Document:

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EXHIBIT 10.128

                                    AGREEMENT

THIS AGREEMENT is entered into as of this 1st day of January, 1999, by and
between Sherman Oaks Hospital and Health Center, ("Hospital") and OPTIMUMCARE(R)
CORPORATIon ("Manager"), a Delaware Corporation.

                                    RECITALS

    A.   Hospital operates an acute care facility in Sherman Oaks, California
         and desires to operate an outpatient Partial Hospitalization Programs
         (the PHP) for the treatment of psychiatric disorders, and

    B.   Manager is in the business of providing management services for the
         treatment of patients with psychiatric disorders; and

    C.   Hospital desires to retain Manager, and Manager desires to be retained,
         to provide the services described herein; and

    D.   Hospital will provide (subject to the provisions of this Agreement)
         appropriate program and office space for the use of these Partial
         Hospitalization Programs during the term of this Agreement.

THEREFORE, it is mutually agreed as follows:

1.  DEFINITIONS

    (a)  "Confidential Information" of the Manager shall mean all documents and
         other materials provided by Manager not available through sources in
         the public domain. Manager's documents and other materials may include,
         but are not limited to, memoranda, manuals, handbooks, pamphlets,
         production books and audio and visual recordings, which contain

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         information relating to the Partial Hospitalization Programs (including
         written materials distributed to Program patients or for promotion of
         the Programs); and all models, techniques, formulations and procedures
         used to provide psychiatric services to Program patients.

    (b)  "Employee Benefits" shall include, by way of illustration and not
         limitation, the employer's contribution under the Federal Insurance
         Contributions Act, unemployment compensation and related insurance,
         payroll and other employment taxes, pension and retirement plan
         contributions, worker's compensation and related insurance, group life,
         health, disability and accident insurance, severance and other
         benefits.

    (c)  A "Patient Day" shall be deemed to exist with each out-patient visit to
         the "Program."

    (d)  "PHP" shall mean the out-patient partial hospitalization psychiatric
         programs managed x by Manager at the Hospital.

2.  TERM

    (a)  This Agreement shall have an initial term commencing on January 1, 1999
         and terminating December 31, 2001.

    (b)  Termination provisions are in Section (11) of this Agreement.

3.  COVENANTS OF HOSPITAL

    Hospital will:

    (a)  Furnish necessary and identified program space and provide support,
         ancillary, and standard out-patient services to Partial Hospitalization
         Program patients, including available diagnostic facilities as directed
         by each Program patient's attending physician. Medical treatment shall
         be provided as directed only by physicians duly licensed to practice
         medicine in the state in which the hospital is located and who are
         appointees to

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         the Hospital medical staff with appropriate privileges. Hospital will
         cooperate with Manager in providing appropriate program space for a
         capacity of at least thirty (30) chairs at each facility.

    (b)  Provide support activities including: i) maintenance of or installation
         of carpet and decorating of patient treatment areas as needed; ii) (a)
         dietary service for patients, (b) housekeeping services for patients
         and Manager's offices at the Hospital, (c) utilities for patient areas
         and Manager's offices at the Hospital, (d) staff offices, furniture,
         electrical support and office supplies, (e) daily patient
         transportation within the normal primary service area, (f) services of
         a nutritionist, (g) a psychiatric registered nurse, and (iii) other
         services customarily provided in the ordinary course of business for
         Hospital's patients (e.g. record keeping, etc.).

    (c)  Charge and collect all PHP charges due from Partial Hospitalization
         Program patients or third party payors.

    (d)  Staff the Partial Hospitalization Program with qualified personnel in
         accordance with the staffing table and be solely liable to those
         personnel who are Hospital employees for their wages, compensation and
         employee benefits. Nursing staff will be supervised by Hospital's
         nursing management system. Hospital personnel shall comply with the
         Program policies and procedures as mutually agreed upon in writing by
         Hospital and Manager. Hospital shall not, without Manager's prior
         written consent (which shall not be unreasonably withheld), deviate,
         change or otherwise decrease the agreed staffing table.

    (e)  Provide to Manager's Program staff such appropriate pre-employment and
         periodic diagnostic and health screening procedures as are customarily
         provided by Hospital for Hospital employees.

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    (f)  Maintain accreditation by the Joint Commission on Accreditation of
         Healthcare Organizations and pay all related fees.

    (g)  Provide Manager's employees and contracted personnel with copies of all
         relevant Policies and Procedures, as amended from time to time.

    (h)  Indemnify, save harmless, and defend Manager from all claims and
         liability and expenses (including reasonable attorney's fees) arising
         solely from the negligence of or breach of this Agreement by Hospital
         or its employees or contracted personnel.

    (i)  Use reasonable efforts to resolve any issues regarding acceptability of
         Hospital personnel to Program personnel and patients which may arise
         with respect to any of Hospital's employees or contracted personnel.

    (j)  Provide admissions and billing services. It is further understood that
         Hospital may deny admission to a patient who, in its opinion, is not
         financially qualified to meet financial obligations.

    (k)  Provide appropriate Utilization Review and Quality Assessment services
         for all Partial Hospitalization Program patients under the supervision
         and with the continuous guidance of the partial hospitalization program
         administrator. The administrator is responsible for reviewing and
         validating by signature the above named services.

    (l)  Maintain professional and comprehensive general liability insurance for
         itself and its employees and contracted personnel in an amount not less
         than $5,000,000 per occurrence or claim and whenever reasonably
         requested provide Manager with a certificate from the insurer stating
         that such insurance is in effect and which also states that Manager
         will be given at least ten (10) days advance written notice of any
         cancellation, non-renewal, or changes in policy limits, deductible, or
         co-insurance. Any deductible or co-insurance or

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         aggregate limits shall be subject to Managers approval which shall not
         be unreasonably withheld. Manager agrees that $100,000 is an acceptable
         deductible or co-insurance. Hospital shall maintain "tail" coverage if
         necessary for any terminated "claims made" policy so as to apply to any
         of its acts or omissions which occur during the term of this Agreement
         until the expiration of any applicable statute of limitation but not to
         exceed seven (7) years.

    (m)  As a condition precedent to this agreement, obtain appropriate
         California state license to operate the Program.

4.  COVENANTS OF MANAGER

    Manager will do the following at its own cost and expense:

    (a)  Provide the following: (i) Partial Hospitalization Administrator (note:
         he/she will educate UR/QI staff and mentor, review and validate these
         activities); (ii) Social Services; (iii) Psychological Services;
         (iv)Activities Services; (v) Part-time services of Corporate Clinical
         Director and Corporate Director of Utilization Review; (vi) Medical
         Director, the manager will contract with a physician duly licensed in
         the state wherein the Hospital is situated and shall be required to
         fulfill the requirements to be admitted as a member of the hospital's
         medical staff. The manager is responsible for payment to the medical
         director; and other professional counseling staff as needed to provide
         for the professional counseling of outpatient program patients and to
         adequately supervise and operate the Program. All such personnel shall
         be subject to Hospital approval. Such personnel shall not be deemed
         employees or contracted personnel or borrowed servants of Hospital.
         Manager shall have full responsibility for their wages, payroll taxes
         and employee benefits and acts or omissions and shall indemnify, save
         harmless and defend Hospital

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         from all claims and liability expenses (including reasonable attorneys'
         fees) arising from any claims, actions, causes of actions, damages or
         settlements with respect to any of the foregoing. Manager will assist
         Hospital in its screening, interviewing, and selecting of employees for
         the Program staff.

    (b)  Provide Partial Hospitalization Program orientation and training for
         all appropriate personnel and serve as a resource to the Hospitals
         Education Department regarding psychiatric topics and M.A.B. training.

    (c)  Indemnify, save harmless, and defend Hospital from all claims and
         liability and expenses (including reasonable attorney's fees) (1)
         arising solely from the negligence of or breach of this Agreement by
         Manager or its employees or contracted personnel or (2) arising out of
         Hospital negligence if the sole basis for any such negligence consists
         of entering into this Agreement with Manager, failing to properly
         supervise, monitor, or oversee Manager or its employees or agents, or
         failing to properly review or act upon its review of the qualifications
         of Manager or its employees or contracted personnel.

    (d)  Consult, manage and support the Partial Hospitalization Program
         treatment team's effort to provide quality psychiatric treatment while
         maintaining prudent control of patient length of stay in concert with
         patient needs and insurance and regulatory requirements.

    (e)  Require all employees to participate in mandatory Hospital education
         and orientation programs.

    (f)  Administrative Services: Program Administrator will report to Hospital
         COO on a regular basis; in conjunction with Hospital Management.
         Provide availability of Corporate Clinical Director and Corporate
         Director of UR for mock surveys, training of clinical staff, customer
         service training, documentation inservicing in conjunction with
         Hospital

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         staff; plus ongoing, active evaluation of program according to needs of
         clients and Hospital. Provide full involvement with JCAHO survey and
         preparation for survey in conjunction with Hospital staff. Services of
         24 hour/day Intake Office. Maintain communication with County Patient
         Rights Office, and provide ongoing an appropriate education/inservice.
         Provide Hospital community education regarding Behavioral Health
         patients and issues.

    (g)  Clinical Services: Training of all clinical staff with Program
         Administrator and Hospital COO responsible for licensed staff. Medical
         Director to be responsible to lead treatment planning, utilizing
         concepts of teamwork for quality care, insure admission and discharge
         criteria are appropriate. Training and reviews to insure documentation
         criteria are met, and treatment team planning and documentation meet
         regulatory standards.

    (h)  Utilization Review Services: Periodic audits by Director of UR to
         monitor compliance and report to Hospital UR Department. Attendance at
         appropriate county and/or Federal meetings and educational events to
         maintain current knowledge related to changes in regulations,
         documentation requirements, billing requirements, etc., with
         appropriate follow-up for clinical staff, Program Administrator, and
         Hospital COO.

    (i)  Maintain professional and comprehensive general liability insurance for
         itself and its employees and contracted personnel in an amount not less
         than $5,000,000 per occurrence or claim and whenever reasonably
         requested provide Hospital with a certificate from the insurer stating
         that such insurance is in effect and which also states that Hospital
         will be given at least ten (10) days advance written notice of any
         cancellation, non-renewal, changes in policy limits, deductible, or
         co-insurance or aggregate limits. Any deductible or co-insurance or
         aggregate limits shall be subject to Hospital's approval which shall
         not

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         be unreasonably withheld. Hospital agrees that $100,000 is an
         acceptable deductible or co-insurance. Hospital shall maintain "tail"
         coverage if necessary for any terminated "claims made" policy so as to
         apply to any of its acts or omissions which occur during the term of
         this Agreement until the expiration of any applicable statute of
         limitation but not to exceed seven (7) years. Manager shall use
         reasonable efforts to have Hospital named as an additional insured on
         Manager's insurance with respect to any claim or liability arising
         solely out of any act of omission by Manager, its employees, or
         contracted personnel.

    (j)  Until the expiration of four (4) years after the furnishing of any
         services to be provided under this Agreement make available, upon
         request, to the Secretary of Health and Human Services or to the
         Comptroller General of the United States of America, or their duly
         authorized representatives, this Agreement and books, documents and
         records which are necessary to certify the nature and extent of
         reimbursable costs under the Medicare laws.

    (k)  Comply with all applicable laws (including but not limited to 42 U.S.C.
         1395 (nn) (b) or any similar law or regulation), regulations, medical
         staff bylaws, Hospital policies and procedures, Partial Hospitalization
         Program policies and procedures and any applicable standards of care.

    (l)  Use reasonable efforts to resolve any issues regarding acceptability of
         Program personnel to Hospital personnel and to Program patients which
         may arise with respect to any of Manager's employees or contracted
         personnel.

    (m)  Provide monthly written reports to Hospital regarding all aspects of
         the operation of the Partial Hospitalization Program.

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    (n)  Commit no act or omission which adversely affects the Hospital license
         with respect to the psychiatric chairs.

    (o)  Admit patients to the Partial Hospitalization Program (including but
         not limited to Medicare and MediCal patients) only if the admission is
         ordered by a physician on the Hospital medical staff with admitting
         privileges.

5.  REPRESENTATION AND WARRANTS OF HOSPITAL

    Hospital hereby represents to Manager as follows:

    (a)  Hospital is owned by Sherman Oaks Health System, a California, non
         profit public benefit corporation duly organized and validly existing
         in good standing under the laws of the State in which the Hospital
         resides with the power and authority to carry on the business in which
         it is engaged and to perform its obligations under this Agreement
         subject to obtaining the license described in subpart (m) of Section
         (3).

    (b)  The execution of this Agreement and the performance of the obligations
         of the Hospital hereunder will not result in any breach of any of the
         terms, conditions or provisions of any agreement or other instrument to
         which Hospital is a party or by which it may be bound or affected, or
         any governmental license, franchise, permit or other authorization
         possessed by the Hospital, nor will such execution and performance
         violate any Federal, State or local law, rule or regulation. The
         Hospital is accredited by the Joint Commission on Accreditation of
         Healthcare Organizations.

    (c)  There is no litigation, administrative proceeding or investigation
         pending or threatened against Hospital (nor is the Hospital subject to
         any judgement, order, decree or regulation of any court or other
         governmental administrative agency) which would materially adversely
         affect the performance of Hospital's obligations hereunder.

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    (d)  No Certificate of Need is required by Hospital from any state
         regulatory agency for the operation of the PHP.

6.  REPRESENTATIONS OF MANAGER

    Manager hereby represents to Hospital as follows:

    (a)  Manager is a corporation duly organized and validly existing in good
         standing under the laws of the State of Delaware with the power and
         authority to carry on the business in which it is engaged and to
         perform its obligations under this Agreement.

    (b)  The execution of this Agreement and the performance of the obligations
         of the Manager hereunder will not result in any breach of any of the
         terms, conditions or provisions of any agreement or other instrument to
         which the Manager is a party or by which it may be bound or affected,
         or any governmental license, franchise, permit or other authorization
         possessed by the Manager, nor will such execution and performance
         violate any Federal, State or local law, rule or regulation.

    (c)  There is no litigation, administrative proceeding or investigation
         pending or threatened against Manager (nor is Manager subject to any
         judgement, order, decree or regulation of any court or other
         governmental administrative agency) which would materially adversely
         affect the performance of Manager's obligations hereunder.

7.  MANAGEMENT FEE

    (a)  Hospital shall pay to manager a monthly fee of $54,000. Manager will be
         paid its contractual fee forty five (45) days following the month for
         which services were performed. For example, the management fee for
         February 1999 will be due on April 15, 1999. As of an effective date of
         this agreement, the management fee discussed above replaces any and all
         previous arrangement in force.

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8.  PAYMENT BY HOSPITAL

    (a)  On or before the fifth (5th) day of each calendar month, Manager will
         forward to Hospital an invoice for the fees payable by Hospital under
         this Section 7. If any amount so invoiced is not paid on or prior to
         the end of the calendar month in which the invoice is sent, the
         outstanding balance shall bear simple interest from the date of said
         invoice at a rate of nine percent (9%) per annum until such amount
         shall be paid in full, but in no event will this percentage be greater
         than the maximum permitted by law. Any payments made thereafter and
         received by manager shall be applied first to interest accrued, but
         unpaid, and then to the oldest unpaid invoice. In addition, the parties
         agree that a failure by Hospital to pay any such invoice by the
         twentieth (20th) day of the calendar month in Which the invoice is sent
         shall be a material breach of this Agreement by written notice To
         Hospital delivered personally or deposited in the United States Mail,
         Certified or Registered, with postage prepaid and addressed to Hospital
         as indicated in Section 10 hereof. If contract is terminated by
         Hospital, all management fees are due and payable prior to the
         effective date of termination and any such termination of this
         Agreement by Manager shall not affect Hospitals obligation to pay
         amounts due Manager under this Agreement, but no such payment shall
         affect the effectiveness of such termination.

9.  CONFIDENTIAL AND PROPRIETARY INFORMATION

    (a)  Hospital agrees and acknowledges that Confidential Information is
         disclosed to it in confidence with the understanding that it
         constitutes business information developed by Manager. Hospital further
         agrees that it shall not use such Confidential Information for any
         purpose other than in connection with the Partial Hospitalization
         Program. Hospital further agrees not to disclose such Confidential
         Information to any third party except as

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         required by law or regulation or in order to serve the purposes of the
         Partial Hospitalization Program or as permitted by written
         authorization of Manager.

    (b)  Manager hereby grants to Hospital for the term of this Agreement, a
         non-exclusive license to use the registered service marks of Manager
         when identifying the Partial Hospitalization Program. These service
         marks are the exclusive property of Manager.

    (c)  Manager agrees not to disclose confidential information pertaining to
         the Hospital business or Partial Hospitalization Program patients
         except as required by law or regulation or as permitted by written
         authorization of Hospital or the respective patient as the case may be.

10. RECRUITMENT OF EMPLOYEES AND AGENTS

    (a)  Hospital acknowledges that Manager has expended and will continue to
         expend substantial time, effort, and money to train its employees and
         contracted personnel in the operation of the Partial Hospitalization
         Program. The employees and contracted personnel of Manager who will
         operate the Partial Hospitalization Program at the Hospital will have
         access to and possess Confidential Information of Manager. Hospital,
         therefore, agrees that for the earlier of one (1) year after the
         cessation of the employment or agency relationship between the Manager
         and the employee or agent or one (1) year after termination of this
         Agreement, it will not knowingly (and it will not induce any of its
         affiliates to) employ or solicit the employment of, or in any way
         retain the services of any employee, former employee, or contracted
         personnel or former agent of Manager if such individual has been
         employed or retained by Manager in the Partial Hospitalization Program
         unless Manager gives Hospital prior written consent therein or unless
         this Agreement is terminated by Hospital pursuant to paragraph (11) of
         this agreement.

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    (b)  Manager agrees that during the same respective period of time, it will
         not knowingly (and it will not induce any of its affiliates to) employ
         or solicit the employment of or in any way retain the services of any
         employee, former employee, or contracted personnel or former agent of
         Hospital without Hospital's prior written consent thereto.

11. TERMINATION

    (a)  Termination by Manager:

        (1)     By written notice to Hospital, if Hospital should have a
                bankruptcy, reorganization or similar action filed by or against
                it, become insolvent, go into liquidation for any purpose.

        (2)     In the event Hospital has failed to comply with the terms of
                this Agreement in any material respect, including substantial
                completion of all refurbishing in the identified program space,
                Manager shall, in writing, notify all of the nature of the
                breach, and Hospital shall have thirty (30) days to cure such
                breach or else the Agreement will thereupon be terminated upon
                written notice to Hospital.

        (3)     By written notice to Hospital if Hospital fails to maintain its
                accreditation by the Joint Commission on Accreditation of
                Healthcare Organizations or any license granted to it by a
                regulatory agency without which the PHP would be materially and
                adversely affected.

        (4)     By written notice to Hospital if Hospital fails to maintain
                professional and general liability insurance in the minimum
                amount of $5,000,000.

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    (b)  Termination by Hospital:

        1.      By written notice to Manager if Manager should have a
                bankruptcy, reorganization or similar action filed by or against
                it, become insolvent, or go into liquidation for any purpose.

        2.      In the event Manager has failed to comply with the terms of this
                Agreement in any material respect, Hospital shall, in writing,
                notify Manager of the nature of the breach, and Manager shall
                have thirty (30) days to cure such breach or else the Agreement
                will thereupon be terminated upon written notice to Manager.

        3.      By written notice to Manager if Manager fails to provide
                professional and general liability insurance in the minimum
                amount of $5,000,000.

        4.      In the event Manager is acquired by another entity, Hospital
                shall have the option to terminate the contract upon thirty (30)
                days written notice to Manager.

        5.      In the event Medicare changes in reimbursement and/or
                regulations make the program financially or operationally
                onerous for the Hospital to operate. Such determination shall be
                at the sole discretion of the Hospital.

12. MISCELLANEOUS PROVISIONS

    (a)  Compulsory Arbitration: Any controversy or claim arising out of or
         relating to this Agreement, or the breach thereof, shall be settled by
         binding arbitration in accordance with the rules of the American
         Arbitration Association, and judgement on the award rendered may be
         entered in any court having jurisdiction. However, this shall not apply
         with respect to any claim for indemnity for bodily injury or death.

    (b)  Attorneys' Fees: If any legal action (including arbitration) is
         necessary to enforce the terms of this Agreement, the prevailing party
         shall be entitled to reasonable attorneys' fees

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         and costs awarded against the other party in addition to any other
         relief to which that party may be entitled.

    (c)  Liquidated Damages: If Hospital should terminate Manager's services
         without cause, for any reason, Hospital agrees to pay Manager in the
         amount of $20,000 per month for the remainder of the contractual
         period.

    (d)  UCC1: Hospital agrees to allow Manager, at Manager's expense, to file a
         UCC1 or any similar local law or regulation with respect to a "payment
         promise" against the Hospital's psychiatric outpatient accounts
         receivables referred to in this agreement.

    (e)  Governing Law: The validity of this Agreement and of any of its terms
         or provisions, the interpretation of the rights and duties of the
         parties hereunder, and the construction of the terms or provisions
         hereof shall be governed in accordance with the laws of the State of
         California.

    (f)  Force Majeure: If either of the parties hereto is delayed or prevented
         from fulfilling any of its obligations under this Agreement by force
         majeure, said party shall not be liable for said delay or failure.
         "Force Majeure" means any cause beyond the reasonable control of a
         party, including but not limited to an act of God, act or omission of
         civil military authorities, fire, strike, earthquake, flood, riot, war,
         delay of transportation, or inability due to the aforementioned causes
         to obtain necessary labor, materials, or facilities.

    (g)  Severability: If any part of this Agreement is held to be void or
         unenforceable, such part will be treated as severable, leaving valid
         the remainder of this Agreement notwithstanding the part found void or
         unenforceable.

    (h)  Waiver: A waiver by either party of a breach or failure to perform
         shall not constitute a waiver of any provision hereof or of any other
         breach or failure whether or not similar.

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         There shall be no waiver unless in writing signed by the party against
         whom the waiver is sought to be enforced.

    (i)  Binding Effect: This Agreement shall be binding on the successors, and
         assigns of the respective parties, provided, however, neither party may
         assign or otherwise transfer this Agreement or delegate obligations
         hereunder without the other's written consent.

    (j)  Complete Agreement: This Agreement constitutes the complete
         understanding of the parties and supersedes all other agreements,
         either oral or in writing, between the parties hereto with respect to
         the subject matter hereof, and no other agreement, representation,
         statement, or promise relating to the subject matter of this Agreement
         which is not contained herein shall be valid or binding. There shall be
         no amendment unless in writing signed by both parties.

    (k)  No Agency or Partnership: The relationship between Manager and Hospital
         is that of independent contractors and nothing in the Agreement shall
         be deemed to create an agency, joint venture, partnership or similar
         relationship between the parties hereto. Neither party shall have the
         right to bid for the other or enter into any contract or commitment in
         the name of, or on behalf of the other.

    (l)  Notice: All notices hereunder shall be in writing, delivered personally
         or by U.S. Certified or Registered postal mails, postage prepaid,
         return receipt requested, and shall be deemed given when delivered
         personally or upon the earlier of actual receipt or five (5) days after
         deposit in said United States Mail, addressed as below with proper
         postage affixed, but each party may change his address by written
         notice in accordance with this Paragraph.

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    (m)  Changes in Reimbursement Rules: In the event that Medicare, Medicaid, a
         third party payor or other Federal, State, Local laws, rules,
         regulations, or interpretations thereof at any time during this
         agreement duration; prohibit, restrict or substantially change the
         method, payment or amount of reimbursement or the like for services
         provided under this agreement, then the Hospital and Manager in good
         faith shall amend or cancel the agreement to provide for payment of
         compensation to each other in a manner consistent with any such
         prohibition restriction and/or limitation.

     HOSPITAL'S ADDRESS:          SHERMAN OAKS HOSPITAL AND HEALTH CENTER
                                  4929 VAN NUYS BLVD.
                                  SHERMAN OAKS, CA.   91403

     MANAGER'S ADDRESS:           OPTIMUMCARE(R) CORPORATIoN
                                  30011 IVY GLENN DRIVE, SUITE 219
                                  LAGUNA NIGUEL, CA.  92677-5018

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IN WITNESS WHEREOF, this Agreement has been executed on _______________, 1999,
at ____________________________, California.

Manager:                               Hospital:

OPTIMUMCARE(R) CORPORATION             SHERMAN OAKS HOSPITAL
                                       AND HEALTH CENTER

By:                                    By:
    ------------------------------         -------------------------------------
     Edward A. Johnson                      David Levinsohn
     Chairman of the Board & CEO            Chief Executive Officer

By:                                    By:
    ------------------------------         -------------------------------------
     Mulumebet Gebre Michael                Kate O'Rourke
     President & COO                        COO

                                      -18-<PAGE>   1

EXHIBIT 10.129

                                 AMENDMENT NO. 1
                                       TO
                            AGREEMENT BY AND BETWEEN
                     SHERMAN OAKS HOSPITAL AND HEALTH CENTER
                           AND OPTIMUMCARE CORPORATION

        THIS AMENDMENT NO. 1 (this "Amendment"), dated as of July 17, 2000, is
made by and between Sherman Oaks Hospital and Health Center (the "Hospital") and
OptimumCare Corporation (the "Manager"), amending that certain Agreement (the
"Agreement"), dated as of January 1, 1999, by and between the Hospital and the
Manager, with reference to the following recitals:

                                    RECITALS

        A. Hospital operates an acute care facility in Sherman Oaks, California
and, in connection therewith, operates an outpatient partial hospitalization
program ("PHP") for the treatment of patients with psychiatric disorders.

        B. Manager is in the business of providing management services with
respect to outpatient hospitalization programs operated by hospitals.

        C. Pursuant to the Agreement, Manager agreed to provide certain
management services for the treatment of patients of the Hospital with
psychiatric disorders in connection with Hospital's PHP for a fee as set forth
in the Agreement;

        D. Hospital has determined that the needs of the community served by the
Hospital (the "Hospital Community") could be served by the expansion of the
Hospital's PHP so that it can accommodate additional patients;

        E. The Hospital's PHP currently can accommodate a maximum of 35 average
patient days. The Hospital has determined that the needs of the Hospital's
Community would be served better by expanding the PHP to accommodate a maximum
of at least 50 average patient days.

        F. It is anticipated that the expansion of the program to accommodate a
maximum of at least 50 average patient days, which represents a 42% increase in
average patient days, will occur gradually commencing on August 1, 2000 and
continuing for at least one (1) year.

        G. In order to expand the PHP, it will be necessary for the Hospital to
incur additional costs, including, without limitation, additional capital costs,
additional tenant improvements. Furthermore, expansion of the PHP will require
additional and expanded management services from those contemplated when the
Agreement was originally entered into by the parties.

        H. In order to accommodate the expansion of the PHP contemplated by the
Hospital, it will be necessary for the Manager to (i) incur additional and
significant labor costs with respect to

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both administrative and professional services that are Manager's responsibility
pursuant to the terms of the Agreement; (ii) incur additional and significant
overhead costs in order for Manager to fulfill its obligations with respect to
training, orientation, education, consultation, clinical services, QA/UR and
related matters, all as contemplated under the Agreement, and (iii) incur
additional costs in order to meet the requirements under the Agreement with
respect to professional and comprehensive general liability insurance for itself
and its employees and contracted personnel.

        NOW, THEREFORE, in reliance on the foregoing recitals, and in
consideration of the mutual promises and agreements set forth below, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:

        1. AMENDMENT OF SECTION 7 - MANAGEMENT FEE.

        In recognition of the increased costs to the Manager resulting from the
expansion of the Hospital's PHP as described in the above recitals, the first
sentence of Section 7(a) shall be deleted and replaced in its entirety with the
following:

        "Hospital shall pay to Manager a monthly fee for its services hereunder
in accordance with the following schedule:

        a. For the period commencing November 1, 2000 and ending January 31,
2001 - Fifty- Four Thousand Dollars ($54,000) per month;

        b. For the period commencing February 1, 2001 and ending May 31, 2001 -
Sixty-Two Thousand Four Hundred Dollars ($62,400) per month;

        c. For the period commencing June 1, 2001 and ending September 30, 2001
- Seventy Thousand Eight Hundred Dollars ($70,800) per month;

        d. For the period commencing on October 1, 2001 thereto, - Seventy-Nine
Thousand Two Hundred Dollars ($79,200) per month; and

        2. MANAGEMENT FEE FOR THE PERIOD JANUARY 1, 2000 THROUGH JUNE 30, 2000.

        The parties hereto acknowledge a prior verbal agreement between them to
amend the Agreement to increase the management fee thereunder during the period
January 1, 2000 through August 31, 2000 to Sixty ($60,000) per month. The
parties intend to memorialize this verbal agreement pursuant to this Section 2.

        3. REAFFIRMATION.

        The Agreement shall remain in full force and effect, subject to the
amendments and modifications specifically provided for in this Amendment.

                                       2
<PAGE>   3

        4. COUNTERPARTS.

        This Amendment may be executed in counterparts, each of which shall
constitute an original and all of which together shall constitute one
instrument.

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

SHERMAN OAKS HOSPITAL
AND HEALTH CENTER

By:     David Levinsohn
   -------------------------------

Title   CEO
      -------------------------------

OPTIMUMCARE CORPORATION

By:     Edward A. Johnson
   -------------------------------

Title:  CEO
      -------------------------------

                                       3

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