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                                                                   EXHIBIT 10.18
                               FIRST AMENDMENT TO
                                  JUNE 14, 1996
                          PRIVATE PLACEMENT MEMORANDUM
                                       OF
                    HEART HOSPITAL OF BK, LLC (the "Company")
                                     TO THE
                       OPERATING AGREEMENT OF THE COMPANY
                                   AND TO THE
                        RIGHT OF FIRST REFUSAL AGREEMENT
                             TO BE ENTERED INTO WITH
                                   HHBF, INC.


         Prospective investors in the Company have previously received copies of
the Company's June 14, 1996 Private Placement Memorandum (the "Memorandum")
which includes in it the Company's Operating Agreement as Exhibit B (the
"Operating Agreement") and the Right of First Refusal Agreement attached as
Exhibit C (the "Right of First Refusal"). Prospective investors should read this
First Amendment carefully and should note the changes it makes to the
Memorandum, the Operating Agreement and the Right of First Refusal. Please note
in particular that a new Section 8.12 has been added to the Operating Agreement
which provides for certain circumstances upon which a member may withdraw from
the Company. The Memorandum, the Operating Agreement and the Right of First
Refusal are hereby amended in accordance with the terms of this First Amendment
dated as of July 11, 1996 (the "First Amendment") as set forth below:

         1.       Amendments to Operating Agreement. The Operating Agreement is
hereby amended by:

         (a)      Deleting the word "No" as the first word of the second
sentence of Section 3.3 and substituting in its place the words: "Except as
provided in Section 8.12 below, no";

         (b)      Adding the following after the phrase "privileges at any other
hospital" in Section 5.10(b):

                           "or from owning an interest in a medical practice
                           that provides the professional service component of
                           the medical procedures described in (b) (ii) above"

         (c)      Adding the following new subsection 7.2(i):


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                           "(i)     In accordance with Section 8.12 hereof;"

         (d)      Adding the following after the word "basis" in Section 7.6:

                           "; provided however, upon a dissolution of the
                           Company in connection with the sale of substantially
                           all of the assets of the Company, this Section 7.6
                           shall not increase the distributions and allocations
                           to which HHBF is otherwise entitled"

         (e)      Adding the following after the phrase "The purchase price for
such Membership Interest shall equal" in Section 8.9:

                           "the greater of (a) such deceased Member's Capital
                           Account balance as of the last day of the calendar
                           quarter most recently ended prior to such Member's
                           death, or (b)"

         (f)      Deleting the reference to "5.9" in Section 8.10 and
substituting "5.10" in lieu thereof.

         (g)      Adding the following new Section 8.12:

                  SECTION 8.12 Special Provisions Regarding Withdrawal.
         Notwithstanding anything else contained in the Act or this Agreement,
         the withdrawal of an Investor Member from the Company shall be governed
         by and made only pursuant to the terms of this Section 8.12 and the
         withdrawal of HHBF shall be governed by Section 8.1.

                           (a)      Subject to this Section 8.12, an Investor
         Member may withdraw from the Company by giving written notice of such
         withdrawal to the Company at least six (6) months prior to the
         effective date of the withdrawal except that, during the first thirty
         six (36) months after an Investor Member is first admitted to the
         Company as a Member, such Investor Member shall not withdraw from the
         Company except as further permitted in subsections (b) or (c) below.
         Upon the effective date of a withdrawal, the Investor Member shall no
         longer be a Member in the Company and shall have the status as if he
         were only an assignee of a Member and shall be only an Economic
         Interest Owner to the extent the withdrawing Investor Member retains
         its Economic Interest. Except as expressly provided below, an Investor
         Member shall not be entitled to any distributions or to have its
         Economic Interest redeemed or to any other type of payment from the
         Company or any other Member as a result of the Investor Member=s
         withdrawal. Except as otherwise expressly provided below, the Company
         shall have the option to redeem the Membership Interest of any Investor
         Member who has withdrawn from the Company for an amount equal to such
         withdrawn Investor Member=s Capital Account balance as of the effective
         date of such withdrawal net of distributions to such withdrawn Investor
         Member after the effective date of such withdrawal. HHBF may exercise
         such option on behalf of the Company by causing it to tender the
         redemption price to the withdrawn Investor Member within three (3)


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         months of the effective date of the withdrawal.

                           (b)      If, by the end of the sixth (6th) month
         after an Investor Member is first admitted to the Company as a Member,
         the Company has not received a written commitment from a lender for the
         financing of the construction of the Hospital (which commitment shall
         contain commercially reasonable terms and shall be subject to
         negotiation of definitive loan agreements), such Investor Member may
         withdraw from the Company by providing written notice of such
         withdrawal to the Company within ten (10) days of that six (6) month
         anniversary. In such a case, the Membership Interest of the withdrawing
         Investor Member shall be redeemed by the Company for an amount equal to
         the Investor Member's Capital Contributions to the Company net of any
         previous distributions by the Company to such Investor Member.

                           (c)      If, by the end of the eighteenth (18th)
         month after an Investor Member is first admitted to the Company as a
         Member, the Company has not commenced, or is not diligently pursuing,
         construction of the Hospital pursuant to a construction contract or
         series of related construction contracts to build the Hospital, such
         Investor Member may withdraw from the Company by providing written
         notice of such withdrawal to the Company within ten (10) days of that
         eighteen (18) month anniversary. In such a case and subject to (f)
         below, the Membership Interest of the withdrawing Investor Member shall
         be redeemed by the Company for an amount equal to the Investor Member's
         Capital Account balance as of that eighteen (18) month anniversary.

                           (d)      If the Company receives notices of
         withdrawal from any Investor Member pursuant to subsection (c) above
         that would result, when aggregated with withdrawals previously made
         pursuant to subsection (b) above, in the withdrawal of Members holding
         at least twenty percent (20%) of the percentage Membership Interests in
         the Company held by Investor Members, at the election of HHBF, the
         Company may be dissolved and liquidated and no Investor Member will be
         entitled to withdraw or have its Membership Interest redeemed. HHBF
         shall make this election by written notice to the Investor Manager
         within thirty (30) days of the above referenced withdrawal notices.

                           (e)      In the event an Investor Member withdraws
         from the Company pursuant to (b) or (c) above and is not and has not as
         of the withdrawal date been in breach of this Agreement, there shall be
         no "Tail Period" for the purposes of Section 5.10(b) of this Agreement
         with respect to the withdrawn Investor Member, it being acknowledged
         that if an Investor Member withdraws from the Company pursuant to
         subsection (a) above, there shall be a Tail Period as set forth in
         Section 5.10(b).

                           (f)      In the event an Investor Member withdraws
         from the Company pursuant to (b) or (c) above and has not as of the
         withdrawal date been in breach of this Agreement, then such Investor
         Member shall simultaneously be released from the restrictions set forth
         in paragraph 7 of the Hospital Professional Services Agreement


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         entered into by and among the Company, the Investor Member's medical
         practice and the owners of such medical practice."

         (h)      Adding the following at the end of Section 12.1 following the
word "Agreement":

                           ";provided that HHBF shall give written notice at
                           least five (5) days in advance of executing any
                           document on behalf of a Member pursuant to this
                           Section 12.1."

         2.       Amendment to Right of First Refusal. The Right of First
Refusal is hereby amended as follows:

                  (a)      All references in the Right of First Refusal to
                           "shareholder" or "shareholders" or "shareholder's"
                           are hereby deleted and "owner" or "owners" or
                           "owner's" as applicable is substituted in lieu
                           thereof; and for purposes of this Agreement, the term
                           "owner" shall include proprietors, shareholders,
                           partners, members or other equity holders.

                  (b)      Adding the following new subparagraphs (v) and (vi)
                           to paragraph 1(b) after the phrase "terms of this
                           Agreement,":

                                    "or (v) a reorganization of the legal form
                                    of the Medical Practice without changing the
                                    ownership of the Medical Practice, or (vi)
                                    the sale of the portion of the Medical
                                    Practice, if any, located outside of Kern
                                    and Tulare Counties, California, provided
                                    that any such sale shall not be used to
                                    enable any of the Owners practicing in Kern
                                    and Tulare Counties to indirectly avoid the
                                    intended purposes of this Agreement"

                  (c)      The following is added to the end of paragraph 1 of
                           the Right of First Refusal:

                                    "This Agreement shall terminate in the event
                                    the hospital being developed by the LLC is
                                    not open for business within forty-eight
                                    (48) months from the date the Owner was
                                    first admitted to the LLC as a member.
                                    Additionally, this Agreement shall terminate
                                    if all of the Owners of the Medical Practice
                                    have withdrawn from the LLC pursuant to
                                    Section 8.12(b) or (c) of the Operating
                                    Agreement of the LLC."

         3.       Continuing Effectiveness. Except as provided above, the
Memorandum, the Operating Agreement and the Right of First Refusal remain in
full force and effect.

         4.       Counterpart Execution; Facsimile Execution. This First
Amendment may be executed in any number of counterparts with the same effect as
if all of the Members had signed the same document. Such executions may be
transmitted to the Company and/or the other Members by facsimile and such
facsimile execution shall have the full force and effect of an original
signature. All fully executed counterparts, whether original executions or
facsimile executions or a combination, shall be construed together and
constitute one and the same agreement.

         IN WITNESS WHEREOF, this First Amendment has been executed by the
parties hereto as of the day and year first above written.

         For the purpose of acknowledging and agreeing to be bound by the terms
of this Amendment, the undersigned affiliates of the Members other than HHBF
hereby execute this Operating Agreement.

[***]


[***] These portions of this exhibit have been omitted and filed separately
      with the Commission pursuant to a request for confidential treatment.

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