Licensure, appropriate for the Ancillary
       Provider.

3.     Accreditation by the Joint Commission on Accreditation of Healthcare
       Organizations (JCAHO), American Osteopathic Association (AOA), or other
       appropriate nationally recognized accrediting agency and/or certification
       by Medicare appropriate for the Ancillary Provider.

4.     No disciplinary actions by Medicare, Medicaid or State Licensing agency.

5.     Evidence of adequate malpractice and casualty coverage.

6.     Governance, management, administration, and organizational structure
       appropriate for the size and type of Ancillary Provider.

7.     Ability and willingness to provide access to appropriate patient/member
       financial information.

                  Utilize an appropriate financial planning process.

                  Engage in responsible accounting practices.

                  Present accurate fiscal information.

                  Evidence of financial stability.

8.     Demonstrated willingness to accept reimbursement methods established by
       CCPN and/or Payor.

                                       25
<PAGE>   100

9.     Demonstrated ability and willingness to bill according to Plan
       requirements established by CCPN and/or Payor.

10.    In conformance with all state and local safety requirements and OSHA
       regulations.

11.    Information management processes are planned and designed to meet
       internal and external information needs.

12.    Appropriate risk management program is established and implemented.

13.    Reports documenting findings and intervention are maintained.

14.    Staffing is adequate and appropriate for the type and size of the
       Ancillary Provider. Physician/Medical supervision is available as
       appropriate.

15.    Staff appropriately licensed/certified based on job description.

16.    Educational and training programs which keep staff current in general
       information and specialty-specific information are provided.

17.    Protocol for credentialing and/or privileging independently practicing
       professionals which provides for primary source verification of
       credentials and procedures for appointment/reappointment and appeals.

18.    Requirement of continuing education appropriate for each specialty.

19.    Organization of professional staff which provides for adequate monitoring
       of quality of care.

20.    Protocol for contracting of professional and/or ancillary services
       ensures contracted professionals meet CCPN Participation Criteria.

21.    Medical records are maintained in a manner that is current, legible,
       detailed, organized and permits effective patient care and quality
       review.

22.    Storage of records allows prompt retrieval of clinical information,
       including statistics.

                                       26
<PAGE>   101

23.    Medical records are systematically reviewed for conformance to documented
       standards with corrective action when standards are not met.

24.    Records identify the patient, diagnosis and treating provider and other
       professionals, support the assessment, justify treatment and document the
       course and results.

25.    Confidentiality and security are maintained.

26.    If there is an organized pharmacy, it is supervised by a Registered
       Pharmacist.

27.    If medications are stored or dispensed, written policies and procedures
       providing safe, secure storage of medications as well as appropriate
       dispensing and monitoring procedures.

28.    Therapeutic services adequate for quality patient care are available.

29.    Services are provided and supervised by appropriately qualified,
       certified staff.

30.    Equipment is adequate, current and well-maintained.

31.    24 hour provider coverage is available as needed.

32.    Equipment and supplies for emergency patient care is adequate, current
       and well-maintained.

33.    Personnel is trained and adequate for patient emergencies.

34.    Emergency policies and procedures are well documented.

35.    Documented transfer arrangement with a network acute care facility as
       appropriate.

36.    Availability of patient referrals to multiple levels of care and other
       appropriate providers in order to provide a continuum of care.

                                       27
<PAGE>   102

37.    Demonstrated need for the services provided.

38.    Willingness to participate in managed care.

39.    Meets the needs of the network related to geographic location and
       services provided as defined by the Strategic Planning Committee.

40.    A QM/QI program approved by the governing body is implemented.

41.    The program is comprehensive and includes quality of clinical care and
       quality of service.

42.    Individual provider performance is considered in
       recredentialing/reappointment professional providers and outside
       contractors.

43.    Satisfactory utilization statistics.

44.    There is a documented UM plan which meets the needs of the Ancillary
       Provider and the Network.


                                       28
<PAGE>   103

OCCUPATIONAL THERAPY

<TABLE>
<CAPTION>

PROCEDURE
CODE                DESCRIPTION                                          RATES

<S>                 <C>                                                  <C>
5381X*              Assessment/Reassessment                              $40.00

584lX               Therapy, Initial 30 minutes                          $20.00

5850X               Therapy, Ea. additional 15 minutes                   $10.00

5853X               Therapy, more than one hour                          $40.00

5842X               Group treatment                                      $10.00 per client per session

5384X               Assistive technology - equipment training            $40.00 per session

5387X               Seating Assessment                                   $40.00 per session

</TABLE>


NUTRITIONAL ASSESSMENT, COUNSELING, FOLLOW-UP

<TABLE>
<CAPTION>

PROCEDURE
CODE                 DESCRIPTION                                         RATES
<S>                 <C>                                                  <C>
5294X**             Nutritional services                                 $30.00 per session

</TABLE>

*      Assessment/Reassessment services do not require prior authorization by
       Payor. However, payment for Assessment/Reassessment services is
       contingent upon member's eligibility with Payor at the time services are
       rendered.

**     Assessment/Reassessment devices for Dietary Counseling are allowed once
       every six months without prior authorization. All post assessment Dietary
       Counseling services require prior authorization for reimbursement
       purposes.



                                       29
<PAGE>   104

                                    AMENDMENT
                                       to
                         CCPN and HMO MEDICAID AGREEMENT
                                 by and between
              AMERICAID Texas Inc., d/b/a AMERICAID Community Care
                                       and
    Cook Children's Physician Network A Texas 5.01(a) Non-Profit Corporation
                              Dated October 9, 1997

       Pursuant to the Texas Department of Insurance (TDI) requirements, the
above referenced Agreement shall be modified, effective immediately, as stated
below to comply with the Texas Insurance Code (TIC). The original Agreement
remains in full force and effect. To the extent that any provisions herein
contained conflict with a provision of the Agreement, this Addendum prevails.

       Pursuant to Article 20A.02 (g) of the TIC, "Emergency Care" means health
care services provided in a hospital emergency facility or comparable facility
to evaluate and stabilize medical conditions of a recent onset and severity,
including but not limited to severe pain, that would lead a prudent layperson,
possessing an average knowledge of medicine and health, to believe that his or
her condition, sickness or injury is of such a nature that failure to get
immediate medical care could result in: (a) placing the patient's health in
serious jeopardy; (b) serious impairment to bodily functions; or (c) serious
dysfunction of any bodily organ or part; (d) serious disfigurement; or (e) in
the case of a pregnant woman, serious jeopardy to the health of the fetus.

       Pursuant to Article 20A.18A(c) of the TIC, the termination of the
AMERICAID/provider contract, except for reason of medical competence or
professional behavior, does not release AMERICAID from the obligation to
reimburse the provider who is treating an enrollee of special circumstances,
such as a person who has a disability, acute condition, or life threatening
illness, or is past the twenty-fourth week of a pregnancy at no less than the
contract rate for that enrollee's care in exchange for continuity of ongoing
treatment of an enrollee then receiving medically necessary treatment in
accordance with the dictates of medical prudence.

       Pursuant to Article 20A.18A(e), AMERICAID shall begin payment of
capitated amounts to the enrollee's primary care provider (PCP) no later than
the 60th (sixtieth) day following the date an enrollee has selected or has been
assigned a PCP.


<PAGE>   105

       Pursuant to Article 20A.18A(i), Provider shall post, in Provider's
office, a notice to enrollees on the process for resolving complaints with
AMERICAID. Notice must include the Texas Department of Insurance toll free
telephone number for filing complaints.

       Pursuant to Article 20A.14(g) No type of provider licensed or otherwise
authorized to practice in this state may be denied participation to provide
health care services which are delivered by AMERICAID and which are within the
scope of licensure or authorization of the type of provider on the sole basis of
type of license or authorization. However, if a hospital, facility, agency, or
supplier is certified by the Medicare program, Title XVIII of the Social
Security Act (42 U.S.C. Section 1395 et seq.), or accredited by the Joint
Commission on Accreditation of Healthcare Organizations or another national
accrediting body, AMERICAID shall be required to accept such certification or
accreditation. This section may not be construed to (1) require AMERICAID to
utilize a particular type of provider in its operation; (2) require, except as
provided in Article 21.52B of this code, that AMERICAID accept each provider of
a category or type; or (3) require that health maintenance organizations
contract directly with such providers. Notwithstanding any other provision,
nothing herein shall be construed to limit AMERICAID's authority to set the
terms and conditions under which health care services will be rendered by
providers. All providers must comply with the terms and conditions established
by AMERICAID for the provision or health services and for designation as a
provider.

       Pursuant to Article 20A.14(h) AMERICAID shall provide a twenty (20)
calendar day period each calendar year during which any provider or physician in
the geographic service area may apply to participate in providing health care
services or medical care under the terms and conditions established by Americaid
for the provision of such services and the designation of such providers and
physicians. Americaid will notify, in writing, such provider or physician of the
reason for nonacceptance to participate in providing health care services or
medical care. This section may in no way be construed to (1) require that
AMERICAID utilize a particular type of provider or physician in its operation;
(2) require that AMERICAID accept a provider or physician of a category or type
that does not meet the practice standards and qualifications established by
AMERICAID; or (3) require that AMERICAID contract directly with such providers
or physicians.

       Pursuant to Article 20A.14(i)(1), AMERICAID may not prohibit, attempt to
prohibit, or discourage a physician or provider from:

                                       2
<PAGE>   106


       a.     discussing with or communicating to a current, prospective or
              former patient, or a party designated by a patient, information or
              opinions regarding the patient's health care, including but not
              limited to the patient's medical condition or treatment options;

       b.     discussing with or communicating in good faith to a current,
              prospective or former patient, information or opinions regarding
              the provisions, terms, requirements or services of the health care
              plan as they relate to the health care needs of the patient.

       Pursuant to Article 20A.14(i)(2), AMERICAID shall not in any way
penalize, terminate, or refuse to compensate, for covered services, a physician
or provider for discussing or communicating with a current, prospective, or
former patient, or a party designated by a patient pursuant to this section.

       Pursuant to Article 20A.14(k), AMERICAID shall not engage in any
retaliatory action, including termination of, or refusal to renew a contract,
against a physician or provider because the physician or provider has, on behalf
of an enrollee, reasonably filed a complaint against AMERICAID or has appealed a
decision of AMERICAID.



                                       3
<PAGE>   107


       Pursuant to Article 20A.14(l), AMERICAID may not use any financial
incentive or make any payment to a physician or provider that acts directly or
indirectly as an inducement to limit medically necessary services.

       AMERICAID Texas, Inc.                  Cook Children's Physician Network

       /s/ Robert F. Westcott                 /s/ Alan Kent Lassiter, MD
       -------------------------------        ---------------------------------
              Signature                                   Signature

          Robert F. Westcott                         Alan Kent Lassiter, MD
         Associate Vice President                      President and CEO
       -------------------------------        ---------------------------------
           Print Name and Title                       Print Name and Title

                 August 26, 1999                        August 12, 1999
       -------------------------------        ---------------------------------
                     Date                                      Date

                                                         801 Seventh Avenue
                                                         Ft. Worth, TX 76104
                                               --------------------------------
                                                              Address
                                                       (817) 885 -1416
                                               --------------------------------
                                                           Telephone



                                       4




<PAGE>   108

                                  AMENDMENT TO
                         CCPN AND HMO MEDICAID AGREEMENT

       THIS AMENDMENT TO CCPN AND HMO MEDICAID AGREEMENT (the "Amendment") is
entered into as of the 1st day of January, 2000 (the "Effective Date"), by and
between AMERICAID Texas, Inc., a Texas corporation ("HMO") and Cook Children's
Physician Network, a Texas non-profit corporation ("CCPN").

                                    RECITALS:

       WHEREAS, HMO and CCPN have entered into a CCPN and HMO Medicaid Agreement
on October 1, 1996 (the "Initial Agreement"), as amended pursuant to the
Modification Agreement (defined below) and the amendments identified on Schedule
1 attached hereto (as amended, the "Medicaid Services Agreement"); and

       WHEREAS, HMO and CCPN desire to amend the Medicaid Services Agreement on
the terms set forth below; and

       WHEREAS, Cook Children's Health Care System (f/k/a Cook Children's Heath
Care Network) and AMERIGROUP Corporation (f/k/a AMERICAID, Inc.) as parties to
that certain Agreement executed October 9, 1997 to be effective as of September
1, 1995 (the "Modification Agreement") are executing this Amendment solely to
acknowledge that certain of its terms modify the terms of the Modification
Agreement.

       NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

1.     Definitions. Capitalized terms not otherwise defined herein shall have
       the meaning given such terms under the Medicaid Services Agreement.

2.     Modifications to Compensation Terms.

       a)     The "Financial Arrangements" set forth in Attachment A of the
              Initial Agreement, as amended, are amended and restated in their
              entirety as set forth in Attachment A attached hereto; such
              attachment shall

<PAGE>   109
              supersede Sections 5, 6 and 7 of the Modification Agreement. The
              new terms therein with respect to the administration and
              settlement of the pools shall be effective retroactively to
              September 1, 1998 (not withstanding the Effective Date herein for
              the other terms of this Amendment) so that they shall apply for
              purposes of the 98/99 Year-End Settlement. The Exhibits to
              Attachment A of the Initial Agreement (e.g., Exhibits 4 and 5)
              shall continue to apply.

       b)     Attachments B and C to the Initial Agreement are hereby amended
              and restated by the rates set forth in revised Attachments B and C
              attached hereto, and Schedule A-IV.H (which had been implemented
              pursuant to the Second Amendment dated March 1, 1998) is hereby
              amended and restated by the rates set forth in Attachment D
              hereto.

3.     Delegation of Additional Administrative Functions.

       a)     CCPN shall have the option to receive delegation of medical
              management, provider services and/or claims processing,
              adjudication and payment (the "Administrative Functions"), if each
              of the conditions in this Section 3 are satisfied. CCPN shall
              provide HMO with not less than ninety (90) days (the "Notice
              Period") prior written notice of exercise (the "Exercise No tice")
              and shall, with such Notice, provide HMO with such documentation
              and information as HMO may deem reasonably necessary to
              demonstrate that the conditions have been or will be satisfied.
              HMO shall promptly review whether all conditions are satisfied, it
              being the intent of the parties to implement the delegation not
              earlier than ninety (90) days nor later than one hundred fifty
              (150) days after the Exercise Notice is received (assum ing all
              conditions are satisfied). The conditions are as follows:

              i)     CCPN has received delegation of the same Administrative
                     Func tions from all other contracted health maintenance or
                     managed care organizations in connection with CCPN's
                     provision of Medicaid services to such organizations'
                     members under the STAR Program (or its successor program)
                     and at least one of such delegated arrangements for a
                     Medicaid product will be operational by the end of the
                     Notice Period;



                                       2
<PAGE>   110

              ii)    CCPN meets all of HMO's standards for performing such ser
                     vices, including, without limitation, HCFA, TDI and TDH
                     require ments, and the standards and requirements of HEDIS
                     and NCQA. Upon request by CCPN, HMO agrees to provide any
                     such stan dards related to the aforementioned
                     administrative functions to CCPN. CCPN acknowledges that
                     HMO shall have the ability to perform a site visit and
                     audit prior to the delegation of such admin istrative
                     functions to ensure compliance with HMO's standards;

              iii)   CCPN and HMO agree to negotiate and enter into a mutually
                     acceptable delegation agreement to ensure CCPN
                     appropriately assists HMO in meeting all then applicable
                     legal requirements (including, without limitation, any
                     applicable requirements of HCFA, TDH, TDI or Texas Senate
                     Bill 890 or its successor) and the standards and
                     requirements of HEDIS and the NCQA, and continues to
                     satisfy the conditions set forth herein. The agreement
                     shall, among other things, (A) ensure appropriate
                     accountabilities for performance, service delivery, and
                     data reporting (CCPN shall, among other things, be required
                     to timely report all data elements presently used by HMO in
                     its claims processing and precertification functions so
                     that there will be no disruption in HMO's ability to
                     accurately project medical claims), (B) ensure CCPN's
                     participation in and compliance with federal, state and
                     NCQA reviews, (C) establish performance standards and penal
                     ties, (D) include reciprocal indemnification provisions by
                     which each party agrees to defend and hold the other
                     harmless from claims, damages, penalties, sanctions, etc.
                     (whether governmental, private party or otherwise) related
                     to, among other things, the functions for which the
                     indemnifying party is responsible under the agreement,
                     whether performed by such party or sub-delegated, (B)
                     prohibit sub-delegation without HMO's prior written
                     consent, and (F) establish the circumstances under which
                     delegation may be revoked;

              iv)    The parties shall have mutually agreed on (A) the amount
                     HMO shall pay CCPN for CCPN's performance of the
                     Administrative Functions, which amount will consider, among
                     other



                                       3
<PAGE>   111


                     things, HMO's costs to provide oversight of the delegation
                     and HMO's actual average total direct costs for such
                     services as a percentage of total premium and applied to
                     the premium payable with respect to pediatric Members (as
                     defined in Attachment A), and (B) adjustments required to
                     the Pool allocation and settlement method ologies set forth
                     on Attachment A in light of such modified pay ment terms;
                     and

              v)     If claims processing and precertification is to be
                     delegated,

                     (A)    CCPN must successfully complete a thorough review by
                            HMO and/or its designee (such as external auditors)
                            re garding appropriate internal controls over the
                            performance of such services (based on HMO's then
                            applicable review tool) prior to implementation;

                     (B)    The delegation agreement shall further provide that
                            on a periodic basis, but not less than quarterly for
                            internal re view and annually for external review,
                            CCPN (and its designees, if any) will be audited to
                            ensure that the controls and procedures reviewed
                            prior to implementation are in place and are being
                            used appropriately and that any defi ciencies will
                            be promptly cured through a corrective action plan;
                            and

                     (C)    The delegation agreement shall further require CCPN
                            to meet on an ongoing basis HMO's then applicable
                            financial adequacy and reporting requirements for
                            delegated claims relationships.

4.     Use of HMO-to-HMO Contract. To the extent permitted by law, at CCPN's
       option, the obligations of CCPN under the Medicaid Services Agreement
       shall be effected through Cook Children's Health Plan (through an
       HMO-to-HMO contract), which plan shall maintain sufficient risk reserves
       to satisfy all of CCPN's obligations hereunder.

5.     Modifications to Administrative Processes. Within thirty (30) days of
       execution of this Amendment, CCPN and HMO agree to work collaboratively
       to reform in writing the current processes regarding claims submis-

                                       4
<PAGE>   112


       sions, claims adjudication, claims resubmissions, and accounts
       receivable. CCPN and HMO shall each assign a high level person to guide
       the reformation process with HMO's person also available on a bi-weekly
       basis to resolve all pending claims problems.

6.     Effect of Increases to Cook's Charge Master and Adjustments to

       Cost-to-Charge Ratio. The rates/charges upon which HMO is reimbursing
       CCMC are not subject to increase in connection with any increase in
       CCMC's charge master until October 1 each year, beginning October 1,
       2000. CCPN shall (or shall cause CCMC to) provide HMO with written notice
       of the change. CCMC's current cost-to-charge ratio (percentage discount)
       used by the State shall be the basis for reimbursement prospectively and
       shall not change (notwithstanding the State's May, 2000 adjustments, if
       any) until October 1, 2000, at which time the cost-to-charge ratio shall
       be adjusted prospectively to the cost-to-charge ratio then in use by the
       State (i.e., the ratio adopted in May 2000). Then, on June 1, 2001, and
       annually on June 1 thereafter, the cost-to-charge ratio shall be adjusted
       (again to apply on a prospective basis only) to the cost-to-charge ratio
       that the State is then using. Because of system configuration
       requirements, any change required by the foregoing may be delayed by HMO
       for up to, but not more than, sixty (60) days.

7.     Clarifications with Respect to the Modification Agreement.

       a)     The text in the first sentence of Section 10 of the Modification
              Agreement beginning with "as well as" and ending with "AMERICAID"
              is hereby replaced with the following: "as well as any additional
              counties into which TDH permits AMERICAID to expand such Service
              Area."

       b)     It is understood and agreed that the automatic one year renewals
              following the initial term, as described in Section 13 of the
              Modification Agreement, shall not apply if either party gives 180
              days notice of termination prior to the end of the term then in
              effect.

8.     Services Outside of Service Area. If CCPN desires to be a provider in
       HMO's Dallas STAR network, HMO shall include CCPN in its network on such
       terms as the parties agree; provided, such participation shall be on
       Dallas contract terms and not part of the incentive arrangement
       implemented through the Risk Funds.

                                       5
<PAGE>   113

9.     Additional Regulatory Amendments. The Medicaid Services Agreement is
       hereby further amended by the terms set forth on Attachment E hereto
       which are incorpo rated for purposes of regulatory compliance.

10.    Miscellaneous. Each party represents and warrants that it has full
       corporate power and has taken all required corporate and other action
       necessary to permit it to execute and deliver this Amendment. Except as
       modified by the provisions of this Amendment, all of the terms of the
       Medicaid Services Agreement shall remain in full force and effect (the
       parties hereby acknowledge that Schedule 1 accurately identifies the
       applicability of the terms of the prior amendments from and after the
       date hereof). This Amendment may be executed in any number of
       counterparts, by each party on a separate counterpart, each of which,
       when so executed and delivered, shall be deemed to be an original and all
       of which taken together shall constitute one and the same instrument.


                                       6
<PAGE>   114

       IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.

                                              AMERICAID TEXAS, INC.



                                              By: /s/ James D. Donovan, Jr.
                                                  ----------------------------
                                                  Name: James D. Donovan, Jr.
                                                        ----------------------
                                                  Title:   CEO
                                                        -----------------------
                                              COOK CHILDREN'S PHYSICIAN NETWORK

                                              By: /s/ Alan Kent Lassiter, MD
                                                  -----------------------------
                                                  Name:  Alan Kent Lassiter, MD
                                                         ----------------------
                                                  Title: President & CEO
                                                         ----------------------

SEEN AND ACKNOWLEDGED:

COOK CHILDREN'S HEALTH CARE SYSTEM

By:  /s/ John A. Grigson
     ----------------------------
     Name:John A. Grigson
          -----------------------
     Title: E.V.P./ CEO
            ---------------------

AMERIGROUP CORPORATION


By: /s/ James D. Donovan
    -----------------------------
      Name: James D. Donovan
            ---------------------
      Title:
            ---------------------


                                       7
<PAGE>   115


                                   SCHEDULE 1

                LIST OF AMENDMENTS TO MEDICAID SERVICES AGREEMENT
<TABLE>
<CAPTION>

                                                                                      Terms that have been
                                                                                   Superseded, Terminated or
                       Document                                                     are No Longer Applicable
                       --------                                                     ------------------------

<S>                                                                                <C>
1.   Modification Agreement (as defined above)                                     Sections 2, 3, 4, 5, 6, 7
                                                                                   and 14(a)(i) (10 and 13,
                                                                                   only partially)
2.   First Amendment effective 1/1/98 (Footer                                      All sections superseded
     12/4/97)

3.   First Amendment entered into 10/31/96                                         All sections terminated

4.   Second Amendment entered into 11/26/96                                        All sections terminated

5.   Third Amendment effective 1/31/97                                             None (document is effective)

6.   Second Amendment effective 3/1/98 (Footer                                     Section 5 superseded as of 1/1/00
     TXACCNO2.268)

7.   Amendment by Mutual Consent effective 7/1/99                                  All terms superseded as of
     (Footer FWPCPAMD)                                                             1/1/00


8.   Amendment signed 8/12/99 (Footer                                              None (document is effective)
     TICAMEND)
</TABLE>


<PAGE>   116



                                  ATTACHMENT A

                             FINANCIAL ARRANGEMENTS



<PAGE>   117

                                  ATTACHMENT A
                             FINANCIAL ARRANGEMENTS

I.     Additional Definitions. The following additional definitions shall apply
       to this Attachment A.

       A.     Adult Enrollees means any individual 16 years of age and above
              residing in the Service Area who is (1) in a Medicaid eligibility
              category included in the STAR Program, and (2) enrolled in the
              STAR Program as a member of Americaid Texas, Inc.

       B.     Adult Pool means a Risk Fund established by HMO and used for the
              payment of all professional, hospital, ancillary and other medical
              claim expenses attributable to Adult Enrollees. Expenses charged
              to the Adult Pool shall include, but not be limited to, inpatient
              facility fees, fees for alternative inpatient care (e.g., skilled
              nursing, extended care and home care), outpatient surgery fees,
              professional fees for primary and specialty care, and ancillary
              service fees.

       C.     Adult Pool Deficit means the amount by which the medical claim
              expenses charged to the Adult Pool for an applicable year exceed
              the Adult Target Amount (defined below) for such year.

       D.     Adult Pool Surplus means the amount by which the Adult Target
              Amount for the applicable year exceeds the medical claim expenses
              charged to the Adult Pool for such year.

       E.     Adult Target Amount has the meaning given in Section V.C. below.

       F.     CCPN Physician and CCPN Participating Provider each shall have the
              meaning set forth for such terms in the Agreement.

       G.     Members has the meaning set forth in the Agreement.

       H.     Pediatric Pool means a Risk Fund established by HMO and used for
              payment of all monthly capitation payments and valid
              fee-for-service claims for Covered Health Services attributable to
              Members.

Attachment A                                                          Page 1
<PAGE>   118


       I.     Pediatric Pool Deficit means the amount by which the medical claim
              expenses charged to the Pediatric Pool for an applicable year
              exceed the Pediatric Target Amount (defined below) for such year.

       J.     Pediatric Pool Surplus means the amount by which the Pediatric
              Target Amount for the applicable year exceeds the medical claim
              expenses charged to the Adult Pool for such year.

       K.     Pediatric Target Amount means for each applicable year the sum of
              the monthly allocations to the Pediatric Pool for such year.

       L.     Profit Product Pool means a Risk Fund established by HMO as a
              reserve to cover deficits in the Adult and Pediatric Pools and
              which is funded by HMO with seven percent (7%) of the Total TDH
              Payments received by HMO for all STAR Members and Adult Enrollees
              in the Tanant Service Area (excluding SSI).

       M.     Profit Product Pool Total means for each applicable year the sum
              of the monthly allocations to the Profit Product Pool for such
              year.

       N.     Risk Fund is a defined report to which revenues and expenses are
              recorded for the purpose of tracking actual and expected claim
              liabilities and funding required to support the claim liability.

       O.     Total TDH Payment means all revenues and payments received by HMO
              from TDH for all STAR Members and Adult Enrollees in the Tarrant
              Service Area (excluding SSI).

II.    Allocations to Pediatric Pool.

       A.     HMO will receive a Monthly TDH Payment (as defined below) paid
              directly to HMO by TDH for Members enrolled or assigned to HMO.
              "Monthly TDH Payment" means all revenue and payments received by
              HMO each month of this Agreement from TDH for Members. The Monthly
              TDH Payment shall be based on the eligibility category, as
              determined by TDH, of Members. From this Monthly TDH Payment, HMO
              shall post to the Pediatric Pool seventy-five percent (75%) of the
              total Monthly TDH Payment received by HMO from TDH for Members.

Attachment A                                                          Page 2

<PAGE>   119

       1.     HMO shall post the requisite amount to the Pediatric Pool after
              receipt of payment from TDH.

       2.     The amount recorded each month will be computed on the basis of
              the current monthly Enrollment Report, which is generated by TDH
              and sent to HMO. This current Enrollment Report will be sent to
              CCPN by HMO simultaneously with the posting of the requisite
              amount to the Pediatric Pool. It shall include the names and aid
              categories of Members that correspond to the recorded amount and
              shall be subject to CCPN review and audit.

       3.     HMO will handle retroactive recoupment of capitated payments from
              CCPN and CCPN Physicians as follows:

              a.     If the retroactive recoupment is a result of action taken
                     by TDH, then the retroactive recoupment will follow the
                     procedure applied to the HMO by TDH. Under this procedure
                     as presently implemented, TDH will not recoup, through HMO,
                     a capitation payment for a Member when CCPN Physicians or
                     CCPN Participating Providers have actually provided a
                     service or due to a subsequent ineligibility determination
                     unless 1) a Member cannot use CCPN facilities (e.g., move
                     to a different county, correction of computer or human
                     error, including, but not limited to, instances where more
                     than one plan was paid a premium for the same Member, the
                     Member dies prior to the first day for the month covered by
                     the payment, etc.) in which case, TDH, through HMO, will
                     recoup the capitation payment for such Member; or 2) if a
                     Member's type of program designation needs to be
                     retroactively corrected in which case, TDH will recoup,
                     through HMO, the capitation payment for such Member under
                     the previous type program and retroactively make a
                     capitation payment to CCPN or CCPN Physicians, through HMO,
                     under the revised type program designation, if appropriate;
                     or 3) TDH notifies HMO in writing of a

Attachment A                                                          Page 3

<PAGE>   120


                     valid determination by TDH of the need to retroactively
                     recoup the capitation payment made for a Member.

              b.     Additionally, if CCPN, CCPN Physicians or CCPN
                     Participating Providers comply with the verification of
                     eligibility and benefits procedures provided to CCPN by the
                     Effective Date, HMO shall be financially responsible to
                     CCPN and CCPN Physicians for the capitation payment
                     described below for all care provided by CCPN Physicians
                     and/or CCPN Participating Providers to an ineligible person
                     or retroactively canceled Member due to erroneous,
                     incomplete or delayed HMO eligibility listings.

       4.     If HMO is notified that it will be assessed a penalty by TDH for
              failure to perform administrative functions, as described in the
              State Contract, HMO and CCPN shall immediately meet to discuss the
              cause of the TDH penalty. Each party shall indemnify and hold
              harmless the other party from any such penalties incurred or
              arising from any breach or other violation of the terms of the
              Agreement (including the terms of this Attachment A) by the
              indemnifying party. The preceding sentence shall not apply to the
              handling of any "Allocated Penalty Amount," as defined and
              described below.

B.     HMO also shall adjust the Pediatric Pool as may be required pursuant to
       Section III.A below in connection with Administrative Cost Reductions.

C.     The Pediatric Pool shall be used by HMO for the payment and adjudication
       of monthly medical capitation payments and other valid medical claims
       submitted by CCPN Physicians and CCPN Participating Providers or any
       other applicable provider for the Covered Health Services.

Attachment A                                                          Page 4

<PAGE>   121


III.   Exclusions from Allocations to Pediatric Pool.

       A.     (i) Subject to subsections (ii), (iii) and (iv) below, HMO will
              exclude sixteen percent (16%) of the Monthly TDH Payment from the
              allocations to the Pediatric Pool for its administration and
              marketing activities related to Members and any payments to Value
              Options Behavioral Health or its successor for administrative
              services (collectively, the "Pediatric Administrative Expenses").

              (ii) In connection with each Year-End Settlement, HMO shall
              evaluate whether the Pediatric Administrative Expenses for such
              Year are less than 16% of the aggregate Monthly TDH Payments
              attributable to Members for such Year (the amount of such
              difference, the "Pediatric Expense Savings").

              (iii) If the Pediatric Expense Savings that accrue in connection
              with such Year-End Settlement(s) exceed the amount required to be
              realized by HMO to recoup its net implementation costs and costs
              related to Experience Rebates for Contract Years ending 1997, 1998
              and 1999 of $2,327,607.31 in the aggregate (as may be adjusted to
              recognize any subsequent change in the State policies or financial
              information used to calculate such figure) (such difference, the
              "Excess"), then for the Year-End Settlement in which such Excess
              first results, the amount of the Pediatric Pool for such Year
              shall be increased by an amount equal to the Excess; provided,
              however, the increase in the amount of the Pediatric Pool, and the
              corresponding decrease in the aggregate amount excluded on account
              of Pediatric Administrative Expenses, shall in no event result in
              the aggregate amount excluded on account of the Pediatric
              Administrative Expenses for such Year being less than thirteen
              percent (13%) of the aggregate Monthly TDH Payments attributable
              to Members for such Year (the "Minimum Administrative Expense
              Allocation").

              (iv) In connection with the Year-End Settlement immediately
              following the Year in which the Excess is applied and in
              connection with each Year-End Settlement thereafter, (A) the
              amount of the Pediatric Pool each year shall be increased by the
              amount of the Pediatric Expense Savings for such Year, and (B) the
              exclusions, made on account of Pediatric Administrative Expenses
              shall be correspond-

Attachment A                                                          Page 5

<PAGE>   122


              ingly decreased, subject in each case to the Minimum
              Administrative Expense Allocation for such Year.

              (v) Each quarter, HMO shall provide CCPN with a quarterly report
              with respect to estimated Pediatric Administrative Expenses for
              the prior quarter.

       B.     HMO will exclude two percent (2%) of the Monthly TDH Payment from
              the allocations to the Pediatric Pool to maintain a Texas HMO
              license.

       C.     HMO will exclude seven percent (7%) of the Monthly TDH Payment
              from the allocations to the Pediatric Pool and post such amount to
              the Profit Product Pool.

IV.    Reimbursement of CCPN Physicians and Providers for Pediatric Services.
       CCPN Physicians and Providers shall be compensated by HMO out of the
       Pediatric Pool funds for Covered Health Services provided to Members
       pursuant to the contractual terms then in effect, which are subject to
       the following:

       A.     Payment to Primary Care Physicians or Providers. As compensation
              for services provided or arranged for by a PCP to Members under
              the STAR Program in the Service Area, HMO shall make a monthly
              capitation payment from the Pediatric Pool funds based on the
              age/sex adjusted capitation rates referenced in Attachment B of
              this Agreement or shall reimburse such PCP in accordance with such
              HMO fee schedule as such PCP may have elected. Monthly PCP
              capitation payments, as applicable, shall include all retroactive
              additions and deletions as referenced in II.A.3.a and II.A.3.b
              above. Monthly PCP capitation payments are due to the applicable
              PCPs five (5) business days after receipt of the Monthly TDH
              Payment by HMO. Capitated PCPs will be reimbursed for
              non-capitated services provided to Members from the Pediatric Pool
              funds on a fee-for-service basis at the reimbursement rate agreed
              to between such provider and CCPN, which is presently HMO's fee
              schedule (any changes to such reimbursement rates, if higher than
              the HMO fee schedule then in effect, shall be subject to Section
              IV.C below); if PCP and CCPN have not agreed to a reimbursement
              rate, then PCP will be reimbursed at the

Attachment A                                                          Page 6

<PAGE>   123


              then current Medicaid allowable rate for noncapitated services or
              the HMO's usual and customary rates, whichever is less. Primary
              Care Physicians or Providers shall submit itemized statements on
              current HCFA 1500 claim forms with current HCPCS coding, current
              ICD9 coding and current CPT4 coding for all capitated services and
              non-capitated Covered Health Services provided by Primary Care
              Physicians or Providers to HMO at the address set forth below
              within sixty (60) days of the date the Covered Health Service was
              provided. PCPs shall be paid by HMO no later than thirty (30) days
              after receipt by HMO of a completed Clean Claim for non-capitated
              Covered Health Services (or within such period as may otherwise be
              prescribed by law). If Clean Claims submitted by CCPN
              Participating Providers are not paid within such period, HMO shall
              be subject to Section IV.E below. HMO will notify applicable CCPN
              Participating Providers of any claims that are not Clean Claims
              within thirty (30) days of HMO's receipt of such claims.

       B.     Payments to Specialist Physicians. Specialist Physicians will be
              reimbursed from the Pediatric Pool funds for Covered Health
              Services provided to Members on a fee-for-service basis at the
              reimbursement rate agreed to between such physician and CCPN,
              which is presently HMO's fee schedule (any changes to such
              reimbursement rates, if higher than the HMO fee schedule then in
              effect, shall be subject to Section IV.C below). If Specialist
              Physicians and CCPN have not agreed to a reimbursement rate, then
              Specialist Physician will be reimbursed at the then current
              Medicaid allowable rate. Itemized statements on current HCFA 1500
              claim forms with current HCPC coding, current ICD9 coding and
              current CPT4 coding for all Covered Health Services provided by
              Specialist Physicians must be submitted by Specialist Physician to
              HMO at the address set forth below within sixty (60) days of the
              date the Covered Health Service was provided. If the claim form is
              not timely filed with HMO within sixty (60) days from the date the
              Covered Health Service was provided, the right to payment will be
              deemed waived by the Specialist Physician unless Specialist
              Physician establishes to the reasonable satisfaction of CCPN that
              there was reasonable justification for a delay in billing or that
              delay was caused by circumstances beyond Specialist Physician's
              control. Specialist Physician shall be paid by HMO no later than
              thirty (30) days after receipt by HMO of a completed Clean Claim
              for

Attachment A                                                          Page 7

<PAGE>   124


              Covered Health Services (or within such period as may otherwise be
              prescribed by law). If submitted Clean Claims are not paid within
              such period, HMO shall be subject to Section IV.E below. HMO will
              notify applicable Specialist Physicians of any claims that are not
              Clean Claims within thirty (30) days of HMO's receipt of such
              claims.

       C.     Increases in Reimbursement Rates for PCPs and Specialists. The
              parties acknowledge and agree that the reimbursement rates
              presently in effect are based on AMERICAID's fee schedule (HMO
              agrees to provide CCPN with a complete copy of the fee schedule in
              effect within thirty (30) days of CCPN's request). To ensure that
              such reimbursement rates continue to reasonably reflect the then
              current Medicaid reimbursement/payment methodologies and that
              subsequent increases agreed to between CCPN and its providers will
              not inequitably increase the medical expense ratio under the
              Pediatric Pool and can be administered by HMO under its claims
              payment system, CCPN agrees that the fee schedule shall not be
              increased more than once a year and that CCPN shall provide HMO
              with prior written notice of any proposed increase. The notice
              shall include in reasonable detail the reasons therefor and
              contain pro forma calculations that have been prepared using
              CCPN's usual and customary accounting practices and, where
              applicable, reasonable actuarial assumptions. HMO's consent to
              such increase shall be required unless (i) the increase to the fee
              schedule represents an increase in the rates of five percent (5%)
              or less (as calculated on a weighted average basis; i.e., taking
              into account whether the impact of all rate adjustments causes an
              increase in the aggregate pro forma physician reimbursement of
              five percent (5%) or less) or (ii) CCPN provides pro forma
              calculations which reflect the expected adverse effect, if any, of
              the greater than five percent (5%) increase in the fee schedule
              and, in connection with the settlements described in Section VI
              below, CCPN holds HMO harmless from any actual adverse effect
              resulting from a greater than five percent (5%) increase in the
              physician reimbursement. The foregoing notwithstanding, no
              increase may be effected in any year unless (a) a Pediatric Pool
              Surplus existed for the immediately preceding Contract Year and
              (b) the pro forma calculations for the Contract Year in which the
              increase is proposed to be effective indicate an expected
              Pediatric Pool Surplus for such year as well. Because of system
              configuration requirements, any change required by the fore-


Attachment A                                                          Page 8

<PAGE>   125


              going may be delayed by HMO for up to, but not more than, sixty
              (60) days.

       D.     Payments to CCPN Participating Provider. CCPN Participating
              Providers will be reimbursed for Covered Health Services provided
              to Members on a fee-for-service basis as listed in Attachment B of
              this Agreement. These fee-for-service rates will be the
              reimbursement rate agreed to between such Participating Provider
              and CCPN. If Participating Provider and CCPN have not agreed to a
              reimbursement rate, then Participating Provider will be reimbursed
              at the then current Medicaid allowable rate. Itemized statements
              on current HCFA 1500 claim forms with current HCPC coding, current
              ICD9 coding and current CPT4 coding for all Covered Health
              Services provided by CCPN Participating Providers must be
              submitted by CCPN Participating Provider to HMO at the address set
              forth below within sixty (60) days of the date the Covered Health
              Service was provided. If the claim form is not filed with HMO
              within sixty (60) days from the date the Covered Health Service
              was provided, the right to payment will be deemed waived by the
              CCPN Participating Provider unless CCPN Participating Provider
              establishes to the reasonable satisfaction of CCPN that there was
              reasonable justification for a delay in billing or that delay was
              caused by circumstances beyond CCPN Participating Provider's
              control. CCPN Participating Provider shall be paid by HMO within
              thirty (30) days after receipt by HMO of a completed Clean Claim
              for Covered Health Services (or within such period as may
              otherwise be prescribed by law). If submitted Clean Claims are not
              paid within such period, HMO shall be subject to Section IV.E
              below. HMO will notify applicable CCPN Participating Providers of
              any claims that are not Clean Claims within thirty (30) days of
              HMO's receipt of such claims.

       E.     Claims Reimbursement. All Clean Claims submitted to HMO by CCPN,
              CCPN Physicians or CCPN Participating Providers for payment will
              be paid within thirty (30) days of the date of HMO's receipt of
              such Clean Claim (or within such period as may otherwise be
              prescribed by law). Upon CCPN's request each quarter (and
              automatically in connection with each Year-End Settlement if not
              earlier requested), HMO will reimburse CCPN (or the applicable
              CCPN Physician CCPN Participating Provider) for any incurred late
              payment

Attachment A                                                          Page 9

<PAGE>   126


              penalties related to such Clean Claims that were not timely paid
              during such period. This amount shall be equal to the interest on
              the claims paid amount during the preceding quarter or year, as
              applicable, that exceeded the applicable time limit for payment.
              The interest rate is 1.5% per month (18% annual for each month any
              such Clean Claim remains unadjudicated) or such rate as may be
              prescribed by law. Subject to Section VI.D below, such late
              payment penalties, at HMO's discretion, may be charged to the
              Pediatric Pool (as charged, the "Allocated Penalty Amount").

       F.     Overpayment. CCPN, CCPN Physicians and/or CCPN Participating
              Providers shall promptly report overpayments to HMO. HMO shall,
              upon notice to HMO or upon its discovery, deduct such overpayment
              from future payments with an explanation of the action taken.

       G.     In-house Pediatric Service. CCPN and HMO jointly will develop a
              program for PCPs to elect to use the CMC In-house Pediatric
              Service for Members admitted to CMC.

       H.     Reinsurance. Notwithstanding anything to the contrary set forth
              herein, (i) CCPN agrees to purchase and maintain reinsurance in
              amounts required by law (including where substantial financial
              risk exists), regulation, and the STAR program, and (ii) HMO will
              reimburse CCPN out of the Pediatric Pool for such reinsurance,
              provided, CCPN shall promptly notify HMO of all recoveries so that
              such recoveries may be recorded as additional allocations to the
              Pediatric Pool revenues. CCPN shall provide HMO with prior written
              notice of any changes in the reinsurance in effect (including,
              without limitation, any changes in the rates, premiums and/or
              underwriter/insurer) so that HMO may verify that CCPN is providing
              adequate coverage for, among other things, HMO's continued
              compliance with TDH/TDI requirements. HMO agrees to provide CCPN,
              on a monthly basis on or before the twenty-fifth (25th) day of
              such month, the reinsurance report required under Exhibit 4 to
              this Attachment A.

       I.     Claims Procedures for Emergency Room and Outpatient Services. [See
              Section 2 of the Amendment to which this document is attached.]

Attachment A                                                          Page 10

<PAGE>   127


V.     Risk Funds.

       A.     General Provisions. HMO and CCPN shall establish an Adult Pool, a
              Pediatric Pool, and a Profit Product Pool to serve as risk sharing
              incentive arrangements to monitor utilization goals while
              maintaining quality of care. The budget for each pool is described
              below. Each pool shall be adjusted for actual Members or Adult
              Enrollees covered by the applicable pool.

       B.     Pediatric Pool. Revenues and expenses shall be recorded and
              charged to the Pediatric Pool as described above and balances
              reconciled and settled as described below.

       C.     Adult Pool. HMO will allocate (post) seventy-five percent (75%) of
              the Total TDH Payment attributable to Adult Enrollees (the "Adult
              Target Amount") to the Adult Pool and charge all medical claim
              expenses attributable to Adult Enrollees to such Pool. Balances
              shall be reconciled and settled as described below.

       D.     Profit Product Pool. CCPN and HMO agree that the Profit Product
              Pool shall be used as described below.

VI.    Reviews and Settlement. The Pediatric Pool and Adult Pool shall be
       subject to quarterly year-to-date reviews and each Risk Fund shall have
       an annual final settlement, described below, as of each Contract
       Anniversary Date (a "Year-End Settlement") for the then ending year of
       this Agreement (the "Contract Year"), at which time the surpluses and
       deficits in each Risk Fund shall be reconciled and each party's rights
       and obligations with respect to such surpluses and deficits, as
       determined pursuant to Section VII below, shall be satisfied.

       A.     Reviews. Within twenty-five (25) days of the end of each month of
              this Agreement, an unaudited monthly report of the Pediatric Pool
              and the Adult Pool results will be produced. HMO will also report
              and record total incurred but not reported (IBNR) claims.

       B.     Settlements. The Year-End Settlement of the Pediatric Pool, the
              Adult Pool, and the Profit Product Pool for each Contract Year
              will be performed in two phases, consisting of an interim
              reconciliation after

Attachment A                                                          Page 11

<PAGE>   128


              the first ninety (90) days following each Contract Anniversary
              Date and a final settlement immediately prior to HMO's submission
              of its Managed Care Financial and Statistical Report (or its
              successor) to TDH (the "Annual Report") for such preceding Year;
              provided, however, if the TDH Annual Report is not submitted
              within two hundred seventy (270) days of the Contract Anniversary
              Date, a second reconciliation will be performed until the final
              settlement can be performed contemporaneously with the submission
              of the Annual Report. In connection with each reconciliation and
              the final settlement, HMO shall calculate pursuant to Section VII
              the net amount payable to or due from CCPN and the net amount to
              be retained or absorbed by HMO and deliver written notice thereof
              to CCPN. Such calculations shall be based on the information then
              available and, if applicable, shall take into account payments
              made pursuant to this Section VI in connection with prior
              reconciliation(s) for such Year. At the time of each
              reconciliation for such Year and the final settlement, HMO shall
              pay CCPN the net amount agreed as due CCPN, or conversely, CCPN
              shall pay HMO the net amount agreed as due from CCPN; it being
              understood and agreed that the parties shall agree upon each
              reconciliation and the final settlement within thirty (30) days of
              HMO's delivery of the written calculations with respect to the
              reconciliations and settlement, as applicable.

       C.     Settlement in the Event of Termination. After termination of this
              Agreement, HMO and CCPN agree to reconcile payments to and amounts
              owed from all Risk Funds in accordance with this Section VI.

       D.     Adjustment for Allocated Penalty Amount. In connection with each
              Year-End Settlement, any Allocated Penalty Amount charged to the
              Pediatric Pool shall be reversed (i.e., excluded from the medical
              expenses charged to the Pediatric Pool for purposes of the
              Year-End Settlement).

VII.   Rights and Obligations with Respect to Pool Surpluses and Deficits. The
       following describes each party's rights and obligations in connection
       with the Year-End Settlements in each identified scenario. To the extent
       TDH requires that positive balances in any one or more of the Pools/Risk
       Funds be subject to any Experience Rebate paid to TDH under the State
       Contract, such

Attachment A                                                          Page 12

<PAGE>   129


       Experience Rebate will proportionately impact CCPN and HMO with respect
       to such affected pools in accordance with the percentage allocations
       specified herein.

       A.     Surplus in Both the Pediatric Pool and the Adult Pool. If there is
              a Pediatric Pool Surplus and an Adult Pool Surplus, then (i) HMO
              shall pay CCPN an amount equal to the sum of 100% of the Pediatric
              Pool Surplus, 25% of the Adult Pool Surplus, and 25% of the Profit
              Product Pool Total, and (ii) HMO shall be entitled to retain the
              remaining 75% of the Adult Pool Surplus and 75% of the Profit
              Product Pool Total.

       B.     Deficit in Both the Pediatric Pool and the Adult Pool. If there is
              a Pediatric Pool Deficit and an Adult Pool Deficit, then (i) CCPN
              shall pay HMO an amount equal to the sum of 75% of the Pediatric
              Pool Deficit and 25% of the Adult Pool Deficit, (ii) HMO shall pay
              CCPN an amount equal to 25% of the Profit Product Pool Total,
              (iii) HMO shall absorb 25% of the Pediatric Pool Deficit and 75%
              of the Adult Pool Deficit, and (iv) HMO shall be entitled to
              retain an amount equal to the remaining 75% of the Profit Product
              Pool Total.

       C.     Deficit in Adult Pool and Surplus in Pediatric Pool.

              1.     If there is an Adult Pool Deficit and a Pediatric Pool
                     Surplus, then the aggregate net surplus allocable to each
                     party shall be compared. For purposes of such comparison,
                     it shall be assumed that (a) CCPN would (i) receive 100% of
                     the Pediatric Pool Surplus, (ii) reimburse HMO for 25% of
                     the Adult Pool Deficit, and (iii) receive 25% of the Profit
                     Product Pool Total (the net result, the "Assumed Net CCPN
                     Share (Scenario C)"), and (b) HMO would (i) absorb 75% of
                     the Adult Pool Deficit, and (ii) retain 75% of the Profit
                     Product Pool Total (the net result, the "Assumed Net HMO
                     Share (Scenario C)").

              2.     If the Assumed Net CCPN Share (Scenario C) is less than or
                     equal to 50% of the aggregate of the Assumed Net CCPN Share
                     (Scenario C) and the Assumed Net HMO Share (Scenario C),
                     then the rights and obligations of CCPN and HMO shall be
                     determined in accordance with the method of deter-

Attachment A                                                          Page 13

<PAGE>   130


                     mining the Assumed Net CCPN Share (Scenario C) and Assumed
                     Net HMO Share (Scenario C), as applicable, described in
                     Section VII.C.1 above.

              3.     If the Assumed Net CCPN Share (Scenario C) is more than 50%
                     of the aggregate of the Assumed Net CCPN Share (Scenario C)
                     and the Assumed Net HMO Share (Scenario C), then

                     a.     CCPN shall

                            (i)    receive the difference of 100% of the
                                   Pediatric Pool Surplus less the Pediatric
                                   Surplus Reduction Amount (defined below),

                            (ii)   reimburse HMO for 25% of the Adult Pool
                                   Deficit, and

                            (iii)  receive the difference of 25% of the Profit
                                   Product Pool Total less the CCPN Profit Share
                                   Reduction Amount (defined below), if any, and

                     b.     HMO shall

                            (i)    absorb 75% of the Adult Pool Deficit, and

                            (ii)   retain the Pediatric Surplus Reduction
                                   Amount, the CCPN Profit Share Reduction
                                   Amount (if applicable), and 75% of the Profit
                                   Product Pool Total.

              4.     As used in this Section C,

                     a.     The "Pediatric Surplus Reduction Amount" means the
                            amount which if subtracted from the Pediatric Pool
                            Surplus included in the calculation of the Assumed
                            Net CCPN Share (Scenario C) and then added to the
                            Assumed Net HMO Share (Scenario C) would make such
                            shares for CCPN and HMO equal; provided, the amount
                            so subtracted shall in no event exceed 25% of

Attachment A                                                          Page 14

<PAGE>   131


                            the Pediatric Pool Surplus (if such maximum is
                            reached before the desired true-up is effected, then
                            the CCPN Profit Share Reduction Amount described
                            below shall apply).

                     b.     The "CCPN Profit Share Reduction Amount" means the
                            amount which if subtracted from CCPN's share of the
                            Profit Product Pool Total included in the
                            calculation of the Assumed Net CCPN Share (Scenario
                            C) and then added to the Assumed Net HMO Share
                            (Scenario C) (as increased by the Pediatric Surplus
                            Reduction Amount) would make such shares for CCPN
                            and HMO equal (it being understood that the CCPN
                            Profit Share Reduction Amount can equal up to, but
                            not exceed, CCPN's full 25% share of the Profit
                            Product Pool Total).

              5.     Notwithstanding anything to the contrary set forth in
                     subsections (3) and (4) of this Section VII.C, the amounts
                     subtracted in connection with the Pediatric Surplus
                     Reduction Amount and, if applicable, the CCPN Profit Share
                     Reduction Amount shall be limited to such amounts which
                     when added to HMO's Assumed Net HMO Share (Scenario C)
                     would cause the net pool distributions to HMO to equal
                     5.25% of the Total TDH Payment.

       D.     Deficit in Pediatric Pool and Surplus in Adult Pool.

              1.     If there is a Pediatric Pool Deficit and an Adult Pool
                     Surplus, then the aggregate net surplus allocable to each
                     party shall be compared. For purposes of such comparison it
                     shall be assumed that (a) CCPN would (1) reimburse HMO for
                     75% of the Pediatric Pool Deficit, (2) receive 25% of the
                     Adult Pool Surplus, and (3) receive 25% of the Profit
                     Product Pool Total (the net result, the "Assumed Net CCPN
                     Share (Scenario D)"), and (b) HMO would (1) absorb 25% of
                     the Pediatric Pool Deficit, (2) retain 75% of the Adult
                     Pool Surplus, and (3) retain 75% of the Profit Product Pool
                     Total (the net result, the "Assumed Net HMO Share (Scenario
                     D)").

Attachment A                                                          Page 15

<PAGE>   132


              2.     If the Assumed Net HMO Share (Scenario D) is less than or
                     equal to 75% of the aggregate of the Assumed Net CCPN Share
                     (Scenario D) and the Assumed Net HMO Share (Scenario D),
                     then the rights and obligations of CCPN and HMO shall be
                     determined in accordance with the method of determining the
                     Assumed Net CCPN Share (Scenario D) and Assumed Net HMO
                     Share (Scenario D), as applicable, described in Section
                     VII.D.1 above.

              3.     If the Assumed Net HMO Share (Scenario D) is more than 75%
                     of the aggregate of the Assumed Net CCPN Share (Scenario D)
                     and the Assumed Net HMO Share (Scenario D), then

                     a.     CCPN shall

                            (i)    reimburse HMO for 75% of the Pediatric Pool
                                   Deficit,

                            (ii)   receive (or have applied as a credit) 25% of
                                   the Adult Pool Surplus, and

                            (iii)  receive (or have applied as a credit) the HMO
                                   Profit Share Reduction Amount (defined
                                   below), and

                            (iv)   receive (or have applied as a credit) up to
                                   an additional 25% of the Profit Product Pool
                                   Total, and

                     b.     HMO would

                            (i)    absorb 25% of the Pediatric Pool Deficit,

                            (ii)   retain 75% of the Adult Pool Surplus, and

                            (iii)  retain the difference of 75% of the Profit
                                   Product Pool Total less the HMO Profit Share
                                   Reduction Amount.

Attachment A                                                          Page 16

<PAGE>   133


              4.     As used in this Section D, the "HMO Profit Share Reduction
                     Amount" means that amount which if subtracted from HMO's
                     share of the Profit Product Pool included in the
                     calculation of the Assumed Net HMO Share (Scenario D) and
                     then added to the Assumed Net CCPN Share (Scenario D) would
                     make the respective shares for HMO and CCPN equal 75% and
                     25%; provided, the amount so subtracted shall in no event
                     exceed up to an additional 25% of the Profit Product Pool
                     Total (i.e. CCPN's share of the Profit Product Pool Total
                     would not exceed 50% of the aggregate Profit Product Pool
                     Total when the HMO Profit Share Reduction Amount is added
                     to the 25% share under Section VII.D.3.a.(iv) above).

       E.     Examples. Mathematical examples of Scenarios C and D above are set
              forth in Exhibit 1 attached.

VIII.  Preventive Health Performance Incentive.

       A.     TDH has retained a performance objective capitation amount of two
              dollars ($2.00) per Member per month that is available to be paid
              to the HMO after the end of each Contract Year and after
              appropriate encounter data is reviewed and confirmed by the Texas
              Department of Health. TDH will determine the performance of HMO
              against the objectives described in the State Contract. To the
              extent that the HMO receives incentive payments from the TDH for
              meeting the preventive health performance objectives, HMO will
              distribute to CCPN seventy-five percent (75%) of those funds
              attributable to CCPN Members within five (5) days of receipt of
              such payment from TDH. The foregoing notwithstanding, the parties
              acknowledge that such practice will end with the 1999 Contract
              Year as TDH will completely curtail payment of such amount.

IX.    Adult Enrollees Needing Pediatric Services. CCPN agrees that CCPN
       Physicians and CCPN Participating Providers will provide pediatric
       services to Adult Enrollees provided that: (1) HMO will pay CCPN
       Physician and CCPN Participating Provider directly for such services at
       the reimbursement rate agreed to by such CCPN Physician and CCPN
       Participating Provider and (2) the Pediatric Pool will not be used for
       payment of any health care services provided to Adult Enrollees.

Attachment A                                                          Page 17


<PAGE>   134



                             AMERICAID - FORT WORTH
                       COOKCHILDRENS FY00 RISK ARRANGEMENT
                                EXAMPLE SCENARIOS

<TABLE>
<CAPTION>
                               -------------------------------------------------------------------------------------
ILLUSTRATION DYNAMICS:                   SCENARIO                                                 C
                               -------------------------------------------------------------------------------------
<S>                                <C>                     <C>                          <C>
                                         Pedi Pool                To 75% Target                FAVORABLE
                                         Adult Pool               To 75% Target               UNFAVORABLE

                                      Cap(s) Triggered                                             NO

</TABLE>


<TABLE>
<CAPTION>

                                          COOK                ACC
                                       PEDI POOL           ADULT POOL           TOTAL                 NOTES
------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>                  <C>               <C>             <C>
    Member Months                       226,200              49,500            272,700         sample member months

   Premium Revenue                    $28,200,000         $13,900,000        $42,100,000          sample revenue
         PMPM                           $124.67             $280.81            $152.70

   Medical Expense                    $18,200,000         $13,500,000        $31,700,000          sample medical
         PMPM                            $80.46             $272.73            $114.98
         MLR                             64.5%               97.1%              75.3%         PEDI FAV, ADULT UNFAV

    Admin Expense            14%       $3,948,000          $1,946,000         $5,894,000
HMO License Allowance         2%        $564,000            $278,000           $842,000
 Recoupment Withhold          2%        $564,000            $278,000           $842,000
------------------------------------------------------------------------------------------------------------------------------

     GROSS MARGIN                      $4,924,000         ($2,102,000)        $2,822,000     RISK ARRANGEMENT BALANCE

------------------------------------------------------------------------------------------------------------------------------
 Pedi Pool Variance to Target                                                 $2,950,000
   Pedi Pool Variance Split            $2,212,500          $737,500                          Pedi favorability split 75/25
                                          75%                25%

Adult Pool Variance To Target                                                ($3,075,000)

  Adult Pool Variance Split            ($768,750)        ($2,306,250)                       Adult unfavorability split 25/75
                                          25%                75%
     Product Profit Pool         7%                                           $2,947,000
  Product Profit Pool Split                $0             $2,947,000                           Product Profit split 0/100
                                           0%               100%

      Pre-State Subtotal               $1,443,750         $1,378,250          $2,822,000
     ACC Pre-State Return                                    3.27%                              return below 5.25% cap
      Distribution Split                 51.2%               48.8%                           distribution below 50/50 cap
------------------------------------------------------------------------------------------------------------------------------
Adjusted Product Profit Pool Split         $0            $2,947,000           $2,947,000
                                          0.0%             100.0%                               NO PPP SPLIT ADJUSTMENT

   Adjusted Pre-State Subtotal         $1,443,750        $1,378,250           $2,822,000
  Adjusted ACC Pre-State Return                            3.27%                                 return below 5.25% cap
   Adjusted Distribution Split           51.2%             48.8%                              distribution below 50/50 cap

    $0 Profit Share Threshold    3%                      $1,263,000
  Amount Subject To Profit Share                          $115,250
        State Profit Share       25%                     ($28,813)
     State Profit Share Split           ($7,203)         ($21,609)            ($28,813)      State Profit Share split 25/75
                                          25%               75%
------------------------------------------------------------------------------------------------------------------------------

               BOTTOM LINE             $1,436,547        $1,356,641           $2,793,188            FINAL RESULTS
                ACC RETURN                3.41%             3.22%
            DISTRIBUTION SPLIT            51.4%             48.6%

FIGURES SHOWN WOULD BE APPLIED TO CIRCULAR FORMULA SETTLEMENT MODEL FOR SETTLEMENT DISBURSEMENT

</TABLE>


<PAGE>   135


                             AMERICAID - FORT WORTH
                       COOKCHILDRENS FY00 RISK ARRANGEMENT
                                EXAMPLE SCENARIOS

<TABLE>
<CAPTION>
                               -------------------------------------------------------------------------------------
ILLUSTRATION DYNAMICS:                   SCENARIO                                                 D
                               -------------------------------------------------------------------------------------
<S>                                <C>                           <C>                    <C>
                                         Pedi Pool                To 75% Target               UNFAVORABLE
                                         Adult Pool               To 75% Target                FAVORABLE

                                       Cap(s) Triggered                                            YES

</TABLE>


<TABLE>
<CAPTION>


                                         COOK                 ACC
                                       PEDI POOL           ADULT POOL           TOTAL                 NOTES
----------------------------------------------------------------------------------------------------------------------------------

<S>                                  <C>                <C>                <C>              <C>
    Member Months                        226,200            49,500             272,700         sample member months

    Premium Revenue                   $28,200,000        $13,900,000        $42,100,000          sample revenue

         PMPM                            $124.67             $280.81          $152.70

   Medical Expense                    $22,100,000         $9,900,000        $32,000,000          sample medical

         PMPM                            $97.70              $200.00          $116.07
         MLR                              78.4%                71.2%            76.0%          PEDI UNFAV, ADULT FAV

    Admin Expense            14%      $3,948,000           $1,946,000       $5,894,000
HMO License Allowance        2%         $564,000             $278,000         $842,000
 Recoupment Withhold         2%         $564,000             $278,000         $842,000
----------------------------------------------------------------------------------------------------------------------------------

               GROSS MARGIN           $1,024,000           $1,498,000       $2,522,000         RISK ARRANGEMENT BALANCE
----------------------------------------------------------------------------------------------------------------------------------
 Pedi Pool Variance to Target                                               ($950,000)

   Pedi Pool Variance Split           ($712,500)           ($237,500)                          Pedi unfavorability split 75/25
                                         75%                  25%

Adult Pool Variance To Target                                                $525,000

  Adult Pool Variance Split           $131,250             $393,750                            Adult unfavorability split 25/75
                                        25%                   75%
     Product Profit Pool      7%                                            $2,947,000
  Product Profit Pool Split           $736,750             $2,210,250                            Product Profit split 25/75
                                        25%                   75%

      Pre-State Subtotal              $155,750             $2,366,500       $2,522,000
     ACC Pre-State Return                                    5.62%
     Distribution Split                 6.2%                 93.8%                                    ACC SHARE > 75%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
Adjusted Product Profit Pool Split  $1,211,750           $1,735,250        $2,947,000
                                      41.1%                58.9%                                    PPP SPLIT DUE TO CAP

    Adjusted Pre-State Subtotal      $630,500            $1,891,500        $2,522,000
   Adjusted ACC Pre-State Return                           4.49%
    Adjusted Distribution Split        25.0%               75.0%                                    SPLIT CAPPED AT 25/75

   $0 Profit Share Threshold   3%                        $1,263,000
  Amount Subject To Profit Share                          $628,500
    State Profit Share        25%                        ($157,125)
    State Profit Share Split        ($39,281)            ($117,844)        ($157,125)          State Profit Share split 25/75
                                       25%                   75%
----------------------------------------------------------------------------------------------------------------------------------

               BOTTOM LINE          $591,219        $1,773,656            $2,364,875                   FINAL RESULTS
                ACC RETURN            1.40%            4.21%
            DISTRIBUTION SPLIT        25.0%            75.0%

FIGURES SHOWN WOULD BE APPLIED TO CIRCULAR FORMULA SETTLEMENT MODEL FOR SETTLEMENT DISBURSEMENT

</TABLE>


<PAGE>   136


                                  ATTACHMENT B

                      REVISED PHYSICIAN REIMBURSEMENT RATES


I.     PRIMARY CARE CAPITATION PAYMENTS. - HMO shall compensate Primary Care
       Physicians or Providers from the Pediatric Risk Pool through
       age/sex/benefit adjusted capitation rates for Primary Care Services.

A.     Capitation Payments - Primary Care Physicians or Providers

       Per Member Per Month = weighted average based upon the actual
       distribution of the provider panel of members. See below for specific
       capitation rates by cell.

<TABLE>
<CAPTION>

                   <500 Member Avg.                         500-750 Member Avg.                  >750 Member Avg.
==================================================    ================================    ===============================
     CATEGORY
        AGE             FEMALE          MALE              FEMALE            MALE              FEMALE           MALE
==================================================    ================================    ===============================
<S>                   <C>            <C>                <C>              <C>                <C>             <C>
    61 days to
     <2 years           $39.59         $39.59             $41.67           $41.67             $43.75          $43.75
--------------------------------------------------    --------------------------------    -------------------------------
     2-4 years          $13.31         $13.31             $14.01           $14.01             $14.71          $14.71
--------------------------------------------------    --------------------------------    -------------------------------
    5-14 years           $8.08          $8.08              $8.51           $8.51               $8.94           $8.94
--------------------------------------------------    --------------------------------    -------------------------------
     15 years            $7.70          $5.81              $8.10           $6.12               $8.51           $6.43
==================================================    ================================    ===============================
    16 + years            FFS            FFS                FFS             FFS                 FFS             FFS
==================================================    ================================    ===============================
</TABLE>

For PCPs with less than 250 members, there will be an annual true-up to 100% of
the fee-for-service equivalent in the event capitation payments are less than
the fee-for-service total.

Average membership is calculated based upon the total members per Group
(contract) divided by the number of PCPs in the Group serving AMERICAID Members.

Rates are adjusted quarterly on a prospective basis, once a membership level has
been maintained during the prior quarter.

Notwithstanding the foregoing PMPM capitation rate cells by age/sex factors, HMO
shall compensate Participating Primary Care Physicians or Providers on a
fee-for-service basis for Covered Health Services provided to Members age sixty
(60) days

                                      B-1




<PAGE>   137


or less. Payment for such services will be deducted from the Pediatric Risk Fund
and shall be reimbursed at the lesser of billed charges or the AMERICAID
Medicaid Fee Schedule. A sample of fees from the AMERICAID Medicaid Fee Schedule
is attached as Schedule "1", and made a part hereof. Capitation payments will
not be applicable to such Members until they are sixty-one (61) days old.

B.     Primary Care Fee-For-Service Payment - Primary Care Physicians or
       Providers

       HMO shall compensate Primary Care Physicians or Providers for CPT codes
not listed on the attached listing of Primary Care Services on a fee-for-service
basis for non-capitated services provided to Members at the reimbursement rate
agreed to between such provider and CCPN. If PCP and CCPN have not agreed to a
reimbursement rate, then PCP will be reimbursed at the then current Medicaid
allowable rate for non-capitated services with the exception of the following:
1) Immunizations will be reimbursed at 90% of the prevailing Medicaid maximum
allowable fee schedule, and 2) Injectable drugs will be reimbursed at the
average wholesale price (AWP). The rate agreed to between such provider and CCPN
shall not exceed HMO's fee schedule, except as otherwise provided in the
agreement to which this schedule is attached.

II.
<TABLE>
<CAPTION>

============================================================================================================================
          Primary
      Diagnosis Code                                DESCRIPTION                                       MEDICAID
----------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                                                                 <C>
V72.3                             Well Woman Annual GYN Visit                                         $47.00
                                  Includes:  Office Visit, Pap Smear
                                  and Breast, Pelvic and Rectal Exams.
============================================================================================================================
</TABLE>

                                      B-2

<PAGE>   138



<TABLE>
<CAPTION>

===========================================================================================================================
               DESCRIPTION                                                                               MEDICAID
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>
Care for Newborns in the first 60 days of life                                                       BILLED CHARGES
                                                                                                        UP TO THE
                                                                                                      AMERICAID FEE
                                                                                                         SCHEDULE
---------------------------------------------------------------------------------------------------------------------------
Primary Care for Members 16 years and older                                                          BILLED CHARGES
                                                                                                        UP TO THE
                                                                                                      AMERICAID FEE
                                                                                                         SCHEDULE
===========================================================================================================================
</TABLE>


<TABLE>
<CAPTION>
===========================================================================================================================
<S>                                                                                                  <C>
Reporting of Texas Health Steps screenings on a HCFA-l500 based on the Texas Health Steps codes      $21.00 per visit
and periodicity schedule in the TDH/NHIC Medicaid Manual.
---------------------------------------------------------------------------------------------------------------------------
Reporting of the Administration of Immunizations on a HCFA-1500 based on the Texas Health Steps      $3.00 per
codes and periodicity schedule in the TDH/NI-IIC Medicaid Manual.                                    administration
===========================================================================================================================
</TABLE>


III. Specialist Reimbursement. HMO shall compensate Specialist physicians for
Covered Health Services on a fee for service basis at the reimbursement rate
agreed to between such physicians and CCPN, which payments shall be charged to
the Pediatric Pool. If Specialist Physicians and CCPN have not agreed to
reimbursement rate, then Specialist Physicians will be reimbursed at the then
current Medicaid allowable rate. The rate agreed to between such provider and
CCPN shall not exceed HMO's fee schedule, except as otherwise provided in the
agreement to which this schedule is attached.

IV. Primary Care Fee-For-Service Option. AMERICAID and CCPN acknowledge and
agree that CCPN has the option to offer contracted Primary Care Physicians or
Providers Fee-For-Service reimbursement methodology as an option to the
capitation described above. The rate agreed to between such provider and CCPN
shall not exceed HMO's fee schedule, except as otherwise provided in the
agreement to which this schedule is attached.

V. Risk Sharing/Incentive Program. Each CCPN Physician will be eligible to
participate in a risk sharing/incentive program to be developed by CCPN.

                                      B-3

<PAGE>   139

                           SCHEDULE 1 TO ATTACHMENT B

                          SAMPLE AMERICAID FEE SCHEDULE






<PAGE>   140




                                  ATTACHMENT C

                      REVISED HOSPITAL REIMBURSEMENT RATES

Inpatient, Outpatient and Ambulatory Surgery Services Provided by CCMC All
medically necessary inpatient, outpatient and ambulatory surgery services will
be reimbursed in accordance with CCMC's applicable charge master and the
applicable cost-to-charge ratio (percentage discount), as each is determined
pursuant to the Amendment dated as of January 1, 2000 to which this is attached.
AMERICAID is not obligated to pay clinic facility charges until such time as
clinic physician accepts a lesser payment for physician services.

-      Hospital claims for dental surgeries will be paid without prior
       authorization requirements.

-      Care Team (sexual and physical abuse) charges (facility and physician
       charges) will be paid without prior authorization requirements.





                                      C-1

<PAGE>   141


                                  ATTACHMENT D

                    CLAIMS PROCEDURES FOR EMERGENCY ROOM AND
                               OUTPATIENT SERVICES

1)     ER Services

       Reimbursement for ER Services will be based upon discharge level;
       determination of whether to pay ER claims will be based on admission
       triage level. Admission triage levels 1, 2 and 3 will be paid based upon
       the discharge level (professional claims submitted by physicians will be
       reimbursed according to the applicable professional fee schedule). ER
       visits with an admission triage level of 4 or 5 will be paid a triage fee
       unless the visit meets certain criteria outlined below.

       Claims will be paid based on the level of care documented on the claim.
       There are 5 discharge triage levels:

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>                                                          <C>
Discharge Level                 Line Item Charge on the UB-92                               Reimbursement
                                for Revenue Code 450,
                               "Emergency Room"
------------------------------------------------------------------------------------------------------------------------------
Level I                         $447.00 or $400.00                                           ___% of charges*
------------------------------------------------------------------------------------------------------------------------------
Level II                        $263.00 or $200.00                                           $500 per case
------------------------------------------------------------------------------------------------------------------------------
Level III                       $153.00 or $100.00                                           $250 per case
------------------------------------------------------------------------------------------------------------------------------
Level IV                        $90.00 or $50.00                                             $98 per case
------------------------------------------------------------------------------------------------------------------------------
Level V                         $53.00 or $25.00                                             $37 per case
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

       CCPN will continue to notify AMERICAID, within one (1) business day, of
       any inpatient admissions or observation stays that result from an
       Emergency Room visit.

       OTHER TYPES OF SERVICES PERFORMED IN THE ER ? In cases when minor
       procedures are performed in the ER or a physician meets a patient at the
       ER for service/treatment, CCMC's claims will be submitted as "Outpatient
       Hospital Services" with no triage level assigned. CCMC's claims will be
       reimbursed in accordance with CCMC's applicable charge master and the
       applicable cost-to-charge ratio (percentage discount), as each is
       determined pursuant to the Amendment dated as of January 1, 2000 to which
       this is


                                      D-1

<PAGE>   142


       attached. CCMC will provide AMERICAID a list of ER "clinic" codes used so
       that AMERICAID can pursue an automated method of identifying these
       claims.


2)     OUTPATIENT SURGERY - Dental surgeries (CPT Code 41899) have been grouped
       as "Group 9" and paid an all inclusive global fee of $553.00. The
       following list of procedures which are ungroupable are included in the
       group listed in the right hand column of the table below. Any future
       ungroupable procedure will be paid at an inclusive global fee of $510.00,
       subject to multiple procedure protocol currently specified in the
       contract.


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                   PROCEDURE                                            CPT                RATE               GROUP
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                 <C>                  <C>
Incision and drainage of abscess                                                       10060               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, benign lesion, except skin tag                                               11401               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Injection procedure during cardiac cath.                                               93542               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, benign lesion, except skin tag                                               11421               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Control nasal hemorrhage, anterior                                                     30901               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, benign lesion, except skin tag                                               11420               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, benign lesion, except skin tag                                               11400               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Injection procedure during cardiac cath.                                               93541               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Nasal endoscopy, diagnostic, uni/bilateral                                             31231               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, other benign lesion                                                          11440               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, other benign lesion                                                          11441               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Injection procedure during cardiac cath.                                               93544               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Injection procedure during cardiac cath.                                               93543               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Removal of sutures under anesthesia                                                    15850               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Repair umbilical hernia, under age 5                                                   49580               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Repair initial inguinal hernia < 6 mos.                                                49495               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Application of hip spica cast                                                          29305               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Fracture nasal turbinate(s), t                                                         30930               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Plastic repair of cleft lip/na                                                         40761               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Repair initial inguinal hernia (6 mos. to 5 yrs.)                                      49500               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Adenoidectomy, primary                                                                 42830               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Intubation, endotracheal, emergency                                                    31500               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Tonsillectomy and adenoidectomy                                                        42820               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Tonsillectomy, primary and secondary                                                   42825               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, benign lesion except skin tag                                                11422               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Probing of nasoclarimal duct                                                           68810               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      D-2

<PAGE>   143


<TABLE>
<CAPTION>


<S>                                                                                    <C>                 <C>                  <C>
-----------------------------------------------------------------------------------------------------------------------------------
Incision and removal of foreign body                                                   10120               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Removal of skin tags, multiple                                                         11200               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Cathexerization of umbilical vein                                                      36510               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Cathexerization, umbilical artery                                                      36660               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Layer closure of wounds of scalp                                                       12031               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Scraping of cornea, diagnostic                                                         65430               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Removal of corneal epithelium;                                                         65435               $361                 I
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure external ear                                                        69399               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure, skin, mucous mbrane                                                17999               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Layer closure of wounds of neck                                                        12041               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Closed treatment of radial & ulnar                                                     25560               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Excision, other benign lesion                                                          11442               $361                 1
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure lacrimal system                                                     68899               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Probe Nasolacrimal duct                                                                68811               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Repair of retinal detachment                                                           67101               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure, male genital syst.                                                 55899               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Total abdominal hysterectomy                                                           58150               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Angiography, renal, unilateral                                                         75722               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Cystoscopy and treatment                                                               52301               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Angiography, renal, bilateral                                                          75724               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure, accessory sinuses                                                  31299               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Probe Nasolacrimal duct w/insertion                                                    68815               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Percutaneous balloon valvuloplasty                                                     92990               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Treatment of slipped femoral epiphysis                                                 27176               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
Cutaneous vesicostomy                                                                  51980               $510                 2
-----------------------------------------------------------------------------------------------------------------------------------
One stage distal hypospadias repair                                                    54324               $750                 4
-----------------------------------------------------------------------------------------------------------------------------------
Repair of hypospadias repair                                                           54324               $750                 4
-----------------------------------------------------------------------------------------------------------------------------------
Combined right heart catheterization                                                   93526               $750                 4
-----------------------------------------------------------------------------------------------------------------------------------
Unlisted procedure, dentoalveolar                                                      41899               $553                 9
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


3)     Interim billing ? CCMC submits claims every 30 days even if patient is
       not discharged. Interim bills will be processed and paid under the
       contract terms.

                                      D-3

<PAGE>   144


4)     ER to Inpatient or ER to 24-hour Observation will be reimbursed at the
       inpatient reimbursement level when an ER visit results in an admission or
       a 24-hour observation.

----------------------
*Determined in accordance with CCMC's applicable charge master and the
applicable cost-to-charge ratio (percentage discount), as each is determined
pursuant to the Amendment dated as of January 1, 2000 to which this is attached.

                                      D-4

<PAGE>   145


                                  ATTACHMENT E

                AMENDMENTS FOR PURPOSES OF REGULATORY COMPLIANCE





<PAGE>   146





                                  ATTACHMENT E

                           AMENDMENTS FOR PURPOSES OF
                              REGULATORY COMPLIANCE

1.     No payment by HMO to CCPN or any CCPN Physician or Participating Provider
       shall be a financial incentive or a direct or indirect inducement to
       limit Medically Necessary Covered Services.

2.     HMO will not impose restrictions upon the provider's free communication
       with members about a member's medical conditions, treatment options or
       their costs, HMO's referral policies, and other HMO policies, including
       financial incentives or arrangements.

3.     CCPN and its Physicians and Participating Providers understand that any
       violation by a provider of a state or federal law relating to the
       delivery of services by the provider under this Agreement, or any
       violation of the State Contract could result in liability for money
       damages, and/or civil or criminal penalties and sanctions under state
       and/or federal law.

4.     Federal and state laws provide severe penalties for any provider who
       attempts to collect any payment from or bill a Member or Adult Enrollee
       for a covered service.

5.     (a) This Agreement is subject to all state and federal laws and
       regulations relating to fraud and abuse in health and the Medicaid
       program. CCPN and its Physicians and Participating Providers must
       cooperate and assist TDH and any state or federal agency that is charged
       with the duty of identifying, investigating, sanctioning or prosecuting
       suspected fraud and abuse. The provider must provide originals and/or
       copies of any and all information, allow access to premises and provide
       records to TDH or its authorized agent(s), THHSC, HCFA, U.S. Department
       of Health and Human Services, FBI, TDI, and the Texas Attorney General's
       Medicaid Fraud Control Unit upon request and free of charge. The provider
       must report any suspected fraud or abuse including any suspected fraud
       and abuse committed by HMO or a recipient to TDH for a referral to THHSC.

       (b) The Texas Medicaid Fraud Control Unit must be allowed to conduct
       private interviews of providers and their employees, contractors and
       patients.

                                      E-1

<PAGE>   147


       Requests for information must be complied with in the form and language
       requested. Providers and their employees and contractors must cooperate
       fully in making themselves available in person for interview,
       consultation, grand jury proceedings, pre-trial conference, hearings,
       trial and any other process, including investigations. Compliance with
       this requirement is at the HMO's and provider's own expense.

6.     CCPN shall (or shall cause its Physicians and Participating Providers) to
       submit proxy claims forms to HMO for services provided to all STAR
       Members that are capitated by HMO in accordance with the encounter data
       submission requirements established by the HMO and the State.

7.     No provider may interfere with or place liens upon the State's right or
       the HMO's right, acting as the State's agent, to recover from third party
       resources.

8.     Subtitle H of the Medicaid Balanced Budget Act of 1997, Section
       1852(d)(2) requires Providers to comply with guidelines respecting
       coordination of post-stabilization care in the same manner as such
       guidelines apply to Medicare + Choice plans offered under part C of Title
       XVIII.

9.     Pursuant to Section 12.2.4 of the Texas Department of Health Medicaid
       contract, CCPN shall, and shall cause its Physicians and Participating
       Providers to, submit claims no later than ninety-five (95) days after the
       date services are provided.

10.    28 Texas Administrative Code, Section 11.1102 requires that any
       modifications, addition, or deletion to the provisions of the Hold
       Harmless clause shall be effective no earlier than fifteen (15) days
       after the Commissioner of Insurance has received written notice of such
       proposed changes.

11.    Pursuant to Section 7.2.8.1 of the Texas Department of Health Medicaid
       contract, CCPN acknowledges that services provided under this Agreement
       are funded by state and federal funds under the Texas Medical Assistance
       Program (Medicaid) and that CCPN, its Physicians and Participating
       Providers are subject to all state and federal laws, rules and
       regulations, penalties, and sanctions that apply to persons or entities
       receiving state and federal funding.

                                      E-2

<PAGE>   148



12.    28 Texas Administrative Code, Section 11.901 requires that a Physician or
       Provider receive written notice of termination at least ninety (90) days
       prior to the effective date of the termination of the Physician or
       Provider, except in the case of imminent harm to patient health, action
       against license to practice, or fraud pursuant to Insurance Code Article
       20A.l8A(b), in which case termination may be immediate. Upon written
       notification of termination, a Physician or Provider may seek review of
       the termination within a period not to exceed sixty (60) days, pursuant
       to the procedure set forth in the Insurance Code Article 20A.18A(b). HMO
       must provide notification of the termination of a Physician or Provider
       to its enrollees receiving care from the provider being terminated at
       least thirty (30) days before the effective date of the termination.
       Notification of termination of a Physician or Provider to enrollees for
       reasons related to imminent harm may be given to enrollees immediately.
       HMO and CCPN shall coordinate the delivery of the foregoing notices, with
       CCPN being required to provide notice whenever it terminates a Physician
       or Provider.

13.    Subtitle H of the Medicaid Balanced Budget Act of 1997 requires, in
       accordance with 42 C.F.R. Section 434.28, HMO to maintain written
       policies and procedures in compliance with Advance Directives. CCPN
       shall, and shall cause its Physicians and Participating Providers to,
       fulfill their obligations in regard to Advance Directives as outlined in
       the AMERICAID Provider Manual.

       Advance Directives as defined in 42 C.F.R. Section 489.100 means a
       written instruction, such as a living will or durable power of attorney
       for health care, recognized under State law (whether statutory or as
       recognized by the courts of the State), relating to the provision or
       withholding of health care when the individual is incapacitated.

14.    The Texas Department of Health has modified the definition of Emergency
       Medical Condition (and references in the Agreement to "Emergency
       Condition" shall be deemed) to read as follows:

       Emergency Medical Condition means a medical condition manifesting itself
       by acute symptoms of sufficient severity (including severe pain), such
       that a prudent layperson, who possesses an average knowledge of health
       and medicine, could reasonably expect the absence of immediate medical
       care could result in:

                                      E-3

<PAGE>   149



       (a) placing the patient's health in serious jeopardy;
       (b) serious impairment to bodily functions;
       (c) serious dysfunction of any bodily organ or party;
       (d) serious disfigurement; or
       (e) in the case of a pregnant woman, serious jeopardy to the health of
           the fetus.

15.    THE FOLLOWING LANGUAGE MODIFICATIONS APPLY TO INDEPENDENT PRACTICE
       ASSOCIATIONS (IPAS) IN GROUP AGREEMENTS ONLY:

       IPA. Independent Practice Association - "A professional association
       organized under the Texas Professional Association Act (Article 1528f,
       Vernon's Texas Civil Statutes), a nonprofit health corporation certified
       under Section 501, Medical Practice Act (Article 4495b, Vernon's Texas
       Civil Statutes), another person or entity wholly owned by physicians, an
       approved nonprofit health corporation, a person who is wholly owned or
       controlled by a provider or by a group of providers who are licensed to
       provide the same health care service, or a person who is wholly owned or
       controlled by one or more hospitals and physicians, including a
       physician-hospital organization..."

       The Texas Department of Health Medicaid contract, Section 7.18.2.1
       requires the UM protocol used by a delegated network to produce
       substantially similar outcomes, as approved by Texas Department of
       Health, as the UM protocol employed by HMO. The responsibilities of HMO
       in delegating UM functions to a delegated network will be governed by
       Article 16.3.11 of such contract.

       Section 7.18.2.3 requires the delegated network to comply with the same
       records retention and production requirements, including Open Records
       requirements, as HMO under such contract.

       Section 7.18.2.4 requires the delegated network to be subject to the same
       marketing restrictions and requirements, as HMO under such contract.

16.    THIS SECTION APPLIES TO HOME HEALTH AGENCIES AND DURABLE MEDICAL
       EQUIPMENT SUPPLIERS ONLY: At HMO's request, Provider shall provide HMO
       evidence of surety bond in compliance with Section 4724(b) of the
       Balanced Budget Act of 1997.



                                      E-4
<PAGE>   150
                                  ATTACHMENT A
                                    EXHIBIT 5

                      DELEGATION OF CREDENTIALING AGREEMENT


THIS EXHIBIT 5 to that certain CCPN and HMO Medicaid Agreement (the "Agreement")
by and between HMO and CCPN sets forth certain additional terms governing the
relationship between the parties.

RECITALS

1.     HMO maintains credentialing programs designed to periodically review and
       monitor the credentials of physicians and providers who render Covered
       Services to Members. HMO has established policies and procedures for
       delegating certain, of its administrative functions to CCPN where CCPN's
       credentialing and re-credentialing standards are consistent with HMO's
       standards and the standards of the NCQA, the Federal Medicaid Quality
       Assurance Reform Initiative (QAR1), and JCAHO.

2.     CCPN desires to facilitate the credentialing review of all CCPN
       Physicians and CCPN Participating Providers by performing certain
       delegated functions on behalf of HMO, and HMO is willing to delegate such
       functions, on the terms and conditions set forth below:

NOW THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, the parties do hereby agree as follows:

1.     A. Capitalized terms used herein and not defined herein shall have the
          meaning ascribed to those terms in the CCPN and HMO Agreement.

       B. Except as modified below, the provisions of the CCPN and HMO Agreement
          shall remain in full force and effect.

2.     CCPN will provide a copy of its credentialing policies and procedures
       before or with the execution of the Agreement which shall be based on
       current NCQA, QARI and JCAHO standards. CCPN has the power and authority
       under applicable state law to accept the delegation of credentialing
       functions.

3.     HMO hereby delegates to CCPN, and CCPN hereby agrees to provide, the
       following credentialing and re-credentialing functions for all CCPN
       Physicians and CCPN Participating Providers in accordance with CCPN's
       credentialing policies and procedures, as these policies have been
       approved by HMO, provided that in any circumstance where CCPN's
       credentialing policies and procedures are less stringent than HMO's
       credentialing policies and procedures, HMO's policies and procedures
       shall apply:

                             Attachment A - Page 1

<PAGE>   151




   -      verification of Board certification for any and all specialties in
          which each provider represents he/she/it is certified;

   -      verification of completion of residency and reported performance;

   -      review of CV/work history and confirmation that during the last five
          (5) years there are no unexplained gaps of more than six months;

   -      verification of hospital privileges and good standing;

   -      verification of license from a primary source;

   -      verification of valid and current DEA Certificate;

   -      verification of current malpractice insurance satisfying HMO standards
          and collection of documentation in support thereof;

   -      research regarding any malpractice claims;

   -      confirmation that provider's record is clear of any Medicare/Medicaid
          sanctions;

   -      confirmation that all credentialing questions on the application have
          been answered and that no answer raises an issue;

   -      confirmation that NPDB search is clean;

   -      confirmation that search of Federation files is clear;

   -      obtain affidavit from provider that, pursuant to NCQA CR6.1 and
          CR6.2, he or she is fit to practice and has reviewed his or her
          application and verifies its correctness/completeness;

   -      (PCP's/OB/GYNs only) performance of a site visit evaluation and
          confirmation that evaluation is favorable;

   -      (PCP's/OB/GYNs only) performance of medical record review and
          confirmation that evaluation is favorable;

   -      (for Texas only) verification of DPS certification;

   -      obtain all necessary attestations and relations with respect to
          information needed to perform credentialing;

                             Attachment A - Page 2

<PAGE>   152



       -      Re-credential each provider within two years.

4.     HMO shall make available to CCPN its credentialing policies and
       procedures and shall notify CCPN in writing of all substantive changes to
       such credentialing policies and criteria.

5.     CCPN shall at all times (a) be accountable to HMO for the credentialing
       functions delegated herein (b) obtain HMO's prior written approval of any
       revision to CCPN's credentialing policies and procedures used in
       connection with the performance of the functions delegated hereunder, (c)
       comply with the credentialing and re-credentialing standards of HMO, the
       NCQA, QARA and the JCAHO, (d) abide by, and cause its Physicians and
       Participating Providers to abide by, the results of any decision of HMO's
       credentialing committee, and (e) take appropriate steps to implement
       corrective action if HMO notifies CCPN that it has failed to perform or
       comply with the terms of this Addendum.

6.     HMO reserves the right, in its sole discretion, to disapprove any CCPN
       Physician and/or CCPN Participating Provider, regardless of the initial
       credentialing or re-credentialing decision, and CCPN's Physicians and
       Participating Providers who are disapproved by HMO shall not provide
       services to Members pursuant to the CCPN Agreement.

7.     CCPN shall, on a quarterly basis or more frequently if necessary for HMO
       to comply with the reporting requirements of its state Medicaid contract,
       provide HMO with a written report in a format reasonably acceptable to
       HMO which addresses summary results of its credentialing activities. This
       report should summarize process indicators, improvement activities, and
       status of credentialing and re-credentialing activities.

8.     HMO may review periodically CCPN's credentialing policies and criteria
       and shall, from time to time, be granted access to CCPN's files, on an
       unscheduled basis, to ensure compliance by CCPN with HMO's credentialing
       standards. HMO may review the greater of five percent (5%) or fifty (50)
       of CCPN's credentialing files in connection with each such audit.

9.     HMO shall have the option to revoke its delegation of some or all of the
       functions delegated hereunder if: (a) HMO, in its sole discretion, after
       giving CCPN a reasonable chance to cure, is dissatisfied with the
       arrangement, (b) the delegation is jeopardizing HMO's eligibility for
       NCQA accreditation or its compliance with the terms of its state Medicaid
       contract, or (c) HMO determines through an audit proves that CCPN has not
       complied with HMO's credentialing policies and procedures and, if within
       a period of time required by HMO as set forth in a notice of
       noncompliance, CCPN fails to respond with a corrective action plan and
       effect such plan. Any revocation made pursuant to Sections (a) or (b)
       herein shall be effective immediately upon HMO notifying CCPN. If HMO
       revokes the delegation of any function, HMO will resume performing that
       function.

                             Attachment A - Page 3

<PAGE>   153


10.    In the event that any of CCPN's Physicians and/or CCPN Participating
       Providers ceases to meet HMO's credentialing criteria, or is disapproved
       by CCPN or HMO in accordance with Section 9 above, CCPN shall promptly
       notify HMO, and if such CCPN Physician and/or CCPN Participating Provider
       is a Primary Care Physician and/or providing an active course of
       treatment to a Member, make alternate arrangements for the provision of
       Covered Services.

11.    CCPN shall immediately notify HMO if any information comes to its
       attention regarding any adverse action taken with respect to the
       licensure of any CCPN Physician and/or CCPN Participating Provider,
       suspension or termination (in whole or in part) of a CCPN Physician's
       hospital staff privileges or clinical privileges, suspension or
       termination of CCPN, or a CCPN Physician's, Medicare or Medicaid
       privileges, a lawsuit is filed against a CCPN Physician alleging
       professional negligence, or any other information that adversely reflects
       on the ability or capacity of a CCPN Physician to provide medically
       appropriate care consistent with appropriate standards of professional
       competence and conduct.

12.    CCPN agrees to require its Physicians and Participating Providers to
       cooperate with and abide by the results of HMO's credentialing policies
       and procedures whether implemented through CCPN or directly by HMO.

13.    CCPN shall permit HMO to conduct an initial due diligence audit to
       confirm that CCPN is in compliance with each of the provisions of this
       Addendum. Information disclosed shall be protected by any and all
       applicable peer review legal protection.

14.    CCPN's credentialing activities shall be coordinated with HMO's quality
       improvement program and utilize information derived from HMO's programs,
       whether delegated or not, related to member services, utilization
       management and quality assurance.

15.    CCPN shall comply with all state requirements (including applicable
       licensure, State Medicaid and Star Healthplan) and requirements of other
       applicable regulatory authorities in the performance of the
       administrative functions delegated hereunder. CCPN shall, upon written
       request, provide HMO with documentation of the satisfaction of these
       requirements.

16.    CCPN shall obtain errors and omissions insurance related to its
       credentialing activities, or self-insure at its own expense, in the
       minimum coverage amount of $1,000,000.

17.    Upon the revocation of the functions delegated hereunder or the
       termination of the Agreement, CCPN shall assist HMO in the transfer of
       records related to the information requested as part of the Credentialing
       Program.

                             Attachment A - Page 4

<PAGE>   154




                               FIRST AMENDMENT OF
                         CCPN AND HMO MEDICAID AGREEMENT
                                 BY AND BETWEEN
             AMERICAID TEXAS, INC., D/B/A AMERICAID COMMUNITY CARE,
                                       AND
                        COOK CHILDREN'S PHYSICIAN NETWORK

            This First Amendment of CCPN and HMO Medicaid Agreement (the
"Agreement") is made and entered into by and between Americaid Texas, Inc.
("HMO") and Cook Children's Physician Network ("CCPN") on October 31, 1996.

            WHEREAS, HMO and CCPN entered into the Agreement effective as of
October 1, 1996; and

            WHEREAS, the Agreement required HMO and CCPN to enter into a
mutually satisfactory agreement detailing the terms of sharing pre-operational
costs and other business arrangements by November 1, 1996;

            WHEREAS, the parties desire to negotiate for an additional thirty
(30) days, thereby extending the date to enter into a mutually safisfactory
agreement to December 2, 1996; and

            WHEREAS, the parties desire to amend the Agreement to reflect the
date of December 2, 1996 as the deadline for negotiations.

            NOW, THEREFORE, for the mutual benefit of both HMO and CCPN, HMO and
CCPN agree to amend the Agreement as follows:


<PAGE>   155



        1.     Section 8, "Term and Termination," Paragraph 8.2(6) is amended by
               deleting the reference to November 1, 1996 and substituting
               therefor the date of December 2, 1996.

        2.     Except for the amendment specified above, all provisions of the
               Agreement remain in full force and effect and are hereby ratified
               and affirmed.

        3.     All defined terms as contained herein shall have the same
               definitions as are contained in the Agreement.

        This First Amendment has been executed as of the date and year first
written above.

                              Cook Children's Physician Network


                              By:/s/ Alan Kent Lassiter, M.D.
                                 ----------------------------------
                                 Alan Kent Lassiter, M.D.
                                 President and
                                 Chief Executive Officer

                              Americaid Texas, Inc.

                              By: /s/ James D. Donovan, Jr.
                                 ----------------------------------
                                  James D. Donovan, Jr.
                                  President and
                                  Chief Executive Officer


<PAGE>   156





                               SECOND AMENDMENT OF
                         CCPN AND HMO MEDICAID AGREEMENT
                                 BY AND BETWEEN
             AMERICAID TEXAS, INC., D/B/A AMERICAID COMMUNITY CARE,
                                       AND
                        COOK CHILDREN'S PHYSICIAN NETWORK


            This Second Amendment of CCPN and HMO Medicaid Agreement (the
"Agreement") is made and entered into by and between Americaid Texas, Inc.
("HMO") and Cook Children's Physician Network ("CCPN") on November 26, 1996.

            WHEREAS, HMO and CCPN entered into the Agreement effective as of
October 1, 1996; and

            WHEREAS, the Agreement required HMO and CCPN to enter into a
mutually satisfactory agreement detailing the terms of sharing pre-operational
costs and other business arrangements by November 1, 1996;

            WHEREAS, the parties entered into a First Amendment of CCPN and HMO
Medicaid Agreement dated October 31, 1996 extending the date to enter into a
mutually satisfactory agreement to December 2, 1996; and

            WHEREAS, the parties desire to again amend the Agreement to reflect
the date of January 31, 1997 as the deadline for negotiations.



<PAGE>   157



            NOW, THEREFORE, for the mutual benefit of both HMO and CCPN, HMO and
 CCPN agree to amend the Agreement as follows:

            1.     Section 8, "Term and Termination," Paragraph 8.2(6) is
                   amended by deleting the reference to December 2, 1996 and
                   substituting therefor the date of January 31, 1997.

            2.     Except for the amendment specified above, all provisions of
                   the Agreement remain in full force and effect and are hereby
                   ratified and affirmed.

            3.     All defined terms as contained herein shall have the same
                   definitions as are contained in the Agreement.

            This Second Amendment has been executed as of the date and year
first written above.

                              Cook Children's Physician Network


                              By:
                                 ----------------------------------------
                                 Alan Kent Lassiter, M/D.
                                 President and Chief Executive Officer


                              Americaid Texas, Inc.


                              By:
                                 ----------------------------------------
                                 James D. Donovan, Jr.
                                 President and Chief Executive Officer



                                       2
<PAGE>   158


                               SECOND AMENDMENT TO
                         CCPN AND HMO MEDICAID AGREEMENT

            THIS SECOND AMENDMENT TO CCPN AND HMO MEDICAID AGREEMENT ("Second
Amendment") is entered into effective this 1st day of March, 1998 (the
"Effective Date"), by and between AMERICAID Texas, Inc. d.b.a. AMERICAID
Community Care ("HMO" or "AMERICAID") and Cook Children's Physician Network
("CCPN").

            WHEREAS, HMO and CCPN entered into that certain CCPN and HMO
Medicaid Agreement dated to be effective October 1, 1996 (the "Agreement");

            WHEREAS, HMO and CCPN entered into that certain First Amendment to
CCPN and HMO Medicaid Agreement effective January 1, 1998 (the "First
Amendment"); and

            WHEREAS, HMO and CCPN desire to further amend the Agreement by
transferring certain data entry functions from CCPN to HMO, by reducing the
administrative fee paid by HMO to CCPN to reflect CCPN's reduced administrative
duties, and clarify and define certain claims processing procedures for
emergency room and outpatient procedures, and are entering into this Second
Amendment for such purpose.

            NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, HMO and CCPN hereby agree as follows:

           1.   All defined terms used in this Second Amendment shall have the
                same meanings as ascribed to such terms in the Agreement and the
                First Amendment.

           2.   The terms, conditions and provisions of this Second Amendment
                shall control over any inconsistent terms, conditions and
                provisions contained in the Agreement and First Amendment,

           3.   Section 1.11. The last sentence of Section 1.11 of the Agreement
                shall be deleted in its entirety and replaced with the
                following:



<PAGE>   159



             "For those Members admitted to CMC, CMC shall perform concurrent
             review, discharge planning and case management while HMO will
             provide pre-certification and referral management services and data
             entry services for all inpatient review information generated for
             Members admitted to CMC."

        4.   Section 3.3. The first sentence of Section 3.3 of the Agreement
             shall be deleted in its entirety and replaced with the following:

             "HMO shall pay CCPN according to HMO's best information within five
             (5) business days of receipt of the TDH Payment (described in
             Attachment A) $0.20 per Member per month for each Member enrolled
             with HMO. HMO will conduct a true-up in the month following each
             payment.

        5.   Attachment A, Financial Arrangements. A new section IV.H. shall
             be added to Attachment A, Financial Arrangements, of the Agreement,
             and shall read as follows:

             "Claims Procedures for Emergency Room and Outpatient Services.
             Attached hereto and incorporated herein as Schedule "A - IV.H" is a
             description of emergency room and outpatient claims processing
             procedures to be implemented by the parties hereto as of the
             effective date of this Second Amendment."

        6.   Except as amended hereby, the Agreement, as amended by the First
             Amendment, is unchanged and is ratified and affirmed by HMO and
             CCPN as valid and subsisting.

<TABLE>
<CAPTION>
AMERICAID Texas, Inc. d.b.a,                                          Cook Children's Physician Network
AMERICAID Community Care
<S>                                                                   <C>
By: /s/ James D. Donovan, Jr.                                         By: /s/ Alan Kent Lessiter, MD
   -----------------------------------                                    ------------------------------------
Printed Name: James D. Donovan , Jr.                                  Alan Kent Lassiter, M.D.
             -------------------------
Title: President & CEO                                                President & CEO
      --------------------------------
</TABLE>


                                       2
<PAGE>   160


                                SCHEDULE "A-IV-H"

                              CLAIMS PROCEDURES FOR
                     EMERGENCY ROOM AND OUTPATIENT SERVICES

1)          ER Services

            Reimbursement for ER Services will be based upon discharge level;
            determination of whether to pay ER claims will be based on admission
            triage level. Admission triage levels 1,2, and 3 will be paid based
            upon the discharge level (professional claims submitted by
            physicians will be reimbursed according to the applicable
            professional fee schedule). ER visits with an admission triage level
            of 4 or 5 will be paid a triage fee unless the visit meets certain
            criteria outlined below.

            AMERICAID Service Center Medical Management will authorize ER visits
            with Admission Triage Levels 1,2 and 3 for certain Admission Triage
            Levels 4 and 5 based on the Admission Triage Level listed in a
            column on the daily ER Report submitted by CCMC to the AMERICAID
            Service Center Medical Management Department. The Admission Triage
            Levels 4 and 5 that will be authorized are those that are referred
            by the PCP; those whose PCPs cannot be reached; those which Nurse on
            Call has recommended be seen; and, those newborns with no PCP
            identified. AMERICAID Service Center Medical Management will not
            authorize any other Admission Triage Levels 4 or 5. Claims with
            authorizations will be paid at the Discharge Level identified by
            pricing on the claim. There are 5 discharge triage levels:

<TABLE>
<CAPTION>
-------------------------------- ----------------------------------------------------------- -------------------------------
                                 Line Item Charge on the UB-92
                                 for Revenue Code 450,
Discharge Level                  "Emergency Room"                                            Reimbursement
-------------------------------- ----------------------------------------------------------- -------------------------------
<S>                              <C>                                                         <C>
Level I                          $447.00 or $400.00                                          60% of charges
-------------------------------- ----------------------------------------------------------- -------------------------------
Level II                         $263 .00 or $200.00                                         $500 per case
-------------------------------- ----------------------------------------------------------- -------------------------------
Level III                        $153.00 or $100.00                                          $250 per case
-------------------------------- ----------------------------------------------------------- -------------------------------
Level IV                         $90.00 or $50.00                                            $98 per case
-------------------------------- ----------------------------------------------------------- -------------------------------
Level V                          $53.00 or $25.00                                            $37 per case
-------------------------------- ----------------------------------------------------------- -------------------------------
</TABLE>

                                       3

<PAGE>   161



       Claims with no authorization in the system will default to pay a triage
       fee of $25.

       OTHER TYPES OF SERVICES PERFORMED IN THE ER - In cases when minor
       procedures are performed in the ER or a physician meets a patient at the
       ER for service/treatment, CCMC's claims will be submitted as "Outpatient
       Hospital Services" with no triage level assigned. CCMC's claim will be
       paid at 60% of billed charges. CCMC will provide AMERICAID a list of ER
       "clinic" codes used so that AMERICAID can pursue an automated method of
       identifying these claims.

2)     OUTPATIENT SURGERY - Dental surgeries (CPT Code 41899) have been grouped
       as "Group 9" and paid an all inclusive global fee of $553.00. The
       following list of procedures which are ungroupable are included n the
       group listed in the right hand column of the table below. Any future
       ungroupable procedure will be paid at an inclusive global fee of $510.00,
       subject to multiple procedure protocol currently specified in the
       contract.

<TABLE>
<CAPTION>
------------------------------------------------------------------------ ---------------- ----------------- -----------------
                               PROCEDURE                                       CPT              RATE             GROUP
------------------------------------------------------------------------ ---------------- ----------------- -----------------
<S>                                                                      <C>              <C>               <C>
Incision and drainage of abscess                                              10060             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, benign lesion, except skin tag                                      11040             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Injection procedure during cardiac cath.                                      93542             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, benign lesion, except skin tag                                      11421             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Control nasal hemorrhage, anterior                                            30901             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision benign lesion, except skin tag                                       11420             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision benign lesion, except skin tag                                       11400             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Injection procedure during cardiac cath.                                      93541             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Nasal endoscopy, diagnostic, uni/bilateral                                    31231             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, other benign lesion                                                 11440             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, other benign lesion                                                 11441             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Injection procedure during cardiac cath.                                      93544             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Injection procedure during cardiac cath.                                      93543             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Removal of sutures under anesthesia                                           15850             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Repair umbilical hernia, under age 5                                          49580             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Repair initial inguinal hernia < 6 mos.                                       49495             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Application of hip spica cast                                                 29305             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Fracture nasal turbinate(s), t                                                30930             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Plastic repair of cleft lip/na                                                40761             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
</TABLE>
                                       4

<PAGE>   162

<TABLE>
------------------------------------------------------------------------ ---------------- ----------------- -----------------
<S>                                                                      <C>              <C>               <C>
Repair initial inguinal hernia (6 mos to 5 yrs)                               49500             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Adenoidectomy, primary                                                        42830             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Intubation, endotracheal, emergency                                           31500             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Tonsillectomy and adenoidectomy                                               42820             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Tonsillectomy, primary or secondary                                           42825             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, benign lesion except skin tag                                       11422             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Probing of nasoclacrimal duct                                                 68810             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Incision and removal of foreign body                                          10120             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Removal of skin tags, multiple                                                11200             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Catherization of umbilical vein                                               36510             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Catherization, umbilical artery                                               36660             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Layer closure of wounds of scalp                                              12031             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Scraping of cornea, diagnostic                                                65430             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Removal of corneal epithelium;                                                65435             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Unlisted procedures external ear                                              69399             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Unlisted procedures, skin, mucous mbrane                                      17999             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Layer closure of wounds of neck                                               12041             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Closed treatment of radial & ulnar                                            25560             $361               1
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Excision, other benign lesion                                                 11442             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Unlisted procedure lacrimal system                                            68899             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Probe Nasolacrimal duct                                                       68811             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Repair of retinal detachment                                                  67101             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Unlisted procedure, male genital syst.                                        55899             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Total abdominal hysterectomy                                                  58150             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Angiography, renal, unilateral                                                75722             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Cystoscopy and treatment                                                      52301             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Angiography, renal bilateral                                                  75724             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Unlisted procedure, accessory sinuses                                         31299             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Probe Nasolacrimal duct w/insertion                                           68815             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Percutaneous balloon valvuloplasty                                            92990             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Treatment of slipped femoral epiphysis                                        27176             $510               2
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Cutaneous vesicostomy                                                         51980             $750               4
------------------------------------------------------------------------ ---------------- ----------------- -----------------
One stage distal hypospadias repair                                           54324             $750               4
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Repair of hypospadias repair                                                  54324             $750               4
------------------------------------------------------------------------ ---------------- ----------------- -----------------
Combined right heart catheterization                                          93526             $553               9
------------------------------------------------------------------------ ---------------- ----------------- -----------------
</TABLE>


                                       5

<PAGE>   163



           3)     Interim billing CCMC submits claims every 30 days even if
                  patient is not discharged. Interim bills will be processed and
                  paid under the contract terms.
           4)     ER to Inpatient or ER to 24-hour Observation will be
                  reimbursed at the inpatient reimbursement level when an ER
                  visit results in an admission or a 24-hour observation.

                                       6

<PAGE>   164



                               THIRD AMENDMENT OF
                         CCPN AND HMO MEDICAID AGREEMENT
                                 BY AND BETWEEN
            AMERICAID, TEXAS, INC., D/B/A/ AMERICAID COMMUNITY CARE,
                                       AND
                        COOK CHILDREN'S PHYSICIAN NETWORK

            This Third Amendment of CCPN and HMO Medicaid Agreement (the
       "Agreement") is made and entered into by and between Americaid Texas,
       Inc. ("HMO") and Cook Children's Physician Network ("CCPN") to be
       effective January 31, 1997.

            WHEREAS, HMO and CCPN entered into the Agreement effective as of
       October 1, 1996; and

            WHEREAS, the Agreement required HMO and CCPN to enter into a
       mutually satisfactory agreement detailing the terms of sharing
       pre-operational costs and other business arrangements by November 1,
       1996;

            WHEREAS, the parties entered into a First Amendment of CCPN and HMO
       Medicaid Agreement dated October 31, 1996 extending the date to enter
       into a mutually satisfactory agreement to December 2, 1996; and

            WHEREAS, the parties entered into a Second Amendment extending the
       negotiation date to January 31, 1997; and

            WHEREAS, the parties desire to again amend the Agreement to delete
       any date as a deadline for negotiations.


<PAGE>   165



            NOW, THEREFORE, for the mutual benefit of both HMO and CCPN, HMO and
       CCPN agree to amend the Agreement as follows:

            1.     Section 8, "Term and Termination", Paragraph 8.2(6) is
                   deleted in its entirety.

            2.     Except for the amendment specified above, all provisions of
                   the Agreement remain in full force and effect and are hereby
                   ratified and affirmed.

            3.     All defined terms as contained herein shall have the same
                   definitions as are contained in the Agreement.

            This Third Amendment has been executed as of the date and year first
       written above.

                             Cook Children's Physician Network


                             By:  /s/ Alan Kent Lassiter, M.D.
                                ----------------------------------
                             Alan Kent Lassiter, M.D.
                             President and
                             Chief Executive Officer

                             Americaid Texas, Inc.


                             By:  /s/ James D. Donovan, Jr.
                                ----------------------------------
                             James D. Donovan, Jr.
                             President and
                             Chief Executive Officer


<PAGE>   166

                          AMENDMENT BY MUTUAL CONSENT
                                       TO
                 PARTICIPATING GROUP PHYSICIAN AGREEMENT BETWEEN
           AMERICAID TEXAS, INC. AND COOK CHILDREN'S PHYSICIAN NETWORK

Effective July 1, 1999, pursuant to Section 10.14, (Amendment by Written Mutual
Consent), of the November 10, 1996 CCPN & Medicaid Agreement ("Agreement")
between AMERICAID Texas, Inc., d/b/a Americaid Community Care ("AMERICAID") and
Cooks Children's Physician Network, ("CCPN"), AMERICAID and CCPN mutually
consent to amend the Agreement as follows:

       Attachment B is revoked in its entirety and amended to include revised
       ATTACHMENT B which shall read as follows:


                                  ATTACHMENT B

                            AMERICAID COMMUNITY CARE
                          CCPN PHYSICIAN REIMBURSEMENT
                        TEXAS HEALTH STEPS REIMBURSEMENT
                          TARRANT SERVICE DELIVERY AREA

Physician reimbursement effective July 1, 1999, shall be governed by the
following reimbursement terms:


I.          PRIMARY CARE CAPITATION PAYMENTS. -- HMO shall compensate Primary
            Care Physicians or Providers from the Pediatric Risk Pool through
            age/sex/benefit adjusted capitation rates for Primary Care Services.

A.          Capitation Payments -- Primary Care Physicians or Providers

            Per Member Per Month = weighted average based upon the actual
            distribution of the provider panel of members. See below for
            specific capitation rates by cell.



<PAGE>   167

<TABLE>
<CAPTION>
                               <500 Member Avg.               500-750 Member Avg.               >750 Member Avg.

CATEGORY              AGE       FEMALE         MALE           FEMALE            MALE            FEMALE          MALE
==========================  ============================  ================================= ==============================
<S>                         <C>                           <C>                               <C>
       61 days to                   $39.59       $39.59            $41.67           $41.67          $43.75         $43.75
        <2 years
--------------------------  ----------------------------  --------------------------------- ------------------------------
        2-4 years                   $13.31       $13.31            $14.01           $14.01          $14.71         $14.71
--------------------------  ----------------------------  --------------------------------- ------------------------------
       5-14 years                    $8.08        $8.08             $8.51            $8.51           $8.94          $8.94
--------------------------  ----------------------------  --------------------------------- ------------------------------
        15 years                     $7.70        $5.81             $8.10            $6.12           $8.51          $6.43
==========================  ============================  ================================= ==============================
        16+ years                     FFS           FFS              FFS             FFS              FFS            FFS
==========================  ============================  ================================= ==============================
</TABLE>

For PCPs with less than 250 members, there will be an annual true-up to 100% of
the fee-for-service equivalent in the event capitation payments are less than
the fee-for-service total.

Average membership is calculated based upon the total members per Group
(contract) divided by the number of PCPs in the Group serving AMERICAID Members.

Rates are adjusted quarterly on a prospective basis, once a membership level has
been maintained during the prior quarter.

B.        Primary Care Fee-For-Service Payment -- Primary Care Physicians or
          Providers.

          1.     HMO shall compensate Primary Care Physicians or Providers
                 for CPT codes not listed on the attached listing of Primary
                 Care Services on a fee-for-service basis for non-capitated
                 services provided to Members at the reimbursement rate
                 agreed to between such provider and CCPN. If PCP and CCPN
                 have not agreed to a reimbursement rate, then PCP will be
                 reimbursed at the then current Medicaid allowable rate for
                 non-capitated services with the exception of the following:
                 1) Immunizations will be reimbursed at 90% of the
                 prevailing Medicaid maximum allowable fee schedule. 2)
                 Injectable drugs at the average wholesale price (AWP).


                                       2
<PAGE>   168


2.

<TABLE>
<CAPTION>
=========================== ================================================================= ======================================
         PRIMARY
      DIAGNOSIS CODE                                   DESCRIPTION                                              MEDICAID
=========================== ================================================================= ======================================
<S>                         <C>                                                               <C>
                            Well Woman Annual GYN Visit Includes:  Office Visit, Pap Smear,
V72.3                       and Breast, Pelvic and Rectal Exams.                                                 $47.00
=========================== ================================================================= ======================================
</TABLE>

<TABLE>
<CAPTION>
=========================== ================================================================= ======================================
                                         DESCRIPTION                                                            MEDICAID
============================================================================================= ======================================
<S>                                                                                           <C>
                                                                                              BILLED CHARGES UP TO THE AMERICAID FEE
Care for Newborns in the first 60 days of life.                                                                 SCHEDULE
============================================================================================= ======================================
                                                                                              BILLED CHARGES UP TO THE AMERICAID FEE
Primary Care of Members 16 years and older.                                                                     SCHEDULE
============================================================================================= ======================================

Reporting of Texas Health Steps screenings on a HCFA-1500 based on the Texas Health Steps
codes and periodicity schedule in the TDH/NHIC Medicaid Manual.                                $20.00 per visit
============================================================================================= ======================================
Reporting of the Administration of Immunizations on a HCFA-1500 based on the Texas Health
Steps codes and periodicity schedule in the TDH/NHIC Medicaid Manual.                           $3.00 per administration
============================================================================================= ======================================
</TABLE>


III.        Specialist Reimbursement. HMO shall compensate Specialist physicians
            from the Pediatric Risk Fund for Covered Health Services on a fee
            for service basis at the reimbursement rate agreed to between such
            physicians and CCPN. If Specialist Physicians and CCPN have not
            agreed to reimbursement rate, then Specialist Physicians will be
            reimbursed at the then current Medicaid allowable rate.

IV.         Risk Sharing/Incentive Program. Each CCPN Physician will be eligible
            to participate in a risk sharing/incentive program to be developed
            by CCPN. HMO and CCPN will jointly determine how to integrate the
            Hospital and Referral Pool ("HARP") developed by HMO and the Risk
            Sharing Incentive Program developed by CCPN.



                                       3
<PAGE>   169


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
personally or by their duly authorized officers or agents.


              AMERICAID Texas, Inc.    Cook Children's Physician Network


        /s/ Robert Westcott            /s/ Alan Kent Lassiter, MD
        ----------------------------   -----------------------------------------
                     Signature                       Signature

              ROBERT F. WESTCOTT
            ASSOCIATE VICE PRESIDENT   Alan Kent Lassiter, M.D., President & CEO
        ----------------------------   -----------------------------------------
                Print Name and Title           Print Name and Title


                    SEP 13 1999                      09-03-99
        ----------------------------   -----------------------------------------
                       Date                             Date


                                                  801 7th Avenue
                                       -----------------------------------------
                                                      Address


                                                  Ft. Worth TX  76104
                                       -----------------------------------------

                                                      (817) 885-1416
                                       -----------------------------------------
                                                     Telephone Number


                                       4
<PAGE>   170



                            AMENDMENT BY NOTIFICATION

Pursuant to the Amendment by Notification Section of the AMERICAID Participating
Physician/Provider Group Agreement, effective December 1, 1999, ATTACHMENT A is
revoked in its entirety and amended to include revised ATTACHMENT A, which shall
read as follows:


                            AMERICAID COMMUNITY CARE
                      PRIMARY CARE PHYSICIAN REIMBURSEMENT
                        TEXAS HEALTH STEPS REIMBURSEMENT

            Providers are reimbursed subject to the terms of Article III.,
            Payment for Services


            PRIMARY CARE PHYSICIAN REIMBURSEMENT

            I.   Primary Care Physician (PCP) Capitation

            Per Member Per Month = weighted average based upon the actual
            distribution of the provider panel of members. See below for
            specific capitation notes by cell.

<TABLE>
<CAPTION>
                                <500 Member Avg.               500-750 Member Avg.               >750 Member Avg.

=========================== ============================ ================================= =========================================
 CATEGORY              AGE     FEMALE         MALE           FEMALE            MALE            FEMALE          MALE
=========================== ============================ ================================= =========================================
<S>                         <C>                          <C>                               <C>
        61 days to                 $39.59       $39.59            $41.67           $41.67          $43.75         $43.75
         <2 years
---------------------------                              --------------------------------- -----------------------------------------
         2-4 years                 $13.31       $13.31            $14.01           $14.01          $14.71         $14.71
---------------------------                              --------------------------------- -----------------------------------------
        5-14 years                 $ 8.08       $ 8.08            $ 8.51           $ 8.51          $ 8.94         $ 8.94
---------------------------                              --------------------------------- -----------------------------------------
         15 years                  $ 7.70       $ 5.81            $ 8.10           $ 6.12          $ 8.51         $ 6.43
=========================== ============================ ================================= =========================================

</TABLE>

For PCPs with less than 250 members, there will be an annual true-up to 100% of
the fee-for-service equivalent in the event capitation payments are less than
the fee-for-service total.

Average membership is calculated based upon the total members per Group
(contract) divided by the number of PCPs in the Group serving AMERICAID Members.



<PAGE>   171



Rates are adjusted quarterly on a prospective basis, once a membership level has
been maintained during the prior quarter.

[PAGE 2 IS MISSING]

III.        PRIMARY CARE PHYSICIAN QUALITY IMPROVEMENT PROGRAM (PQIP)

            Provider Quality Incentive Program is established to reward
            providers for producing high quality results in the following
            categories:

            -           Patient access and satisfaction
            -           Membership retention
            -           Prevention and Education
            -           Clinical outcomes
            -           Compliance with AMERICAID policies and procedures

            A.          For Members 16 years of age and over, this fund is
                        available based on the following conditions:

            -           A minimum of 50 members 16 years of age and older per
                        provider

            -           HARP must have a positive balance, but the plan reserves
                        the right to pay out, even if negative

            -           PQIP payout to occur on an annual basis after HARP
                        resolution

            -           Provider panel must remain open to new AMERICAID members

            -           Participation as PCP at time of PQIP payment

            B.          For Members under 16 years of age, this fund will pay
                        out as follows on an ongoing basis based on reporting
                        Texas Health Steps Services within 60 days of completing
                        the service:


                                       2
<PAGE>   172


<TABLE>
<CAPTION>
============================================================================================= ======================================
                                         DESCRIPTION                                                         REIMBURSEMENT
============================================================================================= ======================================
<S>                                                                                           <C>
Reporting of Texas Health Steps screenings on a HCFA-1500 based on the Texas                   $21 per visit
Health Steps codes and periodicity schedule in the TDH/NHIC Medicaid Manual
============================================================================================= ======================================
Reporting of the Administration of Immunizations on a HCFA-1500 based on the Texas Health       $3 per administration
Steps codes and periodicity schedule in the TDH/NHIC Medicaid Manual
============================================================================================= ======================================
</TABLE>

AMERICAID reserves the right to change the PCP's method of reimbursement if the
PCP's compliance rates for their members is below 60% and is in the lowest 25%
of PCPs over a calendar quarter. In that case, the cost of Texas Health Step
Services will be excluded from the PCP Capitation reimbursement, the reporting
reimbursement for Members under 16 years of age under PQIP will be eliminated,
and Texas Health Steps Services will be reimbursed on a fee-for-service basis to
allow other providers to bill for these services.


                                       3
<PAGE>   173


<TABLE>
<CAPTION>
----------------------------------------------------------  -----------------------------------------------------------------------
SENDER: COMPLETE THIS SECTION                                      COMPLETE THIS SECTION ON DELIVERY
----------------------------------------------------------  -----------------------------------------------------------------------
<S>                                                         <C>
-      Complete items 1, 2, and 3.  Also complete item 4      A.   Received by (Please Print Clearly)       B.   Date of Delivery
       if Restricted Delivery is desired.                          Nelson G. Ponto                          NOV 08 1999

                                                            -----------------------------------------------------------------------
-      Print your name and address on the reverse so that   -----------------------------------------------------------------------
       we can return the card to you.                       C.   Signature

-      Attach this card to the back of the mailpiece, or                                                     [ ] Agent
       on the front if space permits.                       X    /s/ Nelson G. Ponto                         [ ] Addressee
                                                            -----------------------------------------------------------------------
                                                            -----------------------------------------------------------------------
                                                            D.   Is delivery address different from item 1?  [ ] Yes
                                                                 If YES, enter delivery address below:       [ ] No


----------------------------------------------------------
----------------------------------------------------------
1.   Article Addressed to:

                                                            -----------------------------------------------------------------------
     Sara Neese RN                                          -----------------------------------------------------------------------
     Vice President, Managed Care                           3.   Service Type
     Cook Children's Physician Network                         [X] Certified Mail             [ ] Express Mail
     801 7th Ave                                               [ ] Registered                 [X] Return Receipt for Merchandise
     Fort Worth, TX  76104                                     [ ] Insured Mail               [ ] C.O.D.
                                                            -----------------------------------------------------------------------
                                                            -----------------------------------------------------------------------

                                                            4.   Restricted Delivery?  (Extra Fee)            [ ] Yes
-----------------------------------------------------------------------------------------------------------------------------------
2.   Article Number (Copy from service label)
     Z 265 886 276
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       4