SECOND AMENDED AND RESTATED CREDIT AGREEMENT



                                  by and among



                           SHERIDAN HEALTHCARE, INC.,
                                  as Borrower,


                       NATIONSBANK, NATIONAL ASSOCIATION,
                             as Agent and as Lender

                                       and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME




                                 April 30, 1998









<PAGE>




                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         THIS SECOND AMENDED AND RESTATED  CREDIT  AGREEMENT,  dated as of April
30, 1998 (the "Agreement"),  is made by and among SHERIDAN  HEALTHCARE,  INC., a
Delaware  corporation  having its  principal  place of  business  in  Hollywood,
Florida (the "Borrower"),  NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association  organized and existing under the laws of the United States,  in its
capacity  as a Lender  ("NationsBank"),  and each  other  financial  institution
executing  and  delivering  a  signature  page  hereto and each other  financial
institution  which may hereafter execute and deliver an instrument of assignment
with  respect to this  Agreement  pursuant  to Section  12.1  (hereinafter  such
financial  institutions  may  be  referred  to  individually  as a  "Lender"  or
collectively  as  the  "Lenders"),  and  NATIONSBANK,  NATIONAL  ASSOCIATION,  a
national banking association organized and existing under the laws of the United
States, in its capacity as agent for the Lenders (in such capacity, and together
with any successor agent appointed in accordance with the terms of Section 11.9,
the "Agent");

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

         WHEREAS,  (a) the Borrower and NationsBank have heretofore entered into
a Revolving Credit  Agreement dated November 1, 1995 (the "Original  Agreement")
pursuant to which NationsBank  agreed to make a revolving credit facility to the
Borrower,  which facility was guaranteed by certain  subsidiaries and affiliates
(the  "Original  Guarantors")  of  the  Borrower  by  Guaranty  Agreements  (the
"Original  Guarantys"),  and (b) the Borrower and the Original  Guarantors  have
secured their  obligations  pursuant to a Security  Agreement  dated November 1,
1995 (the "Original Security  Agreement") by which the Borrower and the Original
Guarantors  granted to  NationsBank  a security  interest in property  described
therein,  and (c) the  Borrower and certain  subsidiaries  and  affiliates  (the
"Original   Pledgors")  have  secured  their   obligations  and  the  Borrower's
obligations  pursuant to a Securities  Pledge  Agreement  dated November 1, 1995
(the  "Original  Pledge  Agreement")  pursuant  to which the  Original  Pledgors
granted to NationsBank a security interest in the securities  described therein;
and

         WHEREAS,  by the Amended and Restated Credit  Agreement dated March 12,
1997,  as amended by the First  Amendment  to the  Amended and  Restated  Credit
Agreement dated December 17, 1997 (the "Existing  Agreement") the Borrower,  the
Agent and certain  Lenders  (the  "Existing  Lenders")  amended and restated the
Original Agreement in its entirety; and

         WHEREAS,  in  conjunction  with  the  entering  into  of  the  Existing
Agreement,  (a) the  Original  Guarantors  amended  and  restated  the  Original
Guarantys in their  entirety  pursuant to (i) that certain  Amended and Restated
Guaranty Agreement dated March 12, 1997 and (ii) subsequent  Guaranty Agreements
delivered  to the Agent  pursuant  to  Section  8.20 of the  Existing  Agreement
(collectively,  the  "Existing  Guarantys"),  (b) the  Borrower and the Original
Guarantors  amended and restated the Original Security Agreement in its entirety
pursuant to (i) that certain Amended and Restated Security Agreement dated March
12, 1997 and (ii) subsequent Security Agreements delivered to the Agent pursuant
to Section 8.20 of the Existing Agreement (collectively,  the "Existing Security
Agreements"),  and (c) the  Original  Pledgors  have  amended and  restated  the
Original Pledge  Agreement in its entirety  pursuant to (i) that certain Amended

<PAGE>

and Restated  Securities Pledge Agreement and (ii) subsequent  Securities Pledge
Agreements  delivered  to the Agent  pursuant  to Section  8.20 of the  Existing
Agreement (collectively, the "Existing Pledge Agreements"); and

         WHEREAS,  the Borrower has requested that the Lenders amend and restate
the  Existing  Agreement  in its  entirety  in order to provide  for a revolving
credit facility of $75,000,000, the proceeds of which are to be used as provided
in  Section  2.12 and  which  shall  include  a letter  of  credit  facility  of
$2,000,000 for the issuance of standby letters of credit; and

         WHEREAS,  the  Lenders are  willing to make such  revolving  credit and
letter  of  credit  facilities  available  to the  Borrower  upon the  terms and
conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:



                                    ARTICLE I
                             Definitions and Terms
                             ---------------------

1.1.    Amendment  and  Restatement . The  Borrower,  the Agent,  and the Lender
hereby  agree  that  upon the  effectiveness  of this  Agreement,  the terms and
provisions  of the  Existing  Agreement  shall be and  hereby  are  amended  and
restated in their entirety by the terms and conditions of this Agreement and the
terms and  provisions of the Existing  Agreement,  except as otherwise  provided
herein, shall be superseded by this Agreement.

         Notwithstanding the amendment and restatement of the Existing Agreement
by this Agreement, the Borrower shall continue to be liable to the Agent and the
Existing  Lenders with respect to agreements  on the part of the Borrower  under
the Existing  Agreement to  indemnify  and hold  harmless the Agent and Existing
Lenders  from and against all claims,  demands,  liabilities,  damages,  losses,
costs,  charges and expenses to which the Agent and the Existing  Lenders may be
subject  arising in connection  with the Existing  Agreement.  This Agreement is
given as a substitution of, and not as a payment of, the obligations of Borrower
under the Existing Agreement and is not intended to constitute a novation of the
Existing Agreement.  Except as otherwise selected by the Borrower by delivery of
a Borrowing Notice or Interest Rate Protection  Notice prior to the Closing Date
in accordance with the terms hereof,  upon the  effectiveness  of this Agreement
all amounts outstanding and owing by Borrower under the Existing Agreement as of
the Closing  Date,  as  determined  by the Lenders,  shall  constitute  Advances
hereunder  accruing  interest with respect to Base Rate Loans under the Existing
Agreement,  at the Base  Rate  hereunder.  The  parties  hereto  agree  that the
Interest  Periods for all Eurodollar Rate Loans  outstanding  under the Existing
Agreement on the Closing Date shall be terminated and the Borrower shall furnish
to the  Agent an  Interest  Rate  Selection  Notice  for  existing  Loans  and a
Borrowing  Notice for additional Loans as may be required in connection with the
allocation of Loans among Lenders in accordance with their Applicable Commitment
Percentages.  All of the indebtedness,  liabilities and obligations owing by the
Borrower  under the  Existing  Agreement  shall  continue  to be  secured by the
"Collateral" as defined in the Existing Agreement and the Borrower  acknowledges
and agrees that the  "Collateral" as defined in the Existing  Agreement  remains

                                       2
<PAGE>

subject to a security  interest in favor of NationsBank in its capacity as Agent
hereunder for the ratable  benefit of the Lenders and to secure the  liabilities
of Borrower re-evidenced by this Agreement and the other Loan Documents.

1.2.    Definitions.   For the  purposes of this  Agreement,  in addition to the
definitions  set forth  above,  the  following  terms shall have the  respective
meanings set forth below:

                  "Acquisition"  means  the  acquisition  of  (i) a  controlling
         equity interest in another Person (including the purchase of an option,
         warrant or  convertible  or similar  type  security  to acquire  such a
         controlling  interest at the time it becomes  exercisable by the holder
         thereof),  whether by purchase of such equity interest or upon exercise
         of an option or warrant for, or  conversion of  securities  into,  such
         equity interest,  or (ii) assets of another Person which constitute all
         or substantially all of the assets of such Person or of a line or lines
         of business conducted by such Person.

                  "Advance"  means  a  borrowing  under  the  Revolving   Credit
         Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.

                  "Affiliate"  means any Person (i) which directly or indirectly
         through one or more intermediaries controls, or is controlled by, or is
         under common control with the Borrower; or (ii) which beneficially owns
         or holds 5% or more of any class of the outstanding voting stock (or in
         the case of a  Person  which  is not a  corporation,  5% or more of the
         equity  interest)  of the  Borrower;  or 5% or more of any class of the
         outstanding  voting  stock  (or in the case of a Person  which is not a
         corporation,   5%  or  more  of  the  equity   interest)  of  which  is
         beneficially  owned or held by the Borrower.  The term "control"  means
         the possession, directly or indirectly, of the power to direct or cause
         the  direction  of the  management  and  policies of a Person,  whether
         through ownership of voting stock, by contract or otherwise.

                  "Applicable Commitment Percentage" means, with respect to each
         Lender that portion of the Total Revolving Credit Commitment (including
         its Participations and its obligations hereunder to the Issuing Bank to
         acquire  Participations)  allocable  to such Lender (i) with respect to
         Lenders as of the Closing Date, as set forth in Exhibit A and (ii) with
         respect to any Person who becomes a Lender  hereafter,  as reflected in
         each  Assignment  and  Acceptance  to  which  such  Lender  is a  party
         Assignee;  provided that the Applicable  Commitment  Percentage of each
         Lender shall be increased or decreased to reflect any assignments to or
         by such Lender effected in accordance with Section 12.1.

                  "Applicable  Lending  Office"  means,  for each Lender and for
         each  Type of Loan,  the  "Lending  Office"  of such  Lender  (or of an
         affiliate  of such  Lender)  designated  for  such  Type of Loan on the
         signature  pages  hereof or such  other  office of such  Lender  (or an
         affiliate  of such Lender) as such Lender may from time to time specify
         to the Agent and the Borrower by written notice in accordance  with the
         terms  hereof  as the  office by which its Loans of such Type are to be
         made and maintained.


                                       3
<PAGE>

                  "Applicable Margin" and "Applicable Unused Fee" means for each
         Eurodollar  Rate Loan that  percent  per annum set forth  below,  which
         shall  be  based  upon  the   Consolidated   Leverage   Ratio  for  the
         Four-Quarter Period most recently ended as specified below:

<TABLE>
<CAPTION>

         Tier     Consolidated Leverage Ratio        Eurodollar Applicable Margin       Applicable Unused Fee

         <S>                                                <C>                                  <C>  
         I        Less than 1.50 to 1.00                    1.000%                               0.250%

         II       Equal to or greater than 1.50 to          1.125%                               0.375%
                  1.00 and less than 2.00 to 1.00

         III      Equal to or greater than 2.00 to          1.375%                               0.375%
                  1.00 and less than 2.50 to 1.00

         IV       Equal to or greater than 2.50 to          1.875%                               0.500%
                  1.00 and equal to or less than 3.00
                  to 1.00
</TABLE>

         From the Closing  Date to through  October  31,  1998,  the  Applicable
         Margin  and  Applicable  Unused Fee shall be Tier IV.  Thereafter,  the
         Applicable Margin and Applicable Unused Fee shall be established at the
         end of each fiscal  quarter of the  Borrower  (each,  a  "Determination
         Date").  Any change in the Applicable  Margin or Applicable  Unused Fee
         following each  Determination  Date shall be determined  based upon the
         computations  set  forth  in the  certificate  furnished  to the  Agent
         pursuant  to Section  8.1(a)(ii)  and  Section  8.1(b)(ii),  subject to
         review and confirmation of such computations by the Agent, and shall be
         effective  commencing on the first Business Day next following the date
         such certificate is received (or, if earlier, the date such certificate
         was required to be  delivered)  until the first  Business Day following
         the date on which a new  certificate  is delivered or is required to be
         delivered,  whichever  shall first  occur;  provided,  however,  if the
         Borrower  shall fail to deliver  any such  certificate  within the time
         period  required  by  Section  8.1,  then  the  Applicable  Margin  and
         Applicable   Unused  Fee  shall  be  Tier  IV  until  the   appropriate
         certificate is so delivered.

                  "Applications  and  Agreements  for Letters of Credit"  means,
         collectively, the Applications and Agreements for Letters of Credit, or
         similar  documentation,  executed by the Borrower from time to time and
         delivered  to the Issuing  Bank to support  the  issuance of Letters of
         Credit.

                  "Asset Disposition" means any voluntary  disposition,  whether
         by sale,  lease or transfer of (a) any or all of the assets,  excluding
         cash and cash  equivalents,  of the Borrower or any  Subsidiary  or any
         professional  corporation or association  whose  financial  results are
         included in the consolidated  financial statements of the Borrower, and
         (b)  any  of  the  capital  stock,   or  securities   and   investments
         interchangeable,  exercisable or convertible  for or into, or otherwise
         entitling  the  holder  to  receive,  any of the  capital  stock of any
         Subsidiary  or  any  professional   corporation  or  association  whose
         financial results are included in the consolidated financial statements

                                       4
<PAGE>

         of the Borrower (other than a disposition  permitted under Sections 9.6
         or Section 9.9 hereof).

                  "Assignment  and  Acceptance"  shall  mean an  Assignment  and
         Acceptance in the form of Exhibit B (with blanks  appropriately  filled
         in)  delivered  to the  Agent in  connection  with an  assignment  of a
         Lender's interest under this Agreement pursuant to Section 12.1.

                  "Authorized  Representative"  means any of the Chairman of the
         Board,   the  President,   the  Chief  Financial   Officer,   the  Vice
         President-Finance, or the General Counsel of the Borrower or, any other
         Person  expressly  designated by the Board of Directors of the Borrower
         (or the appropriate committee thereof) as an Authorized  Representative
         of the Borrower, as set forth from time to time in a certificate in the
         form of Exhibit C.

                  "Base Rate"  means,  for any day,  the rate per annum equal to
         the higher of (a) the Federal  Funds Rate for such day plus one-half of
         one percent  (1/2%) and (b) the Prime Rate for such day.  Any change in
         the Base Rate due to a change in the Prime  Rate or the  Federal  Funds
         Rate shall become effective on the effective date of such change in the
         Prime Rate or the Federal Funds Rate.

                  "Base Rate Loan"  means a Loan for which the rate of  interest
         is determined by reference to the Base Rate.

                  "Base  Rate  Refunding  Loan"  means a Base  Rate Loan made to
         satisfy Reimbursement Obligations arising from a drawing under a Letter
         of Credit.

                  "Board"    means the Board of Governors of the Federal Reserve
         System (or any successor body).

                  "Borrower's  Account"  means a demand  deposit  account number
         3603892011  or any  successor  account  with the  Agent,  which  may be
         maintained  at one or more  offices  of the  Agent  or an  agent of the
         Agent.

                  "Borrowing Notice" means the notice delivered by an Authorized
         Representative in connection with an Advance under the Revolving Credit
         Facility, in the form of Exhibit D.

                  "Business Day" means,  (i) with respect to any Base Rate Loan,
         any day which is not a Saturday,  Sunday or a day on which banks in the
         States of New York and North  Carolina are  authorized  or obligated by
         law, executive order or governmental decree to be closed and, (ii) with
         respect to any  Eurodollar  Rate Loan, any day which is a Business Day,
         as described above, and on which the relevant  international  financial
         markets are open for the  transaction of business  contemplated by this
         Agreement in London,  England, New York, New York and Charlotte,  North
         Carolina.


                                       5
<PAGE>

                  "Capital Expenditures" means, with respect to the Borrower and
         the Guarantors, for any period the sum of (without duplication) (i) all
         expenditures  (whether paid in cash or accrued as  liabilities)  by the
         Borrower  or any  Guarantor  during such period for items that would be
         classified as "property, plant or equipment" or comparable items on the
         consolidated   balance  sheet  of  the  Borrower  and  the  Guarantors,
         including  without  limitation  all  transactional  costs  incurred  in
         connection  with  such   expenditures   provided  the  same  have  been
         capitalized, excluding, however, the amount of any Capital Expenditures
         paid for with  proceeds of casualty  insurance  as evidenced in writing
         and  submitted to the Agent  together with any  compliance  certificate
         delivered  pursuant  to  Section  8.1(a)  or  (b),  and  excluding  all
         expenditures which are included in the Cost of Acquisition with respect
         to an  Acquisition,  and (ii) with respect to any Capital Lease entered
         into by the  Borrower or a Guarantor  during such  period,  the present
         value of the lease  payments due under such Capital Lease over the term
         of such Capital  Lease  applying a discount  rate equal to the interest
         rate  provided  in such lease (or in the  absence of a stated  interest
         rate,  that rate used in the  preparation  of the financial  statements
         described in Section 8.1(a)), all the foregoing in accordance with GAAP
         applied on a Consistent Basis.

                  "Capital Leases" means all leases which have been or should be
         capitalized  in  accordance  with GAAP as in  effect  from time to time
         including Statement No. 13 of the Financial  Accounting Standards Board
         and any successor thereof.

                  "Change of Control" means, at any time:

                           (i) any "person" or "group" (each as used in Sections
                  13(d)(3) and 14(d)(2) of the Exchange Act) other than existing
                  shareholders  at the  Closing  Date  either  (A)  becomes  the
                  "beneficial  owner" (as defined in Rule 13d-3 of the  Exchange
                  Act ), directly or indirectly, of Voting Stock of the Borrower
                  (or  securities  convertible  into or  exchangeable  for  such
                  Voting Stock)  representing  thirty-five percent (35%) or more
                  of the  combined  voting  power  of all  Voting  Stock  of the
                  Borrower (on a fully diluted basis) or (B) otherwise  acquires
                  the ability,  directly or  indirectly,  to elect a majority of
                  the board of directors of the Borrower; or

                           (ii)  during  any  period  of up  to  12  consecutive
                  months, commencing on the Closing Date, individuals who at the
                  beginning  of  such  12-month  period  were  directors  of the
                  Borrower  shall  cease for any reason  (other  than the death,
                  disability or retirement of an officer of the Borrower that is
                  serving as a director at such time so long as another  officer
                  of  the  Borrower  replaces  such  Person  as a  director)  to
                  constitute  a  majority  of  the  board  of  directors  of the
                  Borrower; or

                           (iii)  any  Person  or two or  more  Persons  who are
                  stockholders  other  than  existing  stockholders  as  of  the
                  Closing Date, either directly or indirectly, acting in concert
                  shall have  acquired,  after the Closing  Date, by contract or
                  otherwise,   or  shall  have   entered   into  a  contract  or
                  arrangement  that, upon consummation  thereof,  will result in
                  its or their acquisition of the power to exercise, directly or
                  indirectly,  a  controlling  influence  on the  management  or
                  policies of the Borrower.

                                       6
<PAGE>


                  "Closing Date"    means the date as of which this Agreement is
         executed by the Borrower,  the Lenders and the Agent and on  which  the
         conditions set forth in Section 6.1 have been satisfied.

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
         and any regulations promulgated thereunder.

                  "Collateral"   means,   collectively,   all  property  of  the
         Borrower,  any  Guarantor or any other Person in which the Agent or any
         Lender is  granted a Lien as  security  for all or any  portion  of the
         Obligations under any Security Instrument.

                  "Consistent  Basis" in  reference to the  application  of GAAP
         means the accounting  principles observed in the period referred to are
         comparable in all material respects to those applied in the preparation
         of the audited  financial  statements  of the  Borrower  referred to in
         Section 7.6(a).

                  "Consolidated  EBITDA" means, with respect to the Borrower and
         the Guarantors for any Four-Quarter Period ending on the date for which
         the computation thereof is being made, the sum of, without duplication,
         (i) Consolidated Net Income, (ii) Consolidated Interest Expense,  (iii)
         taxes on income, (iv) amortization,  (v) depreciation, and (vi) certain
         demonstrable  adjustments  approved by the Agent in connection  with an
         Acquisition  all determined on a consolidated  basis in accordance with
         GAAP  applied  on a  Consistent  Basis;  provided,  however,  that with
         respect to an  Acquisition  that is accounted for as a "purchase",  for
         the  first  four  Four-Quarter  Periods  ending  after the date of such
         Acquisition,  the computation of Consolidated  EBITDA shall include the
         actual  historical  results  of  operations  of the Person or assets so
         acquired,  which amounts shall be determined on a historical  pro forma
         basis as if such  Acquisition  had been  consummated  as a "pooling  of
         interests".

                  "Consolidated  Fixed Charge Ratio" means,  with respect to the
         Borrower and the Guarantors for any  Four-Quarter  Period ending on the
         date for which the computation  thereof is being made, the ratio of (i)
         Consolidated  EBITDA for such period plus  Consolidated  Lease Payments
         for such period less (without  duplication)  Capital  Expenditures  for
         such period, to (ii) Consolidated Fixed Charges for such period.

                                       7
<PAGE>

                  "Consolidated  Fixed  Charges"  means,  with  respect  to  the
         Borrower and the Guarantors for any  Four-Quarter  Period ending on the
         date for which  the  computation  thereof  is being  made,  the sum of,
         without duplication,  (i) Consolidated  Interest Expense,  (ii) current
         maturities  of  Consolidated   Indebtedness  as  of  the  end  of  such
         Four-Quarter  Period (but excluding any amounts  outstanding  under the
         Revolving Credit Facility and any insurance premium financing plan that
         fully amortizes within one year) (iii)  Consolidated Lease Payments for
         such period and (iv) all cash  dividends  paid to  shareholders  of the
         Borrower,  all  determined on a consolidated  basis in accordance  with
         GAAP  applied  on a  Consistent  Basis;  provided,  however,  that with
         respect to an  Acquisition  that is accounted for as a "purchase",  for
         the  first  four  Four-Quarter  Periods  ending  after the date of such
         Acquisition,  the  computation  of  Consolidated  Fixed  Charges  shall
         include the actual  historical  results of  operations of the Person or
         assets so acquired,  which  amounts shall be determined on a historical
         pro  forma  basis  as if such  Acquisition  had been  consummated  as a
         "pooling of interests".

                  "Consolidated  Indebtedness"  means all Indebtedness for Money
         Borrowed and all Deferred  Excess  Compensation of the Borrower and the
         Guarantors, all determined on a consolidated basis.

                  "Consolidated  Interest  Expense"  means,  with respect to any
         period  ending on the date for which the  computation  thereof is being
         made,  the gross interest  expense of the Borrower and the  Guarantors,
         including without  limitation (i) the current amortized portion of debt
         discounts to the extent  included in gross interest  expense,  (ii) the
         current  amortized  portion  of all fees  (including  fees  payable  in
         respect  of  any  Swap  Agreement)   payable  in  connection  with  the
         incurrence of  Indebtedness  to the extent  included in gross  interest
         expense and (iii) the portion of any payments made in  connection  with
         Capital  Leases  allocable to interest  expense,  all  determined  on a
         consolidated  basis in  accordance  with GAAP  applied on a  Consistent
         Basis.

                  "Consolidated  Lease  Payments"  means,  with  respect  to any
         period ending on the date for which computation  thereof is being made,
         the  gross  amount  of all lease or  rental  payments,  whether  or not
         characterized  as rent, of the Borrower and the  Guarantors,  excluding
         payments in respect of Capital Leases  constituting  Indebtedness,  all
         determined on a consolidated basis in accordance with GAAP applied on a
         Consistent Basis.

                  "Consolidated  Leverage  Ratio" means,  for any date for which
         the  computation  thereof is being made, the ratio of (i)  Consolidated
         Indebtedness  (determined as at such date) to (ii) Consolidated  EBITDA
         (for the  Four-Quarter  Period ending on (or most recently  ended prior
         to) such date).

                  "Consolidated  Net Income" means, for any period ending on the
         date for which  computation  thereof is being made,  the gross revenues
         from operations of the Borrower and the Guarantors  (including payments
         received by the Borrower and the Guarantors of (i) interest income, and
         (ii) dividends and  distributions  made in the ordinary course of their
         businesses by Persons in which investment is permitted pursuant to this
         Agreement  and  not  related  to  an  extraordinary  event),  less  all
         operating and non-operating expenses of the Borrower and the Guarantors
         including  taxes on income,  all determined on a consolidated  basis in
         accordance with GAAP applied on a Consistent  Basis; but excluding (for
         all  purposes  other than  compliance  with Section  9.1(a))  hereof as
         income:  (i) net gains on the sale,  conversion or other disposition of
         capital assets, (ii) net gains on the acquisition,  retirement, sale or
         other disposition of capital stock and other securities of the Borrower

                                       8
<PAGE>

         or the  Guarantors,  (iii) net gains on the  collection  of proceeds of
         life insurance  policies,  (iv) any write-up of any asset,  and (v) any
         other net gain or credit of an  extraordinary  nature as  determined in
         accordance with GAAP applied on a Consistent Basis.

                  "Consolidated  Net Worth" means,  as of any date for which the
         amount  thereof is to be  determined,  the  consolidated  stockholder's
         equity of the Borrower and the  Guarantors  as determined in accordance
         with GAAP minus (without  duplication of deductions in respect of items
         already deducted in arriving at consolidated  stockholder's equity) (i)
         all reserves  (other than  contingency  reserves  not  allocated to any
         particular   purpose),   including  without  limitation   reserves  for
         depreciation,  depletion, amortization,  obsolescence,  deferred income
         taxes,  insurance and inventory  valuation and (ii) any treasury  stock
         all as  determined  on a  consolidated  basis in  accordance  with GAAP
         applied on a Consistent Basis.

                  "Consolidated  Total Assets"  means,  as of any date for which
         the  amount  thereof  is to be  determined,  the net book  value of all
         assets  of  the  Borrower  and  the   Guarantors  as  determined  on  a
         consolidated  basis in  accordance  with GAAP  applied on a  Consistent
         Basis.

                  "Contingent  Obligation"  of any Person  means all  contingent
         liabilities required (or which, upon the creation or incurring thereof,
         would  be  required)  to  be  included  in  the  financial   statements
         (including footnotes) of such Person in accordance with GAAP applied on
         a  Consistent  Basis,  including  Statement  No.  5  of  the  Financial
         Accounting Standards Board, all Rate Hedging Obligations and Letters of
         Credit and any  obligation  of such  Person  guaranteeing  or in effect
         guaranteeing  any  Indebtedness,  dividend or other  obligation  of any
         other Person (the "primary obligor") in any manner, whether directly or
         indirectly, including obligations of such Person however incurred:

                           (1) to purchase such Indebtedness or other obligation
                  or any property or assets constituting security therefor;

                           (2) to advance or supply  funds in any manner (i) for
                  the  purchase  or  payment  of  such   Indebtedness  or  other
                  obligation, or (ii) to maintain a minimum working capital, net
                  worth or other balance sheet condition or any income statement
                  condition of the primary obligor;

                           (3) to grant or convey any lien,  security  interest,
                  pledge,  charge or other encumbrance on any property or assets
                  of such Person to secure payment of such Indebtedness or other
                  obligation of the primary obligor;

                           (4) to lease  property or to purchase  securities  or
                  other  property  or  services  primarily  for the  purpose  of
                  assuring  the  owner  or  holder  of  such   Indebtedness   or
                  obligation  of the  ability  of the  primary  obligor  to make
                  payment of such Indebtedness or other obligation; or

                                       9
<PAGE>

                           (5) otherwise to assure the owner of the Indebtedness
                  or such  obligation  of the primary  obligor  against  loss in
                  respect thereof.

         Such liabilities shall be computed at the amount which, in light of all
         the facts and  circumstances  existing  at the time,  represent  in the
         reasonable  judgment of the Agent the present value of the amount which
         can  reasonably  be expected to become an actual or matured  liability.
         The  Borrower  shall  furnish  to the  Agent  the  calculation  of such
         Contingent Obligations and such information as it shall reasonably deem
         necessary in order to calculate such present value.

                  "Continue", "Continuation", and "Continued" shall refer to the
         continuation  pursuant to Section 2.8 hereof of a Eurodollar  Rate Loan
         of one  Type as a  Eurodollar  Rate  Loan of the  same  Type  from  one
         Interest Period to the next Interest Period.

                  "Contract Provider" means any Person or any employee, agent or
         subcontractor  of such  Person who  provides  professional  health care
         services  under or pursuant to any  contract  with the  Borrower or any
         Guarantor.

                  "Convert",   "Conversion",  and  "Converted"  shall refer to a
         conversion pursuant to Section 2.8 or Article V of

         one Type of Loan into another Type of Loan.

                  "Cost of Acquisition"  means, with respect to any Acquisition,
         as at the date of entering into any agreement therefor,  the sum of the
         following  (without  duplication):  (i) the value of the capital stock,
         warrants  or options to acquire  capital  stock of the  Borrower or any
         Guarantor to be transferred in connection therewith, (ii) the amount of
         any cash and fair market value of other  property  (excluding  property
         described  in clause  (i) and the unpaid  principal  amount of any debt
         instrument)  given as  consideration,  (iii) the amount  (determined by
         using the face amount or the amount  payable at maturity,  whichever is
         greater)  of any  Indebtedness  incurred,  assumed or  acquired  by the
         Borrower or any Guarantor in connection with such Acquisition, (iv) all
         additional  purchase  price  amounts in the form of earnouts  and other
         contingent  obligations  that  should  be  recorded  on  the  financial
         statements of the Borrower and the Guarantors in accordance  with GAAP,
         (v) all amounts paid in respect of covenants not to compete, consulting
         agreements  that should be recorded  as a  liability  on the  financial
         statements of the Borrower and the Guarantors in accordance  with GAAP,
         and other  affiliated  contracts in connection  with such  Acquisition,
         (vi) the aggregate fair market value of all other  consideration  given
         by the Borrower or any Guarantor in connection  with such  Acquisition,
         and (vii) out of pocket transaction costs for the services and expenses
         of attorneys,  accountants and other consultants  incurred in effecting
         such transaction, and other similar transaction costs so incurred.

                  "Debt Offering" means the incurrence of any  Indebtedness  for
         Money Borrowed permitted hereunder in connection with a public offering
         or  private  placement  of  debt  securities  of  the  Borrower  or any
         Subsidiary  or  any  professional   corporation  or  association  whose

                                       10
<PAGE>

         financial results are included in the consolidated financial statements
         of the Borrower;  provided however,  the term "Debt Offering" shall not
         include any Indebtedness permitted by Section 9.5.

                  "Default" means any event or condition which,  with the giving
         or  receipt  of notice or lapse of time or both,  would  constitute  an
         Event of Default hereunder.

                  "Default Rate" means (i) with respect to each  Eurodollar Rate
         Loan, until the end of the Interest Period applicable  thereto,  a rate
         of two percent (2%) above the Eurodollar  Rate applicable to such Loan,
         and  thereafter  at a rate of  interest  per annum  which  shall be two
         percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
         at a rate of interest  per annum which shall be two percent  (2%) above
         the Base Rate and (iii) in any case,  the  maximum  rate  permitted  by
         applicable law, if lower.

                  "Deferred  Excess  Compensation"  means the  present  value of
         those amounts  payable to a Person  pursuant to an employment  contract
         with the Borrower or a Guarantor in excess of  reasonable  compensation
         for services  which  present value is reflected on the balance sheet of
         the Borrower or such Guarantor as a liability.

                  "Dollars" and the symbol "$" means dollars  constituting legal
         tender for the payment of public and private debts in the United States
         of America.

                  "Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
         Lender, and (iii) any other Person approved by the Agent and, unless an
         Event  of  Default  has  occurred  and is  continuing  at the  time any
         assignment is effected in accordance  with Section 12.1,  the Borrower,
         such approval not to be  unreasonably  withheld or delayed by the Agent
         or the  Borrower,  it being  agreed that the  Borrower may withhold its
         approval  if  as a  result  of  such  assignment  the  Borrower  incurs
         increased  costs under Section 5.1 or Section 5.6;  provided,  however,
         that  neither the  Borrower  nor an  affiliate  of the  Borrower  shall
         qualify as an Eligible Assignee.

                  "Eligible  Securities" means the following obligations and any
         other obligations previously approved in writing by the Agent:

                           (a)      Government Securities;

                           (b)  obligations of any  corporation  organized under
                  the laws of any state of the United States of America or under
                  the laws of any other nation,  payable in the United States of
                  America, expressed to mature not later than 180 days following
                  the date of issuance  thereof and rated in an investment grade
                  rating category by S&P and Moody's;

                           (c) interest  bearing demand or time deposits  issued
                  by any Lender or certificates  of deposit  maturing within one
                  year from the date of issuance thereof and issued by a bank or
                  trust company organized under the laws of the United States or

                                       11
<PAGE>

                  of any state  thereof  having  capital  surplus and  undivided
                  profits  aggregating  at least  $400,000,000  and being  rated
                  "A-3" or better by S&P or "A" or better by Moody's;

                           (d)      Repurchase Agreements;

                           (e)      Municipal Obligations;

                           (f)      Pre-Refunded Municipal Obligations;

                           (g)   shares  of  mutual   funds   which   invest  in
                  obligations described in paragraphs (a) through (f) above, the
                  shares of which  mutual  funds are at all times rated "AAA" by
                  S&P;
                           (h) tax-exempt or taxable  adjustable  rate preferred
                  stock  issued  by a Person  having a rating  of its long  term
                  unsecured  debt of "A" or  better by S&P or "A-3" or better by
                  Moody's; and

                           (i)   asset-backed    remarketed    certificates   of
                  participation  representing a fractional undivided interest in
                  the assets of a trust,  which  certificates are rated at least
                  "A-1" by S&P and "P-1" by Moody's.

                  "Employee Benefit Plan" means any employee benefit plan within
         the  meaning  of  Section  3(3) of ERISA  which (i) is  maintained  for
         employees of the Borrower or any of its ERISA  Affiliates or is assumed
         by the Borrower or any of its ERISA  Affiliates in connection  with any
         Acquisition  or (ii) has at any time been  maintained for the employees
         of the Borrower or any current or former ERISA Affiliate.

                  "Environmental  Laws" means,  collectively,  the Comprehensive
         Environmental  Response,  Compensation  and  Liability  Act of 1980, as
         amended,  the Superfund Amendments and Reauthorization Act of 1986, the
         Resource  Conservation and Recovery Act, the Toxic  Substances  Control
         Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as
         amended, any other "Superfund" or "Superlien" law or any other federal,
         or applicable  state or local  statute,  law,  ordinance,  code,  rule,
         regulation,  order or  decree  regulating,  relating  to,  or  imposing
         liability or standards of conduct concerning, any Hazardous Material.

                  "Equity Offering" means a public or private offering of equity
         securities (including,  without limitation,  any security or investment
         exchangeable,  exercisable  or  convertible  for or into,  or otherwise
         entitling the holder to receive,  equity securities) of the Borrower or
         any Subsidiary or any  professional  corporation  or association  whose
         financial results are included in the consolidated financial statements
         of the  Borrower  (other than  securities  issued to the  Borrower or a
         Subsidiary);  provided  however,  the term "Equity  Offering" shall not
         include any issuance of equity  securities in  connection  with (i) the
         exercise of stock options  granted,  or purchase of  restricted  stock,
         pursuant to Schedule 9.9, or (ii) an  Acquisition  permitted by Section
         9.2 and constituting all or a portion of the Cost of Acquisition.

                                       12
<PAGE>

                  "ERISA" means the Employee  Retirement  Income Security Act of
         1974, as amended from time to time,  and any successor  statute and all
         rules and regulations promulgated thereunder.

                  "ERISA  Affiliate",  as  applied  to the  Borrower,  means any
         Person or trade or business which is a member of a group which is under
         common  control with the Borrower,  who together with the Borrower,  is
         treated as a single  employer  within the meaning of Section 414(b) and
         (c) of the Code.

                  "Eurodollar  Rate  Loan"  means a Loan for  which  the rate of
         interest is determined by reference to the Eurodollar Rate.

                  "Eurodollar Rate" means the interest rate per annum calculated
         according to the following formula:

             Eurodollar =  Interbank Offered Rate   +   Applicable
                           ----------------------
                Rate       1- Reserve Requirement       Margin

                  "Event of Default" means any of the  occurrences set forth  as
         such in Section 10.1.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
         amended, and the regulations promulgated thereunder.

                  "Excluded  Asset   Dispositions"   means,   collectively   (or
         individually  as the  context  may  indicate),  (i) the sale of certain
         assets of  Primedica  Healthcare,  Inc.  pursuant  to the terms of that
         certain  Consent  Letter dated April 16, 1998, and (ii) the sale of the
         furniture,  equipment  and medical  supplies  of the  primary  care and
         rheumatology practice located at 4700 North Habana Avenue, #201, Tampa,
         Florida  pursuant  to the terms set forth in the  Sheridan  Healthcare,
         Inc. Memorandum dated April 17, 1998.

                  "Facility  Guaranty"  means the Second  Amended  and  Restated
         Guaranty and  Suretyship  Agreement  among the Guarantors and the Agent
         for the benefit of the  Lenders,  delivered  as of the Closing Date and
         such other Guaranty and  Suretyship  Agreements  otherwise  pursuant to
         Section  8.20,  as  from  time  to  time  amended,  revised,  modified,
         supplemented or amended and restated.

                  "Facility  Termination  Date"  means  the  date on  which  the
         Revolving Credit  Termination  Date shall have occurred,  no Letters of
         Credit shall  remain  outstanding  and the  Borrower  shall have fully,
         finally and irrevocably paid and satisfied all Obligations.


                                       13
<PAGE>

                  "Federal  Funds Rate"  means,  for any day, the rate per annum
         (rounded  upwards,  if necessary,  to the nearest 1/100 of 1%) equal to
         the  weighted   average  of  the  rates  on  overnight   Federal  funds
         transactions  with members of the Federal  Reserve  System  arranged by
         Federal funds brokers on such day, as published by the Federal  Reserve
         Bank of New York on the Business Day next succeeding such day; provided
         that if such day is not a Business Day, the Federal Funds Rate for such
         day  shall be such  rate on such  transactions  on the  next  preceding
         Business Day as so published on the next succeeding Business Day.

                  "Fiscal  Year"  means the twelve  month  fiscal  period of the
         Borrower and the  Guarantors  commencing  on January 1 of each calendar
         year and ending on December 31 of each calendar year.

                  "Foreign  Benefit  Law"  means any  applicable  statute,  law,
         ordinance,  code,  rule,  regulation,  order or decree  of any  foreign
         nation  or  any  province,  state,  territory,  protectorate  or  other
         political  subdivision  thereof  regulating,  relating  to, or imposing
         liability  or  standards of conduct  concerning,  any Employee  Benefit
         Plan.

                  "Four-Quarter  Period" means a period of four full consecutive
         fiscal quarters of the Borrower and the  Guarantors,  taken together as
         one accounting period.

                  "GAAP" or "Generally  Accepted  Accounting  Principles"  means
         generally  accepted  accounting  principles,  being those principles of
         accounting  set forth in  pronouncements  of the  Financial  Accounting
         Standards Board, the American Institute of Certified Public Accountants
         or  which  have  other  substantial   authoritative   support  and  are
         applicable in the circumstances as of the date of a report.

                  "Government   Securities"  means  direct  obligations  of,  or
         obligations  the timely  payment of principal and interest on which are
         fully and unconditionally guaranteed by, the United States of America.

                  "Governmental   Authority"  shall  mean  any  Federal,  state,
         municipal,  national  or  other  governmental  department,  commission,
         board,   bureau,   court,   agency  or   instrumentality  or  political
         subdivision  thereof  or any entity or  officer  exercising  executive,
         legislative,  judicial,  regulatory or  administrative  functions of or
         pertaining  to any  government  or any  court,  in  each  case  whether
         associated with a state of the United States,  the United States,  or a
         foreign entity or government.

                  "Guarantors"   means,   at   any   date,   the   Subsidiaries,
         Partnerships  and  professional   corporations  or  associations  whose
         financial results are included in the consolidated financial statements
         of the Borrower.

                  "Hazardous  Material" means and includes any hazardous,  toxic
         or dangerous waste,  substance or material,  the generation,  handling,
         storage,  disposal,  treatment  or  emission of which is subject to any
         Environmental Law.

                                       14
<PAGE>


                  "HCFA"  means  the  United   States   Health  Care   Financing
         Administration and any successor thereto.

                  "Indebtedness"  means  with  respect  to any  Person,  without
         duplication,  all Indebtedness for Money Borrowed,  all indebtedness of
         such Person for the acquisition of property,  all indebtedness  secured
         by any  Lien  on the  property  of  such  Person  whether  or not  such
         indebtedness  is  assumed,  all  Letter  of  Credit  Outstandings,  all
         liability  of  such  Person  by way of  endorsements  (other  than  for
         collection  or deposit in the  ordinary  course of  business),  and all
         Contingent Obligations;  but excluding all accounts payable and accrued
         expenses in the ordinary course of business so long as payment therefor
         is due  within  one  year;  provided  that in no event  shall  the term
         Indebtedness  include surplus and retained earnings,  lease obligations
         (other than pursuant to Capital  Leases),  reserves for deferred income
         taxes and investment  credits,  other deferred credits or reserves,  or
         deferred compensation obligations.

                  "Indebtedness  for Money  Borrowed"  means with respect to any
         Person,  without  duplication,  all  indebtedness  in  respect of money
         borrowed,   including  without   limitation  all  Capital  Leases,  all
         insurance  premium  financing  and the deferred  purchase  price of any
         property or asset,  evidenced by a promissory note, bond,  debenture or
         similar  written   obligation  for  the  payment  of  money  (including
         conditional  sales or similar title retention  agreements),  other than
         trade payables incurred in the ordinary course of business.

                  "Interbank Offered Rate" means, with respect to any Eurodollar
         Rate Loan for the  Interest  Period  applicable  thereto,  the rate per
         annum  (rounded  upwards,  if  necessary,  to the nearest  1/100 of 1%)
         appearing on Telerate Page 3750 (or any  successor  page) as the London
         interbank  offered rate for deposits in Dollars at approximately  11:00
         A.M.  (London  time) two  Business  Days prior to the first day of such
         Interest  Period for a term comparable to such Interest  Period.  If or
         any reason  such rate is not  available,  the term  "Interbank  Offered
         Rate"  shall mean,  with  respect to any  Eurodollar  Rate Loan for the
         Interest  Period  applicable  thereto,  the  rate  per  annum  (rounded
         upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
         Screen LIBO Page as the London  interbank  offered rate for deposits in
         Dollars at  approximately  11:00 A.M.  (London  time) two Business Days
         prior to the first day of such Interest Period for a term comparable to
         such  Interest  Period;  provided,  however,  if more  than one rate is
         specified on Reuters Screen LIBO Page, the applicable rate shall be the
         arithmetic mean of all such rates (rounded  upwards,  if necessary,  to
         the nearest 1/100 of 1%).

                  "Interest  Period"  means,  for each  Eurodollar  Rate Loan, a
         period  commencing  on the date  such  Eurodollar  Rate Loan is made or
         Converted and ending,  at the Borrower's  option, on the date one, two,
         three,  or six  months  thereafter  as  notified  to the  Agent  by the
         Authorized   Representative  three  (3)  Business  Days  prior  to  the
         beginning of such Interest Period; provided, that,

                                       15
<PAGE>


                           (i) if the Authorized  Representative fails to notify
                  the  Agent of the  length  of an  Interest  Period  three  (3)
                  Business Days prior to the first day of such Interest  Period,
                  the Loan for which such  Interest  Period was to be determined
                  shall be  deemed  to be a Base  Rate  Loan as of the first day
                  thereof;

                           (ii) if an Interest Period for a Eurodollar Rate Loan
                  would end on a day which is not a Business  Day, such Interest
                  Period shall be extended to the next Business Day (unless such
                  extension would cause the applicable Interest Period to end in
                  the  succeeding  calendar  month,  in which case such Interest
                  Period shall end on the next preceding Business Day);

                           (iii) any  Interest  Period  which begins on the last
                  Business Day of a calendar  month (or on a day for which there
                  is no numerically  corresponding  day in the calendar month at
                  the  end of  such  Interest  Period)  shall  end  on the  last
                  Business Day of a calendar month;

                           (iv) no Interest  Period shall extend past the Stated
                  Termination Date; and

                           (v) there  shall not be more than seven (7)  Interest
                  Periods in effect on any day.

                  "Interest  Rate  Selection  Notice"  means the written  notice
         delivered  by an  Authorized  Representative  in  connection  with  the
         election of a subsequent  Interest  Period for any Eurodollar Rate Loan
         or the Conversion of any Eurodollar  Rate Loan into a Base Rate Loan or
         the  Conversion  of any Base Rate Loan into a Eurodollar  Rate Loan, in
         the form of Exhibit E.

                  "Issuing Bank" means initially  NationsBank and thereafter any
         Lender which is successor to NationsBank as issuer of Letters of Credit
         under Article III.

                  "LC Account Agreement" means the LC Account Agreement dated as
         of the date hereof  between  the  Borrower  and the Agent,  as amended,
         modified or supplemented from time to time.

                  "Letter of Credit" means a standby  letter of credit issued by
         the Issuing  Bank for the account of the  Borrower in favor of a Person
         advancing credit or securing an obligation on behalf of the Borrower.

                  "Letter  of Credit  Commitment"  means,  with  respect to each
         Lender,  the  obligation  of such Lender to acquire  Participations  in
         respect of Letters of Credit  and  Reimbursement  Obligations  up to an
         aggregate  amount at any one time  outstanding  equal to such  Lender's
         Applicable   Commitment  Percentage  of  the  Total  Letter  of  Credit
         Commitment as the same may be increased or decreased  from time to time
         pursuant to this Agreement.

                                       16
<PAGE>

                  "Letter of Credit  Facility"  means the facility  described in
         Article III hereof  providing  for the issuance by the Issuing Bank for
         the account of the Borrower of Letters of Credit in an aggregate stated
         amount at any time outstanding not exceeding the Total Letter of Credit
         Commitment.

                  "Letter  of  Credit  Outstandings"  means,  as of any  date of
         determination, the aggregate amount remaining undrawn under all Letters
         of Credit plus Reimbursement Obligations then outstanding.

                  "Lien" means any interest in property  securing any obligation
         owed to, or a claim by, a Person other than the owner of the  property,
         whether such interest is based on the common law,  statute or contract,
         and including but not limited to the lien or security  interest arising
         from a mortgage, encumbrance,  pledge, security agreement,  conditional
         sale or trust receipt or a lease,  consignment or bailment for security
         purposes.  For the  purposes of this  Agreement,  the  Borrower and any
         Guarantor  shall be deemed to be the owner of any property which it has
         acquired or holds subject to a conditional  sale  agreement,  financing
         lease, or other arrangement pursuant to which title to the property has
         been retained by or vested in some other Person for security purposes.

                  "Loan" or "Loans" means any  borrowing  pursuant to an Advance
         under the Revolving Credit Facility.

                  "Loan Documents" means this Agreement, the Notes, the Security
         Instruments,  the Facility  Guaranties,  the LC Account Agreement,  the
         Applications and Agreements for Letter of Credit,  the Swap Agreements,
         and  all  other  instruments  and  documents  heretofore  or  hereafter
         executed  or  delivered  to or in favor of any  Lender  or the Agent in
         connection with the Loans made and transactions contemplated under this
         Agreement, as the same may be amended, revised, modified,  supplemented
         or amended and restated amended from the time to time.

                  "Loan Party" means, collectively, the Borrower, each Guarantor
         and each other  Person  providing  Collateral  pursuant to any Security
         Instrument.

                  "Material  Adverse Effect" means a material  adverse effect on
         (i) the business,  properties,  operations  or condition,  financial or
         otherwise, of the Borrower or any of the Guarantors,  taken as a whole,
         (ii) the  ability of any Loan Party to pay or  perform  its  respective
         obligations,  liabilities and indebtedness  under the Loan Documents as
         such payment or  performance  becomes due in accordance  with the terms
         thereof,  or (iii) the rights,  powers and remedies of the Agent or any
         Lender  under  any  Loan   Document  or  the   validity,   legality  or
         enforceability  thereof  (including  for  purposes of clauses  (ii) and
         (iii) the imposition of burdensome conditions thereon).

                  "Material  Guarantor"  means any Guarantor which (i) has total
         assets  equal  to or  greater  than  5% of  Consolidated  Total  Assets

                                       17
<PAGE>

         (calculated as of the end of the most recent fiscal period with respect
         to which the Agent shall have received financial statements required to
         be  delivered  pursuant  to  Sections  8.1(a)  or (b) (or if  prior  to
         delivery of any financial  statements  pursuant to such Sections,  then
         calculated  with  respect to the Fiscal Year end  financial  statements
         referenced in Section 7.6) (the "Required  Financial  Information")) or
         (ii) has net income  equal to or greater  than 5% of  Consolidated  Net
         Income  (calculated  for the most recent period for which the Agent has
         received the Required Financial Information).

                  "Medicaid  Certification"  means  certification  by  HCFA or a
         state  agency or entity  under  contract  with  HCFA that  health  care
         operations are in compliance  with all the conditions of  participation
         set forth in the Medicaid Regulations.

                  "Medicaid Provider  Agreement" means an agreement entered into
         between a state agency or other such entity  administering the Medicaid
         program  and a health  care  operation  under  which  the  health  care
         operation  agrees  to  provide   services  for  Medicaid   patients  in
         accordance with the terms of the agreement and Medicaid Regulations.

                  "Medicaid  Regulations" means,  collectively,  (i) all federal
         statutes  (whether set forth in Title XIX of the Social Security Act or
         elsewhere)  affecting the medical  assistance  program  established  by
         Title  XIX of the  Social  Security  Act  and any  statutes  succeeding
         thereto;   (ii)  all  applicable   provisions  of  all  federal  rules,
         regulations,   manuals  and  orders  of  all  Governmental  Authorities
         promulgated pursuant to or in connection with the statutes described in
         clause  (i) above and all  federal  administrative,  reimbursement  and
         other  guidelines of all Governmental  Authorities  having the force of
         law  promulgated  pursuant  to  or  in  connection  with  the  statutes
         described in clause (i) above;  (iii) all state  statutes and plans for
         medical   assistance  enacted  in  connection  with  the  statutes  and
         provisions  described  in  clauses  (i) and  (ii)  above;  and (iv) all
         applicable provisions of all rules, regulations,  manuals and orders of
         all Governmental  Authorities  promulgated pursuant to or in connection
         with the  statutes  described  in  clause  (iii)  above  and all  state
         administrative,  reimbursement and other guidelines of all Governmental
         Authorities  having  the  force of law  promulgated  pursuant  to or in
         connection  with the statutes  described in clause (ii) above,  in each
         case as may be amended, supplemented or otherwise modified from time to
         time.

                  "Medicare  Certification"  means  certification  by  HCFA or a
         state  agency or entity under  contract  with HCFA that the health care
         operation is in compliance with all the conditions of participation set
         forth in the Medicare Regulations.

                  "Medicare Provider  Agreement" means an agreement entered into
         between a state agency or other such entity  administering the Medicare
         program  and a health  care  operation  under  which  the  health  care
         operation  agrees  to  provide   services  for  Medicare   patients  in
         accordance with the terms of the agreement and Medicare Regulations.

                  "Medicare  Regulations"  means,   collectively,   all  federal
         statutes  (whether set forth in Title XVIII of the Social  Security Act
         or elsewhere)  affecting the health insurance  program for the aged and

                                       18
<PAGE>

         disabled  established by Title XVIII of the Social Security Act and any
         statutes succeeding thereto; together with all applicable provisions of
         all  rules,   regulations,   manuals  and  orders  and  administrative,
         reimbursement  and  other  guidelines  having  the  force of law of all
         Governmental  Authorities  (including  without  limitation,  Health and
         Human Services  ("HHS"),  HCFA, the Office of the Inspector General for
         HHS, or any person succeeding to the functions of any of the foregoing)
         promulgated  pursuant  to or in  connection  with any of the  foregoing
         having  the  force of law,  as each  may be  amended,  supplemented  or
         otherwise modified from time to time.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer  Plan" means a "multiemployer  plan" as defined
         in  Section  4001(a)(3)  of ERISA to which  the  Borrower  or any ERISA
         Affiliate   is  making,   or  is  accruing  an   obligation   to  make,
         contributions  or has made,  or been  obligated to make,  contributions
         within the preceding six (6) Fiscal Years.

                  "Municipal  Obligations" means general  obligations issued by,
         and supported by the full taxing  authority of, any state of the United
         States of America or of any municipal  corporation or other public body
         organized  under  the laws of any such  state  which  are  rated in the
         highest investment rating category by both S&P and Moody's.

                  "NationsBank" means NationsBank, National Association.

                  "Net  Proceeds"  means (a) from any  Equity  Offering  or Debt
         Offering  cash payments  received by the Borrower or any  Subsidiary or
         any professional corporation or association whose financial results are
         included  in the  consolidated  financial  statements  of the  Borrower
         therefrom as and when received, net of all legal,  accounting,  banking
         and underwriting  fees and expenses,  commissions,  discounts and other
         issuance  expenses  incurred  in  connection  therewith  and all  taxes
         required to be paid or accrued as a consequence of such  issuance;  (b)
         from any Asset  Disposition  cash payments  received by the Borrower or
         any Subsidiary or any  professional  corporation  or association  whose
         financial results are included in the consolidated financial statements
         of the Borrower therefrom (including cash payments received pursuant to
         any note or other debt security  received in connection  with any Asset
         Disposition)  as and when received,  net of (i) all legal,  accounting,
         banking and underwriting  fees and expenses and other fees and expenses
         paid to third  parties and incurred in connection  therewith,  (ii) all
         taxes  required  to be paid or accrued as a  consequence  of such sale,
         (iii)  amounts  applied to  repayment of  Indebtedness  (other than the
         Obligations)  secured by a Lien on the asset or property disposed,  and
         (iv) any other  necessary  costs incurred in connection with such Asset
         Disposition.

                  "Note  Pledge   Agreement"  means  that  certain  Amended  and
         Restated Note Pledge  Agreement dated April 16, 1998 between  Primedica
         Healthcare, Inc. and the Agent, for the benefit of the Lenders, as from
         time to time amended,  revised,  modified,  supplemented or amended and
         restated.


                                       19
<PAGE>

                  "Notes"  means,  collectively,  the  promissory  notes  of the
         Borrower  evidencing  Revolving  Loans  executed  and  delivered to the
         Lenders as provided in Section 2.5 substantially in the form of Exhibit
         F.

                  "NMS" means NationsBanc Montgomery Securities LLC.

                  "Obligations"   means   the   obligations,   liabilities   and
         Indebtedness  of the  Borrower  with respect to (i) the  principal  and
         interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
         Obligations  and  otherwise in respect of the Letters of Credit,  (iii)
         all  liabilities  of the  Borrower to any Lender or an affiliate of any
         Lender  which  arise under a Swap  Agreement,  and (iv) the payment and
         performance of all other  obligations,  liabilities and Indebtedness of
         the  Borrower to the Lenders or the Agent  hereunder,  under any one or
         more of the other Loan Documents or with respect to the Loans.

                  "Participation"  means, with respect to any Lender (other than
         the  Issuing  Bank) and a Letter of  Credit,  the  extension  of credit
         represented  by the  participation  of  such  Lender  hereunder  in the
         liability of the Issuing  Bank in respect of a Letter of Credit  issued
         by the Issuing Bank in accordance with the terms hereof.

                  "Partnership"  means any  general or limited  partnership  (as
         defined by the Florida Uniform  Partnership  Act) in which the Borrower
         or an affiliate is a partner.

                  "Partnership   Interests"  shall  have  the  meaning  therefor
         provided in the Pledge Agreement.

                  "PBGC" means the Pension Benefit Guaranty  Corporation and any
         successor thereto.

                  "Pension Plan" means any employee  pension benefit plan within
         the meaning of Section 3(2) of ERISA, other than a Multiemployer  Plan,
         which is subject to the  provisions of Title IV of ERISA or Section 412
         of the Code and which (i) is  maintained  for employees of the Borrower
         or any of its ERISA  Affiliates or is assumed by the Borrower or any of
         its ERISA  Affiliates in connection with any Acquisition or (ii) has at
         any time been  maintained  for the  employees  of the  Borrower  or any
         current or former ERISA Affiliate.

                  "Permitted  Liens"  has the  meaning  given  to  such  term in
         Section 9.4.

                  "Person"  means  an  individual,   partnership,   corporation,
         limited  liability   company,   trust,   unincorporated   organization,
         association,  joint  venture  or a  government  or agency or  political
         subdivision thereof.

                  "Pledge Agreement" means, collectively (or individually as the
         context may  indicate),  (i) that certain  Second  Amended and Restated
         Securities  Pledge  Agreement  dated as of the date hereof by and among
         the Borrower,  certain  Guarantors and the Agent for the benefit of the

                                       20
<PAGE>

         Agent  and the  Lenders,  and  (ii)  any  additional  Pledge  Agreement
         delivered to the Agent  pursuant to Section  8.20, as from time to time
         amended, revised, modified, supplemented or amended and restated.

                  "Pledged Partnership  Interests" has the meaning given to such
         term in the Pledge Agreement.

                  "Pledged Securities" has the meaning given to such term in the
         Pledge Agreement.

                  "Pledged  Stock"  has the  meaning  given to such  term in the
         Pledge Agreement.

                  "Pre-Refunded  Municipal Obligations" means obligations of any
         state of the United States of America or of any  municipal  corporation
         or other public body  organized  under the laws of any such state which
         are  rated,  based on the  escrow,  in the  highest  investment  rating
         category by both S&P and Moody's and which have been irrevocably called
         for  redemption and advance  refunded  through the deposit in escrow of
         Government  Securities  or  other  debt  securities  which  are (i) not
         callable at the option of the issuer  thereof  prior to maturity,  (ii)
         irrevocably pledged solely to the payment of all principal and interest
         on such  obligations  as the same  becomes due and (iii) in a principal
         amount and bear such rate or rates of interest  as shall be  sufficient
         to pay in full all principal of, interest, and premium, if any, on such
         obligations  as the  same  becomes  due  as  verified  by a  nationally
         recognized firm of certified public accountants.

                  "Prime Rate" means the per annum rate of interest  established
         from time to time by NationsBank as its prime rate,  which rate may not
         be the lowest rate of interest charged by NationsBank to its customers.

                  "Principal  Office" means the principal  office of NationsBank
         presently  located at Independence  Center,  15th Floor, NC1 001-15-04,
         Charlotte,  North Carolina 28255,  Attention:  Agency Services, or such
         other office and address as the Agent may from time to time designate.

                  "Rate Hedging  Obligations"  means any and all  obligations of
         the  Borrower or any  Guarantor,  whether  absolute or  contingent  and
         howsoever  and  whensoever  created,  arising,  evidenced  or  acquired
         (including  all  renewals,  extensions  and  modifications  thereof and
         substitutions therefor),  under (i) any and all agreements,  devices or
         arrangements  designed to protect at least one of the  parties  thereto
         from the  fluctuations  of interest  rates,  exchange  rates or forward
         rates  applicable  to such  party's  assets,  liabilities  or  exchange
         transactions,  including,  but not  limited to,  Dollar-denominated  or
         cross-currency  interest rate  exchange  agreements,  forward  currency
         exchange agreements, interest rate cap or collar protection agreements,
         forward rate  currency or interest  rate  options,  puts,  warrants and
         those commonly known as interest rate "swap"  agreements;  and (ii) any
         and all cancellations, buybacks, reversals, terminations or assignments
         of any of the foregoing.

                                       21
<PAGE>


                  "Regulation D" means Regulation D of the Board as the same may
         be amended or supplemented from time to time.

                  "Regulatory  Change"  means  any  change  effective  after the
         Closing  Date in United  States  federal or state  laws or  regulations
         (including  Regulation D and capital  adequacy  regulations) or foreign
         laws or  regulations  or the  adoption or making after such date of any
         interpretations,  directives or requests  applying to a class of banks,
         which  includes any of the Lenders,  under any United States federal or
         state or foreign laws or  regulations  (whether or not having the force
         of law) by any court or governmental or monetary authority charged with
         the  interpretation  or  administration  thereof or  compliance  by any
         Lender  with any  request  or  directive  regarding  capital  adequacy,
         including those relating to "highly leveraged transactions," whether or
         not  having  the force of law,  and  whether  or not  failure to comply
         therewith  would be unlawful  and whether or not  published or proposed
         prior to the date hereof.

                  "Reimbursement   Obligation"  shall  mean  at  any  time,  the
         obligation  of the  Borrower  with  respect  to any Letter of Credit to
         reimburse  the  Issuing  Bank and the  Lenders  to the  extent of their
         respective Participations (including by the receipt by the Issuing Bank
         of proceeds of Loans  pursuant to Section 3.2) for amounts  theretofore
         paid by the Issuing  Bank  pursuant  to a drawing  under such Letter of
         Credit.

                  "Repurchase  Agreement" means a repurchase  agreement  entered
         into  with  any  financial   institution   whose  debt  obligations  or
         commercial  paper are rated "A" by either of S&P or Moody's or "A-1" by
         S&P or "P-1" by Moody's.

                  "Required Lenders" means, as of any date, Lenders on such date
         having Credit Exposures (as defined below) aggregating at least 51%, of
         the  aggregate  Credit  Exposures of all the Lenders on such date.  For
         purposes of the preceding sentence, the amount of the "Credit Exposure"
         of each Lender shall be equal to the aggregate  principal amount of the
         Loans  owing to such Lender plus the  aggregate  unutilized  amounts of
         such  Lender's  Revolving  Credit  Commitment  plus the  amount of such
         Lender's   Applicable   Commitment   Percentage  of  Letter  of  Credit
         Outstandings;  provided that, if any Lender shall have failed to pay to
         the Issuing Bank its  Applicable  Commitment  Percentage of any drawing
         under any Letter of Credit  resulting in an  outstanding  Reimbursement
         Obligation,  such Lender's Credit  Exposure  attributable to Letters of
         Credit and Reimbursement  Obligations shall be deemed to be held by the
         Issuing Bank for purposes of this definition.

                  "Reserve  Requirement" means, at any time, the maximum rate at
         which reserves (including,  without limitation, any marginal,  special,
         supplemental,  or emergency  reserves)  are  required to be  maintained
         under regulations issued from time to time by the Board of Governors of
         the Federal  Reserve  System (or any  successor) by member banks of the
         Federal Reserve System against "Eurocurrency liabilities" (as such term
         is used in Regulation D). Without limiting the effect of the foregoing,
         the Reserve Requirement shall reflect any other reserves required to be
         maintained  by such member  banks with  respect to (i) any  category of

                                       22
<PAGE>

         liabilities   which  includes   deposits  by  reference  to  which  the
         Eurodollar Rate is to be determined, or (ii) any category of extensions
         of credit or other  assets which  include  Eurodollar  Rate Loans.  The
         Eurodollar  Rate  shall  be  adjusted  automatically  on  and as of the
         effective date of any change in the Reserve Requirement.

                  "Restricted   Payment"   means  (a)  any   dividend  or  other
         distribution, direct or indirect, on account of any shares of any class
         of stock of Borrower or any of the Guarantors (other than those payable
         or  distributable  solely to the Borrower or another  Guarantor) now or
         hereafter outstanding,  except a dividend payable solely in shares of a
         class  of stock  to the  holders  of that  class;  (b) any  redemption,
         conversion,  exchange, retirement or similar payment, purchase or other
         acquisition for value,  direct or indirect,  of any shares of any class
         of stock of Borrower or any of the Guarantors (other than those payable
         or  distributable  solely to the Borrower or another  Guarantor) now or
         hereafter outstanding; (c) any payment made to retire, or to obtain the
         surrender  of, any  outstanding  warrants,  options or other  rights to
         acquire  shares of any class of stock of Borrower or any  Guarantor now
         or  hereafter  outstanding;  and (d) any  issuance  and sale of capital
         stock of any Guarantor (or any option, warrant or right to acquire such
         stock) other than to the Borrower or another Guarantor.

                  "Revolving  Credit  Commitment"  means,  with  respect to each
         Lender,  the obligation of such Lender to make Loans to the Borrower up
         to an aggregate  principal amount at any one time outstanding  equal to
         such Lender's Applicable  Commitment  Percentage of the Total Revolving
         Credit Commitment.

                  "Revolving  Credit  Facility" means the facility  described in
         Article II hereof providing for Loans to the Borrower by the Lenders in
         the  aggregate   principal   amount  of  the  Total  Revolving   Credit
         Commitment.

                  "Revolving  Credit  Outstandings"  means,  as of any  date  of
         determination,  the  aggregate  principal  amount  of  all  Loans  then
         outstanding.

                  "Revolving  Credit  Termination  Date"  means  (i) the  Stated
         Termination  Date or (ii) such earlier date of  termination of Lenders'
         obligations pursuant to Section 10.1 upon the occurrence of an Event of
         Default,  or  (iii)  such  date as the  Borrower  may  voluntarily  and
         permanently  terminate the Revolving Credit Facility by payment in full
         of all  Obligations  (including the discharge of all Obligations to the
         Issuing  Bank and the  Lenders  with  respect  to Letters of Credit and
         Participations).

                  "Revolving  Loan" means any  borrowing  pursuant to an Advance
         under the Revolving Credit Facility in accordance with Article II.

                  "S&P" means  Standard & Poor's  Ratings  Group,  a division of
         McGraw-Hill.

                  "Securities Pledge Agreement  Supplement" means,  collectively
         (or  individually  as the context may indicate) any duly  completed and
         signed Securities Pledge Agreement  Supplement in the form of Exhibit A
         to the Pledge Agreement delivered to the Agent pursuant to the terms of
         the Pledge Agreement or Section 8.20.

                                       23
<PAGE>

                  "Security  Agreement" means,  collectively (or individually as
         the context may indicate), (i) the Second Amended and Restated Security
         Agreement  dated  as of  the  date  hereof  by  the  Borrower  and  the
         Guarantors to the Agent,  and (ii) any  additional  Security  Agreement
         delivered to the Agent  pursuant to Section  8.20, as from time to time
         amended, revised, modified, supplemented or amended and restated.

                  "Security   Instruments"  means,   collectively,   the  Pledge
         Agreement,  the Security Agreement,  the LC Account Agreement, the Note
         Pledge  Agreement  and all  other  agreements,  instruments  and  other
         documents,  whether now existing or  hereafter  in effect,  pursuant to
         which the Borrower or any Guarantor  shall grant or convey to the Agent
         or the Lenders a Lien in property as security for all or any portion of
         the  Obligations,  as any of them may be  amended,  revised,  modified,
         supplemented or amended and restated from time to time.

                  "Single Employer Plan" means any employee pension benefit plan
         covered by Title IV of ERISA in respect  of which the  Borrower  or any
         Guarantor is an "employer" as described in Section 4001(b) of ERISA and
         which is not a Multiemployer Plan.

                  "Solvent" means, when used with respect to any Person, that at
         the time of determination:

                             (i) the  fair  value  of its  assets  (both at fair
                  valuation  and at present  fair  saleable  value on an orderly
                  basis) is in excess  of the total  amount of its  liabilities,
                  including Contingent Obligations; and

                           (ii) it is then  able and  expects  to be able to pay
                  its debts as they mature; and

                           (iii)  it has  capital  sufficient  to  carry  on its
                  business as conducted and as proposed to be conducted.

                  "Stated Termination Date" means April 30, 2001.

                  "Subsidiary"  means any  corporation  or other entity in which
         more than 50% of its  outstanding  voting stock or more than 50% of all
         equity interests is owned directly or indirectly by the Borrower and/or
         by one or more of the Borrower's Subsidiaries.

                  "Swap  Agreement"  means one or more  agreements  between  the
         Borrower and any Lender with respect to  Indebtedness  evidenced by any
         or all of the Notes, on terms mutually  acceptable to Borrower and such
         Person and approved by each of the  Lenders,  which  agreements  create
         Rate Hedging Obligations.

                                       24
<PAGE>


                  "Termination  Event" means: (i) a "Reportable Event" described
         in Section 4043 of ERISA and the regulations  issued thereunder (unless
         the notice  requirement has been waived by applicable  regulation);  or
         (ii) the  withdrawal  of the  Borrower  or any ERISA  Affiliate  from a
         Pension  Plan  during  a plan  year  in  which  it  was a  "substantial
         employer" as defined in Section  4001(a)(2) of ERISA or was deemed such
         under Section  4068(f) of ERISA;  or (iii) the termination of a Pension
         Plan,  the filing of a notice of intent to  terminate a Pension Plan or
         the  treatment  of a Pension  Plan  amendment  as a  termination  under
         Section  4041 of  ERISA;  or (iv) the  institution  of  proceedings  to
         terminate  a  Pension  Plan by the  PBGC;  or (v) any  other  event  or
         condition which would constitute grounds under Section 4042(a) of ERISA
         for the  termination of, or the appointment of a trustee to administer,
         any Pension  Plan;  or (vi) the partial or complete  withdrawal  of the
         Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
         imposition of a Lien pursuant to Section 412 of the Code or Section 302
         of  ERISA;  or (viii)  any  event or  condition  which  results  in the
         reorganization or insolvency of a Multiemployer Plan under Section 4241
         or Section 4245 of ERISA, respectively;  or (ix) any event or condition
         which results in the termination of a Multiemployer  Plan under Section
         4041A  of  ERISA  or the  institution  by the  PBGC of  proceedings  to
         terminate a Multiemployer Plan under Section 4042 of ERISA.

                  "Total  Letter of Credit  Commitment"  means an amount  not to
         exceed $2,000,000.

                  "Total Revolving Credit  Commitment"  means a principal amount
         equal to  $75,000,000,  as reduced from time to time in accordance with
         Section 2.7.

                  "Type" shall mean any type of Loan (i.e. a Base Rate Loan or a
         Eurodollar Rate Loan).

                  "Voting  Stock"  means  shares of  capital  stock  issued by a
         corporation,  or equivalent  interests in any other Person, the holders
         of which are ordinarily,  in the absence of contingencies,  entitled to
         vote for the  election  of  directors  (or persons  performing  similar
         functions)  of such  Person,  even if the  right  so to vote  has  been
         suspended by the happening of such a contingency.

         1.3.     Rules of Interpretation .

                  (a) All accounting terms not specifically defined herein shall
         have the meanings  assigned to such terms and shall be  interpreted  in
         accordance with GAAP applied on a Consistent Basis.

                  (b) Each term defined in Article 1 or 9 of the Florida Uniform
         Commercial  Code shall have the meaning given therein unless  otherwise
         defined herein,  except to the extent that the Uniform  Commercial Code
         of another jurisdiction is controlling,  in which case such terms shall
         have the meaning given in the Uniform Commercial Code of the applicable
         jurisdiction.

                                       25
<PAGE>

                  (c) The  headings,  subheadings  and  table of  contents  used
         herein or in any other Loan  Document  are solely  for  convenience  of
         reference  and  shall not  constitute  a part of any such  document  or
         affect the meaning, construction or effect of any provision thereof.

                  (d) Except as otherwise expressly provided,  references herein
         to  articles,  sections,  paragraphs,   clauses,  annexes,  appendices,
         exhibits  and   schedules  are   references   to  articles,   sections,
         paragraphs,  clauses, annexes, appendices, exhibits and schedules in or
         to this Agreement.

                  (e) All  definitions  set forth  herein  or in any other  Loan
         Document shall apply to the singular as well as the plural form of such
         defined term, and all references to the masculine  gender shall include
         reference  to the  feminine or neuter  gender,  and vice versa,  as the
         context may require.

                  (f) When used herein or in any other Loan Document, words such
         as "hereunder", "hereto", "hereof" and "herein" and other words of like
         import  shall,  unless the context  clearly  indicates to the contrary,
         refer to the whole of the applicable document and not to any particular
         article, section, subsection, paragraph or clause thereof.

                  (g) References to "including" means including without limiting
         the generality of any description preceding such term, and for purposes
         hereof the rule of ejusdem  generis  shall not be applicable to limit a
         general  statement,  followed  by or  referable  to an  enumeration  of
         specific matters, to matters similar to those specifically mentioned.

                  (h) All dates and times of day specified herein shall refer to
         such dates and times at Charlotte, North Carolina.

                  (i)  Each of the  parties  to the  Loan  Documents  and  their
         counsel have reviewed and revised, or requested (or had the opportunity
         to  request)  revisions  to,  the  Loan  Documents,  and  any  rule  of
         construction  that  ambiguities are to be resolved against the drafting
         party shall be inapplicable in the construing and interpretation of the
         Loan Documents and all exhibits, schedules and appendices thereto.

                  (j) Any  reference  to an officer of the Borrower or any other
         Person by  reference  to the title of such  officer  shall be deemed to
         refer to each other officer of such Person, however titled,  exercising
         the same or substantially similar functions.

                  (k) All  references  to any  agreement or document as amended,
         modified or supplemented,  or words of similar effect,  shall mean such
         document  or  agreement,  as the case may be, as  amended,  modified or
         supplemented  from  time to time  only as and to the  extent  permitted
         therein and in the Loan Documents.



                                       26
<PAGE>



                                   ARTICLE II
                          The Revolving Credit Facility
                          -----------------------------

2.1.   Revolving Loans .

                  (a)  Commitment.  Subject to the terms and  conditions of this
         Agreement,  each  Lender  severally  agrees  to  make  Advances  to the
         Borrower under the Revolving Credit Facility from time to time from the
         Closing Date until the Revolving Credit  Termination Date on a pro rata
         basis as to the total  borrowing  requested  by the Borrower on any day
         determined by such Lender's Applicable  Commitment Percentage up to but
         not exceeding the Revolving Credit Commitment of such Lender, provided,
         however,  that the  Lenders  will not be  required  and  shall  have no
         obligation  to make any such  Advance  (i) so long as a  Default  or an
         Event of Default has  occurred and is  continuing  or (ii) if the Agent
         has  accelerated  the  maturity  of any of the  Notes as a result of an
         Event of Default;  provided  further,  however,  that immediately after
         giving effect to each such Advance,  the principal  amount of Revolving
         Credit Outstandings plus Letter of Credit Outstandings shall not exceed
         the Total Revolving Credit Commitment. Within such limits, the Borrower
         may borrow, repay and reborrow under the Revolving Credit Facility on a
         Business Day from the Closing  Date until,  but (as to  borrowings  and
         reborrowings)  not including,  the Revolving Credit  Termination  Date;
         provided, however, that (y) no Revolving Loan that is a Eurodollar Rate
         Loan shall be made which has an Interest Period that extends beyond the
         Stated  Termination  Date  and  (z)  each  Revolving  Loan  that  is  a
         Eurodollar Rate Loan may,  subject to the provisions of Section 2.8, be
         repaid only on the last day of the Interest Period with respect thereto
         unless such payment is accompanied by the additional  payment,  if any,
         required by Section 5.4.

                  (b) Amounts. Except as otherwise permitted by the Lenders from
         time to time, the aggregate  unpaid  principal  amount of the Revolving
         Credit Outstandings plus Letter of Credit Outstandings shall not exceed
         at any time the Total Revolving  Credit  Commitment,  and, in the event
         there  shall  be  outstanding  any  such  excess,  the  Borrower  shall
         immediately make such payments and prepayments as shall be necessary to
         comply with this restriction. Each Revolving Loan hereunder, other than
         Base Rate Refunding Loans, and each Conversion under Section 2.8, shall
         be in an  amount  of at  least  (i)  $750,000,  and,  if  greater  than
         $750,000,  an integral  multiple of $500,000 in the case of  Eurodollar
         Rate  Loans,  and (ii)  $500,000,  and if  greater  than  $500,000,  an
         integral multiple of $100,000 in the case of Base Rate Loans.

                  (c)  Advances.  An  Authorized  Representative  shall give the
         Agent (1) at least three (3) Business Days' irrevocable  written notice
         by  telefacsimile  transmission of a Borrowing  Notice or Interest Rate
         Selection Notice (as applicable) with appropriate insertions, effective
         upon receipt,  of each  Revolving  Loan that is a Eurodollar  Rate Loan
         (whether   representing  an  additional   borrowing  hereunder  or  the
         Conversion of a borrowing  hereunder from Base Rate Loans to Eurodollar
         Rate Loans) prior to 11:00 A.M. and (2)  irrevocable  written notice by
         telefacsimile  transmission  of a  Borrowing  Notice or  Interest  Rate
         Selection Notice (as applicable) with appropriate insertions, effective
         upon receipt,  of each  Revolving  Loan (other than Base Rate Refunding
         Loans to the extent the same are effected  without  notice  pursuant to
         Section  2.1(c)(iv)) that is a Base Rate Loan (whether  representing an

                                       27
<PAGE>

         additional borrowing hereunder or the Conversion of borrowing hereunder
         from  Eurodollar  Rate Loans to Base Rate Loans) prior to 11:00 A.M. on
         the day of such proposed Revolving Loan. Each such notice shall specify
         the amount of the  borrowing,  the type of Revolving Loan (Base Rate or
         Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
         the Interest Period to be used in the  computation of interest.  Notice
         of receipt of such Borrowing Notice or Interest Rate Selection  Notice,
         as the case may be,  together with the amount of each Lender's  portion
         of an Advance requested  thereunder,  shall be provided by the Agent to
         each Lender by telefacsimile  transmission with reasonable  promptness,
         but  (provided the Agent shall have received such notice by 11:00 A.M.)
         not later than 1:00 P.M. on the same day as the Agent's receipt of such
         notice.

                  (ii) Not later than 2:00 P.M. on the date  specified  for each
         borrowing  under this Section 2.1, each Lender  shall,  pursuant to the
         terms and subject to the conditions of this Agreement,  make the amount
         of the Advance or Advances  to be made by it on such day  available  by
         wire  transfer  to the  Agent  in the  amount  of its pro  rata  share,
         determined according to such Lender's Applicable  Commitment Percentage
         of the Revolving  Loan or Revolving  Loans to be made on such day. Such
         wire transfer  shall be directed to the Agent at the  Principal  Office
         and shall be in the form of Dollars constituting  immediately available
         funds. The amount so received by the Agent shall,  subject to the terms
         and conditions of this Agreement,  be made available to the Borrower by
         delivery of the proceeds thereof to the Borrower's Account or otherwise
         as  shall  be  directed  in  the  applicable  Borrowing  Notice  by the
         Authorized Representative and reasonably acceptable to the Agent.

                  (iii) The Borrower shall have the option to elect the duration
         of the initial and any subsequent  Interest  Periods and to Convert the
         Revolving Loans in accordance  with Section 2.8.  Eurodollar Rate Loans
         and Base Rate  Loans may be  outstanding  at the same  time,  provided,
         however, there shall not be outstanding at any one time Eurodollar Rate
         Loans having more than seven (7)  different  Interest  Periods.  If the
         Agent does not receive a Borrowing Notice or an Interest Rate Selection
         Notice giving notice of election of the duration of an Interest  Period
         or of  Conversion  of  any  Loan  to or  Continuation  of a  Loan  as a
         Eurodollar  Rate Loan by the time  prescribed by Section 2.1(c) or 2.8,
         the  Borrower  shall be deemed to have elected to Convert such Loans to
         (or Continue such Loan as) a Base Rate Loan until the Borrower notifies
         the Agent in accordance with Section 2.8.

                  (iv) Notwithstanding the foregoing, if a drawing is made under
         any Letter of Credit, such drawing is honored by the Issuing Bank prior
         to the Stated  Termination Date, and the Borrower shall not immediately
         fully  reimburse  the  Issuing  Bank in  respect of such  drawing,  (A)
         provided  that the  conditions  to  making a  Revolving  Loan as herein
         provided shall then be satisfied,  the Reimbursement Obligation arising
         from  such  drawing  shall  be paid to the  Issuing  Bank by the  Agent
         without  the  requirement  of  notice  to or  from  the  Borrower  from
         immediately  available  funds  which  shall be  advanced as a Base Rate
         Refunding Loan by each Lender under the Revolving Credit Facility in an
         amount equal to such Lender's Applicable  Commitment Percentage of such
         Reimbursement  Obligation,  and  (B)  if the  conditions  to  making  a
         Revolving Loan as herein provided shall not then be satisfied,  each of
         the Lenders  shall fund by payment to the Agent (for the benefit of the
         Issuing  Bank) in  immediately  available  funds the purchase  from the

                                       28
<PAGE>

         Issuing  Bank  of  their  respective   Participations  in  the  related
         Reimbursement   Obligation   based  on  their   respective   Applicable
         Commitment  Percentages of the Total Letter of Credit Commitment.  If a
         drawing is presented  under any Letter of Credit in accordance with the
         terms  thereof and the Borrower  shall not  immediately  reimburse  the
         Issuing Bank in respect thereof, then notice of such drawing or payment
         shall be provided  promptly  by the  Issuing  Bank to the Agent and the
         Agent shall provide notice to each Lender by telephone or telefacsimile
         transmission. If notice to the Lenders of a drawing under any Letter of
         Credit is given by the Agent at or before  12:00  noon on any  Business
         Day, each Lender shall,  pursuant to the  conditions  specified in this
         Section 2.1(c)(iv),  either make a Base Rate Refunding Loan or fund the
         purchase of its Participation in the amount of such Lender's Applicable
         Commitment  Percentage  of such  drawing or payment  and shall pay such
         amount  to the  Agent  for  the  account  of the  Issuing  Bank  at the
         Principal  Office in Dollars and in immediately  available funds before
         2:30 P.M.  on the same  Business  Day.  If notice to the  Lenders  of a
         drawing under a Letter of Credit is given by the Agent after 12:00 noon
         on any Business  Day,  each Lender  shall,  pursuant to the  conditions
         specified in this Section 2.1(c)(iv), either make a Base Rate Refunding
         Loan or fund the  purchase of its  Participation  in the amount of such
         Lender's  Applicable  Commitment  Percentage of such drawing or payment
         and shall pay such  amount to the Agent for the  account of the Issuing
         Bank at the Principal  Office in Dollars and in  immediately  available
         funds before 12:00 noon on the next  following  Business  Day. Any such
         Base Rate Refunding Loan shall be advanced as, and shall Continue as, a
         Base Rate Loan unless and until the  Borrower  Converts  such Base Rate
         Loan in accordance with the terms of Section 2.8.

                  2.2 Payment of Interest.  (a) The Borrower  shall pay interest
         to the Agent for the  account  of each  Lender on the  outstanding  and
         unpaid  principal amount of each Revolving Loan made by such Lender for
         the period  commencing  on the date of such  Revolving  Loan until such
         Revolving Loan shall be due at the then  applicable  Base Rate for Base
         Rate Loans or applicable  Eurodollar Rate for Eurodollar Rate Loans, as
         designated by the  Authorized  Representative  pursuant to Section 2.1;
         provided,  however,  that if any amount  shall not be paid when due (at
         maturity,  by  acceleration  or  otherwise),  all  amounts  outstanding
         hereunder shall bear interest thereafter at the Default Rate.

                  (b) Interest on each  Revolving  Loan shall be computed on the
         basis of a year of 360 days and  calculated in each case for the actual
         number of days elapsed.  Interest on each  Revolving Loan shall be paid
         (i) quarterly in arrears on the last Business Day of each March,  June,
         September  and  December,  commencing  June 30, 1998 for each Base Rate
         Loan,  (ii) on the last day of the applicable  Interest Period for each
         Eurodollar  Rate Loan,  and (iii) upon payment in full of the principal
         amount of such Revolving Loan.

                  2.3.  Payment  of  Principal  . (a)  Manner  of  Payment.  The
         principal amount of each Revolving Loan shall be due and payable to the
         Agent for the  benefit of each Lender in full on the  Revolving  Credit
         Termination  Date,  or earlier as  specifically  provided  herein.  The
         principal  amount of any Base Rate Loan may be  prepaid  in whole or in
         part at any time. The principal  amount of any Eurodollar Rate Loan may
         be prepaid only at the end of the applicable Interest Period unless the
         Borrower  shall pay to the Agent for the  account  of the  Lenders  the
         additional  amount, if any, required under Section 5.4. All prepayments
         of Revolving  Loans made by the Borrower  shall be in the amount of (i)
         $750,000  or such  greater  amount  which is an  integral  multiple  of

                                       29
<PAGE>

         $500,000 in the case of  Eurodollar  Rate Loans,  (ii) $500,000 or such
         greater amount which is an integral multiple of $100,000 in the case of
         Base Rate  Loans,  or (iii) the amount  equal to all  Revolving  Credit
         Outstandings  and all interest  accrued thereon or such other amount as
         necessary to comply with Section  2.1(b) or Section 2.8. 

                  (b)  Mandatory  Prepayments.   The  Borrower  shall  make  the
         following  required  prepayments,  each such  payment to be made to the
         Agent for the benefit of the Lenders  within the time period  specified
         below:

                  (i) Equity Offerings.  The Borrower shall make, or shall cause
         each  applicable   Subsidiary  or  any   professional   corporation  or
         association  whose financial  results are included in the  consolidated
         financial statements of the Borrower to make, a prepayment from the Net
         Proceeds  of any  Equity  Offering  in an amount  equal to one  hundred
         percent (100%) of such Net Proceeds, but excluding up to $20,000,000 in
         Net Proceeds of an Equity  Offering of the Borrower  within ninety (90)
         days of the Closing  Date.  Each such  prepayment  shall be made within
         fifteen (15) Business Days of receipt of such Net Proceeds and upon not
         less than three (3) Business  Days'  written  notice to the Agent,  and
         shall include within one (1) Business Day of repayment a certificate of
         an Authorized  Representative  setting  forth in reasonable  detail the
         calculations utilized in computing the amount of the Net Proceeds.

                  (ii) Debt  Offerings.  The Borrower shall make, or shall cause
         each  applicable   Subsidiary  or  any   professional   corporation  or
         association  whose financial  results are included in the  consolidated
         financial statements of the Borrower to make, a prepayment from the Net
         Proceeds of any Debt Offering in an amount equal to one hundred percent
         (100%) of such Net Proceeds.  Each such prepayment shall be made within
         fifteen (15) Business Days of receipt of such Net Proceeds and upon not
         less than three (3) Business  Days'  written  notice to the Agent,  and
         shall include within one (1) Business Day of repayment a certificate of
         an Authorized  Representative  setting  forth in reasonable  detail the
         calculations utilized in computing the amount of the Net Proceeds.

                  (iii) Asset  Dispositions.  The Borrower  shall make, or shall
         cause each  applicable  Subsidiary or any  professional  corporation or
         association  whose financial  results are included in the  consolidated
         financial statements of the Borrower to make, a prepayment from the Net
         Proceeds  of any Asset  Disposition  in an amount  equal to one hundred
         percent (100%) of such Net Proceeds,  but excluding the Net Proceeds of
         any Excluded  Asset  Disposition.  Each such  prepayment  shall be made
         within  fifteen (15)  Business Days of receipt of such Net Proceeds and
         upon not less  than  three (3)  Business  Days'  written  notice to the
         Agent,  and shall  include  within one (1)  Business Day of repayment a
         certificate of an Authorized Representative setting forth in reasonable
         detail the  calculations  utilized in  computing  the amount of the Net
         Proceeds.

                  All  mandatory  prepayments  made pursuant to this Section 2.3
         shall  permanently  reduce the Total Revolving Credit Commitment by the
         amount of such  mandatory  prepayment and shall be applied first to all
         Base Rate Loans  until all Base Rate Loans  shall have been  repaid and

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<PAGE>

         then to Eurodollar Rate Loans. Any prepayment of a Eurodollar Rate Loan
         pursuant to this  Section 2.3 other than on the last day of an Interest
         Period shall be accompanied by the additional payment, if any, required
         under Section 5.4 hereof.

                  2.4.  Non-Conforming  Payments.  (a) Each payment of principal
         (including  any  prepayment)  and payment of interest and fees, and any
         other  amount  required to be paid to the Lenders  with  respect to the
         Revolving  Loans,  shall be made to the Agent at the Principal  Office,
         for the account of each Lender, in Dollars and in immediately available
         funds before 12:30 P.M. on the date such payment is due. The Agent may,
         but shall not be  obligated  to,  debit the amount of any such  payment
         which is not made by such time to any ordinary deposit account, if any,
         of the Borrower with the Agent.

                  (b) The Agent shall deem any  payment  made by or on behalf of
         the  Borrower  hereunder  that  is not  made  both  in  Dollars  and in
         immediately   available   funds  and  prior  to  12:30  P.M.  to  be  a
         non-conforming  payment.  Any such  payment  shall  not be deemed to be
         received by the Agent until the later of (i) the time such funds become
         available  funds and (ii) the next  Business  Day.  Any  non-conforming
         payment  may  constitute  or  become a  Default  or  Event of  Default.
         Interest  shall  continue  to  accrue  on any  principal  as to which a
         non-conforming  payment  is made  until  the later of (x) the date such
         funds  become  available  funds  or (y) the  next  Business  Day at the
         Default Rate from the date such amount was due and payable.

                  (c) In the event that any payment hereunder or under the Notes
         becomes due and payable on a day other than a Business  Day,  then such
         due date shall be extended to the next  succeeding  Business Day unless
         provided  otherwise  under clause (ii) of the  definition  of "Interest
         Period";  provided  that interest  shall  continue to accrue during the
         period of any such  extension  and provided  further,  that in no event
         shall  any  such due  date be  extended  beyond  the  Revolving  Credit
         Termination Date.

                  2.5.  Notes .  Revolving  Loans made by each  Lender  shall be
         evidenced  by the  Note  payable  to the  order of such  Lender  in the
         respective  amount  of  its  Applicable  Commitment  Percentage  of the
         Revolving Credit Commitment, which Note shall be dated the Closing Date
         or a later date pursuant to an Assignment  and  Acceptance and shall be
         duly completed, executed and delivered by the Borrower.

                  2.6. Pro Rata Payments . Except as otherwise  provided herein,
         (a) each  payment on account of the  principal  of and  interest on the
         Revolving Loans and the fees described in Section 2.10 shall be made to
         the  Agent  for the  account  of the  Lenders  pro rata  based on their
         Applicable Commitment  Percentages,  (b) all payments to be made by the
         Borrower  for  the  account  of  each  of the  Lenders  on  account  of
         principal, interest and fees, shall be made without diminution, setoff,
         recoupment or counterclaim,  and (c) the Agent will promptly distribute
         to the Lenders in  immediately  available  funds  payments  received in
         fully collected, immediately available funds from the Borrower.

                  2.7.  Reductions  . The  Borrower  shall,  by  notice  from an
         Authorized  Representative,  have the  right  from time to time but not

                                       31
<PAGE>

         more frequently than once each calendar month,  upon not less than five
         (5) Business Days' written notice to the Agent, effective upon receipt,
         to reduce the Total Revolving Credit  Commitment.  The Agent shall give
         each  Lender,  within one (1)  Business  Day of receipt of such notice,
         telefacsimile  notice, or telephonic notice (confirmed in writing),  of
         such reduction. Each such reduction shall be in the aggregate amount of
         $750,000 or such  greater  amount  which is in an integral  multiple of
         $500,000,  or the entire remaining Total Revolving  Credit  Commitment,
         and shall  permanently  reduce the Total Revolving  Credit  Commitment.
         Each  reduction  of the  Total  Revolving  Credit  Commitment  shall be
         accompanied  by payment of the  Revolving  Loans to the extent that the
         principal amount of Revolving Credit Outstandings plus Letter of Credit
         Outstandings exceeds the Total Revolving Credit Commitment after giving
         effect to such reduction,  together with accrued and unpaid interest on
         the amounts  prepaid.  No such reduction shall result in the payment of
         any  Eurodollar  Rate Loan other  than on the last day of the  Interest
         Period  of  such   Eurodollar  Rate  Loan  unless  such  prepayment  is
         accompanied by amounts due, if any, under Section 5.4.

                  2.8.  Conversions and Elections of Subsequent Interest Periods
         .  Subject  to the  limitations  set forth  below and in Article V, the
         Borrower may:

                  (a) upon  delivery,  effective  upon  receipt,  of a  properly
         completed  Interest  Rate  Selection  Notice  to the Agent on or before
         11:00 A.M. on any  Business  Day,  convert all or a part of  Eurodollar
         Rate  Loans to Base Rate Loans on the last day of the  Interest  Period
         for such Eurodollar Rate Loans; and

                  (b)  provided  that no Default or Event of Default  shall have
         occurred and be continuing and upon  delivery,  effective upon receipt,
         of a properly  completed Interest Rate Selection Notice to the Agent on
         or before 11:00 A.M. three (3) Business Days' prior to the date of such
         election or conversion:

                           (i) elect a subsequent  Interest  Period for all or a
                  portion of  Eurodollar  Rate Loans to begin on the last day of
                  the then  current  Interest  Period for such  Eurodollar  Rate
                  Loans; and

                           (ii) convert Base Rate Loans to Eurodollar Rate Loans
                  on any Business Day.

                  Each  election  and  conversion  pursuant to this  Section 2.8
         shall be subject to the  limitations on Eurodollar Rate Loans set forth
         in the definition of "Interest  Period" herein and in Sections 2.1, 2.3
         and  Article V. The Agent shall give  written  notice to each Lender of
         such  notice of election  or  conversion  prior to 3:00 P.M. on the day
         such  notice  of  election  or   conversion   is  received.   All  such
         continuations  or conversions of Loans shall be effected pro rata based
         on the Applicable Commitment Percentages of the Lenders.

                  2.9.  Increase  and  Decrease  in  Amounts . The amount of the
         Total  Revolving  Credit  Commitment  which shall be  available  to the
         Borrower  as  Advances  shall be  reduced  by the  aggregate  amount of
         Outstanding Letters of Credit.

                                       32
<PAGE>

                  2.10.  Unused Fee . For the period  beginning  on the  Closing
         Date and ending on the Revolving Credit  Termination Date, the Borrower
         agrees to pay to the Agent,  for the pro rata  benefit  of the  Lenders
         based on their Applicable Commitment  Percentages,  an unused fee equal
         to the Applicable  Unused Fee multiplied by the average daily amount by
         which the Total  Revolving  Credit  Commitment  exceeds  the sum of (i)
         Revolving Credit Outstandings plus (ii) Letter of Credit  Outstandings.
         Such fees  shall be due in  arrears  on the last  Business  Day of each
         March, June,  September and December commencing June 30, 1998 to and on
         the Revolving Credit Termination Date.  Notwithstanding  the foregoing,
         so long as any  Lender  fails  to make  available  any  portion  of its
         Revolving  Credit  Commitment when requested,  such Lender shall not be
         entitled  to  receive  payment  of its pro rata share of such fee until
         such  Lender  shall  make  available  such  portion.  Such fee shall be
         calculated  on the basis of a year of 360 days for the actual number of
         days elapsed.

                  2.11. Deficiency Advances . No Lender shall be responsible for
         any  default of any other  Lender in  respect  to such  other  Lender's
         obligation  to make any Loan or fund its purchase of any  Participation
         hereunder  nor shall the  Revolving  Credit  Commitment  of any  Lender
         hereunder be increased as a result of such default of any other Lender.
         Without  limiting the  generality  of the  foregoing,  in the event any
         Lender shall fail to advance funds to the Borrower as herein  provided,
         the Agent may in its discretion, but shall not be obligated to, advance
         under the Revolving Note in its favor as a Lender all or any portion of
         such  amount  or  amounts  (each,  a  "deficiency  advance")  and shall
         thereafter be entitled to payments of principal of and interest on such
         deficiency  advance in the same manner and at the same interest rate or
         rates to which such other Lender  would have been  entitled had it made
         such advance under its Revolving  Note;  provided that, upon payment to
         the Agent from such other  Lender of the entire  outstanding  amount of
         each such deficiency advance, together with accrued and unpaid interest
         thereon,  from the most recent date or dates  interest  was paid to the
         Agent by the Borrower on each Revolving Loan  comprising the deficiency
         advance at the interest rate per annum for  overnight  borrowing by the
         Agent  from the  Federal  Reserve  Bank,  then  such  payment  shall be
         credited  against the  applicable  Revolving  Note of the Agent in full
         payment of such deficiency  advance and the Borrower shall be deemed to
         have  borrowed  the amount of such  deficiency  advance from such other
         Lender as of the most  recent  date or dates,  as the case may be, upon
         which any payments of interest were made by the Borrower thereon.

                  2.12.  Use of  Proceeds  . The  proceeds  of  the  Loans  made
         pursuant to the Revolving  Credit  Facility  hereunder shall be used by
         the  Borrower for general  corporate  purposes,  including  refinancing
         certain  Indebtedness,   working  capital  needs,  and  the  making  of
         Acquisitions and Capital Expenditures permitted hereunder.

                                   ARTICLE III
                                Letters of Credit
                                -----------------

                  3.1.  Letters of Credit . The Issuing Bank agrees,  subject to
         the  terms  and  conditions  of this  Agreement,  upon  request  of the
         Borrower  to issue from time to time for the  account  of the  Borrower
         Letters of Credit upon  delivery to the Issuing Bank of an  Application
         and Agreement for Letter of Credit relating thereto in form and content
         acceptable to the Issuing Bank; provided, that (i) the Letter of Credit

                                       33
<PAGE>

         Outstandings shall not exceed the Total Letter of Credit Commitment and
         (ii) no Letter  of  Credit  shall be issued  if,  after  giving  effect
         thereto,   Letter  of  Credit   Outstandings   plus  Revolving   Credit
         Outstandings  shall exceed the Total Revolving  Credit  Commitment.  No
         Letter of Credit shall have an expiry date (including all rights of the
         Borrower or any  beneficiary  named in such Letter of Credit to require
         renewal) or payment date  occurring  later than the earlier to occur of
         one year after the date of its issuance or the fifth Business Day prior
         to the Stated Termination Date.

                  3.2. Reimbursement .

                       (a) The Borrower hereby  unconditionally agrees to pay to
         the Issuing  Bank  immediately  on demand at the  Principal  Office all
         amounts  required  to pay all drafts  drawn or  purporting  to be drawn
         under the Letters of Credit and all reasonable expenses incurred by the
         Issuing Bank in connection with the Letters of Credit, and in any event
         and without  demand to place in  possession  of the Issuing Bank (which
         shall include Advances under the Revolving Credit Facility if permitted
         by  Section  2.1)  sufficient  funds to pay all debts  and  liabilities
         arising under any Letter of Credit. The Issuing Bank agrees to give the
         Borrower  prompt  notice of any  request  for a draw  under a Letter of
         Credit.  The Issuing  Bank may charge any account the Borrower may have
         with it for any and all amounts the Issuing Bank pays under a Letter of
         Credit,  plus  charges  and  reasonable  expenses  as from time to time
         agreed to by the Issuing Bank and the  Borrower;  provided  that to the
         extent permitted by Section 2.1(c)(iv),  amounts shall be paid pursuant
         to Advances under the Revolving Credit Facility. The Borrower agrees to
         pay the Issuing Bank interest on any Reimbursement Obligations not paid
         when due  hereunder  at the Base Rate plus two percent  (2.0%),  or the
         maximum rate  permitted by  applicable  law, if lower,  such rate to be
         calculated on the basis of a year of 360 days for actual days elapsed.

                       (b) In accordance  with the provisions of Section 2.1(c),
         the Issuing Bank shall notify the Agent of any drawing under any Letter
         of Credit  promptly  following  the receipt by the Issuing Bank of such
         drawing.

                       (c) Each  Lender  (other  than the  Issuing  Bank)  shall
         automatically  acquire on the date of issuance thereof, a Participation
         in the  liability  of the  Issuing  Bank in respect  of each  Letter of
         Credit  in an  amount  equal  to such  Lender's  Applicable  Commitment
         Percentage  of such  liability,  and to the extent that the Borrower is
         obligated to pay the Issuing  Bank under  Section  3.2(a),  each Lender
         (other than the Issuing Bank) thereby shall absolutely, unconditionally
         and irrevocably  assume, and shall be unconditionally  obligated to pay
         to the Issuing Bank as hereinafter described, its Applicable Commitment
         Percentage  of the  liability  of the Issuing Bank under such Letter of
         Credit.

                           (i) Each Lender  (including  the Issuing  Bank in its
                  capacity  as  a  Lender)  shall,  subject  to  the  terms  and
                  conditions  of Article II, pay to the Agent for the account of
                  the  Issuing  Bank at the  Principal  Office in Dollars and in
                  immediately available funds, an amount equal to its Applicable
                  Commitment Percentage of any drawing under a Letter of Credit,
                  such funds to be provided in the manner  described  in Section
                  2.1(c)(iv).

                                       34
<PAGE>

                           (ii)  Simultaneously  with the making of each payment
                  by  a  Lender  to  the  Issuing   Bank   pursuant  to  Section
                  2.1(c)(iv)(B),  such Lender shall,  automatically  and without
                  any  further  action on the part of the  Issuing  Bank or such
                  Lender,  acquire a  Participation  in an amount  equal to such
                  payment (excluding the portion thereof  constituting  interest
                  accrued  prior to the date the Lender made its payment) in the
                  related   Reimbursement   Obligation  of  the  Borrower.   The
                  Reimbursement Obligations of the Borrower shall be immediately
                  due and payable  whether by Advances made in  accordance  with
                  Section 2.1(c)(iv) or otherwise.

                           (iii) Each Lender's obligation to make payment to the
                  Agent for the account of the Issuing Bank  pursuant to Section
                  2.1(c)(iv)  and  this  Section  3.2(c),  and the  right of the
                  Issuing  Bank to  receive  the  same,  shall be  absolute  and
                  unconditional,  shall  not be  affected  by  any  circumstance
                  whatsoever  and shall be made  without any offset,  abatement,
                  withholding  or  reduction   whatsoever.   If  any  Lender  is
                  obligated to pay but does not pay amounts to the Agent for the
                  account  of the  Issuing  Bank in full  upon such  request  as
                  required by Section  2.1(c)(iv) or this Section  3.2(c),  such
                  Lender shall,  on demand,  pay to the Agent for the account of
                  the Issuing  Bank  interest on the unpaid  amount for each day
                  during the period  commencing  on the date of notice  given to
                  such Lender  pursuant to Section 2.1(c) until such Lender pays
                  such amount to the Agent for the  account of the Issuing  Bank
                  in full at the interest rate per annum for overnight borrowing
                  by the Agent from the Federal Reserve Bank.

                           (iv)  In  the  event  the  Lenders   have   purchased
                  Participations in any Reimbursement Obligation as set forth in
                  clause  (ii)  above,  then  at  any  time  payment  (in  fully
                  collected,  immediately available funds) of such Reimbursement
                  Obligation,  in whole or in part,  is received by Issuing Bank
                  from the  Borrower,  Issuing  Bank shall  promptly pay to each
                  Lender an amount equal to its Applicable Commitment Percentage
                  of such payment from the Borrower.

                  (d) Promptly  following the end of each calendar quarter,  the
         Issuing  Bank  shall  deliver  to the  Agent a  notice  describing  the
         aggregate  undrawn  amount of all  Letters of Credit at the end of such
         quarter.  Upon the request of any Lender from time to time, the Issuing
         Bank shall  deliver to the Agent,  and the Agent shall  deliver to such
         Lender, any other information  reasonably requested by such Lender with
         respect to each Letter of Credit outstanding.

                  (e) The  issuance by the Issuing Bank of each Letter of Credit
         shall, in addition to the conditions precedent set forth in Article VI,
         be subject to the conditions that such Letter of Credit be in such form
         and  contain  such  terms as shall be  reasonably  satisfactory  to the
         Issuing Bank consistent with the then current  practices and procedures
         of the Issuing Bank with respect to similar letters of credit,  and the
         Borrower shall have executed and delivered such other  instruments  and
         agreements relating to such Letters of Credit as the Issuing Bank shall
         have reasonably requested consistent with such practices and procedures
         and shall  not be in  conflict  with any of the  express  terms  herein
         contained.  All  Letters  of  Credit  shall be issued  pursuant  to and
         subject to the Uniform  Customs and Practice for  Documentary  Credits,
         1993 revision,  International  Chamber of Commerce  Publication No. 500
         (the "UCP") and all subsequent amendments and revisions thereto.

                                       35
<PAGE>

                  (f) The  Borrower  agrees that  Issuing  Bank may, in its sole
         discretion, accept or pay, as complying with the terms of any Letter of
         Credit,  any drafts or other documents  otherwise in order which may be
         signed or issued by an administrator,  executor, trustee in bankruptcy,
         debtor  in   possession,   assignee  for  the  benefit  of   creditors,
         liquidator, receiver, attorney in fact or other legal representative of
         a party who is authorized  under such Letter of Credit to draw or issue
         any drafts or other documents.

                  (g) Without  limiting  the  generality  of the  provisions  of
         Section 12.9, the Borrower hereby agrees to indemnify and hold harmless
         the Issuing Bank,  each other Lender and the Agent from and against any
         and all claims and damages, losses,  liabilities,  reasonable costs and
         expenses  which the Issuing  Bank,  such other  Lender or the Agent may
         incur (or which may be claimed  against  the Issuing  Bank,  such other
         Lender or the Agent) by any Person by reason of or in  connection  with
         the  issuance  or  transfer  of or  payment or failure to pay under any
         Letter of Credit;  provided that the Borrower  shall not be required to
         indemnify  the  Issuing  Bank,  any  other  Lender or the Agent for any
         claims, damages, losses, liabilities,  costs or expenses to the extent,
         but only to the extent,  (i) caused by the willful  misconduct or gross
         negligence of the party to be indemnified or (ii) caused by the failure
         of the  Issuing  Bank to pay  under  any  Letter  of  Credit  after the
         presentation to it of a request for payment strictly complying with the
         terms and  conditions of such Letter of Credit,  unless such payment is
         prohibited  by  any  law,  regulation,   court  order  or  decree.  The
         indemnification  and hold harmless  provisions  of this Section  3.2(g)
         shall survive repayment of the Obligations, occurrence of the Revolving
         Credit   Termination  Date,  and  expiration  or  termination  of  this
         Agreement.

                  (h) Without limiting Borrower's rights as set forth in Section
         3.2(g),  the  obligation of the Borrower to  immediately  reimburse the
         Issuing Bank for drawings  made under Letters of Credit and the Issuing
         Bank's right to receive such payment  shall be absolute,  unconditional
         and  irrevocable,  and  such  obligations  of  the  Borrower  shall  be
         performed  strictly in accordance  with the terms of this Agreement and
         such Letters of Credit and the related  Applications  and Agreement for
         any Letter of Credit, under all circumstances whatsoever, including the
         following circumstances:

                           (i) any lack of  validity  or  enforceability  of the
                  Letter of Credit,  the  obligation  supported by the Letter of
                  Credit or any other agreement or instrument  relating  thereto
                  (collectively, the "Related LC Documents");

                           (ii) any  amendment or waiver of or any consent to or
                  departure from all or any of the Related LC Documents;

                           (iii) the  existence  of any claim,  setoff,  defense
                  (other  than the  defense of payment  in  accordance  with the
                  terms of this  Agreement)  or other  rights which the Borrower
                  may have at any time against any beneficiary or any transferee
                  of a Letter of Credit (or any persons or entities for whom any

                                       36
<PAGE>

                  such  beneficiary or any such  transferee may be acting),  the
                  Agent, the Lenders or any other Person,  whether in connection
                  with the Loan  Documents,  the  Related  LC  Documents  or any
                  unrelated transaction;

                           (iv) any breach of contract or other dispute  between
                  the Borrower and any beneficiary or any transferee of a Letter
                  of  Credit  (or  any  persons  or   entities   for  whom  such
                  beneficiary or any such transferee may be acting),  the Agent,
                  the Lenders or any other Person;

                           (v)  any  draft,  statement  or  any  other  document
                  presented  under the  Letter of Credit  proving  to be forged,
                  fraudulent,  invalid  or  insufficient  in any  respect or any
                  statement  therein  being untrue or  inaccurate in any respect
                  whatsoever;

                           (vi)  any   delay,   extension   of  time,   renewal,
                  compromise  or other  indulgence  or  modification  granted or
                  agreed to by the Agent,  with or without notice to or approval
                  by the  Borrower in respect of any of  Borrower's  Obligations
                  under this Agreement; or

                           (vii) any other circumstance or happening whatsoever,
                  whether or not similar to any of the foregoing.

                  3.3.  Letter of Credit  Facility Fees . The Borrower shall pay
         to the  Agent,  (i) for the pro rata  benefit of the  Lenders  based on
         their Applicable Commitment Percentages,  a fee on the aggregate amount
         available  to be drawn on each  outstanding  Letter of Credit at a rate
         equal to the  Applicable  Margin,  and (ii) for the  Issuing  Bank,  an
         amount to be agreed upon from time to time by the Issuing  Bank and the
         Borrower,  based on the aggregate  amount available to be drawn on each
         outstanding  Letter of Credit.  Such fees shall be due with  respect to
         each  Letter of Credit  quarterly  in  arrears  on the last day of each
         March, June, September and December,  the first such payment to be made
         on the first such date occurring after the date of issuance of a Letter
         of Credit.  The fees  described in this Section 3.3 shall be calculated
         on the  basis  of a year of 360  days  for the  actual  number  of days
         elapsed.

                  3.4.  Administrative  Fees .  The  Borrower  shall  pay to the
         Issuing  Bank  such  administrative  fee and  other  fees,  if any,  in
         connection with the Letters of Credit in such amounts and at such times
         as the Issuing Bank and the Borrower shall agree from time to time.

                                   ARTICLE IV
                                    Security
                                    --------

                  4.1.  Security . As security  for the full and timely  payment
         and performance of all Obligations, the Loan Parties shall on or before
         the  Closing  Date do or cause to be done all things  necessary  in the
         reasonable  opinion of the Agent and its  counsel to grant to the Agent
         for the benefit of the Lenders a duly perfected first priority security
         interest  in  all  Collateral   subject  to  no  prior  Lien  or  other
         encumbrance  or  restriction on transfer  (other than  restrictions  on
         transfer imposed by applicable securities laws).

                                       37
<PAGE>

                  4.2.  Further  Assurances.  At the  request of the Agent,  the
         Borrower will or will cause the Guarantors or other Loan Party,  as the
         case may be to execute, by its duly authorized officers,  alone or with
         the Agent, any certificate,  instrument,  statement or document,  or to
         procure any such certificate,  instrument, statement or document, or to
         take such other  action (and pay all actual out of pocket  costs) which
         the Agent  reasonably  deems  necessary  from  time to time to  create,
         continue or preserve  the liens and security  interests  in  Collateral
         (and the  perfection  and priority  thereof) of the Agent  contemplated
         hereby and by the other Loan Documents.

                  4.3.   Information   Regarding   Collateral.    The   Borrower
         represents,  warrants and covenants that (i) the chief executive office
         of the Borrower and each other Person providing  Collateral pursuant to
         a Security  Instrument  (each,  a  "Grantor")  at the  Closing  Date is
         located at the address or addresses specified on Schedule 4.3, and (ii)
         Schedule  4.3  contains  a true and  complete  list of (a) the name and
         address of each  Grantor and of each other Person that has effected any
         merger or consolidation with a Grantor or contributed or transferred to
         a  Grantor  any  property  constituting  Collateral  at any time  since
         January 1, 1993 (excluding  Persons making sales in the ordinary course
         of their businesses to a Grantor of property constituting  inventory in
         the hands of such  seller),  (b) each  location of the chief  executive
         office of each  Grantor  at any time since  January  1, 1993,  (c) each
         location  in  which  goods  constituting  Collateral  are or have  been
         located since January 1, 1993  (together with the name of each owner of
         the property located at such address if not the applicable Grantor, and
         a  summary  description  of the  relationship  between  the  applicable
         Grantor and such Person),  and (d) each trade style used by any Grantor
         since January 1, 1993 and the purposes for which it was used.  Borrower
         shall not change, and shall not permit any other Grantor to change, the
         location of its chief  executive  office or any  location  specified in
         clause (c) of the immediately  preceding sentence, or use or permit any
         other Grantor to use, any  additional  trade style,  except upon giving
         not less than thirty (30) days' prior  written  notice to the Agent and
         taking or causing  to be taken all such  action at  Borrower's  or such
         other Grantor's expense as may be reasonably  requested by the Agent to
         perfect  or  maintain  the  perfection  of the  Lien  of the  Agent  in
         Collateral.

                  4.4.Security  Instruments  . On or before the Closing Date the
         Borrower  shall execute and deliver to the Agent,  and shall cause each
         of the  Guarantors  to execute  and  deliver to the Agent,  each of the
         Security  Instruments to which it is a party,  together with such other
         instruments   and  documents,   including   financing   statements  and
         amendments  to  financing  statements,  as  the  Agent  may  reasonably
         request.

                                    ARTICLE V
                             Change in Circumstances
                             -----------------------

                  5.1 Increased Cost and Reduced Return .

                  (a) If, after the date hereof,  the adoption of any applicable
         law, rule, or regulation, or any change in any applicable law, rule, or
         regulation,  or any  change  in the  interpretation  or  administration
         thereof by any  governmental  authority,  central  bank,  or comparable

                                       38
<PAGE>


         agency charged with the  interpretation or administration  thereof,  or
         compliance by any Lender (or its  Applicable  Lending  Office) with any
         request or  directive  (whether  or not having the force of law) of any
         such governmental authority, central bank, or comparable agency:

                        (i) shall subject such Lender (or its Applicable Lending
         Office)  to  any  tax,  duty,  or  other  charge  with  respect  to any
         Eurodollar  Rate Loans,  its Note, or its obligation to make Eurodollar
         Rate Loans,  or change the basis of taxation of any amounts  payable to
         such Lender (or its Applicable  Lending Office) under this Agreement or
         its Note in respect of any  Eurodollar  Rate  Loans  (other  than taxes
         imposed on the overall net income of such Lender by the jurisdiction in
         which such Lender has its principal  office or such Applicable  Lending
         Office);

                       (ii)  shall  impose,   modify,  or  deem  applicable  any
         reserve,  special deposit,  assessment,  or similar  requirement (other
         than the  Reserve  Requirement  utilized  in the  determination  of the
         Eurodollar  Rate)  relating to any extensions of credit or other assets
         of, or any deposits with or other  liabilities or commitments  of, such
         Lender (or its  Applicable  Lending  Office),  including  the Revolving
         Credit Commitment of such Lender hereunder; or

                      (iii)  shall  impose  on such  Lender  (or its  Applicable
         Lending Office) or on the London  interbank  market any other condition
         affecting  this  Agreement  or its  Note or any of such  extensions  of
         credit or liabilities or commitments;

         and the result of any of the  foregoing is to increase the cost to such
         Lender (or its Applicable  Lending Office) of making,  Converting into,
         Continuing,  or maintaining  any Eurodollar Rate Loans or to reduce any
         sum received or  receivable by such Lender (or its  Applicable  Lending
         Office) under this Agreement or its Note with respect to any Eurodollar
         Rate Loans,  then the Borrower  shall pay to such Lender on demand such
         amount or amounts as will  compensate  such  Lender for such  increased
         cost or  reduction;  provided  that no Lender  will be  entitled to any
         compensation  for any such  increased  cost or  reduction if demand for
         payment  thereof  is made by such  Lender  more than 180 days after the
         occurrence  of the  circumstances  giving  rise to such  claim.  If any
         Lender requests compensation by the Borrower under this Section 5.1(a),
         the Borrower  may, by notice to such Lender (with a copy to the Agent),
         suspend the  obligation of such Lender to make or Continue Loans of the
         Type with  respect  to which  such  compensation  is  requested,  or to
         Convert  Loans of any other  Type into  Loans of such  Type,  until the
         event or condition  giving rise to such request  ceases to be in effect
         (in which  case the  provisions  of Section  5.4 shall be  applicable);
         provided that such suspension shall not affect the right of such Lender
         to receive the compensation so requested.

                  (b)  If,  after  the  date  hereof,   any  Lender  shall  have
         determined that the adoption of any applicable law, rule, or regulation
         regarding   capital   adequacy   or  any  change   therein  or  in  the
         interpretation or administration thereof by any governmental authority,
         central bank, or comparable  agency charged with the  interpretation or
         administration  thereof,  or any request or directive regarding capital
         adequacy  (whether  or not  having  the  force  of  law)  of  any  such
         governmental  authority,  central bank, or  comparable  agency,  has or
         would have the effect of reducing  the rate of return on the capital of
         such

                                       39
<PAGE>

         Lender or any corporation  controlling  such Lender as a consequence of
         such  Lender's  obligations  hereunder to a level below that which such
         Lender or such  corporation  could have achieved but for such adoption,
         change,  request,  or directive (taking into consideration its policies
         with respect to capital  adequacy),  then from time to time upon demand
         the Borrower shall pay to such Lender such additional amount or amounts
         as will compensate such Lender for such reduction.

                  (c) Each Lender  shall  promptly  notify the  Borrower and the
         Agent of any event of which it has knowledge,  occurring after the date
         hereof, which will entitle such Lender to compensation pursuant to this
         Section and will  designate a different  Applicable  Lending  Office if
         such designation will avoid the need for, or reduce the amount of, such
         compensation and will not, in the judgment of such Lender, be otherwise
         disadvantageous  to it. Any  Lender  claiming  compensation  under this
         Section shall furnish to the Borrower and the Agent a statement setting
         forth the additional amount or amounts to be paid to it hereunder which
         shall be conclusive in the absence of manifest  error.  In  determining
         such  amount,  such  Lender  may  use  any  reasonable   averaging  and
         attribution  methods that such Lender uses for its  customers  that are
         similarly situated to the Borrower.

                  5.2 Limitation on Types of Loans . If on or prior to the first
         day of any Interest Period for any Eurodollar Rate Loan:

                  (a)  the  Agent  determines  (which   determination  shall  be
         conclusive)  that by reason of  circumstances  affecting  the  relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Eurodollar Rate for such Interest Period; or

                  (b) the Required Lenders determine (which  determination shall
         be conclusive)  and notify the Agent that the Eurodollar  Rate will not
         adequately  and  fairly  reflect  the cost to the  Lenders  of  funding
         Eurodollar Rate Loans for such Interest Period;

         then the Agent shall give the Borrower prompt notice thereof specifying
         the relevant Type of Loans and the relevant amounts or periods,  and so
         long as such condition remains in effect, the Lenders shall be under no
         obligation to make  additional  Loans of such Type,  Continue  Loans of
         such  Type,  or to  Convert  Loans of any other Type into Loans of such
         Type and the  Borrower  shall,  on the last day(s) of the then  current
         Interest  Period(s)  for the  outstanding  Loans of the affected  Type,
         either  prepay such Loans or Convert  such Loans into  another  Type of
         Loan in accordance with the terms of this Agreement.

                  5.3.  Illegality . Notwithstanding any other provision of this
         Agreement,  in the event that it becomes unlawful for any Lender or its
         Applicable  Lending Office to make,  maintain,  or fund Eurodollar Rate
         Loans  hereunder,  then such Lender shall promptly  notify the Borrower
         thereof and such  Lender's  obligation  to make or Continue  Eurodollar
         Rate Loans and to Convert  other  Types of Loans into  Eurodollar  Rate
         Loans shall be suspended until such time as such Lender may again make,
         maintain,  and fund Eurodollar Rate Loans (in which case the provisions
         of Section 5.4 shall be applicable).

                                       40
<PAGE>

                  5.4.  Treatment of Affected  Loans . If the  obligation of any
         Lender to make a  Eurodollar  Rate Loan or to  Continue,  or to Convert
         Loans of any other  Type  into,  Loans of a  particular  Type  shall be
         suspended  pursuant  to Section  5.1 or 5.3 hereof  (Loans of such Type
         being herein called  "Affected Loans" and such Type being herein called
         the  "Affected   Type"),   such  Lender's   Affected   Loans  shall  be
         automatically  Converted into Base Rate Loans on the last day(s) of the
         then current Interest  Period(s) for Affected Loans (or, in the case of
         a  Conversion  required by Section 5.3 hereof,  on such earlier date as
         such Lender may specify to the Borrower  with a copy to the Agent) and,
         unless and until such Lender  gives  notice as provided  below that the
         circumstances  specified in Section 5.1 or 5.3 hereof that gave rise to
         such Conversion no longer exist:

                  (a) to the extent that such Lender's  Affected Loans have been
         so  Converted,  all payments and  prepayments  of principal  that would
         otherwise be applied to such Lender's  Affected  Loans shall be applied
         instead to its Base Rate Loans; and

                  (b) all Loans that would  otherwise  be made or  Continued  by
         such Lender as Loans of the  Affected  Type shall be made or  Continued
         instead as Base Rate  Loans,  and all Loans of such  Lender  that would
         otherwise  be  Converted  into  Loans  of the  Affected  Type  shall be
         Converted instead into (or shall remain as) Base Rate Loans.

         If such Lender gives notice to the Borrower  (with a copy to the Agent)
         that the circumstances specified in Section 5.1 or 5.3 hereof that gave
         rise to the Conversion of such Lender's Affected Loans pursuant to this
         Section 5.4 no longer  exist  (which such Lender  agrees to do promptly
         upon such  circumstances  ceasing to exist) at a time when Loans of the
         Affected Type made by other Lenders are outstanding, such Lender's Base
         Rate Loans shall be automatically Converted, on the first day(s) of the
         next succeeding  Interest  Period(s) for such outstanding  Loans of the
         Affected  Type,  to the extent  necessary so that,  after giving effect
         thereto,  all Loans held by the Lenders  holding  Loans of the Affected
         Type and by such  Lender  are held pro rata (as to  principal  amounts,
         Types,  and  Interest  Periods)  in  accordance  with their  respective
         Revolving Credit Commitments.

                  5.5.  Compensation  . Upon  the  request  of any  Lender,  the
         Borrower  shall pay to such  Lender  such amount or amounts as shall be
         sufficient (in the reasonable  opinion of such Lender) to compensate it
         for any loss, cost, or expense (including loss of anticipated  profits)
         incurred by it as a result of:

                  (a) any payment,  prepayment,  or  Conversion  of a Eurodollar
         Rate  Loan  for  any  reason  (including,   without   limitation,   the
         acceleration  of the Loans  pursuant  to Section  10.1) on a date other
         than the last day of the Interest Period for such Loan; or

                  (b) any  failure by the  Borrower  for any reason  (including,
         without limitation, the failure of any condition precedent specified in
         Article VI to be satisfied) to borrow, Convert,  Continue, or prepay an
         Eurodollar  Rate  Loan on the  date  for  such  borrowing,  Conversion,
         Continuation,  or  prepayment  specified  in  the  relevant  notice  of
         borrowing,   prepayment,   Continuation,   or  Conversion   under  this
         Agreement.

                  5.6.  Taxes . (a) Any and all  payments by the  Borrower to or
         for the account of any Lender or the Agent hereunder or under any other

                                       41
<PAGE>

         Loan Document shall be made free and clear of and without deduction for
         any  and  all  present  or  future  taxes,  duties,  levies,   imposts,
         deductions,  charges or withholdings,  and all liabilities with respect
         thereto,  excluding,  in the case of each  Lender and the Agent,  taxes
         imposed  on its  income,  and  franchise  taxes  imposed  on it, by the
         jurisdiction  under the laws of which such  Lender  (or its  Applicable
         Lending  Office) or the Agent (as the case may be) is  organized or any
         political  subdivision  thereof (all such non-excluded  taxes,  duties,
         levies, imposts,  deductions,  charges,  withholdings,  and liabilities
         being  hereinafter  referred to as "Taxes").  If the Borrower  shall be
         required  by law to deduct  any  Taxes  from or in  respect  of any sum
         payable  under this  Agreement or any other Loan Document to any Lender
         or the Agent,  (i) the sum payable  shall be  increased as necessary so
         that  after  making  all  required  deductions   (including  deductions
         applicable  to  additional  sums  payable  under this Section 5.6) such
         Lender or the Agent  receives an amount  equal to the sum it would have
         received had no such deductions been made, (ii) the Borrower shall make
         such deductions,  (iii) the Borrower shall pay the full amount deducted
         to the relevant  taxation  authority or other  authority in  accordance
         with  applicable law, and (iv) the Borrower shall furnish to the Agent,
         at its address referred to in Section 12.2, the original or a certified
         copy of a receipt evidencing payment thereof.

                  (b) In  addition,  the  Borrower  agrees  to pay  any  and all
         present or future  stamp or  documentary  taxes and any other excise or
         property  taxes or  charges  or  similar  levies  which  arise from any
         payment made under this  Agreement  or any other Loan  Document or from
         the  execution  or  delivery  of, or  otherwise  with  respect to, this
         Agreement or any other Loan Document (hereinafter referred to as "Other
         Taxes").

                  (c) The Borrower agrees to indemnify each Lender and the Agent
         for the full  amount  of Taxes  and  Other  Taxes  (including,  without
         limitation,  any  Taxes or  Other  Taxes  imposed  or  asserted  by any
         jurisdiction  on amounts  payable  under this Section 5.6) paid by such
         Lender or the Agent (as the case may be) and any  liability  (including
         penalties,  interest,  and expenses)  arising therefrom or with respect
         thereto.  (d) Each Lender  organized  under the laws of a  jurisdiction
         outside the United States, on or prior to the date of its execution and
         delivery of this  Agreement  in the case of each  Lender  listed on the
         signature  pages hereof and on or prior to the date on which it becomes
         a  Lender  in the case of each  other  Lender,  and  from  time to time
         thereafter  if  requested  in writing by the Borrower or the Agent (but
         only so long as such  Lender  remains  lawfully  able to do so),  shall
         provide the Borrower and the Agent with (i)  Internal  Revenue  Service
         Form 1001 or 4224, as appropriate,  or any successor form prescribed by
         the Internal Revenue  Service,  certifying that such Lender is entitled
         to benefits  under an income tax treaty to which the United States is a
         party which reduces the rate of withholding tax on payments of interest
         or certifying that the income receivable  pursuant to this Agreement is
         effectively  connected  with the  conduct of a trade or business in the
         United  States,  (ii)  Internal  Revenue  Service  Form W-8 or W-9,  as
         appropriate,  or any successor form prescribed by the Internal  Revenue
         Service, and (iii) any other form or certificate required by any taxing
         authority  (including any  certificate  required by Sections 871(h) and
         881(c) of the Internal  Revenue Code),  certifying  that such Lender is
         entitled  to an  exemption  from or a reduced  rate of tax on  payments
         pursuant to this Agreement or any of the other Loan Documents.



                                       42
<PAGE>

                  (e) For any period  with  respect to which a Lender has failed
         to  provide  the  Borrower  and the  Agent  with the  appropriate  form
         pursuant to Section  5.6(d)  (unless such failure is due to a change in
         treaty, law, or regulation  occurring subsequent to the date on which a
         form originally was required to be provided),  such Lender shall not be
         entitled to  indemnification  under Section 5.6(a),  5.6(b),  or 5.6(c)
         with respect to Taxes imposed by the United States; provided,  however,
         that should a Lender,  which is  otherwise  exempt from or subject to a
         reduced rate of withholding tax, become subject to Taxes because of its
         failure to deliver a form required  hereunder,  the Borrower shall take
         such steps as such  Lender  shall  reasonably  request  to assist  such
         Lender to recover such Taxes.

                  (f) If the Borrower is required to pay  additional  amounts to
         or for the account of any Lender  pursuant to this  Section  5.6,  then
         such  Lender  will  agree  to use  reasonable  efforts  to  change  the
         jurisdiction  of its  Applicable  Lending  Office so as to eliminate or
         reduce any such additional  payment which may thereafter accrue if such
         change,   in  the   judgment   of  such   Lender,   is  not   otherwise
         disadvantageous to such Lender.

                  (g) Within  thirty  (30) days after the date of any payment of
         Taxes,  the  Borrower  shall  furnish  to the Agent the  original  or a
         certified copy of a receipt evidencing such payment.

                  (h) Without  prejudice to the survival of any other  agreement
         of the  Borrower  hereunder,  the  agreements  and  obligations  of the
         Borrower contained in this Section 5.6 shall survive the termination of
         the Revolving Credit Commitments and the payment in full of the Notes.

                                   ARTICLE VI
            Conditions to Making Loans and Issuing Letters of Credit
            --------------------------------------------------------

                  6.1.  Conditions  of Initial  Advance . The  obligation of the
         Lenders  to  continue  to make  Advances  under  the  Revolving  Credit
         Facility,  and of the  Issuing  Bank to continue to issue any Letter of
         Credit, is subject to the conditions precedent that:

                  (a)  NationsBank  and NMS shall have  received  on the Closing
         Date, in form and substance  satisfactory to the Agent and Lenders, the
         following:

                           (i) executed originals of each of this Agreement, the
                  Notes, the Facility Guaranty, the Security Instruments, the LC
                  Account Agreement and the other Loan Documents,  together with
                  all schedules and exhibits thereto; and

                           (ii) the favorable  written  opinion or opinions with
                  respect   to  the   Loan   Documents   and  the   transactions
                  contemplated  thereby of special  counsel to the Loan  Parties
                  dated the Closing Date, addressed to the Agent and the Lenders
                  and  satisfactory  to Smith  Helms  Mulliss  & Moore,  L.L.P.,
                  special  counsel  to the Agent,  substantially  in the form of
                  Exhibit G; and

                           (iii) resolutions of the boards of directors or other
                  appropriate  governing body (or of the  appropriate  committee
                  thereof)  of each Loan Party  certified  by its  secretary  or

                                       43
<PAGE>

                  assistant  secretary  as of the Closing  Date,  approving  and
                  adopting the Loan Documents to be executed by such Person, and
                  authorizing the execution and delivery thereof; and

                           (iv)  specimen  signatures  of  officers of each Loan
                  Party  executing  the Loan  Documents  on  behalf of such Loan
                  Party,  certified by the  secretary or assistant  secretary of
                  such Loan Party; and

                           (v)  the  charter   documents   of  each  Loan  Party
                  certified as of a recent date by the Secretary of State of its
                  state of  organization  or a  certificate  of the secretary or
                  assistant  secretary of each Loan Party that there has been no
                  change in such charter documents since the date they were last
                  delivered  to the Agent and such charter  documents  remain in
                  full force and effect; and

                           (vi) the  bylaws of each Loan Party  certified  as of
                  the  Closing  Date as true and  correct  by its  secretary  or
                  assistant  secretary  or a  certificate  of the  secretary  or
                  assistant  secretary of each Loan Party that there has been no
                  change in such bylaws since the date they were last  delivered
                  to the Agent and such bylaws  remain in full force and effect;
                  and

                           (vii) certificates  issued as of a recent date by the
                  Secretaries  of  State  of  the  respective  jurisdictions  of
                  formation of each Loan Party as to the due  existence and good
                  standing of each Loan Party; and

                           (viii)  appropriate  certificates of qualification to
                  do business,  good standing and, where appropriate,  authority
                  to conduct  business under assumed name,  issued in respect of
                  each Loan Party as of a recent date by the  Secretary of State
                  or  comparable  official  of each  jurisdiction  in which  the
                  failure to be  qualified  to do business or  authorized  so to
                  conduct business could have a Material Adverse Effect; and

                           (ix)  a  copy  of  the   partnership   agreement  and
                  certificate of limited partnership of each Guarantor that is a
                  Partnership together with all necessary consents, certified as
                  to its correctness by the General Partner of such  partnership
                  or a certificate of the General Partner that there has been no
                  change  in  such  partnership  agreement  and  certificate  of
                  limited partnership since the date they were last delivered to
                  the Agent and such partnership  documents remain in full force
                  and effect; and

                           (x) notice of appointment  of the initial  Authorized
                  Representative(s); and

                           (xi)  certificate  of  an  Authorized  Representative
                  dated  the  Closing  Date  demonstrating  compliance  with the

                                       44
<PAGE>

                  covenants  contained in Sections  9.1(a) through  9.1(c),  and
                  Section 9.5, as of March 31, 1998,  substantially  in the form
                  of Exhibit H; and

                           (xii) evidence of all insurance  required by the Loan
                  Documents; and

                           (xiii) an initial  Borrowing  Notice, if any, and, if
                  elected by the Borrower, Interest Rate Selection Notice; and

                           (xiv)  evidence of the filing of  additional  Uniform
                  Commercial Code financing  statements,  if any, reflecting the
                  filing in all places required by applicable law to perfect the
                  Liens of the Agent under the Security  Instruments  as a first
                  priority  Lien as to items of  Collateral  in which a security
                  interest   may  be   perfected  by  the  filing  of  financing
                  statements,  and such other documents and/or evidence of other
                  actions as may be necessary  under  applicable  law to perfect
                  the Liens of the Agent  under the  Security  Instruments  as a
                  first  priority  Lien in and to such other  Collateral  as the
                  Agent may require, including without limitation:

                           (A)the   delivery  by  the   Borrower  of  all  stock
                           certificates    evidencing    Pledged    Stock    and
                           certificates, if any, evidencing ownership of Pledged
                           Partnership  Interests,  accompanied  in each case by
                           duly  executed  stock  powers  (or other  appropriate
                           transfer documents) in blank affixed thereto; and

                           (B)the  delivery by the Borrower of  certificates  of
                           the   Registrar   of   each   partnership   Guarantor
                           evidencing the due  registration on the  registration
                           books of such partnership of the Lien in favor of the
                           Agent conferred under the Security Instruments; and

                           (xv)  evidence  that all fees payable by the Borrower
                  on the  Closing  Date to the Agent and the  Lenders  have been
                  paid in full; and

                           (xvi) the  consolidated  financial  statements of the
                  Borrower  and  the   Guarantors  for  the  fiscal  year  1997,
                  including   balance   sheets,    statements   of   operations,
                  stockholders'  equity,  and cash flow  statements,  audited by
                  independent   public  accountants  of  national  standing  and
                  prepared in  accordance  with GAAP and on a Consistent  Basis;
                  and

                           (xvii) financial  projections of the Borrower and the
                  Guarantors for the next four (4) Fiscal Years,  in such detail
                  and based on such  assumptions  as are acceptable to the Agent
                  in its sole discretion; and

                           (xviii) a schedule  of the current  ownership  of the
                  Borrower; and


                                       45
<PAGE>

                           (xix) such other documents, instruments, certificates
                  and opinions as the Agent or any Lender may reasonably request
                  on or  prior  to the  Closing  Date  in  connection  with  the
                  consummation of the transactions contemplated hereby; and

                  (b) In the good faith and reasonable judgment of the Agent and
                  the Lenders:

                           (i) Except as set forth on Schedule 6.1,  there shall
                  not have occurred a material adverse change since December 31,
                  1997 in the business, assets, operations, condition (financial
                  or otherwise) or prospects of the Borrower and the Guarantors,
                  or in  the  facts  and  information  regarding  such  entities
                  (including litigation) as represented to date; and

                           (ii) the absence of any action,  suit,  investigation
                  or proceeding pending or threatened in any court or before any
                  arbitrator or  governmental  authority that purports to affect
                  the Borrower or the Guarantors (other than existing litigation
                  which shall be disclosed to, and in their  discretion shall be
                  acceptable to, the Agent and the Lenders),  or any transaction
                  contemplated  hereby,  or that could  have a material  adverse
                  effect on the Borrower or the  Guarantors  or any  transaction
                  contemplated  hereby or on the ability of the Borrower and the
                  Guarantors  to  perform  their   obligations  under  the  Loan
                  Documents; and

                           (iii) the Borrower, the Guarantors and any other Loan
                  Party shall have received all approvals, consents and waivers,
                  and shall have made or given all necessary filings and notices
                  as  shall  be  required   to   consummate   the   transactions
                  contemplated  hereby  without  the  occurrence  of any default
                  under,  conflict with or violation of (A) any applicable  law,
                  rule,   regulation,   order  or  decree  of  any  Governmental
                  Authority or arbitral authority or (B) any agreement, document
                  or instrument to which any of the Borrower or any Guarantor is
                  a party or by which any of them or their  properties is bound;
                  and

                           (iv)  the  Borrower  and the  Guarantors  shall be in
                  compliance with all existing financial obligations,  including
                  the terms and conditions set forth in the Existing  Agreement;
                  and

                           (v) the absence of any disruption or material adverse
                  change in market for syndicated bank credit facilities similar
                  in nature  to the  Revolving  Credit  Facility  or a  material
                  disruption  of, or a material  adverse  change in,  financial,
                  banking,  or  capital  market  conditions,  in  each  case  as
                  determined  by  NationsBank  and NMS in their sole  discretion
                  based on reasonable judgment; and

                  6.2.  Conditions of Revolving Loans and Letter of Credit . The
         obligations of the Lenders to make any Revolving Loans, and the Issuing
         Bank to issue  Letters of Credit,  hereunder  on or  subsequent  to the
         Closing  Date  are  subject  to  the   satisfaction  of  the  following
         conditions:

                                       46
<PAGE>


                  (a) the  Agent  shall  have  received  a  Borrowing  Notice if
         required by Article II; and

                  (b) the representations and warranties of the Borrower and the
         Guarantors  set  forth in  Article  VII and in each of the  other  Loan
         Documents shall be true and correct in all material  respects on and as
         of the date of such  Advance or Letter of Credit  issuance  or renewal,
         with the same effect as though such  representations and warranties had
         been made on and as of such date,  except:  (i) to the extent that such
         representations and warranties expressly relate to an earlier date, and
         (ii) that the financial  statements referred to in Section 7.6(a) shall
         be deemed to be those financial  statements most recently  delivered to
         the  Agent  and the  Lenders  pursuant  to  Section  8.1  from the date
         financial  statements  are  delivered  to the Agent and the  Lenders in
         accordance  with such Section,  and (iii) with respect to  transactions
         permitted hereunder; and

                  (c) in the case of the  issuance  of a Letter of  Credit,  the
         Borrower  shall have  executed  and  delivered  to the Issuing  Bank an
         Application  and  Agreement  for  Letter of Credit in form and  content
         acceptable to the Issuing Bank together with such other instruments and
         documents as it shall request; and

                  (d) at the time of (and after  giving  effect to) each Advance
         or the  issuance of a Letter of Credit,  no Default or Event of Default
         specified in Article X shall have occurred and be continuing; and

                  (e) immediately after giving effect to:

                           (i) a Revolving Loan, the aggregate principal balance
                  of all  outstanding  Revolving Loans for each Lender shall not
                  exceed such Lender's Revolving Credit Commitment;

                           (ii) a Letter  of  Credit  or  renewal  thereof,  the
                  aggregate principal balance of all outstanding  Participations
                  in Letters of Credit and Reimbursement  Obligations (or in the
                  case  of  the  Issuing  Bank,  its  remaining  interest  after
                  deduction  of all  Participations  in  Letters  of Credit  and
                  Reimbursement  Obligations  of other  Lenders) for each Lender
                  and in the aggregate shall not exceed, respectively,  (X) such
                  Lender's  Letter of Credit  Commitment or (Y) the Total Letter
                  of Credit Commitment; and

                           (iii) a  Revolving  Loan or a  Letter  of  Credit  or
                  renewal thereof, the sum of Letter of Credit Outstandings plus
                  Revolving  Credit  Outstandings  shall  not  exceed  the Total
                  Revolving Credit Commitment.

                                   3. ARTICLE
                         Representations and Warranties
                         ------------------------------

                                       47
<PAGE>

         The Borrower  represents and warrants with respect to itself and to the
Guarantors (which  representations  and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:

                  7.1. Organization and Authority .

                           (a) The Borrower and each  Guarantor is a corporation
                  or partnership  duly organized and validly  existing under the
                  laws of the jurisdiction of its formation;

                           (b)  The  Borrower  and  each  Guarantor  (x) has the
                  requisite power and authority to own its properties and assets
                  and to carry on its  business  as now being  conducted  and as
                  contemplated in the Loan Documents, and (y) is qualified to do
                  business in every  jurisdiction in which failure to so qualify
                  would have a Material Adverse Effect;

                           (c) The  Borrower  has the  power  and  authority  to
                  execute, deliver and perform this Agreement and the Notes, and
                  to borrow hereunder,  and to execute, deliver and perform each
                  of the other Loan Documents to which it is a party;

                           (d) Each  Guarantor  has the power and  authority  to
                  execute, deliver and perform the Facility Guaranty and each of
                  the other Loan Documents to which it is a party; and

                           (e) When  executed  and  delivered,  each of the Loan
                  Documents  to which the  Borrower or any other Loan Party is a
                  party  will be the  legal,  valid and  binding  obligation  or
                  agreement,  as the case may be, of the  Borrower  or such Loan
                  Party,  enforceable against the Borrower or such Loan Party in
                  accordance  with  its  terms,  subject  to the  effect  of any
                  applicable bankruptcy, moratorium, insolvency,  reorganization
                  or  other  similar  law  affecting   the   enforceability   of
                  creditors'  rights  generally  and to the  effect  of  general
                  principles  of equity  (whether  considered in a proceeding at
                  law or in equity);

                  7.2. Loan Documents . The execution,  delivery and performance
         by the Borrower and each other Loan Party of each of the Loan Documents
         to which it is a party:

                           (a)  have  been  duly  authorized  by  all  requisite
                  corporate action (including any required shareholder approval)
                  of the  Borrower  and each other Loan Party  required  for the
                  lawful execution, delivery and performance thereof;

                           (b) do not violate any  provisions of (i)  applicable
                  law,  rule or  regulation,  (ii) any  judgment,  writ,  order,
                  determination,  decree or arbitral  award of any  Governmental
                  Authority or arbitral authority binding on the Borrower or any
                  Guarantor or its properties, or (iii) the charter documents or
                  bylaws of the Borrower or any other Loan Party;

                           (c) does not and will not be in conflict with, result
                  in a breach of or constitute an event of default,  or an event
                  which,  with notice or lapse of time or both, would constitute

                                       48
<PAGE>

                  an event of default, under any contract, indenture,  agreement
                  or other  instrument  or  document  to which  Borrower  or any
                  Guarantor is a party,  or by which the properties or assets of
                  Borrower or any Guarantor are bound; and

                           (d) does not and will not result in the  creation  or
                  imposition of any Lien upon any of the properties or assets of
                  Borrower  or any  Guarantor  except  any Liens in favor of the
                  Agent and the Lenders created by the Security Instruments;

                  7.3.  Solvency  . The  Borrower  and each  other Loan Party is
         Solvent after giving  effect to the  transactions  contemplated  by the
         Loan Documents;

                  7.4.  Guarantors  and  Stockholders  .  The  Borrower  has  no
         Guarantors  other  than  those  Persons  listed  in  Schedule  7.4  and
         additional  Subsidiaries  or Guarantors  created or acquired  after the
         Closing Date in compliance with Section 8.20; Schedule 7.4 states as of
         the date hereof the organizational  form of each entity, the authorized
         and issued  capitalization of each Guarantor listed thereon, the number
         of shares or other equity  interests of each class of capital  stock or
         interest  issued and  outstanding of each such Guarantor and the number
         and/or  percentage  of  outstanding  shares  or other  equity  interest
         (including options,  warrants and other rights to acquire any interest)
         of each such class of capital stock or other equity  interest  owned by
         Borrower or officers of the Borrower;  the outstanding  shares or other
         equity  interests of each such Guarantor have been duly  authorized and
         validly issued and are fully paid and  nonassessable;  and Borrower and
         each such Guarantor owns  beneficially and of record all the shares and
         other  interests it is listed as owning in Schedule 7.4, free and clear
         of any Lien;

                  7.5.  Ownership  Interests . Borrower  owns no interest in any
         Person  other  than  the  Persons   listed  in  Schedule  7.4,   equity
         investments  in Persons not  constituting  Subsidiaries  or  Guarantors
         permitted  under Section 9.7 and additional  Subsidiaries or Guarantors
         created or acquired  after the Closing Date in compliance  with Section
         8.20;

                  7.6. Financial Condition .

                  (a) The  Borrower has  heretofore  furnished to each Lender an
         audited  consolidated  balance sheet of the Borrower and the Guarantors
         as at  December  31,  1997  and  the  notes  thereto  and  the  related
         consolidated  statements  of operation,  stockholders'  equity and cash
         flows for the  Fiscal  Year then ended as  examined  and  certified  by
         Arthur  Andersen  LLP.  Except as set  forth  therein,  such  financial
         statements  (including the notes thereto)  present fairly the financial
         condition  of the  Borrower  and the  Guarantors  as of the end of such
         Fiscal  Year and  results of their  operations  and the  changes in its
         stockholders'  equity for the Fiscal Year then ended, all in conformity
         with GAAP applied on a Consistent Basis; and

                  (b) Except as set forth on Schedule  6.1,  since  December 31,
         1997  there  has been no  material  adverse  change  in the  condition,
         financial or otherwise,  of the Borrower or any of the Guarantors or in
         the businesses, properties, performance, prospects or operations of the
         Borrower or the Guarantors, nor have such businesses or properties been
         materially  adversely  affected  as a result  of any  fire,  explosion,
         earthquake,  accident, strike, lockout,  combination of workers, flood,
         embargo or act of God; and

                                       49
<PAGE>

                  (c) except as set forth in the financial  statements  referred
         to in Section  7.6(a) or in Schedule  9.5 or  permitted by Section 9.5,
         neither  Borrower nor any  Guarantor  has  incurred,  other than in the
         ordinary  course of  business,  any material  Indebtedness,  Contingent
         Obligation or other  commitment or liability which remains  outstanding
         or unsatisfied;

                  7.7.  Title  to  Properties  . The  Borrower  and  each of the
         Guarantors has good and marketable title to all its real properties and
         good title to all of its material  personal  properties,  subject to no
         transfer  restrictions  or Liens of any kind,  except for the  transfer
         restrictions and Liens described in Schedule 7.7 and Liens permitted by
         Section 9.4;

                  7.8. Taxes . Except as set forth in Schedule 7.8, the Borrower
         and each of the Guarantors has filed or caused to be filed all federal,
         state and local tax returns  which are  required to be filed by it and,
         except  for taxes and  assessments  being  contested  in good  faith by
         appropriate proceedings diligently conducted and against which reserves
         reflected in the financial  statements  described in Section 7.6(a) and
         satisfactory to the Borrower's independent certified public accountants
         have  been  established,  have  paid or  caused to be paid all taxes as
         shown on said  returns  or on any  assessment  received  by it,  to the
         extent that such taxes have become due;

                  7.9. Other Agreements . Neither the Borrower nor any Guarantor
         is:

                           (a) a party to or  subject  to any  judgment,  order,
                  decree,  agreement,  lease or instrument,  or subject to other
                  restrictions,  which  individually  or in the aggregate  could
                  reasonably be expected to have a Material Adverse Effect; or

                           (b) in  default  in the  performance,  observance  or
                  fulfillment of any of the obligations, covenants or conditions
                  contained in (i) any  Medicaid  Provider  Agreement,  Medicare
                  Provider  Agreement or other  agreement or instrument to which
                  the Borrower or any  Guarantor is a party,  which  default has
                  resulted in, or if not remedied  within any  applicable  grace
                  period   could   result  in,  the   revocation,   termination,
                  cancellation  or  suspension  of  Medicaid   Certification  or
                  Medicare  Certification  of Borrower or any  Guarantor or (ii)
                  any other agreement or instrument to which the Borrower or any
                  Guarantor  is a party,  which  default has, or if not remedied
                  within any applicable  grace period could reasonably be likely
                  to have, a Material Adverse Effect;

                  7.10. Litigation . Except as set forth in Schedule 7.10, there
         is no action, suit,  investigation or proceeding at law or in equity or
         by or before any  governmental  instrumentality  or agency or  arbitral
         body pending,  or, to the  knowledge of the Borrower,  threatened by or
         against the  Borrower,  any  Guarantor  or any  Contract  Provider,  or
         affecting the Borrower or any Guarantor or any Contract Provider or any
         properties  or rights of the Borrower or any  Guarantor or any Contract

                                       50
<PAGE>

         Provider,  which  could  reasonably  be  expected  (i) to result in the
         revocation,   termination,   cancellation  or  suspension  of  Medicaid
         Certification or Medicare Certification of such Person, or (ii) to have
         a Material Adverse Effect;

                  7.11.  Margin  Stock . The  proceeds  of the  borrowings  made
         hereunder will be used by the Borrower only for the purposes  expressly
         authorized  herein.  None of such  proceeds  will be used,  directly or
         indirectly,  for the purpose of purchasing or carrying any margin stock
         or for the purpose of reducing or retiring any  Indebtedness  which was
         originally  incurred to purchase or carry margin stock or for any other
         purpose which might  constitute any of the Loans under this Agreement a
         "purpose  credit" within the meaning of said Regulation U or Regulation
         X (12 C.F.R. Part 224) of the Board; provided however that the Borrower
         may purchase  its own stock as provided in Section  9.9(d) only so long
         as the Loans are not  considered  "indirectly  secured"  by such  stock
         pursuant to Section  221.1(g)(2)  of Regulation U. Neither the Borrower
         nor any agent  acting in its  behalf  has taken or will take any action
         which might cause this Agreement or any of the documents or instruments
         delivered  pursuant hereto to violate any regulation of the Board or to
         violate  the  Securities  Exchange  Act of  1934,  as  amended,  or the
         Securities Act of 1933, as amended,  or any state  securities  laws, in
         each case as in effect on the date hereof;

                  7.12.  Investment  Company  .  Neither  the  Borrower  nor any
         Guarantor is an "investment  company," or an "affiliated person" of, or
         "promoter" or "principal  underwriter" for, an "investment company", as
         such  terms are  defined  in the  Investment  Company  Act of 1940,  as
         amended (15 U.S.C. ss. 80a-1, et seq.). The application of the proceeds
         of the Loans and repayment  thereof by the Borrower and the performance
         by the  Borrower  and  the  other  Loan  Parties  of  the  transactions
         contemplated  by the Loan  Documents  will not violate any provision of
         said Act, or any rule, regulation or order issued by the Securities and
         Exchange Commission  thereunder,  in each case as in effect on the date
         hereof;

                  7.13.  Patents,  Etc.  The  Borrower and each other Loan Party
         owns or has the  right  to  use,  under  valid  license  agreements  or
         otherwise,  all material  patents,  licenses,  franchises,  trademarks,
         trademark  rights,  trade names,  trade name rights,  trade secrets and
         copyrights necessary to or used in the conduct of its businesses as now
         conducted  and as  contemplated  by the Loan  Documents,  without known
         conflict with any patent, license, franchise,  trademark, trade secret,
         trade name, copyright, other proprietary right of any other Person;

                  7.14. No Untrue Statement . Neither (a) this Agreement nor any
         other Loan Document or certificate  or document  executed and delivered
         by or on behalf of the Borrower or any Guarantor in accordance  with or
         pursuant to any Loan Document nor (b) any statement, representation, or
         warranty  provided to the Agent in connection  with the  negotiation or
         preparation of the Loan  Documents  contains any  misrepresentation  or
         untrue  statement  of material  fact or omits to state a material  fact
         necessary,  in light of the  circumstance  under which it was made,  in
         order to make any such warranty,  representation or statement contained
         therein not misleading;

                  7.15. No Consents,  Etc.  Except for certain service and payor
         contracts which may require the parties' consent to assignment  thereto
         which  consent has not been required and which  assignment  pursuant to


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<PAGE>

         Security  Instruments shall not be required to the extent prohibited by
         such contract,  neither the respective  businesses or properties of the
         Borrower or any Guarantor, nor any relationship between the Borrower or
         any Guarantor and any other Person,  nor any circumstance in connection
         with the execution,  delivery and performance of the Loan Documents and
         the transactions contemplated thereby, is such as to require a consent,
         approval or authorization of, or filing,  registration or qualification
         with, any Governmental Authority or any other Person on the part of the
         Borrower or any Guarantor as a condition to the execution, delivery and
         performance of, or consummation of the transactions contemplated by the
         Loan Documents, which, if not obtained or effected, would be reasonably
         likely to have a  Material  Adverse  Effect,  or if so,  such  consent,
         approval, authorization, filing, registration or qualification has been
         duly obtained or effected, as the case may be;

                  7.16.Employee Benefit Plans .

                           (a) The  Borrower  and  each  ERISA  Affiliate  is in
                  compliance  with all  applicable  provisions  of ERISA and the
                  regulations  and published  interpretations  thereunder and in
                  compliance  with all Foreign  Benefit Laws with respect to all
                  Employee Benefit Plans except for any required  amendments for
                  which the  remedial  amendment  period as  defined  in Section
                  401(b) of the Code has not yet expired.  Each Employee Benefit
                  Plan that is intended to be qualified  under Section 401(a) of
                  the Code has been  determined by the Internal  Revenue Service
                  to be so  qualified,  and each trust  related to such plan has
                  been determined to be exempt under Section 501(a) of the Code.
                  No material liability has been incurred by the Borrower or any
                  ERISA  Affiliate  which remains  unsatisfied  for any taxes or
                  penalties  with  respect to any  Employee  Benefit Plan or any
                  Multiemployer Plan;

                           (b) Neither the Borrower nor any ERISA  Affiliate has
                  (i) engaged in a nonexempt prohibited transaction described in
                  Section 4975 of the Code or Section 406 of ERISA affecting any
                  of the Employee Benefit Plans or the trusts created thereunder
                  which could subject any such Employee Benefit Plan or trust to
                  a material tax or penalty on prohibited  transactions  imposed
                  under  Internal  Revenue  Code  Section  4975 or  ERISA,  (ii)
                  incurred any  accumulated  funding  deficiency with respect to
                  any Employee Benefit Plan, whether or not waived, or any other
                  liability to the PBGC which remains outstanding other than the
                  payment of premiums  and there are no premium  payments  which
                  are  due  and  unpaid,   (iii)   failed  to  make  a  required
                  contribution  or  payment  to a  Multiemployer  Plan,  or (iv)
                  failed  to  make a  required  installment  or  other  required
                  payment under Section 412 of the Code, Section 302 of ERISA or
                  the terms of such Employee Benefit Plan;

                           (c)  No   Termination   Event  has   occurred  or  is
                  reasonably  expected to occur with respect to any Pension Plan
                  or Multiemployer  Plan, and neither the Borrower nor any ERISA
                  Affiliate has incurred any unpaid  withdrawal  liability  with
                  respect to any Multiemployer Plan;

                           (d) The present value of all vested accrued  benefits
                  under each Employee  Benefit Plan which is subject to Title IV
                  of ERISA,  did not, as of the most recent  valuation  date for
                  each such plan, exceed the then current value of the assets of
                  such Employee Benefit Plan allocable to such benefits;

                                       52
<PAGE>

              

                           (e) To the  best of the  Borrower's  knowledge,  each
                  Employee Benefit Plan subject to Title IV of ERISA, maintained
                  by the Borrower or any ERISA Affiliate,  has been administered
                  in accordance  with its terms in all material  respects and is
                  in  compliance in all material  respects  with all  applicable
                  requirements of ERISA and other applicable  laws,  regulations
                  and rules;

                           (f) The consummation of the Loans and the issuance of
                  the Letters of Credit provided for herein will not involve any
                  prohibited  transaction  under ERISA which is not subject to a
                  statutory or administrative exemption; and

                           (g) No material  proceeding,  claim,  lawsuit  and/or
                  investigation exists or, to the best knowledge of the Borrower
                  after due inquiry,  is threatened  concerning or involving any
                  Employee Benefit Plan;

                  7.17. No Default . As of the date hereof, there does not exist
         any Default or Event of Default hereunder;

                  7.18. Hazardous Materials . The Borrower and each Guarantor is
         in compliance  with all applicable  Environmental  Laws in all material
         respects.  Neither the Borrower nor any  Guarantor has been notified of
         any action,  suit,  proceeding or investigation  which, and neither the
         Borrower nor any Guarantor is aware of any facts which,  (i) calls into
         question,  or could  reasonably  be  expected  to call  into  question,
         compliance  by the  Borrower or any  Guarantor  with any  Environmental
         Laws,  (ii) which seeks,  or could  reasonably  be expected to form the
         basis of a meritorious proceeding,  to suspend, revoke or terminate any
         license,  permit or approval  necessary for the  generation,  handling,
         storage,  treatment  or disposal of any  Hazardous  Material,  or (iii)
         seeks to cause, or could  reasonably be expected to form the basis of a
         meritorious  proceeding  to cause,  any property of the Borrower or any
         Guarantor  to  be  subject  to  any  restrictions  on  ownership,  use,
         occupancy or transferability under any Environmental Law;

                  7.19.  Employment  Matters . (a) None of the  employees of the
         Borrower  or any  Guarantor  is  subject to any  collective  bargaining
         agreement  and  there  are no  strikes,  work  stoppages,  election  or
         decertification  petitions or proceedings,  unfair labor charges, equal
         opportunity  proceedings,  or  other  material  labor/employee  related
         controversies  or proceedings  pending or, to the best knowledge of the
         Borrower,  threatened  against the Borrower or any Guarantor or between
         the  Borrower or any  Guarantor  and any of its  employees,  other than
         employee  grievances  arising in the ordinary  course of business which
         could not reasonably be expected,  individually or in the aggregate, to
         have a Material Adverse Effect; and

                  (b)  Except to the  extent a failure  to  maintain  compliance
         would  not  have a  Material  Adverse  Effect,  the  Borrower  and each
         Guarantor is in compliance in all respects  with all  applicable  laws,
         rules  and  regulations  pertaining  to  labor or  employment  matters,

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<PAGE>

         including  without   limitation  those  pertaining  to  wages,   hours,
         occupational  safety  and  taxation  and there is  neither  pending  or
         threatened  any  litigation,  administrative  proceeding  nor,  to  the
         knowledge  of the  Borrower,  any  investigation,  in  respect  of such
         matters  which,  if  decided  adversely,  could  reasonably  be likely,
         individually  or in the aggregate,  to have a Material  Adverse Effect;
         and

                  7.20. RICO . Neither the Borrower nor any Guarantor is engaged
         in or has  engaged in any course of conduct  that could  subject any of
         their  respective  properties to any Lien,  seizure or other forfeiture
         under any criminal law, racketeer influenced and corrupt  organizations
         law, civil or criminal, or other similar laws.

                  7.21.  Reimbursement  from Third Party  Payors . The  accounts
         receivable  of the  Borrower  and  each  Guarantor  have  been and will
         continue to be adjusted to reflect  the  reimbursement  policies  (both
         those  most  recently  published  in  writing  as well as those  not in
         writing  which have been  verbally  communicated)of  third party payors
         such as Medicare,  Medicaid,  Blue Cross/Blue Shield, private insurance
         companies,   health  maintenance   organizations,   preferred  provider
         organizations,  alternative  delivery  systems,  managed care  systems,
         government  contracting  agencies  and other  third  party  payors.  In
         particular,  accounts receivable relating to such third party payors do
         not and shall not exceed  amounts  any  obligee is  entitled to receive
         under any  capitation  arrangement,  fee  schedule,  discount  formula,
         cost-based reimbursement or other adjustment or limitation to its usual
         charges.

                  7.22. Fraud and Abuse . Neither the Borrower nor any Guarantor
         nor, to the knowledge of Borrower's officers,  any of its stockholders,
         officers or directors,  or any Contract  Provider,  have engaged in any
         activities  which are  prohibited  under federal  Medicare and Medicaid
         statutes,  42  U.S.C.  ss.1320a-7b,   or  the  regulations  promulgated
         pursuant  to such  statutes  or  related  state  or local  statutes  or
         regulations,  or which are prohibited by binding rules or  professional
         conduct,  including but not limited to the following: (i) knowingly and
         willfully   making  or  causing  to  be  made  a  false   statement  or
         representation  of a material fact in any  applications for any benefit
         or payment;  (ii) knowingly and willfully  making or causing to be made
         any false  statement or  representation  of a material  fact for use in
         determining rights to any benefit or payment; (iii) failing to disclose
         knowledge by a claimant of the  occurrence  of any event  affecting the
         initial or continued  right to any benefit or payment on its own behalf
         or on behalf of another,  with intent to secure such benefit or payment
         fraudulently;  (iv) knowingly and willfully soliciting or receiving any
         remuneration  (including  any kickback,  bribe or rebate),  directly or
         indirectly,  overtly or covertly, in cash or in kind or offering to pay
         such remuneration (a) in return for referring an individual to a Person
         for the  furnishing  or  arranging  for the  furnishing  of any item or
         service for which  payment may be made in whole or in part by Medicare,
         Medicaid or other applicable  third party payors,  or (b) in return for
         purchasing,  leasing or ordering or arranging for or  recommending  the
         purchasing, leasing or ordering of any good, facility, service, or item
         for which payment may be made in whole or in part by Medicare, Medicaid
         or other applicable third party payors.

                  7.23.  Licensing and  Accreditation . Each of the Borrower and
         the  Guarantors  and, to the  knowledge of  Borrower's  officers,  each
         Contract Provider, has, to the extent applicable: (i) obtained (or been
         duly assigned) all required  certificates of need or  determinations of

                                       54
<PAGE>

         need as required by the relevant state  Governmental  Authority for the
         acquisition,  construction, expansion of, investment in or operation of
         its  businesses as currently  operated;  (ii) obtained and maintains in
         good standing all required  licenses;  (iii) to the extent  prudent and
         customary  in  the  industry  in  which  it is  engaged,  obtained  and
         maintains  accreditation  from  all  generally  recognized  accrediting
         agencies;  (iv)  obtained  and  maintains  Medicaid  Certification  and
         Medicare  Certification;  and (v) entered  into and  maintains  in good
         standing  its Medicare  Provider  Agreement  and its Medicaid  Provider
         Agreement.  To the  knowledge of  Borrower's  officers,  each  Contract
         Provider is duly licensed  (where license is required) by each state or
         state agency or commission,  or any other Governmental Authority having
         jurisdiction over the provisions of such services by such Person in the
         locations in which the  Borrower or such  Guarantor  conduct  business,
         required to enable such  Person to provide  the  professional  services
         provided by such Person and  otherwise  as is  necessary  to enable the
         Borrower or such  Guarantor  to operate as  currently  operated  and as
         presently  contemplated to be operated.  To the knowledge of Borrower's
         officers,  all such  required  licenses are in full force and effect on
         the date hereof and have not been  revoked or  suspended  or  otherwise
         limited.

                                  ARTICLE VIII
                              Affirmative Covenants
                              ---------------------

                  Until the  Facility  Termination  Date,  unless  the  Required
         Lenders shall  otherwise  consent in writing,  the Borrower  will,  and
         where applicable will cause each Guarantor to:

                  8.1. Financial Reports, Etc.

                           (a) As soon as  practical  and in any event within 90
                  days  after  the end of  each  Fiscal  Year  of the  Borrower,
                  deliver or cause to be  delivered to the Agent and each Lender
                  (i)  consolidated  and  consolidating  balance  sheets  of the
                  Borrower and the Guarantors as at the end of such Fiscal Year,
                  and the  notes  thereto,  and  the  related  consolidated  and
                  consolidating  statements of operations,  stockholders' equity
                  and cash flows,  and the respective  notes  thereto,  for such
                  Fiscal  Year,  setting  forth  (other  than for  consolidating
                  statements) comparative financial statements for the preceding
                  Fiscal Year, all prepared in accordance with GAAP applied on a
                  Consistent   Basis  and   containing,   with  respect  to  the
                  consolidated financial statements, opinions of Arthur Andersen
                  LLP, or other such independent  certified  public  accountants
                  selected by the Borrower and approved by the Agent,  which are
                  unqualified  as to the scope of the audit  performed and as to
                  the "going  concern"  status of the  Borrower  and without any
                  exception  not   acceptable   to  the  Lenders,   and  (ii)  a
                  certificate  of  an  Authorized  Representative  demonstrating
                  compliance  with Sections 9.1(a) through 9.1(c) and 9.5, which
                  certificate shall be in the form of Exhibit H;

                           (b) as soon as  practical  and in any event within 45
                  days after the end of each  fiscal  quarter  (except  the last
                  fiscal  quarter of the Fiscal Year),  deliver to the Agent and
                  each Lender (i) consolidated and consolidating  balance sheets
                  of the  Borrower  and  the  Guarantors  as at the  end of such
                  fiscal quarter, and the related consolidated and consolidating
                  statements of operations,  stockholders' equity and cash flows
                  for such fiscal  quarter and for the period from the beginning
                  of the  then  current  Fiscal  Year  through  the  end of such
                  reporting  period,  and  accompanied  by a  certificate  of an
                  Authorized  Representative  to the effect that such  financial

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<PAGE>

                  statements  present  fairly  the  financial  position  of  the
                  Borrower  and the  Guarantors  as of the  end of  such  fiscal
                  period and the results of their  operations and the changes in
                  their financial position for such fiscal period, in conformity
                  with the standards set forth in Section 7.6(a) with respect to
                  interim  financial  statements,  and (ii) a certificate  of an
                  Authorized  Representative  containing  computations  for such
                  quarter  comparable  to  that  required  pursuant  to  Section
                  8.1(a)(ii);

                           (c)  together  with each  delivery  of the  financial
                  statements required by Section 8.1(a)(i), deliver to the Agent
                  and  each  Lender a letter  from  the  Borrower's  accountants
                  specified in Section  8.1(a)(i) stating that in performing the
                  audit   necessary  to  render  an  opinion  on  the  financial
                  statements delivered under Section 8.1(a)(i), they obtained no
                  knowledge  of any Default or Event of Default by the  Borrower
                  in the  fulfillment  of  the  terms  and  provisions  of  this
                  Agreement  insofar as they relate to financial  matters (which
                  at the  date of such  statement  remains  uncured);  or if the
                  accountants  have obtained  knowledge of such Default or Event
                  of Default,  a statement  specifying  the nature and period of
                  existence thereof;

                           (d)  promptly  upon their  becoming  available to the
                  Borrower,  the  Borrower  shall  deliver to the Agent and each
                  Lender  a copy  of (i)  all  regular  or  special  reports  or
                  effective  registration   statements  which  Borrower  or  any
                  Guarantor   shall  file  with  the   Securities  and  Exchange
                  Commission  (or  any  successor  thereto)  or  any  securities
                  exchange, (ii) any proxy statement distributed by the Borrower
                  or any  Guarantor  to  its  shareholders,  bondholders  or the
                  financial community in general, (iii) any management letter or
                  other report  submitted  to the  Borrower or any  Guarantor by
                  independent accountants in connection with any annual, interim
                  or special  audit of the Borrower or any  Guarantor;  and (iv)
                  all material reports and other statements  (other than routine
                  reports and other  statements  prepared in the ordinary course
                  of business that would not result in adverse  action) that the
                  Borrower  or any  Guarantor  may  render  to or file  with any
                  Governmental Authority, including without limitation HCFA; and

                           (e)  together  with each  delivery  of the  financial
                  statements required by Section 8.1(a)(i), deliver to the Agent
                  and each  Lender a capital  budget  for the  following  twelve
                  month period,  together  with  financial  projections  for the
                  Borrower and the  Guarantors,  on a consolidated  basis,  with
                  respect to each  fiscal year  through  the Stated  Termination
                  Date, or budgets or related items as the Agent may  reasonably
                  request including,  without limitation, a breakdown of revenue
                  and direct expenses for each  hospital-based  contract and for
                  each practice; and

                           (f)  together  with each  delivery  of the  financial
                  statements  received by Section  8.1(a) and (b) deliver to the
                  Agent a then-current listing of each Guarantor,  indicating if
                  such Guarantor is a Material Guarantor;

                           (g) promptly,  from time to time, deliver or cause to
                  be   delivered  to  the  Agent  and  each  Lender  such  other
                  information   regarding   Borrower's   and   any   Guarantor's
                  operations,  business  affairs and financial  condition as the
                  Agent or such Lender may reasonably request;

                  The Agent and the Lenders are hereby  authorized  to deliver a
         copy of any such financial or other information  delivered hereunder to
         the Lenders (or any  affiliate  of any Lender) or to the Agent,  to any

                                       56
<PAGE>

         Governmental Authority having jurisdiction over the Agent or any of the
         Lenders  pursuant to any written  request  therefor or in the  ordinary
         course of examination  of loan files,  or to any other Person who shall
         acquire  or  consider  the   assignment   of,  or  acquisition  of  any
         participation interest in, any Obligation permitted by this Agreement;

                  8.2. Maintain  Properties . Maintain all properties  necessary
         to its operations in good working order and condition,  make all needed
         repairs,  replacements  and renewals to such  properties,  and maintain
         free from Liens all trademarks, trade names, patents, copyrights, trade
         secrets,  know-how,  and other  intellectual  property and  proprietary
         information  (or  adequate  licenses  thereto),  in  each  case  as are
         reasonably  necessary to conduct its business as currently or hereafter
         conducted or as contemplated  hereby,  all in accordance with customary
         and prudent business practices;

                  8.3.  Existence,   Qualification,  Etc.  Except  as  otherwise
         expressly  permitted  under  Section  9.8,  do or  cause to be done all
         things  necessary  to  preserve  and keep in full  force and effect its
         existence  and all  material  rights and  franchises,  and maintain its
         license or  qualification  to do business as a foreign  corporation and
         good standing in each  jurisdiction  in which its ownership or lease of
         property  or  the  nature  of  its  business   makes  such  license  or
         qualification  necessary and the failure to do so would have a Material
         Adverse Effect;

                  8.4.  Regulations and Taxes . Comply in all material  respects
         with or contest in good faith all statutes and governmental regulations
         and pay all taxes, assessments, governmental charges, claims for labor,
         supplies,  rent and any other obligation which, if unpaid, would become
         a Lien against any of its properties except liabilities being contested
         in good  faith by  appropriate  proceedings  diligently  conducted  and
         against  which   adequate   reserves   acceptable  to  the   Borrower's
         independent  certified public  accountants have been established unless
         and until any Lien resulting  therefrom attaches to any of its property
         and becomes enforceable against its creditors;

                  8.5.  Insurance  . (a)  Keep all of its  insurable  properties
         adequately  insured at all times with  responsible  insurance  carriers
         against  loss or damage by fire and other  hazards to the extent and in
         the manner as are  customarily  insured  against by similar  businesses
         owning such properties similarly situated,  (b) maintain general public
         liability  insurance at all times with responsible  insurance  carriers
         against liability on account of damage to persons and property, and (c)
         maintain insurance under all applicable workers'  compensation laws (or
         in the  alternative,  maintain  required  reserves if self-insured  for
         workers' compensation purposes) such policies of insurance to have such
         limits,  deductibles,  exclusions,  co-insurance  and other  provisions
         providing no less  coverages  than that specified in Schedule 8.5, such
         insurance policies to be in form reasonably  satisfactory to the Agent.
         Each of the policies of  insurance  described in this Section 8.5 shall
         provide that the insurer shall give the Agent not less than thirty (30)
         days' prior written  notice before any such policy shall be terminated,
         lapse or be altered in any manner.  Each insurance  policy  provided to
         the Agent by the Borrower shall be written by an insurer having no less
         than "A-X1"  Best's  Rating  according to the most  current  edition of
         Best's Key Rating Guide;

                  8.6.  True Books . Keep true  books of record  and  account in
         which  full,  true  and  correct  entries  will  be  made of all of its
         dealings and transactions, and set up on its books such reserves as may

                                       57
<PAGE>

         be required by GAAP with  respect to doubtful  accounts  and all taxes,
         assessments,  charges,  levies  and  claims  and  with  respect  to its
         business in general,  and include  such  reserves in interim as well as
         year-end financial statements;

                  8.7. Right of Inspection . Permit any Person designated by any
         Lender  or the  Agent  to  visit  and  inspect  any of the  properties,
         corporate books and financial  reports of the Borrower or any Guarantor
         and to discuss its affairs,  finances and accounts  with its  principal
         officers  and  independent   certified  public   accountants,   all  at
         reasonable  times,  at  reasonable  intervals,  with  reasonable  prior
         notice,  and  without  unreasonable  interference  with the  conduct of
         business operations;

                  8.8. Observe all Laws . Conform to and duly observe, and cause
         all Contract Providers to conform to and duly observe,  in all material
         respects  all  laws,   rules  and   regulations  and  all  other  valid
         requirements of any regulatory authority with respect to the conduct of
         its business,  including without limitation Titles XVIII and XIX of the
         Social Security Act, Medicare Regulations,  Medicaid  Regulations,  and
         all laws, rules and regulations of Governmental  Authorities pertaining
         to the  licensing  of  professional  and other  health care  providers;
         notwithstanding  the foregoing,  if a Contract Provider fails to comply
         with this  Section 8.8 and  neither the  Borrower  nor  Guarantors  are
         liable  therefor,  such  violation of this Section 8.8 by such Contract
         Provider shall not be a Default or Event of Default hereunder.

                  8.9.  Governmental  Licenses . Obtain and maintain,  and cause
         all Contract Providers during periods when performing  services for the
         Borrower or a Guarantor to obtain and maintain, all licenses,  permits,
         certifications and approvals of all applicable Governmental Authorities
         as are required for the conduct of its business as currently  conducted
         and herein  contemplated,  including  without  limitation  professional
         licenses,  Medicaid  Certifications and Medicare Certifications and the
         failure to do so would have a Material Adverse Effect;

                  8.10. Covenants Extending to Other Persons . Cause each of the
         Guarantors  to do with respect to itself,  its business and its assets,
         each of the things  required of the  Borrower  in Sections  8.2 through
         8.9, and 8.18 inclusive;

                  8.11.  Knowledge of Default . Upon any officer of the Borrower
         obtaining  knowledge  of any Default or Event of Default  hereunder  or
         under any other  obligation  of the  Borrower or any  Guarantor  to any
         Lender, or any event,  development or occurrence which could reasonably
         be expected to have a Material Adverse Effect, cause such officer or an
         Authorized  Representative  to promptly  notify the Agent of the nature
         thereof,  the period of existence thereof, and what action the Borrower
         or such Guarantor proposes to take with respect thereto;

                  8.12.  Suits or Other  Proceedings  . Upon any  officer of the
         Borrower obtaining knowledge of any actual or threatened  litigation or
         other  proceedings  being  instituted  (i) against the  Borrower or any
         Guarantor,  or any attachment,  levy,  execution or other process being
         instituted against any assets of the Borrower or any Guarantor or other
         Loan Party, in an aggregate  amount greater than $200,000 not otherwise
         covered by insurance,  or (ii) against the  Borrower,  any Guarantor or
         any  Contract  Provider to suspend,  revoke or  terminate  any Medicaid

                                       58
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         Provider   Agreement,   Medicaid   Certification,   Medicare   Provider
         Agreement, Medicare Certification or other federal or state health care
         payor  program,  promptly  deliver to the Agent written  notice thereof
         stating the nature and status of such litigation,  dispute, proceeding,
         levy, execution or other process;

                  8.13.   Notice  of   Discharge   of   Hazardous   Material  or
         Environmental  Complaint . Promptly provide to the Agent true, accurate
         and  complete  copies  of any  and  all  notices,  complaints,  orders,
         directives,  claims,  or  citations  received  by the  Borrower  or any
         Guarantor  relating to any (a)  violation  or alleged  violation by the
         Borrower or any  Guarantor  of any  applicable  Environmental  Law, (b)
         release or threatened  release by the Borrower or any Guarantor,  or at
         any facility or property owned or leased or operated by the Borrower or
         any  Guarantor,  of any  Hazardous  Material,  except  where  occurring
         legally,  or (c) liability or alleged  liability of the Borrower or any
         Guarantor  for the  costs of  cleaning  up,  removing,  remediating  or
         responding to a release of Hazardous  Materials;  provided that so long
         as there is no suspension of  operations,  such notice is required only
         when the aggregate cost of compliance or remedy exceeds $100,000 in the
         aggregate.

                  8.14  Environmental  Compliance  .  If  the  Borrower  or  any
         Guarantor  shall  receive  any  letter,   notice,   complaint,   order,
         directive,  claim  or  citation  alleging  that  the  Borrower  or  and
         Guarantor has violated any Environmental Law or is liable for the costs
         of cleaning up,  removing,  remediating  or  responding to a release of
         Hazardous  Materials,  the  Borrower  shall,  within  the  time  period
         permitted  by the  applicable  Environmental  Law  or the  Governmental
         Authority  responsible for enforcing such  Environmental Law, remove or
         remedy,  or cause the  applicable  Guarantor to remove or remedy,  such
         violation or release or satisfy such  liability  unless and only during
         the period that the applicability of the Environmental Law, the fact of
         such  violation  or  liability  or what is required to remove or remedy
         such  violation is being  contested  by the Borrower or the  applicable
         Guarantor  by  appropriate  proceedings  diligently  conducted  and all
         reserves  with  respect  thereto  as may be  required  under  Generally
         Accepted Accounting Principles,  if any, have been made, and no Lien in
         connection  therewith  shall  have  attached  to  any  property  of the
         Borrower  or  the   applicable   Guarantor   which  shall  have  become
         enforceable against creditors of such Person;

                  8.15.  Indemnification  . Without  limiting the  generality of
         Section  12.9,  the Borrower  hereby  agrees to indemnify  and hold the
         Agent  and the  Lenders,  and  their  respective  officers,  directors,
         employees  and  agents,  harmless  from and against any and all claims,
         losses,  penalties,   liabilities,   damages  and  expenses  (including
         assessment  and  cleanup  costs  and  reasonable  attorneys'  fees  and
         disbursements) arising directly or indirectly from, out of or by reason
         of (a) the  violation of any  Environmental  Law by the Borrower or any
         Guarantor or with respect to any property owned,  operated or leased by
         the Borrower or any Guarantor or (b) the handling,  storage, treatment,
         emission or disposal of any Hazardous  Materials by or on behalf of the
         Borrower or any  Guarantor or on or with  respect to property  owned or
         leased or operated by the  Borrower or any  Guarantor.  Notwithstanding
         the foregoing,  this Section 8.15 shall not apply to violations  caused
         by the Agent when the  Collateral is in the  possession  and control of
         the Agent.  The  provisions  of this  Section  8.15 shall  survive  the
         Facility  Termination  Date  and  expiration  or  termination  of  this
         Agreement;

                  8.16 Further  Assurances . At the Borrower's cost and expense,
         upon request of the Agent, duly execute and deliver or cause to be duly
         executed  and  delivered,   to  the  Agent  such  further  instruments,

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         documents, certificates,  financing and continuation statements, and do
         and cause to be done such further acts that may be reasonably necessary
         or advisable in the  reasonable  opinion of the Agent to carry out more
         effectively the provisions and purposes of this Agreement, the Security
         Instruments and the other Loan Documents;

                  8.17. Employee Benefit Plans .

                           (a)  With  reasonable  promptness,  and in any  event
                  within thirty (30) days  thereof,  give notice to the Agent of
                  (a) the  establishment  of any new Pension Plan (which  notice
                  shall include a copy of such plan),  (b) the  commencement  of
                  contributions  to any  Employee  Benefit  Plan  to  which  the
                  Borrower  or any of its ERISA  Affiliates  was not  previously
                  contributing, (c) any material increase in the benefits of any
                  existing  Employee  Benefit  Plan,  (d)  each  funding  waiver
                  request  filed with respect to any  Employee  Benefit Plan and
                  all  communications  received  or sent by the  Borrower or any
                  ERISA  Affiliate  with  respect  to such  request  and (e) the
                  failure  of the  Borrower  or any  ERISA  Affiliate  to make a
                  required  installment or payment under Section 302 of ERISA or
                  Section 412 of the Code by the due date; and

                           (b)  Promptly  and in any event  within  fifteen (15)
                  days  of  becoming  aware  of the  occurrence  or  forthcoming
                  occurrence  of any  (a)  Termination  Event  or (b)  nonexempt
                  "prohibited  transaction,"  as such term is defined in Section
                  406 of ERISA or Section 4975 of the Code, in  connection  with
                  any Pension Plan or any trust created  thereunder,  deliver to
                  the Agent a notice specifying the nature thereof,  what action
                  the Borrower or any ERISA  Affiliate  has taken,  is taking or
                  proposes to take with  respect  thereto and,  when known,  any
                  action taken or  threatened by the Internal  Revenue  Service,
                  the Department of Labor or the PBGC with respect thereto; and

                           (c)  With  reasonable  promptness  but in  any  event
                  within  fifteen (15) days for purposes of clauses (a), (b) and
                  (c),  deliver  to the  Agent  copies  of (a)  any  unfavorable
                  determination   letter  from  the  Internal   Revenue  Service
                  regarding the  qualification of an Employee Benefit Plan under
                  Section  401(a) of the Code,  (b) all notices  received by the
                  Borrower  or any  ERISA  Affiliate  of the  PBGC's  intent  to
                  terminate  any Pension Plan or to have a trustee  appointed to
                  administer  any Pension  Plan,  (c) each Schedule B (Actuarial
                  Information)  to the annual report (Form 5500 Series) filed by
                  the Borrower or any ERISA Affiliate with the Internal  Revenue
                  Service  with respect to each Pension Plan and (d) all notices
                  received  by  the  Borrower  or  any  ERISA  Affiliate  from a
                  Multiemployer Plan sponsor concerning the imposition or amount
                  of withdrawal liability pursuant to Section 4202 of ERISA. The
                  Borrower  will  notify  the Agent in writing  within  five (5)
                  Business Days of the Borrower or any ERISA Affiliate obtaining
                  knowledge  or reason to know  that the  Borrower  or any ERISA
                  Affiliate  has filed or  intends to file a notice of intent to
                  terminate any Pension Plan under a distress termination within
                  the meaning of Section 4041(c) of ERISA;

                  8.18.  Continued Operations . At all times continue to conduct
         its  business  and  engage  principally  in the  same  line or lines of
         business substantially as heretofore conducted;

                  8.19.  Patents,  Etc.  Maintain at all times the right to use,
         under valid  license  agreements or  otherwise,  all material  patents,
         licenses, franchises,  trademarks, trademark rights, trade names, trade

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         name rights,  trade secrets and copyrights  necessary to or used in the
         conduct of its businesses as now conducted and as  contemplated  by the
         Loan  Documents,  without  known  conflict  with any  patent,  license,
         franchise,  trademark,  trade secret, trade name,  copyright,  or other
         proprietary right of any other Person;

                  8.20. New Guarantors . Simultaneously  with the acquisition or
         creation of any  Guarantor,  cause to be delivered to the Agent for the
         benefit of the Lenders each of the following:

                           (i) a Facility  Guaranty  executed by such  Guarantor
            substantially in the form of Exhibit I;

                           (ii)  a   Security   Agreement   of  such   Guarantor
            substantially  in the form of Exhibit J,  together with such Uniform
            Commercial Code financing statements on Form UCC-1 or otherwise duly
            executed by such  Guarantor as "Debtor" and naming the Agent for the
            benefit of the Lenders as "Secured  Party",  in form,  substance and
            number  sufficient  in the  reasonable  opinion of the Agent and its
            special  counsel to be filed in all Uniform  Commercial  Code filing
            offices  in all  jurisdictions  in  which  filing  is  necessary  or
            advisable  to perfect  in favor of the Agent for the  benefit of the
            Lenders  the  Lien  on  Collateral  conferred  under  such  Security
            Instrument  to the  extent  such Lien may be  perfected  by  Uniform
            Commercial Code filing;

                           (iii)  if such  Guarantor  is a  corporation  or is a
            partnership  that has issued  certificates  evidencing  ownership of
            Partnership  Interests,  (A) the  Pledged  Stock or, if  applicable,
            certificates of ownership of such  Partnership  Interests,  together
            with duly  executed  stock powers or powers of  assignment  in blank
            affixed thereto,  and (B) the Securities Pledge Agreement Supplement
            if such  Guarantor is a party to the Pledge  Agreement,  or a Pledge
            Agreement  substantially  in the form of Exhibit L if the  Guarantor
            has not executed and delivered to the Agent a Pledge Agreement;

                           (iv) if such Guarantor is a partnership not described
            in  clause  (iii)  immediately  above,  (A) the  certificate  of the
            Registrar of such  partnership  with respect to the  registration of
            the Lien on Partnership Interests, which certificate shall be in the
            form of Exhibit K and (B) the Securities Pledge Agreement Supplement
            if such  Guarantor is a party to the Pledge  Agreement,  or a Pledge
            Agreement  substantially  in the form of Exhibit L if the  Guarantor
            has not executed and delivered to the Agent a Pledge Agreement;

                           (v) a supplement to Schedule 4.3 and the  appropriate
            schedule attached to the appropriate  Security  Instruments  listing
            the additional  Collateral,  certified as true, correct and complete
            by the  Authorized  Representative  (provided  that the  failure  to
            deliver such supplement  shall not impair the rights conferred under
            the Security Instruments in after acquired Collateral);

                           (vi) if the  Guarantor  is a Material  Guarantor,  an
            opinion of counsel to the Guarantor dated as of the date of delivery
            of the Facility  Guaranty and other Loan  Documents  provided for in
            this  Section 8.20 and  addressed  to the Agent and the Lenders,  in
            form and substance reasonably acceptable to the Agent (which opinion
            may include  assumptions  and  qualifications  of similar  effect to
            those  contained  in the opinions of counsel  delivered  pursuant to
            Section 6.1(a)(ii)), to the effect that:

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                           (A)  such  Guarantor  is  duly   organized,   validly
                  existing  and in  good  standing  in the  jurisdiction  of its
                  formation,  has the  requisite  power and authority to own its
                  properties  and  conduct  its  business as then owned and then
                  conducted and proposed to be conducted,  and is duly qualified
                  to  transact  business  and is in good  standing  as a foreign
                  corporation or partnership in each other jurisdiction in which
                  the  character  of the  properties  owned  or  leased,  or the
                  business carried on by it, requires such qualification and the
                  failure  to be so  qualified  would  reasonably  be  likely to
                  result in a Material Adverse Effect;

                           (B) the  execution,  delivery and  performance of the
                  Facility  Guaranty and other Loan Documents  described in this
                  Section 8.20 to which such  Guarantor is a signatory have been
                  duly  authorized  by all  requisite  corporate or  partnership
                  action   (including   any  required   shareholder  or  partner
                  approval),  each of such agreements has been duly executed and
                  delivered and constitutes  the valid and binding  agreement of
                  such   Guarantor,   enforceable   against  such  Guarantor  in
                  accordance  with  its  terms,  subject  to the  effect  of any
                  applicable bankruptcy, moratorium, insolvency,  reorganization
                  or  other  similar  law  affecting   the   enforceability   of
                  creditors'  rights  generally  and to the  effect  of  general
                  principles  of equity  (whether  considered in a proceeding at
                  law or in equity); and

                           (C) the Uniform Commercial Code financing  statements
                  on Form  UCC-1  delivered  to the  Agent by the  Guarantor  in
                  connection  with the delivery of the Security  Instruments  of
                  such  Guarantor  have been duly  executed by the Guarantor and
                  are in form, substance and number sufficient for filing in all
                  Uniform Commercial Code filing offices in all jurisdictions in
                  which filing is necessary to perfect in favor of the Agent for
                  the benefit of the Lenders  the Lien on  Collateral  conferred
                  under such Security Instruments to the extent such Lien may be
                  perfected by Uniform Commercial Code filing;

                           (vii)  current  copies  of  the  charter   documents,
            including   partnership   agreements  and   certificate  of  limited
            partnership, if applicable, and bylaws of such Guarantor, minutes of
            duly  called  and  conducted  meetings  (or  duly  effected  consent
            actions)  of  the  Board  of  Directors,  partners,  or  appropriate
            committees  thereof  (and,  if required by such  charter  documents,
            bylaws or by applicable law, of the  shareholders) of such Guarantor
            authorizing  the actions and the execution and delivery of documents
            described in this Section 8.20.

                                   ARTICLE IX
                               Negative Covenants
                               ------------------

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                  Until the Obligations have been paid and satisfied in full, no
         Letters  of  Credit  remain  outstanding  and this  Agreement  has been
         terminated  in accordance  with the terms  hereof,  unless the Required
         Lenders shall otherwise consent in writing,  the Borrower will not, nor
         will it permit any Guarantor to:

                  9.1. Financial Covenants .

                           (a) Consolidated Net Worth.  Permit  Consolidated Net
                  Worth to be less than (i) $35, 847,500 at the Closing Date and
                  through  June  29,  1998,  and (ii) as at the last day of each
                  succeeding  fiscal  quarter  of the  Borrower  and until  (but
                  excluding) the last day of the next  following  fiscal quarter
                  of the Borrower, the sum of (A) the amount of Consolidated Net
                  Worth  required  to be  maintained  pursuant  to this  Section
                  9.1(a)  as at  the  end of the  immediately  preceding  fiscal
                  quarter,  plus (B) 50% of  Consolidated  Net  Income  (with no
                  reduction  for net losses  during any  period)  for the fiscal
                  quarter of the Borrower  ending on such day (including  within
                  "Consolidated Net Income" certain items otherwise excluded, as
                  provided for in the definition of "Consolidated  Net Income"),
                  plus (c) 100% of the Net Proceeds of any Equity Offering.

                           (b)   Consolidated   Leverage   Ratio.   Permit   the
                  Consolidated  Leverage Ratio as of the end of any Four-Quarter
                  Period to be greater than 3.00 to 1.00.

                           (c)  Consolidated  Fixed  Charge  Ratio.  Permit  the
                  Consolidated Fixed Charge Ratio to be less than that set forth
                  opposite each such period:

         Four-Quarter Period Ending             Consolidated Fixed Charge Ratio

         Closing - September 30, 1998                     2.00 to 1.00
         October 1, 1998 - September 30, 1999             2.25 to 1.00
         Thereafter                                       2.75 to 1.00

                  9.2.  Acquisitions  .  Enter  into  any  agreement,  contract,
         binding commitment or other arrangement  providing for any Acquisition,
         or take any action to solicit  the tender of  securities  or proxies in
         respect thereof in order to effect any Acquisition, unless:

                           (a) the  Person  to be (or  whose  assets  are to be)
         acquired  does not  oppose  such  Acquisition  and the line or lines of
         business of the Person to be acquired are substantially the same as one
         or more line or lines of business  conducted  by the  Borrower  and the
         Guarantors, and

                           (b)  no  Default  or  Event  of  Default  shall  have
         occurred and be continuing  either  immediately prior to or immediately
         after giving  effect to such  Acquisition  and the Borrower  shall have
         furnished to the Agent (A) pro forma historical financial statements as
         of the end of the most recently  completed  Fiscal Year of the Borrower

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         and most recent interim fiscal quarter, if applicable, giving effect to
         such  Acquisition  and  (B) a  certificate  in the  form of  Exhibit  H
         prepared  on a  historical  pro  forma  basis  giving  effect  to  such
         Acquisition,  which  certificate  shall  demonstrate that no Default or
         Event of Default would exist immediately after giving effect thereto,

                           (c) the Person  acquired shall be a Guarantor,  or be
         merged into the Borrower or a Guarantor,  immediately upon consummation
         of the Acquisition (or if assets are being acquired, the acquiror shall
         be the Borrower or a Guarantor), and

                           (d) if the  Cost  of  Acquisition  shall  (A)  exceed
         $10,000,000 in cash, or (B) exceed $12,500,000 in the aggregate, or (C)
         cause the aggregate Cost of Acquisitions incurred in any Fiscal Year to
         exceed  $40,000,000,   the  Required  Lenders  shall  consent  to  such
         Acquisition  in  their  discretion;   provided  that  all  Acquisitions
         completed  before the  Closing  Date  shall not be  counted  toward the
         limitation in clause (C) for Fiscal Year 1998.

                  9.3 [Reserved] .

                  9.4. Liens . Incur, create or permit to exist any Lien, charge
         or other  encumbrance  of any  nature  whatsoever  with  respect to any
         property or assets now owned or  hereafter  acquired by the Borrower or
         any Guarantor,  other than the following (collectively,  the "Permitted
         Liens"):

                           (a) Liens created under the Security  Instruments  in
            favor of the Agent and the Lenders, and otherwise existing as of the
            date hereof and as set forth in Schedule 7.7;

                           (b) Liens  imposed by law for taxes,  assessments  or
            charges  of any  Governmental  Authority  for  claims not yet due or
            which are being  contested in good faith by appropriate  proceedings
            diligently  conducted and with respect to which adequate reserves or
            other appropriate provisions are being maintained in accordance with
            GAAP  and  which  Liens  are  not  yet  enforceable   against  other
            creditors;

                           (c)  statutory   Liens  of  landlords  and  Liens  of
            carriers,  warehousemen,  mechanics,  materialmen  and  other  Liens
            imposed by law or created in the ordinary  course of business and in
            existence  less than 90 days from the date of  creation  thereof for
            amounts  not yet due or which are being  contested  in good faith by
            appropriate  proceedings  diligently  conducted  and with respect to
            which adequate  reserves or other  appropriate  provisions are being
            maintained  in  accordance  with  GAAP and  which  Liens are not yet
            enforceable against other creditors;

                           (d) Liens  incurred or deposits  made in the ordinary
            course of business (including,  without limitation, surety bonds and
            appeal bonds) in connection with workers' compensation, unemployment
            insurance and other types of social  security  benefits or to secure
            the performance of tenders, bids, leases,  contracts (other than for
            the  repayment of  Indebtedness),  statutory  obligations  and other
            similar  obligations  or  arising as a result of  progress  payments
            under government contracts;

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<PAGE>

                           (e)   easements   (including    reciprocal   easement
            agreements  and  utility  agreements),   rights-of-way,   covenants,
            consents,  reservations,  encroachments,  variations  and zoning and
            other  restrictions,   charges  or  encumbrances   (whether  or  not
            recorded),  which do not  interfere  materially  with  the  ordinary
            conduct of the business of the Borrower or any  Subsidiary and which
            do not  materially  detract  from the value of the property to which
            they attach or materially  impair the use thereof to the Borrower or
            any Guarantor;

                           (f)  purchase  money  Liens  to  secure  Indebtedness
            permitted  under  Section  9.5(f) and  incurred  to  purchase  fixed
            assets,  provided such Indebtedness  represents not less than 75% of
            the purchase price of such assets as of the date of purchase thereof
            and no  property  other than the assets so  purchased  secures  such
            Indebtedness; and

                           (g) Liens arising in connection  with Capital  Leases
            permitted  under  Section  9.5(g);  provided that no such Lien shall
            extend to any  Collateral  or to any other  property  other than the
            assets subject to such Capital Leases;

                  9.5  Indebtedness . Incur,  create,  assume or permit to exist
         any Indebtedness of the Borrower, howsoever evidenced, except:

                           (a)  Indebtedness  existing as of the Closing Date as
            set forth in Schedule 9.5;  provided,  none of the  instruments  and
            agreements  evidencing  or  governing  such  Indebtedness  shall  be
            amended,  modified or supplemented  after the Closing Date to change
            any terms of subordination,  repayment or rights of conversion, put,
            exchange or other  rights from such terms and rights as in effect on
            the Closing Date;

                           (b) Indebtedness  owing to the Agent or any Lender in
            connection with this Agreement, any Note or other Loan Document;

                           (c) the  endorsement  of negotiable  instruments  for
            deposit or collection or similar transactions in the ordinary course
            of business;

                           (d)  additional  unsecured   Indebtedness  for  Money
            Borrowed and not otherwise covered by clauses (a) through (c) above;
            provided that the aggregate outstanding principal amount of all such
            other  Indebtedness  permitted  under this  clause (d) and  Sections
            9.5(e), (f), (g), and (h) shall in no event exceed $10,00,000 in the
            aggregate at any time;

                           (e)   Indebtedness    arising   from   Rate   Hedging
            Obligations   permitted  under  Section  9.15;   provided  that  the
            aggregate outstanding  risk-adjusted  principal amount as determined
            by the  Agent  of  all  such  Rate  Hedging  Obligations  and of all
            Indebtedness  permitted  under this clause (e) and Sections  9.5(d),
            (f),  (g),  and (h)  shall in no  event  exceed  $10,000,000  in the
            aggregate at any time;

                           (f) purchase money Indebtedness  described in Section
            9.4(f);  provided that the aggregate outstanding principal amount of

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<PAGE>

            all such purchase money Indebtedness permitted under this clause (f)
            and of all Indebtedness  permitted under Sections 9.5(d),  (e), (g),
            and (h) shall in no event exceed $10,000,000 in the aggregate at any
            time;

                           (g)  Indebtedness  for Money  Borrowed  arising  from
            Capital  Leases  described  in  Section  9.4(g);  provided  that the
            aggregate  outstanding  principal  amount of such  Indebtedness  for
            Money  Borrowed  arising from Capital  Leases  permitted  under this
            clause (g) and of all Indebtedness  permitted under Sections 9.5(d),
            (e),  (f),  and (h)  shall in no  event  exceed  $10,000,000  in the
            aggregate at any time;

                           (h)  Indebtedness  for Money  Borrowed  arising  from
            insurance  premium  financing  plans that fully amortize  within one
            year;  provided that the aggregate  outstanding  principal amount of
            such  Indebtedness  for Money  Borrowed  arising from such insurance
            premium  financing  plans permitted under this clause (h) and of all
            Indebtedness  permitted  under  Sections  9.5(d),  (e), (f), and (g)
            shall in no event exceed $10,000,000 in the aggregate at any time;

                           (i) Deferred Excess Compensation.

                  9.6. Transfer of Assets . Sell,  lease,  transfer or otherwise
         dispose  of any  assets  of  Borrower  or any  Guarantor  in  excess of
         $250,000  per Fiscal Year other than (a)  dispositions  of inventory in
         the ordinary course of business,  (b)  dispositions of property that is
         substantially  worn,  damaged,  obsolete  or,  in the  judgment  of the
         Borrower,  no longer best used or useful in its business or that of any
         Guarantor,  (c) transfers of assets necessary to give effect to merger,
         sale or  consolidation  transactions  permitted by Section 9.8, (d) the
         disposition of Eligible Securities in the ordinary course of management
         of the investment portfolio of the Borrower and the Guarantors, and (e)
         transfers of assets from one Guarantor to another or to the Borrower so
         long as after  giving  effect  thereto  the  Agent  shall  have a first
         priority perfected security interest in such assets;

                  9.7.  Investments  .  Purchase,  own,  invest in or  otherwise
         acquire, directly or indirectly, any stock or other securities, or make
         or permit  to exist  any  interest  whatsoever  in any other  Person or
         permit  to exist any  loans or  advances  to any  Person,  except  that
         Borrower may maintain investments or invest in:

                           (a)   securities   of  any  Person   acquired  in  an
                  Acquisition permitted hereunder;

                           (b) Eligible Securities;

                           (c) investments existing as of the date hereof and as
                  set forth in Schedule 7.4;

                           (d)  receivable  arising and trade credit  granted in
                  the ordinary course of business and any securities received in
                  satisfaction  or partial  satisfaction  thereof in  connection
                  with accounts of  financially  troubled  Persons to the extent
                  reasonably necessary in order to prevent or limit loss; and

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                           (e) investments in or loans to Guarantors;

                           (f)  other  loans,  advances  and  investments  in an
                  aggregate  principal  amount  at any time  outstanding  not to
                  exceed $500,000;

                  9.8. Merger or  Consolidation . (a) Consolidate  with or merge
         into any other Person, or (b) permit any other Person to merge into it,
         or (c)  liquidate,  wind-up or dissolve  or sell,  transfer or lease or
         otherwise  dispose of all or a  substantial  part of its assets  (other
         than sales  permitted  under  Section 9.6 (a), (b) and (d));  provided,
         however,  (i) any Guarantor may merge or transfer all or  substantially
         all  of its  assets  into  or  consolidate  with  the  Borrower  or any
         Guarantor, and (ii) any other Person may merge into or consolidate with
         the  Borrower  or any  Guarantor  and any  Guarantor  may merge into or
         consolidate with any other Person in order to consummate an Acquisition
         permitted  by Section  9.2,  provided  further,  that any  resulting or
         surviving  entity shall execute and deliver such  agreements  and other
         documents, including a Facility Guaranty, and take such other action as
         the Agent may require to evidence or confirm its express  assumption of
         the obligations  and liabilities of its predecessor  entities under the
         Loan Documents;

                  9.9.  Restricted  Payments  . Make any  Restricted  Payment or
         apply or set apart any of their  assets  therefor or agree to do any of
         the foregoing except;

                           (a) any Guarantor may make Restricted Payments to the
                  Borrower; or

                           (b) any  Guarantor  may make  Restricted  Payments to
                  another Guarantor; or

                           (c) those distributions set forth on Schedule 9.9; or

                           (d) subject to the limitation of Section 7.11, if the
                  Consolidated  Leverage  Ratio is less  than 2.50 to 1.00 as of
                  the end of the  previous  fiscal  quarter,  the  Borrower  may
                  purchase  its own  stock so long as the  aggregate  value  (as
                  quoted by a national  securities exchange on any date) held as
                  treasury stock does not at any time exceed $2,000,000;

                  9.10.  Transactions  with Affiliates . Other than transactions
         permitted under Sections 9.7 and 9.8, and transactions with Guarantors,
         enter into any transaction after the Closing Date,  including,  without
         limitation,  the purchase, sale, lease or exchange of property, real or
         personal,  or the  rendering of any service,  with any Affiliate of the
         Borrower,  except  (a) that such  Persons  may render  services  to the
         Borrower or the Guarantors for compensation at the same rates generally
         paid by Persons engaged in the same or similar  businesses for the same
         or similar services,  (b) that the Borrower or any Guarantor may render
         services to such Persons for  compensation  at the same rates generally
         charged by the Borrower or such Guarantor and (c) in either case in the
         ordinary course of business and pursuant to the reasonable requirements
         of the Borrower's (or any  Guarantor's)  business  consistent with past
         practice  of  the  Borrower  and  the  Guarantors  and  upon  fair  and
         reasonable  terms no less  favorable to the Borrower (or any Guarantor)
         than would be obtained in a comparable arm's-length  transaction with a
         Person not an Affiliate;

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                  9.11 Compliance with ERISA . With respect to any Pension Plan,
         Employee Benefit Plan or Multiemployer Plan:

                           (a) permit the  occurrence of any  Termination  Event
                  which would  result in a liability on the part of the Borrower
                  or any ERISA Affiliate to the PBGC; or

                           (b)  permit  the   present   value  of  all   benefit
                  liabilities  under all  Pension  Plans to exceed  the  current
                  value of the assets of such  Pension  Plans  allocable to such
                  benefit liabilities; or

                           (c) permit any  accumulated  funding  deficiency  (as
                  defined in Section  302 of ERISA and  Section 412 of the Code)
                  with respect to any Pension Plan, whether or not waived; or

                           (d) fail to make any  contribution  or payment to any
                  Multiemployer  Plan which the Borrower or any ERISA  Affiliate
                  may be required to make under any  agreement  relating to such
                  Multiemployer Plan, or any law pertaining thereto; or

                           (e)  engage,  or  permit  any  Borrower  or any ERISA
                  Affiliate  to  engage,  in any  prohibited  transaction  under
                  Section 406 of ERISA or Sections  4975 of the Code for which a
                  civil  penalty  pursuant  to Section  502(I) of ERISA or a tax
                  pursuant to Section 4975 of the Code may be imposed; or

                           (f)   establishment  of  any  Employee  Benefit  Plan
                  providing  post-retirement  welfare  benefits or  establish or
                  amend  any  Employee  Benefit  Plan  which   establishment  or
                  amendment  could  result in  liability  to the Borrower or any
                  ERISA  Affiliate or increase the obligation of the Borrower or
                  any ERISA Affiliate to a Multiemployer Plan which liability or
                  increase,   individually   or   together   with  all   similar
                  liabilities and increases, is in excess of $50,000; or

                           (g)  fail,  or  permit  the  Borrower  or  any  ERISA
                  Affiliate  to fail,  to  establish,  maintain and operate each
                  Employee  Benefit Plan in compliance in all material  respects
                  with the provisions of ERISA, the Code, all applicable Foreign
                  Benefit Laws and all other applicable laws and the regulations
                  and interpretations thereof;

                  9.12. Fiscal Year . Change its Fiscal Year;

                  9.13.  Dissolution,   etc.  Wind  up,  liquidate  or  dissolve
         (voluntarily  or  involuntarily)  or commence or suffer any proceedings
         seeking any such  winding up,  liquidation  or  dissolution,  except in
         connection with a merger or consolidation permitted pursuant to Section
         9.8;


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                  9.14. Change in Control . Cause,  suffer or permit to exist or
         occur any Change of Control;

                  9.15.  Rate  Hedging  Obligations  . Incur  any  Rate  Hedging
         Obligations  or enter  into any  agreements,  arrangements,  devices or
         instruments  relating  to Rate  Hedging  Obligations,  except  for Rate
         Hedging  Obligations  incurred  to limit  risks of currency or interest
         rate  fluctuations to which the Borrower and the Guarantors are subject
         by virtue of the Indebtedness evidenced by the Notes.

                  9.16. Negative Pledge Clauses . Enter into or cause, suffer or
         permit to exist any agreement  with any Person other than the Agent and
         the Lenders  pursuant  to this  Agreement  or any other Loan  Documents
         which  prohibits  or limits the  ability of any of the  Borrower or any
         Guarantor to create, incur, assume or suffer to exist any Lien upon any
         of its  property,  assets or  revenues,  whether now owned or hereafter
         acquired,  provided  that the Borrower and any Guarantor may enter into
         such an  agreement  in  connection  with  property  subject to any Lien
         permitted by this  Agreement  and not  released  after the date hereof,
         when such  prohibition  or  limitation is by its terms  effective  only
         against the assets subject to such Lien;

                                    ARTICLE X
                       Events of Default and Acceleration
                       ----------------------------------

                  10.1.  Events of Default . If any one or more of the following
         events (herein  called "Events of Default")  shall occur for any reason
         whatsoever  (and  whether  such   occurrence   shall  be  voluntary  or
         involuntary  or  come  about  or be  effected  by  operation  of law or
         pursuant to or in compliance with any judgment,  decree or order of any
         court or any order, rule or regulation of any Governmental  Authority),
         that is to say:

                           (a) if default  shall be made in the due and punctual
                  payment of the principal of any Loan, Reimbursement Obligation
                  or other  Obligation,  when  and as the same  shall be due and
                  payable  whether  pursuant to any  provision  of Article II or
                  Article III, at maturity, by acceleration or otherwise; or

                           (b) if default  shall be made in the due and punctual
                  payment of any amount of interest  on any Loan,  Reimbursement
                  Obligation or other Obligation or of any fees or other amounts
                  payable  to any of the  Lenders  or the  Agent  on the date on
                  which the same shall be due and payable and such default shall
                  continue for four (4) or more days; or

                           (c) if default  shall be made in the  performance  or
                  observance  of any covenant  set forth in Section  8.7,  8.11,
                  8.20, or Article IX;

                           (d) if a default shall be made in the  performance or
                  observance of, or shall occur under,  any covenant,  agreement
                  or provision  contained in this  Agreement or the Notes (other
                  than as  described  in clauses (a), (b) or (c) above) and such
                  default  shall  continue for 30 or more days after the earlier
                  of  receipt  of  notice  of  such  default  by the  Authorized
                  Representative  from the Agent or an officer  of the  Borrower

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                  becomes aware of such  default,  or if a default shall be made
                  in the performance or observance of, or shall occur under, any
                  covenant, agreement or provision contained in any of the other
                  Loan Documents  (beyond any applicable  grace period,  if any,
                  contained therein) or in any instrument or document evidencing
                  or creating any obligation,  guaranty, or Lien in favor of the
                  Agent or any of the Lenders or  delivered  to the Agent or any
                  of  the  Lenders  in  connection  with  or  pursuant  to  this
                  Agreement or any of the  Obligations,  or if any Loan Document
                  ceases to be in full force and effect (other than by reason of
                  any action by the Agent), or if without the written consent of
                  the Lenders,  this  Agreement or any other Loan Document shall
                  be  disaffirmed  or  shall  terminate,  be  terminable  or  be
                  terminated  or become  void or  unenforceable  for any  reason
                  whatsoever  (other  than in  accordance  with its terms in the
                  absence of  default or by reason of any action by the  Lenders
                  or the Agent); or

                           (e) if there shall occur (i) a default,  which is not
                  waived, in the payment of any principal,  interest, premium or
                  other amount with respect to any Indebtedness  (other than the
                  Loans and other  Obligations) of the Borrower or any Guarantor
                  in  an  amount  not  less  than   $100,000  in  the  aggregate
                  outstanding,  or (ii) a default,  which is not waived,  in the
                  performance, observance or fulfillment of any term or covenant
                  contained in any agreement or instrument  under or pursuant to
                  which any such  Indebtedness  may have been  issued,  created,
                  assumed,   guaranteed  or  secured  by  the  Borrower  or  any
                  Guarantor, or (iii) any other event of default as specified in
                  any  agreement  or  instrument  under or pursuant to which any
                  such  Indebtedness  may have been  issued,  created,  assumed,
                  guaranteed  or secured by the Borrower or any  Guarantor,  and
                  such default or event of default shall  continue for more than
                  the  period  of  grace,  if any,  therein  specified,  or such
                  default  or event of  default  shall  permit the holder of any
                  such Indebtedness (or any agent or trustee acting on behalf of
                  one or more holders) to accelerate the maturity thereof; or

                           (f)  if  any   representation,   warranty   or  other
                  statement  of fact  contained  in any Loan  Document or in any
                  writing,   certificate,   report  or  statement  at  any  time
                  furnished  to the  Agent or any  Lender by or on behalf of the
                  Borrower or any other Loan Party  pursuant to or in connection
                  with  any  Loan  Document,  or  otherwise,  shall  be false or
                  misleading in any material respect when given; or

                           (g) if the  Borrower or any  Guarantor  or other Loan
                  Party  shall be  unable  to pay its  debts  generally  as they
                  become  due;  file  a  petition  to  take   advantage  of  any
                  insolvency statute;  make an assignment for the benefit of its
                  creditors;  commence a  proceeding  for the  appointment  of a
                  receiver,  trustee,  liquidator or conservator of itself or of
                  the  whole or any  substantial  part of its  property;  file a
                  petition  or answer  which in either  case seeks  liquidation,
                  reorganization  or  arrangement  or similar  relief  under the
                  federal  bankruptcy  laws  or  any  other  applicable  law  or
                  statute; or

                           (h) if a court of competent  jurisdiction shall enter
                  an order, judgment or decree appointing a custodian, receiver,
                  trustee,  liquidator  or  conservator  of the  Borrower or any
                  Guarantor  or of the  whole  or any  substantial  part  of its
                  properties  and  such  order,  judgment  or  decree  continues
                  unstayed  and in effect for a period of sixty  (60)  days,  or
                  approve a petition filed against the Borrower or any Guarantor
                  seeking liquidation,  reorganization or arrangement or similar

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                  relief  under  the  federal   bankruptcy  laws  or  any  other
                  applicable  law or statute of the United  States of America or
                  any state,  which  petition is not  dismissed or stayed within
                  sixty (60) days; or if, under the  provisions of any other law
                  for  the  relief  or aid of  debtors,  a  court  of  competent
                  jurisdiction  shall assume  custody or control of the Borrower
                  or any  Guarantor or of the whole or any  substantial  part of
                  its properties, which control is not relinquished within sixty
                  (60) days;  or if there is  commenced  against the Borrower or
                  any   Guarantor   any    proceeding   or   petition    seeking
                  reorganization,   arrangement  or  similar  relief  under  the
                  federal bankruptcy laws or any other applicable law or statute
                  of the United States of America or any state which  proceeding
                  or  petition  remains  undismissed  for a period of sixty (60)
                  days; or if the Borrower or any Guarantor  takes any action to
                  indicate its consent to or approval of any such  proceeding or
                  petition; or

                           (i) if (i) one or more  judgments or orders where the
                  amount not covered by insurance (or the amount as to which the
                  insurer denies liability) is in excess of $100,000 is rendered
                  against the  Borrower or any  Guarantor,  or (ii) there is any
                  attachment,   injunction  or  execution  against  any  of  the
                  Borrower's or Guarantors'  properties for any amount in excess
                  of $100,000 in the aggregate;  and such judgment,  attachment,
                  injunction   or   execution    remains    unpaid,    unstayed,
                  undischarged,  unbonded or undismissed  for a period of thirty
                  (30) days; or

                           (j) if the  Borrower or any  Guarantor  shall,  other
                  than in the ordinary course of business (as determined by past
                  practices), suspend all or any part of its operations material
                  to the  conduct  of the  business  of the  Borrower  and  such
                  Guarantor,  taken as a whole,  for a  period  of more  than 30
                  days; or

                           (k) if the Borrower or any Guarantor shall breach any
                  of the material  terms or conditions  of any  agreement  under
                  which any Rate Hedging Obligations permitted hereby is created
                  and such breach shall  continue  beyond any grace  period,  if
                  any, relating thereto pursuant to the terms of such agreement,
                  or if the Borrower or any Guarantor shall disaffirm or seek to
                  disaffirm  any  such  agreement  or  any  of  its  obligations
                  thereunder; or

                           (l) if there  shall  occur and not be waived an Event
                  of Default as defined in any of the other Loan Documents;

                           (m)  (i)  cancellation,   revocation,  suspension  or
                  termination of any Medicare  Certification,  Medicare Provider
                  Agreement,   Medicaid   Certification  or  Medicaid   Provider
                  Agreement  affecting  the  Borrower,   any  Guarantor  or  any
                  Contract  Provider,  or (ii)  the loss of any  other  permits,
                  licenses, authorizations, certifications or approvals from any
                  federal,  state or local Governmental Authority or termination
                  of any contract with any such authority,  in either case which
                  cancellation,  revocation, suspension, termination or loss (X)
                  in  the  case  of  any  suspension  or  temporary  loss  only,
                  continues for a period greater than 60 days and (Y) results in
                  the suspension or termination of operations of the Borrower or

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<PAGE>

                  any  Guarantor  or in  the  failure  of  the  Borrower  or any
                  Guarantors  or  any  Contract   Provider  to  be  eligible  to
                  participate  in  Medicare  or  Medicaid  programs or to accept
                  assignments   of  rights  to   reimbursement   under  Medicaid
                  Regulations  or Medicare  Regulations;  provided that any such
                  events  described in this Section  10.1(m) shall result either
                  singly or in the aggregate in the  termination,  cancellation,
                  suspension  or material  impairment of operations or rights to
                  reimbursement which produce 5% or more of the Borrower's gross
                  revenues (on an annualized basis);

                           (n) if there shall occur any Termination Event;

                           (o) any actual or asserted  invalidity (other than by
                  the Agent and Lenders) of any of the Loan Documents;

         then, and in any such event and at any time  thereafter,  if such Event
         of Default or any other Event of Default shall have not been waived,

                                 (A) either or both of the following actions may
                         be  taken:  (i) the  Agent,  with  the  consent  of the
                         Required  Lenders,  may,  and at the  direction  of the
                         Required  Lenders shall,  declare any obligation of the
                         Lenders and the Issuing Bank to make further  Revolving
                         Loans  or  to  issue   additional   Letters  of  Credit
                         terminated,  whereupon the obligation of each Lender to
                         make further Revolving Loans and of the Issuing Bank to
                         issue  additional  Letters of Credit,  hereunder  shall
                         terminate immediately,  and (ii) the Agent shall at the
                         direction of the  Required  Lenders,  at their  option,
                         declare  by  notice to the  Borrower  any or all of the
                         Obligations to be immediately due and payable,  and the
                         same,  including all interest  accrued  thereon and all
                         other  obligations of the Borrower to the Agent and the
                         Lenders,  shall  forthwith  become  immediately due and
                         payable without presentment, demand, protest, notice or
                         other  formality  of any kind,  all of which are hereby
                         expressly waived,  anything  contained herein or in any
                         instrument  evidencing the  Obligations to the contrary
                         notwithstanding;      provided,      however,      that
                         notwithstanding  the  above,  if there  shall  occur an
                         Event of Default  under  clause (g) or (h) above,  then
                         the obligation of the Lenders to make  Revolving  Loans
                         and of the  Issuing  Bank to issue  Letters  of  Credit
                         hereunder shall automatically terminate and any and all
                         of the Obligations shall be immediately due and payable
                         without the necessity of any action by the Agent or the
                         Required Lenders or notice to the Agent or the Lenders;

                                 (B) the  Borrower  shall,  upon  demand  of the
                         Agent or the  Required  Lenders,  deposit cash with the
                         Agent in an amount equal to the amount of any Letter of
                         Credit  Outstandings,  as  collateral  security for the
                         repayment of any future drawings or payments under such
                         Letters of Credit,  and such  amounts  shall be held by
                         the  Agent  pursuant  to the  terms  of the LC  Account
                         Agreement; and

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                                 (C) the  Agent  and each of the  Lenders  shall
                         have all of the rights and remedies available under the
                         Loan Documents or under any applicable law.

                  10.2.  Agent to Act. In case any one or more Events of Default
         shall  occur  and not have  been  waived,  the  Agent  may,  and at the
         direction of the Required Lenders shall, proceed to protect and enforce
         their rights or remedies  either by suit in equity or by action at law,
         or  both,  whether  for  the  specific  performance  of  any  covenant,
         agreement  or other  provision  contained  herein or in any other  Loan
         Document,  or to enforce  the payment of the  Obligations  or any other
         legal or equitable right or remedy.

                  10.3. Cumulative  Rights. No right or remedy herein  conferred
         upon the Lenders or the Agent is intended to be  exclusive of any other
         rights or remedies contained herein or in any other Loan Document,  and
         every such right or remedy shall be cumulative and shall be in addition
         to every other such right or remedy contained herein and therein or now
         or hereafter existing at law or in equity or by statute, or otherwise.

                  10.4. No Waiver. No course of dealing between the Borrower and
         any  Lender  or the  Agent or any  failure  or delay on the part of any
         Lender or the Agent in exercising any rights or remedies under any Loan
         Document or otherwise  available to it shall operate as a waiver of any
         rights or remedies  and no single or partial  exercise of any rights or
         remedies  shall  operate as a waiver or  preclude  the  exercise of any
         other rights or remedies  hereunder or of the same right or remedy on a
         future occasion.

                  10.5.  Allocation  of  Proceeds.  If an Event of  Default  has
         occurred  and not been  waived,  and the maturity of the Notes has been
         accelerated  pursuant to Article X hereof, all payments received by the
         Agent  hereunder,  in respect of any  principal  of or  interest on the
         Obligations  or any other  amounts  payable by the Borrower  hereunder,
         shall be applied by the Agent in the following order:

                           (a) amounts  due to the Lenders  pursuant to Sections
                  2.10, 3.3, 3.4 and 12.5;

                           (b)  amounts  due to the Agent  pursuant  to  Section
                  11.8;

                           (c)  payments of interest on Loans and  Reimbursement
                  Obligations,  to be  applied  for the  ratable  benefit of the
                  Lenders;

                           (d) payments of principal of Loans and  Reimbursement
                  Obligations,  to be  applied  for the  ratable  benefit of the
                  Lenders;

                           (e)  payments of cash amounts to the Agent in respect
                  of outstanding Letters of Credit pursuant to Section 10.1(B);

                           (f) amounts  due to the Lenders  pursuant to Sections
                  3.2(g), 8.15 and 12.9;

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                           (g)  payments  of all other  amounts due under any of
                  the Loan  Documents,  if any,  to be applied  for the  ratable
                  benefit of the Lenders;

                           (h)  amounts  due to any of the Lenders in respect of
                  Obligations consisting of liabilities under any Swap Agreement
                  with any of the Lenders on a pro rata basis  according  to the
                  amounts owed; and

                           (i) any other Indebtedness.

                                   ARTICLE XI
                                    The Agent
                                    ---------

                  11.1. Appointment,  Powers, and Immunities. Each Lender hereby
         irrevocably appoints and authorizes the Agent to act as its agent under
         this  Agreement  and the other  Loan  Documents  with such  powers  and
         discretion as are  specifically  delegated to the Agent by the terms of
         this Agreement and the other Loan  Documents,  together with such other
         powers as are reasonably  incidental thereto.  The Agent (which term as
         used in this  sentence  and in Section  11.5 and the first  sentence of
         Section 11.6 hereof shall  include its  affiliates  and its own and its
         affiliates' officers, directors,  employees, and agents): (a) shall not
         have any duties or responsibilities except those expressly set forth in
         this  Agreement and shall not be a trustee or fiduciary for any Lender;
         (b) shall not be responsible to the Lenders for any recital, statement,
         representation,  or  warranty  (whether  written or oral) made in or in
         connection  with any Loan Document or any certificate or other document
         referred to or provided  for in, or received by any of them under,  any
         Loan Document, or for the value, validity, effectiveness,  genuineness,
         enforceability,  or  sufficiency  of any Loan  Document,  or any  other
         document  referred to or provided for therein or for any failure by any
         Loan  Party or any  other  Person  to  perform  any of its  obligations
         thereunder;  (c)  shall  not be  responsible  for or have  any  duty to
         ascertain, inquire into, or verify the performance or observance of any
         covenants or  agreements by any Loan Party or the  satisfaction  of any
         condition or to inspect the property  (including the books and records)
         of any Loan Party or any of its  Subsidiaries or affiliates;  (d) shall
         not be required to initiate  or conduct any  litigation  or  collection
         proceedings  under any Loan Document;  and (e) shall not be responsible
         for  any  action  taken  or  omitted  to be  taken  by it  under  or in
         connection with any Loan Document,  except for its own gross negligence
         or   willful   misconduct.    The   Agent   may   employ   agents   and
         attorneys-in-fact  and shall not be  responsible  for the negligence or
         misconduct of any such agents or attorneys-in-fact  selected by it with
         reasonable care.

                  11.2.  Reliance  by Agent. The Agent shall be entitled to rely
         upon  any  certification,   notice,   instrument,   writing,  or  other
         communication (including,  without limitation, any thereof by telephone
         or telefacsimile)  believed by it to be genuine and correct and to have
         been  signed,  sent or made by or on  behalf  of the  proper  Person or
         Persons,  and upon advice and  statements of legal  counsel  (including
         counsel for any Loan Party), independent accountants, and other experts
         selected  by the  Agent.  The Agent may deem and treat the payee of any
         Note as the holder thereof for all purposes hereof unless and until the
         Agent  receives and accepts an Assignment  and  Acceptance  executed in
         accordance  with Section 12.1 hereof.  As to any matters not  expressly
         provided  for by this  Agreement,  the Agent  shall not be  required to
         exercise any  discretion  or take any action,  but shall be required to

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         act or to  refrain  from  acting  (and shall be fully  protected  in so
         acting or refraining from acting) upon the instructions of the Required
         Lenders,  and such instructions shall be binding on all of the Lenders;
         provided,  however,  that the Agent  shall not be  required to take any
         action that exposes the Agent to personal liability or that is contrary
         to any Loan  Document  or  applicable  law or unless it shall  first be
         indemnified  to its  satisfaction  by the  Lenders  against any and all
         liability  and expense  which may be incurred by it by reason of taking
         any such action.

                  11.3.  Defaults.  The  Agent  shall  not  be  deemed  to  have
         knowledge or notice of the  occurrence of a Default or Event of Default
         unless  the  Agent has  received  written  notice  from a Lender or the
         Borrower  specifying  such Default or Event of Default and stating that
         such  notice  is a "Notice  of  Default".  In the event  that the Agent
         receives  such a notice  of the  occurrence  of a  Default  or Event of
         Default, the Agent shall give prompt notice thereof to the Lenders. The
         Agent shall  (subject  to Section  11.2  hereof)  take such action with
         respect to such  Default or Event of  Default  as shall  reasonably  be
         directed by the Required  Lenders,  provided that, unless and until the
         Agent shall have received such directions, the Agent may (but shall not
         be obligated to) take such action,  or refrain from taking such action,
         with  respect  to such  Default  or Event of  Default  as it shall deem
         advisable in the best interest of the Lenders.

                  11.4. Rights as Lender. With respect to its Commitment and the
         Loans made by it,  NationsBank  (and any successor  acting as Agent) in
         its  capacity  as a Lender  hereunder  shall  have the same  rights and
         powers  hereunder  as any other  Lender  and may  exercise  the same as
         though  it were not  acting  as the  Agent,  and the term  "Lender"  or
         "Lenders" shall,  unless the context otherwise  indicates,  include the
         Agent in its individual capacity. NationsBank (and any successor acting
         as Agent) and its affiliates may (without having to account therefor to
         any Lender) accept deposits from,  lend money to, make  investments in,
         provide  services  to,  and  generally  engage in any kind of  lending,
         trust, or other business with any Loan Party or any of its Subsidiaries
         or affiliates as if it were not acting as Agent,  and NationsBank  (and
         any successor  acting as Agent) and its  affiliates may accept fees and
         other  consideration  from any Loan Party or any of its Subsidiaries or
         affiliates for services in connection  with this Agreement or otherwise
         without having to account for the same to the Lenders.

                  11.5.  Indemnification.  The Lenders  agree to  indemnify  the
         Agent (to the extent not  reimbursed  under  Section 12.9  hereof,  but
         without  limiting the  obligations  of the Borrower under such Section)
         ratably  in  accordance   with  their   respective   Revolving   Credit
         Commitments, for any and all liabilities, obligations, losses, damages,
         penalties,  actions,  judgments,  suits,  reasonable costs and expenses
         (including  attorneys'  fees), or  disbursements of any kind and nature
         whatsoever that may be imposed on, incurred by or asserted  against the
         Agent  (including  by any Lender) in any way relating to or arising out
         of any Loan Document or the  transactions  contemplated  thereby or any
         action taken or omitted by the Agent under any Loan Document;  provided
         that no Lender  shall be liable for any of the  foregoing to the extent
         they  arise from the gross  negligence  or  willful  misconduct  of the
         Person to be  indemnified.  Without  limitation of the foregoing,  each
         Lender  agrees to  reimburse  the Agent  promptly  upon  demand for its

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         ratable  share of any costs or expenses  payable by the Borrower  under
         Section 12.5,  to the extent that the Agent is not promptly  reimbursed
         for such costs and expenses by the Borrower.  The agreements  contained
         in this  Section  shall  survive  payment  in full of the Loans and all
         other amounts payable under this Agreement.

                  11.6.  Non-Reliance  on Agent and Other  Lenders.  Each Lender
         agrees that it has,  independently and without reliance on the Agent or
         any other Lender, and based on such documents and information as it has
         deemed  appropriate,  made its own credit  analysis of the Loan Parties
         and their  Subsidiaries  and decision to enter into this  Agreement and
         that it will,  independently and without reliance upon the Agent or any
         other Lender,  and based on such documents and  information as it shall
         deem  appropriate  at the time,  continue to make its own  analysis and
         decisions  in taking or not  taking  action  under the Loan  Documents.
         Except  for  notices,  reports,  and other  documents  and  information
         expressly  required  to be  furnished  to  the  Lenders  by  the  Agent
         hereunder,  the  Agent  shall  not have any duty or  responsibility  to
         provide any Lender with any credit or other information  concerning the
         affairs,  financial condition,  or business of any Loan Party or any of
         its Subsidiaries or affiliates that may come into the possession of the
         Agent or any of its affiliates.

                  11.7 Resignation of Agent. The Agent may resign at any time by
         giving notice  thereof to the Lenders and the  Borrower.  Upon any such
         resignation,  the  Required  Lenders  shall have the right to appoint a
         successor  Agent  subject to the approval of the Borrower so long as no
         Default or Event of Default shall have occurred and be continuing, such
         approval not to be unreasonably  withheld.  If no successor Agent shall
         have been so appointed by the Required  Lenders and shall have accepted
         such  appointment  within  thirty (30) days after the retiring  Agent's
         giving of notice of resignation, then the retiring Agent may, on behalf
         of the Lenders,  appoint a successor  Agent which shall be a commercial
         bank  organized  under the laws of the United States of America  having
         combined  capital  and  surplus  of at  least  $100,000,000.  Upon  the
         acceptance of any appointment as Agent  hereunder by a successor,  such
         successor  shall  thereupon  succeed to and become  vested with all the
         rights,  powers,  discretion,  privileges,  and duties of the  retiring
         Agent,  and the retiring Agent shall be discharged  from its duties and
         obligations hereunder. After any retiring Agent's resignation hereunder
         as Agent,  the  provisions of this Article XI shall  continue in effect
         for its benefit in respect of any actions  taken or omitted to be taken
         by it while it was acting as Agent.

                  11.8.  Fees. The Borrower agrees to pay to the Agent,  for its
         individual account, an annual  Administrative  Agent's fee as from time
         to time agreed to by the Borrower and Agent in writing.

                                   ARTICLE XII
                                  Miscellaneous
                                  -------------

                  12.1.  Assignments  and  Participations  . (a) Each Lender may
         assign to one or more Eligible Assignees all or a portion of its rights
         and obligations under this Agreement  (including,  without  limitation,
         all or a portion  of its  Loans,  its Note,  and its  Revolving  Credit
         Commitment); provided, however, that

                           (i) each  such  assignment  shall  be to an  Eligible
                  Assignee;

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                           (ii) except in the case of an  assignment  to another
                  Lender  or an  assignment  of all  of a  Lender's  rights  and
                  obligations under this Agreement,  any such partial assignment
                  shall be in an  amount  at least  equal  to  $5,000,000  or an
                  integral multiple of $1,000,000 in excess thereof;

                           (iii) each such  assignment by a Lender shall be of a
                  constant, and not varying, percentage of all of its rights and
                  obligations under this Agreement and the Note; and

                           (iv) the parties to such assignment shall execute and
                  deliver  to the Agent for its  acceptance  an  Assignment  and
                  Acceptance in the form of Exhibit B hereto,  together with any
                  Note  subject  to  such  assignment  and a  processing  fee of
                  $3,500.

                  Upon  execution,  delivery,  and acceptance of such Assignment
                  and  Acceptance,  the  assignee  thereunder  shall  be a party
                  hereto  and,  to the  extent  of  such  assignment,  have  the
                  obligations,  rights,  and benefits of a Lender  hereunder and
                  the assigning  Lender shall, to the extent of such assignment,
                  relinquish  its rights and be  released  from its  obligations
                  under this Agreement.  Upon the consummation of any assignment
                  pursuant  to this  Section,  the  assignor,  the Agent and the
                  Borrower  shall  make  appropriate  arrangements  so that,  if
                  required,  new  Notes  are  issued  to the  assignor  and  the
                  assignee.  If the assignee is not incorporated  under the laws
                  of the United States of America or a state  thereof,  it shall
                  deliver  to the  Borrower  and the Agent  certification  as to
                  exemption from deduction or withholding of Taxes in accordance
                  with Section 5.6.

         (b) The Agent shall maintain at its address referred to in Section 12.2
      a copy of each  Assignment and Acceptance  delivered to and accepted by it
      and a  register  for the  recordation  of the names and  addresses  of the
      Lenders and the Commitment of, and principal amount of the Loans owing to,
      each  Lender  from  time to time  (the  "Register").  The  entries  in the
      Register shall be conclusive and binding for all purposes, absent manifest
      error,  and the Borrower,  the Agent and the Lenders may treat each Person
      whose name is  recorded  in the  Register  as a Lender  hereunder  for all
      purposes of this Agreement. The Register shall be available for inspection
      by the Borrower or any Lender at any reasonable time and from time to time
      upon reasonable prior notice.

         (c) Upon its receipt of an Assignment  and  Acceptance  executed by the
      parties  thereto,  together with any Note subject to such  assignment  and
      payment of the  processing  fee, the Agent shall,  if such  Assignment and
      Acceptance has been completed and is in substantially  the form of Exhibit
      B hereto,  (i) accept  such  Assignment  and  Acceptance,  (ii) record the
      information contained therein in the Register and (iii) give prompt notice
      thereof to the parties thereto.

         (d) Each Lender may sell  participations  to one or more Persons in all
      or a portion of its rights and obligations or rights and obligations under
      this  Agreement  (including  all  or a  portion  of its  Revolving  Credit
      Commitment  or  its  Loans);   provided,   however,   that  (i)  any  such
      participation  shall be in an amount at least  equal to  $5,000,000  or an
      integral  multiple of  $1,000,000  in excess  thereof,  (ii)such  Lender*s
      obligations under this Agreement shall remain unchanged, (iii) such Lender
      shall  remain  solely  responsible  to the other  parties  hereto  for the
      performance of such obligations, (iv) the participant shall be entitled to
      the benefit of the yield protection  provisions contained in Article V and
      the right of set-off contained in Section 12.3, and (v) the Borrower shall
      continue to deal solely and directly with such Lender in  connection  with
      such Lender*s rights and obligations under this Agreement, and such Lender
      shall  retain the sole right to enforce the  obligations  of the  Borrower
      relating  to its  Loans  and  its  Note  and  to  approve  any  amendment,

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<PAGE>

      modification,  or waiver of any  provision of this  Agreement  (other than
      amendments,  modifications,  or waivers decreasing the amount of principal
      of or the  rate at  which  interest  is  payable  on such  Loans  or Note,
      extending  any  scheduled  principal  payment  date or date  fixed for the
      payment of  interest on such Loans or Note,  or  extending  its  Revolving
      Credit Commitment).

         (e)  Notwithstanding  any other  provision set forth in this Agreement,
      any  Lender may at any time  assign  and pledge all or any  portion of its
      Loans and its Note to any  Federal  Reserve  Bank as  collateral  security
      pursuant to Regulation A and any Operating Circular issued by such Federal
      Reserve Bank. No such assignment  shall release the assigning  Lender from
      its obligations hereunder.

         (f) Any Lender may furnish any  information  concerning the Borrower or
      any of its Subsidiaries in the possession of such Lender from time to time
      to  assignees  and  participants   (including  prospective  assignees  and
      participants),  subject,  however,  to the  provisions  of  Section  12.15
      hereof.

                  12.2. Notices. Any notice shall be conclusively deemed to have
         been  received by any party hereto and be  effective  (i) on the day on
         which delivered (including hand delivery by commercial courier service)
         to such party (against receipt  therefor),  (ii) on the date of receipt
         at such address,  telefacsimile number or telex number as may from time
         to time be  specified  by such  party in  written  notice  to the other
         parties  hereto  or  otherwise  received),  in the  case of  notice  by
         telegram,  telefacsimile or telex,  respectively  (where the receipt of
         such message is verified by return), or (iii) on the fifth Business Day
         after  the  day on  which  mailed,  if sent  prepaid  by  certified  or
         registered  mail,  return receipt  requested,  in each case  delivered,
         transmitted or mailed, as the case may be, to the address, telex number
         or telefacsimile number, as appropriate,  set forth below or such other
         address or number as such party shall specify by notice hereunder:

             (a) if to the Borrower or any Guarantor:

                 Sheridan Healthcare, Inc.
                 4561 Sheridan Street, Suite 400
                 Hollywood, Florida 33021
                 Attn: Mitchell Eisenberg, M.D., President
                 Telephone:       (954) 986-7550
                 Telefacsimile:  (954) 987-8359

                 with a copy to:
                 Sheridan Healthcare, Inc.
                 4561 Sheridan Street, Suite 400
                 Hollywood, Florida 33021
                 Attn:Jay A. Martus, Esquire, Vice President and General Counsel
                 Telephone:       (954) 986-7770
                 Telefacsimile:  (954) 987-8359

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<PAGE>

             (b) if to the Agent:

                 NationsBank, National Association
                 Independence Center, 15th Floor
                 NC1-001-15-04
                 Charlotte, North Carolina  28255
                 Attention: Agency Services
                 Telephone:       (704) 388-3916
                 Telefacsimile:   (704) 386-9923

                 with a copy to:

                 NationsBank, National Association
                 100 North Tryon Street, 8th Floor
                 Charlotte, North Carolina 28255
                 Attention: Michael A. Crabb, III
                 Telephone: (704) 388-6000
                 Telefacsimile: (704) 388-6002

            (c)  if to the Lenders:

                 At the  addresses  set forth on the  signature  pages
                 hereof and on the signature  page of each  Assignment
                 and Acceptance.

                  12.3.  Right of Setoff;  Adjustments . (a) Upon the occurrence
         and during the  continuance  of any Event of Default,  each Lender (and
         each of its affiliates) is hereby  authorized at any time and from time
         to time, to the fullest  extent  permitted by law, to set off and apply
         any and all deposits (general or special,  time or demand,  provisional
         or final) at any time held and other  indebtedness at any time owing by
         such  Lender  (or any of its  affiliates)  to or for the  credit or the
         account of the Borrower  against any and all of the  obligations of the
         Borrower now or hereafter  existing  under this  Agreement and the Note
         held by such  Lender,  irrespective  of whether  such Lender shall have
         made any demand under this  Agreement  or such Note and  although  such
         obligations may be unmatured. Each Lender agrees promptly to notify the
         Borrower  after any such set-off and  application  made by such Lender;
         provided,  however,  that the  failure  to give such  notice  shall not
         affect the validity of such set-off and application. The rights of each
         Lender  under this  Section  12.3 are in addition  to other  rights and
         remedies (including,  without limitation, other rights of set-off) that
         such Lender may have.

                  (b) If any Lender (a  "benefitted  Lender")  shall at any time
         receive  any  payment  of all or  part of the  Loans  owing  to it,  or
         interest thereon, or receive any collateral in respect thereof (whether
         voluntarily or involuntarily,  by set-off, or otherwise),  in a greater
         proportion than any such payment to or collateral received by any other
         Lender, if any, in respect of such other Lender's Loans owing to it, or
         interest  thereon,  such benefitted Lender shall purchase for cash from
         the other Lenders a participating interest in such portion of each such
         other  Lender's  Loans owing to it, or shall provide such other Lenders
         with the benefits of any such collateral,  or the proceeds thereof,  as
         shall be necessary to cause such benefitted  Lender to share the excess
         payment or benefits of such collateral or proceeds ratably with each of

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         the  Lenders;  provided,  however,  that if all or any  portion of such
         excess payment or benefits is thereafter recovered from such benefitted
         Lender,  such purchase  shall be rescinded,  and the purchase price and
         benefits  returned,  to  the  extent  of  such  recovery,  but  without
         interest.   The  Borrower  agrees  that  any  Lender  so  purchasing  a
         participation  from a Lender  pursuant to this Section 12.3 may, to the
         fullest extent permitted by law,  exercise all of its rights of payment
         (including the right of set-off) with respect to such  participation as
         fully as if such Person were the direct creditor of the Borrower in the
         amount of such participation.

                  12.4. Survival. All covenants, agreements, representations and
         warranties  made herein shall  survive the making by the Lenders of the
         Loans and the issuance of the Letters of Credit and the  execution  and
         delivery  to the  Lenders  of this  Agreement  and the  Notes and shall
         continue in full force and effect so long as any of Obligations  remain
         outstanding or any Lender has any commitment  hereunder or the Borrower
         has continuing  obligations hereunder unless otherwise provided herein.
         Whenever in this  Agreement  any of the parties  hereto is referred to,
         such reference  shall be deemed to include the successors and permitted
         assigns of such party and all  covenants,  provisions and agreements by
         or on behalf of the Borrower  which are contained in the Loan Documents
         shall inure to the benefit of the successors  and permitted  assigns of
         the Lenders or any of them.

                  12.5.  Expenses.  The  Borrower  agrees to pay on  demand  all
         reasonable  costs  and  expenses  of the Agent in  connection  with the
         syndication,  preparation,  execution,  and delivery of this Agreement,
         the other  Loan  Documents,  and the other  documents  to be  delivered
         hereunder,  including,  without  limitation,  the  reasonable  fees and
         expenses of counsel for the Agent with respect thereto and with respect
         to advising the Agent as to its rights and  responsibilities  under the
         Loan  Documents.  The  Borrower  further  agrees to pay on  demand  all
         reasonable  costs  and  expenses  of  the  Agent,   including   without
         limitation,  the reasonable fees and expenses of counsel for the Agent,
         in  connection  with  any  future  modification  or  amendment  of this
         Agreement,  the other Loan Documents, and the other documents delivered
         hereunder.  The Borrower  further agrees to pay on demand all costs and
         expenses  of the  Agent and the  Lenders,  if any  (including,  without
         limitation,  reasonable  attorneys'  fees and expenses),  in connection
         with the enforcement (whether through negotiations,  legal proceedings,
         or  otherwise)  of the Loan  Documents  and the other  documents  to be
         delivered  hereunder.  Without  prejudice  to the survival of any other
         agreement of the Borrower hereunder,  the agreements and obligations of
         the Borrower  contained in this Section 12.5 shall  survive the payment
         in  full  of the  Loans  and  all  other  amounts  payable  under  this
         Agreement.

                  12.6. Amendments and Waivers . Any provision of this Agreement
         or any other  Loan  Document  may be amended or waived if, but only if,
         such  amendment  or waiver is in writing and is signed by the  Borrower
         and the Required Lenders (and, if Article XI or the rights or duties of


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         the Agent are affected  thereby,  by the Agent);  provided that no such
         amendment  or  waiver  shall,  unless  signed by all the  Lenders,  (i)
         increase the Revolving Credit  Commitments of the Lenders,  (ii) reduce
         the  principal  of or rate of interest on any Loan or any fees or other
         amounts  payable  hereunder,  (iii)  postpone  any date  fixed  for the
         payment of any scheduled installment of principal of or interest on any
         Loan or any fees or other amounts payable  hereunder or for termination
         of any Revolving Credit  Commitment,  (iv) change the percentage of the
         Revolving  Credit  Commitments or of the unpaid principal amount of the
         Notes,  or the  number of  Lenders,  which  shall be  required  for the
         Lenders  or any of them to take any action  under  this  Section or any
         other  provision of this  Agreement or (v) release any Guarantor or all
         or substantially all of the Collateral.

                  12.7.  Counterparts.  This  Agreement  may be  executed in any
         number of  counterparts,  each of which when so executed and  delivered
         shall be deemed an  original,  and it shall not be  necessary in making
         proof of this  Agreement  to produce or account  for more than one such
         fully-executed counterpart.

                  12.8. Termination. The termination of this Agreement shall not
         affect  any  rights of the  Borrower,  the  Lenders or the Agent or any
         obligation of the Borrower,  the Lenders or the Agent, arising prior to
         the effective date of such termination, and the provisions hereof shall
         continue to be fully operative until all  transactions  entered into or
         rights created or obligations  incurred prior to such  termination have
         been fully  disposed of,  concluded or liquidated  and the  Obligations
         arising prior to or after such  termination  have been irrevocably paid
         in full. The rights granted to the Agent for the benefit of the Lenders
         under the Loan  Documents  shall  continue  in full  force and  effect,
         notwithstanding  the  termination of this  Agreement,  until all of the
         Obligations have been paid in full after the termination  hereof (other
         than  Obligations  in the nature of continuing  indemnities  or expense
         reimbursement   obligations  not  yet  due  and  payable,  which  shall
         continue) or the Borrower has  furnished the Lenders and the Agent with
         an  indemnification  satisfactory  to the  Agent and each  Lender  with
         respect thereto. All representations,  warranties,  covenants,  waivers
         and agreements  contained herein shall survive termination hereof until
         payment in full of the Obligations  unless  otherwise  provided herein.
         Notwithstanding  the foregoing,  if after receipt of any payment of all
         or any part of the Obligations,  any Lender is for any reason compelled
         to  surrender  such  payment  to any  Person  because  such  payment is
         determined  to be  void  or  voidable  as a  preference,  impermissible
         setoff,  a  diversion  of trust  funds or for any  other  reason,  this
         Agreement shall continue in full force and the Borrower shall be liable
         to, and shall indemnify and hold the Agent or such Lender harmless for,
         the amount of such payment  surrendered  until the Agent or such Lender
         shall have been finally and irrevocably paid in full. The provisions of
         the foregoing  sentence shall be and remain  effective  notwithstanding
         any  contrary  action  which  may have  been  taken by the Agent or the
         Lenders in reliance upon such payment,  and any such contrary action so
         taken shall be without  prejudice to the Agent or the  Lenders'  rights
         under this Agreement and shall be deemed to have been  conditioned upon
         such payment having become final and irrevocable.

                  12.9.    Indemnification;    Limitation   of   Liability.   In
         consideration  of the execution  and delivery of this  Agreement by the
         Agent and each Lender and the extension of credit under the Loans,  the
         Borrower  hereby  indemnifies,  exonerates and holds the Agent and each

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         Lender and each of their respective  affiliates,  officers,  directors,
         employees,   agents  and  advisors   (collectively,   the  "Indemnified
         Parties")  free and  harmless  from  and  against  any and all  claims,
         actions,  causes of  action,  suits,  losses,  costs,  liabilities  and
         damages, and expenses incurred in connection therewith (irrespective of
         whether any such  Indemnified  Party is a party to the action for which
         indemnification  hereunder is sought),  including reasonable attorneys'
         fees and disbursements  (collectively,  the "Indemnified  Liabilities")
         that may be incurred by or asserted or awarded  against any Indemnified
         Party,  in each case arising out of or in connection  with or by reason
         of,  or  in  connection  with  the  execution,  delivery,  enforcement,
         performance  or  administration  of this  Agreement  and the other Loan
         Documents, or any transaction financed or to be financed in whole or in
         part,  directly or indirectly,  with the proceeds of any Loan or Letter
         of Credit,  whether or not such action is brought  against the Agent or
         any Lender, the shareholders or creditors of the Agent or any Lender or
         an  Indemnified  Party or an  Indemnified  Party is  otherwise  a party
         thereto and  whether or not the  transactions  contemplated  herein are
         consummated,  except to the extent such claim,  damage, loss, liability
         or expense is found in a final,  non-appealable  judgment by a court of
         competent  jurisdiction to have resulted from such Indemnified  Party's
         gross negligence or willful  misconduct,  and if and to the extent that
         the foregoing  undertaking  may be  unenforceable  for any reason,  the
         Borrower hereby agrees to make the maximum  contribution to the payment
         and  satisfaction  of  each of the  Indemnified  Liabilities  which  is
         permissible   under   applicable  law.  The  Borrower  agrees  that  no
         Indemnified Party shall have any liability (whether direct or indirect,
         in contract or tort or  otherwise)  to it, any of the  Guarantors,  any
         Loan Party,  or any security  holders or creditors  thereof arising out
         of,  related to or in  connection  with the  transactions  contemplated
         herein,  except to the extent that such  liability  is found in a final
         non-appealable  judgment by a court of competent  jurisdiction  to have
         resulted  from such  Indemnified  Party's  gross  negligence or willful
         misconduct;  provided, however, in no event shall any Indemnified Party
         be liable for consequential, indirect or special, as opposed to direct,
         damages.  Without  prejudice to the survival of any other  agreement of
         the Borrower hereunder,  the agreements and obligations of the Borrower
         contained in this Section 12.9 shall survive the payment in full of the
         Loans and all other amounts payable under this Agreement.

                  12.10. Severability. If any provision of this Agreement or the
         other Loan Documents shall be determined to be illegal or invalid as to
         one or more of the parties hereto,  then such provision shall remain in
         effect with respect to all parties,  if any, as to whom such  provision
         is neither illegal nor invalid,  and in any event all other  provisions
         hereof shall remain effective and binding on the parties hereto.

                  12.11.  Entire  Agreement.  This Agreement,  together with the
         other  Loan  Documents,  constitutes  the  entire  agreement  among the
         parties with respect to the subject  matter hereof and  supersedes  all
         previous  proposals,  negotiations,  representations,  commitments  and
         other  communications  between  or among  the  parties,  both  oral and
         written, with respect thereto.

                  12.12.  Agreement Controls.  In the event that any term of any
         of the Loan  Documents  other than this  Agreement  conflicts  with any
         express  term of this  Agreement,  the  terms  and  provisions  of this
         Agreement shall control to the extent of such conflict.

                  12.13.  Usury  Savings  Clause.   Notwithstanding   any  other
         provision herein,  the aggregate interest rate charged under any of the
         Notes,  including all charges or fees in connection therewith deemed in

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         the  nature of  interest  under  applicable  law shall not  exceed  the
         Highest  Lawful  Rate (as such term is defined  below).  If the rate of
         interest  (determined  without regard to the preceding  sentence) under
         this  Agreement at any time exceeds the Highest Lawful Rate (as defined
         below),  the outstanding  amount of the Loans made hereunder shall bear
         interest at the Highest  Lawful Rate until the total amount of interest
         due hereunder  equals the amount of interest  which would have been due
         hereunder if the stated  rates of interest set forth in this  Agreement
         had at all times been in effect.  In  addition,  if when the Loans made
         hereunder are repaid in full the total  interest due hereunder  (taking
         into  account the  increase  provided for above) is less than the total
         amount of interest  which would have been due  hereunder  if the stated
         rates of interest set forth in this  Agreement had at all times been in
         effect,  then to the extent permitted by law, the Borrower shall pay to
         the Agent an  amount  equal to the  difference  between  the  amount of
         interest paid and the amount of interest  which would have been paid if
         the   Highest   Lawful   Rate  had  at  all  times   been  in   effect.
         Notwithstanding  the foregoing,  it is the intention of the Lenders and
         the  Borrower  to  conform  strictly  to  any  applicable  usury  laws.
         Accordingly,  if any Lender  contracts  for,  charges,  or receives any
         consideration  which  constitutes  interest  in excess  of the  Highest
         Lawful Rate, then any such excess shall be cancelled automatically and,
         if previously  paid,  shall at such  Lender's  option be applied to the
         outstanding  amount of the Loans made  hereunder  or be refunded to the
         Borrower.  As used in this  paragraph,  the term "Highest  Lawful Rate"
         means the maximum  lawful  interest  rate,  if any, that at any time or
         from time to time may be contracted for, charged, or received under the
         laws applicable to such Lender which are presently in effect or, to the
         extent allowed by law, under such  applicable  laws which may hereafter
         be in effect and which allow a higher maximum nonusurious interest rate
         than applicable laws now allow.

                  12.14. Governing Law; Waiver of Jury Trial .

                           (a)  THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS
                  (OTHER THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE
                  THAT  THEY   SHALL  BE   GOVERNED   BY  THE  LAWS  OF  ANOTHER
                  JURISDICTION)   SHALL  BE  GOVERNED   BY,  AND   CONSTRUED  IN
                  ACCORDANCE  WITH, THE LAWS OF THE STATE OF FLORIDA  APPLICABLE
                  TO  CONTRACTS  EXECUTED,  AND TO BE FULLY  PERFORMED,  IN SUCH
                  STATE, NOTWITHSTANDING ITS EXECUTION AND DELIVERY OUTSIDE SUCH
                  STATE.

                           (b)  EACH  PARTY  HEREBY  EXPRESSLY  AND  IRREVOCABLY
                  AGREES  AND  CONSENTS  THAT ANY  SUIT,  ACTION  OR  PROCEEDING
                  ARISING  OUT  OF  OR  RELATING  TO  THIS   AGREEMENT  AND  THE
                  TRANSACTIONS  CONTEMPLATED  HEREIN  MAY BE  INSTITUTED  IN ANY
                  STATE OR FEDERAL COURT SITTING IN THE COUNTY OF BROWARD, STATE
                  OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
                  DELIVERY OF THIS AGREEMENT,  THE BORROWER EXPRESSLY WAIVES ANY
                  OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE LAYING OF
                  VENUE IN, OR TO THE EXERCISE OF  JURISDICTION  OVER IT AND ITS
                  PROPERTY  BY,  ANY  SUCH  COURT IN ANY SUCH  SUIT,  ACTION  OR
                  PROCEEDING,   AND  THE  BORROWER  HEREBY  IRREVOCABLY  SUBMITS

                                       83
<PAGE>

                  GENERALLY AND  UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
                  COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

                           (c) EACH PARTY HEREBY  AGREES THAT SERVICE OF PROCESS
                  MAY BE MADE BY  PERSONAL  SERVICE OF A COPY OF THE SUMMONS AND
                  COMPLAINT OR OTHER LEGAL  PROCESS IN ANY SUCH SUIT,  ACTION OR
                  PROCEEDING,  OR  BY  REGISTERED  OR  CERTIFIED  MAIL  (POSTAGE
                  PREPAID)  TO THE ADDRESS OF THE  BORROWER  PROVIDED IN SECTION
                  12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
                  APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.

                           (d)  NOTHING  CONTAINED  IN  SUBSECTIONS  (a)  OR (b)
                  HEREOF SHALL PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION
                  OR PROCEEDING  ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT
                  IN THE COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF
                  THE BORROWER'S  PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO
                  THE  EXTENT  PERMITTED  BY THE  APPLICABLE  LAWS  OF ANY  SUCH
                  JURISDICTION,  EACH PARTY  HEREBY  IRREVOCABLY  SUBMITS TO THE
                  JURISDICTION  OF ANY  SUCH  COURT  AND  EXPRESSLY  WAIVES,  IN
                  RESPECT OF ANY SUCH SUIT,  ACTION OR PROCEEDING,  OBJECTION TO
                  THE EXERCISE OF  JURISDICTION  OVER IT AND ITS PROPERTY BY ANY
                  SUCH  OTHER  COURT OR  COURTS  WHICH NOW OR  HEREAFTER  MAY BE
                  AVAILABLE UNDER APPLICABLE LAW.

                           (e) IN ANY ACTION OR  PROCEEDING TO ENFORCE OR DEFEND
                  ANY RIGHTS OR REMEDIES  UNDER OR RELATED TO ANY LOAN  DOCUMENT
                  OR ANY AMENDMENT,  INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
                  OR  THAT  MAY  IN  THE  FUTURE  BE  DELIVERED  IN   CONNECTION
                  THEREWITH,  THE  BORROWER,  THE AGENT AND THE  LENDERS  HEREBY
                  AGREE,  TO THE EXTENT  PERMITTED BY  APPLICABLE  LAW, THAT ANY
                  SUCH ACTION OR  PROCEEDING  SHALL BE TRIED  BEFORE A COURT AND
                  NOT BEFORE A JURY AND HEREBY  IRREVOCABLY WAIVE, TO THE EXTENT
                  PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO
                  TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.

                  12.15.  Confidentiality.  The Agent and each Lender  (each,  a
         "Lending Party") agrees to keep confidential any information  furnished
         or made  available  to it by the Borrower  pursuant to this  Agreement;
         provided  that  nothing  herein  shall  prevent any Lending  Party from
         disclosing  such  information  (a) to any  other  Lending  Party or any
         affiliate of any Lending  Party,  or any officer,  director,  employee,
         agent or advisor  of any  Lending  Party or  affiliate  of any  Lending
         Party,  (b) to any other  Person who agrees to comply with the terms of

                                       84
<PAGE>

         this Section 12.15 if reasonably  incidental to the  administration  of
         the credit facility provided herein,  (c) as required by any law, rule,
         or  regulation,  (d) upon  the  order  of any  court or  administrative
         agency,  (e) upon the  request  or  demand of any  regulator  agency or
         authority, (f) that is or becomes available to the public or that is or
         becomes  available  to any  Lending  Party  other than as a result of a
         disclosure by any Lending Party  prohibited by this  Agreement,  (g) in
         connection  with any  litigation  to which such Lending Party or any of
         its  affiliates  may  be a  party,  (h)  to  the  extent  necessary  in
         connection  with the exercise of any remedy under this Agreement or any
         other  Loan  Document,  and (i)  subject  to  provisions  substantially
         similar to those  contained in this Section,  to any actual or proposed
         assignee.

                  12.16 Payments. All principal,  interest, and other amounts to
         be made by the  Borrower  under  this  Agreement  and  the  other  Loan
         Documents shall be made to the Agent at the Principal Office in Dollars
         and in  immediately  available  funds,  without  setoff,  deduction  or
         counterclaim.  Subject to the definition of "Interest  Period"  herein,
         whenever any payment  under this  Agreement or any other Loan  Document
         shall be stated  to be due on a day this is not a  Business  Day,  such
         payment  may be made on the  next  succeeding  Business  Day,  and such
         extension of time in such case shall be included in the  computation of
         interest and fees, as applicable, and as the case may be.

                         [Signatures on following pages]



                                       85
<PAGE>





         IN WITNESS  WHEREOF,  the parties hereto have caused this instrument to
be made,  executed and delivered by their duly authorized officers as of the day
and year first above written.


                                            SHERIDAN HEALTHCARE, INC.
WITNESS:

 s/Wade M. Kennedy                          By:  s/Jay A. Martus, V.P. 
------------------                               ------------------------------
                                            Name:    Jay A. Martus
 s/Lucy L. Tate                     Title:  Vice President


WITNESS:                                   NATIONSBANK, NATIONAL ASSOCIATION, 
                                           as Agent for the Lenders

 s/Kimberly Saltrick                        By: s/Michael S. Sylvester 
--------------------                            ----------------------
                                            Name: Michael S. Sylvester
 s/Lucy L. Tate                             Title:  Vice President
--------------------
                                            NATIONSBANK, NATIONAL ASSOCIATION


                                            By:  s/Michael S. Sylvester         
                                                 -------------------------------
                                            Name:    Michael S. Sylvester
                                            Title:   Vice President

                                            Applicable Lending Office:
                                            NationsBank, National Association
                                            Independence Center, 15th Floor
                                            NC1-001-15-04
                                            Charlotte, North Carolina  28255
                                            Attention: Agency Services
                                            Telephone:        (704) 388-3916
                                            Facsimile:        (704) 386-9923

                                            COOPERATIEVE CENTRALE RAIFFEISEN-
                                            BOERENLEENBANK B.A., "RABOBANK
                                            NEDERLAND", NEW YORK BRANCH

                                            By:        s/J. Walter Bland        
                                                  ------------------------------
                                            Name:    J. Walter Bland   
                                                  ------------------------------
                                            Title:      Vice President 
                                                  ------------------------------

                                            By:          s/Robert B. Benoit     
                                                  ------------------------------
                                            Name:      Robert B. Benoit         
                                                  ------------------------------
                                            Title:     Senior Vice President 
                                                  ------------------------------
<PAGE>

                           Applicable Lending Office:
                           1201 W. Peachtree Street, Suite 3450
                           Atlanta, Georgia 30309
                           Attention: Mr. Walter Bland, Vice President
                           Telephone: (404) 877-9113
                           Facsimile: (404) 877-9150

                           FIRST UNION NATIONAL BANK

                           By:       s/Joseph H. Towell        
                           Name:   Joseph H. Towell   
                           Title:     Senior Vice President    

                           Applicable Lending Office:
                           One First Union Center
                           Charlotte, North Carolina 28288-0735
                           Attention: Mr. Rodney Carson, Vice President
                           Telephone:  (704) 383-4097
                           Facsimile:  (704) 383-9144

                           SUNTRUST BANK, CENTRAL FLORIDA, N.A.

                           By:        s/Janet P. Sammons       
                           Name:    Janet P. Sammons  
                           Title:      Vice President 

                           Applicable Lending Office:
                           200 S. Orange Avenue, Mail Code: 0-1101
                           Orlando, Florida 32802
                           Attention: Ms. Karen George, Executive Vice President
                           Telephone:  (407) 237-4541
                           Facsimile:  (407) 237-5489

                           BANKBOSTON, N.A.


                           By:       s/Walter J. Marullo       
                           Name:   Walter J. Marullo  
                           Title:     Vice President  

                           Applicable Lending Office:
                           100 Federal Street, MS 01-08-06
                           Boston, Massachusetts 02110
                           Attention: Mr. Walter J. Marullo, Vice President
                           Telephone:  (617) 434-2308
                           Facsimile:  (617) 434-0819
<PAGE>

                           LASALLE NATIONAL BANK
                           By:        s/Jody M. Staszesky      
                           Name:    Jody M. Staszesky 
                           Title:      First Vice President    

                           Applicable Lending Office:
                           135 S. LaSalle Street
                           Chicago, Illinois 60603
                           Attention: Ms. Jody M. Staszesky
                           Telephone:  (312) 904-5416
                           Facsimile:  (312) 904-6457

                           UNION BANK OF CALIFORNIA, N.A.

                           By:        s/Jennifer L. Banks      
                           Name:    Jennifer L. Banks 
                           Title:      Vice President 

                           Applicable Lending Office:
                           445 S. Figueroa Street
                           Los Angeles, California 90071
                           Attention: Mr. Ted Scribner, Credit Officer
                           Telephone:  (213) 236-6918
                           Facsimile:  (213) 236-7636




<PAGE>


                                  Form of Note

                                 Promissory Note
                                (Revolving Loan)

$---------------                                       ---------, --------------

                                                                  April 30, 1998

         FOR VALUE RECEIVED,  SHERIDAN HEALTHCARE,  INC., a Delaware corporation
having its  principal  place of  business  located in  Hollywood,  Florida  (the
"Borrower"),     hereby     promises     to    pay    to    the     order     of
__________________________________________  (the  "Lender"),  in its  individual
capacity, in care of NATIONSBANK, NATIONAL ASSOCIATION, as agent for the Lenders
(the   "Agent"),   at  One   Independence   Center,   101  North  Tryon  Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may  designate  in  writing)  pursuant  to the Second  Amended  and
Restated  Credit  Agreement dated as of April___,  1998 among the Borrower,  the
financial institutions party thereto (collectively, the "Lenders") and the Agent
(the  "Agreement" -- all  capitalized  terms not otherwise  defined herein shall
have the respective meanings set forth in the Agreement), in lawful money of the
United States of America,  in immediately  available funds, the principal amount
of ___________ DOLLARS ($__________) or, if less than such principal amount, the
aggregate  unpaid  principal amount of all Revolving Loans made by the Lender to
the Borrower pursuant to the Agreement on the Revolving Credit  Termination Date
or such earlier date as may be required  pursuant to the terms of the Agreement,
and to pay interest from the date hereof on the unpaid  principal amount hereof,
in like money, at said office, on the dates and at the rates provided in Article
II of the Agreement.  All or any portion of the principal amount of Loans may be
prepaid or required to be prepaid as provided in the Agreement.

         If payment of all sums due hereunder is accelerated  under the terms of
the  Agreement,  the then  remaining  principal  amount and  accrued  but unpaid
interest  shall bear interest  which shall be payable on demand at the rates per
annum set forth in the proviso to Section 2.2 (a) of the Agreement.  Further, in
the event of such  acceleration,  this Note  shall  become  immediately  due and
payable,  without  presentation,  demand,  protest or notice of any kind, all of
which are hereby waived by the Borrower.

         In the  event  this  Note  is not  paid  when  due  at  any  stated  or
accelerated  maturity,  the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This  Note is one of the  Notes  referred  to in the  Agreement  and is
issued pursuant to and entitled to the benefits and security of the Agreement to
which  reference is hereby made for a more  complete  statement of the terms and
conditions upon which the Revolving Loans evidenced  hereby were or are made and
are to be repaid.  This Note is subject to certain  restrictions  on transfer or
assignment as provided in the Agreement.
<PAGE>

         All Persons bound on this obligation,  whether primarily or secondarily
liable as principals, sureties, Guarantors, endorsers or otherwise, hereby waive
to the full extent  permitted by law the benefits of all  provisions  of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability  hereon  until  judgment be obtained
and execution  issues against any other of them and returned  satisfied or until
it can be shown  that the  maker  or any  other  party  hereto  had no  property
available for the  satisfaction  of the debt  evidenced by this  instrument,  or
until any other proceedings can be had against any of them, also their right, if
any,  to  require  the  holder  hereof  to hold as  security  for this  Note any
collateral  deposited  by any of said Persons as  security.  Protest,  notice of
protest, notice of dishonor,  diligence or any other formality are hereby waived
by all parties bound hereon.

         IN WITNESS  WHEREOF,  the  Borrower  has  caused  this Note to be made,
executed and delivered by its duly authorized  representative as of the date and
year first above written, all pursuant to authority duly granted.



<PAGE>


                                                SHERIDAN HEALTHCARE, INC.

WITNESS:

----------------------                       By:
                                                --------------------------------
----------------------                       Name:
                                                   -----------------------------
                                             Title: 
                                                    ----------------------------