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                                                                   EXHIBIT 10.18


                              MANAGEMENT AGREEMENT

         This Management Agreement ("Agreement") is made and entered into this
1st day of August, 1996, by and between SWEDISH COVENANT MANAGED CARE ALLIANCE,
INC., a physician hospital organization (the "Company") organized under the laws
of the State of Illinois, and North American Medical Management - Illinois,
Inc., a corporation organized under the laws of the State of Illinois ("NAMM").
This Agreement shall take effect as of September 1, 1996 ("Effective Date").

                                   WITNESSETH:

         WHEREAS, the Company is affiliated with a hospital member ("Hospital")
of the Northwestern Healthcare Network ("NHN");

         WHEREAS, NHN and NAMM entered into a certain Master Agreement (the
"Master Agreement"), whereby those parties agreed to certain issues with respect
to the control and operations of the Company, the terms of which Master
Agreement set forth the governance and terms of this Agreement as provided
below;

         WHEREAS, NAMM operates in the State of Illinois to provide management
services to physicians and hospitals participating in Medicare-risk management
and other types of services which may be agreed to from time to time, and to
arrange for the provision of efficient and effective health care services;

         WHEREAS, the Company requires certain staffing and management expertise
to provide it with administrative services;

         WHEREAS, NAMM is an organization with personnel who have expertise in
managed care contracting, with particular expertise in the area of Medicare-risk
management and related claims processing, financial, business and medical
services management and administration; and

         WHEREAS, the Company desires to retain NAMM, and NAMM desires to be
retained by the Company, all on terms and provisions mutually desirable to the
respective parties and for compensation to be paid by the Company to NAMM, on
such terms, provisions and compensation arrangements as are described in this
Agreement.

         NOW, THEREFORE, in consideration of the mutual agreements, covenants
and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which the parties hereby
acknowledge, the parties agree as follows.


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                                   ARTICLE I

                 RELATIONSHIP OF THE PARTIES; MASTER AGREEMENT

1.01     RELATIONSHIP OF THE PARTIES

         Except as otherwise provided in this Agreement, neither this Agreement
         nor any of its provisions shall be construed to create any partnership,
         joint venture, principal/agent or employer/employee relationship
         between the Company and NAMM, or to in any way make one party
         responsible for the debts, liabilities or any other legal obligations
         of the other party. It is expressly understood and agreed by the
         parties that the Company and NAMM shall at all times be acting as
         entities independently contracting with each other for the performance
         of services described in this Agreement. Neither party shall have the
         power to bind or obligate the other party except as set forth in this
         Agreement. Unless the Parties otherwise agree, this Agreement and all
         references to the Company in this Agreement are limited to services
         provided by NAMM solely with respect to Risk Contracts and related
         services rather than all services and contracts entered into by the
         Company. The Company does not report to NAMM and retains its separate
         autonomy and direct reporting relationship to Swedish Covenant Managed
         Care Alliance, Inc. and its affiliates and the other owners of the
         Company.

1.02     MASTER AGREEMENT

                  The terms of the Master Agreement are Incorporated into this
         Agreement by reference and all of the terms of this Agreement are
         subject to and must comply with the applicable terms of the Master
         Agreement. If there is any Inconsistency between the two agreements,
         unless otherwise specifically provided, the provisions of this
         Agreement shall be construed in a manner which is not Inconsistent with
         the Master Agreement.

                  As an overview, the Master Agreement describes the contractual
         relationships which may exist between NHN and NAMM regarding the
         relationships between NAMM and NHN-affiliated general Hospitals and/or
         affiliated Physician Organizations and Physician Hospital Organizations
         ("PHOs") for the purpose of Medicare risk contracting. The Master
         Agreement describes two alternative models pursuant to which Hospitals,
         affiliated Physician Organizations and/or PHOs may affiliate with NAMM.
         The first alternative Includes the development of joint ventures (i.e.
         the Management Companies) in which NAMM and the Hospitals, affiliated
         Physician Organizations and/or PHOs act as investors (the "Equity
         Model"). It is understood that this option is still available to the
         Company or its affiliated hospital and PHO in the event that its
         affiliated Physician Organization declines or, for whatever reason, is
         unable to participate. The second alternative describes a relationship
         in which NAMM agrees to provide management and


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         administrative services for risk contracts to (ii) Management Companies
         owned by the Hospitals, their affiliated Physician Organizations and/or
         PHOs, or (ii) a Hospital division if the Parties agree to proceed in
         that manner, in each case with NAMM having no ownership interest in the
         Company ("Management Contract Model"). Every Hospital, its affiliated
         Physician Organizations and/or PHOs has the opportunity to participate
         in either the Equity Model or Management Contract Model (or other
         participation model agreed upon by the Parties hereto and thereto) with
         NAMM. The provisions of the Master Agreement which relate to the Equity
         Model as defined therein shall not apply to the terms of this
         Agreement, except as to when they require a termination of this
         Agreement or as specifically set forth herein.

         Capitalized terms used in this Agreement which are not defined herein
         but are defined in the Master Agreement, shall have the meanings
         ascribed to them in the Master Agreement.


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                                   ARTICLE II

                   REPRESENTATIONS, WARRANTIES AND AGREEMENTS

2.01     NAHM REPRESENTATIONS, WARRANTIES AND AGREEMENTS

         As a material inducement for Company to enter into this Agreement, NAMM
         hereby represents, warrants and agrees as follows:

         (A)      NAMM has the legal power, right and authority to consummate
                  the transactions contemplated hereby.

         (B)      NAMM has been duly formed and is validly existing under the
                  laws of Illinois and has made all filings with governmental
                  authorities required by such laws.

         (C)      NAMM is a wholly owned subsidiary of North American Medical
                  Management, Inc. ("NAMM Parent") a Tennessee corporation that
                  is the parent of a number of comparable corporate subsidiaries
                  operating in seven states. NAMM Parent is a wholly owned
                  subsidiary of PhyCor, Inc., a Tennessee corporation that is
                  publicly traded on the Nasdaq stock exchange. At the end of
                  calendar year 1995, PhyCor, Inc. operated 33 multispecialty
                  clinics with approximately 2100 physicians and had annual
                  revenues in excess of $441,000,000.

         (D)      This Agreement, the Master Agreement and all other documents
                  and instruments which have been executed and delivered
                  pursuant to this Agreement, or, if not yet executed or
                  delivered will when so executed and delivered, constitute
                  valid and binding obligations of NAMM enforceable in
                  accordance with their respective terms, subject to the
                  provisions of all laws relating to bankruptcy and insolvency
                  and other laws relating to creditors' rights generally.
                  Neither the execution and delivery of this Agreement, nor the
                  Master Agreement, nor the incurrence of the obligations herein
                  set forth, nor the consummation of the transactions herein
                  contemplated, nor compliance with the terms of this Agreement
                  or the Master Agreement will conflict with or result in a
                  breach of any of the terms, conditions or provisions of, or
                  constitute a default under any, bond, note or other evidence
                  of indebtedness or any contract, indenture, mortgage, deed of
                  trust, loan, agreement, lease or other agreement or instrument
                  to which NAMM or NAMM Parent is a party.


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         (E)      NAMM has disclosed to NHN a true and accurate depiction of its
                  financial position as of the fiscal year ended December 31,
                  1995, and NAMM's financial position to date has not materially
                  changed from that reflected in such December 31, 1995
                  financial statements.

         (F)      NAMM and NAMM Parent have complied with all laws, ordinance
                  and regulations applicable to it Including the filing of all
                  required tax returns or other tax notices.

         (G)      There is no suit, action or other proceeding pending against
                  NAMM, NAMM Parent or any NAMM Affiliate (a NAMM Affiliate is
                  any party controlled by NAMM, under common control with NAMM
                  or in a joint venture with NAMM or other similar contractual
                  relationship), of such a magnitude or character as to put NAMM
                  at risk of being unable to meet fully and in good faith the
                  obligations imposed on NAMM by this Agreement.

         (H)      To the best of the knowledge of NAMM, none of the information
                  contained in the representations and warranties of NAMM set
                  forth in this Agreement or in any of the certificates,
                  exhibits and schedules, lists, documents or other instruments
                  delivered or to be delivered to NHN pursuant to this Agreement
                  or the Master Agreement contain any untrue statement of a
                  material fact or omit to state a material fact regarding the
                  operation of NAMM which would make the statements contained
                  herein or therein misleading


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                                  ARTICLE III

                              OBLIGATIONS OF NAMM

3.01     AUTHORITY OF NAMM

         The Company authorizes NAMM to manage the affairs and provide
         administration services to the Company for the Company's Medicare HMO
         (Risk Contracts) - and such other business as the Company shall
         specifically authorize in writing for NAMM to perform for it
         ("Business"), as set forth in this Agreement, and as approved as set
         forth in the Master Agreement. NAMM shall be authorized, without
         further approval of the Company, to commit funds of the Company to
         perform the services and to staff the Company as described hereunder,
         and to contract for services for the Company, provided all such actions
         are within the operating budgets previously approved by the Company's
         Board of Directors and provided further that NAMM shall require in its
         agreements with any third parties who may perform services on behalf of
         NAMM that such contractors perform their duties in accordance with this
         Agreement. The Company shall cooperate with and shall use its best
         efforts to cause its employees, agents and independent contractors to
         cooperate with personnel provided by NAMM hereunder so that NAMM may
         perform its duties under this Agreement. NAMM shall manage and
         administer the Business of the Company in accordance with the terms and
         conditions of this Agreement.

         Without limiting the need for NAMM to obtain prior approval of the
         Company for other matters, NAMM will not take the following actions on
         behalf of the Company, without the approval of the Company:

         (A)      endorse any note, or act as an accommodation party, or
                  otherwise become surety with respect to any amount;

         (B)      borrow or lend money, or make, deliver or accept any
                  commercial paper or execute any mortgage, bond, or lease,
                  purchase or contract to purchase any property, or sell or
                  contract to sell any property or assets of the Company;

         (C)      enter into any agreement as a result of which any person shall
                  obtain an interest in the Company;

         (D)      assign, transfer, pledge, compromise or release any of the
                  Company's claims or debts, except upon payment in full of such
                  claim or debt, or arbitrate or consent to the arbitration of
                  any of the Company's debts or claims;

         (E)      change the nature of the Company's Business;


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         (F)      distribute surplus amounts other than as agreed upon with the
                  Company;

         (G)      either individually or in the aggregate, make any expenditure,
                  allocate any expense or enter into a contract or agreement for
                  an amount in excess of five thousand dollars ($5,000), which
                  is not included in the operating or capital budget.

         (H)      enter into any agreement or transaction on behalf of the
                  Company with NAMM or a NAMM Affiliate;

         (I)      do any other act that would make it impossible to carry on the
                  ordinary business of the Company; or

         (J)      enter into any agreement involving the sale, lease, assignment
                  or use of any real estate, property or other assets owned,
                  operated, leased, managed by or otherwise related to the
                  Company or any of its affiliates.

3.02     MANAGEMENT SERVICES

         NAMM will work in close cooperation with Company staff to provide those
         management services specified in Exhibit A of this Agreement. In
         addition, NAMM will perform the following services:

         A.       CONTRACT NEGOTIATIONS. NAMM will provide its expertise and
                  contacts in the managed care industry to facilitate
                  negotiation of Risk Contracts for the Company. As provided in
                  the Master Agreement, where permitted to do so by state or
                  federal regulations, contracts will be negotiated by NAMM for
                  NHN directly with the HMOs on behalf of the applicable
                  affiliated Physician Organization, PHO and/or Hospital, with
                  subcontracts to be provided from NHN to the Company to manage
                  the Physician Organization, PHO and Hospital only with respect
                  to the Medicare-risk products as described hereunder. NHN will
                  not charge any additional cost, fee or margin to the Company,
                  its Physician Organization, PHO or Hospital for contracting
                  with any HMOs or related payers. Where NAMM and NHN jointly
                  determine that they are required to do so by state or federal
                  regulations, NAMM will arrange for contracts to be negotiated
                  directly between an HMO and the applicable Hospital, and
                  affiliated Physician Organization and PHO, with appropriate
                  management and risk sharing agreements as necessary to provide
                  for the agreed distribution of surplus funds and to implement
                  the terms of the Master Agreement. The final contracts between
                  the HMOs and NHN will be subject to approval by the Company as
                  and to the extent the contracts relate to the services to be
                  provided by or through the Company. NAMM believes it is
                  crucial to obtain the Company's ongoing input during the
                  process of negotiating contracts with the HMO. This is


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                  especially true since the Company must agree with the final
                  HMO contract (as described above) before it is adopted by NHN.
                  Therefore, a representative of the Company will be Included in
                  meetings to develop the strategy for NAMM's negotiations with
                  the HMOs. NAMM shall keep the Company informed of the
                  discussions at, and results of, its meetings with the HMOs and
                  physicians.

         B.       FINANCIAL SERVICES. NAMM will assist the Company to manage the
                  funds paid under the Risk Contract and ensure that any surplus
                  funds are distributed in accordance with the agreements
                  between the Company and providers with which it contracts. As
                  more particularly described in Exhibit A, NAMM will provide
                  financial services to Company, Including the management of
                  bank accounts and the distribution of funds to affiliated
                  Physician Organizations, PHOs and Hospitals managed by the
                  Company. NAMM will arrange for audited financial statements of
                  the Company to be prepared in accordance with generally
                  accepted accounting principles and consistent with Exhibit
                  A.01(J). NAMM will also prepare operating and capital budgets
                  for the Company in a timely fashion, to be shared with NHN.
                  NAMM will determine the reasonable working capital
                  requirements of the Company. NAMM will be bonded and present
                  evidence of same to NHN and the Company in an amount agreed to
                  by the parties, as reasonably necessary to protect Company
                  funds.

         C.       PHYSICIAN SERVICE MANAGEMENT. As more particularly described
                  in Exhibit A, NAMM, through the auspices of the Company, will
                  manage one or more affiliated Physician Organizations and PHOs
                  regarding its provision of health care services under the Risk
                  Contract. As part of its duties for Risk Contracts, NAMM will
                  negotiate and manage agreements with affiliated Physician
                  Organizations and PHOs, which may include fee-for-service and
                  capitation agreements. When deemed reasonably appropriate by
                  NAMM, NAMM will also employ a Medical Advisor who will work in
                  close consultation with and through the medical director of
                  any affiliated Physician Organization and PHO in order to
                  manage the Risk Contract project or any other line of business
                  for which NAMM has been retained by the Company. The costs of
                  employing such Medical Advisor will be allocated, based upon
                  an appropriate measure of the use of such services, to all
                  Risk Contract arrangements managed by NAMM of Illinois.

         D.       SPECIFIC SERVICES FOR RISK CONTRACTS. As more particularly
                  described in Exhibit A, NAMM will provide the following
                  services to the Company with respect to Risk Contracts.
                  Performance of these services will be in compliance with
                  parameters outlined in the HMO agreements between any HMO and
                  NHN (or, in the limited cases described above, between an HMO
                  and the applicable affiliated Physician Organization, PHO
                  and/or Hospital). The Parties agree that certain services are
                  "core" services which will in all cases be provided by NAMM
                  (Including those set


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                  forth in paragraphs (i), (ii), (iii), (iv), (v), (vi), (vii),
                  (viii) and (ix) below). NAMM will also look to existing
                  affiliated Physician Organization and PHO standards when
                  providing any of the services listed below and will try, to
                  the extent reasonably possible, to coordinate standards it
                  implements or recommends with such existing affiliated
                  Physician Organization or PHO standards. In addition, any such
                  significant changes and/or additional standards will be
                  communicated to the Physician Organization, PHO and Company
                  prior to being implemented by NAMM.

                  (i)      Prepare and adopt initial benchmark utilization
                           review and quality management procedures.

                  (ii)     Perform claims processing for providers.

                  (iii)    Perform provider contracting services.

                  (iv)     Perform utilization management and quality assurance
                           services, which will Include utilization
                           authorization, concurrent review, case management,
                           and discharge planning, and establish credentialing
                           criteria and grievance procedures.

                  (v)      Perform member services relating to claims matters.

                  (vi)     Establish and maintain financial management for the
                           affiliated Physician Organization, PHO and Hospitals,
                           Including risk-sharing administration only with
                           respect to the Medicare-risk contracts and program.

                  (vii)    Administer provider education programs as reasonably
                           necessary.

                  (viii)   Prepare quarterly individual and aggregate physician
                           profiling reports comparing physician performances to
                           adopted utilization review standards.

                  (ix)     Recommend and administer quality outcome standards
                           and accompanying reports comparing physician
                           performance to standards required by the applicable
                           HMOs.

         E.       PROVIDING PHYSICIANS. NAMM will use its best efforts to
                  encourage physicians, Including a sufficient number of primary
                  care physicians, to form and participate in affiliated
                  Physician Organizations, PHOs where payments on a capitated
                  basis will be accepted by primary care physicians and in which
                  a sufficient number of primary care physicians are willing and
                  able to provide leadership to the affiliated Physician
                  Organization and PHO.


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         F.       PRICING AND SERVICE COVERAGE ISSUES. NAMM will assist the
                  Company, and provide the Company with guidance, in negotiating
                  which services should be provided by the Hospital and which
                  should be provided by the physicians, as they relate to
                  payments for such services out of the Hospital and Physician
                  Organization service fund account, as well as which prices the
                  Company's providers will charge. NAMM will provide a suggested
                  allocation of services and suggested prices based on
                  actuarially determined market basket pricing figures for the
                  Hospital and physicians providing medical services under the
                  Risk Contracts.

         G.       AGREEMENT TO SUBCONTRACT. NAMM agrees to subcontract with
                  Swedish Covenant or Managed Health Care Associates (MHCA) for
                  services referred in paragraph A, B, C, D, E, F if Swedish
                  Covenant and MHCA can provide these services at least as
                  effectively as NAMM and more efficiently. NAMM will have
                  authority to set operating policies and procedures and
                  supervise the personnel directly involved for any
                  subcontracted service. To the extent performance levels are
                  materially below other Chicago area NAMM sites for any ninety
                  (90) day period, NAMM and subcontractor will develop a
                  corrective action plan. If after another ninety (90) day
                  period performance levels have not improved, the subcontract
                  will be terminated. NAMM will not be penalized under the
                  performance requirements for substandard performance of
                  subcontractors.

3.03     REPORTING

         NAMM shall provide to the Company the reports and compilations
         described in Exhibit A which, together with any other reports referred
         to in this Agreement, the parties believe are all of the reports
         necessary for the management and administration of the Business. NAMM
         shall provide additional extraordinary reports and compilations upon
         request by the Company, which are reasonably necessary for management
         and administration of the Business of the Company, consistent with the
         Company's then current goals, objectives, financial condition and
         business plan.


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3.04     NAMM STAFFING

         NAMM will, through its own employees in the Chicago area and elsewhere,
         provide management of all aspects of the Risk Contract business
         associated with the Company in exchange for its participation in the
         Company's profits as described in Article V of this Agreement. NAMM
         will interview and select a Senior Management Team, subject to NHN
         approval. Where such expertise is not provided by full-time personnel
         of NAMM in the Chicago area, the expertise of other NAMM personnel or
         consultants may be obtained on an hourly or shared (with other
         NHN-related management companies) expenses basis when, in NAMM's
         opinion, it is appropriate and financially efficient to do so, provided
         that such expense is identified and approved in the Company budget as
         an additional expense or if not, that the budget is amended and
         approved in advance by the Company.

         NAMM shall make available a sufficient number of its (or its
         Affiliates') employees to fulfill its duties under this Agreement, as
         identified in the budget, as such number is determined by NAMM, subject
         to approval by the Company, and shall revise the budget to change the
         number of employees as warranted by changes in the operations of the
         Company. Such personnel shall be drawn from such locations as deemed
         appropriate at the sole discretion of NAMM. NAMM shall be solely
         responsible for performing job evaluations for all personnel hired by
         NAMM (or its Affiliate) to carry out the terms of this Agreement,
         provided that the Company retains the right to evaluate NAMM's overall
         performance. NAMM shall also have in its sole discretion the authority
         to hire and fire all NAMM (or its Affiliates') employees; except that
         NAMM agrees to allow Swedish Covenant Managed Care Alliance's (SCMCA)
         management committee to interview NAMM's designated SCMCA
         administrative director, and to raise any reasonable concerns regarding
         the ability to operate within SCMCA structure.

3.05     ANNUAL OPERATING BUDGET

         NAMM shall develop and present to the Board of the Company annual
         operating and capital budgets for the Company on a calendar year basis
         or as agreed to. Upon approval of the annual budgets by the Company's
         Board, NAMM shall operate within such budgets in providing its
         management services to the Company.

3.06     RETENTION OF MEDICAL ADVISOR

         NAMM shall, in consultation with the Company, be responsible for the
         selection, development of performance standards for and appraisal of a
         Medical Advisor who will help manage the Risk Contracts and work in
         close consultation with and through the medical director of any
         affiliated Physician Organization or PHO.


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3.07     KEY CONTACT

         One of NAMM's (or its Affiliates') employees shall serve as the key
         contact for the Company. The key contact will be the president of NAMM,
         who will be principally responsible for managing NAMM's duties under
         this Agreement and will be a member of the Senior Management Team of
         the Company, approved as described in Section 3.04 of this Agreement.
         Unless this individual shall die or become disabled and be unable to
         perform such duties under this Agreement, NAMM shall not be permitted,
         without the Company's consent, to replace this named individual as the
         key contact. In the event of any such replacement, the Company and NHN
         shall have the right to approve the individual selected by NAMM to
         replace the key contact person, as a member of the Senior Management
         Team and as the key contact under this Section, provided such approval
         shall not be unreasonably withheld.

3.08     OWNERSHIP OF AND ACCESS TO RECORDS

         All records relating to the Company's operations and Business
         (Including, but not limited to, all books of account and general
         administrative records, and all of the following, to the extent such
         are non-proprietary to NAMM and relate solely to (or were purchased
         solely for) the Company's operations: software programs, MIS data,
         utilization management policies, credentialing guidelines, case
         management, quality assurance information and all other related
         documents and policies), shall be and remain the property of the
         Company, except as the parties may otherwise agree in writing. All such
         information, data and records may be used by NAMM to perform the
         services hereunder. All property of this nature which was the
         proprietary property of the Hospital or affiliated Physician
         Organization or PHO which the Company or NAMM was allowed to utilize in
         its management of the Company or the risk business shall remain the
         proprietary property of the Hospital or the affiliated Physician
         Organization or PHO, as the case may be. The Parties understand that
         the Company will contract with a variety of health care providers and
         that certain financial and medical record information from these
         individual provider entities will be kept confidential and may not be
         shared with the owners of the Company.

         All records relating to NAMM's operations (Including, but not limited
         to, the following, to the extent such are non-proprietary to the
         Company and relate solely to (or were purchased solely for) NAMM's
         operations: software programs, MIS data, utilization management
         policies, credentialing guidelines, case management, quality assurance
         information and all other related documents and policies), shall be and
         remain the property of NAMM, except as the parties may otherwise agree
         in writing. All such information, data and records may be used by the
         Company with respect to the services hereunder. All property of this
         nature which was the proprietary property of NAMM or which the Company
         or an affiliated


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         Physician Organization or hospital was allowed to utilize in the
         Hospital's risk Business shall remain the proprietary property of NAMM.

         NAMM will assure appropriate, convenient, and unlimited access to all
         records of the Company to NHN except where such access might be limited
         by patient medical record confidentiality requirements under law.

3.09     DISCLOSURE OF INFORMATION

         NAMM agrees to make available information contained in the records of
         the Company to parties to whom the Company has authorized such
         disclosure, including NHN. NAMM agrees to protect the confidentiality
         of such records and will only disclose confidential data upon written
         consent of the affected parties or when subpoenaed or otherwise
         required by law or compelled by legal process. NAMM agrees to disclose
         to the Company any subpoena or other legal request for documents prior
         to the disclosure of such documents in order to permit the Company to
         intervene or file appropriate legal documents contesting their
         disclosure. These obligations shall survive the termination of this
         Agreement.

3.10     MEDICAL CONFIDENTIALITY

         NAMM agrees to comply with applicable federal, state and local laws for
         handling confidential medical information and shall take all
         appropriate and reasonable action in developing technological and
         contractual methods of maintaining confidentiality for any medical or
         other confidential information converted to electronic data.

3.11     PERFORMANCE STANDARDS AND GOALS

         In performing its obligations under this Agreement, NAMM shall act at
         all times in a professional manner, devoting its efforts in good faith
         and with reasonable diligence to the performance of this Agreement.
         NAMM shall provide services in conformity with all applicable standards
         set forth in the HMO contract pursuant to which Medical services are
         being provided by the Company. For contracts other than Medicare, NAMM
         agrees to set performance and utilization targets consistent with the
         market and to obtain SCMCA Board approval before contracts are
         initiated.

         NAMM's overall performance hereunder will be evaluated by reference to
         goals the Parties have established including the following (provided
         that unless otherwise agreed to by the Parties, the amount of NAMM's
         compensation provided for in Article V above is not dependent on
         meeting such goals but may lead to termination for Cause under Section
         7.02. The Company understands and accepts that NAMM's ability to comply
         with these standards is based, at least in part, on its willingness to
         accept and implement NAMM's recommendations made pursuant to this
         Agreement):


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1.       NAMM's success in realizing a decrease in the Hospital's Medicare
         utilization rate to 1,200 acute inpatient days per 1,000 population by
         the end of the third year of the Company's operations contingent on the
         Company's agreement to retain directly or through NAMM an in-patient
         manager whose duties shall be defined by the Parties. Any decrease must
         only be accomplished while maintaining the quality of care.

2.       Growth in member enrollment utilizing the services of the affiliated
         Physician Organization (MHCA) or PHO providers. For example, the
         Parties have as a goal reaching 1,500 enrolled Medicare recipients by
         the end of 1998. Parties will evaluate and adjust the goal in light of
         the market willingness to offer Medicare full risk contracts.

3.       NAMM's ability to negotiate and obtain for the Company a portion or an
         Increased portion of all health insurance premiums, Including those
         that may be charged to the Medicare enrollees by the HMO, as evidence
         by the HMO retaining less than 15% for administrative services and
         profit with the understanding that this retention may be negotiated at
         a higher rate should the HMO assume additional risks for healthcare
         services.



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                                   ARTICLE IV

                           OBLIGATIONS OF THE COMPANY

4.01     AUTHORITY OF THE COMPANY

         The Board of Directors of the Company ("Board") shall be the governing
         body of the Company and shall at all times exercise ultimate control
         over the financial assets, operations and Business of the Company and
         shall have the right under this Agreement to direct NAMM on how to
         expend any funds or assets of the Company. The responsibilities of the
         Company Include, but are not limited to, managing and administering the
         Company's operations not delegated to NAMM hereunder and accepting or
         rejecting recommendations by NAMM therefore. The Company shall continue
         to exercise general responsibility for the operation and affairs of the
         Company. NAMM shall administer the Company's adopted plans and criteria
         and perform the services identified in this Agreement and in Exhibit A,
         consistent with the directives and approvals of the Company.

4.02     OWNERSHIP OF ASSETS

         The Company will own all of its assets purchased specifically for the
         Company for purposes of operating the Medicare-risk undertaking,
         considering the limitations thereon set forth in Section 3.08 above.
         Upon termination of this Agreement as described in Article VII, Company
         shall retain title and ownership of all said assets.

4.03     THE COMPANY'S RESPONSIBILITIES

         HOSPITAL COOPERATION. The Board of the Company will use its best
         efforts to assure that the management personnel of the Hospital
         cooperate and give full support to the provisions of the Master
         Agreement and this Agreement.

         PROVIDING PHYSICIANS. The Board of the Company will use its best
         efforts to encourage physicians, Including a sufficient number of
         primary care physicians, to form and participate in affiliated
         Physician Organizations and PHOs where payments are accepted on a
         capitated basis by primary care physicians and in which a sufficient
         number of primary care physicians are willing and able to provide
         leadership to the Physician Organization and PHO.

         ANCILLARY SERVICES. NAMM shall arrange for the provision of ancillary
         and non-hospital services through entities affiliated with the
         Hospital, the Company or other similarly situated providers willing to
         contract. The Company shall cause the entities affiliated with the
         Company or Hospital to price those ancillary and other non-hospital
         services which they


                                      -15-
<PAGE>   16
         wish to provide through HMO contracts covered by the Master Agreement
         at prices which are competitive with those otherwise available to HMOs
         in the same or similarly situated community in the Chicago Metropolitan
         area at the time the Risk Contracts are executed. Unless otherwise
         agreed to by the parties, the Company shall cause the ancillary
         providers affiliated with a Hospital to provide such services at prices
         that are at least equal to the lowest prices that the affiliated entity
         offers, at the time the Medicare-risk contracts are executed, to any
         other payers (other than reimbursements received from Medicaid) in the
         community. To implement this pricing process, NAMM will actuarially
         determine a market-competitive price based on its assessment of the
         market and will discuss with the Company, Hospital and affiliated
         entity the basis for its recommendations and will obtain input from the
         Hospital; the Hospital affiliated entity will then have a right of
         first refusal to contract to provide such services at the price so
         established by NAMM.

         HOSPITAL SERVICES. The Company shall cause the Hospital to agree
         (unless otherwise agreed to between such Hospital and NAMM) to provide
         services through arrangements covered by the Master Agreement at prices
         that are at least equal to the lowest prices that they offer, at the
         time the applicable Risk Contracts are executed, to any other payers
         (other than reimbursements received from Medicaid) in the community,
         unless the lowest price offered by the Hospital is lower than the price
         which may be obtained under the risk contract, as actuarially
         determined by NAMM.

         DISTRIBUTION OF SURPLUS FUNDS. The distribution of surplus funds for
         affiliated Physician Organizations, PHOs and the Hospital shall be made
         as set forth in Exhibit B hereto. The Company, or at its instruction,
         NAMM shall be responsible for making the actual distribution of any
         such funds.

4.04     DEVELOPMENT FUNDS

         The Hospital, the Physician Organizations and/or PHOs affiliated with
         the Company will provide development funds to the Company. The owners
         of the Company, will contribute to the Company a maximum of $300,000,
         as described in the following schedule. At the discretion of the
         Company, this amount will be treated as equity in the Company or as an
         operating capital loan to the Company.

         The following is a schedule of the amounts to be required by the
         Company on the dates indicated:


                                      -16-
<PAGE>   17


<TABLE>
<CAPTION>
                    Period of Time                           Maximum Amount
                   -----------------                         --------------

                   <S>                                       <C>
                   September 1, 1996                            $100,000
                   December 1, 1996                             $ 50,000
                   March 1, 1997                                $ 50,000
                   June 1, 1997                                 $ 50,000
                   September 1, 1997                            $ 50,000
</TABLE>


4.05     THE COMPANY'S FINANCIAL RESPONSIBILITIES

         Deficits of the Company's operations and the two risk service fund
         accounts are dealt with as set forth in Exhibit B.

         The other financial responsibilities of the Company shall Include, but
         not be limited to, directly providing or paying the cost of providing
         the following:

         (A)      All payments to health care providers.

         (B)      Interest expense for monies borrowed by the Company.

         (C)      Repayment of principal for monies borrowed by the Company.

         (D)      Attorney's fees and expenses Incurred by or on behalf of the
                  Company, relating to litigation by or against the Company or
                  otherwise directly relating to the Company's operations or
                  Business.

         (E)      Fees for accountants or consultants retained to audit the
                  Company and/or prepare and submit tax forms for the Company.

         (F)      A program of property, liability and other forms of insurance
                  coverage, limits and carriers acceptable to NAMM.

         (G)      All costs associated with investments or loans made by the
                  Company.

         (H)      Any dividends or distributions paid to shareholders of the
                  Company.

         (I)      Remuneration, if any, of the Company's officers and Board
                  members.

         (J)      Any other fees, costs, expenses or taxes paid by NAMM (in all
                  cases in conformity with the budget approved by the Company)
                  relating to the Business or operations of the Company.

                                      -17-


<PAGE>   18


4.06     BOARD COMMITTEE MEETINGS

         The Company Board shall schedule and hold regular, periodic meetings.
         NAMM shall provide reports, which it is required to provide by the
         terms of this Agreement, to the Board prior to such meetings.
         Representatives of NAMM may be invited to be present at such meetings
         and to be given prior notice of all regular and special meetings of the
         Board, provided that the Board shall have the right to request that
         NAMM be excluded from any meeting in which NAMM's performance will be
         discussed, or otherwise as determined by the Board. Representatives of
         NAMM shall also attend such Company committee meetings as NAMM and the
         Company agree are necessary for an NAMM representative to attend.


                                      -18-
<PAGE>   19


                                   ARTICLE V

                              COMPENSATION TO NAMM

5.01     BASIS FOR ACCOUNTING

         The accounting year for the Company shall be January 1 through December
         31. Revenue and expenses shall be determined on an accrual basis and
         be consistent with generally accepted accounting principles.

5.02     NAMM'S PARTICIPATION IN ANY COMPANY PROFITS

         NAMM shall be paid a management fee for its services hereunder
         ("Management Fee") in an amount equal to fifteen thirty-fifths (15/35)
         (per Exhibit C1, C2) of the Company's profit, if any, for each year of
         this Agreement. The Company's profit is calculated as follows:

         Revenue:

                  (i)      the Company's share of the Physician Organization
                           surplus, if any, plus

                  (ii)     the "4.50%/$4.50 Expense Reimbursement" (as defined
                           in Section 5.04 below) provided that if the
                           4.50%/$4.50 Expense Reimbursement exceeds the actual
                           expenses incurred by the Company for the year, such
                           excess will not be considered revenue;       less

         Expenses:
                  all expenses of the Company, including services provided by
                  the Company to NAMM (note that this is before payment of the
                  Management Fee to NAMM and any bonus payments to the local
                  management and employees of NAMM, as described below).

         NAMM's share and local management and employees' share shall be limited
         to the amounts shown on the following chart. The total that is credited
         to the Company is 35%. The allocation of the Company's Profits (i.e.,
         the Hospital's Business Profit as therein defined) is described in this
         Section 5.02 of the Agreement

<TABLE>
<CAPTION>
 PHYSICIAN ORGANIZATION                          NAMM'S SHARE                                LOCAL MANAGEMENT SHARE
      SURPLUS
------------------------            --------------------------------------           -------------------------------------

<S>                                 <C>                                              <C>
$0 to $1,000,000                    18% of Surplus plus                              6% of Surplus plus
$1,000,001 to $3,000,000            15% of Surplus over $1,000,000 plus              5% of Surplus over $1,000,000 plus
$3,000,001 to $6,000,000            11.25% of Surplus over $3,000,000 plus           3.75% of Surplus over $3,000,000 plus
$6,000,001 to $8,000,000            6% of Surplus over $6,000,000 plus               2% of Surplus over $6,000,000 plus
$8,000,001 to $10,000,000           3% of Surplus over $8,000,000 plus               1% of Surplus over $8,000,000 plus
$10,000,001 and greater             1.5% of Surplus over $10,000,000                 0.5% of Surplus over $10,000,000
</TABLE>


                                      -19-
<PAGE>   20


NAMM will contribute to the Company 15/35 (per Exhibit E) of any operating
deficits incurred by the Company. The previous sentence does not apply during
the development phase of the Company's operations during which the
capitalization funds contributed by the owner(s) of the Company are being
utilized to fund Company deficits.

For example, if the 4.50%/$4.50 Expense Reimbursement for a year equaled
$100,000 and the Physician Organization surplus for that year was $500,000 (and,
as described in Exhibit B, 35% of that surplus was retained by the Company),
then:

1.       If the Company's actual expenses for the year were $100,000, (a) the
         revenue would be $175,000 (35% x $500,000) plus the $100,000
         4.5%/$4.50 Expense Reimbursement, and (b) the actual incurred expenses
         were $100,000, then the Company's profit would be $175,000, of which
         NAMM would receive $75,000 (15/35 x $175,000), local management and
         staff would receive $25,000 (5/35 x $175,000) and the owners of the
         Company would receive $75,000 (15/35 x $175,000).

2.       If the Company's actual expenses for the year were $150,000, (a) the
         revenue would be $175,000 (35% x $500,000) plus the $100,000
         4.5%/$4.50 Expense Reimbursement, and (b) the actual incurred expenses
         were $150,000, then the Company's profit would be $125,000, of which
         NAMM would receive $53,571.50 (15/35 x $125,000), local management and
         staff would receive $17,857 (5/35 x $125,000) and the owners of the
         Company would receive $53,571.50 (15/35 x $125,000).

3.       If the Company's actual expenses for the year were $50,000, (a) the
         revenue would be $175,000 (35% x $500,000) plus the $50,000 4.5%/$4.50
         Expense Reimbursement, and (b) the actual incurred expenses were
         $50,000, then the Company's profit would be $175,000, of which NAMM
         would receive $75,000 (15/35 x $175,000), local management and staff
         would receive $25,000 (5/35 x $175,000) and the owners of the Company
         would receive $75,000 (15/35 x $175,000). Under this third example,
         since the actual expenses incurred for the year were less than the
         4.5%/$4.50 Expense Reimbursement, an adjustment may be made to future
         payments under the 4.5%/$4.50 Expense Reimbursement, as described in
         Section 5.04 below, to more closely reflect anticipated Company
         expenses for future years and to recoup the unused amount for the past
         year.

Attached to this Agreement as Exhibits C, D and E are charts which illustrate
the flow of funds for surplus distribution, sample capitation payment
distributions and responsibilities for deficits.


                                      -20-
<PAGE>   21


5.03     PAYMENT IN THE EVENT THE JOINT MARKET STRATEGY IS NOT AGREED UPON

         If this Agreement is terminated pursuant to Section 7.02(A) (i.e.
         failure to agree on the Joint Market Strategy within ninety days
         following the execution of the Master Agreement), NAMM shall be
         reimbursed its full out-of-pocket expenses and for the value of any
         consultation services provided to the Company directly related to the
         development of the Company, which amount is considered part of the
         development funds with which the Company was capitalized as described
         in Section 4.02 above.

5.04     PAYMENT OF EXPENSE REIMBURSEMENTS TO NAMM

         The Company shall allocate for NAMM as a management expense the
         "4.5%/$4.50 Expense Reimbursement". The "4.5%/$4.50 Expense
         Reimbursement" means a flat rate sum designed to offset basic fixed
         expenses of the Company and will be equal to 4.5% of the total revenues
         received for Medicare HMO enrollees and $4.50 per-member-per-month for
         any Commercial HMO Members, as those percentage and dollar amounts may
         be adjusted in the future, as described below in this paragraph. NAMM
         will provide the Company with reports, on at least a quarterly basis,
         to show the itemized actual expenses of the Company in comparison to
         the amount received for the 4.5%/$4.50 Expense Reimbursement. The
         Company and NAMM, in conjunction with the Hospital, affiliated
         Physician Organizations and/or PHO providing medical services under
         contracts with respect to the Company, will review this percentage and
         amount annually (with a view to reducing them if the actual experience
         in the prior year shows that the percentage and/or amount utilized
         resulted in a material excess amount of reimbursement under this
         provision) so that the per-member-per-month component of the management
         fee provides sufficient funds only to meet break even expenses for the
         Company. In order to avoid duplication of services among the Company,
         the Hospital and the affiliated Physician Organization or PHO, NAMM may
         utilize the services of the Hospital, Physician Organization and PHO to
         the extent requested provided the services meet the standards set forth
         by NAMM and the cost of such services to the Company is less than that
         charged by NAMM at its cost, as described above.


                                      -21-
<PAGE>   22


                                   ARTICLE VI

                                  EXCLUSIVITY

6.01     JOINT MARKET STRATEGY

         The Joint Market Strategy will set forth the mutual and individual
         goals of the Company, NAMM, NHN and the Hospitals, Physician
         Organizations and PHOs affiliated with the Company. From the Company's
         perspective, the purpose of the Agreement and the Joint Market Strategy
         is to obtain NAMM's best efforts to Increase the market share of the
         Company and its affiliated Hospital, Physician Organization and PHO. It
         is a further goal that the Company or its Hospital affiliate be
         designated the local hospital, for purposes of this Agreement and
         Master Agreement having the right of first refusal to serve as the
         local hospital or a venture party for opportunities outside of the
         defined service area within Cook County. The Joint Market Strategy will
         describe the Company Service Area by identifying (a) those hospitals
         within the area that are considered as competitors of the Hospital(s)
         and where management of a Physician Organization or PHO by NAMM would
         be considered harmful to the competitive interests of the Company or
         the Hospital affiliated Physician Organizations and/or PHOs, when it
         attempts to secure payer contracts, whether Medicare, Medicaid or
         commercial; (b) competitors to any affiliated Physician Organization or
         PHO located outside a NHN Hospital Service Area ("Physician
         Organizations' Service Area"); (c) specific geographic region, as
         defined by zip codes, as to the Company's primary and secondary service
         areas, for purposes of this Agreement; (d) describe goals and
         opportunities for NAMM that are outside of the Hospitals' Service Areas
         and Physician Organizations' Service Areas, or which are within those
         areas but not available to and are not competitive with NHN, the
         Hospitals or affiliated Physician Organizations or PHOs; (e) describing
         those lines of business which the Parties agree to pursue in each
         service area (Including establishing definitions or "Managed Care" and
         "Commercial Business") and establish the principal that NAMM will use
         its best efforts not to take actions which would adversely affect the
         Hospital's other lines of business not being performed by NAMM for the
         Company; and (f) for ventures outside of the primary service area, the
         types of models for participation from those described in the Master
         Agreement. Once agreed to, within ninety days after the execution of
         the Master Agreement by NHN, the Company and NAMM, the Joint Market
         Strategy shall be amended in the event there is a membership change
         (addition or withdrawal) in which hospitals are Hospitals, or a
         Physician Organization or PHO becomes or ceases being affiliated with
         NHN, or NAMM, NHN and the Company otherwise agree.


                                      -22-
<PAGE>   23


         NAMM and the Company understand that the Company may from time to time
         introduce NAMM to physicians and/or Physician Organizations who are not
         affiliated with or participating in the Company. If after these
         introductions and during the term of this Agreement such physicians
         and/or Physician Organizations shall have further contract with NAMM,
         NAMM shall keep the Company advised of such discussions, as
         appropriate. NAMM and the Company understand that NAMM may from time to
         time introduce the Company to physicians and/or Physician Organizations
         who are not affiliated with or participating in the Company. If after
         these introductions and during the term of this Agreement such
         physicians and/or Physician Organizations shall have further contract
         with the Company, the Company shall keep NAMM advised of such
         discussions, as appropriate.

6.02     COMPANY EXCLUSIVITY

         For the term of this Agreement, the Company, the Hospital affiliated
         with the Company and its affiliated hospital entities will use NAMM to
         manage their Risk Contracts unless otherwise agreed to by NAMM. For the
         term of this Agreement, the Company, the Hospital affiliated with the
         Company and its affiliated hospital entities will not joint venture
         with, or otherwise engage, any third party company (other than NAMM)
         for the management of their risk business unless otherwise agreed to by
         NAMM.

6.03     NAMM EXCLUSIVITY

         NAMM will not, during the term of this Agreement, provide any services
         within the Company service area, as identified in the Joint Market
         Strategy, without the approval of NHN and the Company. NAMM shall not,
         for a one year period following the termination of this Agreement by
         the Company for Cause, provide risk services (or any other services
         being provided to the Company at the time of the termination or within
         the six months prior thereto) to the Company, Hospitals, Physician
         Organizations or PHOs affiliated with the Company, related providers,
         or to any other hospital system or integrated delivery network
         identified as competitors in the Joint Market Strategy, or to any
         hospital within fifteen miles of the Hospital. Further, during the term
         of this Agreement, NAMM shall not pro-actively solicit any of the
         physicians or Physician Organizations who are affiliated with or
         participating in the Company of any non-Medicare-risk lines of
         business. Notwithstanding the previous sentence, Company hereby grants
         specific permission for NAMM to enter into a management services
         agreement with MHCA. These exclusivity provisions apply, after
         termination of this Agreement, only if this Agreement is terminated for
         cause.


                                      -23-
<PAGE>   24


6.04     NON-SOLICITATION

         During the term of this Agreement and for a one year period thereafter,
         NAMM will not solicit for employment or services any person employed by
         Company nor the Hospitals, Physician Organizations and PHOs affiliated
         with the Company. During the term of this Agreement and for a one year
         period thereafter, neither the Company nor the Hospitals, Physician
         Organizations and PHOs affiliated with the Company will solicit for
         employment or services any person employed by NAMM, provided, however,
         that if this Agreement is extended for a total term of in excess of 20
         years, the restriction on hiring NAMM employees following termination
         of this Agreement will be deleted.


                                      -24-
<PAGE>   25


                                  ARTICLE VII

                              TERM AND TERMINATION

7.01     TERM

         The term of this Agreement shall be from the Effective Date for a term
         of seven years and shall automatically renew for one year terms
         thereafter unless (1) either party to this Agreement gives at least one
         year's prior written notice prior to the expiration of the term to the
         other that this Agreement will not be renewed, or (2) this Agreement is
         otherwise terminated as provided for herein. In no event shall this
         Agreement extend beyond the end of the original ten year term of the
         Master Agreement, unless otherwise agreed to by the Company, NAMM, NHN
         and the owners of the Company.

7.02     TERMINATION FOR CAUSE

         A party may terminate this Agreement by giving notice of termination to
         the other party, specifying the effective date of such termination, for
         the causes and within the time period set forth below:

         (A)      Ninety (90) days following the execution of the Master
                  Agreement, without notice, if the parties to this Agreement
                  and NHN fail to agree on a formal written Joint Market
                  Strategy (as defined in the Master Agreement);

         (B)      Within thirty (30) days of the date the party receives notice
                  of the Alternate Dispute Resolution ("ADR") decision if the
                  Parties to this Agreement and the Master Agreement cannot
                  agree as to the nature of an amendment to the Joint Market
                  Strategy in the event there is a membership change (addition
                  or withdrawal) in which hospitals are Hospitals (i.e., NHN
                  Hospitals), or a Physician Organization or PHO becomes or
                  ceases being affiliated with NHN, or otherwise, and the
                  Alternative Dispute Resolution provided for in the Master
                  Agreement does not provide a resolution to the issue by
                  providing for the changes required to the Joint Market
                  Strategy.

         (C)      Thirty days following notice if such other party: (i)
                  generally does not pay its debts as they become due or admits
                  in writing its inability to pay its debts, or makes a general
                  assignment for the benefit of creditors; (ii) commences any
                  case, proceeding or other action seeking to have an order for
                  relief entered on its behalf as a debtor or to adjudicate it
                  as bankrupt or insolvent, or seeking reorganization,
                  arrangement, adjustment, liquidation, dissolution or
                  composition of it or its debts under any law


                                      -25-
<PAGE>   26


                  relating to bankruptcy, insolvency, reorganization or relief
                  of debtors, or seeking appointment of a receiver, trustee,
                  custodian or other similar official for it or for all or any
                  substantial part of its property; or (iii) takes any corporate
                  or other action to authorize or in contemplation of any of the
                  actions set forth in this Section 7.02(C);

         (D)      Thirty days following notice if any case, proceeding or other
                  action against such other party hereunder is commenced seeking
                  to have an order for relief entered against it as debtor or to
                  adjudicate it as bankrupt or insolvent, or seeking
                  reorganization, arrangement, adjustment, liquidation,
                  dissolution or composition of it or its debts under any law
                  relating to bankruptcy, insolvency, reorganization or relief
                  of debtors, or seeking appointment of a receiver, trustee,
                  custodian or other similar official for it or for or any
                  substantial part of its property;

         (E)      Except with respect to criminal conduct as to which there is
                  no cure period, termination of this Agreement may occur under
                  the following circumstances, provided the non breaching party
                  provides thirty (30) days' written notice to the breaching
                  party describing the breach, and at the end of such thirty
                  (30) day period the breaching party has not corrected the
                  breach to the reasonable satisfaction of the non breaching
                  party:

                  (i)      Criminal conduct, violation of law or breach of
                           fiduciary duty by a Party to this Agreement.

                  (ii)     Material breach of a substantive provision of this
                           Agreement by a party or failure of NAMM to meet the
                           performance standards set forth in Section 3.11.

                  (iii)    Continuing failure of NAMM to maintain adequate
                           experienced staffing sufficient to provide
                           appropriate oversight to the Company or failure of
                           NAMM to manage the Company in an appropriate manner.

                  (iv)     Continuing failure of a party to use its best efforts
                           to enlist sufficient support of enough primary care
                           physicians to provide adequate levels of physician
                           services for Medicare-risk contracts entered into by
                           the Company.

                  (v)      Change in law as described in Article VIII, provided
                           that the attempt to address such change, as also
                           described in such section, is unsuccessful.

                  (vi)     Breach of a representation or warranty as described
                           in Article II.

         (F)      Upon an assignment or change of ownership which is not
                  authorized pursuant to Article VIII;


                                      -26-
<PAGE>   27


         (G)      If Hospital at any time ceases being affiliated with NHN, this
                  Agreement shall be terminated; or

         (H)      Failure to achieve any two (2) of the (3) Performance
                  Standards and Goals listed in Section 3.11 within a three (3)
                  year period from the Effective Date of this Agreement.

         (I)      Each period where an individual Physician Organization service
                  fund account or a Hospital service fund account runs an annual
                  deficit (which is above and beyond the budgeted losses to be
                  covered by the initial capitalization of the Company of
                  $300,000) for two (2) years in a row or three (3) years in any
                  given five (5) year period during the term of this Agreement.
                  SCMCA agrees to follow NAMM's reasonable recommendations
                  regarding operating changes required by NAMM to meet these
                  targets.

7.03     TERMINATION OF THE MASTER AGREEMENT

         Consistent with the terms and conditions of Section D of Article V of
         the Master Agreement, this Agreement shall terminate upon the effective
         date of the termination of the Master Agreement unless otherwise agreed
         to by the Company, NAMM, NHN and the owners of the Company.

7.04     TERMINATION BY MUTUAL AGREEMENT

         This Agreement may be terminated upon the mutual agreement of the
         Parties, which termination agreement shall specify all of the terms of
         such termination.

7.05     CONSEQUENCES OF TERMINATION

         (A)      In the event of termination of this Agreement, the parties
                  shall cooperate with one another to prevent a disruption of
                  the Company's operations. The procedures to govern the conduct
                  of the parties hereto after termination of this Agreement are
                  as follows:

                  (1)      NAMM shall conduct its affairs prior to the effective
                           date of the termination of this Agreement in such a
                           manner that it protects the interests of the Company
                           and allows an orderly takeover of NAMM's duties.


                                      -27-
<PAGE>   28


                  (2)      On the effective date of the termination of this
                           Agreement: (1) NAMM shall return all property
                           (Including, but not limited to, equipment, manuals
                           and supplies) of the Company in a manner that is
                           reasonably requested by the Company, that can be
                           accommodated by NAMM using existing NAMM equipment
                           and that will allow the Company to continue its
                           operations, and (2) the Company shall return all
                           property (Including, but not limited to, equipment,
                           manuals, programs of NAMM and supplies) of NAMM in a
                           manner that is reasonably requested by NAMM, that can
                           be accommodated by Company using existing Company
                           equipment and that will allow the Company to continue
                           its operations. NAMM will consult with the Company
                           after the date of termination with regard to the
                           above mentioned materials.

                  (3)      The provisions of Article V of this Agreement
                           regarding Exclusivity shall continue to apply
                           notwithstanding a termination of this Agreement.

                  (4)      Within 180 days following the effective date of the
                           termination of this Agreement, either party may
                           review any records or documents of the other party
                           relating to the Company and the services provided by
                           NAMM hereunder, in order that an accounting may be
                           conducted to settle all claims that each party hereto
                           may have against the other party.

                  (5)      Cooperate with Company or its designee in
                           transitioning the claims processing, claims payment
                           and surplus fund management or any other management
                           activity which obligations shall survive the
                           termination of this Agreement. Except as specified
                           elsewhere in this Agreement or the Master Agreement
                           or as required by law, NAMM shall have no obligations
                           to the Company after the date of termination of this
                           Agreement.

                  (6)      In the event of termination of this Agreement, either
                           party hereto shall be entitled to all remedies
                           provided in this Agreement in addition to any other
                           remedies that are available to it under law or
                           equity, Including the remedies of specific
                           performance, injunctions or any other measures that
                           either party hereto shall be believe it necessary to
                           take to protect its interests under this Agreement,
                           Including but not limited to its rights to protect
                           the exclusivity provisions hereof.


                                      -28-
<PAGE>   29


                                  ARTICLE VIII

                                 MISCELLANEOUS

8.01     ASSIGNMENT

         This Agreement shall not be assigned by either Party hereto without the
         prior written consent of the other Party provided, however, that the
         Company consents to NAMM assigning or subcontracting any of the
         services hereunder to a subsidiary of NAMM, or any of its subsidiaries
         or Affiliates, so long as such assignee or subcontractor agrees to be
         bound by the terms and conditions of this Agreement, NAMM agrees to
         continue to be bound by the terms of this Agreement and the conditions
         of the third paragraph of this Section 8.01 continue to be met.

         ORGANIZATIONAL CHANGE. It is recognized that the NAMM, NHN, the Company
         or its affiliated Hospitals, Physician Organizations and/or PHOs may
         undergo organizational changes during the term of this Agreement for
         good and valid reasons that are important to their future success. It
         is also recognized that the obligations and relationships established
         by the Master Agreement and this Agreement implement important
         strategies for the Parties and must, therefore, be protected from any
         harmful influence that might be caused by organizational evolution.

         NAMM. If NAMM or NAMM Parent is sold by PhyCor, Inc. to another
         company New Owner) or is spun off as a separate company ("Newco"),
         except as provided in the next sentence of this paragraph, the Company
         may terminate this Agreement with NAMM for Cause. However, without
         providing the Company with a right to terminate this Agreement with
         NAMM for Cause, a New Owner or Newco may result from an organizational
         change or may assign this Agreement to such New Owner or a Newco
         provided that: (a) New Owner or Newco is not a hospital network, payer,
         Physician Organization or other entity which could be considered as a
         competitor of NHN, the Company or its affiliated Hospitals, entities,
         Physician Organizations or PHOs, (b) NAMM shall continue to meet its
         obligations under the Master Agreement and this Agreement without a
         decrease in quality, responsiveness and effectiveness, (c) both Mr.
         Herbert Fritch and Dr. John Jordan have not left (other than for death
         or disability) their positions as senior officers in NAMM parent, and
         (d) Mr. Fritch continues to oversee the services provided by NAMM
         through his position as President and Chief Executive Officer of NAMM
         Parent.

         COMPANY. The Company may assign this Agreement to any new entity
         created through merger, acquisition, or other organizational change
         without the consent of NAMM unless such third party entity is a
         competitor of NAMM providing the same services to third parties that
         NAMM is providing to the Company. The Company shall be entitled to
         assign this Agreement to any subsidiary or affiliate corporation of the
         Company which is


                                      -29-
<PAGE>   30



         authorized to conduct business, and is duly formed as a for-profit or
         not-for-profit corporation in the State of Illinois.

         APPROVAL. If there is an assignment that is not approved as described
         herein, there shall be a termination of this Agreement as described
         above (unless the Parties agree otherwise), Notwithstanding the
         foregoing, the Parties agree that such approval will not be
         unreasonably withheld without good reason which shall be based on the
         anticipation of harm to the non-assigning Party. These reasons may
         Include, without limitation, consideration of the reputation of the
         party to which the agreement is proposed to be assigned, whether such
         party or a related party has sufficient experience in the area, whether
         such party or a related party is a competitor of NHN or of a Hospital
         or affiliated Physician Organization or PHO, or if such party's
         operations are otherwise Incompatible with those of the non-assigning
         Party.

8.02     BINDING ON SUCCESSORS AND PERMITTED ASSIGNS

         The terms, covenants, conditions, provisions and agreements herein
         contained shall be binding upon and inure to the benefit of the parties
         hereto, and to their permitted successors and assignees.

8.03     NON-ASSUMPTION OF LIABILITIES AND INDEMNIFICATION

         The parties agree to indemnify each other as follows:

         (A)      NAMM does not assume any of the obligations, liabilities or
                  debts of the Company and shall not, by virtue of its
                  performance hereunder, assume or become liable for any such
                  obligations, liabilities or debts of the Company. The Company
                  agrees to indemnify and hold NAMM harmless from and against
                  any and all such obligations, liabilities and debts of the
                  Company.

         (B)      The Company does not assume any of the obligations,
                  liabilities or debts of NAMM and shall not, by virtue of its
                  performance hereunder, assume or become liable for any such
                  obligations, liabilities or debts of NAMM. NAMM agrees to
                  indemnify and hold the Company harmless from and against any
                  and all such obligations, liabilities and debts of NAMM.

         (C)      Company and NAMM are independent contractors. Except as
                  otherwise provided in this Agreement, neither Company nor NAMM
                  nor any of their respective agents or employees shall be
                  liable for any act or omission of the other party; and each
                  party shall remain responsible for or liable for its own acts
                  or actions.


                                      -30-
<PAGE>   31


8.04     INSURANCE

         (A)      Company shall purchase and maintain, at the sole cost and
                  expense of Company, policies of comprehensive general
                  liability insurance and such other insurance in such amounts
                  as shall be agreed upon between the Company and NAMM as is
                  necessary to ensure Company and its agents and employees,
                  acting within the scope of their duties, against any claim or
                  claims arising by reason of personal injuries or death
                  occasioned directly or indirectly in connection with their
                  performance of any services by the Company or by such agents
                  or employees and in connection with any other coverage in
                  effect for Company as the date of this Agreement. The Company
                  shall provide NAMM with prior notification of any
                  cancellation, termination, or material alteration of any such
                  insurance policies. Prior to the expiration and/or
                  cancellation of any such policy Company shall secure
                  replacement of such insurance coverage upon the same terms and
                  provisions and furnish NAMM with a certificate of insurance
                  for such replacement insurance coverage. In the event any
                  insurance required under this section is maintained and in
                  claims-made form, subject to applicable provisions of law, the
                  party required to maintain such insurance shall ensure the
                  tail period for not less than two years after the expiration
                  of the application policy.

         (B)      NAMM shall purchase and maintain, at the sole cost and expense
                  of NAMM, policies of insurance as provided for in the Master
                  Agreement, in such amounts that shall be necessary to ensure
                  NAMM and its agents and employees acting within the scope of
                  their duties against any claim or claims arising by reason of
                  personal injuries or death occasioned directly or indirectly
                  in connection with the performance of any services by NAMM or
                  by such agents or employees and in connection with any other
                  coverage in effect for NAMM as of the date of this Agreement.
                  NAMM shall provide Company with prior notification of any
                  cancellation, termination or material alteration of any such
                  insurance policies. Prior to the expiration and/or
                  cancellation of any such policy, NAMM shall secure replacement
                  of such insurance coverage upon the same terms and provisions
                  and furnish Company with a certificate of insurance for such
                  replacement insurance coverage. In the event any insurance
                  required under this section is maintained and in claims-made
                  form, subject to applicable provisions of law, the party
                  required to maintain such insurance shall ensure the tail
                  period for not less than two years after the expiration of the
                  application policy. NAMM shall name the Company and the
                  Hospital as an additional insured under such policies. NAMM
                  will maintain these coverages (or such additional coverages as
                  the Company and NAMM shall agree to) for the Company and, to
                  the extent NAMM manages other Management Companies it will
                  obtain additional coverage for those purposes.


                                      -31-
<PAGE>   32


8.05     LAWS, REGULATIONS, LICENSES

         (A)      The parties agree that they shall at all times operate in a
                  lawful manner in accordance with all requirements of
                  applicable laws, rules and regulations. NAMM shall assist the
                  Company, in accordance with the terms of this Agreement, in
                  complying with all applicable federal, state, and local laws,
                  rules, and regulations relating to the Company and shall use
                  its best efforts to manage and provide administrative services
                  to the Company so that it shall maintain any necessary
                  licenses, permits, consents, and approvals from all
                  governmental agencies that have jurisdiction over the
                  operations of the Company. NAMM shall not be obligated to the
                  Company for failure of the Company to comply with any such
                  laws, rules, and regulations or for failure of the Company to
                  maintain any such licenses, permits, consents, and approvals,
                  if the failure of the Company to comply is not solely caused
                  by any act or failure to act by NAMM or its employees, agents,
                  representatives or contractors.

         (B)      Neither party shall knowingly, purposely or negligently take
                  any action that shall cause any government authority having
                  jurisdiction over the operation of the Company or NAMM to
                  institute any proceeding for the rescission or revocation of
                  any necessary license, permit, consent or approval.

         (C)      NAMM shall, with the written approval of the Company, have the
                  right, but not the obligation, to contest by appropriate legal
                  proceedings, diligently conducted in good faith in the name of
                  the Company, the validity or application of any law,
                  ordinance, rule, ruling, regulations, order or requirement of
                  any government agency having jurisdiction over the operation
                  of the Company. After having given its written approval, the
                  Company shall cooperate with NAMM with regard to the contest,
                  and the Company shall pay the reasonable attorneys' fees,
                  costs or fines Incurred with regard to the contest.

8.06     RIGHTS CUMULATIVE

         No right or remedy herein conferred upon or reserved to either NAMM or
         the Company is intended to be exclusive of any other right or remedy,
         and each and every right and remedy shall be cumulative and in addition
         to any other right or remedy given hereunder, or now or hereafter
         legally existing upon the occurrence of any event of default hereunder.


                                      -32-
<PAGE>   33


8.07     Waiver

         The failure of either NAMM or the Company to insist at any time upon
         the strict observance or performance of any of the provisions of this
         Agreement or to exercise any right or remedy as provided in this
         Agreement shall not impair any such right or remedy or be construed as
         a waiver or relinquishment thereof. Every right and remedy given by
         this Agreement to the parties hereto may be exercised from time to time
         and as often as may be deemed expedient by the parties hereto, as the
         case may be.

8.08     CAPTIONS AND HEADINGS

         The captions and headings throughout this Agreement are for convenience
         and reference only, and the words contained therein shall in no way be
         held or deemed to define, limit, describe, explain, modify, amplify, or
         add to the interpretation, construction or meaning of any provision of
         or to the scope or intent of this Agreement nor in any way affect this
         Agreement.

8.09     IMPOSSIBILITY OF PERFORMANCE

         Neither the Company nor NAMM shall be deemed to be in violation of this
         Agreement if prevented from performing any obligations hereunder for
         any reasons beyond its control Including, without limitation, acts of
         God or of any public enemy, flood, storm, strike, or action or inaction
         of any federal, state or local regulatory agency. Nothing in this
         Section 8.09 shall be construed to relieve NAMM or the Company, as the
         case may be, of its duty to provide the Company or NAMM, as the case
         may be, with notices it may receive of any action necessary for
         compliance with federal, state or local requirements.

8.10     NOTICE

         All notices, demands, and requests required hereunder shall be in
         writing and shall be deemed given when mailed, postage prepaid, via
         registered or certified mail or via overnight courier service, return
         receipt requested, to the following address, and/or to such other
         address or to such other person as may be designated by written notice
         given from time to time during the term of this Agreement by one party
         to the other:

         (A) to the Company at:     Swedish Covenant Managed Care Alliance, Inc.
                                    Attention: Chairman of the Board
                                    5145 North California Avenue
                                    Chicago, IL 60625


                                      -33-
<PAGE>   34


         (B) to NAMM at:            North American Medical Management -
                                      Illinois, Inc.
                                    Attention: President
                                    188 Industrial Drive - Suite 428
                                    Elmhurst, IL 60126

8.11     GOVERNING LAW

         This Agreement has been executed and delivered in the State of Illinois
         and all of the terms and provisions thereof and the rights and
         obligations of the parties hereto shall be interpreted and enforced in
         accordance with the laws thereof, without regard to the conflicts of
         laws sections thereof. Notwithstanding anything contained in this
         Agreement to the contrary, the parties agree to the exclusive
         jurisdiction of any local or state court located in Cook County,
         Illinois, or the United States District Court for the District of
         Illinois, and the parties waive any objection which it may have based
         on improper venue or forum non convenience to the conduct of any
         proceeding in such court; provided, further, nothing contained in this
         Agreement shall affect the right of the parties to serve legal process
         in any manner permitted by law.

8.12     INVALIDITY OF PROVISIONS

         The invalidity or unenforceability of any term or condition contained
         herein shall in no way affect the validity or enforceability of the
         remainder of this Agreement. Any such provision held or declared by a
         court of competent jurisdiction to be invalid, illegal or unenforceable
         under any law applicable thereto, shall be deemed deleted from this
         Agreement without impairing or prejudicing the validity, legality, or
         enforceability of the remaining provisions hereof


                                      -34-
<PAGE>   35


8.13     CHANGE OF LAW

         In the event that there shall be a change in applicable state or
         federal law or specifically in Medicare or Medicaid statutes,
         regulations, or instructions (or in the application thereof), the
         adoption of new legislation, judicial interpretations, or a change in
         any other third party payer reimbursement system, or any similar matter
         which, in a Party's opinion materially and adversely affects such
         Party's (or a Hospital's or affiliated Physician Organization's or
         PHO's) rights or obligations or materially changes the economic or
         legal relationships between the Parties as set forth in this Agreement
         (a "Change") a Party may request that this Agreement shall terminate
         upon at least thirty days prior advance written notice to the other
         Parties, provided that (i) the Parties will attempt in good faith to
         amend the provisions of this Agreement to comply with such Change so as
         to not materially change the economic or legal relationships between
         the Parties as set forth in this Agreement, (ii) such change is
         accompanied by any required changes to the Master Agreement, upon the
         consent of the Parties thereto, and (iii) any such termination cannot
         occur before the effective date of the Change relied upon to terminate
         this Agreement under this Section. If the Parties and their attorneys
         do not agree that the Change materially adversely affects their
         financial operations, and/or whether proposed changes to this Agreement
         can be made which address the Change in a way which does not materially
         and adversely affects such Party's (or a Hospitals or affiliated
         Physician Organization's or PHO's) rights or obligations or materially
         change the economic or legal relationships between the Parties as set
         forth in this Agreement, an arbitrator, chosen in the manner described
         in the ADR, shall decide such undetermined matters; provided, however,
         that if the ADR process has not been completed by the effective date of
         the Change no Party shall be required to take actions which it
         reasonably believes would no longer be legal following the change,
         subject to completion of the ADR process.

8.14     DISPUTE RESOLUTION

         If any controversy, dispute or claim ("Dispute") between the parties
         arises out of or relates to this Agreement, which the parties cannot
         settle by good faith negotiations between them, the parties agree that
         any of them may, upon written notice to the others, submit the Dispute
         to the ADR process described in this Master Agreement. The Parties
         shall split the cost of a mediation. This Section 8.14 is not
         applicable if a party believes that it will suffer irreparable harm by
         any delay caused by this mediation process. Except as specifically set
         forth in this Agreement or in the Master Agreement, in the event
         mediation does not resolve the Dispute within thirty (30) days, or
         other period mutually agreeable to the parties, the parties may pursue
         any and all remedies available to them at law or in equity.


                                      -35-
<PAGE>   36


8.15     THIRD PARTY BENEFICIARIES

         The parties to this Agreement intend that there be no third party
         beneficiaries of this Agreement other than NHN to the extent required
         to effectuate the terms of the Master Agreement.

8.16     ENTIRE AGREEMENT; CONFLICTS

         This Agreement, Including the Master Agreement Incorporated herein,
         contains the entire agreement between the parties hereto with regard to
         this subject matter, and no representations or agreements, oral or
         otherwise, between the parties not embodied herein or attached hereto
         shall be of any force and effect. Any additions or amendments to this
         Agreement subsequent hereto shall be of no force and effect unless in
         writing and signed by the parties hereto. In the event there is a
         conflict between the terms and conditions of this Agreement and the
         Master Agreement, the Master Agreement shall control.

8.17     EXHIBITS

         All Exhibits to this Agreement are to be considered part of this
         Agreement, as if Incorporated herein, and all terms, provisions and
         conditions stated in such Exhibits shall be binding on the parties to
         this Agreement.


                                      -36-
<PAGE>   37



8.18     CONFLICTS OF INTEREST STATEMENTS

         NAMM agrees to execute a standard conflict of interest statement, on an
         annual basis, with the first such signing occurring on the date hereof
         (in the form of Exhibit F attached hereto).

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and
year set forth above.

                                    SWEDISH COVENANT MANAGED CARE
                                    ALLIANCE, INC.

                                    By: /s/
                                       --------------------------------

                                    Its:  Chairman of the Board
                                         ------------------------------

                                    Date:  9-24-96
                                          -----------------------------

                                    NORTH AMERICAN MEDICAL MANAGEMENT -
                                    ILLINOIS, INC.

                                    By: /s/ George E. Stevens
                                       ---------------------------------
                                        George E. Stevens

                                    Its:  President
                                         -------------------------------

                                    Date: 9-24-96
                                          ------------------------------



                                      -37-