SEQUENTIAL STEPS

CONVERSION, CLOSING & DISSOLUTION

(Revised March 30, 2000)

1. PRECLOSING
   1. AHS and Dissolution Trustee sign engagement letter setting out respective duties, obligations, and fee arrangement.
   2. AHS and Liquidating Trust Trustee sign letter of acceptance of the trust and set fee arrangement.
   3. Foundation incorporates under Title 13-B and Attorney General appoints trustees and officers (Foundation Bylaw Section 4.4)
   4. AHS Board votes to:
      1. approve changes (as needed) to
         1. Asset Purchase Agreement (Amendment #1, approved by AHS 3/15/00);
         2. Plan of Recapitalization and Conversion; and
         3. Plan of Complete Liquidation and Dissolution.
      2. appoint Dissolution Trustee to effectuate the liquidation and dissolution of the corporation.
2. CLOSING
   1. AHS converts to stock company (AHS Liquidating Corp.) and
      1. files amended Certificate of Organization with Secretary of State;
      2. issues stock to Foundation; and
      3. establishes capital stock on balance sheet.
   2. Foundation executes a Unanimous Shareholder Consent to vote AHS Liquidating Corp. stock to approve:
      1. sale of assets to Anthem pursuant to Asset Purchase Agreement;
      2. Plan of Recapitalization and Conversion; and
      3. Plan of Complete Liquidation and Dissolution (including authorization to form the liquidating trust, bulk reinsurance agreement, etc.) including the transactions contemplated by the foregoing (Foundation Articles of Incorporation, Article II.C.)
   3. AHS Liquidating Corp. transfers assets and liabilities to Anthem’s acquiring subsidiary.
   4. Anthem pays net cash to AHS Liquidating Corp. equal to purchase price, less Patriot’s Machigonne Stock adjustment, Patriot Notes, Escrow Amount, Medicare indemnification adjustment and other deductions provided in the APA, and assumes liabilities under the APA, including policy and contract obligations via bulk reinsurance.
   5. Anthem pays $4.7M, to discharge Patriot Notes.
   6. AHS Liquidating Corp. establishes AHS Liquidating Trust, with Dissolution Trustee and Trustee of Liquidating Trust.
   7. AHS Liquidating Corp. pays (current estimates):
      1. known accrued expenses and liabilities;
      2. $3.0M for Closing Tax Reserve (under separate agreement, as provided in APA);
      3. $3.41M to Liquidating Trust for Transaction Expenses adjusted for amounts prepaid by AHS (plan of conversion, sale and liquidation);
      4. $.5M to Liquidating Trust as a reserve for additional expenses;
      5. Balance to Foundation.
   8. Under the Liquidating Trust, the Liquidation Trustee is to take actions set forth in the Liquidating Trust Agreement which include the following:
      1. cause filing of final tax returns;
      2. oversee tax settlements and controversies;
      3. make final disbursements;
      4. make final distribution payments to Foundation upon termination of Liquidation Trust.
3. POST CLOSING
   1. Dissolution Trustee files Notice of Intent to Dissolve with Secretary of State.
   2. Dissolution Trustee certifies to Superintendent of Insurance that all assets have been distributed and liabilities provided for (which includes reserves and payments to the Liquidating Trust for further disbursement and distribution).
   3. Superintendent of Insurance examines Certificate and, upon giving approval, files one copy with Secretary of State.
   4. Dissolution Trustee files Certificate of Dissolution with the Secretary of State and in Cumberland County Registry of Deeds.
   5. Secretary of State issues Certificate of Dissolution.
   6. Liquidating Trustee pursues claims for tax refunds, pays remaining debts when finally known, and makes interim and/or final distributions to the Foundation.

s:\bcbs\boi\hearing\addlexhibits\ex77.doc

Applicants’ Exhibit 79

Projected Transaction Expenses

Legal/Consulting

February – May 2000

3/31/00

Detail Sheet: Attachment A