UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

Commission file number 0-20654

                         HEALTHTECH INTERNATIONAL, INC.

         Nevada                                        36-3797495
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

                           1237 South Val Vista Drive
                               Mesa, Arizona 85204
                    (Address of principal executive offices)

                                  602-396-0660
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No____

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 12, 13 or 15(d) of the  Securities
Act of 1934 subsequent to the  distribution of securities under a plan confirmed
by a court.
Yes____  No____

APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date: As of June 30, 1997,
Registrant has a total of 9,276,134  common stock and 8,134,561 class A warrants
outstanding.


<PAGE>


PART I - FINANCIAL INFORMATION

ITEM I - Financial Statements

                         HEALTHTECH INTERNATIONAL, INC.
                           CONSOLDIATED BALANCE SHEETS
                                    Unaudited
                      June 30, 1997 and September 30, 1996

                                                   ASSETS
<TABLE>
<S>                                                                 <C>           <C>       

                                                                      6/30/97       9/30/96
Current assets:                                                                         
     Cash and cash equivalents ..................................   $     8,768   $     9,018
     Accounts receivable - net of allowance for doubtful accounts     3,484,253     1,176,244
     Notes receivable ...........................................        27,036
     Current portion of deferred tax asset ......................       254,442
     Prepaid expenses and deposits ..............................       337,116       133,573
                                                                    -----------   -----------
        Total current assets ....................................     4,111,615     1,318,835

Property, plant and equipment at cost, net of accumulated
   depreciation of $1,252,500 and $585,230 in 1997 and 1996, 
   respectively .................................................    13,902,190    13,023,246
Land held for resale ............................................        60,000        60,000
Prepaid expenses ................................................     1,919,955     7,320,597
Costs in excess of net assets acquired, net of accumulated
   amortization of $135,267 and $27,826 in 1997 and 1996,
   respectively .................................................     7,037,382     1,385,932
Long-term certificate of deposit ................................       100,000       100,000
Non-current marketable equity securities
Deferred tax asset ..............................................       737,967       336,584
Notes receivable - long-term ....................................       750,000       750,000
Other assets, at cost, net ......................................       219,696
                                                                    -----------   -----------

        Total assets ............................................   $28,619,109   $24,514,890
                                                                    ===========   ===========

</TABLE>



The accompanying notes are an integral part of these financial statements



<PAGE>



                         HEALTHTECH INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                                    Unaudited
                      June 30, 1997 and September 30, 1996


<TABLE>

                                    LIABILITIES AND SHAREHOLDERS EQUITY
<S>                                                                                <C>             <C>  
                                                                                    6/30/97         9/30/96
Current liabilities
     Current portion of notes payable and capitalized lease                                   
        obligations ............................................................   $  1,064,032    $  1,526,017
     Accounts payable trade ....................................................        606,895         769,573
     Accounts payable related parties ..........................................        288,137         259,981
     Accrued expenses - other ..................................................        124,765         135,089
     Deferred revenues .........................................................      1,363,172         871,755
     Other current liabilities .................................................        189,347         429,299
                                                                                   ------------    ------------

        Total current liabilities ..............................................      3,636,348       3,991,714

Notes payable and capitalized lease obligations, less
   current maturities ..........................................................      1,335,587       1,686,330
                                                                                   ------------    ------------

        Total liabilities, commitments and contingencies .......................      4,971,935       5,678,044

Shareholders' equity
     Series D Preferred stock,  $.001 par value,  10,000,000 shares  authorized,
        21,200 shares issued and 19,200 shares
        outstanding ............................................................             19              19

Common stock, $.001 par value, 500,000,000 shares authorized, 9,276,134 and
   4,023,751 shares issued and outstanding for
   6/30/97 and 9/30/96, respectively ...........................................          6,357           4,024
Additional paid in capital .....................................................     30,177,148      25,860,070
Net unrealized loss on non-current marketable equity securities ................       (625,000)       (625,000)
Accumulated deficit ............................................................     (5,908,350)     (6,402,267)
                                                                                   ------------    ------------

        Total shareholders' equity .............................................     23,647,174      18,836,846
                                                                                   ------------    ------------

                                                                                   $ 28,619,109    $ 24,514,890
                                                                                   ============    ============

</TABLE>


    The accompanying notes are an integral part of these financial statements


<PAGE>



                         HEALTHTECH INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    Unaudited
                  For the periods ended June 30, 1997 and 1996
<TABLE>

                                                       Quarter         Year to           Quarter        Year to 
                                                        Ended            Date             Ended           Date

                                                       6/30/97          6/30/97          6/30/96         6/30/96
<S>                                                  <C>             <C>             <C>             <C>    
Revenues
   Health center revenues ........................   $  4,707,238    $ 11,447,154    $    853,135    $  2,456,253
   Equipment sales ...............................        672,403       1,908,566          95,401         981,279
                                                     ------------    ------------    ------------    ------------
      Total revenues .............................      5,379,641      13,355,720         948,536       3,437,532
       Less reserves and allowances ..............     (2,094,629)     (4,917,101)        (11,993)       (170,947)
                                                     ------------    ------------    ------------    ------------
         Net revenues ............................      3,285,012       8,438,619         936,543       3,266,585

Costs and operating expenses:
Cost of sales ....................................        469,691       1,320,770          74,737         692,768
Selling, general and administrative ..............      2,256,334       5,596,124         708,322       2,769,002
 Depreciation and Amortization ...................        236,995         614,409         147,045         428,753
                                                     ------------    ------------    ------------    ------------
     Total costs and operating expenses ..........      2,963,020       7,531,303         930,104       3,890,523

Gain (loss) from operations ......................        321,992         907,316           6,439        (623,938)

Other income (expenses):
   Interest income ...............................         19,828          53,578            --              --
   Interest expense ..............................        (75,637)       (212,536)       (134,705)       (260,433)
                                                     ------------    ------------    ------------    ------------
Total other income (expense) .....................        (55,809)       (158,958)       (134,705)       (260,433)

Gain (loss) before income taxes and
    extraordinary items ..........................        266,183         748,358        (128,266)       (884,371)

Provision (benefit) for income taxes .............         90,502         254,442         (43,610)       (300,686)
                                                     ------------    ------------    ------------    ------------

Gain (loss) before extraordinary items, net of tax
                                                          175,681         493,916         (84,656)       (583,685)

Debt forgiveness- related party, net of tax ......           --              --           198,000         297,000
                                                     ------------    ------------    ------------    ------------

Net gain (loss) ..................................   $    175,681    $    493,916    $    113,344    $   (286,685)
                                                     ============    ============    ============    ============

</TABLE>


    The accompanying notes are an integral part of these financial statements



<PAGE>


                         HEALTHTECH INTERNATIONAL, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
                                    Unaudited
                  For the periods ended June 30, 1997 and 1996

<TABLE>

                                                        Quarter        Year to          Quarter         Year to 
                                                         Ended           Date            Ended            Date
                                                        6/30/97        6/30/97          6/30/96         6/30/96

<S>                                                  <C>              <C>             <C>            <C>    

Primary earnings per common share and
   common share equivalents

   Gain (loss) from continuing operations                 $0.02          $0.07           $(0.02)        $ (0.16)

   Gain from extraordinary items                            -              -             $ 0.05         $  0.08

   Net gain (loss)                                        $0.02          $0.07           $ 0.03         $ (0.08)          

Weighted average number of common
   shares outstanding                                 9,202,079      7,463,506        3,915,970       3,743,805


Fully diluted earnings per common share and
   common share equivalents

   Gain (loss) from continuing operations                 $0.02          $0.05           $(0.01)             -
                                                                                     

   Gain from extraordinary items                            -               -            $ 0.03              -
                                                                                               

   Net gain                                               $0.02          $0.05           $ 0.02              -
                                                                                       

Weighted average number of fully diluted
   common shares outstanding                         11,172,079      9,433,506        5,835,970              -

</TABLE>



    The accompanying notes are an integral part of these financial statements


<PAGE>



                         HEALTHTECH INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    Unaudited
                  For the periods ended June 30, 1997 and 1996
<TABLE>
<S>                                                                     <C>            <C>   
Cash flows from operating activities:
     Net gain (loss) ................................................   $   493,916    $  (286,685)
     Adjustments to reconcile net income (loss) to net cash provided
        by (used in) operating activities:
            Depreciation and amortization ...........................       614,409        428,753
            Issuance of common stock for consulting fees and services     1,433,534        285,542
            Change in operating assets and liabilities:
                Increase in deferred tax asset ......................       523,594        202,706
                (Increase) in accounts receivable ...................    (2,308,009)      (126,768)
                (Increase) in notes receivable ......................       (27,036)          --
                (Increase) decrease in prepaid expense and other ....        16,153       (487,915)
                (Increase) in deposits ..............................       (94,631)        (6,381)
                Increase (decrease) in accounts payable .............      (134,522)       159,420
                (Decrease) in accrued expenses ......................       (10,324)      (145,603)
                Increase (decrease) in other current liabilities ....      (239,952)        23,987
                Increase in deferred member revenue .................       491,417        224,935
                Increase (decrease) in advance deposits .............       (23,004)       425,348
                                                                        -----------    -----------
Net cash provided by (used in) operating activities .................       735,545        697,339

Cash flows from investing activities:
     Disposal (Acquisition) of property, plant and equipment ........      (391,524)          --
                                                                        -----------    -----------
Net cash provided by  (used in) investing activities ................      (391,524)          --

Cash flow from financing activities:
     Retirements and payments of long-term debt .....................    (1,507,129)    (1,410,567)
     Forgiveness of debt ............................................          --          450,000
     Proceeds from borrowings .......................................        85,191           --
     Issuance of common stock for settlements & debt payments .......       524,667           --
     Issuance of common stock for cash ..............................       553,000           --
                                                                        -----------    -----------
Net cash provided by (used in) financing activities .................      (344,271)      (960,567)

Net increase (decrease) in cash .....................................          (250)      (263,228)

Cash and cash equivalents at beginning of year ......................         9,018        372,836
                                                                        -----------    -----------

Cash and cash equivalents at end of year ............................   $     8,768    $   109,608
                                                                        ===========    ===========

Supplemental disclosure of cash flow information: Cash paid for:
        Interest ....................................................   $   212,536    $   260,433
        Income tax ..................................................          --             --
</TABLE>

    The accompanying notes are an integral part of these financial statements


<PAGE>




                         HEALTHTECH INTERNATIONAL, INC.
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
                                    Unaudited
                  For the periods ended June 30, 1997 and 1996

<TABLE>
<S>                                                                             <C>    
1997

Supplemental schedule of non-cash and financing activities:

Issuance of 615,999 shares of common stock in exchange for
services.                                                                       $ 1,433,534

Issuance of 570,000 shares of common stock in exchange for
cash and other current assets.                                                  $   553,000

Issuance of 2,778,871 shares of restricted (R-144) common stock
in settlement of debt.                                                          $   524,667

Purchase of 100% of the  outstanding  shares of  Primus  Health
Care  Systems, Incorporated and the payment of associated  commissions 
through the issuance of 1,000,000  shares  of  restricted  (R-144)  
common  stock and  48,000  shares of free-trading common stock.                 $ 1,220,000



1996

Issuance of 16,817 shares of common stock (S-8) and 9,809
class A warrants in exchange for services.                                      $    87,677

Issuance of 67,037 shares of restricted (R-144) common stock in
partial settlement of senior debentures.                                        $   109,847

Issuance of 25,783 shares of restricted (R-144) common stock
and 25,783 class A warrants in settlement of debt.                              $   117,518

Issuance of 227,500 shares of common stock and 192,500
class A warrants in exchange for cash and other current assets.                 $   570,000

Issuance  of 416,533  shares of  restricted  (R-144)  common  stock and  
416,533 restricted (R-144) class A warrants to complete the
Riverbend acquisition.                                                          $ 1,568,438

    The accompanying notes are an integral part of these financial statements
</TABLE>


<PAGE>





                         HEALTHTECH INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1997 AND 1996
                  ---------------------------------------------

NOTE 1.  BUSINESS ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Organization -

HEALTHTECH  INTERNATIONAL,  INC. ("Company" or "HealthTech"),  formerly known as
"USA  Health  Technologies,  Inc."  was  incorporated  in 1990 in the  State  of
Colorado,  and then was  redomiciled to the State of Nevada on February 8, 1995.
On  October  4,  1995 the  Company  formally  changed  its  name to  "HealthTech
International,  Inc." Currently  HealthTech  International,  Inc. and its wholly
owned  subsidiaries  Results Sports and Fitness,  Inc., IFM  Investments,  Inc.,
Fitness Performance,  Inc., Results Riverbend, Inc., Results Stark Street, Inc.,
Results Bedford, Inc., Sherman Results, Inc., Arlington Results, Inc. and Primus
Health Care  Systems,  Inc.  (collectively  "the  Company")  develop and operate
health and fitness clubs,  provide medical  services  through clinics within its
clubs, and market and sell fitness equipment.
Per Share Information -

Primary  earnings  or loss per  common  share has been  computed  based upon the
weighted average number of common  equivalent  shares  outstanding.  Primary and
fully diluted  earnings per share have been presented  separately for the period
ended June 30,  1997,  whereas  for June 30,  1996,  primary  and fully  diluted
earnings per share have been only been  presented for the quarter ended June 30,
1996.  Primary and fully  diluted  earnings per share for the year to date as of
June 30, 1996 are the same since the Company experienced losses for that period;
dilutive common stock  equivalents are excluded from the calculation of loss per
share as the  effect  would be  antidilutive.  The  number of common  and common
equivalent  shares  utilized in the per share  computations  were  7,463,506 and
3,743,805 for the years to date as of June 30, 1997 and 1996, respectively.

Accounting Estimates -

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  (GAAP)  requires   management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period.  Actual  results could differ from those  estimates.  The Company made a
change in the  estimate of the reserve  account  during the  recently  completed
quarter  retroactively to the beginning of the fiscal year. The previous reserve
applied to  medical  billings  of 38% was  adjusted  to 50% based on  collection
information available to management during the quarter.


<PAGE>



Income Taxes  -

The Company adopted the provisions of Financial  Accounting  Standards Board No.
109 (FAS 109) effective as of October 1, 1994.  Under FAS 109,  deferred  income
taxes are recognized for the future tax consequences attributable to differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax bases.  Deferred tax assets and liabilities
are measured  using enacted tax rates expected to apply to taxable income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  The effect on deferred taxes of a change in tax rates is recognized in
income in the period that  includes the enactment  date.  The deferred tax asset
has been adjusted in the current year to reflect loss carry  forwards from prior
years. The portion which is available to offset current year tax liabilities has
been  included  in current  assets.  The  application  of FAS 109 did not have a
material effect on the Company's consolidated financial statements.

Non-current Marketable Equity Securities -

The  non-current  portfolio of  marketable  securities is stated at the lower of
aggregate  cost or market  at the  balance  sheet  date and  consists  of common
stocks.

Realized  gains or losses are determined on the specific  identification  method
and are reflected in income.  Net unrealized  losses on  non-current  marketable
securities  are recorded  directly in a separate  shareholders'  equity  account
except those unrealized losses that are deemed to be other than temporary, which
losses are reflected in income.

On December 2, 1994, the Company  acquired  5,000,000  shares of common stock of
the Equitas Group, a related party controlled by the Chairman of the Board.

Due to the restrictive  nature of these securities and  unavailability of market
quotes to determine  the present  market  value,  the Company has  reflected the
total  carrying value of $625,000 as unrealized  loss on non-current  marketable
equity securities as a separate component in shareholders' equity.

NOTE 2.   CHANGES IN SUBSIDIARIES BEING CONSOLIDATED

The consolidated  financial statements presented for the periods ended March 31,
1996 and 1997  included the results of  operations of the Company and its wholly
owned subsidiaries. The following indicates which subsidiaries were consolidated
for the appropriate periods:

         June 30, 1996

         Subsidiaries:   Results Sports and Fitness, Inc.
                         Fitness Performance, Inc.
                         IFM Investments, Inc.
                         Results Riverbend, Inc.
                         Results Stark Street, Inc.


<PAGE>



         March 31, 1997

         Subsidiaries:   Results Sports and Fitness, Inc. (Tucson, Arizona club)
                         Fitness Performance, Inc. (seller of fitness equipment)
                         IFM Investments, Inc. (Midland, Texas club)
                         Results Riverbend, Inc. (Ft. Worth, Texas club)
                         Results Stark Street, Inc. (Portland, Oregon club)
                         Results Bedford, Inc. (Bedford, Texas club)
                         Arlington Results, Inc. (Arlington, Texas club)
                         Sherman Results, Inc. (Sherman, Texas club)
                         Primus Health Care Systems, Inc.

Due to a changes in consolidated  subsidiaries and their  respective  activities
for each of the periods reported,  the consolidated financial statements are not
comparable between periods.

NOTE 3.   ACQUISITIONS

Effective January 1, 1997, the Company acquired Primus Health Care Systems, Inc.
(Primus). The acquisition consisted of the following consideration:

         Common stock issued -                                     $  1,220,000
         Transfer of prepaid advertising credits                      5,400,000
                                                                  -------------
                                                                   $  6,620,000

The  acquisition  was recorded  using the purchase  method of accounting and was
allocated to the assets acquired as follows:

         Medical receivables                                      $     500,000
         Equipment                                                      330,000
         Furniture and fixtures                                          40,000
         Costs in excess of net assets acquired                       5,750,000
                                                                  -------------
                                                                   $  6,620,000

The following pro forma  financial  data presents the Company's  unaudited,  pro
forma  statements of operations for the nine months ended June 30, 1997,  giving
effect to the  consummation of the Primus  acquisition as if the transaction had
occurred on October 1, 1996.  The  unaudited  pro forma  condensed  statement of
operations  do not purport to represent  what the  Company's  actual  results of
operations  would have been had such  transaction in fact occurred on that date.
The unaudited pro forma  condensed  statements of operations also do not purport
to project the results of operations of the Company for any future period.

                Revenue, less reserves and allowances         $  3,000,000
                Net income                                       1,500,000

                Primary earnings per share                        $   0.20

Effective  April 1, 1997 the Company  acquired  certain assets of Family Fitness
Exchange in Bedford,  Texas.  The asset  purchase  agreement  was included as an
exhibit in the Company's Form 10-Q dated March 31, 1997,  incorporated herein by
reference. The assets were acquired for the assumption of certain lease, service
and tax  obligations.  These assets were transferred from the Company to Results
Bedford,  Inc.  in  exchange  for all of the  issued and  outstanding  shares of
Results Bedford, Inc.


<PAGE>


NOTE 4.   PREPAID ADVERTISING CREDITS

The Company  acquired  deferred  advertising  and  broadcast  air-time  credits,
primarily  in  exchange  for common  stock,  from  related  parties  aggregating
$7,300,000.   The  advertising  and  broadcast  credits  were  recorded  at  net
realizable  value,  based upon the seller's  published rate cards at the date of
acquisition  or the  historical  founder's  cost as it relates to related  party
transactions, whichever was lower. These credits have expirations ranging from 5
to 10 years from date of issuance of September  29,  1995,  and January 1, 1994,
respectively.

During the quarter  ended March 31, 1997,  the Company  exchanged  $5,400,000 of
these  credits  as part of the  consideration  in the  Primus  acquisition.  The
details of the Primus  acquisition  were included in the  previously  filed Form
10-K/A,  incorporated  herein by  reference.  Management  intends to utilize the
balance of these credits totaling  $1,900,000 in similar  acquisitions and joint
ventures.

NOTE 5.   INCENTIVE COMPENSATION PLANS

The  Company  has an  Incentive  Compensation  Plan  which  provides  awards  to
officers,  employees and consultants of the Company,  who,  individually or as a
group, contribute in a substantial degree to the success of the Company. The S-8
registration  dated December 29, 1994, allowed for the designation of 25,000,000
units for awards pursuant to this plan. The S-8 registration dated June 1, 1996,
allowed for the designation of an additional 1,000,000 units for awards pursuant
to this plan.  During the nine months  ended June 30, 1997,  the Company  issued
1,375,449 shares for a value of $1,640,743.

NOTE 6.   COMMITMENTS AND CONTINGENCIES

Notes payable stock commitment -

Under terms of the loan  agreement  refinancing  the Midland  club,  the Company
pledged, among other things, 50,000 fully paid and unrestricted shares of common
stock of  HealthTech.  If the value of these shares become less than $150,000 at
the end of any given calendar quarter,  the Company is obligated to deposit with
the bank within 10 business days,  additional fully paid and unrestricted shares
of common  stock of  HealthTech  such that the value of all shares  pledged is a
minimum of  $150,000.  During the second  quarter of fiscal  1997,  the  Company
pledged an  additional  51,351 shares to meet this  requirement  for the quarter
ended December 31, 1996. The Company is also a primary  guarantor under terms of
the note which at June 30, 1997 was approximately $771,500.

Results - Stark Street, Inc. Loan -

As part of the  acquisition of the Stark Street Club, the Company assumed a loan
originated through a local bank and the Small Business Administration.  The loan
agreements contain a "due on sale" clause if the property is transferred without
prior  written  approval  of the  lending  institution.  Such  approval  was not
obtained in conjunction  with the acquisition of the club.  While the Company is
currently  in  substantial  performance  with  other  provisions  and  covenants
contained in the loan agreements,  should the lending  institution  discover the
property was transferred without approval, the remaining unpaid balance could be
accelerated  and become  immediately due and payable.  The remaining  balance at
June 30, 1997, was approximately $396,000.


<PAGE>



NOTE 7.   SUBSEQUENT EVENTS

In June,  1997, the Company  negotiated a Settlement  Agreement and Release (see
Exhibit 1) to sever  ties with the  clinic  management  group and  dissolve  any
profit  participation and employment  agreements between the Company and members
of the Kirkham Group as defined in the agreement. The agreement has an effective
date of July 1, 1997.  As part of the  agreement,  a net of  650,000  restricted
common shares were returned to the treasury and canceled,  1,000,000  options to
purchase  restricted  common  shares  were  canceled,  the profit  participation
detailed in the Ulti-Med  license  agreement  was  canceled  and all  employment
agreements with the Kirkham Group were canceled.  The Company  canceled its note
receivable  from Ulti-Med of $750,000,  returned its  ownership  interest in the
Sherman facility and agreed to continue a profit  participation in the Arlington
facility for a period not to exceed 180 days.

NOTE 8.  INDUSTRY SEGMENTS

The Company  classifies its revenues into two divisions:  Health center revenues
and Equipment  sales.  Health center revenues  combine revenues from the medical
clinics and revenues from the fitness centers.


<PAGE>



ITEM II -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
           RESULTS OF OPERATION


OVERVIEW FOR REVIEW OF FINANCIAL STATEMENTS

GENERAL DISCUSSION AND HISTORY

The financial  statements presented in Item I. of Part I hereof are incorporated
by this  reference and the following  discussion  should be read in  conjunction
therewith.  When comparing the current  operating results with operating results
of prior periods it must be noted that: (i) the Company made certain operational
divestitures  prior to mid-fiscal  1995; (ii) the Company  acquired three health
clubs in various  periods in fiscal 1995;  (iii.) the Company  acquired a fourth
health club during the third quarter of fiscal 1996;  (iv) the Company  acquired
Primus  Health Care  Systems,  Inc. in the first  quarter of fiscal 1997 and its
operations  were first  recognized in the second quarter of fiscal 1997; (v) the
Company made an operational transition from health and fitness to health care by
providing medical services; (vi) the Company acquired its fifth health center in
the third quarter of fiscal 1997 which is anticipated will be fully  operational
as a Health Care Center in the fourth  quarter of fiscal 1997;  and, (vii) a 50%
reserve has been recorded  against medical clinic revenue  (discussed  below and
see Notes to the Financial  Statements) as a result of  management's  review and
analysis  of  its  first  full  quarter  of the  Primary  Medical  Care  Clinics
operations  and  information  which became  available as a result of the Kirkham
Dispute and settlement .

RESERVES MADE AGAINST MEDICAL REVENUES

At June  30,1997,  management  adjusted  the year to date  reserve to 50% of the
revenues  generated  from medical  operations,  a 12% increase  over the reserve
presented in the Company's previous Form 10-Q dated March 31, 1997. The previous
estimate of a 38% reserve rate was based upon: (i) the representations of Joseph
R. Kirkham and Mark  Darner,  D.C. who came to work for the Company in the first
quarter of 1997 through the acquisition of Primus Health Care Systems,  Inc. and
were first  affiliated  with the Company in fiscal 1996 when the Company entered
into a license  agreement  with  Ulti-Med;  and (ii) the  collection  history of
Surety Bank and Providers  Funding through which the receivables  were factored.
The  increase in the reserve  for the third  quarter is based upon:  (a) current
historical data; (b) analysis and review of the billing structure formerly used;
(c) review and analysis of the former  billing  structure by MedQuest  Services,
Inc.  ("MedQuest")(On  July 8, 1997,  the Company  contracted  with  MedQuest to
provide  the  Company's  medical  billing   services);   (d)  MedQuest's  actual
collection rate for receivables currently generated; and, (e) the age of certain
receivables  received  as  part  of  the  Primus  Transaction  and  other  older
receivables.  The Company's  management  believes that in the fourth  quarter of
fiscal 1997 the reserve  rate  should be  significantly  reduced and the Company
will reserve  approximately 30% of the revenues generated by operations and that
such reserve  will be  conservative.  Both the 50% current  reserve rate and the
anticipated 30% reserve rate are  speculative in that management  still does not
have  significant  historical  data and new  facts are  still  being  uncovered.
However,  these  reserves will enable the Company to recognize  adequate  income
from the medical operations without the uncertainty of future writedowns.



<PAGE>


COMPANY STRUCTURE

The  Company's  operations  are centered  around the  formation and operation of
"Health Care Centers" which are comprised of "Primary Care Medical  Clinics" and
"Fitness Centers" and offer  comprehensive,  primary care medical and health and
fitness services to their clientele.  The Company's  Fitness Centers offer state
of  the  art  physical   fitness   equipment  that  is  used  by  clientele  for
rehabilitation and general strength,  sports and fitness training.  HealthTech's
Primary Care Medical  clinics  provide  protocol  based primary care medical and
chiropractic care, advanced diagnostic testing and therapeutic and post surgical
rehabilitation.  Each of the  clinics is  situated  within one of the  Company's
Fitness Centers in approximately a 2,000 square foot clinic space.

HealthTech's expansion and acquisition strategy is to find management distressed
facilities  and acquire such by using the  Company's  (R-144)  stock and minimal
cash or no cash,  lease or buy facilities or complexes on favorable  lease terms
and convert those  facilities  into Health Care Centers  and/or develop raw land
and place a Health  Care  Center in the  development  as the anchor  tenant.  In
addition  to the  foregoing,  HealthTech  aggressively  pursues  all  reasonable
opportunities  to improve or expand its business.  During July, 1997 the Company
acquired  approximately  $250,000  (retail price) worth of equipment and a 1,000
person  membership  base  from a  competitor  facility  in the  vicinity  of the
Company's  Bedford  Health  Care Center in  exchange  for 125,000  shares of the
Company's  Rule-144  common  stock.  The  Company  also  acquired  approximately
$480,000 (retail price) worth of equipment in exchange for 100,000 shares of the
Company's  Rule-144  common  stock.  The  Company  has  signed  four  definitive
agreements  contingent on various factors to acquire additional  locations.  The
Company expects to close on some or all of these acquisitions within the current
calendar year.

HEALTH CENTER OPERATIONS

HealthTech's  operational  plans and  strategy  for all of its  present  fitness
centers and to be acquired  clubs/gyms/Health  Centers is that they be converted
into  Health  Care  Centers.  At June 30,  1997  the  Company's  fitness  center
operations  division  operated  seven  facilities.  HealthTech  has  renovations
underway at the Bedford facility for conversion of the facility to a Health Care
Center.  The clinic  construction  at the Bedford  facility is anticipated to be
completed  in the fourth  quarter  of fiscal  1997.  Effective  July 1, 1997 the
Company will cease to operate the facility at Sherman,  Texas and for six months
a significant  percentage  of the net profit of the  Arlington  facility will be
distributed to Mr. J.R. Kirkham and his associates (see Subsequent Events).

MEDICAL OPERATIONS:

At June 30, 1997 the Company operated four "Primary Care Medical"  clinics.  The
clinics are located in Midland, Fort Worth, Arlington, and Sherman Texas. In the
first  quarter of fiscal 1998,  the  operations  of the new Bedford  Health Care
Center are  anticipated  to replace the revenues lost from the Sherman  facility
transfer.


<PAGE>


FINANCIAL ANALYSIS
EBITDA

The EBITDA analysis below is one method to measure the performance and status of
the Company at June 30, 1997.  The EBITDA  analysis  should not be considered an
alternative  to any  measure  of  performance  or  liquidity  promulgated  under
generally accepted  accounting  principals (GAAP) nor should it be considered as
an indicator of the Company's overall financial performance.

         EBITDA is calculated as follows:
                                                 Quarter Ended     Year to Date
                                                    6/30/97           6/30/97

         Net income                                $   175,681      $   493,917

         Interest expense                          $    75,637      $   212,536

         Provision for taxes                       $    90,502      $   254,442

         Depreciation & amortization               $   236,995      $   614,409

         Earnings before interest, taxes
         depreciation and amortization             $   578,815      $ 1,575,304


INCOME TAX CREDITS

The  Company  has sold those  operations  that  previously  created  significant
operating losses.  However, the Company was able to preserve certain tax credits
associated  with the  divestiture  of these  operations in the form of NOL ("net
operating  losses") carry forwards.  HealthTech's  management  believes that the
Company has approximately a six million dollar credit of which a portion will be
applied  in this  fiscal  year and  future  years to reduce  the tax owed by the
Company.  The NOL carry  forwards to be applied to the Company's  current fiscal
year tax  liability  have the effect of  increasing  by $254,442 to $748,358 the
realizable profit from the currently  reported  $493,917.  However,  the Federal
Income Tax rules and guidelines for the application of the NOL carry forward are
complex and stringent and the  application  of all of the tax credits may or may
not be able to be used or fully  used by the  Company  as a credit  against  tax
liability. (See notes to financial statement in the 1996 Form 10-K.)

LIQUIDITY

At June,  30, 1997,  the Company's debt to equity ratio was 21%, and its current
ratio was 1.13.  At September 30, 1996,  the  Company's  current ratio was 0.33.
Management  attributes  the change in the current  ratio to the net  increase in
accounts  receivable for medical services performed and the reduction of current
liabilities.  As set forth in the  Company's  1996 Form 10-K,  the  Company  has
continued to  successfully  follow its plan to  restructure  short-term and long
term debt.  Subsequent to June 30, 1997 the Company  refinanced  the Fort Worth,
Texas  facility  and plans to continue  to reduce  short and  long-term  debt to
improve its debt to equity and  current  ratios for fiscal  1997.  In the second
quarter of fiscal 1997, the Company recognized $5.7 million Goodwill as an asset
in the  Primus  transaction  and  the  income  stream  associated  with  Primus'
operations.  Despite the Kirkham Dispute and settlement  (discussed  below), the
Company's management believes that the significant  potential growth in revenues
which can be generated  from operating  Primary  Medical Care Clinics within its
facilities from the business "know-how" acquired in the

<PAGE>


Primus  transaction  continues  to justify  the  acquisition.  At June 30,  1997
HealthTech's working capital position was approximately $475,000.  Subsequent to
June 30, 1997 the  refinancing  of the Fort Worth,  Texas facility has increased
the Company's cash position by approximately  $220,000. As set forth in the 1996
Form 10-K., and the information  disclosed in this Form 10-Q Report, the Company
believes its cash flows are sufficient to meet its short-term cash requirements.
During the past two fiscal years and year to date fiscal  1997,  the Company has
satisfied some cash requirements through the issuance of the registrant's common
stock and securities in accordance  with SEC regulations  (see the  Consolidated
Statement  of Cash  Flows,  supplemental  schedule  of  non-cash  and  financing
activities).

RESULTS OF OPERATIONS

The Company's  revenues have grown  substantially over the last two fiscal years
through the acquisition of existing health clubs. In the first quarter of fiscal
1997, the Company's revenues were  significantly  impacted by recognition of the
full  operations of one "Primary Care Medical"  clinic and the operations of the
Company's  first  Health  Care  Center.  In the second  quarter of fiscal  1997,
HealthTech  added  three  Health  Care  Centers  by  integrating  and adding the
operations  of three  additional  "Primary Care Medical  Clinics".  In the third
quarter of fiscal 1997, the Company set a reserve  against  medical  revenues of
50% which  significantly  impacted  the  Company's  net  revenue and net profit.
Despite this additional reserve,  the gain from operations for the third quarter
increased  significantly over the corresponding quarter in fiscal 1996. The year
to date  net  income,  even  with  the  increased  reserves,  of  $493,917  is a
substantial  improvement  over the 1996  year to date  loss in June 30,  1996 of
$(286,684).  The Company's  management believes that the results for fiscal 1997
year to date are in line with its operational  projections set forth in the 1996
Form I0-K and that the current  reserves against revenues will be reduced to 30%
in the fourth  quarter of fiscal 1997.  Further,  the Company  believes that the
Kirkham  settlement  and the  return of 650,000  shares of common  stock and the
return of the 1,000,000  options to purchase stock at $1.00 will allow for other
substantial acquisitions to be made. Based upon the current operations, the plan
to open three more  "Primary Care  Medical"  clinics in the  Company's  existing
Health Centers as well as the  acquisition of additional  health  facilities for
conversion  into Health Care Centers will likely  produce  revenues in excess of
$15,000,000  for the twelve  months of  operation  in fiscal 1997 as compared to
$5,598,000 for fiscal 1996. This projection is based upon management annualizing
the  Company's   current  revenue,   past   performance,   industry  trends  and
management's  belief that its acquisition and expansion plans are reasonable and
achievable in fiscal 1997.  Due to the change in clinic  management,  changes in
billing protocols and the subsequent  reorganization of this significant area of
operations,  the Company expects a decline in revenues for the fourth quarter of
fiscal 1997. Prior to acquiring the operational  history of the last quarter and
without  the  knowledge  that the  Kirkham  Dispute  would  arise,  the  Company
projected  that gross  revenues for fiscal 1997 would exceed  $25,000,000.  That
estimate has now been revised. However, as stated above, the return of the stock
and the  options to  purchase  stock as part of the  settlement  of the  Kirkham
Dispute is believed by management to be a substantial  benefit to the Company in
the near  future as it will allow the Company to find and  purchase  assets that
will replace the loss of prior projected income. It must, however, be emphasized
that such  projections  and  planned  acquisitions  are  speculative  since many
factors outside the Company's control and/or other events may effect operational
performance.

Note - Debt to equity  ratio is  computed  above by the formula - Debt to Equity
Ratio = Debt/Equity  expressed as a percentage.  Current ratio is computed above
by the formula - Current Ratio = Current Assets/Current Liabilities.


<PAGE>



SUBSEQUENT EVENTS

THE KIRKHAM DISPUTE.

On or  about  June  2,  1997,  Joseph  R.  Kirkham,  Ulti-Med,  Primus  LLC  and
erroneously  Primus Inc.  ("Mr. J. R. Kirkham and the  Plaintiffs" or along with
other  associates "the Kirkham Group")  commenced  litigation in Tarrant County,
Texas  against the Company,  some of its  subsidiaries  and some of its officers
(the "Kirkham Dispute").  At the time of the Kirkham Dispute,  Mr. J. R. Kirkham
was a director and officer of HealthTech but did not resign until  approximately
10 days after the  litigation had commenced and did not request the Company take
any  actions  with  respect  to the  resignation.  The  Company  did  and  still
steadfastly  denies all claims made by Mr. J.R.  Kirkham and the  Plaintiffs and
took immediate  action to protect the Company's  assets.  This  course of action
resulted in a  Settlement  Agreement  and Release  and the  cancellation  of the
Ulti-Med  License  Agreement  upon  the  following  terms  which  the  Company's
management  believes are very favorable:  (i) Primus L.L.C.  will return 650,000
shares of (Rule l44) stock and 1,000,000  (Rule-144) options to purchase Company
stock at $1,00 per  share;  (ii)  cancellation  of an  approximately  $3,500,000
employment  obligation  over the next  five  years;  (iii)  cancellation  of all
obligations  under the  Ulti-Med  License  Agreement  which  provided for profit
participation in all of the Company's clinics except Arlington and Sherman; (iv)
transfer of Ulti-Med's  ownership interest in the clinic tenant improvements and
the clinic  equipment at the Midland and Fort Worth clinics back to  HealthTech;
(v) cancellation of the $750,000  promissory note from Ulti-Med to Primus,  (vi)
transfer of the license agreement to operate the Sherman facility and all of the
equipment  at the  facility  back  to  Primus  L.L.C.;  and  (vii)  a six  month
management  work out  contract  whereby  the  Kirkham  Group  will  oversee  the
management of the  Arlington  facility in return for profit  participation.  The
above terms are  incorporated in a Settlement  Agreement dated effective July 1,
1997 (see  Exhibit  1) which  also  provides  for among  other  things:  (a) the
contingent  return,  on a  cost  basis,  of  an  additional  100,000  shares  of
HealthTech  (Rule-144) stock in the event the Company agrees to proposed changes
in the  Settlement  Agreement  arising from having the Ulti-Med  portions of the
Settlement  Agreement  approved  by the  U.S.  Bankruptcy  Court  (Note:  in the
alternative,  the Company has the option to not accept the terms  imposed by the
Bankruptcy Court and have such severed from the Settlement Agreement);  (b) that
Mr. J. R. Kirkham and the other  Plaintiffs  would dismiss the  litigation  they
commenced against the Company with prejudice;  and, (e) the  representations and
warranties  made to  HealthTech  by Mr. J. R.  Kirkham  survive  the  Settlement
Agreement as does the liability of others  associated  with Mr.  Kirkham and the
Plaintiffs.  On August 10, 1997 the Company  was  informed  that the order to so
dismiss the litigation was entered on July 29, 1997.
Note: In February of 1997 the Company reported the details of the acquisition of
Primus Health Care Systems,  Inc. from Primus Health Care Systems,  L.L.C. ( the
"Primus  Transaction" a subsequent  event) and the ULTI-MED Health Care Systems,
Inc. license or management  agreement (the "Ulti-Med License  Agreement") in its
annual  report on Form 10-K for the fiscal year ending  September  30, 1996 (the
1996 Form 10-K") which the Company hereby  incorporates and makes a part of this
Quarterly  Report on Form 10-Q for the  Company's  third  quarter of  operations
ending June 30,1997 (this "Form I0-Q Report").


<PAGE>



RESTRUCTURING OF MEDICAL OPERATIONS MANAGEMENT

Whereas the  Settlement  Agreement  released the Company from the  obligation to
continue to contact for the medical  management  services  that were acquired in
the Primus  transaction,  the Company sought out highly  experienced and quality
management for its medical  operations.  On July 11, 1997 the Company  announced
that it had entered into a contract with Dr. William J. Kelly,  D.C.,  D.A.C. I.
T. whereby Dr. Kelly became the Director of Clinical  Operations for the Company
and assumed  responsibility  for:  (i) quality  assurance  for the Primary  Care
Medical Clinic's operations;  (ii) medical protocols (including making sure that
services and charges are within industry standards);  (iii) billing efficiencies
(including working with MedQuest Services,  Inc., the Company's billing company,
and establishing the Company's  billing  procedures);  (iii) medical staffing in
the Primary Care Medical  Clinics;  and (iv) the operations of the Company's new
School of Advanced  Diagnostic and Clinical  Procedures  (the 'Medical  Training
School"  discussed  below).  Under the terms of the  contract in addition to Dr.
Kelly  receiving small  percentages of the net operating  profit of each Primary
Care Medical Clinic and another small percentage for his help in collecting some
of the Company's older accounts  receivable,  he will also receive forty percent
of the net operating profit of the Medical Training School.

SCHOOL OF ADVANCED DIAGNOSTIC AND CLINICAL PROCEDURES:

The School of  Advanced  Diagnostic  and  Clinical  Procedures  is a  continuing
education and postgraduate  school for doctors of chiropractic and other medical
professionals  which  will  teach  new  techniques,   medical  ethics,  practice
management, inter-disciplinary relations, marketing and other topics nationally.
Dr.  Kelly  previously  operated  the  Physicians  Academy  School  of  Advanced
Diagnostic  and Clinical  Procedures  which has trained  thousands of doctors in
many aspects of their practice and both he and the Company's  management believe
that HealthTech's new School of Advanced Diagnostic and Clinical Procedures will
not only enhance the Primary Care Medical Facilities  operations but will become
a significant source of revenue for the Company.



<PAGE>




PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Not Applicable

Item 2.  Changes in Securities

Not Applicable

Item 3.  Defaults upon Senior Securities

Not Applicable

Item 4.  Submission of Matters to a Vote of Security Holders

Not Applicable

Item 5.  Other Information

Not Applicable

Item 6.  Exhibits and Reports on Form 8-K

Exhibit 1.     Settlement Agreement and Release


<PAGE>



SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

HEALTHTECH INTERNATIONAL, INC.


By:   /s/ Gordon L. Hall            Date: July 20, 1997
    ----------------------
Gordon L. Hall, Chief Executive Officer and
Chairman of the Board of Directors



By:   /s/ Tim Williams              Date: July 20, 1997
    -----------------------
Tim Williams, President



By: /s/ Stephen L. Smith            Date: July 20, 1997
   ------------------------
Stephen L. Smith, Chief Financial Officer and
Vice President



<PAGE>









                                     PART II


                                     ITEM 6

                                    EXHIBIT I

                               MATERIAL CONTRACTS






<PAGE>




                        SETTLEMENT AGREEMENT AND RELEASE

This Agreement,  effective as of the 1st day of July, 1997, is a full compromise
and settlement of claims pursuant to the terms and conditions set forth herein.

1.0 RECITALS

1.1  HealthTech  International,  Inc., a Nevada corporation,  has its principal
     place of business at 1237 South Val Vista Drive, Mesa, Arizona, 85204 and 
     is herein after referred to as "HealthTech".

1.2  Ulti-Med Health Centers,  Inc., a Utah Corporation,  herein after referred
     to as "Ulti-Med",  has its principal place of business at 2100 N. Hwy. 360,
     Suite 1500B, Grand Prairie, Texas 75050.

1.3  Primus Health Care Systems,  L.L.C.,  a Texas  limited  liability  company,
     herein  after  referred  to as "Primus  LLC",  has its  principal  place of
     business at 2017 East Lamar Blvd., Suite 100, Arlington, Texas 76006.

1.4  Primus Health Care Systems,  Inc., a Texas corporation and the wholly owned
     subsidiary of HealthTech has it's principal place of business at 1237 South
     Val Vista Drive,  Mesa, Arizona 85204,  hereinafter  referred to as "Primus
     Inc.".

1.5  Metro Rehab, Inc., a Texas  Corporation,  herein after referred to as 
     "Metro Rehab" has its principal place of business at 2100 N Hwy. 360, 
     #1500B, Grand Prairie, Texas 75050.

1.6  Joseph R.  Kirkham,  whose  principal  place of business at 2017 East Lamar
     Blvd. Suite 100, Arlington,  Texas 76006, resigned as an officer, director,
     employee, and agent of HealthTech International, Inc., as of June 6th, 1997
     and who is the  operating  manager of Primus LLC,  and the  Chairman of the
     Board of Ulti-Med.

1.7  Dr. Mark A. Darner, D.C., is an employee of Ulti-Med, and Primus,L.L.C.and
     as of the date of this Agreement is no longer an employee of HealthTech.

1.8  David M. Kirkham, a former  employee of HealthTech  (terminated  as of June
     5, 1997) and currently an employee of Primus LLC and the Vice President, 
     Treasurer and Secretary of Ulti-Med.

1.9  Jeff  Kirkham,  a former  employee of  HealthTech  (terminated  as of June 
     5, 1997) and  currently  an employee of Primus LLC and Ulti-Med.

1.10 Kathy Kirkham,  a former  employee of HealthTech  (terminated as of June 5,
     1997) and currently an employee of Primus LLC and Ulti-Med.

1.11 The parties  named in sections 1.5 through  1.10 refer to  themselves  and
     are  hereinafter  collectively  referred to as the "Kirkham Group".

1.12 T. Allen Owen, a lawyer and  consultant to Joseph R.  Kirkham,  Primus
     LLC,  Primus Inc.,  Ulti-Med,  HealthTech and others has his principal
     place of business at 2017 East Lamar Blvd. Suite 100, Arlington, Texas
     76006.  Mr.  Owen was  engaged  by  HealthTech  and Primus LLC to form
     Primus Inc. Mr. Owen has represented to HealthTech that Primus Inc. is
     chartered with the Texas Secretary of State as a corporation, however,
     the first  organizational  meeting of the corporation has not yet been
     held.  In the Lawsuit,  Mr.  Joseph R. Kirkham  caused  Primus Inc. to
     become a plaintiff, and he hereby acknowledges that such action was an
     error; he and the Plaintiffs  (defined below) further acknowledge that
     HealthTech is the sole owner of Primus Inc.

1.13 In the fourth  quarter of  HealthTech's  1996  fiscal  year,  an  agreement
     between  Ulti-Med and HealthTech was entered into,  whereby  HealthTech and
     Ulti-Med  would conduct  certain joint  ventures (the agreement is attached
     hereto as Exhibit A and  hereinafter  referred to as the "Ulti-Med  License
     Agreement").  By way of the  Ulti-Med  License  Agreement,  Ulti-Med was to
     perform  certain  services  and receive  profit  participation  of "primary
     medical care clinics"  operated in  HealthTech  facilities  and  HealthTech
     would receive a license fee.

1.14 In the first  quarter  of  HealthTech's  1997  fiscal  year,  a  definitive
     agreement  between  Primus LLC and  HealthTech,  was entered  into  whereby
     HealthTech  acquired  certain of the operating  assets and  liabilities  of
     Primus LLC (the  agreement  is attached  hereto as Exhibit B and  hereafter
     referred to as the "Primus Acquisition  Agreement") through the purchase of
     all the outstanding  stock of Primus LLC's  subsidiary  Primus Inc.,  which
     owned  certain  assets  and  liabilities  of Primus  LLC,  including  those
     necessary to operate the clinics at Arlington and Sherman.

1.15 On or about June 2, 1997, Joseph R. Kirkham,  Ulti-Med, Primus LLC and
     erroneously  Primus Inc.  (hereinafter,  with the  exception of Primus
     Inc.,  collectively  referred  to  as  the  "Plaintiffs"),   commenced
     litigation in the Tarrant County,  Texas, District Court, as cause no.
     048-169289-97(hereinafter   referred  to  as  "The  Lawsuit")  against
     HealthTech,   Gordon  L.  Hall,  Stephen  Smith,  Tim  Williams,   IFM
     Investments,   Inc.   and   Results   Riverbend,   Inc.   (hereinafter
     collectively  referred to as the  "Defendants"  and/or the "HealthTech
     Group").

1.16 The Defendants steadfastly deny the claims made in the lawsuit. The parties
     hereto,   without  acknowledging  the  truth  or  falsity  of  any  of  the
     allegations  any of them  may have  against  the  other,  are  desirous  of
     settling the disputes between themselves under the terms and conditions set
     forth herein.


2.0      AGREEMENT

Based  on the  foregoing  Recitals,  all of which  are  incorporated  herein  by
reference, each of the parties hereto hereby warrants,  represents and agrees as
follows:

2.1  No claim,  other than the claims  made in the  Lawsuit has been filed or is
     presently  pending  before any court,  administrative  agency,  arbitrator,
     mediator,   or  any  other   governmental  or   nongovernmental   tribunal,
     administrative  body,  or other  such  organization  as to the date of this
     Agreement  relating to any claim or grievance either party may have against
     the other.

2.2  The Plaintiffs and/or the Kirkham Group agree to pay, transfer, give and/or
     return,  or  cause to be  paid,  transferred,  given  and/or  returned,  to
     HealthTech:  (i) 750,000  shares of HealthTech  Common Stock of the 750,000
     shares issued in the Primus  Acquisition  (currently  restricted under Rule
     144);  (ii) 1,000,000  options to purchase  HealthTech  Common Stock (which
     would be restricted under Rule 144) issued in the Primus Acquisition; (iii)
     a complete  release (which release extends to and covers the defendants) of
     any and all claims  arising  out of or in any way related to claims made by
     the  Plaintiffs  and/or the Kirkham  Group (and/or the  individual  members
     thereof)  in the  Lawsuit  or which  could have been  jointly or  severally
     asserted  therein,  or elsewhere,  or which could be made by the Plaintiffs
     and/or the Kirkham Group or their  respective  predecessors  in interest of
     any kind or nature whatsoever known or generally publicly available; (iv) a
     full  release  from  any  and  all   obligations   HealthTech   and/or  its
     subsidiaries  have or may have under the Ulti-Med  License  Agreement;  (v)
     certain assets and liabilities of Ulti-Med,  Primus LLC and/or owned by the
     Kirkham Group,  individually or  collectively,  the Plaintiffs or any other
     affiliated  group or entity that solely relate to the  Arlington  facility,
     located at 1001 NE  Greenoaks  Blvd.,  Suite 151,  Arlington,  Texas 76006,
     shall be  transferred to  HealthTech's  wholly owned  subsidiary  Arlington
     Results, Inc., a Texas Corporation,  including without limitation:  (a) the
     real property lease for the Arlington facility; and, (b) the leases for any
     equipment  used at the  Arlington  facility  (collectively  the  "Arlington
     Facility  Assets")  and further  the  parties  agree that all of the clinic
     equipment used in the Fort Worth facility and the Midland facility as among
     the  Kirkham  Group,  Plaintiffs  and  HealthTech  is the sole  property of
     HealthTech  (or  its  subsidiaries   IFM  Investments,   Inc.  and  Results
     Riverbend,  Inc.) and that the  Plaintiffs  and the  Kirkham  Group have no
     right or  ownership  in any of the  clinic  improvements  (construction  or
     tenant  improvements) at either the Fort Worth or Midland facilities;  (vi)
     cancellation of any and all  agreements,  written and/or oral, for services
     (including,  without limitation,  employment  contracts) between HealthTech
     and any of its  subsidiaries  and/or  affiliates and members of the Kirkham
     Group, the officers, directors,  employees, agents and or affiliates of the
     Plaintiffs;  and,  (vii)  dismissal  and/or  withdrawal  with  prejudice by
     Plaintiffs  all claims  presently  pending in the Lawsuit and each party to
     the Lawsuit  agrees to bear their own costs and  attorneys'  fees  incurred
     therein; and (viii) the transfer of a loan, collateralized by a Certificate
     of Deposit,  Primus  Inc.  has with Bank One to the  Plaintiffs  and/or the
     Kirkham  Group as such is  their  sole  obligation.  Items  2.2(i)  through
     2.2(viii)  are  collectively  hereinafter  referred  to  as  the  "Purchase
     Consideration".

2.3  In exchange for the Purchase  Consideration  identified herein,  HealthTech
     agrees to: (i)  transfer to Primus LLC, or any other entity  designated  by
     the Plaintiffs and the Kirkham Group all of the rights HealthTech  acquired
     in the Primus  acquisition  to operate the  Sherman  primary  medical  care
     clinic (attached as Exhibit C is a copy of the agreement between Primus LLC
     and Ulti-Med that defines the rights of Primus LLC to operate the Arlington
     and Sherman primary medical care clinics in the Ulti-Med facilities);  (ii)
     transfer to Primus LLC, or any other entity  designated  by the  Plaintiffs
     and Kirkham  Group the title to the  equipment  HealthTech  acquired in the
     Primus  acquisition which is used in the Sherman clinic operation (with the
     exception of the credit card  machine and printer,  which shall be returned
     to HealthTech in good working order, and the equipment  installed by Vestar
     Automation  including but not limited to the Pentium computer,  HP printer,
     camera and accessories which shall either be returned to HealthTech in good
     working  condition);  (iii) enter into a  "Consulting  Agreement",  defined
     below,  with certain members of the Kirkham Group;  (iv) pay the Plaintiffs
     and/or the Kirkham Group an agreed to amount for the assets that HealthTech
     does not already own that make up and are required and necessary to own and
     operate the  Arlington  facility  (the assets not acquired by HealthTech in
     the Primus  Acquisition),  referred to hereafter as the "Arlington Buy-out"
     and  defined  below;  (v) release  Ulti-Med  from its  obligation  to pay a
     license  fee  ($750,000)  to  HealthTech  under the  terms of the  Ulti-Med
     License  agreement;  (vi) issue 100,000 shares of common stock,  restricted
     under Rule 144, to the Kirkham  Group,  and (vii) return of the  promissory
     note  executed by  Ulti-Med,  as part of the  Ulti-Med  License  Agreement,
     marked  canceled and paid as of the date of this  Agreement.  Items 2.3 (i)
     through 2.3 (vii) are hereinafter referred to as the "Settlement Package".

2.4  In  exchange  for  the  tender,   payment  and  delivery  of  the  Purchase
     Consideration  to HealthTech  and/or the  HealthTech  Group and the tender,
     payment and delivery of the Settlement Package to the Kirkham Group and the
     Plaintiffs,  the Kirkham Group and the Plaintiffs,  including their agents,
     heirs, successors,  shareholders, partners, and assigns, hereby release and
     forever discharge any and all liability,  rights, claims, demands,  actions
     or causes of action  arising  between  any of the  parties,  including  all
     shareholders,  agents, employees,  affiliates,  and constituent partners of
     the Defendants, hereto out of or related to any damage or injury in any way
     resulting  from any of the acts,  occurrences,  omissions  or other  events
     identified  herein  relating  to (i) the  Lawsuit  (or  which may have been
     asserted in the Lawsuit),  (ii)any employment  relationship,  and (iii) and
     any claim for recovery of costs,  attorneys  fees,  expert  witness fees or
     other  expenses  of any kind or  nature  incurred  in  connection  with the
     filing,  prosecution  or settlement of the Lawsuit.  The Plaintiffs and the
     Kirkham Group,  by this  Agreement,  hereby release all liability,  rights,
     claims,  demands,  action or causes of action of any kind whatsoever,  save
     and except the liabilities,  rights and obligations set forth herein, which
     they now or may in the future  possess  because new laws and or other basis
     for causes of action  may  become  retroactively  viable  because  such are
     connected with the above mentioned matters. Further, the Plaintiffs and the
     Kirkham  Group  waive any and all laws  which  would toll any  statutes  of
     limitation  and  thereby  could  create a cause of action in the  future on
     matters that are released  hereunder.  The Plaintiffs and the Kirkham Group
     acknowledge  and agree that part of the  consideration  set forth  above is
     intended to compensate the Plaintiffs and the Kirkham Group for any damages
     alleged in the Lawsuit or defenses  which may be raised in the Lawsuit were
     counterclaims to be asserted therein, which may become known in the future.

2.5  The  Plaintiffs  and the  Kirkham  Group  acknowledge  and  agree  that the
     consideration  paid, in the form of a "Settlement  Package," defined below,
     and all other legal  consideration  provided under this Agreement is not to
     be  considered  an  admission  of  liability  on the  part  of any  person,
     corporation, partnership, or entity, said liability being expressly denied,
     by that said  consideration is given in compromise and full settlement of a
     disputed claim.

2.6  This Agreement shall be binding upon each of the parties hereto,  including
     their    successors,    heirs,    executors,    administrators,    personal
     representatives,  assigns,  receivers, and trustees as to each of the terms
     and conditions set forth herein.

2.7  Certain  portions of this Agreement may be or are under the jurisdiction of
     the Bankruptcy court and may require the court's  approval.  This Agreement
     shall be submitted to the Bankruptcy court and, in the event the Bankruptcy
     court does not approve the  portions  of this  Agreement  over which it has
     jurisdiction,  this Agreement  shall be modified to comply with the court's
     requirements   arising   from   Ulti-Med's   bankruptcy   filing.   If  the
     modifications  required  by the  court  in any  way  increase  HealthTech's
     liability or  obligations  generally or under this Agreement the Plaintiffs
     and/or the Kirkham Group shall transfer to HealthTech additional HealthTech
     common stock  proportionate  to the  additional  obligation  imposed by the
     court (stock valued at the low bid price on the date of the courts  ruling;
     R-144 shall be valued the same as free trading).  The  Plaintiffs'  and the
     Kirkham Group's  liability in the foregoing shall not exceed 100,000 shares
     of HealthTech common stock. Notwithstanding, HealthTech has the sole option
     to reject any or all of the  requirements  imposed by the Bankruptcy  court
     and the  resulting  modifications,  such  rejection  to be made  within two
     business days. In such an event the portions of this Agreement that can not
     be enforced  because of the  non-agreed  to bankruptcy  court  requirements
     shall be stricken and the remaining portions of this Agreement shall remain
     in full force and effect.

2.8  In exchange for the Purchase  Consideration,  HealthTech and the HealthTech
     Group  agree to  release  the  Plaintiffs  and the  Kirkham  Group from all
     liability,  rights, claims, demands, action or causes of action of any kind
     whatsoever , save and except the  liabilities,  rights and  obligations set
     forth herein.  HealthTech  specifically  and expressly does not release the
     Plaintiffs  and/ or the Kirkham Group from the  following:  (i) any and all
     representations (which singularly or in the aggregate are material or had a
     material  effect) made to the management of HealthTech and its shareholders
     with  respect to the  assets  and  liabilities  of the  Plaintiffs  and the
     business operations of the Plaintiffs  (HealthTech hereby acknowledges that
     the value of the assets acquired in the Primus acquisition as to equipment,
     fixtures and receivables  are as presented on page 11 of HealthTech's  Form
     10-Q for the second  quarter of fiscal  1997);  (ii) having  completed  all
     reasonable  and  prudent  investigations,  to the best of their  knowledge,
     information and belief, the Plaintiffs and the Kirkham Group represent that
     the  Plaintiffs  and Primus  Inc.'s  relationship  with  medical  insurance
     providers,  including but not limited to, the amount the Plaintiffs  should
     recover from such entities for services  billed and/or the size of Ulti-Med
     in relation to the market have been completely and accurately  disclosed to
     HealthTech and the medical insurance providers;  (iii) having completed all
     reasonable  and  prudent  investigations,  to the best of their  knowledge,
     information and belief,  the Plaintiffs and the Kirkham Group represent and
     warrant that the Plaintiffs and the Kirkham Group are and have been in full
     compliance with the terms and conditions of all relevant contracts, any and
     all laws,  ordinances,  etc.  that govern the  business  operations  of the
     Plaintiffs and the operations of Ulti-Med, Primus LLC and Primus Inc.
     while the Plaintiffs and the Kirkham Group were involved in such.

2.9  The terms of the Consulting Agreement are as follows: (i) HealthTech may at
     its sole option engage, for up to twenty hours each, the services of either
     or any of the following: Joseph R. Kirkham, Dr. Darner and/or David Kirkham
     (the  "Consultants") for a period of thirty days; (ii) the first thirty day
     period is  mandatory  commencing  July 1, 1997,  and the  agreement  may be
     extended for  subsequent  thirty day periods at  HealthTech's  sole option;
     (iii) once engaged,  services  cannot be terminated  upon less than 10 days
     written notice.  HealthTech shall pay to the Plaintiffs  and/or the Kirkham
     Group 15% of actual  cash  received,  net of all  costs of  collection  and
     operating  expenses,  beginning  July 30, 1997 as received (the 1st through
     the 15th of each month shall be paid on the 30th of the same month, and the
     16th  through  the end of the month of each month shall be paid on the 15th
     of  the  following  month)  from  the  operation  of  HealthTech's   clinic
     operations  (excluding the Arlington  facility) for each 30 day period that
     the  Consultants  were  engaged.  The duties of the  Consultants  under the
     Consulting Agreement shall be mutually agreed according to each task.

2.10 The terms of the Arlington Buy-out are the following: (i) the Kirkham Group
     shall manage the  Arlington  facility for  HealthTech  in the manner it was
     operated  prior to June 4, 1997;  (ii) no act or  omission  of the  Kirkham
     Group  shall  violate  any  applicable   state,   local  or  federal  laws,
     ordinances,  etc.,  or breach  any of the terms and  conditions  of all the
     contracts  associated with the operation of the Arlington facility or cause
     the Arlington  facility to be in default  thereunder;  (iii) the period the
     Arlington  operations are managed by the Kirkham Group shall not exceed 180
     days from the date of this Agreement (the "Operation Period"); and (iv) the
     results of  operations  from the  Arlington  facility will be calculated in
     relation to a Target Price as described below and the Plaintiffs and/or the
     Kirkham Group will be paid the calculated  amount as adjusted under Section
     2.12 for the Arlington facility assets.

2.11 The adjusted  Target Price or actual price paid for the Arlington  Facility
     Assets shall be calculated as follows:  At the end of the sixth (6th) month
     of operation,  the average of the actual  revenues  generated in the fourth
     (4th),  fifth (5th) and sixth (6th) months of operation  will be multiplied
     by the actual average  collection  rate on services  provided in months one
     (1)  and two (2) of the  Operation  Period.  The  product  of the  forgoing
     calculation  will have the mutually  agreed to actual average  expenses for
     the six (6) month period  subtracted  and the result of that number will be
     multiplied by eighteen (18) and the product of that calculation will be the
     "Target  Price".  The Target  Price will be adjusted by a dollar for dollar
     credit for all  payments  made under  Section  2.12.  At the end of six (6)
     months of operation of the Arlington facility,  HealthTech may choose three
     ways to pay or satisfy the Plaintiffs and/or the Kirkham group the adjusted
     purchase price: (i) in cash; (ii) by executing a promissory note secured by
     the  Arlington  facility;  or  (iii)  by  returning  and  transferring  the
     Arlington facility to the Plaintiffs and/or the Kirkham Group. In the event
     HealthTech elects to return the Arlington  facility (option iii above), all
     equipment purchased during the period from April 1, 1997 through the end of
     the Operating  Period,  inclusive,  shall be returned to HealthTech in good
     operating  order or the  Plaintiffs  and/or the Kirkham  Group may purchase
     said equipment from HealthTech at a mutually  agreeable price. In the event
     HealthTech  chooses  to pay  the  adjusted  Target  Price  by  executing  a
     promissory  note, the terms of the promissory note shall be simple interest
     only for the term of five years at seven and one half percent (7.5%) on the
     outstanding  balance,  payable monthly,  with the mutually agreed option to
     convert  the  note to  HealthTech  common  stock.  Within  ten  days of the
     expiration  of the  Operation  Period,  HealthTech  will notify the Kirkham
     Group the option chosen to  pay/satisfy  the Target Price.  If no option is
     chosen  within this time period,  it shall be deemed that  HealthTech  will
     transfer and return the Arlington facility (see section 2.11).

2.12 During  the  Operation  Period,   HealthTech  will  make  "Interim  Monthly
     Payments"  to the  Plaintiffs  and the  Kirkham  Group of the net cash from
     operating  activities  of the  Arlington  facility as  follows:  (i) 35% to
     Ulti-Med;  (ii) 32.5% to the Kirkham  Group;  and,  (iii) 32.5% retained by
     HealthTech.  However,  in no event  shall the Interim  Monthly  Payments to
     Ulti-Med  be less than of $2,000.  The  Plaintiffs  and the  Kirkham  Group
     represent and warrant that the Interim  Monthly  Payments are being paid so
     that the Plaintiff's  obligations to its creditors  listed in its tentative
     bankruptcy  reorganization  plan can be satisfied  first. The parties agree
     that once the  Operation  Period has expired and the adjusted  Target Price
     has been paid/satisfied,  HealthTech will have no continuing obligation for
     any Interim Monthly Payments or payments to satisfy the Plaintiffs'  and/or
     the Kirkham  Groups'  obligations  in bankruptcy or otherwise.  The parties
     agree  that all money  paid as  additional  consideration  hereunder  shall
     reduce the Arlington buy-out price dollar for dollar.

2.13 All of  the  revenue  generated  by  HealthTech  subsequent  to the  Primus
     Acquisition is and shall remain HealthTech's and HealthTech will retain all
     collections  thereon.  Pursuant to terms of the Primus  Acquisition and the
     terms of this  Agreement,  the  Plaintiffs  and the Kirkham Group agree and
     acknowledge that they have no claim to any of the clinic revenue  generated
     by any of HealthTech  clinics or facilities  (now or in the future)  and/or
     the Primus clinics in the Arlington and/or Sherman  facilities from January
     1, 1997 through June 30, 1997, inclusive. Notwithstanding,  HealthTech will
     pay (or credit if all or partial  payments  have  already been made) to the
     Plaintiff's and/or the Kirkham Group as additional  consideration hereunder
     30% of the net cash received,  of those receivables generated prior to July
     1, 1997.  "Lock-boxes" or functions  normally  associated with "lock-boxes"
     shall be used,  and the  Plaintiffs  and/or the Kirkham  Group will be paid
     from the lock-box arrangement.  HealthTech shall provide monthly statements
     on all receivable activity to the Kirkham Group and the Kirkham Group shall
     provide  monthly  statements  to  HealthTech  on  all  receivable  activity
     controlled by the Plaintiffs  and/or the Kirkham Group or controlled by the
     previous factoring relationship for all medical receivables generated prior
     to July 1, 1997 (e.g., Providers and/or Surety Bank).

2.14 The  parties  agree not to compete by owning  and/or  operating a like kind
     facility (health club and/or clinic) within five driving miles of the other
     party's  facilities  owned as of the date of this Agreement  and,  further,
     neither  party  shall  own and  operate a like kind  facility  within  five
     driving miles of the Arlington and Sherman  facilities  for a period of two
     years from the date of this Agreement.

2.15 The parties  agree that,  until the  adjusted  Target  Price has been fully
     paid/satisfied,  the  Arlington  facility  as  security  for payment of the
     adjusted  Target Price shall not be burdened with debt during the Operation
     Period other than in the ordinary course of business as determined  through
     mutual consent of the Kirkham Group and the HealthTech Group.

2.16 Notwithstanding Section 2.4, HealthTech hereby releases and holds Joseph R.
     Kirkham harmless from any and all liability  arising during the time Joseph
     R. Kirkham was an officer,  director,  employee and agent of  HealthTech to
     the extent that he was not  inv9olved  in any aspect of the events  forming
     the basis of the liability  and/or any vicarious  liability  created by the
     action of others.  HealthTech  further  releases Joseph R. Kirkham from any
     and all  contractual  liability or  obligations  in the Ulti-Med and Primus
     Acquisition  that are not  specifically  preserved or  otherwise  addressed
     hereunder or generally would conflict with the purpose of this Agreement.

3.0   MISCELLANEOUS PROVISIONS

3.1  This Agreement  represents the entire  understanding  and agreement between
     the parties, and any  representations,  discussions or negotiations between
     the parties  and/or their agents with respect to the subject matter hereof,
     which have not been expressly  addressed in this Agreement,  are not relied
     upon and shall not be used in construing the terms and conditions set forth
     herein.

3.2  Each of the parties hereto have been  represented  by separate  counsel and
     have had the  opportunity  to seek advice as to the terms and conditions of
     this  Agreement,  including its effect on any rights they may now or in the
     future possess.

3.3  This Agreement shall not be changed, modified or terminated without the
     written consent of each of the parties hereto.

3.4  This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
     parties hereto, and their respective permitted agents, heirs, shareholders,
     partners,  successors  and assigns.  Neither this  Agreement nor any of the
     rights,  benefits,  or obligations hereunder shall be voluntarily assigned,
     by operation  of law or  otherwise,  by any party hereto  without the prior
     written  consent  of  the  other  parties,   which  consent  shall  not  be
     unreasonable withheld.  With the exception of the provisions of Section 3.5
     below, nothing in this Agreement, express or implied, is intended to confer
     upon  any  person  or  entity  other  than the  parties  hereto  and  their
     respective permitted agents, heirs, shareholders,  partners, successors and
     assigns, any rights, benefits or obligations hereunder.

3.5  This  Agreement  is  expressly  intended  to  benefit,  as third party
     Beneficiaries,  the following  persons and/or entities:  all agents or
     employees of any of the parties hereto and all other  individuals  and
     entities  who are the subject of the release  provisions  set forth in
     sections 2.2 And 2.4 Of this agreement and the following lawyers only:
     William W.  Wilson,  Shannon  Gracy,  et. al,  Haynes and Boone,  LLP,
     Robert B. Scott and T. Gerald chilton, Jr.

3.6  In the  event  any  suit or  other  legal  proceeding  is  brought  for the
     enforcement  of any provision of this  Agreement,  the parties hereto agree
     that the prevailing  party or parties shall be entitled to recover from the
     other party or parties to such lawsuit  upon final  judgment on the merits,
     reasonable  attorney's  fees (and sales taxes thereon,  if any),  including
     attorney's fees for appeal and/or  collection of any amount found to be due
     and owing, and costs incurred in bringing such suit or proceeding.

3.7  This  Agreement has been duly executed and delivered by each of the parties
     identified  below,  who have the requisite  power and legal capacity (i) to
     execute and deliver this Agreement and all collateral  agreements  executed
     and delivered  hereby,  (ii) to  consummate  the  transaction  contemplated
     hereby,  and (iii) to perform their obligations under this Agreement or any
     other agreement  identified  herein.  Upon the approval,  the execution and
     delivery  of this  Agreement,  this  Agreement  will be  duly  and  validly
     authorized, and constitute all necessary action on behalf of all parties to
     complete  this  Agreement.  This  Agreement and each  collateral  agreement
     constitutes  the  legal,  valid  and  binding  obligation  of  each  party,
     enforceable in accordance with its terms,  excepts as such  enforcement may
     be limited by  general  equitable  principals,  or  applicable  bankruptcy,
     insolvency,  moratorium or similar laws or judicial  decisions from time to
     time which effect creditors rights generally.

3.8  This Agreement may be executed in one or more  counterparts,  each of which
     shall be deemed an original, but all of which together shall constitute one
     and the same  instrument.  A fax  transmission  of a document  bearing  the
     signature(s)  of a party  hereto  shall be acted  upon  and be  deemed  and
     treated to be an original document for all purposes.  If a fax transmission
     is so made,  the original of the signed  document shall be mailed or placed
     with a courier for  personal  delivery or mailed  within three (3) business
     days of the fax transmission.

3.9  In  the  event  HealthTech  is  notified  of a  default  or  breach  of any
     agreement,  contract or lease which the Plaintiffs and/or the Kirkham Group
     have an interest,  HealthTech  shall  notify,  in writing,  the  Plaintiffs
     and/or  the  Kirkham  Group  within  five days of such  notice and cure any
     default within 30 days that is the responsibility of HealthTech  hereunder,
     otherwise,  the Plaintiffs and/or the Kirkham Group shall have the right to
     exercise any and all rights  available  under Texas law including,  but not
     limited  to, the  repossession  of any  assets  which are the object of the
     breach or default.

3.10 All parties agree to cooperate  with one another to effectuate the transfer
     of the Arlington and Sherman facilities and to make available, upon written
     demand,  such  books  and  records  as  may  be  reasonable  necessary  for
     accounting, tax and reporting purposes.

3.11 If any  provision  of this  Agreement  is held to be  illegal,  invalid  or
     unenforceable  under  present or future laws  effective  during the term of
     this  Agreement,  such provision shall be fully  severable;  this Agreement
     shall be  construed  and  enforced  as if the severed  provision  had never
     comprised a part of this  Agreement;  and the  remainder of this  Agreement
     shall  be in full  force  and  effect  by the  severance  of the  offending
     provision. The parties agree to replace the offending and severed provision
     with a provision  that is similar in terms but is not  illegal,  invalid or
     unenforceable.

3.12 The parties  agree that upon the request of any of the  parties,  they will
     execute and deliver  such  further  documents  and  undertake  such further
     actions as may  reasonable  be  required  to effect  any of the  provisions
     contained in this Agreement.

3.13 Neither this Agreement, nor any agreement attached hereto, may be amended,
     altered or changed except in writing signed by all the parties.

3.14 Either party hereunder agrees that nay amounts paid hereunder shall be paid
     without  the  right  to off set.  In the  event a party  believes  they are
     entitled to an off set, such party will seek declaratory relief.

4.0  Conditions  Precedent.  The  following  terms and  conditions  must be met,
     satisfied or performed before this Agreement is valid and enforceable.

4.1  The Kirkham Group and the Plaintiffs  shall be in full  compliance with any
     and all aspects of the Temporary  Restraining Order signed June 13, 1997 by
     Judge Bob McCoy (Attached hereto as Exhibit D) exclusive of computers which
     will be  returned  no later  than  July 3,  1997.  Upon  full and  complete
     satisfaction  and performance of the terms and conditions set forth in this
     Section  4 and the  performance  of  and/or  compliance  with the terms and
     conditions of the Court Order by the Plaintiffs and the Kirkham Group,  the
     parties  shall cause the pending  litigation  to be dismissed in accordance
     with the  provisions  of  paragraph  2.2 above  and the  Court  Order to be
     terminated and of no further force or effect.

4.2  The  Plaintiffs  and the  Kirkham  Group  will  execute  and  attach  lease
     assignments  and a general  assignment of all of the assets and liabilities
     associated  with the Arlington  Buy-out and Arlington  Facility  Assets and
     such will be Attached  hereto as Exhibit E. The  Plaintiffs and the Kirkham
     Group represent and warrant that everything  listed in Exhibit F is what is
     required to own/lease and operate the  Arlington  facility in the manner it
     was operated prior to June 4, 1997, and that if any other asset, assignment
     or  obligation  arises  such  shall be at the sole cost and  expense of the
     Plaintiffs  and/or the Kirkham Group to obtain and/or  satisfy.  The clinic
     equipment at HealthTech's Midland facility and Fort Worth facility shall be
     listed  in  Exhibit  G  attached  hereto,  made a part of the  exhibit  and
     incorporated herein by this reference,  is a bill of sale for the equipment
     that transfers any and all rights,  interest or title the Plaintiffs and/or
     the Kirkham Group have in said  equipment.  The  Plaintiffs and the Kirkham
     Group agree to execute any other  documents  necessary  to  effectuate  the
     intent of the  parties  under  this  Agreement  forthwith  upon  request by
     HealthTech ("Collateral Agreements").

4.3  The Plaintiff's  and/or the Kirkham Group shall return to HealthTech  three
     checks that are payable to "Primus" (i.e.,  two in the amounts of $8,724.85
     and $6,108.93 and one that has been marked NSF).

4.4  HealthTech  shall  deliver to the  Plaintiffs  and/or the Kirkham Group the
     "Due Bills" for all prepaid television and radio time transferred to Primus
     LLC in the Primus Acquisition.  HealthTech represents and warrants that the
     assets represented by the Due Bills are freely transferable.

4.5  HealthTech  agrees to pay Joseph R.  Kirkham,  David  Kirkham  and Dr. Mark
     Darner $3,333.33 each for services  rendered to HealthTech  between January
     1`,  1997 and July 1, 1997  payable  in either  cash or S-8 stock  (without
     restriction  and with the bid price as of June 25,  1997) within three days
     of the effective date of this Agreement.

4.6  The parties hereto are executing and delivering this Agreement prior to the
     preparation of all of the Exhibits listed in Section 5 below which shall be
     provided on or before June 30, 1997.

5.0 Exhibits:

Exhibit A: Ulti-Med  License  Agreement  

Exhibit B: Schedule of assets and liabilities  purchased by Primus Inc. from 
           Primus LLC 

Exhibit C: Agreement between  Primus  LLC and  Ulti-Med  for the  rights to  
           operate clinics at Sherman and  Arlington  facilities  

Exhibit D: Court Order  signed June 13, 1997 by Judge Bob McCoy 

Exhibit E: Lease assignments and general assignment associated with the 
           Arlington buy-out and Arlington facility assets 

Exhibit F: List of all  equipment and personal  property  required to own/lease
           the Arlington  facility  prior to June 4, 1997 

Exhibit G: List of equipment for the  clinics at HealthTech's  Midland  facility
           and Fort  Worth  facility

Exhibit H: Copy of public announcement concerning effects of Settlement

<PAGE>



         HealthTech International, Inc.



         By: /s/ Gordon L. Hall
                  Gordon L. Hall
         Its: Chairman and CEO


         Primus Health Care Systems, Inc.




         By: /s/ Gordon L. Hall
                  Gordon L. Hall
         Its: President


         IFM Investments, Inc.




         By: /s/ Gordon L. Hall
                  Gordon L. Hall
         Its: President


         Results Riverbend, Inc.




         By: /s/ Gordon L. Hall
                  Gordon L. Hall
         Its: President


         Arlington, Results Inc.



         By: /s/ Gordon L. Hall
                  Gordon L. Hall
         Its: President


<PAGE>







         /s/ Gordon L. Hall
         Gordon L. Hall, an individual






         /s/ Stephen Smith
         Stephen Smith, an individual





         /s/ Tim Williams
         Tim Williams, an individual




         Ulti-Med Health Centers, Inc.




         By:/s/ Joseph R. Kirkman
                  Joseph R. Kirkham
         Its: Chairman



         Primus Healthcare Systems, L.L.C.




         By: /s/ Joseph R. Kirkman
                  Joseph R. Kirkham
         Its: Manager




<PAGE>




                   /s/ Joseph R. Kirkham
                   Joseph R. Kirkham, an individual and
                   Member of the Kirkham Group





                   /s/ Mark A. Darner
                   Dr. Mark A. Darner, D.C., an individual and
                   Member of the Kirkham Group






                   /s/ David M. Kirkham
                   David M. Kirkham, an individual and
                   Member of the Kirkham Group






                   /s/ Jeff Kirkham
                   Jeff Kirkham, an individual and
                   Member of the Kirkham Group







                   /s/ Kathy Kirkham
                   Kathy Kirkham, an individual and
                   Member of the Kirkham Group








<PAGE>





                                    EXHIBIT A

                           Ulti-Med License Agreement




<PAGE>


  BUSINESS OPPORTUNITY AND MANAGEMENT AGREEMENT


     AGREEMENT,  dated and  effective  as of  September  30, 1996 by and between
     HealthTech  International,  Inc. ("HTI") a Nevada  corporation and Ulti-Med
     Health Centers, Inc. ("UHC").

  THE PARTIES AGREEE AS FOLLOWS:

  1.    This  agreement is for the granting of  permission to do business at HTI
        facilities  as such  exist or may  exist  in the  future.  HTI  makes no
        representations  or warranties  as to how many  facilities it may own or
        operate  now or in the future.  HTI as of the date first  above  written
        grants UHC permission to do business at a total of seven HTI facilities.

  2.    Permission granted hereunder is given only in consideration upon payment
        of the "Opportunity Fee" described herein.

  3.    UHC acknowledges  that it does not rely on any  representations  made by
        HTI with respect to entering  into this  agreement  and that it has done
        its own due  diligence  with  respect  to HTI  and its  operations.  UHC
        assumes any and all risk  associated  with the fact or eventuality  that
        HTI may or may not own or operate  health club  facilities  and/or be in
        business  while UHC's  Permission is still in effect and that this is an
        acceptable risk for the opportunity to do business.

  4.    UHC acknowledges upon its acceptance of the business  opportunity it has
        continuing  obligations under this agreement and that HTI has no further
        obligations  with  respect to the  Opportunity  Fee.  In addition to the
        Opportunity Fee UHC grants to HTI the right and ownership of all revenue
        generated  by UHC's  exploitation  of the business  opportunity  granted
        hereunder and to administer the  distribution of the revenue as provided
        for  hereunder,  however in no event is HTI  obligated  to perform  such
        function  and HTI may assign or waive such right.  Any such waiver shall
        not  diminish  or  change  HTI's  ownership  of  the  revenue  generated
        hereunder and any waiver shall nor preclude HTI from later asserting its
        right.

  5.    The opportunity fee shall be $750,000.00  payable upon execution of this
        Agreement  (the  "Opportunity  Fee").  HTI agrees  that it will accept a
        promissory  note to be secured by the assets created and or generated by
        UHC  by its  exploitation  of  its  rights  under  this  agreement.  UHC
        acknowledges  and agrees that the Opportunity Fee is  nonrefundable  and
        therefore UHC waives any and all



<PAGE>


      right to recover  all or any  portion of the  Opportunity  Fee at any time
      during which UHC's  Permission  is effective and releases HTI from any and
      all obligations that could arise or do arise subsequent to the granting of
      the UHC Permission;  including without  limitation UHC' waives any and all
      laws,  statutes,  standing,  etc., currently or in effect in effect in the
      future,  that would give UHC the right or would  benefit  UHC in trying to
      recover all or part of the Opportunity Fee.

6.    UHC acknowledges that HTI may but is not obligated to, build one clinic in
      a facility  it owns or operates  and that UHC's  permission  includes  the
      right to operate that  clinic.  In the event HTI does build the one clinic
      HTI will own the clinic I 00%  (including  without  limitation  all tenant
      improvements,  equipment,  fixtures and furniture).  UHC's Permission also
      includes the right to build clinics in up to six HTI health clubs,  if six
      such facilities  exist, if not up to the number of clubs that exist not to
      exceed  seven  total  clinics.  In the  event HTI does not build the first
      clinic,  UHC may build the clinic at its sole cost and expense and no cost
      or expense to HTI.

7.    As already  agreed to above and subject to section 4 above,  HTI shall own
      and have sole right to all revenue generated by the exploitation of UHC of
      the rights  granted,  hereunder,  the parties  agree that the such revenue
      shall be deposited  in a  mutual/joint  bank  account  (counter-signatures
      required)  at a financial  institution  of HTI's choice and that from that
      bank account all expenses will be paid and profit  distributions made (the
      "Disbursement Account").

8.    UHC agrees to prepare a quarterly  expense  budget which the parties shall
      mutually  agree,  to. All  payments  for expenses in excess of the budgets
      shall  require  HTI's  Nvritten  consent  which shall not be  unreasonably
      withheld. After expenses the parties will create and maintain a reserve to
      be determined  and net of the expenses and reserve shall be distributed as
      profit to the parties. HTI shall be entitled to 60% of the profits and UHC
      shall receive 40% of the profits.

9.      UHC shall  deposit 50% of the profits it  receives  into a  mutual/joint
        account  (counter-signatures  required)  in a bank of HTI's  choice (the
        "Construction  Account").  The parties agree that  Construction  Account
        funds  shall  only  be used  for  the  construction  of  clinics  in HTI
        facilities.  In the event  there are seven  clinics  constructed  before
        UHC's permission rights have expired the parties shall mutually agree on
        the use of the Construction Account ftmds.

10.     UHC  agrees  and  acknowledges  that the  Construction  Account  and the
        Disbursement  Account are pledged as security  for the  Opportunity  Fee
        promissory  note in the event UHC pays the  Opportunity  Fee by way of a
        promissory note. UHC agrees to sign powers of attorney that shall become
        effective upon a breach



<PAGE>


        of said  promissory  note and  acknowledge  that such powers of attorney
        shall allow HTI to recover as part of the  liquidated  damages set forth
        herein.

II.     In  the  event  UHC  constructs  clinics,   UHC  agrees  to  manage  the
        construction  such that; no liens are filed on any of HTI's  facilities;
        lien releases are obtained from all contractors,  subcontractors  and/or
        material or service suppliers as a condition of payment and in the event
        a lien or any  claim  (including  assessments,  lawsuits,  etc.) is made
        against  the  HTI's  properties,  any  of  its  subsidiaries,  officers,
        employees,  consultants or associates,  UHC shall indemnify and hold HTI
        harmless  (including  bonding  around liens or complying  with any other
        reasonable request of HTI in seeking relief from the claim).

12.     UHC  acknowledges  and agrees  that HTI shall have a one half  undivided
        ownership  interest  in any  clinic  that UHC  constructs.  UHC  further
        acknowledges  and agrees  that HTI shall have an a security  interest in
        any and all clinics that UHC constructs  hereunder and that the power of
        attorney  described  herein shall  authorize HTI to execute its security
        interest such that the clinics entire  ownership is transferred  over to
        HTI or sold at HTI's sole option and  election  upon UHC's breach of the
        promissory note.

13.     UHC  represents  and  warrants  that it has  insurance  or is the  named
        beneficiary  of  insurance  policies  that cover  medical,  chiropractic
        general   liability   insumace  that  adequately  covers  UHC's  current
        operations and that will cover UHC's  management of the first clinic and
        subsequent  clinics.  UHC shall deliver to HTI certificates of insurance
        that name HTI as an additional  insured  under all policies  under which
        UHC has  coverage  before the first and each  subsequent  clinic  begins
        operations.

14.     In the event a claim,  lawsuit or any other  proceeding  names, or seeks
        costs, reimbursement, damages or any other recovery from HTI, any of its
        subsidiaries,  officers, employees,  consultants, or associates that UHC
        shall  indemnify  and hold HTI harmless for any and all costs,  expenses
        (including legal fees) or liabilities  arising from UHC's operations and
        management of the clinics.

15.     The  parties  agree  that the scope of this  Agreement  only goes to the
        right of  permission  granted,  hereunder  and that in no way does  this
        agreement  create any rights  with  respect to the other  aspects of the
        respective  parties' assets or operations.  The parties  acknowledge the
        physical  proximity  of each  party's  respective  operation  may create
        marketing  opportunities and the like, however,  neither party makes any
        representations or warranties as to the benefits that might accrue.



<PAGE>


16.     UHC  acknowledges  that HTI  business  plan is to enter  into  like kind
        arrangements with other businesses and that other operating entities may
        be  granted a  business  opportunity  in the same  facility  that UHC is
        exploiting  its  opportunity.  UHC waives any and all claim for  damages
        against HTI in the event HTI engages in another like kind agreement.

17.     UHC  agrees  and  acknowledges  that  in  the  event  it  breaches  this
        agreement,   the  promissory  note  hereunder,  the  security  agreement
        hereunder and or any other agreement that HTI may reasonably require UHC
        to execute  hereunder  that HTI will suffer  damages.  The parties agree
        that at the time of this  agreement  it would  be  difficult  to fix the
        damages and that both  parties  believe  that such  damages  would be in
        excess  of  $750,000.  The  parties  therefore  agree  that HTI shall be
        entitled to the $750,000,  as liquidated damages for any and all damages
        arising  from  UHC's  breach  of this  agreement,  except  for the costs
        associated with enforcing the terms of this agreement.

18.     This  Agreement   supersedes  all  previous   agreements  and  all  such
        agreements,  if any, are merged into this Agreement.  This Agreement may
        only be modified  by a writing  executed  by both  parties.  The parties
        shall execute any other  documents  necessary to carry our the intent of
        the parties hereunder.

19.     In the event any part of this Agreement is invalid, unenforceable and or
        illegal such shall not affect the  remainder of this  Agreement  and the
        parties shall carry our the intent of this Agreement as if no such event
        occurred.

20.     This  Agreement,  shall be governed by and  construed  under the laws of
        Arizona.  Notwithstanding the location of property, where contracts were
        or are  entered  into or any other  fact or  circumstance,  any  dispute
        arising  directly or indirectly from this Agreement shall be resolved in
        the  state of  Arizona,  Maricopa  County  or such  other  place  solely
        determined  by  HTI.  At  HTI's  election  any or all  disputes  arising
        hereunder  may be  determined  by  binding  arbitration  and UHC  hereby
        consent to such

         HealthTech International, Inc.





         By: /s/ Gordon L. Hall

                  Gordon L. Hall
         Its:     Chairman of the Board and Chief
    Chief Executive Officer



<PAGE>


     Business  Opportunity  and  Management  Agreement  
(Signature page to be incorporated and made a part of the agreement by this 
 reference)

Ulti-Med Health Centers



By: /s/ Joseph R. Kirkham

             Joseph R. Kirkham
Its:     Chairman of the Board




<PAGE>




                                    EXHIBIT B

           Schedule of assets and liabilities purchased by Primus Inc.
                                 from Primus LLC




<PAGE>



FURNITURE, FIXTURES & EQUIPMENT ACQUIRED THROUGH THE PRIMUS
         ACQUISITION


ARLINGTON CLUB:

7 PIECE HYDRA FITNESS $7,000.00
1 COMPUTER-$1,200.00
1 PHONE SYSTEM $1,700.00
1 REFRIDG. $400.00
2 COUCHES $700.00
1 COUCH $600.00


ARLINGTON CLINIC:

1 EMG (OKIDATA MODEL ADVAN) $6,750.00
1 GSX 190 PRINTER-DOS NETWORK $399.00
1 THUMPER $395.00
1 MEDX-1 CERVICAL $65,000.00
                1 LUMBAR
1 PANASONIC COPIER $2,200.00


SHERMAN CLINIC:

1 VENOUS FLOW $4,000.00
1 VIBRATORY MASSAGER $395.00
1 ULTRASOUND $800.00


MIDLAND CLINIC:
                                                   1 MONITOR-KEYBOARD $299.00
4 P.T. TABLES $1,000.00                            2 SMALL REFRIDG $300.00
1 OMNISOUND ULTRASOUND $5,000.00                  11 REAM $1,650.00
                                                   2 DESKS $1,000.00
1 X-RAY MACHINE-DEVELOPER-CASSETTES-               1 CALCULATOR $47.00
   MARKERS-MEASURING RULER $12,000.00              5 CERVICAL TERRYCLOTH
1 LARGE HYDROCULATOR-HOT PACKS                     4 LUMBAR COVERS-$250.00
   AND COVERS $1,100.00                            1 VENOUS FLOW MACHINE $4,000
1 DOPPLER $12,000.00                                                  
1 3IN HOLEPUNCH/2 2IN HOLEPUNCH $30.00
1 CENTRIFUGE $800.00
1 MYOTEK-INCLUDING CHAIR $3,400.00


<PAGE>


1 MEDX-1 CERVICAL-1 LUMBAR $65,000.00 (X 2) 4 CERVICAL HOTPACKS
1 COMPUTER $1,100.00                                 4 LUMBAR HOTPACKS $300.00
1 MEDICAL WEIGHSCALE $250.00                         1 STAPLER $20.00
6 CLIPBOARDS $20.00                                  1 TAPE DISPENSER $5.00


SHERMAN CLUB:

10 REEHOH STEPS $790.00
8 PHONES $4,000.00
1 FAX MACHINE $300.00
2 SODA COOLERS $1,400.00
2 STEREOS $1,000.00
2 T.V.'S $450.00


RIVERBEND CLINIC:



<PAGE>


                                EQUIPMENT LEASES


POLO CLUB                  LEASED FOR 84 MONTHS          36 MONTHS LEFT
MANAGEMENT                     APRIL 1, 1993               MARCH 31, 2000
$12,828.00 PER MONTH


EXCEL LEASING              LEASED FOR 36 MONTHS          22 MONTHS LEFT
$164.96 PER MONTH               OCT. 20, 1995               AUG. 24, 1998
X-RAY PROCESSOR            TOTAL: $4013.69


BANKERS LEASING            LEASED FOR 36 MONTHS           34 MONTHS LEFT
$792.00 PER MONTH               JAN. 5, 1997                JAN. 5, 2000
SEE ATTACHED LIST             TOTAL: $22,000.00


AT&T CAPITAL               LEASED FOR 48 MONTHS           36 MONTHS LEFT
$839.95 PER MONTH              APRIL 30, 1996              APRIL 30, 2000
SEE ATTACHED LIST             TOTAL:  $37,284.00


TRANS LEASING              LEASED FOR 60 MONTHS            31 MONTHS LEFT
$259.20 PER MONTH                JULY 5, 1994               FEB. 5, 2000
2 TROTTER 540 TREADMILLS      TOTAL: $15,391.36
                               DEPOSIT $358.81


PREMIER LEASING
AMERUS LEASING             LEASED FOR 60 MONTHS               14 MONTHS LEFT
$627.99 PER MONTH              JULY 25, 1993                    JULY 25, 1998
BENNETT X-RAY SYSTEM         TOTAL: $34,149.20



<PAGE>


BANKERS LEASING

                                   Exhibit "A"

1-Body Relaxer
1-Blk. Challenger Machine Treadmill Siderails
2-Trotter 460 Treadmills Reconditioned
2-Stairmaster Exercise System
3-Preference Stationary Bike - Upper Body - Grey, Polar Belt
1-Intertron 5000
1-Universal Stairstepper
1-Leander Table
2-Challenger Treadmills


<PAGE>





AT&T CAPITAL

INVOICE #09219301

September 21st, 1993

1 ea. Lifestep 9500 Stair Climber, SN#LS9500
1 ea. Powercise Model 156 Weight Scale, SN#PC156S
1 ea. Powercise Model 264 Chest Press, SN#PC264CP
1 ea. Powercise Model 210 Pec Dec, SNPC210PD
1 ea. Powercise Model 264 Shoulder Press, SN#PC264SP
1 ea. Powercise Model 244 Tricep Extension, SN#PC244TE
1 ea. Powercise Model 364 Inner/Outer Thigh, SN#PC364IOT
1 ea. Powercise Model 314 Leg Extension/Leg Curl, SN#PC314ELC
2 ea. Preference Stationary Bike, upper body -Grey Polar Belt
                            SN#HRT2500I      with Transmitter
1 ea. Cyber Lat Pull Down, SN#43323
1 ea. Body Masters Tricep Press SN#MD411


Total Price $38,519.10


<PAGE>


POLO CLUB MANAGEMENT                                 AMERUS LEASING
1517 JACKSONBORO HWY                                 611 FIFTH AVE.
FT. WORTH, TX.  76114                                SECOND FLOOR
                                                     DES MOINES, IA  50309

EXCELL FINANCIAL                                     LIBERTY LEASING
5236 80TH ST.                                        4201 WESTERN PARKWAY
LUBBOCK, TX.  76119                                  SUITE #320
                                                     W DES MOINES, IA  50266

BANKERS LEASING                                      HEALTH CONCEPTS
5236 80TH ST                                         P.O. BOX 203248
LUBBOCK, TX.  79424                                  AUSTIN, TX.  78720


AT & T CAPITAL                                       SHIRLEY KIRKHAM
1505 LUNA RD. SUITE 134                              1114 ROYALCREST DR.
CARROLLTON, TX.  75006                               ARLINGTON, TX.  76017


TRANS LEASING
3000 DUNDEE RD.
NORTHBROOK, ILL.  60062



<PAGE>





                                    EXHIBIT C

            Agreement between Primus LLC and Ulti-Med for the rights
             to operate clinics at Sherman and Arlington facilities




<PAGE>


                              MANAGEMENT AGREEMENT

         This management Agreement (the "Agreement") is entered into by and 
among Primus Health Care Systems, LLC. ("PHCS"), a Texas corporation, and 
Ulti-Med Health Centers, Inc. ("UHC"), a Utah corporation.

                                    RECITALS

         WHEREAS, UHC desires to retain PHCS to act as the manager and operator 
of its business activities; and

         WHEREAS,  PHCS  desires to be employed by UHC to act as the manager and
operator of UHC's business activities.

         NOW,  THEREFORE,  in  consideration of the covenants,  agreements,  and
considerations set forth below, the parties agree as follows:

                                    AGREEMENT

     1.  Services Performed by PHCS. PHCS hereby represents that it shall act as
         the  manager  and  operator  of UHC's  business  operations  and shall,
         additionally, operate under the following conditions:

         a)    PHCS shall pay all of UHC's outstanding accounts payable as of 
         July 31, 1995,  before any profit split (as set forth below) shall 
         occur;
         b)    PHCS and UHC shall have at least one director in common;
         c) Any  major  acquisitions  (for  UHC) of any kind  shall be  approved
         unanimously  by  UHC's  Board  of  Directors;  d) Any  liquidations  of
         property  of UHC  must  be  approved  unanimously  by  UHC's  Board  of
         Directors;  e) PHCS shall lease and  maintain  office space for UHC; f)
         All funds  collected by UHC shall be split as set forth below;  g) PHCS
         shall pay $15,000.00 to the U.S.  Internal Revenue Service on behalf of
         UHC; h) PHCS shall pay $5,000.00 toward  aggregate  accounts payable of
         UHC; and i) PHCS shall assume responsibility for payment of all current
         and future accounts payable in connection with the
              operation of UHC's business.

     2.  Payment  to PHCS.  In  consideration  for PHCS  acting in the  capacity
         described above,  PHCS shall be paid 65% of all profits  generated from
         the operation of the business of UHC.
     3.  Prior Accounts Receivable.  UHC shall own all accounts receivable in 
         existence prior to the effective date of this
         Agreement.
     4.  Term.  The term of this Agreement shall be five (5) years.
     5.  Termination.  In the event  that PHCS  fails to  properly  perform  its
         duties as required  under this  Agreement,  UHC shall give PHCS written
         notice of such  default.  PHCS shall have thirty (30) days from receipt
         of a default  notice to cure such  default.  If PHCS fails to cure such
         default as set forth in a notice  sent to PHCS  within such thirty (30)
         day period,  UHC shall have the right to terminate this Agreement,  and
         shall  not be  obligated  for any  further  payment  to PHCS  following
         termination of this Agreement.  This Agreement may not be terminated by
         UHC without  cause.  PHCS may terminate  this  Agreement at any time by
         giving UHC thirty (30) days' written notice.
     6.  Right of First Refusal.  UHC shall have an option to purchase the stock
         and/or  assets of PHCS on the same  terms and  conditions  that  PHCS's
         shareholders  and/or management  agree(s) to accept from a third party.
         If PHCS's shareholders and/or PHCS accept(s) such an offer from a third
         party,  PHCS shall  notify UHC of the terms of such offer and UHC shall
         have thirty (30) days to accept or reject such offer.
     7.  Notices.  All notices to the parties hereto shall be at the following 
         addresses:

     If to PHCS:           Primus Health Care Systems, LLC
                           ============================
                           ----------------------------

     If to UHC:            Ulti-Med Health Centers, Inc.
                           ============================
                           ----------------------------

     All notices to any party shall be in writing and delivered to such party of
     deposited in the United States Mail in an envelope, registered of certified
     mail, with postage  prepaid,  addressed to such party as set forth above or
     at such other address as such party shall have previously designated in the
     manner set forth herein.  All notices shall be deemed given when delivered,
     or, if mailed, on the third day after the mailing.

     8.  Governing Law: Venus. This Agreement shall be governed by and construed
         in accordance with the laws of the State of Texas.
         VENUE FOR ANY CAUSE OF ACTION RELATING TO THIS AGREEMENT SHALL BE 
         EXCLUSIVELY DALLAS COUNTY, TEXAS.
     9.  Multiple Counterparts.  This Agreement has been executed in multiple
         counterparts, each copy of which is deemed to be an original and 
         constitute collectively one agreement.
     10. Parties Bound. This Agreement and the terms and provisions hereof shall
         inure to the benefit of and be binding on the parties hereto and their 
         respective heirs, executors, legal representatives, successors in 
         interest, and assigns.
     11. Entire Agreement.  This Agreement contains the entire agreement by and
         among the parties, and no promise, representation, warranty, or 
         covenant not included in this Agreement or any such referenced 
         agreement has been or is relied upon by the parties.
     EXECUTED to be effective as of the 31st day of July, 1995.


                         Primus Health Care Systems, LLC
                         a Texas Limited Liability Corporation

                            By: /s/ Joseph R. Kirkham
                              Joseph R. Kirkham, Manager


                          ULTI-MED HEALTH CENTER, INC.,
                            a Utah Corporation

                            By: /s/ David M. Kirkham
                            David M. Kirkham, Vice President



<PAGE>





                                    EXHIBIT D

               Court Order signed June 13, 1997 by Judge Bob McCoy




<PAGE>


                                NO. 48-169289-97

PRIMUS HEALTH CARE                  ss                 IN THE DISTRICT COURT
SYSTEMS, L.L.C., PRIMUS             ss
HEALTH CARE SYSTEMS, INC.,          ss
ULTI-MED HEALTH CENTERS,            ss
INC., and JOSEPH R. KIRKHAM         ss
                                    ss
VS.                                 ss                 TARRANT COUNTY, TEXAS
                                    ss
HEALTHTECH INTERNATIONAL,           ss
INC., GORDON L. HALL, TIM           ss
WILLIAMS, STEPHEN L. SMITH,         ss
RESULTS RIVERBEND, INC., and        ss
IFM INVESTMENTS, INC.               ss                 48TH JUDICIAL DISTRICT




                                  AGREED ORDER

         On June 9, 1997, Plaintiffs, Primus Health Care Systems, L.L.C., Primus
Health Care  Systems,  Inc.,  (collectively,  "Primus"),  and Joseph R.  Kirkham
("Kirkham"),  and  Defendant,  HealthTech  International,  Inc.  ("HealthTech"),
appeared before this Court by and through their attorneys of record. The parties
announced  to the Court that they had reached an  agreement  concerning  certain
matters, which is reflected in this agreed temporary order:
         It is  ordered  that the  Application  of  HealthTech  for a  Temporary
Injunction  is set for  hearing  before  this  Court on June 27,  1997,  at 3:00
o'clock, P.M.
         Until the time of said hearing, the Court orders as follows:
         1. At of before  5:00 P.M.,  on  Saturday,  June 14,  1997,  Primus and
Kirkham shall return all equipment used in the operation of the Results Sports &
Fitness  Clubs (the  "Clubs") and  affiliated  medical  clinics (the  "Clinics")
(other than computer equipment) to the location where said equipment was located
prior to June 4, 1997.  In addition,  the  computer  equipment  and  therapeutic
exercise  equipment  removed from the Midland and Fort Worth Clubs during May or
June, 1997, shall be returned to those  respective  locations.  It is understood
that the Powercize  equipment will not be operational  until 5:00 P.M.,  Monday,
June 16. 1997.
         2. Each party shall  permit the other party  access to all business and
financial  records of the Clubs and Clinics,  including bank accounts,  billing,
collection, and patient account records. Representatives of each party may, upon
inspection of said financial  records,  obtain copies of any such records at the
expense of the  requesting  party,  provided that they do not leave the location
where said records are maintained.
         3. HealthTech may communicate  directly with Med Quest Inc. to seek any
information concerning the financial affairs of Primus of the Clubs and Clinics,
and neither  Primus nor Kirkham will interfere with the ability of HealthTech to
communicate directly with Med Quest Inc.
         4. HelathTech,  by and through its  representative,  Stephen Smith, may
communicate  directly with Providers Inc.; provided,  however,  that Kirkham may
accompany Mr. Smith to all meetings with any representative of Providers Inc.
         5. Primus and Kirkham shall continue to be responsible for payment of:
a.)the obligations of the Clinics; and b.) all other obligations(except payroll)
of the Arlington and Sherman Clubs.  HealthTech  will continue to be responsible
for  payroll at all Clubs and all other  obligations  of Fort Worth and  Midland
Clubs, except the obligations of the Medical Clinics. The parties shall promptly
provide to one another  copies of all invoices  paid and checks  written,  along
with copies of bank deposit  slips  indicating  cash  receipts  generated by the
Clubs.
         6. The payroll of the Clubs  shall be  maintained  to include  Kirkham,
David Kirkham,  Jeff Kirkham and Kathy  Kirkham,  at the same level as it was on
June 4, 1997. However, pending further order of this Court, Kirkham shall not go
upon the  premises  of the  Clubs,  but  shall  render  any  services  as may be
necessary from his personal office in Arlington, Texas. Kirkham will also ensure
that Jeff  Kirkham  and Kathy  Kirkham,  and David  Kirkham  will have no actual
physical  presence  at the Clubs other than the Sherman  Club,  pending  further
order of this Court.  Kirkham, Jeff Kirkham, and Kathy Kirkham will be permitted
to contact by telephone any doctor or other employee working in the Clinics.
         7. Kirkham,  Jeff Kirkham,  Kathy Kirkham and David Kirkham will assume
complete control of the Sherman Club and Clinic beginning at 12:01 A.M., Monday,
June 16, 1997 and  continuing  until further  order of this Court.  Accordingly,
each of the Kirkhams will be allowed full access to the Sherman Club and Clinic.
Further  Jeff  Kirkham  shall be allowed  access to the Clubs and Clinics to the
extent necessary to re-install the Powercize equipment previously removed.
         8. Each Party  shall  undertake  reasonable  efforts to ensure that all
clinics are at the same  capacity to see patients as they had on June 4, 1997 by
Tuesday June 17, 1997 at 5:00 P.M.,  with the  understanding  that neither party
can ensure the presence of Clinic personnel at any given time.
         9. All parties shall refrain from making disparaging comments about any
other party to Club of Clinic employees, patients, or any other third party.
         Nothing in this order is to be construed  as a waiver by any party of 
any  contention  or position  that party may have in the pending litigation.
         These orders shall remain in effect until the above-referenced  hearing
on HealthTech's Application for Temporary Injunction,  or until further order of
this Court.
         Signed this 13th day of June, 1997.  /s/ Bob McCoy
                                                  JUDGE PRESIDING

AGREED AS TO FORM AND SUBSTANCE:

/s/ Daniel C. Steppick
Daniel C. Steppick
State Bar No. 00791732
Shannon, Gracey, Ratliff & Miller, L.L.P.
500 Throckmorton, Suite 1600
Fort Worth, Texas  76102

ATTORNEYS FOR PLAINTIFFS


/s/ Thomas J. Williams
Thomas J. Williams
State Bar No. 21578500
Haynes and Boone, L.L.P.
801 Cherry Street, Suite 1300
Fort Worth, Texas  79102

ATTORNEYS FOR DEFENDANTS


<PAGE>





                                    EXHIBIT E

          Lease assignments and general assignment associated with the
                 Arlington buy-out and Arlington facility assets





<PAGE>


BILL OF SALE

        For and in  consideration  of the sum of Ten  dollars  ($10.00)  and for
other good and  valuable  consideration,  the  receipt of all of which is hereby
acknowledged,  Ulti-Med Health Centers,  Inc., Metro Rehab,  Inc., Primus Health
Care Systems,  L.L.C.,  Joseph R. Kirkham,  Dr. Mark A. Darner,  D.C.,  David M.
Kirkham,  Jeff  Kirkham  and  Kathy  Kirkham,  respectively  ("Sellers"),  sell,
transfer and assign to HealthTech  International,  Inc. ("Buyer"), the equipment
listed in Exhibit A attached hereto and by this reference made a part hereof.

        Sellers warrant that they are the owner of the above described property,
warrant good and  marketable  title to it, and warrant that the property is free
and clear of liens,  charges and  encumbrances  except those liens,  charges and
encumbrances  listed on Exhibit B attached  hereto and by this  reference made a
part hereof.

        Executed at Arlington, Texas as of the lst day of July, 1997.

Ulti-Med Health Centers,        Metro Rehab, Inc.
Inc.


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

Primus Health Care Systems,
Inc.



By:                                          By:
        Name:                           Joseph R. Kirkham
        Title:



By:                                          By:
Dr. Mark A. Darner                 David M. Kirkham



By:                                         By:
Jeff Kirkham                           Kathy Kirkham



<PAGE>


                        GENERAL UNCONDITIONAL ASSIGNMENT

         For value received,  Ulti-Med Health Centers,  Inc., Metro Rehab, Inc.,
Primus Health Care Systems, L.L.C., Joseph R. Kirkham, Dr. Mark A. Darner, D.C.,
David M.  Kirkham,  Jeff  Kirkham  and Kathy  Kirkham  hereby  sell,  assign and
transfer to HealthTech International, Inc., all their rights, title and interest
in    and    to    that     certain     lease     dated    by    and     between
_____________________________________  ___________________________________,   as
lessor,                and                ______________________________________
_________________________________,  as lessee,  and  represent  and warrant that
there have been no previous  assignments  or transfers of said lease and that it
is free and clear of liens,  charges and encumbrances  excepts the rights, title
and interests of the lessor therein.

         Dated:            July 1, 1997

Ulti-Med Health Centers,        Metro Rehab, Inc.
Inc.



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

Primus Health Care Systems, Inc.


By:                           By:
Name:                         Joseph R. Kirkham
Title:



By:                                    By:
Dr. Mark A. Darner             David M. Kirkham




By:                           By:
Jeff Kirkham                           Kathy Kirkham



<PAGE>


                        GENERAL UNCONDITIONAL ASSIGNMENT

         For value received,  Ulti-Med Health Centers,  Inc., Metro Rehab, Inc.,
Primus Health Care Systems, L.L.C., Joseph R. Kirkham, Dr. Mark A. Darner, D.C.,
David M.  Kirkham,  Jef f Kirkham  and Kathy  Kirkham  hereby  sell,  assign and
transfer  to  HealthTech  International,  Inc.  , all  their  rights,  title and
interest in and to that  certain  lease dated  __________________by  and between
_____________________as lessor, and __________________, as lessee, and represent
and warrant  that there have been no previous  assignments  or transfers of said
lease and that it is free and clear of liens,  charges and encumbrances  excepts
the rights, title and interests of the lessor therein.

         Dated:            July 1, 1997

Ulti-Med Health Centers,                                  Metro Rehab, Inc.
Inc.



By:______________________________________     By: _____________________________
Name:                                         Name:
Title:                                        Title:

Primus Health Care Systems, Inc.



By:______________________________________     By: _____________________________
   Name: Joseph R. Kirkham 
  title:



By:______________________________________     By: _____________________________
     Dr. Mark A. Darner                               David M. Kirkham



By:______________________________________     By: ____________________________
     Jeff Kirkham                                     Kathy Kirkham




<PAGE>


                        GENERAL UNCONDITIONAL ASSIGNMENT

         For value received,  Ulti-Med Health Centers,  Inc., Metro Rehab, Inc.,
Primus Health Care Systems, L.L.C., Joseph R. Kirkham, Dr. Mark A. Darner, D.C.,
David M.  Kirkham,  Jeff  Kirkham  and Kathy  Kirkham  hereby  sell,  assign and
transfer to HealthTech International, Inc., all their rights, title and interest
in and to all of the assets  associated  with the  acquisition  of the Arlington
facility  at 1001 NE  Greenoaks  Blvd.  , Suite 151,  Arlington,  Texas 76006 by
HealthTech  International,  Inc., from Ulti-Med Health Centers, Inc., and Primus
Health Care Systems,  L.L.C.,  and represent and warrant that there have been no
previous  assignments  or  transfers  of said  assets and that they are free and
clear of liens, charges and encumbrances excepts the rights, title and interests
of the lessors thereof.

         Dated:            July 1, 1997

Ulti-Med Health Centers,                                   Metro Rehab, Inc.
Inc.



By:______________________________________     By: _____________________________
      Name:                                        Name:
      Title:                                      Title:

Primus Health Care Systems, Inc.



By:______________________________________     By: _____________________________
     Name:                                            Joseph R. Kirkham 
    Title:



By:______________________________________     By: _____________________________
     Dr. Mark A. Darner                                David M. Kirkham



By:______________________________________     By: ____________________________
     Jeff Kirkham                                      Kathy Kirkham




<PAGE>





                                    EXHIBIT F

               List of equipment and personal property required to
             own/lease the Arlington facility prior to June 4, 1997





<PAGE>


Arlington Clinic Inventory:

4     Therapy tables (1 blue, 2 grey)
1     Therapy table -leander
1     Adjustment table
1      Dynatron Equaliern
1     EMG
1     GSX-190 Printer, DOS network
1     Dry spine
8     14 X 17 Cassettes
5     8 X 17 Cassettes
1     Black desk with chairs
1     X-ray machine with developer
3     Office desks with chairs
2     Large view boxes
2     Small view boxes
1     Thumper
1     Set SOT blocks
1     Blood centrifuge
1     AM REX (low volt)
1    Intertrow 5000
1     Intelect model 700 CUS/CANBAL
1    Hydrocollator
1     Matrix
1     MedX cervical
1     MedX lumbar
1     Panasonic copier
1     Panasonic fax machine
1     HP Printer
1     Computer
1     Actinator
1    Scale
1     Blood pressure cuff
1    Paraffin wax bath



<PAGE>


  Arlington Club Inventory:

  3     Lifecycle bikes
  4     Preference bikes
  3     Treadmills
  2     Trotter treadmills
  2     Startrac treadmills
  1     Challenger treadmill
  1     Universal stairmaster
  1     Stairstepper
  3     Stairmaster 4000 PT
  3     Nordic Tracks (1 broken, 2 working)
  1     7 pc.  Hydra fitness
  1     Bench press
  1     Leg extension
  1     Leg curl
  1     Low back extension
  1     Crunch machine
  2     Pec decks
  1     Cable tower station
  1     Calf raise station
  3     Port cable station
  1     Bicep machine
  1     Tricep machine
  2     Row machines
  4     Curl benches
  3     Curl bars
  2     T-bars
  1     Chin bar/Dip station
  2     Leg/Dip stations
  1     Low back station
  1     Military press
  1     Hack squat
  1     Leg press
  1     P-Curl station
  3     Free weight benches with bar rack
  2     Incline free weight benches with bar rack
  3     Standard free weight benches (raise/lower)
32      45 lb. plates
26      55 lb. plates
50      5 lb. plates
25      10 lb. plates
24      25 lb. plates
20      2.5 lb. plates
 3      pr 3 lb. dumbbells


<PAGE>


  Arlington Club Inventory (continued):

  3     pr 12 lb. dumbbells
  5     pr 8 lb. dumbbells
  5     pr 5 lb. dumbbells
  4     pr 10 lb. dumbbells
  1     pr 15 lb. dumbbells
  1     pr 20 lb. dumbbells
  1     pr 25 lb. dumbbells
  1     pr 30 lb. dumbbells
  2     pr 35 lb. dumbbells
  2     pr 40 lb. dumbbells
  1     pr 45 lb. dumbbells
  3     pr 50 lb. dumbbells
  1     pr 55 lb. dumbbells
  1     pr 60 lb. dumbbells
  2     pr 65 lb. dumbbells
  1     pr 70 lb. dumbbells
  1     pr 75 lb. dumbbells
  1     pr 80 lb. dumbbells
  1     pr 85 lb. dumbbells
  1     pr 90 lb. dumbbells
  1     pr 95 lb. dumbbells
  1     pr 100 lb. dumbbells
  1     pr 105 lb. dumbbells
  1     pr 110 lb. dumbbells
  1     pr 115 lb. dumbbells
  1     pr 120 lb. dumbbells
  7     Straight 45 lb. bars
  1     Roman chair
20      Step benches
  6     pr Bar clips
  2     Copy machine
  1     Room divider
  5     Desks
  1     Time clock
  6     Phones
  2     Computers
  3     CD-ROM towers
24      Chairs
  1     Lamp
  2     Electronic calculators
  1     Credit card machine
  3     Keyboards
  3     File cabinets


<PAGE>


  Arlington Club Inventory (continued):

  2     Chiropractic tables
  1     Fan
  2     Refrigerators
  1     Back table
  1     Stereo
  2     Couches
  2     Tan rolling beds
  1     Keyboard
  1     Printer
  1     Receipt printer
  1     Small round table
  1     Clothes closet
  1     Scale
  3     Silk plants
40     Wooden lockers
  4     Benches
  1     Vanity
  1     Chair



<PAGE>





                                    EXHIBIT G

            List of equipment for the clinics at HealthTech's Midland
                        facility and Fort Worth facility





<PAGE>



  Midland Clinic Inventory:

  4     PT Tables
  2     E-stem AMREX MS324A
  2     E-stem AMREX M3322 low volt
  1     Sonicator ultrasound 716
  1     Omnisound ultrasound
  1     X-ray machine, developer, cassettes, markers, measuring ruler
  2     1st tables
  1     Large hydroculator -hot packs and covers
  1     Venous flow machine
  1     Doppler
  1     Centrifuge
  2     Small refrigerators
17     Chairs
  2     Desks
  1     Calculator
  5     Cervical terry cloth
  4     Lumbar covers
  1     Myotck including chair
  1     MedX cervical
  1     MedX lumbar
  1     Computer
  6     Complete sets of powercise with computer
  1     Medical weight scale
  1     EMG
  6     Clipboards
  1     3 Hole punch
  2     2 Hole punch
  4     Cervical hot packs
  4     Lumbar hot packs
  4     Cold packs
  1     Laundry basket
1 1    Towels
  1     Stapler
  1     Tape dispenser
  1     Monitor
  1     Keyboard
  1     Mouse



<PAGE>


Fort Worth Clinic Inventory:

1     Pelvic bench
2     Therapy benches
1     Roller table
1     Ultrasound
1     AMREX unit
1     Hydrocollator
2     Cervical Hydrocollator packs
2     Lumbar Hydrocollator packs
2     Cervical Hydrocollator covers
2     Lumbar Hydrocollator covers
1     Dynatron 1 00 with 4 pads
2     14 X 36 X-ray view boxes
1     Powerfingers massager
1     Whartenburg pen wheel
1     Reflex hammer
1     Plastic spirometer
1     Stethoscope
       Belts for holding M/S pads
3     14 X 17 X-ray cassettes
4     1 0 X 12 X-ray cassettes
1     Computer screen
1     Keyboard
1     CD-ROM tower
1     Calculator
1     3 Hole punch
2     File cabinets
2     Powercise control units
6     Powercise exercise pieces
1     Drying rack for hydrocollator covers
1     Fischer X-ray unit
1     X-ray film holder
1     Computer printer


<PAGE>






                                    EXHIBIT H

          Copy of public announcement concerning effects of Settlement






<PAGE>


                         HealthTech International, Inc.
                             (NASDAQ: GYMM & GYMMW)


                                  July 8, 1997
                              For Immediate Release


     HealthTech International, Inc. Acquires 650,000 shares of its stock...


Mesa,  Arizona.....HealthTech  International,  Inc. is pleased to  announce  the
acquisition  of  650,000  shares  of its  common  stock  as  well  as 1  million
registered  options at $1.00 in exchange  for one of its health care  operations
and a six month  participation  in  another.  The deal also  release  HealthTech
International,  Inc. from Employment  agreements of  approximately  $3.5 million
dollars over the next five (5) years.

The deal is as follows:

HEALTHTECH INTERNATIONAL, INC. acquires:

     * 1 million options of HealthTech International, Inc. @ $1.00 per share.
     * 650,000 shares of HealthTech International, Inc. common stock.
     * Employment contracts of former medical operators.
     * Profit participation detailed in the Ultimed license agreement
       referenced in the 1996 10K.
     * Certain assets of the clinic  operations  of Arlington  facility.
     * All assets of the clinic operation of Midland and Ft Worth facility  
     * The  Ultimed  share of the Tenant Improvements in build-outs in both
       the Midland and Ft. Worth facilities.
     * Ability to hire new Director of Clinical Operations.

     In exchange  for the above listed  items,  HealthTech  International,  Inc.
     relinquishes the right to:

     * Operate the Sherman facility.
     * The Sherman facility equipment.
     * Six months partial profit participation in Arlington.





    1237 South Val Vista Drive . Mesa . Arizona . 85204 . Tel: (602) 396-0660
                            Web Address: www.gymm.com
                         HealthTech International, Inc.
                             (NASDAQ: GYMM & GYMMW)


                                  July 8, 1997
                              For Immediate Release



HealthTech International, Inc..............continued...................





Although HealthTech International, Inc. expects the above to reduce revenues for
the short term, the addition of clinics in both the Bedford,  Texas facility and
the Tucson,  Arizona  facility  will more than replace the revenues  lost in the
Sherman facility.

The buyout paved the way for the Company to acquire the services of Dr.  William
Kelly and his contacts through  Physicians'  Academy.  This new association will
allow HealthTech  International,  Inc. to grow its Medical and Clinic operations
at an accelerated  pace due to the vast number of Medical Doctors and Doctors of
Chiropractic within Dr. Kelly's network.

HealthTech International, Inc. is a leading investor owned health care company.
The Company is traded on NASDAQ under the symbols GYMM for its common stock and
GYMMW for its Class A Warrants.


Contact: William A Young Sr.
         Investor/Public Relations
         (602) 396-0660
         e-mail: wyoung@gymm.com