FIRST AMENDMENT TO THE
WARRANT PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO THE WARRANT PURCHASE AGREEMENT (this "First
Amendment") is made as of the 17th day of June, 1997, by and between MAGELLAN
HEALTH SERVICES, INC., a Delaware corporation (the "Company"), and CRESCENT REAL
ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer").
R E C I T A L S
A. The Company and Buyer entered into that certain Warrant Purchase
Agreement dated as of January 29, 1997 (the "Agreement"). Capitalized terms used
but not defined herein have the meanings ascribed to them in the Agreement.
B. The parties desire to enter into this First Amendment to evidence
their agreement to certain changes to the Agreement, as hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the Company and the Buyer hereby agree as follows:
1. Section 1.2 is deleted in its entirety and replaced with the
following:
1.2 Purchase Price and Payment. The parties hereto acknowledge
that the Purchase Price for the Warrants was made by them in
arm's length negotiation. The aggregate purchase price for the
Warrants is Twelve Million Five Hundred Thousand Dollars
($12,500,000) (the "Purchase Price"). The Purchase Price
payable by Buyer for the Warrants shall be paid by Buyer on or
before Closing Date (as hereinafter defined) in immediately
available funds by confirmed wire transfer to a bank account
to be designated by the Company (such designation to occur no
later than the third Business Day prior to the Closing Date).
2. Section 3.8 is deleted in its entirety and replaced with the
following:
3.8 Rights Plan. Based upon the representation of Buyer in
Section 4.6 hereof and relying upon the information in the
most recent Schedule 13D filed by Rainwater-Magellan
Holdings,L.P. related to stock ownership in the Company, the
execution of this Agreement and the issuance of the Warrant
Shares (assuming the continued validity of the representation
of Buyer in Section 4.6 hereof) shall not cause an issuance of
certificates within the
- 1 -
meaning of Section 3 of the Rights Agreement dated as of July
21, 1992, as amended by the First Amendment to Rights
Agreement dated as of May 30, 1997, between the Company and
First Union National Bank of North Carolina (the "Rights
Agreement") or a Triggering Event as defined in the Rights
Agreement.
3. The reference to "Crescent Opportunity Corporation ("COC")" in
Section 5.5 should read "Crescent Operating, Inc. ("COI")".
4. Section 5.12 of the Agreement is deleted in its entirety.
5. The definition of "Rights Agreement" contained in Section 11.1
is deleted in its entirety and replaced with the following:
"Rights Agreement" means that certain Rights Agreement, dated
as of July 21, 1992, as amended by the First Amendment to
Rights Agreement, dated as of May 30, 1997, between the
Company and First Union National Bank of North Carolina, as
rights agent.
6. Annex I is deleted in its entirety and replace with Annex I
attached hereto.
- 2 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered this 17th day of June, 1997.
MAGELLAN HEALTH SERVICES, INC., a
Delaware corporation
By: \s\ Linton C. Newlin
-------------------------------
Title: Vice President and Secretary
-------------------------------
CRESCENT REAL ESTATE EQUITIES
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: Crescent Real Estate Equities,
Ltd., A Delaware corporation, its sole
general partner
By: \s\ David M. Dean
-------------------------------
Title: Senior Vice President, Law
-------------------------------
- 3 -