Document:

Exhibit
10.1

EXECUTION
COPY

 

SECOND AMENDMENT TO

MASTER SERVICE AGREEMENT

Amendment
dated as of March 11, 2003 (this “Amendment”) to the Master Service Agreement
dated as of August 5, 1997 (as originally in effect and as amended from time to
time prior to the date hereof the “Original Agreement”) by and among Aetna
Inc. (formerly know as Aetna U.S. Healthcare Inc.), on behalf of itself and all
of its affiliates (collectively, “Aetna”), Magellan Health Services, Inc., on
behalf of itself and all of its affiliates (collectively, “Magellan”) and Human Affairs
International, Incorporated (together with its subsidiaries, “Contractor”),
a Subsidiary of Magellan.  Aetna and
Magellan are hereinafter sometimes referred to collectively as “Parties” and
individually as a “Party”.  Unless
otherwise specifically defined herein, each term used herein which is defined
in the Original Agreement has the meaning assigned to such term in the Original
Agreement.

W I T N E S S E T H :

WHEREAS,
the Parties wish to amend the Original Agreement as provided in this Amendment
(as so amended, and as the same may be amended from time to time after the date
hereof, this “Agreement”; references to the Agreement include, for periods
prior to the date hereof, the Original Agreement as in effect from time to
time);

WHEREAS,
Aetna, Magellan and Contractor mutually desire to enter into this Amendment on
the date hereof (the “Second Amendment Date”) whereby (i) Aetna
and Magellan will provide access to and coordinate the provision of behavioral
heath care services to Members with the objective of delivering cost-effective,
quality behavioral health care services and (ii) Aetna will have an option to
purchase, on the terms and conditions set forth herein, Magellan’s assets that
are dedicated to the provision of behavioral health care services to Members;

WHEREAS,
as part of a restructuring, Magellan and each applicable affiliate intends to
file a petition for relief under Chapter 11 of Title 11 of the United States
Code (the “Chapter 11 Case”);

WHEREAS,
Aetna and Magellan mutually desire that the United States Bankruptcy Court for
the Southern District of New York assigned to Magellan’s Chapter 11 Case (the “Court”)
authorize Magellan to assume the Agreement, as amended by this Amendment, and
confirm the Plan of Reorganization having substantially the terms set forth in
Schedule 6 (the “Restructuring Term Sheet”).

 

1

 

NOW,
THEREFORE, in consideration of the mutual covenants and promises stated herein
and other good and valuable consideration, the parties hereby agree as follows:

I.  Behavioral Healthcare Services

 

Section 1 of the Original
Agreement (“Behavioral Healthcare Services”) shall, on the date hereof, be
amended and restated in its entirety as follows:

 

“1.          Behavioral Healthcare Services

A.                   Magellan provides, and
manages the administration and utilization of, behavioral healthcare benefits
in multiple jurisdictions throughout the United States.

                                Magellan shall
provide the services described in Exhibits A (“GENERIC HMO AGREEMENT”) and B
(“NON-HMO AGREEMENT”) hereto (collectively, the “Vendor Contracts”) in the
markets described in Schedules A (“HMO MARKETS”) and B (“NON-HMO MARKETS”),
respectively, subject to the qualifications set forth in paragraphs B through K
below.  In the case of any conflict
between this Agreement and any Vendor Contract, this Agreement shall govern.

B.                     Aetna and Magellan have
entered into the Behavioral Health Contractor Agreements substantially in the
form attached hereto as Exhibit A, and shall (a) in the case of the Bound
Subsidiaries (as hereinafter defined), execute documents confirming the
agreements of such Bound Subsidiary and (b) in the case of all other Magellan
entities, execute promptly (and in no event later than ten business days) after
the Second Amendment Date, Amendments to the Behavioral Health Contractor
Agreements reflecting the terms on Exhibit A-1 (such agreements as so amended,
or such other confirmatory documents, the “HMO Agreement”) in each event for each of
the markets identified in Schedule A, subject to any applicable regulatory
approvals and licensing requirements. 
It is understood and agreed that the form of HMO Agreement attached
hereto may need to be modified in each market in a manner that is reasonably
acceptable to Aetna and Magellan to meet applicable regulatory
requirements.  The parties to the HMO
Agreements shall be the applicable HMO subsidiary or affiliate of Aetna on the
one hand and Magellan or one of its affiliates on the other.

 

2

 

C.                     Aetna and Magellan may, from
time to time, mutually agree to enter into HMO Agreements in other geographic
markets not identified on Schedule A.

D.                    Aetna and Magellan have
entered into the Behavioral Health Contractor Agreement substantially in the
form attached hereto as Exhibit B, and shall (a) in the case of the Bound
Subsidiaries (as hereinafter defined), execute documents confirming the
agreements of such Bound Subsidiary and (b) in the case of all other Magellan
entities, execute promptly (and in no event later than ten business days) after
the Second Amendment Date, an Amendment to such agreement reflecting the terms
on Exhibit B-1 (such agreement as so amended, or such other confirmatory documents,
“Non-HMO
Agreement”), in each event subject to any applicable regulatory
approvals.  The Non-HMO Agreement shall
govern the provision of services identified therein for Aetna throughout the
United States.

E.                      In order to
provide services pursuant to this Agreement, Network Providers must have
executed individual Participating Provider Addendum attached to the applicable
HMO Agreement or the “Aetna Addendum” as set forth as Attachment 3 to Schedule
3.  Magellan and all Network Providers
will act as independent contractors of Aetna in providing Covered Services to
Members.  Except as otherwise set forth
in this Agreement, Aetna shall not be liable for any provider’s failure to
properly perform health care services to any Member or fulfill his/her/its
obligations under the applicable provider contract.

F.                      To the extent
permitted by law, Network Providers who are HMO Network Providers shall be
required to participate in all Plans covering Members serviced by Magellan
throughout the term of this Agreement, provided they continue to meet Aetna’s
participation criteria.

G.                     On an ongoing basis Magellan
shall identify potential Network Providers who have agreed to participate in
the Aetna provider network and shall encourage such providers not currently
participating with Aetna to apply for participation with Aetna.  Aetna agrees to accept for participation any
such provider that meets Aetna’s applicable participation criteria and agrees
to the terms and conditions required by this Agreement.  It is understood by the parties, however,
that, to the extent permitted by law, an HMO Network Provider cannot provide
services pursuant to this Agreement unless such provider participates in all
Plans.

 

3

 

H.                    Magellan shall implement the
programs and program enhancements (the “Program Enhancements”) set forth on
Schedule 1 on the dates specified therein with respect to any particular item.

I.                         Magellan shall
satisfy the obligations (the “Reporting and Compliance Obligations”) set
forth under the heading “Magellan Reporting and Compliance Obligations” on
Schedule 4 no later than the dates specified therein with respect to any
particular item).

                                Aetna shall
have the oversight rights set forth under the heading “Aetna Oversight Rights” on
Schedule 4.

J.                        Magellan shall
provide services hereunder at a level of service that meets or exceeds the
performance standards (the “Performance Standards”) set forth on
Schedule 2.  Aetna and Magellan shall
have the rights and obligations set forth on such Schedule 2.

K.                    Magellan shall comply with
all applicable written Aetna policies and service metrics in effect on the
Second Amendment Date and thereafter as may be modified (with notice provided
in accordance with this clause K), including but not limited to policies and
metrics relating to Claim Handling, Care Management, Network Management,
Complaint Handling and Customer Service, to the extent that such policies are
not prohibited by Aetna’s certificates of coverage or applicable law.  Notwithstanding the foregoing, Aetna shall
provide Magellan with 60 days written advance notice of any and all proposed
policy additions or changes (unless applicable law requires a shorter period of
implementation in which case the longest notice period it is possible to give
under such law shall be given).  The
parties shall meet to discuss the expressly proposed addition or change and
shall work in good faith to resolve any issues or disputes arising from such
proposal (including, but not limited to, any rate adjustment as set forth in
Section 6 hereof).  The Committee (as
defined in Section 13) shall resolve any issues or disputes arising from
Aetna’s proposed policy change or addition. 
To the extent that relevant Aetna policies do not exist, then Aetna
shall have right to approve any new policies affecting Aetna’s members that are
introduced by Magellan, with such approval not to be unreasonably withheld.”

 

4

 

II.  Network

Section 5 of the Original
Agreement (“Provider Contracts/Network Rental Arrangements”) shall, on the  date
hereof, be amended and restated in its entirety as follows:

 

“5.          Recontracting of Providers / Network
Rental Arrangement

A.                   Magellan will commence an
effort to establish provider contracts directly between Aetna and certain
participating providers and will take all of the actions described on Schedule
3 no later than the dates specified therein with respect to any particular
action.  As further provided in Schedule
3, the Parties shall enter into a network rental arrangement (the “Network
Rental Agreement”) substantially in the form of Attachment 1 to
Schedule 3 on the terms and conditions set forth therein.”

III.  Rates; Payment Arrangements; Exclusivity

Section 6 of the Original
Agreement (“Rates; Payment Arrangements”) shall, on the later of the Plan
Effective Date or January 1, 2004, be amended and restated in its entirety as
follows:

 

“6.          Rates; Payment Arrangements;
Exclusivity

A.                   The rates for services
provided under the HMO Agreements and under the Non-HMO Agreement shall be as
set forth in Schedule 5.

B.                     Current exclusivity
arrangements between Aetna and Magellan in New York, Texas, Florida and
Maryland shall be maintained under this Agreement.  Beginning on the later of the Plan Effective Date or January 1,
2004, Aetna shall offer exclusivity in each other state (each, an “Additional
Market”) in which Magellan provides services hereunder on the Second
Amendment Date, on the following basis:

(i)       Aetna’s PPO business in each Additional
Market shall be provided to Magellan on an exclusive basis; and

 

(ii)      Aetna shall provide Magellan with a
percentage of Aetna’s HMO business in each Additional Market (calculated on a
member basis for behavioral healthcare services in such state) that is at least
equal to the percentage of Aetna’s HMO business in such Additional Market that
was serviced by Magellan on the Second Amendment Date; provided, that if

 

5

 

(a)     any customer of Aetna
elects, after the Second Amendment Date, to have someone other than Magellan
provide behavioral healthcare services; and/or

 

(b)     Aetna, on or after the
Second Amendment Date, enters into a global risk arrangement with an integrated
delivery system, or like entity, whereby such entity arranges for the provision
of behavioral health services to Aetna members by a behavioral health vendor
other than Magellan; and/or

 

(c)     Aetna, prior to the Second
Amendment Date, entered into a global risk arrangement with an integrated
delivery system, or like entity, whereby such entity arranges for the provision
of behavioral health services to Aetna members by a behavioral health vendor
other than Magellan and there is an increase in the number of members serviced
under such arrangement at any time after the Second Amendment Date, so long as
such increase is associated with new Aetna membership or results from a change
in primary care physician affiliation to an integrated delivery system, or like
entity, for reasons other than solely and intentionally transitioning business
from Magellan; and/or

 

(d)     Aetna, prior to the Second
Amendment Date, entered into contracts with behavioral health vendors other
than Magellan in certain states and the Aetna members serviced by such
behavioral health vendors in those states increases at any time after the
Second Amendment Date, so long as such increase is associated with new Aetna
membership or results from a change in primary care physician affiliation to a
behavioral health vendor other than Magellan for reasons other than solely and
intentionally transitioning business from Magellan; and/or

 

(e)     Aetna Government Health
Plans, LLC, or any of its affiliates, enters into a contract or subcontract
with the U.S. Department of Defense TRICARE Management Activity with respect to
the TRICARE Next 

 

 

6

 

Generation
Contracts for the management and delivery of health care services to members;

 

then
in each case such members, or such increase(s) in members, shall be excluded
from both the numerator and the denominator in the calculation of the
percentage of Aetna’s HMO business provided to Magellan as of any time after
the Second Amendment Date.

 

In
the event that Aetna enters into a new global risk arrangement with an integrated
delivery system, or like entity, as set forth in subsection (b) above, Aetna
shall, during the negotiation of such global risk arrangement, and where not
otherwise prohibited by applicable law, take reasonable steps, including, where
reasonably appropriate, coordinating a meeting between representatives of
Magellan and the integrated delivery system in order to encourage the
integrated delivery system to consider the arrangement of the provision of
behavioral health services to Aetna members by Magellan.

 

Within
60 days of the Second Amendment Date, Aetna shall provide Magellan with the
following information:  (i) actual Aetna
HMO membership counts by each market as of the Second Amendment Date; (ii) a
listing of global risk arrangements entered into by Aetna prior to the Second
Amendment Date whereby behavioral health services are provided to Aetna members
through an entity other than Magellan; and (iii) a listing of contracts with
behavioral health vendors entered into by Aetna prior to the Second Amendment
Date.

 

This
Section 6.B will terminate in its entirety as set forth in
Section 9.C(iii).  The exclusivity
arrangements in any state will terminate upon the occurrence of a Network
Retention Event in such state.  A “Network
Retention Event” with respect to any state shall mean that the
number of any of (1) the total outpatient providers (“Category I Providers”), (2)
the total partial hospital and intensive outpatient facility providers (“Category II
Providers”) or (3) the total inpatient facility providers (“Category III
Providers”), in each case contracted by Magellan to provide services
to Aetna Members in such state shall, at any time, be less than 90% of the
number of total Category I Providers, Category II Providers or Category III
Providers, respectively, that were contracted by Magellan to provide services
to Aetna Members in such state as of July 1, 2003.”

 

7

 

IV.  Final Payment and Purchase Option.

Section 7 of the Original
Agreement (“Contingent Payments”) shall, on the Plan Effective Date, be amended
and restated in its entirety as follows:

 

“7.                               Final Payment under Original
Agreement; Note; Warrants; Purchase Option; Security; Letter of Credit

A.                   $60 million
payment; Note; Warrants. 
Magellan agrees and acknowledges that the $60,000,000 Tranche 1 and
Tranche 2 payment for the fifth Contract Year, as contemplated by the Original
Agreement, has been fully earned and is due and payable (Aetna agrees and
acknowledges, however, that the $60,000,000 Magellan owes to Aetna under the
Original Agreement will not become an administrative expense within the meaning
of 11 U.S.C. Section 503, solely by virtue of Magellan’s assumption of this
Amendment under 11 U.S.C. Section 365). 
In settlement of the $60,000,000 payment owed to Aetna, Magellan Health
Services, Inc. shall, on the date of the effectiveness of Magellan’s Plan of
Reorganization (the “Plan Effective Date”), (x) pay to Aetna
$15,000,000 in cash and (y) deliver to Aetna a promissory note (the “Note”)
in an amount and on the terms and conditions (including provisions as to
principal, interest, maturity, repayment and prepayment) set forth on Exhibit F
attached hereto.  In addition, in
consideration of the other agreements of Aetna under this Agreement, Magellan
Health Services, Inc. shall (i) issue to Aetna warrants (the “Warrants”)
in an amount and on the terms and conditions (including provisions as to strike
price, term, exercisability, antidilution and other exit rights) set forth on
Exhibit G attached hereto; provided, that if Magellan grants terms or
conditions to any other warrantholder that are more favorable to such
warrantholder than the terms and conditions set forth on Exhibit G, then the
Warrants shall have such more favorable terms and conditions; and (ii) grant
Aetna one demand registration right (that will not be underwritten) and
unlimited piggyback registration rights (collectively, the “Registration
Rights”) with respect to the Magellan Health Services, Inc. common
stock received upon exercise of the Warrants for so long as such common stock
constitutes “Registrable Securities” (as defined in the Restructuring Term
Sheet).  The Registration Rights will be
documented by a registration rights agreement substantially identical to the
registration rights agreement to be entered into by Magellan Health Services,
Inc. and the other recipients of “New Common Stock” (as defined in the
Restructuring Term Sheet).

 

8

 

On
or prior to the Plan Effective Date, Aetna shall pay Magellan an amount equal
to the net settlement amount due ($3,584,903.50 from Aetna to Magellan under
the letter agreement dated December 20, 2002 between Aetna and Magellan, plus
interest on that amount from December 20, 2002 through the date of such payment
at a rate of 3.85% per annum.

 

B.                     Purchase Option.  Subject to the immediately following
sentence, Aetna shall have an option (the “Purchase Option”), exercisable in its sole
discretion, to consummate the purchase of the Purchased Assets (as defined in
Exhibit D, such purchase to be on and subject to the terms and conditions
(including purchase price) set forth in such Exhibit) on any of the following
dates:  (x) December 31, 2005 (or on such
earlier date on which Aetna’s right to do so arises as provided in the Section
9(C)(ii) of this Agreement); or (y) in the event Aetna chooses to extend this
Agreement until December 31, 2006 , any of March 31, 2006, June 30, 2006,
September 30, 2006 or December 31, 2006 (or on such earlier date on which
Aetna’s right to do so arises as provided in the Section 9(C)(ii) of this
Agreement); provided
that Aetna may, in its sole discretion, elect to delay the date of consummation
of the purchase under the Purchase Option beyond the applicable date specified
in clause (x) or (y) of this sentence, as applicable, until the date that is
three months after such applicable date, in order to obtain any governmental
approvals or other Required Consents (as such term is defined in Exhibit D) so
long as the terms and conditions of this Agreement are extended for such
additional three month period.  Aetna
must deliver written notice (the “Exercise Notice”) of any exercise of the
Purchase Option to Magellan at least six months prior to the intended
consummation of such purchase (which consummation may be extended for any
necessary regulatory approvals); provided that if an early purchase right
is triggered pursuant to Section 9(C)(ii) of this Agreement, then the
consummation of the purchase shall occur as soon as possible after delivery of
the Exercise Notice, and in any event no later than 90 days after delivery of
the Exercise Notice or two days following regulatory approval, if any.  The Exercise Notice shall state whether (i)
Aetna elects (which election may be made in its sole discretion) to have the
claims processing function conducted by Dedicated Staff at the St. Louis
facility of the Business be included within the scope of the “Business” and
“Purchased Assets” under the Asset Purchase Agreement and/or (ii) Aetna elects
(which election may be made in its sole discretion) to have a license to the
“Key Software”  as contemplated by
Section 7.06(a) of the Asset Purchase Agreement, for an increase in the
“Purchase Price” as contemplated by the Asset 

 

9

 

Purchase
Agreement.  The exercise of the Purchase
Option shall be documented by an asset purchase agreement in the form set forth
as Exhibit D hereto (the “Asset Purchase Agreement”), which shall be
executed by Aetna and Magellan promptly after delivery of the Exercise Notice
but in no event later than ten business days after such delivery, with Aetna’s
purchase in all cases to be on the terms and subject to the conditions set
forth in the Asset Purchase Agreement. 
“Business”
means Magellan’s management and operation of the behavioral healthcare services
provided to Aetna’s Members by Magellan pursuant to this Agreement.

C.                     Security
Interest and Guarantees. 
Magellan’s obligations under this Section 7, under the Asset Purchase
Agreement and under the Note, will be guaranteed on a secured basis by each
Magellan entity that is a guarantor under the New Senior Secured Credit
Agreement (the “Guarantees”) and will be secured by a “silent second” security
interest on all of the assets of Magellan and its subsidiaries in which the
lenders under the New Senior Secured Credit Agreement have a security interest
(the “Security
Interest”), in each case on the terms and conditions (including as
to priority and subordination) set forth in the Restructuring Term Sheet.

D.                    Letter of
Credit.  On the Plan Effective Date
Magellan shall provide a letter of credit (the “Letter of Credit”) for the
benefit of Aetna, in an amount and on the terms and conditions set forth in the
Restructuring Term Sheet.

E.                      New Senior
Secured Credit Agreement. 
Subject to Magellan’s compliance with the covenant set forth in Section
8.C(ii), Aetna acknowledges and agrees that the terms of the New Senior Secured
Credit Agreement prohibit, for so long as any obligations of Magellan
thereunder remain outstanding, (i) the consummation by Magellan of the sale and
purchase under the Asset Purchase Agreement and (ii) the set-off by Magellan of
amounts deemed paid by Aetna to Magellan under the Asset Purchase Agreement against
obligations of Magellan to Aetna under the Note, in each case without the prior
written consent of the “Required Lenders” (as defined in the New Senior Secured
Credit Agreement) .

F.                      Additional
Matters Related to Early Purchase Option.  In the event that Aetna is entitled to exercise the Purchase
Option at any time, but is prevented from consummating such purchase, because
of the terms of the New Senior Secured Credit Agreement or any other agreement
to which Magellan is bound (a “Control Trigger”), then Aetna shall have
the right (which right is exercisable in its sole discretion) to 

 

10

 

appoint
one or more individuals (who may be Aetna employees or third parties) (the “Designated
Individuals”) who will have responsibility and full decision-making
authority over the management and direction of all employees of the Business
and at each Aetna-Dedicated Facility, it being understood that at all times all
employees of Magellan shall remain employees of Magellan and Aetna shall not be
responsible for any Magellan obligations to such employees.  It is understood that Aetna has no duty and
shall have no duty of any kind to Magellan or to any other party to exercise its
right to appoint Designated Individuals pursuant to this paragraph.  Subsequent to Aetna’s appointment of
Designated Individuals pursuant to this paragraph, Aetna shall indemnify
Magellan for any actions or omissions taken by Aetna personnel serving as Designated
Individuals, which actions or omissions are found by a court of competent
jurisdiction, by final and nonappealable order, to constitute gross negligence
or willful misconduct, in all events relating solely to the day to day
operation of the Business and the provision of behavioral healthcare services
by Magellan and in no event relating to, among other things, any debt for
borrowed money or other long-term indebtedness or obligations of Magellan.  Aetna shall, through the Designated
Individuals, conduct the Business (including the payment of claims) in the
ordinary course.  Notwithstanding any
provision in this Agreement, from and after a Control Trigger and the date of
appointment of any Designated Individual, all payment arrangements between Aetna
and Magellan hereunder shall be on a non-risk basis, and in lieu of the other
fees arrangements between the parties Aetna shall reimburse Magellan for
services provided under this Agreement at a rate of $0.81 per member per month
for the HMO Business and at a rate equal to 85% of the then-existing PPO rate
for the PPO Business.  In the event of a
Control Trigger the parties will work together in good faith to come up with a
detailed plan to implement the foregoing arrangements.  The Designated Individuals’ authority over
the Business shall continue until Magellan is able to deliver the assets
necessary to consummate the purchase under the Purchase Option.

G.                     Survival.  The provisions of this Section 7 shall
survive any termination of this Agreement until the consummation of the
Purchase Option, in the event that an Exercise Notice shall have been delivered
on or prior to the date of termination of this Agreement.”

 

11

 

V. Migration and Employee
Matters.

Section 8 of the Original
Agreement (“Corporate Governance”) shall, on the date hereof, be deleted and
replaced in its entirety with the following provision:

 

“8.          Migration; Covenants; Employee Matters

A.                   Magellan shall take all
actions required to complete the migration of the following functions of the
Business into Aetna-Dedicated Facilities on or prior to December 31, 2004, in
accordance with the time frames outlined in Schedule 9 (the “Migration”):  (i) customer service; (ii) care management;
(iii) provider relations; (iv) claims processing; (v) quality improvement; and
(vi) the direct, on-site management of the foregoing functions.  The parties acknowledge and agree that
Schedule 9 is a tentative schedule and that the integration activities and time
frames shall be finalized by the Integration Team (as defined below) within 60
days of the Second Amendment Date; provided that the target dates set forth
on Schedule 9 for the beginning and the ending of integration activities are
definitive (i.e., not tentative) and may not be modified by the Integration
Team.  The “Integration Team” shall be
comprised of an equal number of representatives from Magellan and Aetna, which
number shall be determined by mutual agreement of the parties.  “Aetna-Dedicated Facilities” shall consist
of the following facilities of the Business maintained as of the Second
Amendment Date in metropolitan:  (i)
King of Prussia, Pennsylvania, (ii) Sandy, Utah, (iii) El Segundo, California,
in each of clauses (i) through (iii), housing clinical management and customer
service personnel as well as two network management personnel per facility, and
(iv) St. Louis, Missouri, housing claims processing personnel.

B.                     From the Second Amendment
Date until the earlier of the date of execution of the Asset Purchase Agreement
or the date that Aetna indicates in writing to Magellan that Aetna shall not
exercise the Purchase Option, Magellan will provide the information and access
to the Business (including but not limited to facilities, personnel and
systems) that is reasonably necessary to allow Aetna to prepare for the
potential acquisition of the Business through the exercise of its Purchase
Option. Aetna’s requests for information and/or access pursuant to this
paragraph shall be conducted in such manner as not to interfere unreasonably
with the conduct of the business of Magellan.

 

12

 

C.                     (i) Magellan covenants that
the Business shall have all personnel, property, assets, procedures and
controls necessary to conduct the Business as conducted on the Second Amendment
Date and as required to be conducted pursuant to this Agreement, and that all
such property shall be maintained properly and in good working order, updated
on a reasonably current basis in accordance with Magellan’s practices in its other
business operations.

(ii)  Magellan shall not, and shall cause each of
its affiliates not to, enter into, renew, amend, modify, supplement or extend
(or to agree or commit to do any of the foregoing) any agreement, contract,
arrangement or other transaction (including, without limitation, the New Senior
Secured Credit Agreement or any other bank facility, or any refinancing of any
of the foregoing) that would (A) result in the imposition or continuance of any
lien on any of the Purchased Assets (as defined in the Asset Purchase
Agreement) which would not be released upon the sale of the Purchased Assets to
Aetna, or (B) prevent, alter or delay any of the transactions contemplated by
this Agreement or the Asset Purchase Agreement (including without limitation
the repayment of the Note, the exercise of the Purchase Option, the execution
of the Asset Purchase Agreement or the consummation of the purchase
contemplated thereunder); provided that the New Senior Secured
Credit Agreement, together with any amendments thereto as may be entered into
from time to time after the date thereof, shall be excluded from the foregoing
covenant but only to the extent that the stated maturity of the loans under
such agreement (as it may be so amended) is not extended beyond November 30,
2005.

D.                 (i)  From the Second Amendment Date until the
date of execution of the Asset Purchase Agreement, Magellan shall conduct the
Business in all material respects in accordance with this Agreement and, to the
extent not addressed in this Agreement, in the ordinary course consistent with
Magellan’s practices in its other business operations (including without
limitation as to practices relating to assets sales and employee compensation),
and shall use its good faith efforts to preserve intact the business
organizations and relationships with third parties and to keep available the
services of the present employees of the Business.

(ii)               From the Second Amendment
Date until the date of execution of the Asset Purchase Agreement, Magellan
shall not in any material respect (x) take or agree or commit to take any
action that would make any representation or warranty of Magellan under the
Asset Purchase Agreement inaccurate in any respect at, or as of any time prior
to, the 

 

13

 

date of execution of the
Asset Purchase Agreement or (y) omit or agree or commit to omit to take any
action necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time. 
It is understood and agreed that the obligations set forth in this
paragraph shall be effective as of the date hereof as if the Asset Purchase
Agreement were in effect as of the date hereof.

(iii)            From the date of delivery of
the Exercise Notice until the date of execution of the Asset Purchase
Agreement, Magellan shall comply with the covenants set forth in Section 5.01
of the Asset Purchase Agreement.

E.                      Magellan shall
use commercially reasonable efforts to negotiate leases (including any renewals
or replacements) for the Aetna-Dedicated Facilities and any other assets
subject to the Purchase Option that, at the time of the exercise of the
Purchase Option, will be (i) on market rates and terms, and (ii) freely
assignable to Aetna.  True and complete
copies of each such lease and all amendments thereto shall be delivered to
Aetna from time to time promptly upon Aetna’s request.  Without the prior written consent of Aetna,
which consent shall not be unreasonably withhold or delayed, Magellan will not
terminate, amend, modify, renew or replace any leases relating to the
Aetna-Dedicated Facilities.

F.                      Magellan shall
staff the Business with such employees as shall be reasonably necessary to
deliver the services required under this Agreement (the “Dedicated Staff”).  Aetna shall have the right to approve (such
approval not to be unreasonably withheld) the one employee (including any new
hires), who is responsible for the overall management responsibility over the
Business, as a whole.  Aetna hereby
approves Dennis P. Moody as an acceptable choice for such employment
position.  Magellan shall provide Aetna
with sufficient information concerning, and an opportunity to meet with and ask
questions of, such proposed employee so as to enable Aetna to reasonably
evaluate such proposed employee. 
Aetna’s approval or disapproval must be communicated to Magellan within
five days of such provision of information and meeting, or the candidate will
be deemed acceptable to Aetna.

G.                     In the event Aetna perceives
performance issues with a Dedicated Staff member, Aetna shall have an
opportunity to express its concerns to Magellan for investigation and
resolution.  Magellan shall consider
Aetna’s expression of concern and shall respond to such concerns in the same
manner as it would respond to concerns expressed by a senior manager of
Magellan.  If Aetna is dissatisfied with
Magellan’s 

 

14

 

resolution
of the employee concern, Aetna may submit the matter to the Committee.

H.                    During the term of this
Agreement, all Dedicated Staff shall remain employees of Magellan and Aetna
shall not be responsible for any Magellan obligations to Dedicated Staff
members or consultants to the Business, including any severance or other
payments related to the dismissal of any Dedicated Staff member or consultant
(except as otherwise provided herein). 
Magellan shall make no representations to any of its employees relating
to future employment opportunities with Aetna or the Business.

I.                         During the term
of this Agreement, no Dedicated Staff member or consultant to the Business who
provides clinical management services may receive any incentive compensation
based upon utilization of healthcare services.”

VI.  Term and Termination

Section 9 of the Original
Agreement (“Term and Termination”) shall, on the date hereof, be amended and
restated in its entirety as follows:

 

“9.          Term and Termination

A.                   This Agreement shall be
effective for (i) a term ending on the close of business on December 31, 2005
(the “Initial
Term”) and (ii) in the event that Aetna delivers, in its sole
discretion (subject to the next paragraph), a notice of extension (an “Extension
Notice”) on or prior to the end of the Initial Term, for an
additional one (1) year term ending on the close of business on December 31,
2006 (the “Extension Term”).

Aetna
shall be deemed to have delivered an Extension Notice, and the Agreement shall
thereby be extended automatically for the Extension Term, in the event that
Aetna does not deliver on or prior to June 30, 2005 an Exercise Notice to
consummate a purchase under the Purchase Option on December 31, 2005, as
contemplated by clause (x) of Section 7.B.

This Agreement shall terminate upon the
consummation of the purchase of the Purchased Assets on any of the dates
specified in the first sentence of Section 7.B.  In the event that Aetna elects, in its sole discretion, to extend
the date of such consummation as set forth in the proviso to such sentence,
then this Agreement shall be effective for the additional three month term
contemplated by such proviso.

 

15

 

This Agreement may not be terminated by any
Party hereto except as expressly stated in this Section 9.

B.                     An “Event of Default” shall be
deemed to have occurred under this Agreement with respect to any Party in the
event that:

(i)                                     (A)  such Party fails to perform any material
obligation of such Party under this Agreement or breaches any obligation of
such Party under this Agreement having a material adverse effect on the business
of the other Party, including without limitation the health and safety of
Members, taken as a whole, or (B) such Party causes an event of default under
or a breach of the Non-HMO Agreement and the other Party terminates the Non-HMO
Agreement in accordance with the termination provisions thereof;

(ii)                                  an entity that
is a direct competitor of Aetna (with respect to the businesses or practices
prohibited by Section 11  of this Agreement) shall have directly or
indirectly acquired a controlling interest in Magellan or Contractor;

(iii)                               Contractor
shall have been suspended or disbarred from participation in any Medicare or
Medicaid program unless Magellan or a subsidiary of Magellan that is reasonably
acceptable to Aetna and has the necessary license continues to provide the same
services that Contractor can no longer provide due to such suspension or
disbarment;

(iv)                              such Party
shall have commenced a proceeding under Chapter 7 under the federal Bankruptcy
Code or, in the case of Magellan or Contractor, had its bankruptcy case
converted to a case under Chapter 7 of the federal Bankruptcy Code;

(v)                                 Magellan or
Contractor shall have filed, sponsored, approved, supported or failed to object
to the filing of any plan of reorganization in any bankruptcy proceeding not
acceptable to Aetna in its sole discretion;

(vi)                              the closing,
termination or substantial elimination by Magellan of any line of its
behavioral healthcare business required to service Aetna Members covered under
the HMO Agreements or the Non-HMO Agreement;

(vii)                           the termination
by either party for reasons not permitted by the applicable agreement or
agreements of (A) this 

 

16

 

Agreement,
(B) HMO Agreements covering more than 50% of the Members as of the Second
Amendment Date or (C) a Non-HMO Agreement;

(viii)                        Magellan fails
to complete the Migration activities set forth in Section 8 and Schedule 9 on
or prior to December 31, 2004;

(ix)                                Magellan fails
to comply with any three or more of the critical performance measures (the “Critical
Performance Measures”) set forth on Schedule 10 for two consecutive
quarters; or

(x)                                   a determination
by the Committee that Magellan’s financial situation is reasonably likely to
lead to an Event of Default under any of clauses (i) through (ix) under this
Section 9(B);

                                provided, that if any
event described in subsections (i), (ii), (iii) or (vi) above is curable, no
such event shall be deemed to constitute an “Event of Default” unless the Party
causing the event shall fail to remedy such event within a period of ninety
(90) days after the other Party shall have given the Party causing the event a
written notice of default and provided further that if the nature of the
event requires more than ninety days to cure and the Party causing the event
has substantially completed such cure within the ninety day period and
continues diligently to pursue such cure, such cure period shall be extended
for up to an additional 90 day period to permit the breaching Party to complete
such cure.  Aetna shall not have a right
to terminate this Agreement solely as a result of any suspension, withdrawal,
expiration, non-renewal or revocation of any state or local license,
certificate, approval or authorization of Contractor or the indictment, arrest,
charge or conviction of Contractor or any of its senior officers (in connection
with providing services on behalf of Contractor) for any felony related to
moral turpitude or professional practice related to this Agreement.  Each of the Parties agrees to notify each
other Party hereto within two business days after the occurrence of any Event
of Default hereunder.

C.                     Upon the occurrence of an
Event of Default, the Parties shall have the following remedies only:

(i)                    Upon the occurrence of an
Event of Default covered under subsections B(i) through and including (ix)
above with respect to a Party (Aetna on the one hand and Magellan or Contractor
on the other hand), the other Party shall be entitled to terminate this 

 

17

 

Agreement
upon written notice to the Party causing the Event of Default; provided
that this Agreement will terminate automatically upon the occurrence of an
Event of Default described in subsections B(iv) or (v) above.  Further, the non-breaching Party shall be
entitled to pursue any remedy available at law or in equity.

(ii)                 Upon the occurrence of an
Event of Default covered under subsections B(ii), (iii), (vi), (vii)(provided
that termination was by Magellan or Contractor), (viii) or (ix) above by
Magellan or Contractor, in addition to Aetna’s rights under paragraph C(i)
above, Aetna shall be entitled at such time to immediately exercise the
Purchase Option as provided in Section 7 of this Agreement.

(iii)              Upon the occurrence of an
Event of Default covered under subsection B(x) above, the Aetna Non-Competition
Covenant and the exclusivity obligations of Aetna set forth in Section 6 of
this Agreement shall immediately and automatically terminate.

D.                    If under either an HMO
Agreement or the Non-HMO Agreement a breach or an event of default occurs and
such breach or event of default applies to both Agreements, the non-breaching
Party shall treat the breach or event of default in the same manner under both
Agreements.

E.                      The Parties
hereto expressly waive any rights to set-off any amount or payment due
hereunder or any Vendor Contract that any Party may have under law or equity,
except as otherwise expressly permitted herein.

F.                      The provisions
of Sections 7 and 11 of this Agreement shall survive any termination of this
Agreement which results in an exercise of the Purchase Option, to the extent
provided in such Sections.”

VII.  Restrictive Covenants

Section 11 of the Original
Agreement (“Restrictive Covenants”) shall, on the  date hereof, be amended and
restated in its entirety as follows:

 

“11.        Restrictive Covenants

Magellan and its
wholly-owned subsidiaries agree that during the term of this Agreement and, in
the event the Purchase Option is exercised, during an additional term ending
one (1) year following the date of 

 

18

 

consummation of such
Purchase, Magellan and its wholly-owned subsidiaries shall not directly or
indirectly enter into or engage in the ownership, management, operation or
control of any entity which is a managed care entity offering full health care
benefits. Notwithstanding anything to the contrary set forth in the preceding
sentence, Magellan and its wholly-owned subsidiaries may engage in and own,
manage, operate or control any entity engaged in activities, which are
integrated delivery system services, specialty/limited health service managed
care, third party administration of specialty/limited health care services,
disease management, pharmacy benefit management, utilization management,
network management, care management or specialty/limited health care
provision/administration for government agencies, HMOs or insurers.  Nothing in this paragraph shall be construed
to limit the right of Magellan to offer and provide EAP services and non-behavioral
health management services to customers of Aetna.”

VIII.  Information

Section
12 of the Original Agreement (“Cooperation of the Parties”) shall, on the date
hereof, be amended and restated in its entirety as follows:

“12.        Cooperation of the Parties; Access to
Information

A.                   Magellan and Aetna will
maintain an effective liaison and close cooperation with each other to (a)
maximize the mutual benefits of their relationship, (b) enhance the quality of
behavioral health services provided to Members and (c) foster working
relationships with network behavioral health providers.

B.                     Each Party will exchange
such financial information, Member demographics, encounter and clinical data
necessary for the other Party to perform its obligations under this Agreement,
in each case retroactive to January 1, 2003. 
Such information will be exchanged electronically to the extent feasible
to both Parties. In addition, each Party agrees to provide the other Party full
access to the data (which, in the case of Magellan, consists of data for the
Members, subject to applicable law, including data of the type set forth on
Schedule 7), at no additional cost charged to the other Party, which are
necessary for the other Party to perform its obligations hereunder, subject to
the confidentiality obligations set forth in this Agreement.  Without limiting the foregoing, Magellan
will provide a weekly (or such other shorter period as may be technologically
and commercially reasonable) encounter feed, retroactive to January 1, 2003, of
at least the following:  utilization,
encounter data, actual unit cost data, in and out-of-network breaks, level of
care, utilization by co-pay and 

 

19

 

utilization
by diagnosis.  Information will be
provided in a format and under terms mutually agreed upon by the Parties.

C.                     Magellan and Aetna shall
each have the right to audit and inspect at any time during normal business
hours upon reasonable notice, (a) documents or information pertaining to verification
of membership, in the possession of the other Party, covered under this
Agreement and the Vendor Contracts and (b) any documentation or information
relevant to determinations under Subsection 6(C) of this Agreement, in each
case subject to a confidentiality agreement to be entered into between the
parties.”

IX.  Dispute Resolution

Section
13 of the Original Agreement (“Agreement Administration / Dispute Resolution”)
shall, on the date hereof, be amended and restated in its entirety as follows:

“13.        Agreement Administration/Dispute
Resolution

A.                   Operating/Integration
Committee:  Formation.  The Parties shall designate an
Operating/Integration Committee (the “Committee”) to oversee the operation of
this Agreement and the related Vendor Contracts.  The Purpose, Authority, Composition and Operation of the
Committee is set forth on Schedule 8. 
Notwithstanding anything to the contrary in Schedule 8, however, the
Committee shall not have any role whatsoever in adjudicating or determining any
of the damages described in Section XVIII.B.(i) and nothing in this Section
shall in any way limit Aetna’s right to pursue any and all available remedies
to recover such damages.  In addition,
in performing the adjudicative function described in Schedule 8, the Committee
may not take into account that, except as specifically set forth in Section
XVIII of this Agreement, all amounts owed by Magellan to Aetna under this
Agreement shall be entitled to administrative priority within the meaning of 11
U.S.C. § 507.”

 

X.  Private Labeling

Section
14 of the Original Agreement (“Use of Name”) shall, on the date hereof, be
amended by inserting the following new paragraph at the end thereof:

“B.               Aetna shall have the right,
exercisable at its election, to require that the services provided by Magellan
under this Agreement be branded 

 

20

 

and
conducted as “Aetna Behavioral Health”. 
Magellan shall begin the branding effort as soon as practicable after
written notice from Aetna and shall complete this project within 180 days from
the date of such notice.”

XI.  Interference With Contractual Relations

Section
15 of the Original Agreement (“Interference With Contractual Relations”) shall,
on the date hereof, be amended and restated in its entirety as follows:

“15.        Interference with Contractual Relations

Magellan shall not:  (a) counsel or advise, directly or
indirectly, payors, sponsors or other entities currently under contract with
Aetna or any affiliate to cancel, modify, or not renew said contracts; (b)
impede or otherwise interfere with negotiations which Aetna or an affiliate is
conducting for the provision of Plans; or (c) use or disclose to any third
party membership lists acquired during the term of this Agreement for the
purpose of directly or indirectly soliciting individuals who were or are
Members or otherwise to compete with Aetna or any affiliate.  Nothing in this Section is intended or shall
be deemed to (i) restrict any communication between a Participating Provider
and a Member determined by the Participating Provider to be necessary or
appropriate for the diagnosis and care of the Member, (ii) prohibit Magellan
from conducting activities permitted under Section 11 or (iii) apply with
respect to any Aetna customers to the extent such customers send unsolicited
RFPs to Magellan.  This Section shall
survive the termination of this Agreement for a period of one year thereafter.
In the event of a breach or a threatened breach of this Section by Magellan,
Aetna shall have the right of specific performance and injunctive relief in
addition to any and all other remedies and rights at law or in equity, and such
rights and remedies shall be cumulative.”

XII.  Indemnity

Section
16 of the Original Agreement (“Indemnity”) shall, on the date hereof, be
amended and restated in its entirety as follows:

“16.        Indemnification

                                Each Party
agrees to indemnify and hold the other Party harmless against any and all
claims, losses, liabilities, expense and costs (including reasonable attorneys’
fees) (collectively, “Damages”) arising from any of the services
(which, in the case of Magellan, shall 

 

21

 

include
all of the services delegated from Aetna to Magellan under this Agreement, any
of the Vendor Contracts or any other agreement mutually entered into, except
(i) Damages resulting in whole or in part from negligence, recklessness or
willful misconduct on the part of Aetna and (ii) Damages based upon a claim of
damage to the Aetna brandname arising out of the private labeling arrangements
set forth in Section 14(B) of this Agreement unless arising from Magellan’s
gross negligence, recklessness or intentional misconduct) performed by the
indemnifying party under this Agreement or the breach of any of the indemnifying
party’s obligations under this Agreement or any of the Vendor Contracts.”

XIII.  Intellectual Property; EAP Referral Fee 

Section
18 of the Original Agreement (“Miscellaneous”) shall, on the date hereof, be
amended by inserting the following two paragraphs at the end thereof:

“L.                Intellectual Property.  The Parties agree that Aetna intellectual
property (e.g., proprietary disease management algorithms and data once it is
transmitted to the Aetna warehouse) will be Aetna-owned, with no Magellan right
to use, even where Magellan data is used or where Magellan provides
insubstantial input; provided that Magellan shall have rights
to use such data before it is transmitted to Aetna.  Notwithstanding the foregoing, Magellan shall have the right to
use data retained on its systems in order to satisfy its obligations under this
Agreement.  The Parties agree that,
where there is substantial development input from both Aetna and Magellan on
methods, protocols, algorithms and analytics, then such intellectual property
will be co-owned or co-licensed.  It is
understood that the mere provision of data shall not constitute “substantial
development input”.

M.                 EAP Referral Fee.  Magellan will compensate Aetna at the rate
of 2% of the annual first year revenue, and 1% of the annual revenue for every
year thereafter, for all new work life product sales to Aetna employer groups
that result from an Aetna referral.  No
commission will be paid to Aetna for renewals of accounts existing on the
Second Amendment Date, with the exception that commissions will be payable for
the revenue associated with a product expansion to an existing client.  Commission payments will be made to Aetna
and Aetna will be responsible for compensation, if any, to referring sales
personnel.  Magellan will be responsible
for the underwriting of all products. 
Magellan and Aetna will work together to develop a marketing plan to
increase the distribution and breadth of products available to Aetna employer
groups.”

 

22

 

XIV.  Amendment to Definitions

Section 19 of the Original
Agreement (“Definitions”) shall, on the date hereof, be amended by inserting
the following at the end thereof:

 

“Aetna shall mean
Aetna Inc. (formerly know as Aetna U.S. Healthcare Inc.), on behalf of itself
and all of its controlled affiliates.

 

Magellan shall mean
Magellan Health Services, Inc., on behalf of itself and all of its applicable
controlled affiliates.

 

Amendment shall mean the
Second Amendment hereto dated as of March 11, 2003.

 

Second
Amendment Date shall mean March 11, 2003.

 

New
Senior Secured Credit Agreement shall mean the credit
agreement among Magellan and its senior bank lenders that becomes effective as
of the Plan Effective Date in the manner described in, and with the terms and
conditions set forth in, the Restructuring Term Sheet (including without
limitation a stated final maturity of all loans and other obligations
thereunder of no later November 30, 2005), as such original agreement may
thereafter be amended in compliance with Magellan’s covenant to Aetna set forth
in Section 8.C(ii).

 

Original
Agreement shall mean this Agreement as originally in effect
and as amended from time to time prior to (but not including) the Second
Amendment Date.”

 

XV.  Amendment to Aetna Non-Competition Covenant

Aetna and Magellan hereby
agree to amend the Non-Competition Covenant (the “Aetna Covenant”) dated as of
December 4, 1997 between Aetna and Magellan as follows:

 

A.                   The words “the termination
or expiration of the Master Agreement” in the second line of Section 1.1(a) of
the Aetna Covenant are hereby replaced with the words:

“the earlier to occur of (x)
December 3, 2003, (y) the termination (including as a result of the exercise of
the Purchase Option set forth therein) of the Master Agreement as amended by
the Second 

 

23

 

Amendment thereto dated
March 11, 2003 (as so amended, the “Master Agreement”) or (z) the occurrence of
an “Event of Default” under Section 9.B(x) of the Master Agreement”

 

B.                     Section 1.1(e) of the Aetna
Covenant is hereby amended by (1) deleting the “or” at the end of clause (viii)
thereof, (2) replacing the “.” with a “; or” at the end of clause (ix) thereof,
and (3) inserting the following thereafter:

“(x) any of the strategic
activities contemplated by the Master Agreement (including without limitation
the performance enhancement, network recontracting and migration activities set
forth in Sections 1, 5 and 7 thereof);

 

(xi) the commencement and
operation of a pilot program whereby AUSHC or one of its affiliates provides
case management services for its members covered under both health and
disability programs administered by AUSHC or one of its affiliates; provided
such pilot program shall not supersede or have any jurisdiction over
Purchaser’s management of behavioral healthcare services for any of such
members in such pilot program; or

 

(xii) any contingency
measures that may be taken by AUSHC in anticipation of the termination of the
Master Agreement or the exercise of the Purchase Option as defined therein.”

 

XVI.  Governing Law; Counterparts

This Amendment shall be
governed by and construed in accordance with the laws of the State of Delaware
(except for Section XV hereof which shall be governed by and construed in
accordance with the laws of the State of New York).  This Amendment may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

XVII.  Expenses and Indemnification

Magellan agrees to reimburse
Aetna, on demand, for all reasonable fees and expenses of Aetna’s counsel
incurred on and after December 1, 2002 in connection with the negotiation,
administration and implementation of the Original Agreement, this Agreement,
the Chapter 11 Case and all of Aetna’s rights against Magellan in connection
with each of the foregoing (the “General Expense Reimbursement”), provided,
however, that the General Expense Reimbursement shall not exceed $600,000, and provided
further that if (x) none of the Termination Events in Section XX
hereof 

 

24

 

occur and (y) no party
objects to the assumption of this Agreement in the Chapter 11 Case or to
Aetna’s treatment under the Plan of Reorganization, then the General Expense
Reimbursement shall not exceed $400,000. 
In addition and supplemental to the General Expense Reimbursement,
Magellan and each of its affiliates agree to reimburse Aetna, on demand, for
all reasonable fees and expenses of Aetna’s counsel incurred on and after March
10, 2003 in connection with any claims, counterclaims, causes of action, or
actions commenced or overtly threatened to be commenced, orally or in writing,
against Aetna in connection with any of the Original Agreement, this Agreement,
the Chapter 11 Case or Aetna’s rights against Magellan (the “Litigation
Expense Reimbursement”), provided that the Litigation Expense
Reimbursement shall be limited to 100% of the first $200,000 of such fees and
expenses actually incurred by Aetna and 50% of all fees and expenses above
$200,000 incurred by Aetna, and provided further that if a court of
competent jurisdiction, by final and nonappealable order, finds that Aetna
committed gross negligence or willful misconduct, then Aetna shall promptly
reimburse Magellan for all sums previously advanced under the Litigation
Expense Reimbursement and Aetna shall have no further rights to any Litigation
Expense Reimbursement.

 

Magellan and each of its
affiliates agree to indemnify Aetna from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, fees and expenses of counsel) or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against Aetna in any way relating to or arising out of this
Amendment, the Agreement or Magellan’s Chapter 11 Case; provided, however, that
neither Magellan nor any of its affiliates shall be liable for any of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Aetna’s gross negligence
or willful misconduct as found in a final, non-appealable judgment by a court
of competent jurisdiction.

 

XVIII.  Magellan’s Assumption of the Agreement

A.            The Parties agree and acknowledge
that:

 

(i) Magellan induced Aetna to enter into this
Agreement by promising to perform all of its obligations under the Agreement
and to continue such performance throughout the duration of the Chapter 11 Case
and thereafter;

 

(ii) this Agreement and the assumption
thereof in the Chapter 11 Case and performance hereunder confers an actual and
necessary benefit upon Magellan that is necessary to the preservation of
Magellan’s business;

 

25

 

(iii) Magellan shall in all respects fully
and irrevocably assume this Agreement and shall seek Court approval and
authorization of such assumption, to be obtained within 60 days of the
Commencement Date;

 

(iv) the $60,000,000 Magellan owes to Aetna
under the Original Agreement shall not become an administrative expense solely
by virtue of Magellan’s assumption of this Agreement;

 

(v) with the exception of (x) the $60,000,000
million Magellan owes to Aetna under the Original Agreement, and (y) as set
forth in Section B immediately below, all amounts owed by Magellan to Aetna
pursuant to this Agreement shall be entitled to administrative priority within
the meaning of 11 U.S.C. § 507.

 

B.            The Parties agree and acknowledge
that:

 

(i) all damages incurred by Aetna in
connection with any breach of this Agreement by Magellan, including but not
limited to the replacement costs of services or obligations owed or undertaken
by Magellan under this Agreement, shall be entitled to administrative priority
in the Chapter 11 Case; provided, however, that Aetna covenants
and agrees that, for any breaches occurring during the Chapter 11 Case, only
damages attributable to the period within one year of any breach by Magellan
shall be entitled to administrative priority, with damages for any period
thereafter constituting a general unsecured claim in the Chapter 11 Case; and

 

(ii) without prejudice to Aetna’s ability to
recover damages under any other Section of this Agreement, no money damages
shall arise solely as a result of the occurrence of an Automatic Termination
Event as defined in Section XX.

 

XIX.  Further Assurances

Magellan shall use its
reasonable best efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary or desirable under applicable laws
and regulations (i) to consummate its reorganization on the terms set forth in
the Restructuring Term Sheet and (ii) to ensure that the events referred to in
Section XX of this Amendment occur within the time periods specified therein (i.e.,
that no Automatic Termination Event arises under such Section).

 

XX.  Automatic Termination Events

The
Amendment shall terminate automatically (subject to waiver of such termination
by Aetna in writing in its sole discretion) if any of the 

 

26

 

following
automatic termination events (the “Automatic Termination Events”) occur:

A.                   Magellan does not file a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code on or prior to March 15, 2003 (the date of such filing, the “Petition
Date”);

B.                     Within 5 days after the
Petition Date the Court has not entered the following orders which shall be substantially
in the form of Exhibit E-1 attached hereto and which shall be in full force and
effect and which shall not be subject to any stay:

1.               an order: (i) authorizing use of Lenders’ Cash
Collateral on an interim basis; and (ii) granting adequate protection pursuant
to Section 361 and 363 of the Bankruptcy Code;

2.               an order pursuant to Section 105(a) of the Bankruptcy
Code for authorization to pay claims of Providers and Physician Advisors;

3.               an order authorizing debtor to continue Customer
Practices and to satisfy prepetition obligations related thereto; and

4.               an order authorizing Magellan to pay prepetition
wages, compensation and employee benefits pursuant to Sections 105 and 363(b)
of the Bankruptcy Code;

C.                     Within 45 days after the
Petition Date the Court has not entered an order which shall be substantially
in the form of Exhibit E-2 hereto and which shall be in full force and effect
and which shall not be subject to any stay: (i) authorizing use of Lenders’
Cash Collateral for the duration of Magellan’s Chapter 11 Case; and (ii)
granting adequate protection pursuant to Section 361 and 363 of the Bankruptcy
Code;

D.                    Within 60 days after the
Petition Date the Court has not entered an order which shall be acceptable to
Aetna in its sole discretion and which shall be in full force and effect and
which shall not be subject to any stay approving and authorizing Magellan’s
assumption of the Agreement, as amended by this Amendment (including the Asset
Purchase Agreement and all other attachments thereto); within 60 days after the
Petition Date any of the Non-HMO Party or the HMO Parties has not assumed or
otherwise had approved and ratified by the Court, this Agreement or any of the
amendments to the Vendor Contracts contemplated by this Amendment;

 

27

 

E.                      Within 180 days
after the Petition Date the Court has not entered an order which shall be
acceptable in all material respects to Aetna in its sole discretion and which
shall be in full force and effect and which shall not be subject to any stay
approving a Disclosure Statement describing a filed Plan of Reorganization
(substantially on the terms set forth in the Restructuring Term Sheet);

F.                      Within 270 days
after the Petition Date: (i) the Court has not entered an order which shall be
acceptable to Aetna in its sole discretion and which shall be in full force and
effect and which shall not be subject to any stay confirming a Plan of
Reorganization (substantially on the terms set forth in the Restructuring Term
Sheet) including with respect to the New Senior Secured Credit Agreement, the
Warrants, the Note, the Security Interest, the Guarantees and the Registration
Rights; or (ii) consummation of such Plan of Reorganization has not occurred;

G.                     Within 330 days after the
Petition Date, the order confirming the Plan of Reorganization has not become a
final order as to which the time to appeal, or move for a new trial, reargument
or rehearing, or petition for certiori, has expired and as to which no
appeal, or other proceeding for a new trial, reargument or rehearing, or
petition for certiori, is pending or, if an appeal, or other proceeding
for a new trial, reargument or rehearing, or petition for certiori, has
been timely filed or taken, the order or judgment of the Court has been
affirmed (or such appeal or petition has been dismissed) by the highest court
(or other tribunal having appellate jurisdiction over the order or judgment) to
which the order was appealed, or motion for a new trial, reargument or rehearing,
or petition for certiori, has been denied, and the time to take any
further appeal or to move for a new trial, reargument or rehearing, or petition
for certiori, has expired;

H.                    At any time any order is
entered or the Debtors, the committee of unsecured creditors or the Agent for
the prepetition lenders shall have made a motion seeking any order approving
the terms of the Note, the Warrants, the Security Interest, the Guarantees or
the Registration Rights where (i) the proposed terms of the Note, Warrants,
Security Interest, Guarantees or Registration Rights, as the case may be, are
inconsistent with the applicable terms set forth in the Restructuring Term
Sheet or (ii) any other terms of the proposed Note, Warrants, Security
Interest, Guarantees or Registration Rights, as the case may be, are not
reasonably satisfactory to Aetna;

 

28

 

I.                         At any time if
any order is entered or the Debtors, the official committee of unsecured
creditors or the Agent for the pre-petition lenders shall have made a motion
seeking any order:

1.             Dismissing Magellan’s Chapter 11 case or converting it
to a case under Chapter 7;

2.             Appointing a trustee, responsible person, receiver or an
examiner with expanded powers; or

3.             Seeking approval of bidding procedures or the approval
of another buyer for any assets subject to the Asset Purchase Agreement.

 

29

 

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

 

	
  AETNA INC.

  	
   

  	
  MAGELLAN HEALTH SERVICES,
  INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

   

  
	
  /s/ JOHN L. BRIDGE

  	
   

  	
  /s/ Mark S. Demilio

  
	
  Name: JOHN L. BRIDGE

  	
   

  	
  Name: Mark S. Demilio

  
	
  Title: VICE PRESIDENT -
  CORPORATE FINANCE

  	
   

  	
  Title: Exec. Vice
  President, Chief Financial Officer

  
	
  Date: 3/10/03

  	
   

  	
  Date: March 11, 2003

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUMAN AFFAIRS
  INTERNATIONAL, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

   

  
	
   

  	
   

  	
  /s/ Mark S. Demilio

  
	
   

  	
   

  	
  Name: Mark S. Demilio

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
  Date: March 11, 2003

  

 

 

30

 

To the extent that any of the undersigned are
signatories to current contracts with Aetna in connection with the Original
Agreement (a “Bound Subsidiary”), each of Magellan or any Subsidiary of
Magellan that is a party to the Non-HMO Agreement (the “Non-HMO Party”) and each of
Magellan or any Subsidiary of Magellan that is a party to any HMO Agreement
(each, an “HMO Party”) hereby acknowledges that it is bound by, and is
hereby obligated to adhere to, the provisions of this Agreement (including, in
the case of each HMO Party, the terms set forth on Exhibit A-1, and, in the
case of the Non-HMO Party, the terms set forth on Exhibit B-1), in each case
which constitutes a valid and binding agreement of such Bound Subsidiary and a
valid and binding amendment to the Vendor Contract to which such Bound
Subsidiary is a party.  Each of Magellan
Heath Services, Inc. and each of such Bound Subsidiary agrees to execute any
further documentation that may be reasonably necessary in connection with the
foregoing.

	
   

  	
   

  	
   

  
	
  Dated:

  	
  New York, New York

  	
   

  
	
   

  	
  March 11, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
  Respectfully submitted,

  
	
   

  	
   

  
	
   

  	
  Magellan
  Health Services Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark S.
  Demilio

  
	
   

  	
   

  	
   

  	
  Name:
  Mark S. Demilio

  
	
   

  	
   

  	
   

  	
  Title:
  Exec. Vice President, Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
  Advantage
  Behavioral Systems, Inc.

  
	
   

  	
  AdvoCare
  of Tennessee, Inc.

  
	
   

  	
  AGCA
  New York, Inc.

  
	
   

  	
  AGCA,
  Inc.

  
	
   

  	
  Alliance
  Health Systems, Inc.

  
	
   

  	
  Allied
  Specialty Care Services, LLC

  
	
   

  	
  Care
  Management Resources, Inc.

  
	
   

  	
  Charter
  Alvarado Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Bay Harbor Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Behavioral Health System at Fair Oaks, Inc.

  
	
   

  	
  Charter
  Behavioral Health System at Hidden Brook, Inc.

  
	
   

  	
  Charter
  Behavioral Health System at Potomac Ridge, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Columbia, Inc.

  

 

31

 

	
   

  	
  Charter
  Behavioral Health System of Dallas, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Delmarva, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Lake Charles, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Massachusetts, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Nashua, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of New Mexico, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Northwest Indiana,  LLC

  
	
   

  	
  Charter
  Behavioral Health System of Paducah, Inc.

  
	
   

  	
  Charter
  Behavioral Health System of Toledo, Inc.

  
	
   

  	
  Charter
  Behavioral of Layafette, Inc.

  
	
   

  	
  Charter
  Centennial Peaks Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Fairmount Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Fenwick Hall Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Forest Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Grapevine Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Hospital of Mobile, Inc.

  
	
   

  	
  Charter
  Hospital of Santa Teresa, Inc.

  
	
   

  	
  Charter
  Hospital of St. Louis, Inc.

  
	
   

  	
  Charter
  Lakeside Behavioral Health Systems, Inc.

  
	
   

  	
  Charter
  Linden Oaks Behavioral Health System, Inc.

  
	
   

  	
  Charter
  Medical — Clayton County, Inc.

  
	
   

  	
  Charter
  Medical — Long Beach, Inc.

  
	
   

  	
  Charter
  Medical of East Valley, Inc.

  
	
   

  	
  Charter
  Medical of Puerto Rico, Inc.

  
	
   

  	
  Charter
  Milwaukee Behavioral Health System, Inc.

  
	
   

  	
  Charter
  MOB of Charlottesville, Inc.

  

 

32

 

	
   

  	
  Charter
  Northridge Behavioral Health System, LLC

  
	
   

  	
  CMCI,
  Inc.

  
	
   

  	
  CMFC,
  Inc.

  
	
   

  	
  CMG
  Health of New York, Inc.

  
	
   

  	
  CMG
  Health, Inc.

  
	
   

  	
  Continuum
  Behavioral Healthcare Corporation

  
	
   

  	
  Correctional
  Behavioral Solutions of Indiana, Inc.

  
	
   

  	
  Correctional
  Behavioral Solutions of New Jersey, Inc.

  
	
   

  	
  Florida
  Health Facilities, Inc.

  
	
   

  	
  GPA
  of Pennsylvania, Inc.

  
	
   

  	
  Green
  Spring Health Services, Inc.

  
	
   

  	
  Green
  Spring of Pennsylvania, Inc.

  
	
   

  	
  Group
  Plan Clinic, Inc.

  
	
   

  	
  Hawaii
  Biodyne, Inc.

  
	
   

  	
  Human
  Affairs International of Pennsylvania, Inc.

  
	
   

  	
  Ihealth
  Technologies, LLC

  
	
   

  	
  INROADS
  Behavioral Health Services of Texas, LP

  
	
   

  	
  Louisiana
  Biodyne, Inc.

  
	
   

  	
  Magellan
  Behavioral Health of Washington, Inc.

  
	
   

  	
  Magellan
  Behavioral Health Systems, LLC

  
	
   

  	
  Magellan
  Behavioral Health, Inc.

  
	
   

  	
  Magellan
  Behavioral of Michigan, Inc.

  
	
   

  	
  Magellan
  Capital, Inc.

  
	
   

  	
  Magellan
  CBHS Holdings, Inc.

  
	
   

  	
  Magellan
  HRSC, Inc.

  
	
   

  	
  Magellan
  Public Solutions, Inc.

  
	
   

  	
  Magellan
  Specialty Health, Inc.

  
	
   

  	
  Managed
  Care Services Mainstay of Central PA, Inc.

  
	
   

  	
  MBC
  Federal Programs, Inc.

  
	
   

  	
  MBC
  National Service Corporation

  
	
   

  	
  MBC
  of America, Inc.

  
	
   

  	
  MBC
  of New Mexico, Inc.

  
	
   

  	
  MBC
  of Tennessee, Inc.

  
	
   

  	
  MBC
  of Tennessee, LLC

  
	
   

  	
  MBH
  Capital, Inc.

  
	
   

  	
  MBH
  of Puerto Rico, Inc.

  

 

33

 

	
   

  	
  Merit
  Behavioral Care Corporation

  
	
   

  	
  Merit
  Behavioral Care of Florida, Inc.

  
	
   

  	
  Merit
  Behavioral Care of Massachusetts, Inc.

  
	
   

  	
  Merit
  INROADS Behavioral Health Services of Illinois, LLC

  
	
   

  	
  Merit
  INROADS Behavioral Health Services, LLC

  
	
   

  	
  New
  GPA, Inc.

  
	
   

  	
  P.P.C
  Group, Inc.

  
	
   

  	
  P.P.C.,
  Inc.

  
	
   

  	
  Personal
  Performance Consultants of New York, Inc.

  
	
   

  	
  Premier
  Holdings, Inc.

  
	
   

  	
  Vivra,
  Inc.

  
	
   

  	
  Westwood/Pembroke
  Health System Limited Partnership.

  
	
   

  	
   

  
	
   

  	
  By:  Magellan
  Health Service, Inc., as agent and
  attorney-in-fact for

  
	
   

  	
   

  	
  each
  of the foregoing entities

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark S.
  Demilio

  
	
   

  	
   

  	
   

  	
  Name:
  Mark S. Demilio

  
	
   

  	
   

  	
   

  	
  Title:
  Exec. Vice Pres., Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  

 

 

34

EXHIBIT A-1

 

Form of
Amendment to Standard form HMO Agreement

 

Each
HMO Agreement will be amended consistent with the modifications set forth in
the Amendment, including with respect to rates and with respect to Section 1.K.

 

The
following amendments will also be made:

 

•                  to provide for a uniform
termination date of December 31.

•                  to delete the “Termination
without Cause” provision.

•                  to provide that any Event of
Default under the MSA giving a right to terminate the MSA will also be an event
of default under each HMO Agreement, giving a right to terminate such HMO
Agreement.

 

35

 

EXHIBIT B-1

 

Form of
Amendment to Standard form Non-HMO Agreement

 

Each
Non-HMO Agreement will be amended consistent with the modifications set forth
in the Amendment, including with respect to rates and with respect to Section
1.K.

 

The
following amendments will also be made:

 

•                  to provide for a uniform
termination date of December 31.

•                  to provide that any Event of
Default under the MSA giving a right to terminate the MSA will also be an event
of default under each Non-HMO Agreement, giving a right to terminate such
Non-HMO Agreement.

 

 

36EXHIBIT 10.1

                            SHARE EXCHANGE AGREEMENT

This Share Exchange Agreement is entered into by and between Nevada Holding
Group, Inc., a Nevada corporation (NVHG) whose address is 4729 Lomas Sante Fe
Street, Las, Vegas, Nevada 89147 and Green Valley Gaming Enterprises, Inc., a
Nevada corporation whose address is 6380 McLeod Drive, Suite 9, Las Vegas,
Nevada 89120. This Share Exchange Agreement will reflect the mutual intent of
Nevada Holding Group, Inc. and Green Valley Gaming Enterprises, Inc. regarding
the exchange of 108,000,000 common shares of Nevada Holding Group, Inc. in
exchange for 108,000,000 common shares of Green Valley Gaming Enterprises, Inc.
It is understood that this represents 100% of the issued and outstanding shares
of Green Valley Gaming Enterprises, Inc. This is on the basis of one (1) share
of Nevada Holding Group, Inc. for one (1) share of Green Valley Gaming
Enterprises, Inc.

As a result of the transactions ("Transactions") contemplated by this Share
Exchange Agreement, Nevada Holding Group, Inc., will acquire all the issued and
outstanding shares of Green Valley Gaming Enterprises, Inc. upon the terms and
conditions provided herein and any additional terms which will be set forth by
mutual written consent of both corporations.

      1.    Closing Date. The Exchange Date shall be as soon as practicable
            after (i) January 31, 2003. The transfer agent will issue
            certificates of Nevada Holding Group, Inc. to the shareholders of
            record of Green Valley Gaming Enterprises, Inc. upon completion of
            the share exchange. (ii) or any date that is mutually agreed upon in
            writing by both corporations.

      2.    Share Exchange. At the closing the shareholders of Green Valley
            Gaming Enterprises, Inc. will deliver to Nevada Holding Group, Inc.
            a total of 108,000,000 shares of common stock of Green Valley Gaming
            Enterprises, Inc. that represent all of the issued and outstanding
            shares of Green Valley Gaming Enterprises, Inc. Nevada Holding
            Group, Inc. in turn will issue to the shareholders of Green Valley
            Gaming Enterprises, Inc. a total of 108,000,000 shares of Nevada
            Holding Group, Inc. in accordance with the original percentage of
            the shares of Green Valley Gaming Enterprises, Inc.

      3.    Financials. Green Valley Gaming Enterprises, Inc. will provide
            audited financial statements for the years ended December 31, 2001
            and December 31, 2002.

                                       31
<PAGE>

Nevada Holding Group, Inc.
Share Exchange Agreement
Page 2 of 4

      4.    Tax Free Exchange. This exchange is intended to qualify as a
            tax-free reorganization under Section 368 of the Internal Revenue
            Code of 1986, as amended and the Nevada Holding Group, Inc. Common
            Shares, par value $0.001 per share, will be received on a tax-free
            basis. The Nevada Holding Group, Inc. Common Shares, par value
            $0.001 per share, will be "Restricted Securities" as defined in Rule
            144 under the Securities Act of 1934 and an appropriate legend will
            be placed on the certificates representing such shares and stop
            transfer orders placed against them.

      5.    Forward Stock Split of Green Valley Gaming Enterprises, Inc. Green
            Valley Gaming Enterprises, Inc. will file an amended Articles of
            Incorporation with the Secretary of State of the State of Nevada
            increasing the number of authorized common shares to 200,000,000,
            par value $0.001 per share. Green Valley Gaming Enterprises, Inc.
            will complete the forward split on the basis of 4 shares for 1
            common share issued and outstanding to the shareholders of record on
            January 28, 2003. This forward split will take the number of issued
            and outstanding common shares of Green Valley Gaming Enterprises,
            Inc. to 108,000,000.

      6.    Stock Conditions. On the date of closing there shall be no
            outstanding subscriptions, options, rights, warrant, convertible
            securities or other agreements or commissions obligating Green
            Valley Gaming Enterprises, Inc. or Nevada Holding Group, Inc. to
            issue or transfer any additional shares of their capital stock of
            any class.

      7.    Finders Fees. Nevada Holding Group, Inc. and Green Valley Gaming
            Enterprises, Inc., agree that no finders fees are owed. Both parties
            hereby indemnify and hold harmless the other party from any such
            obligation.

      8.    Financial Condition of Nevada Holding Group, Inc. On the date of the
            share exchange Nevada Holding Group, Inc. will not have any assets
            or liabilities. Nevada Holding Group, Inc. does not have any tax
            liabilities of any kind.

                                       32
<PAGE>

Nevada Holding Group, Inc.
Share Exchange Agreement
Page 3 of 4

      9.    Undesirable Shareholders. The Corporation shall have the immediate
            and absolute right to purchase the total amount of shares owned by
            any person or other entity deemed unsuitable by any gaming
            regulatory authority for the par value of the stock of $0.001 per
            share. This right cannot be waived or canceled for any purpose and
            shall extend to any and all owners or subsequent owners of the stock
            of the corporation no matter how such stock was obtained.

      10.   Board of Directors. The Board of Directors and officers of Nevada
            Holding Group, Inc. will resign upon the completion of the share
            exchange of Green Valley Gaming Enterprises, Inc. Upon the
            resignation of the current officers and directors of Nevada Holding
            Group, Inc. a new Board of Directors and officers shall be
            appointed. The officers and directors of Green Valley Gaming
            Enterprises, Inc. will become the officers and directors of Nevada
            Holding Group, Inc. The shareholders of Valley Gaming Enterprises,
            Inc. will become the majority shareholders of Nevada Holding Group,
            Inc. Nevada Holding Group, Inc. will immediately file an amended
            Articles of Incorporation changing the corporate name to Green
            Valley Gaming Enterprises, Inc. and increase the number of
            authorized common shares to 200,000,000 on the date of exchange.

      11.   One Instrument. This Share Exchange Agreement may be executed in two
            or more counterparts, each of which shall be deemed an original, but
            all of which together shall constitute one and the same instrument.

      12.   Binding Effect. The parties intend to proceed with the transactions
            contemplated herein. Each party shall promptly notify the other of
            its progress on the matters specified herein.

                                       33
<PAGE>

Nevada Holding Group, Inc.
Share Exchange Agreement
Page 4 of 4

APPROVED AND AGREED to this 31st day of January 2003.

NEVADA HOLDING GROUP, INC.               GREEN VALLEY GAMING
(A Nevada corporation)                   ENTERPRISES, INC.
                                         (A Nevada corporation)

By:    /s/  Melanie S. Meinders          By:  /s/ James F. Lisowski, Sr
   -------------------------------          ------------------------------
Melanie S. Meinders                      James F. Lisowski, Sr.
Chief Executive Officer                  Secretary

James F. Lisowski, Sr. has been duly elected and appointed as the shareholder
representative for the shareholders of Green Valley Gaming Enterprises, Inc.
with regards to the Share Exchange Agreement between Green Valley Gaming
Enterprises, Inc. and Nevada Holding Group, Inc.

By:    /s/  James F. Lisowski Sr.
   -------------------------------
James F. Lisowski, Sr.
Shareholders Representative

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}]]