AMENDMENT NO. 5
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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AMENDMENT NO. 5 dated as of March 17, 1995 (this "Amendment") to the
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 2, 1994 (as amended
by Amendment No. 1 thereto dated as of June 9, 1994, Amendment No. 2 thereto
dated as of September 30, 1994, Amendment No. 3 thereto dated as of December 12,
1994 and Amendment No. 4 thereto dated as of January 11, 1995, the "Credit
Agreement"), each among CHARTER MEDICAL CORPORATION, a Delaware corporation (the
"Company"), the banking and other financial institutions from time to time party
thereto (the "Lenders"), BANKERS TRUST COMPANY, as agent for the Lenders, and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Co-Agent. Capitalized terms
used herein and not defined herein shall have the respective meanings set forth
for such terms in the Credit Agreement.

W I T N E S S E T H :
- - - - - - - - - -

WHEREAS, the Company has requested that: (a) the Lenders consent to
certain amendments to the definition of the term "Net Income" contained in the
Senior Subordinated Notes Indenture; (b) the Credit Agreement be amended to
permit the Collateral Agent, upon the request of the Company, to enter into a
non-disturbance and attornment agreement in respect of any Facility that is
leased or subleased by the Company or a Wholly-Owned Restricted Subsidiary to a
Permitted Joint Venture pursuant to Section 8.2(i) of the Credit Agreement; and
(c) the respective definitions contained in the Credit Agreement of the terms
"Base Core EBITDA" and "Core EBITDA" be amended to give the Company credit for
the pre-acquisition net income of certain Domestic Guarantors acquired by the
Company in January, 1995;

WHEREAS, subject to and upon the terms and conditions hereinafter set
forth, the Lenders party hereto are willing to agree to the foregoing;

NOW, THEREFORE, the parties hereto hereby agree as follows:

Section 1. CONSENT. The Company may amend the definition of "Net
Income" contained in the Senior Subor-

dinated Notes Indenture to read as set forth in the section entitled "The
Proposed Amendment" of the Consent Solicitation dated March 3, 1995 that is
attached hereto as Exhibit A; PROVIDED that (a) the aggregate amount of the fees
paid or payable to or for the benefit of the Holders (as defined in such Consent
Solicitation) in connection therewith does not exceed $2,812,500 (i.e., 0.75% of
the aggregate outstanding principal amount of the Senior Subordinated Notes),
and (b) the aggregate amount of fees paid or payable to or for the benefit of
the Solicitation Agent (as defined in such Consent Solicitation) in connection
therewith does not exceed such amount as is customary in the industry for
services of the type to be provided by the Solicitation Agent in connection with
such Consent Solicitation.

Section 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is
hereby amended as follows:

(a) The last paragraph of Section 8.2 of the Credit Agreement is
hereby amended by inserting the words "or paragraph (i) of this Section" after
the word "Section" in the fourth line of such paragraph.

(b) The following is inserted after the definition in Section 10
thereof of the term "Accumulated Excess Cash Flow":

"'ACQUIRED MENTOR EBITDA' shall mean, for any period, the
consolidated 'EBITDA' of the Domestic Guarantors acquired by the Company
pursuant to the Mentor Merger Agreement for the portion of such period that
precedes the date on which such Domestic Guarantors were so acquired. For
purposes of the foregoing, (a) each such Domestic Guarantor shall be deemed
to have been so acquired as of the end of the month in which it was so
acquired, and (b) the consolidated 'EBITDA' of such Domestic Guarantors for
such portion of such period shall be deemed to be the sum of the respective
amounts listed on Schedule 10.1(e) for each month that occurs during such
portion of such period."

(c) The definition of the term "Base Core EBITDA" in Section 10
thereof is amended by: (i) inserting the words "sum of the" after the word "the"
in clause (c) thereof, and (ii) inserting the phrase ", plus the

Acquired Mentor EBITDA, if any" after the word "any" in such clause (c).

(d) The definition of the term "Core EBITDA" in Section 10 thereof is
amended by: (i) inserting the words "sum of the" after the word "the" in clause
(d) thereof, and (ii) inserting the phrase ", plus the Acquired Mentor EBITDA,
if any" after the word "any" in such clause (d).

(e) The following is inserted after the definition in Section 10
thereof of the term "Measurement Date":

"'MENTOR MERGER AGREEMENT' shall mean the Merger Agreement dated
as of December 19, 1994 among the Company, Charter Acquisition Subsidiary,
a Delaware corporation, and Magellan Health Services, Inc., a Delaware
corporation, pursuant to which Charter Acquisition Subsidiary merged with
and into Magellan Health Services, Inc."

(f) Exhibit B hereto is added as Schedule 10.1(e) to the Credit
Agreement.

Section 3. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to the Agent and the Lenders that:

(a) each amount set forth opposite a month on Exhibit B hereto is the
true and correct consolidated EBITDA for such month of the Domestic Guarantors
acquired by the Company pursuant to the Mentor Merger Agreement (as defined in
the Credit Agreement as amended hereby), and (ii) each such amount was
calculated for such month in conformity with the respective definitions of the
terms "EBITDA" and "Net Income" contained in the Credit Agreement;

(b) the execution and delivery by the Company of this Amendment and
the performance by the Company of the Credit Agreement as amended hereby are
within the Company's corporate powers, have been duly authorized by all
necessary corporate or other action and will not (i) contravene the certificate
or articles of incorporation or the bylaws of the Company, (ii) contravene any
law, regulation, order, writ, judgment, decree, determination

or award currently in effect binding on or affecting the Company or any of its
Subsidiaries or any of their respective assets, except where such contravention
would not have a Material Adverse Effect, or (iii) conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of the Company or any of its Subsidiaries pursuant to the terms of, any inden-
ture, mortgage, deed of trust, agreement or other instrument (including, without
limitation, the Senior Subordinated Notes Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company, any of its Subsidiaries
or any of their respective properties or assets is bound or subject to, except
to the extent such conflict, breach, default or creation or imposition would not
have a Material Adverse Effect;

(c) this Amendment, the Credit Agreement as amended hereby and, after
giving effect to this Amendment, the other Credit Documents constitute the
legal, valid and binding obligations of the Company and the Credit Parties party
thereto, enforceable against the Company and such Credit Parties in accordance
with their respective terms, except to the extent such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);

(d) on and as of the date hereof, and both before and after giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing; and

(e) the representations and warranties of the Company and the other
Credit Parties contained in the Credit Agreement and the other Credit Documents
are true and correct on and as of the date hereof as if made on and as of the
date hereof, except to the extent such representations and warranties expressly
relate to a specific date.

Section 4. EFFECTIVENESS. This Amendment shall become effective when
the Agent shall have received

duly executed counterparts of this Amendment from the Company, each Subsidiary
of the Company that is a party to any Credit Document and as many of the Lenders
as shall be necessary to comprise the "Required Lenders".

Section 5. STATUS OF CREDIT DOCUMENTS. This Amendment is limited
solely for the purposes and to the extent expressly set forth herein, and,
except as expressly modified hereby, the terms, provisions and conditions of the
Credit Documents and the Liens granted thereunder shall continue in full force
and effect and are hereby ratified and confirmed in all respects.

Section 6. COUNTERPARTS. This Amendment may be executed and
delivered in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Company and
the Agent.

Section 7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized officers to execute and deliver this Amendment No. 5 to the
Second Amended and Restated Credit Agreement as of the date first above written.

CHARTER MEDICAL CORPORATION