EXHIBIT 10.11

                                 $2,500,000.00





                           LOAN AND SECURITY AGREEMENT

                                  by and among

                         MEDICAL ASSET MANAGEMENT, INC.
                   HEALTHCARE PROFESSIONAL MANAGEMENT, INC.


                                  ("Borrower")

                                       and

                               HCFP FUNDING, INC.

                                   ("Lender")





                                November 12, 1997


<PAGE>


                           LOAN AND SECURITY AGREEMENT


      THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made as of this 12th
day of November,  1997, by and among MEDICAL ASSET MANAGEMENT,  INC., a Delaware
corporation,  and  HEALTHCARE  PROFESSIONAL  MANAGEMENT,  INC.,  a  Pennsylvania
corporation  (collectively,  "Borrower"),  and HCFP  FUNDING,  INC.,  a Delaware
corporation ("Lender").

                                    RECITALS

      A. Borrower desires to establish certain  financing  arrangements with and
borrow funds from Lender,  and Lender is willing to establish such  arrangements
for and make  loans  and  extensions  of credit  to  Borrower,  on the terms and
conditions set forth below.

      B. The  parties  desire  to  define  the  terms  and  conditions  of their
relationship and to reduce their agreements to writing.

      NOW,  THEREFORE,  in consideration of the promises and covenants contained
in this Agreement,  and for other consideration,  the receipt and sufficiency of
which are acknowledged, the parties agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

      As used in this  Agreement,  the following  terms shall have the following
meanings:

     SECTION 1.1.  ACCOUNT.  "Account" means any right to payment for goods sold
or leased or services  rendered,  whether or not  evidenced by an  instrument or
chattel paper, and whether or not earned by performance.

     SECTION 1.2. ACCOUNT DEBTOR. "Account Debtor" means any Person obligated on
any  Account of  Borrower,  including  without  limitation,  any Insurer and any
Medicaid/Medicare Account Debtor.

     SECTION  1.3.  AFFILIATE.  "Affiliate"  means,  with respect to a specified
Person, any Person directly or indirectly  controlling,  controlled by, or under
common control with the specified  Person,  including  without  limitation their
stockholders and any Affiliates  thereof.  A Person shall be deemed to control a
corporation or other entity if the Person possesses, directly or indirectly, the
power to direct or cause the  direction  of the  management  and business of the
corporation or other entity, whether through the ownership of voting securities,
by contract, or otherwise.


<PAGE>


     SECTION 1.4. AGREEMENT. "Agreement" means this Loan and Security Agreement,
as it may be amended or supplemented from time to time.

     SECTION 1.5. BASE RATE.  "Base Rate" means a rate of interest  equal to two
percent (2%) above the "Prime Rate of Interest".

     SECTION 1.6. BORROWED MONEY. "Borrowed Money" means any obligation to repay
money,  any  indebtedness  evidenced  by notes,  bonds,  debentures  or  similar
obligations,  any obligation  under a conditional  sale or other title retention
agreement and the net  aggregate  rentals under any lease which under GAAP would
be capitalized on the books of Borrower or which is the  substantial  equivalent
of the financing of the property so leased.

     SECTION  1.7.  BORROWER.  "Borrower"  has  the  meaning  set  forth  in the
Preamble.

     SECTION 1.8. BORROWING BASE.  "Borrowing Base" has the meaning set forth in
Section 2.1(d).

     SECTION 1.9. BUSINESS DAY.  "Business Day" means any day on which financial
institutions are open for business in the State of Maryland, excluding Saturdays
and Sundays.

     SECTION 1.10. CLOSING;  CLOSING DATE. "Closing" and "Closing Date" have the
meanings set forth in Section 5.3.

     SECTION 1.11. COLLATERAL. "Collateral" has the meaning set forth in Section
3.1.

     SECTION 1.12. COMMITMENT FEE. "Commitment Fee" has the meaning set forth in
Section 2.4(a).

     SECTION  1.13.  CONCENTRATION  ACCOUNT.  "Concentration  Account"  has  the
meaning set forth in Section 2.3.

     SECTION  1.14.  CONTROLLED  GROUP.  "Controlled  Group" means a "controlled
group" within the meaning of Section 4001(b) of ERISA.

     SECTION  1.15.  COST REPORT  SETTLEMENT  ACCOUNT.  "Cost Report  Settlement
Account"  means an  "Account"  owed to Borrower by a  Medicaid/Medicare  Account
Debtor  pursuant to any cost report,  either interim,  filed or audited,  as the
context may require.

     SECTION 1.16. DEFAULT RATE.  "Default Rate" means a rate per annum equal to
five percent (5%) above the then applicable Base Rate.

     SECTION 1.17. ERISA. "ERISA" has the meaning set forth in Section 4.12.



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     SECTION 1.18. EVENT OF DEFAULT.  "Event of Default" and "Events of Default"
have the meanings set forth in Section 8.1.

     SECTION 1.19. GAAP. "GAAP" means generally accepted  accounting  principles
applied in a matter  consistent  with the  financial  statements  referred to in
Section 4.7.

     SECTION 1.20.  GOVERNMENTAL AUTHORITY.  "Governmental  Authority" means and
includes any federal, state, District of Columbia,  county,  municipal, or other
government  and  any   department,   commission,   board,   bureau,   agency  or
instrumentality thereof, whether domestic or foreign.

     SECTION 1.21. HAZARDOUS MATERIAL. "Hazardous Material" means any substances
defined or designated as hazardous or toxic waste,  hazardous or toxic material,
hazardous or toxic  substance,  or similar term, by any  environmental  statute,
rule or regulation or any Governmental Authority.

     SECTION 1.22. HIGHEST LAWFUL RATE.  "Highest Lawful Rate" means the maximum
lawful rate of interest  referred to in Section 2.7 that may accrue  pursuant to
this Agreement.

     SECTION  1.23.  INSURER.  "Insurer"  means a Person that  insures a Patient
against  certain of the costs incurred in the receipt by such Patient of Medical
Services,  or that has an agreement  with  Borrower to  compensate  Borrower for
providing services to a Patient.

     SECTION 1.24. LENDER. "Lender" has the meaning set forth in the Preamble.

     SECTION 1.25. LOAN. "Loan" has the meaning set forth in Section 2.1(a).

     SECTION 1.26.  LOAN  DOCUMENTS.  "Loan  Documents"  means and includes this
Agreement,  the  Note,  and each  and  every  other  document  now or  hereafter
delivered in connection therewith,  as any of them may be amended,  modified, or
supplemented from time to time.

     SECTION 1.27. LOAN  MANAGEMENT  FEE. "Loan  Management Fee" has the meaning
set forth in Section 2.4(c).

     SECTION 1.28. LOCKBOX. "Lockbox" has the meaning set forth in Section 2.3.

     SECTION  1.28 A.  LOCKBOX  ACCOUNT.  "Lockbox  Account"  means  an  account
maintained  by  Borrower  at the  Lockbox  Bank into  which all  collections  of
Accounts are paid directly.

     SECTION  1.29.  LOCKBOX BANK.  "Lockbox  Bank" has the meaning set forth in
Section 2.3.

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     SECTION  1.30.  MAXIMUM LOAN AMOUNT.  "Maximum Loan Amount" has the meaning
set forth in Section 2.1(a).

     SECTION 1.31. MEDICAID/MEDICARE ACCOUNT DEBTOR. "Medicaid/ Medicare Account
Debtor"  means any  Account  Debtor  which is (i) the  United  States of America
acting under the  Medicaid/Medicare  program established  pursuant to the Social
Security  Act, (ii) any state or the District of Columbia  acting  pursuant to a
health plan  adopted  pursuant to Title XIX of the Social  Security Act or (iii)
any agent, carrier, administrator or intermediary for any of the foregoing.

     SECTION 1.32.  MEDICAL SERVICES.  Medical and health care services provided
to a Patient,  including,  but not limited to,  medical and health care services
provided to a Patient and performed by Borrower which are covered by a policy of
insurance  issued by an Insurer,  and  includes  physician  services,  nurse and
therapist services, dental services, hospital services, skilled nursing facility
services,  comprehensive  outpatient  rehabilitation  services, home health care
services,  residential  and  out-patient  behavioral  healthcare  services,  and
medicine  or health  care  equipment  provided  by  Borrower  to a Patient for a
necessary or specifically requested valid and proper medical or health purpose.

     SECTION 1.33. NOTE. "Note" has the meaning set forth in Section 2.1(c).

     SECTION  1.34.  OBLIGATIONS.  "Obligations"  has the  meaning  set forth in
Section 3.1.

     SECTION  1.35.  PATIENT.  "Patient"  means  any  Person  receiving  Medical
Services from Borrower and all Persons  legally  liable to pay Borrower for such
Medical Services other than Insurers.

     SECTION 1.36. PERMITTED LIENS. "Permitted Liens" means: (a) liens for taxes
not  delinquent,  or which are being  contested in good faith and by appropriate
proceedings  which  suspend  the  collection  thereof  and in  respect  of which
adequate  reserves have been made  (provided  that such  proceedings  do not, in
Lender's sole  discretion,  involve any substantial  danger of the sale, loss or
forfeiture of such property or assets or any interest therein);  (b) deposits or
pledges to secure obligations under workmen's  compensation,  social security or
similar laws, or under unemployment insurance; (c) deposits or pledges to secure
bids,  tenders,  contracts  (other  than  contracts  for the  payment of money),
leases, statutory obligations,  surety and appeal bonds and other obligations of
like  nature  arising  in the  ordinary  course  of  business;  (d)  mechanic's,
workmen's,  materialmen's  or other like liens arising in the ordinary course of
business  with  respect  to  obligations  which are not due,  or which are being
contested in good faith by appropriate  proceedings which suspend the collection
thereof and in respect of which adequate  reserves have been made (provided that
such  proceedings do not, in Lender's sole  discretion,  involve any substantial
danger  of the  sale,  loss or  forfeiture  of such  property  or  assets or any
interest  therein);  (e) liens and  encumbrances  in favor of Lender;  (f) liens
granted in connection  with the lease or purchase of property or assets financed
by  borrowings  permitted  by  



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<PAGE>

Section 7.1 (provided, however, that no such borrowings permitted by Section 7.1
may be  secured by liens on any of the  Collateral);  and (g) liens set forth on
Schedule 1.36.

     SECTION  1.37.   PERSON.   "Person"  means  an   individual,   partnership,
corporation,  trust,  joint  venture,  joint stock  company,  limited  liability
company,  association,  unincorporated organization,  Governmental Authority, or
any other entity.

     SECTION 1.38. PLAN. "Plan" has the meaning set forth in Section 4.12.

     SECTION  1.39.  PREMISES.  "Premises"  has the meaning set forth in Section
4.15.

     SECTION 1.40.  PRIME RATE OF INTEREST.  "Prime Rate of Interest" means that
rate of interest designated as such by Fleet National Bank of Connecticut, N.A.,
or any successor thereto, as the same may from time to time fluctuate.

     SECTION 1.41.  PROHIBITED  TRANSACTION.  "Prohibited  Transaction"  means a
"prohibited  transaction"  within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Internal Revenue Code.

     SECTION 1.42.  QUALIFIED ACCOUNT.  "Qualified  Account" means an Account of
Borrower  generated in the ordinary course of Borrower's  business from the sale
of goods or  rendition  of medical  services  which  Lender,  in its sole credit
judgment,  deems to be a Qualified  Account.  Without limiting the generality of
the  foregoing,  no Account shall be a Qualified  Account if: (a) the Account or
any  portion  thereof is  payable by an  individual  beneficiary,  recipient  or
subscriber  individually  and not  directly to  Borrower by a  Medicaid/Medicare
Account Debtor or commercial  medical insurance carrier  acceptable to Lender in
its sole discretion; (b) the Account remains unpaid more than one hundred twenty
(120) days past the claim or  invoice  date;  (c) the  Account is subject to any
defense, set-off, counterclaim, deduction, discount, credit, chargeback, freight
claim,  allowance, or adjustment of any kind; (d) any part of any goods the sale
of which has given rise to the Account has been  returned,  rejected,  lost,  or
damaged; (e) if the Account arises from the sale of goods by Borrower, such sale
was not an absolute sale or on consignment or on approval or on a sale-or-return
basis or subject to any other repurchase or return agreement, or such goods have
not been  shipped to the  Account  Debtor or its  designee;  (f) if the  Account
arises from the  performance  of services,  such services have not been actually
been  performed or were  undertaken  in violation of any law; (g) the Account is
subject to a lien other than a Permitted Lien; (h) Borrower knows or should have
known of the  bankruptcy,  receivership,  reorganization,  or  insolvency of the
Account  Debtor;  (i) the Account is evidenced by chattel paper or an instrument
of any kind,  or has been reduced to judgment;  (j) the Account is an Account of
an Account  Debtor  having its principal  place of business or executive  office
outside the United States;  (k) the Account Debtor is an Affiliate or Subsidiary
of Borrower;  (l) more than ten percent  (10%) of the  aggregate  balance of all
Accounts owing from the Account Debtor  obligated on the Account are outstanding
more than one  hundred  fifty  (150) days past  their  invoice  date;  (m) fifty
percent  (50%) or more of the  aggregate  unpaid  Accounts  from any  


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individual Account Debtor are not deemed Qualified Accounts  hereunder;  (n) the
total  unpaid  Accounts of the Account  Debtor,  except for a  Medicaid/Medicare
Account  Debtor,  exceed twenty percent (20%) of the net amount of all Qualified
Accounts  (including  Medicaid/Medicare  Account  Debtors);  (o)  any  covenant,
representation or warranty  contained in the Loan Documents with respect to such
Account  has  been  breached;  or (p)  the  Account  fails  to meet  such  other
specifications  and  requirements  which may from time to time be established by
Lender.

     SECTION  1.43.  REPORTABLE  EVENT.  "Reportable  Event" means a "reportable
event" as defined in Section 4043(b) of ERISA.

     SECTION  1.44.  REVOLVING  CREDIT  LOAN.  "Revolving  Credit  Loan" has the
meaning set forth in Section 2.1(b).

     SECTION 1.45. TERM. "Term" has the meaning set forth in Section 2.8.


                                   ARTICLE II

                                      LOAN

      SECTION 2.1.  TERMS.

            (a) The maximum  aggregate  principal  amount of credit  extended by
Lender to Borrower  hereunder  (the "Loan") that will be outstanding at any time
is Two Million Five Hundred  Thousand and No/100  Dollars  ($2,500,000.00)  (the
"Maximum Loan Amount").

            (b) The Loan shall be in the nature of a  revolving  line of credit,
and shall  include sums  advanced and other credit  extended by Lender to or for
the  benefit  of  Borrower  from  time to time  under  this  Article  II (each a
"Revolving  Credit  Loan") up to the  Maximum  Loan  Amount  depending  upon the
availability  in the Borrowing  Base,  the requests of Borrower  pursuant to the
terms and conditions of Section 2.2 below, and on such other basis as Lender may
reasonably  determine.  The  outstanding  principal  balance  of  the  Loan  may
fluctuate from time to time, to be reduced by repayments made by Borrower (which
may be made without penalty or premium), and to be increased by future Revolving
Credit Loans,  advances and other  extensions of credit to or for the benefit of
Borrower,  and shall be due and payable in full upon the expiration of the Term.
For purposes of this Agreement, any determination as to whether there is ability
within the Borrowing  Base for advances or extensions of credit shall be made by
Lender in its sole discretion and is final and binding upon Borrower.

            (c) At  Closing,  Borrower  shall  execute  and  deliver to Lender a
promissory note evidencing Borrower's  unconditional  obligation to repay Lender
for Revolving Credit Loans,  advances, and other extensions of credit made under
the Loan, in the form of Exhibit A to


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this  Agreement  (the  "Note"),  dated the date hereof,  payable to the order of
Lender in accordance  with the terms thereof.  The Note shall bear interest from
the date thereof until repaid,  with interest  payable monthly in arrears on the
first  Business  Day of each  month,  at a rate per  annum  (on the basis of the
actual  number of days  elapsed over a year of 360 days) equal to the Base Rate,
provided  that after an Event of Default such rate shall be equal to the Default
Rate. Each Revolving Credit Loan, advance and other extension of credit shall be
deemed evidenced by the Note,  which is deemed  incorporated by reference herein
and made a part hereof.

            (d) Subject to the terms and conditions of this Agreement,  advances
under the Loan shall be made  against a borrowing  base equal to eighty  percent
(80%) of Qualified Accounts due and owing from any Medicaid/Medicare, Insurer or
other Account Debtor (the "Borrowing Base").

     SECTION 2.2.  LOAN  ADMINISTRATION.  Borrowings  under the Loan shall be as
follows:

            (a) A request for a Revolving Credit Loan shall be made, or shall be
deemed to be made, in the following manner:  (i) Borrower may give Lender notice
of its intention to borrow, in which notice Borrower shall specify the amount of
the proposed borrowing and the proposed borrowing date, not later than 2:00 p.m.
Eastern  time  two (2)  Business  Day  prior  to the  proposed  borrowing  date;
provided,  however, that no such request may be made at a time when there exists
an Event of Default; and (ii) the becoming due of any amount required to be paid
under this Agreement,  whether as interest or for any other Obligation, shall be
deemed  irrevocably to be a request for a Revolving  Credit Loan on the due date
in the amount required to pay such interest or other Obligation.

            (b) Borrower hereby  irrevocably  authorizes  Lender to disburse the
proceeds of each Revolving Credit Loan requested,  or deemed to be requested, as
follows:  (i) the  proceeds  of  each  Revolving  Credit  Loan  requested  under
subsection  2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank
account  as may be  agreed  upon by  Borrower  or  Lender  from  time to time or
elsewhere if pursuant to written direction from Borrower;  and (ii) the proceeds
of each Revolving  Credit Loan requested under  subsection  2.2(a)(ii)  shall be
disbursed by Lender by way of direct  payment of the relevant  interest or other
Obligation.

            (c) All  Revolving  Credit Loans,  advances and other  extensions of
credit to or for the benefit of Borrower shall constitute one general Obligation
of Borrower, and shall be secured by Lender's lien upon all of the Collateral.

            (d) Lender  shall enter all  Revolving  Credit  Loans as debits to a
loan  account in the name of Borrower and shall also record in said loan account
all payments made by Borrower on any  Obligations and all proceeds of Collateral
which are  indefeasibly  paid to Lender,  and may record therein,  in accordance
with customary accounting practice, other debits and credits, including interest
and all charges and expenses  properly  chargeable to Borrower.  All collections
into the Concentration Account pursuant to Section 2.3 shall be applied first to
fees,  


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costs and expenses due and owing under the Loan Documents,  then to interest due
and owing  under the Loan  Documents,  and then to  principal  outstanding  with
respect to Revolving Credit Loans.

            (e) Lender will  account to  Borrower  monthly  with a statement  of
Revolving  Credit Loans,  charges and payments made pursuant to this  Agreement,
and  such  account  rendered  by  Lender  shall be  deemed  final,  binding  and
conclusive upon Borrower unless Lender is notified by Borrower in writing to the
contrary  within  thirty  (30)  days of the date  each  accounting  is mailed to
Borrower.  Such notice shall be deemed an objection to those items  specifically
objected to therein.

     SECTION  2.3.  COLLECTIONS,   DISBURSEMENTS,  BORROWING  AVAILABILITY,  AND
LOCKBOX ACCOUNT.  Borrower shall maintain a lockbox account (the "Lockbox") with
Bank One Arizona,  N.A.(the  "Lockbox Bank"),  subject to the provisions of this
Agreement,  and shall  execute with the Lockbox Bank a Lockbox  Agreement in the
form attached as Exhibit B, and such other agreements  related thereto as Lender
may require.  Borrower shall ensure that after it receives payment,  it deposits
all  collections of Accounts into the Lockbox,  and that all funds paid into the
Lockbox are  immediately  transferred  into a depository  account  maintained by
Lender at Bank One Arizona,  N.A. or U.S.  Bank N.A., as determined by Lender in
its sole discretion and communicated to Borrower (the "Concentration  Account").
Lender  shall  apply,  on  a  daily  basis,  all  funds   transferred  into  the
Concentration  Account  pursuant to this  Section 2.3 to reduce the  outstanding
indebtedness  under the Loan (in  accordance  with  Section  2.2(d)) with future
Revolving  Credit Loans,  advances and other  extensions of credit to be made by
Lender under the conditions set forth in this Article II. Borrower  acknowledges
and agrees that its compliance  with the terms of this Section 2.3 is essential,
and that upon its failure to comply with any such terms Lender shall be entitled
to assess a non-compliance  fee which shall operate to increase the Base Rate by
two percent (2%) per annum during any period of non-compliance.  Lender shall be
entitled  to assess  such fee  whether or not an Event of Default is declared or
otherwise  occurs.  All funds  transferred  from the  Concentration  Account for
application to Borrower's  indebtedness to Lender shall be applied to reduce the
Loan balance,  but for purposes of  calculating  interest  shall be subject to a
nine (9) Business  Day  clearance  period.  If as the result of  collections  of
Accounts  pursuant  to the terms and  conditions  of this  Section  2.3 a credit
balance exists with respect to the  Concentration  Account,  such credit balance
shall not  accrue  interest  in favor of  Borrower,  but shall be  available  to
Borrower at any time or times for so long as no Event of Default exists.




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     SECTION 2.4. FEES.

            (a) At  Closing,  Borrower  shall  unconditionally  pay to  Lender a
commitment  fee  equal to one  percent  (1%) of the  Maximum  Loan  Amount  (the
"Commitment Fee").

            (b) For so  long as the  Loan is  available  to  Borrower,  Borrower
unconditionally  shall pay to Lender a monthly usage fee (the "Usage Fee") equal
to one twelfth (1/12th) of one percent (1.0%) of the average amount by which the
Maximum  Loan Amount  exceeds the average  amount of the  outstanding  principal
balance of the Revolving  Credit Loans during the preceding month. The Usage Fee
shall be payable monthly in arrears on the first Business Day of each successive
calendar month.

            (c) For so  long as the  Loan is  available  to  Borrower,  Borrower
unconditionally  shall pay to Lender a monthly  loan  management  fee (the "Loan
Management  Fee") equal to fifteen one hundredths of one percent  (0.15%) of the
average  amount of the  outstanding  principal  balance of the Revolving  Credit
Loans  during the  preceding  month.  The Loan  Management  Fee shall be payable
monthly in arrears on the first day of each successive calendar month.

            (d)  Borrower  shall  pay to  Lender  all  out-of-pocket  audit  and
appraisal fees in connection with audits and appraisals of Borrower's  books and
records and such other matters as Lender shall deem appropriate,  which shall be
due and payable on the first  Business  Day of the month  following  the date of
issuance by Lender of a request for payment thereof to Borrower.

            (e) Borrower shall pay to Lender, on demand, any and all fees, costs
or expenses  which  Lender or any  participant  pays to a bank or other  similar
institution  (including,  without  limitation,  any fees  paid by  Lender to any
participant) arising out of or in connection with (i) the forwarding to Borrower
or any other Person on behalf of Borrower,  by Lender,  of proceeds of Revolving
Credit Loans made by Lender to Borrower pursuant to this Agreement, and (ii) the
depositing for collection, by Lender or any participant, of any check or item of
payment  received  or  delivered  to Lender or any  participant  on  account  of
Obligations.

      SECTION 2.5.  PAYMENTS.  Principal  payable on account of Revolving Credit
Loans shall be payable by Borrower to Lender  immediately  upon the  earliest of
(i) the  receipt by Borrower of any  proceeds of any of the  Collateral,  to the
extent  of such  proceeds,  (ii)  the  occurrence  of an  Event  of  Default  in
consequence of which the Loan and the maturity of the payment of the Obligations
are accelerated,  or (iii) the termination of this Agreement pursuant to Section
2.8 hereof;  provided,  however, that if any advance made by Lender in excess of
the Borrowing Base shall exist at any time,  Borrower  shall,  immediately  upon
demand,  repay such overadvance.  Interest accrued on the Revolving Credit Loans
shall be due on the  earliest of (i) the first  Business  Day of each month (for
the  immediately  preceding  month),  computed on the last  calendar  day of the
preceding  month,  (ii) the  occurrence of an Event of Default in consequence of
which  the  Loan  and  the  maturity  of  the  payment  of the  Obligations  are
accelerated,  or (iii) the 


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termination  of this  Agreement  pursuant to Section  2.8 hereof.  Except to the
extent  otherwise set forth in this Agreement,  all payments of principal and of
interest on the Loan,  all other charges and any other  obligations  of Borrower
hereunder,  shall be made to Lender to the Concentration Account, in immediately
available funds.

      SECTION 2.6. USE OF PROCEEDS.  The proceeds of Lender's advances under the
Loan shall be used  solely for  working  capital and for other costs of Borrower
arising in the ordinary course of Borrower's business.

      SECTION  2.7.  INTEREST  RATE  LIMITATION.  The parties  intend to conform
strictly  to the  applicable  usury laws in effect  from time to time during the
term of the Loan. Accordingly,  if any transaction  contemplated hereby would be
usurious under such laws, then  notwithstanding  any other provision hereof: (i)
the aggregate of all interest that is contracted for, charged, or received under
this  Agreement  or under any other Loan  Document  shall not exceed the maximum
amount of interest  allowed by applicable law (the "Highest  Lawful Rate"),  and
any excess  shall be promptly  credited to Borrower by Lender (or, to the extent
that such  consideration  shall have been paid,  such  excess  shall be promptly
refunded to Borrower by Lender);  (ii) neither Borrower nor any other Person now
or  hereafter  liable  hereunder  shall be  obligated  to pay the amount of such
interest  to the extent  that it is in excess of the Highest  Lawful  Rate;  and
(iii) the  effective  rate of interest  shall be reduced to the  Highest  Lawful
Rate.  All sums paid, or agreed to be paid, to Lender for the use,  forbearance,
and detention of the debt of Borrower to Lender shall,  to the extent  permitted
by  applicable  law,  be  allocated  throughout  the full term of the Note until
payment is made in full so that the actual rate of interest  does not exceed the
Highest  Lawful  Rate in  effect at any  particular  time  during  the full term
thereof.  If at any time the rate of interest under the Note exceeds the Highest
Lawful Rate, the rate of interest to accrue  pursuant to this Agreement shall be
limited,  notwithstanding anything to the contrary herein, to the Highest Lawful
Rate,  but any  subsequent  reductions  in the Base Rate  shall not  reduce  the
interest to accrue  pursuant  to this  Agreement  below the Highest  Lawful Rate
until the total amount of interest  accrued  equals the amount of interest  that
would have accrued if a varying rate per annum equal to the interest  rate under
the Note had at all times been in effect.  If the total amount of interest  paid
or accrued  pursuant to this  Agreement  under the foregoing  provisions is less
than the total amount of interest  that would have accrued if a varying rate per
annum  equal to the  interest  rate  under  the Note  had been in  effect,  then
Borrower  agrees to pay to Lender an amount equal to the difference  between (i)
the lesser of (x) the amount of interest  that would have accrued if the Highest
Lawful Rate had at all times been in effect,  or (y) the amount of interest that
would have accrued if a varying rate per annum equal to the interest  rate under
the Note had at all  times  been in  effect,  and (ii) the  amount  of  interest
accrued in accordance with the other provisions of this Agreement.

      SECTION 2.8.  TERM.

            (a) Subject to Lender's right to cease making Revolving Credit Loans
to  Borrower  upon or after any Event of  Default,  this  Agreement  shall be in
effect for a period of 


                                       10
<PAGE>

two (2) years from the  Closing  Date,  unless  terminated  as  provided in this
Section 2.8 (the  "Term"),  and this  Agreement  shall be renewed  for  one-year
periods thereafter upon the mutual written agreement of the parties.

            (b)  Notwithstanding  anything  herein to the  contrary,  Lender may
terminate this Agreement without notice upon or after the occurrence of an Event
of Default.

            (c) Upon at least thirty (30) days prior  written  notice to Lender,
Borrower may terminate this Agreement prior to the second annual  anniversary of
the Closing Date,  provided  that, at the  effective  date of such  termination,
Borrower  shall pay to Lender (in  addition to the then  outstanding  principal,
accrued interest and other  Obligations  owing under the terms of this Agreement
and any other Loan Documents) as liquidated  damages for the loss of bargain and
not as a penalty,  an amount equal to (i) three percent (3%) of the Maximum Loan
Amount if the effective  date of such  termination by Borrower is on or prior to
the first annual  anniversary  of the Closing Date, and (ii) two percent (2%) of
the Maximum Loan Amount if the effective date of such termination by Borrower is
after the first annual  anniversary  of the Closing Date and prior to the second
annual anniversary of the Closing Date.

            (d) All of the Obligations shall be immediately due and payable upon
the termination date stated in any notice of termination of this Agreement.  All
undertakings, agreements, covenants, warranties, and representations of Borrower
contained in the Loan Documents  shall survive any such  termination  and Lender
shall  retain its liens in the  Collateral  and all of its  rights and  remedies
under the Loan Documents  notwithstanding  such  termination  until Borrower has
paid the Obligations to Lender, in full, in immediately available funds.

            (e)  Notwithstanding  any  provision of this  Agreement  which makes
reference to the  continuance of an Event of Default,  nothing in this Agreement
shall be construed to permit Borrower to cure an Event of Default  following the
lapse of the  applicable  cure period,  and Borrower shall have no such right in
any instance unless specifically granted in writing by Lender.

      SECTION 2.9. JOINT AND SEVERAL LIABILITY; BINDING OBLIGATIONS. Each entity
comprising  Borrower and executing this Agreement on behalf of Borrower shall be
jointly and  severally  liable for all of the  Obligations.  In  addition,  each
entity  comprising  Borrower  hereby  acknowledges  and  agrees  that all of the
representations,  warranties, covenants, obligations, conditions, agreements and
other terms  contained in this  Agreement  shall be  applicable  to and shall be
binding upon each individual  entity comprising  Borrower,  and shall be binding
upon all such entities taken together.

                                   ARTICLE III

                                   COLLATERAL

                                       11
<PAGE>


      SECTION 3.1. GENERALLY.  As security for the payment of all liabilities of
Borrower to Lender,  including without  limitation:  (i) indebtedness  evidenced
under  the  Note,  repayment  of  Revolving  Credit  Loans,  advances  and other
extensions  of credit,  all fees and charges  owing by  Borrower,  and all other
liabilities  and  obligations of every kind or nature  whatsoever of Borrower to
Lender, whether now existing or hereafter incurred, joint or several, matured or
unmatured,  direct or indirect, primary or secondary,  related or unrelated, due
or to become due,  including but not limited to any  extensions,  modifications,
substitutions,  increases and renewals thereof,  (ii) the payment of all amounts
advanced  by Lender  to  preserve,  protect,  defend,  and  enforce  its  rights
hereunder  and in the following  property in  accordance  with the terms of this
Agreement,  and  (iii)  the  payment  of all  expenses  incurred  by  Lender  in
connection therewith (collectively, the "Obligations").  Borrower hereby assigns
and grants to Lender a continuing  first priority lien on and security  interest
in, upon, and to the following property (the "Collateral"):

            (a) All of Borrower's  now-owned  and hereafter  acquired or arising
Accounts,   accounts  receivable  and  rights  to  payment  of  every  kind  and
description,  and any contract rights,  chattel paper, documents and instruments
with respect thereto;

            (b) All of Borrower's  now owned and  hereafter  acquired or arising
general  intangibles of every kind and  description  pertaining to its Accounts,
accounts receivable and other rights to payment,  including, but not limited to,
all  existing  and  future  customer  lists,  choses in action,  claims,  books,
records, contracts, licenses, formulae, tax and other types of refunds, returned
and unearned insurance premiums, rights and claims under insurance policies, and
computer information, software, records, and data;

            (c) All of Borrower's  now or hereafter  acquired  deposit  accounts
into which Accounts are deposited, including the Lockbox Account;

            (d) All of  Borrower's  monies and other  property of every kind and
nature now or at any time or times  hereafter in the  possession of or under the
control of Lender or a bailee or Affiliate of Lender; and

            (e) The proceeds (including, without limitation, insurance proceeds)
of all of the foregoing.

      SECTION 3.2.  LIEN  DOCUMENTS.  At Closing and  thereafter as Lender deems
necessary in its sole discretion,  Borrower shall execute and deliver to Lender,
or have executed and delivered (all in form and substance satisfactory to Lender
in its sole discretion):

            (a) UCC-1 Financing  statements  pursuant to the Uniform  Commercial
Code in effect in the  jurisdiction(s) in which Borrower operates,  which Lender
may file in any  jurisdiction  where any  Collateral is or may be located and in
any other  jurisdiction that Lender deems  appropriate;  provided that a carbon,
photographic,  or other  reproduction  or other copy of



                                       12
<PAGE>

this Agreement or of a financing  statement is sufficient as and may be filed in
lieu of a financing statement; and

            (b) Any  other  agreements,  documents,  instruments,  and  writings
deemed necessary by Lender or as Lender may otherwise  request from time to time
in its sole  discretion  to  evidence,  perfect,  or protect  Lender's  lien and
security interest in the Collateral required hereunder.

      SECTION 3.3.  COLLATERAL ADMINISTRATION.

            (a) All Collateral  (except  deposit  accounts) will at all times be
kept by Borrower at its principal office(s) as set forth on Schedule 4.15 hereto
and shall not, without the prior written approval of Lender, be moved therefrom.

            (b)  Borrower  shall  keep  accurate  and  complete  records  of its
Accounts and all payments and collections  thereon and shall submit to Lender on
such periodic basis as Lender shall request a sales and  collections  report for
the preceding period,  in form satisfactory to Lender. In addition,  if Accounts
in an aggregate face amount in excess of $50,000.00  become  ineligible  because
they fall within one of the specified  categories of ineligibility  set forth in
the definition of Qualified Accounts or otherwise,  Borrower shall notify Lender
of such  occurrence on the first Business Day following such  occurrence and the
Borrowing  Base shall  thereupon  be adjusted  to reflect  such  occurrence.  If
requested by Lender, Borrower shall execute and deliver to Lender formal written
assignments  of all of its  Accounts  weekly or daily,  which shall  include all
Accounts that have been created since the date of the last assignment,  together
with copies of claims, invoices or other information related thereto.

            (c) Whether or not an Event of Default has occurred, any of Lender's
officers,  employees  or  agents  shall  have  the  right,  at any time or times
hereafter,  in the name of Lender, any designee of Lender or Borrower, to verify
the  validity,  amount or any other  matter  relating  to any  Accounts by mail,
telephone, telegraph or otherwise. Borrower shall cooperate fully with Lender in
an effort to facilitate and promptly conclude such verification process.

            (d) To expedite  collection,  Borrower  shall  endeavor in the first
instance to make collection of its Accounts for Lender. Lender retains the right
at all times after the occurrence of an Event of Default,  subject to applicable
law regarding  Medicaid/Medicare Account Debtors, to notify Account Debtors that
Accounts  have been assigned to Lender and to collect  Accounts  directly in its
own name and to charge the collection costs and expenses,  including  attorneys'
fees, to Borrower.

      SECTION 3.4.  OTHER ACTIONS.  In addition to the  foregoing,  Borrower (i)
shall provide prompt written notice to each private  indemnity,  managed care or
other  Insurer who either is currently  an Account  Debtor or becomes an Account
Debtor at any time  following  the date hereof  that  Lender has been  granted a
first  priority  lien  and  security  interest  in,  upon  and to  all  



                                       13
<PAGE>

Accounts  applicable to such Insurer,  and hereby  authorizes Lender to send any
and all similar  notices to such Insurers by Lender,  and (ii) shall do anything
further that may be lawfully  required by Lender to secure Lender and effectuate
the intentions and objects of this  Agreement,  including but not limited to the
execution  and  delivery  of  lockbox   agreements,   continuation   statements,
amendments to financing statements,  and any other documents required hereunder.
At Lender's request, Borrower shall also immediately deliver to Lender all items
for  which  Lender  must  receive  possession  to  obtain a  perfected  security
interest.  Borrower  shall,  on  Lender's  demand,  deliver to Lender all notes,
certificates,  and  documents  of  title,  chattel  paper,  warehouse  receipts,
instruments, and any other similar instruments constituting Collateral.

      SECTION  3.5.  SEARCHES.  Prior to Closing,  and  thereafter  (as and when
requested by Lender in its sole  discretion),  Borrower shall obtain and deliver
to Lender the following  searches  against Borrower (the results of which are to
be  consistent  with  Borrower's   representations  and  warranties  under  this
Agreement), all at its own expense:

            (a) Uniform Commercial Code searches with the Secretary of State and
local filing offices of each jurisdiction where Borrower maintains its executive
offices, a place of business, or assets;

            (b) Judgment,  federal tax lien and corporate  and  partnership  tax
lien searches, in each jurisdiction searched under clause (a) above; and

            (c)  Good  standing  certificates  showing  Borrower  to be in  good
standing in its state of formation  and in each other state in which it is doing
and presently intends to do business for which qualification is required.

      SECTION 3.6.  POWER OF ATTORNEY.  Each of the officers of Lender is hereby
irrevocably  made,  constituted  and appointed the true and lawful  attorney for
Borrower  (without  requiring  any of them to act as such)  with  full  power of
substitution to do the following:  (i) endorse the name of Borrower upon any and
all checks, drafts, money orders, and other instruments for the payment of money
that are payable to Borrower and constitute  collections on Borrower's Accounts;
(ii)  execute  in the name of  Borrower  any  financing  statements,  schedules,
assignments,  instruments,  documents, and statements that Borrower is obligated
to give Lender hereunder;  and (iii) do such other and further acts and deeds in
the name of Borrower that Lender may deem  necessary or desirable to enforce any
Account or other Collateral or perfect Lender's security interest or lien in any
Collateral.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES


                                       14
<PAGE>

     Borrower  represents  and  warrants  to  Lender,  and  shall be  deemed  to
represent and warrant on each day on which any Obligations  shall be outstanding
hereunder, that:

     SECTION 4.1.  SUBSIDIARIES.  Except as set forth in Schedule 4.1,  Borrower
has no subsidiaries.

     SECTION 4.2. ORGANIZATION AND GOOD STANDING. Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of its state of
formation,  is in good standing as a foreign corporation in each jurisdiction in
which the  character  of the  properties  owned or leased by it  therein  or the
nature of its business  makes such  qualification  necessary,  has the corporate
power and  authority  to own its assets and transact the business in which it is
engaged, and has obtained all certificates, licenses and qualifications required
under  all laws,  regulations,  ordinances,  or  orders  of  public  authorities
necessary  for  the  ownership  and  operation  of  all of  its  properties  and
transaction of all of its business.

     SECTION 4.3. AUTHORITY.  Borrower has full corporate power and authority to
enter into,  execute,  and deliver this Agreement and to perform its obligations
hereunder, to borrow the Loan, to execute and deliver the Note, and to incur and
perform the obligations  provided for in the Loan  Documents,  all of which have
been duly authorized by all necessary  corporate  action. No consent or approval
of shareholders of, or lenders to, Borrower and no consent,  approval, filing or
registration  with any Governmental  Authority is required as a condition to the
validity of the Loan Documents or the performance by Borrower of its obligations
thereunder.

     SECTION 4.4. BINDING AGREEMENT. This Agreement and all other Loan Documents
constitute,  and the Note,  when issued and delivered  pursuant hereto for value
received,  will  constitute,  the  valid  and  legally  binding  obligations  of
Borrower,  enforceable  against  Borrower in  accordance  with their  respective
terms.

     SECTION 4.5. LITIGATION.  Except as disclosed in Schedule 4.5, there are no
actions,  suits,  proceedings or  investigations  pending or threatened  against
Borrower  before  any  court or  arbitrator  or  before  or by any  Governmental
Authority which, in any one case or in the aggregate, if determined adversely to
the interests of Borrower, could have a material adverse effect on the business,
properties,  condition  (financial  or  otherwise)  or  operations,  present  or
prospective,  of Borrower,  or upon its ability to perform its obligations under
the Loan Documents.  Borrower is not in default with respect to any order of any
court,  arbitrator,  or  Governmental  Authority  applicable  to Borrower or its
properties.

     SECTION 4.6. NO  CONFLICTS.  The execution and delivery by Borrower of this
Agreement  and the other  Loan  Documents  do not,  and the  performance  of its
obligations  thereunder will not, violate,  conflict with,  constitute a default
under,  or result in the creation of a lien or encumbrance  upon the property of
Borrower under:  (i) any provision of Borrower's  articles of  incorporation  or
bylaws,  (ii) any  provision  of any law,  rule,  or  regulation  applicable  to
Borrower, or (iii) any of the following: (A) any indenture or other agreement or
instrument to which Borrower is a party



                                       15
<PAGE>

or by which  Borrower or its property is bound;  or (B) any  judgment,  order or
decree of any court,  arbitration  tribunal,  or Governmental  Authority  having
jurisdiction over Borrower which is applicable to Borrower.

     SECTION  4.7.  FINANCIAL  CONDITION.  The annual  financial  statements  of
Borrower as of December 31, 1996 audited by Ernst & Young, LLP and the unaudited
financial  statements  of Borrower as of June 30,  1997,  certified by the chief
financial  officer of  Borrower,  which have been  delivered  to Lender,  fairly
present the  financial  condition of Borrower and the results of its  operations
and changes in financial  condition as of the dates and for the periods referred
to,  and have been  prepared  in  accordance  with GAAP.  There are no  material
unrealized or anticipated liabilities,  direct or indirect, fixed or contingent,
of Borrower as of the dates of such financial statements which are not reflected
therein  or in the  notes  thereto.  There  has been no  adverse  change  in the
business, properties,  condition (financial or otherwise) or operations (present
or prospective) of Borrower since June 30, 1997.  Borrower's fiscal year ends on
December  31. The federal tax  identification  number of each entity  comprising
Borrower is as described on Schedule 4.7.

     SECTION 4.8. NO DEFAULT.  Borrower is not in default  under or with respect
to any  obligation  in any  respect  which  could be  adverse  to its  business,
operations, property or financial condition, or which could adversely affect the
ability of Borrower  to perform its  obligations  under the Loan  Documents.  No
Event of Default or event which,  with the giving of notice or lapse of time, or
both, could become an Event of Default, has occurred and is continuing.

     SECTION 4.9. TITLE TO PROPERTIES. Borrower has good and marketable title to
its  properties  and assets,  including the  Collateral  and the  properties and
assets reflected in the financial  statements  described in Section 4.7, subject
to no lien,  mortgage,  pledge,  encumbrance  or charge of any kind,  other than
Permitted  Liens.  Borrower  has not  agreed  or  consented  to cause any of its
properties or assets  whether  owned now or hereafter  acquired to be subject in
the future  (upon the  happening of a  contingency  or  otherwise)  to any lien,
mortgage,  pledge, encumbrance or charge of any kind other than Permitted Liens.
Consistent  with the  foregoing  and  pursuant  to the  terms of all  management
services  agreements  and  asset  purchase  agreements  with  medical  practices
applicable to the Accounts being financed  pursuant to this Agreement,  Borrower
has all right,  title and  interest to all such  presently  owned and  hereafter
arising Accounts.

     SECTION 4.10. TAXES. Borrower has filed, or has obtained extensions for the
filing of, all  federal,  state and other tax returns  which are  required to be
filed, and has paid all taxes shown as due on those returns and all assessments,
fees  and  other  amounts  due as of the date  hereof.  All tax  liabilities  of
Borrower were, as of December 31, 1996 and are now,  adequately  provided for on
Borrower's  books.  No tax liability  has been asserted by the Internal  Revenue
Service or other taxing authority  against Borrower for taxes in excess of those
already paid.




                                       16
<PAGE>

      SECTION 4.11.  SECURITIES AND BANKING LAWS AND REGULATIONS.

            (a) The use of the proceeds of the Loan and  Borrower's  issuance of
the Note will not directly or indirectly violate or result in a violation of the
Securities  Act of 1933 or the Securities  Exchange Act of 1934, as amended,  or
any  regulations   issued  pursuant  thereto,   including   without   limitation
Regulations  U, T, G, or X of the  Board of  Governors  of the  Federal  Reserve
System.  Borrower is not engaged in the  business  of  extending  credit for the
purpose of the purchasing or carrying "margin stock" within the meaning of those
regulations.  No part of the  proceeds  of the  Loan  hereunder  will be used to
purchase  or carry  any  margin  stock or to extend  credit  to others  for such
purpose.

            (b) Borrower is not an investment  company within the meaning of the
Investment  Company Act of 1940, as amended,  nor is it, directly or indirectly,
controlled by or acting on behalf of any Person which is an  investment  company
within the meaning of that Act.

     SECTION 4.12.  ERISA.  No employee  benefit plan (a "Plan")  subject to the
Employee Retirement Income Security Act of 1974 ("ERISA") and regulations issued
pursuant  thereto that is maintained by Borrower or under which  Borrower  could
have any liability under ERISA (a) has failed to meet minimum funding  standards
established  in  Section  302 of  ERISA,  (b) has  failed  to  comply  with  all
applicable requirements of ERISA and of the Internal Revenue Code, including all
applicable  rulings  and  regulations  thereunder,  (c) has  engaged  in or been
involved in a prohibited  transaction (as defined in ERISA) under ERISA or under
the Internal Revenue Code, or (d) has been terminated. Borrower has not assumed,
or  received  notice  of a  claim  asserted  against  Borrower  for,  withdrawal
liability (as defined in the Multi-Employer Pension Plan Amendments Act of 1980,
as amended) with respect to any multi-employer  pension plan and is not a member
of any Controlled Group (as defined in ERISA). Borrower has timely made when due
all contributions  with respect to any  multi-employer  pension plan in which it
participates  and no event has occurred  triggering a claim against Borrower for
withdrawal  liability with respect to any  multi-employer  pension plan in which
Borrower participates.

     SECTION 4.13.  COMPLIANCE  WITH LAW.  Except as described in Schedule 4.13,
Borrower  is  not in  violation  of  any  statute,  rule  or  regulation  of any
Governmental  Authority  (including,  without limitation,  any statute,  rule or
regulation  relating to employment  practices or to environmental,  occupational
and health standards and controls). Borrower has obtained all licenses, permits,
franchises, and other governmental authorizations necessary for the ownership of
its  properties  and the conduct of its  business.  Borrower is current with all
reports and documents  required to be filed with any state or federal securities
commission or similar Governmental  Authority and is in full compliance with all
applicable rules and regulations of such commissions.

     SECTION 4.14. ENVIRONMENTAL MATTERS. No use, exposure, release, generation,
manufacture,  storage,  treatment,   transportation  or  disposal  of  Hazardous
Material has occurred or is occurring on or from any real  property on which the
Collateral is located or which is owned,




                                       17
<PAGE>

leased or otherwise  occupied by Borrower (the "Premises"),  or off the Premises
as a result of any action of Borrower, except as described in Schedule 4.14. All
Hazardous Material used, treated,  stored,  transported to or from, generated or
handled on the Premises,  or off the Premises by Borrower,  has been disposed of
on or off the Premises by or on behalf of Borrower in a lawful manner. There are
no underground storage tanks present on or under the Premises owned or leased by
Borrower.  No other  environmental,  public health or safety  hazards exist with
respect to the Premises.

     SECTION 4.15. PLACES OF BUSINESS.  The only places of business of Borrower,
and the places  where it keeps and  intends to keep the  Collateral  and records
concerning  the  Collateral,  are at the addresses  set forth in Schedule  4.15.
Schedule 4.15 also lists the owner of record of each such property.

     SECTION 4.16. INTELLECTUAL PROPERTY. Borrower exclusively owns or possesses
all  the  patents,  patent  applications,  trademarks,  trademark  applications,
service marks, trade names,  copyrights,  franchises,  licenses, and rights with
respect to the foregoing necessary for the present and planned future conduct of
its business, without any conflict with the rights of others. A list of all such
intellectual property (indicating the nature of Borrower's interest), as well as
all  outstanding  franchises  and  licenses  given  by or held by  Borrower,  is
attached  as Schedule  4.16.  Borrower  is not in default of any  obligation  or
undertaking with respect to such intellectual property or rights.

     SECTION  4.17.  STOCK  OWNERSHIP.  The  identity  of the known  significant
stockholders  of record of all  classes of the  outstanding  stock of  Borrower,
together with the respective  ownership  percentages held by such  stockholders,
are as set forth on Schedule 4.17.

     SECTION 4.18.  MATERIAL  FACTS.  Neither this  Agreement nor any other Loan
Document nor any other agreement, document,  certificate, or statement furnished
to Lender  by or on  behalf of  Borrower  in  connection  with the  transactions
contemplated  hereby contains any untrue  statement of material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not  misleading.  There is no fact known to Borrower  that  adversely
affects or in the future may adversely affect the business,  operations, affairs
or financial condition of Borrower, or any of its properties or assets.

     SECTION 4.19. INVESTMENTS, GUARANTEES, AND CERTAIN CONTRACTS. Borrower does
not  own or  hold  any  equity  or  long-term  debt  investments  in,  have  any
outstanding advances to, have any outstanding guarantees for the obligations of,
or have any  outstanding  borrowings  from,  any Person,  except as described on
Schedule 4.19. Borrower is not a party to any contract or agreement,  or subject
to any corporate restriction, which adversely affects its business.

      SECTION 4.20. BUSINESS INTERRUPTIONS.  Within five years prior to the date
hereof, neither the business,  property or assets, or operations of Borrower has
been adversely affected in any way by any casualty, strike, lockout, combination
of  workers,  or order of the United  States OF


                                       18
<PAGE>

America or other Governmental Authority, directed against Borrower. There are no
pending or threatened labor disputes,  strikes, lockouts, or similar occurrences
or grievances against Borrower or its business.

     SECTION 4.21. NAMES.  Within five years prior to the date hereof,  Borrower
has not  conducted  business  under or used any other name  (whether  corporate,
partnership or assumed)  other than as shown on Schedule  4.21.  Borrower is the
sole owner of all names listed on that  Schedule  and any and all business  done
and invoices issued in such names are Borrower's sales,  business, and invoices.
Each trade name of Borrower  represents a division or trading  style of Borrower
and not a separate Person or independent Affiliate.

     SECTION 4.22 JOINT  VENTURES.  Borrower is not engaged in any joint venture
or partnership with any other Person, except as set forth on Schedule 4.22.

     SECTION 4.23 ACCOUNTS.  Lender may rely, in determining  which Accounts are
Qualified Accounts,  on all statements and representations made by Borrower with
respect to any Account or  Accounts.  Unless  otherwise  indicated in writing to
Lender, with respect to each Account:

            (a) It is genuine and in all respects what it purports to be, and is
not evidenced by a judgment;

            (b) It arises out of a  completed,  bona fide sale and  delivery  of
goods or  rendition  of  services  by  Borrower  in the  ordinary  course of its
business and in accordance with the terms and conditions of all purchase orders,
contracts, certification, participation, certificate of need, or other documents
relating  thereto and forming a part of the  contract  between  Borrower and the
Account Debtor;

            (c) It is for a liquidated  amount maturing as stated in a duplicate
claim or invoice  covering  such sale or rendition of services,  a copy of which
has been furnished or is available to Lender;

            (d) Such Account,  and Lender's security  interest therein,  is not,
and will not (by  voluntary  act or  omission  by  Borrower),  be in the future,
subject to any offset, lien, deduction,  defense,  dispute,  counterclaim or any
other adverse  condition,  and each such Account is absolutely owing to Borrower
and is not contingent in any respect or for any reason;

            (e)  There  are no facts,  events  or  occurrences  which in any way
impair the  validity  or  enforceability  of any  Accounts or tend to reduce the
amount  payable  thereunder  from the face  amount of the claim or  invoice  and
statements delivered to Lender with respect thereto;

            (f) To the best of  Borrower's  knowledge,  (i) the  Account  Debtor
thereunder  had the  capacity  to  contract  at the time any  contract  or other
document giving rise to the Account was executed and (ii) such Account Debtor is
solvent;


                                       19
<PAGE>

            (g) To the best of Borrower's knowledge, there are no proceedings or
actions which are threatened or pending  against any Account  Debtor  thereunder
which might  result in any  material  adverse  change in such  Account  Debtor's
financial condition or the collectibility of such Account;

            (h) It has been  billed  and  forwarded  to the  Account  Debtor for
payment in accordance with  applicable laws and compliance and conformance  with
any and requisite procedures,  requirements and regulations governing payment by
such Account Debtor with respect to such Account, and such Account if due from a
Medicaid/Medicare Account Debtor is properly payable directly to Borrower; and

            (i)  Borrower has obtained and  currently  has all  certificates  of
need,   Medicaid  and  Medicare   provider   numbers,   licenses,   permits  and
authorizations as necessary in the generation of such Accounts.

                                    ARTICLE V

                        CLOSING AND CONDITIONS OF LENDING

      SECTION 5.1. CONDITIONS  PRECEDENT TO AGREEMENT.  The obligation of Lender
to enter into and perform this Agreement and to make  Revolving  Credit Loans is
subject to the following conditions precedent:

            (a) Lender shall have received two (2)  originals of this  Agreement
and all other Loan  Documents  required to be executed and delivered at or prior
to Closing  (other than the Note,  as to which  Lender  shall  receive  only one
original), executed by Borrower and any other required Persons, as applicable.

            (b) Lender  shall  have  received  all  searches  and good  standing
certificates required by Section 3.5.

            (c) Borrower  shall have  complied  and shall then be in  compliance
with all the terms, covenants and conditions of the Loan Documents.

            (d) There  shall  have  occurred  no Event of  Default  and no event
which, with the giving of notice or the lapse of time, or both, could constitute
such an Event of Default.

            (e) The representations and warranties contained in Article IV shall
be true and correct.

            (f) Lender  shall  have  received  copies of all board of  directors
resolutions  of  Borrower,  and other  corporate  action  taken by  Borrower  to
authorize the execution,  delivery and performance of the Loan Documents and the
borrowing of the Loan  thereunder,  as well as the 


                                       20
<PAGE>

names and signatures of the officers of Borrower authorized to execute documents
on its  behalf in  connection  herewith,  all as also  certified  as of the date
hereof by Borrower's  chief financial  officer,  and such other papers as Lender
may require.

            (g) Lender shall have received  copies,  certified as true,  correct
and  complete  by a  corporate  officer of each  Borrower,  of the  articles  of
incorporation of each Borrower, with any amendments to any of the foregoing, and
all other  documents  necessary for  performance of the  obligations of Borrower
under this Agreement and the other Loan Documents.

            (h) Lender  shall have  received  a written  opinion of counsel  for
Borrower, dated the date hereof, in the form of Exhibit C.

            (i) Lender shall have received such financial  statements,  reports,
certifications,  and other  operational  information  required  to be  delivered
hereunder,  including  without  limitation an initial borrowing base certificate
calculating the Borrowing Base.

            (j) Lender shall have received the Commitment Fee.

            (k) The  Lockbox  and the  Concentration  Account  shall  have  been
established.

            (l) Lender shall have  received a certificate  of  Borrower's  chief
financial officer, dated the Closing Date, certifying that all of the conditions
specified in this Section have been fulfilled.

     SECTION 5.2.  CONDITIONS  PRECEDENT TO ADVANCES.  Notwithstanding any other
provision of this Agreement, no Loan proceeds,  Revolving Credit Loans, advances
or other extensions of credit under the Loan shall be disbursed hereunder unless
the following conditions have been satisfied or waived immediately prior to such
disbursement:

            (a) The  representations  and  warranties  on the  part of  Borrower
contained  in  Article  IV of this  Agreement  shall be true and  correct in all
respects at and as of the date of disbursement or advance, as though made on and
as of such date (except to the extent that such  representations  and warranties
expressly  relate  solely to an earlier date and except that the  references  in
Section 4.7 to  financial  statements  shall be deemed to be a reference  to the
then most recent annual and interim financial  statements of Borrower  furnished
to Lender pursuant to Section 6.1 hereof).

            (b) No Event of Default or event which, with the giving of notice of
the lapse of time, or both, could become an Event of Default shall have occurred
and be  continuing  or would  result  from the  making  of the  disbursement  or
advance.


                                       21
<PAGE>


            (c) No adverse  change in the condition  (financial  or  otherwise),
properties,  business,  or  operations  of Borrower  shall have  occurred and be
continuing with respect to Borrower since the date hereof.

     SECTION 5.3. CLOSING. Subject to the conditions of this Article V, the Loan
shall be made  available  on the date as is mutually  agreed by the parties (the
"Closing  Date") at such time as may be mutually  agreeable  to the parties upon
the  execution  hereof  (the  "Closing")  at such place as may be  requested  by
Lender.

     SECTION 5.4. WAIVER OF RIGHTS. By completing the Closing  hereunder,  or by
making  advances  under  the  Loan,  Lender  does  not  waive  a  breach  of any
representation  or  warranty  of  Borrower  hereunder  or under any  other  Loan
Document,  and all of Lender's  claims and rights  resulting  from any breach or
misrepresentation by Borrower are specifically reserved by Lender.


                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

      Borrower  covenants  and agrees  that for so long as  Borrower  may borrow
hereunder  and until  payment in full of the Note and  performance  of all other
obligations of Borrower under the Loan Documents:

      SECTION 6.1. FINANCIAL  STATEMENTS AND COLLATERAL  REPORTS.  Borrower will
furnish to Lender (i) a sales and  collections  report and  accounts  receivable
aging schedule on a form acceptable to Lender within fifteen (15) days after the
end of each calendar month, which shall include, but not be limited to, a report
of sales, credits issued, and collections received; (ii) payable aging schedules
within fifteen (15) days after the end of each calendar month;  (iii) internally
prepared  monthly  financial  statements  for  Borrower,  certified by the chief
financial  officer of Borrower,  within  forty-five (45) days of the end of each
calendar  month,  accompanied  by  management  analysis  and actual  vs.  budget
variance reports;  (iv) to the extent prepared by Borrower,  annual projections,
profit and loss statements, balance sheets, and cash flow reports (prepared on a
monthly basis) for the succeeding fiscal year within thirty (30) days before the
end of each of Borrower's fiscal years; (v) internally prepared annual financial
statements  for  Borrower  within  sixty  (60)  days  after  the  end of each of
Borrower's fiscal years;  (vi) annual audited financial  statements for Borrower
prepared by Ernst & Young,  LLP,  or a firm of  independent  public  accountants
satisfactory to Lender,  within one hundred thirty-five (135) days after the end
of each of Borrower's fiscal years; (vii) promptly upon receipt thereof,  copies
of  any  reports  submitted  to  Borrower  by  the  independent  accountants  in
connection  with any interim  audit of the books of Borrower  and copies of each
management  control  letter  provided to Borrower  by  independent  accountants;
(viii) as soon as  available,  copies of all  financial  statements  and notices
provided  by  Borrower  to all of its  stockholders;  and (ix)  such  additional
information,  reports or  statements  as Lender  may from time to time  request.
Annual financial


                                       22
<PAGE>

statements  shall set forth in  comparative  form figures for the  corresponding
periods in the prior fiscal  year.  All  financial  statements  shall  include a
balance sheet and statement of earnings and shall be prepared in accordance with
GAAP.

      SECTION  6.2.  PAYMENTS  HEREUNDER.  Borrower  will make all  payments  of
principal,  interest, fees, and all other payments required hereunder, under the
Loan, and under any other  agreements  with Lender to which Borrower is a party,
as and when due.

     SECTION 6.3. EXISTENCE,  GOOD STANDING,  AND COMPLIANCE WITH LAWS. Borrower
will do or cause to be done all things  necessary (a) to obtain and keep in full
force and effect all corporate  existence,  rights,  licenses,  privileges,  and
franchises of Borrower necessary to the ownership of its property or the conduct
of its  business,  and comply  with all  applicable  present  and  future  laws,
ordinances, rules, regulations, orders and decrees of any Governmental Authority
having or claiming  jurisdiction over Borrower;  and (b) to maintain and protect
the properties used or useful in the conduct of the operations of Borrower, in a
prudent  manner,  including  without  limitation the maintenance at all times of
such insurance upon its insurable  property and operations as required by law or
by Section 6.7 hereof.

      SECTION 6.4.  LEGALITY.  The making of the Loan and each  disbursement  or
advance under the Loan shall not be subject to any penalty or special tax, shall
not  be  prohibited  by any  governmental  order  or  regulation  applicable  to
Borrower,  and shall not  violate  any rule or  regulation  of any  Governmental
Authority,   and  necessary  consents,   approvals  and  authorizations  of  any
Governmental Authority to or of any such disbursement or advance shall have been
obtained.

      SECTION 6.5.  LENDER'S  SATISFACTION.  All instruments and legal documents
and  proceedings  in  connection  with  the  transactions  contemplated  by this
Agreement shall be satisfactory in form and substance to Lender and its counsel,
and Lender shall have  received all  documents,  including  records of corporate
proceedings  and  opinions  of  counsel,  which  Lender  may have  requested  in
connection therewith.

      SECTION 6.6. TAXES AND CHARGES.  Borrower will timely file all tax reports
and pay and discharge all taxes,  assessments and governmental charges or levies
imposed upon  Borrower,  or its income or profits or upon its  properties or any
part thereof, before the same shall be in default and prior to the date on which
penalties  attach  thereto,  as well as all lawful  claims for labor,  material,
supplies or otherwise  which, if unpaid,  might become a lien or charge upon the
properties  or any part thereof of Borrower;  provided,  however,  that Borrower
shall not be required to pay and  discharge  or cause to be paid and  discharged
any such  tax,  assessment,  charge,  levy or claim so long as the  validity  or
amount thereof shall be contested in good faith and by  appropriate  proceedings
by Borrower,  and Borrower shall have set aside on their books adequate  reserve
therefor;  and provided  further,  that such deferment of payment is permissible
only so long as Borrower's title to, and its right to use, the Collateral is not
adversely  affected



                                       23
<PAGE>

thereby and  Lender's  lien and  priority on the  Collateral  are not  adversely
affected, altered or impaired thereby.

     SECTION 6.7.  INSURANCE.  Borrower will carry adequate public liability and
professional  liability  insurance with  responsible  companies  satisfactory to
Lender in such amounts and against such risks as is  customarily  maintained  by
similar businesses and by owners of similar property in the same general area.

     SECTION  6.8.  GENERAL  INFORMATION.  Borrower  will furnish to Lender such
information  as Lender  may,  from time to time,  request  with  respect  to the
business or financial affairs of Borrower,  and permit any officer,  employee or
agent of Lender to visit and  inspect  any of the  properties,  to  examine  the
minute books, books of account and other records,  including  management letters
prepared  by  Borrower's  auditors,  of  Borrower,  and make  copies  thereof or
extracts therefrom, and to discuss its and their business affairs,  finances and
accounts with, and be advised as to the same by, the accountants and officers of
Borrower, all at such times and as often as Lender may require.

     SECTION 6.9.  MAINTENANCE  OF PROPERTY.  Borrower will  maintain,  keep and
preserve all of its  properties in good repair,  working order and condition and
from time to time make all needful and proper repairs,  renewals,  replacements,
betterments  and  improvements  thereto,  so that  the  business  carried  on in
connection therewith may be properly and advantageously conducted at all times.

      SECTION 6.10.  NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE DEVELOPMENTS.
Borrower  promptly will notify Lender upon the  occurrence  of: (i) any Event of
Default;  (ii) any event which,  with the giving of notice or lapse of time,  or
both,  could  constitute an Event of Default;  (iii) any event,  development  or
circumstance  whereby the financial  statements  previously  furnished to Lender
fail in any material  respect to present  fairly,  in accordance  with GAAP, the
financial  condition  and  operational  results of Borrower;  (iv) any judicial,
administrative  or arbitration  proceeding  pending  against  Borrower,  and any
judicial or administrative proceeding known by Borrower to be threatened against
it which, if adversely decided,  could adversely affect its condition (financial
or  otherwise)  or  operations  (present  or  prospective)  or which may  expose
Borrower to uninsured  liability of $25,000.00 or more; (v) any default  claimed
by any other creditor for Borrowed Money of Borrower other than Lender; and (vi)
any other  development  in the  business  or  affairs of  Borrower  which may be
adverse;  in each  case  describing  the  nature  thereof  and  (in the  case of
notification  under clauses (i) and (ii)) the action  Borrower  proposes to take
with respect thereto.

     SECTION 6.11.  EMPLOYEE  BENEFIT  PLANS.  Borrower will (i) comply with the
funding  requirements  of ERISA with respect to the Plans for its employees,  or
will  promptly  satisfy any  accumulated  funding  deficiency  that arises under
Section 302 of ERISA; (ii) furnish Lender,  promptly after filing the same, with
copies  of all  reports  or  other  statements  filed  with  the  United  States
Department of Labor, the Pension Benefit Guaranty  Corporation,  or the Internal
Revenue



                                       24
<PAGE>

Service  with  respect  to all  Plans,  or which  Borrower,  or any  member of a
Controlled Group, may receive from such  Governmental  Authority with respect to
any such  Plans,  and (iii)  promptly  advise  Lender of the  occurrence  of any
Reportable Event or Prohibited Transaction with respect to any such Plan and the
action which Borrower proposes to take with respect thereto.  Borrower will make
all contributions  when due with respect to any  multi-employer  pension plan in
which it participates  and will promptly advise Lender:  (i) upon its receipt of
notice of the assertion  against  Borrower of a claim for withdrawal  liability;
(ii) upon the  occurrence  of any event which could  trigger the  assertion of a
claim for withdrawal  liability against Borrower;  and (iii) upon the occurrence
of any event  which would place  Borrower in a  Controlled  Group as a result of
which any  member  (including  Borrower)  thereof  may be subject to a claim for
withdrawal liability, whether liquidated or contingent.

     SECTION  6.12.  FINANCING  STATEMENTS.  Borrower  shall  provide  to Lender
evidence  satisfactory  to  Lender  as  to  the  due  recording  of  termination
statements,  releases  of  collateral,  and Forms  UCC-3,  and shall cause to be
recorded  financing  statements  on Form UCC-1,  duly  executed by Borrower  and
Lender, in all places necessary to release all existing  security  interests and
other liens in the  Collateral  (other than as permitted  hereby) and to perfect
and  protect  Lender's  first  priority  lien  and  security   interest  in  the
Collateral, as Lender may request.

     SECTION 6.13.  FINANCIAL RECORDS.  Borrower shall keep current and accurate
books of records and accounts in which full and correct  entries will be made of
all of its business  transactions,  and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.

     SECTION 6.14.  COLLECTION OF ACCOUNTS.  Borrower  shall continue to collect
its Accounts in the ordinary course of business.

     SECTION  6.15.  PLACES OF BUSINESS.  Borrower  shall give thirty (30) days'
prior  written  notice  to Lender of any  change in the  location  of any of its
places of business,  of the places where its records concerning its Accounts are
kept, of the places where the Collateral is kept, or of the establishment of any
new, or the discontinuance of any existing, places of business.

     SECTION 6.16. BUSINESS  CONDUCTED.  Borrower shall continue in the business
presently  conducted by it using its best efforts to maintain its  customers and
goodwill.  Borrower  shall not engage,  directly or  indirectly,  in any line of
business  substantially  different from the business conducted by it immediately
prior to the Closing Date, or engage in business or lines of business  which are
not reasonably related thereto.

     SECTION 6.17. LITIGATION AND OTHER PROCEEDINGS.  Borrower shall give prompt
notice to Lender of any litigation,  arbitration, or other proceeding before any
Governmental  Authority  against or affecting  Borrower if the amount claimed is
more than $25,000.00.


                                       25
<PAGE>

     SECTION 6.18.  BANK  ACCOUNTS.  Borrower shall assign all of its depository
and disbursement accounts to Lender.

     SECTION 6.19. SUBMISSION OF COLLATERAL DOCUMENTS.  Borrower will, on demand
of Lender,  make  available to Lender  copies of shipping and delivery  receipts
evidencing the shipment of goods that gave rise to an Account,  medical records,
insurance  verification  forms,  assignment of benefits,  in-take forms or other
proof of the satisfactory  performance of services that gave rise to an Account,
a copy of the claim or  invoice  for each  Account  and  copies  of any  written
contract or order from which the Account arose.  Borrower shall promptly  notify
Lender if an Account  becomes  evidenced or secured by an  instrument or chattel
paper and upon request of Lender,  will promptly  deliver any such instrument or
chattel paper to Lender.

     SECTION 6.20.  LICENSURE;  MEDICAID/MEDICARE  COST  REPORTS.  Borrower will
maintain all certificates of need,  provider  numbers and licenses  necessary to
conduct its  business as  presently  conducted,  and take any steps  required to
comply  with any such new or  additional  requirements  that may be  imposed  on
providers of medical products and services.  If required,  all Medicaid/Medicare
cost reports will be properly filed.

     SECTION 6.21. OFFICER'S  CERTIFICATES.  Together with the monthly financial
statements  delivered pursuant to clause (iii) of Section 6.1, and together with
the audited annual  financial  statements  delivered  pursuant to clause (vi) of
that  Section,  Borrower  shall  deliver  to Lender a  certificate  of its chief
financial officer, in form and substance satisfactory to Lender:

            (a) Setting forth the information  (including detailed calculations)
required to establish whether Borrower is in compliance with the requirements of
Articles  VI and  VII as of the  end of  the  period  covered  by the  financial
statements then being furnished; and

            (b) Stating that the signer has reviewed the relevant  terms of this
Agreement, and has made (or caused to be made under his supervision) a review of
the transactions and conditions of Borrower from the beginning of the accounting
period  covered  by the income  statements  being  delivered  to the date of the
certificate,  and that such review has not disclosed  the existence  during such
period of any condition or event which  constitutes an Event of Default or which
is then,  or with the passage of time or giving of notice or both,  could become
an Event of Default,  and if any such  condition  or event  existed  during such
period or now exists,  specifying the nature and period of existence thereof and
what action Borrower has taken or proposes to take with respect thereto.

     SECTION  6.22.   VISITS  AND   INSPECTIONS.   Borrower   agrees  to  permit
representatives  of  Lender,  from time to time,  as often as may be  reasonably
requested,  but only  during  normal  business  hours,  to visit and inspect the
properties of Borrower,  and to inspect,  audit and make extracts from its books
and records,  and discuss with its officers,  its employees and its  independent
accountants,  Borrower's  business,  assets,  liabilities,  financial condition,
business prospects and results of operations.

                                       26
<PAGE>

     SECTION 6.23. NET WORTH. Borrower will not at any time allow its net worth,
as computed in accordance with GAAP, to fall below $ . -----------------

                                   ARTICLE VII

                               NEGATIVE COVENANTS

     Borrower covenants and agrees that so long as Borrower may borrow hereunder
and until payment in full of the Note and  performance of all other  obligations
of Borrower under the Loan Documents:

     SECTION 7.1. BORROWING.  Borrower will not create,  incur, assume or suffer
to exist any liability for Borrowed Money except:  (i)  indebtedness  to Lender;
(ii)  indebtedness  of  Borrower  secured by  mortgages,  encumbrances  or liens
expressly  permitted  by Section 7.3  hereof;  (iii)  accounts  payable to trade
creditors and current  operating  expenses (other than for borrowed money) which
are not aged more than one hundred  twenty  (120) days from the billing  date or
more than  thirty  (30) days from the due  date,  in each case  incurred  in the
ordinary  course of business and paid within such time  period,  unless the same
are being contested in good faith and by appropriate and lawful proceedings, and
Borrower shall have set aside such reserves, if any, with respect thereto as are
required  by  GAAP  and  deemed   adequate  by  Borrower  and  its   independent
accountants; and (iv) borrowings incurred in the ordinary course of its business
and not  exceeding  $10,000.00  in the  aggregate  outstanding  at any one time.
Borrower will not make  prepayments on any existing or future  indebtedness  for
Borrowed Money to any Person (other than Lender, to the extent permitted by this
Agreement or any subsequent agreement between Borrower and Lender).

     SECTION  7.2.  JOINT  VENTURES.   Borrower  will  not  invest  directly  or
indirectly in any joint venture for any purpose without the prior written notice
to, and the express written consent of, Lender, which consent may be withheld in
Lender's sole discretion.

     SECTION  7.3.  LIENS AND  ENCUMBRANCES.  Borrower  will not create,  incur,
assume or suffer to exist any mortgage, pledge, lien or other encumbrance of any
kind (including the charge upon property  purchased under a conditional  sale or
other title retention  agreement) upon, or any security  interest in, any of its
Collateral, whether now owned or hereafter acquired, except for Permitted Liens.

     SECTION 7.4.  MERGER,  ACQUISITION,  OR SALE OF ASSETS.  Borrower  will not
enter into any merger or consolidation  with or acquire all or substantially all
of the assets of any Person,  and will not sell,  lease, or otherwise dispose of
any of its assets except in the ordinary course of its business.



                                       27
<PAGE>

     SECTION 7.5. SALE AND LEASEBACK. Borrower will not, directly or indirectly,
enter into any arrangement  whereby  Borrower sells or transfers all or any part
of its assets and thereupon and within one year  thereafter  rents or leases the
assets so sold or  transferred  without  the prior  written  notice  to, and the
express  written  consent of, Lender,  which consent may be withheld in Lender's
sole discretion.

     SECTION 7.6. DIVIDENDS, DISTRIBUTIONS AND MANAGEMENT FEES. Upon notice from
Lender to Borrower of the existence of an Event of Default  hereunder,  Borrower
will not declare or pay any  dividends or other  distributions  with respect to,
purchase, redeem or otherwise acquire for value any of its outstanding stock now
or hereafter outstanding,  or return any capital of its stockholders,  nor shall
Borrower pay management fees or fees of a similar nature to any Person.

     SECTION 7.7. LOANS. Borrower will not make loans or advances to any Person,
other than (i) trade credit extended in the ordinary course of its business, and
(ii) advances for business travel and similar temporary advances in the ordinary
course of business to officers, stockholders, directors, and employees.

     SECTION 7.8. CONTINGENT LIABILITIES.  Borrower will not assume,  guarantee,
endorse,  contingently  agree to purchase or  otherwise  become  liable upon the
obligation of any Person,  except by the  endorsement of negotiable  instruments
for deposit or  collection  or similar  transactions  in the ordinary  course of
business.

     SECTION 7.9. SUBSIDIARIES.  Borrower will not form any subsidiary,  or make
any  investment  in or any loan in the  nature of an  investment  to,  any other
Person.

     SECTION 7.10.  COMPLIANCE WITH ERISA. Borrower will not permit with respect
to any Plan  covered  by Title IV of ERISA  any  Prohibited  Transaction  or any
Reportable Event.

     SECTION  7.11.  CERTIFICATES  OF NEED.  Borrower  will not amend,  alter or
suspend or terminate or make provisional in any material way, any certificate of
need or provider number without the prior written consent of Lender.

     SECTION 7.12.  TRANSACTIONS  WITH AFFILIATES.  Borrower will not enter into
any transaction, including without limitation the purchase, sale, or exchange of
property,  or the  loaning or giving of funds to any  Affiliate  or  subsidiary,
except in the  ordinary  course  of  business  and  pursuant  to the  reasonable
requirements of Borrower's business and upon terms substantially the same and no
less  favorable  to Borrower as it would  obtain in a  comparable  arm's  length
transaction  with any Person not an Affiliate or subsidiary,  and so long as the
transaction  is  not  otherwise  prohibited  hereunder.   For  purposes  of  the
foregoing, Lender consents to the transactions described on Schedule 7.12.

     SECTION 7.13. USE OF LENDER'S NAME. Borrower will not use Lender's name (or
the name of any of Lender's  affiliates) in connection  with any of its business
operations. Borrower



                                       28
<PAGE>

may disclose to third  parties that Borrower has a borrowing  relationship  with
Lender.  Nothing herein contained is intended to permit or authorize Borrower to
make any contract on behalf of Lender.

      SECTION 7.14.  CHANGE IN CAPITAL STRUCTURE.  There shall occur no
change in Borrower's capital structure as set forth in Schedule 4.17.

      SECTION 7.15.  CONTRACTS AND AGREEMENTS.  Borrower will not become or be a
party to any contract or agreement which would breach this Agreement,  or breach
any other instrument,  agreement, or document to which Borrower is a party or by
which it is or may be bound.

      SECTION  7.16.  MARGIN  STOCK.  Borrower  will not carry or  purchase  any
"margin security" within the meaning of Regulations U, G, T or X of the Board of
Governors of the Federal Reserve System.

      SECTION 7.17.  TRUTH OF  STATEMENTS  AND  CERTIFICATES.  Borrower will not
furnish to Lender any  certificate  or other  document  that contains any untrue
statement of a material fact or that omits to state a material fact necessary to
make  it not  misleading  in  light  of the  circumstances  under  which  it was
furnished.


                                  ARTICLE VIII

                                EVENTS OF DEFAULT

      SECTION 8.1.  EVENTS OF DEFAULT.  Each of the following (individually,
an "Event of Default" and collectively, the "Events of Default") shall
constitute an event of default hereunder:

            (a) A default in the payment of any  installment of principal of, or
interest upon, the Note when due and payable,  whether at maturity or otherwise,
or any breach of Section  2.3 of this  Agreement,  which  default or breach,  as
applicable,  shall have continued unremedied for a period of five (5) days after
written notice thereof from Lender to Borrower;

            (b) A default in the payment of any other  charges,  fees,  or other
monetary  obligations  owing to Lender  arising out of or incurred in connection
with this  Agreement  when such payment is due and payable,  which default shall
have  continued  unremedied  for a period of five (5) days after written  notice
from Lender;

            (c) A default in the due  observance or  performance  by Borrower of
any other term,  covenant or agreement  contained in any of the Loan  Documents,
which  default  shall have  continued  unremedied  for a period of ten (10) days
after written notice from Lender;

                                       29
<PAGE>

            (d) If any  representation or warranty made by Borrower herein or in
any of the other Loan Documents,  any financial  statement,  or any statement or
representation  made in any other  certificate,  report or opinion  delivered in
connection  herewith or therewith proves to have been incorrect or misleading in
any material  respect when made,  which default shall have continued  unremedied
for a period of ten (10) days after written notice from Lender;

            (e) If any  obligation  of  Borrower  (other  than  its  Obligations
hereunder)  for the payment of Borrowed Money is not paid when due or within any
applicable grace period, or such obligation becomes or is declared to be due and
payable prior to the expressed maturity thereof, or there shall have occurred an
event which,  with the giving of notice or lapse of time,  or both,  would cause
any such  obligation to become,  or allow any such  obligation to be declared to
be, due and payable;

            (f) If Borrower  makes an  assignment  for the benefit of creditors,
offers a composition  or extension to creditors,  or makes or sends notice of an
intended  bulk sale of any  business  or assets now or  hereafter  conducted  by
Borrower;

            (g) If  Borrower  files a petition  in  bankruptcy,  is  adjudicated
insolvent or bankrupt,  petitions or applies to any tribunal for any receiver of
or any trustee for itself or any substantial part of its property, commences any
proceeding   relating   to  itself   under  any   reorganization,   arrangement,
readjustment  or  debt,  dissolution  or  liquidation  law  or  statute  of  any
jurisdiction,  whether now or hereafter in effect, or there is commenced against
Borrower any such  proceeding  which remains  undismissed  for a period of sixty
(60) days, or any Borrower by any act indicates its consent to,  approval of, or
acquiescence  in, any such  proceeding or the  appointment of any receiver of or
any trustee for a Borrower or any substantial  part of its property,  or suffers
any such  receivership or trusteeship to continue  undischarged  for a period of
sixty (60) days;

            (h) If one or more final judgments  against  Borrower or attachments
against its property not fully and unconditionally covered by insurance shall be
rendered  by a court of record  and shall  remain  unpaid,  unstayed  on appeal,
undischarged, unbonded and undismissed for a period of ten (10) days;

            (i)  A  Reportable   Event  which  might   constitute   grounds  for
termination  of any Plan covered by Title IV of ERISA or for the  appointment by
the appropriate United States District Court of a trustee to administer any such
Plan or for the entry of a lien or  encumbrance  to secure any  deficiency,  has
occurred and is continuing  thirty (30) days after its  occurrence,  or any such
Plan is terminated,  or a trustee is appointed by an  appropriate  United States
District  Court to  administer  any such Plan, or the Pension  Benefit  Guaranty
Corporation  institutes  proceedings  to terminate any such Plan or to appoint a
trustee to  administer  any such Plan,  or a lien or  encumbrance  is entered to
secure any deficiency or claim;



                                       30
<PAGE>


            (j) If a majority  of the  outstanding  stock of Borrower is sold or
otherwise transferred by the Person owning such stock on the date hereof;

            (k) If there shall occur any uninsured  damage to or loss,  theft or
destruction of any portion of the Collateral;

            (l) If Borrower  breaches or violates  the terms of, or if a default
or an event which could,  whether  with notice or the passage of time,  or both,
constitute  a  default,  occurs  under any other  existing  or future  agreement
(related or unrelated) between Borrower and Lender;

            (m) Upon the issuance of any execution or distraint  process against
Borrower or any of its property or assets;

            (n)  If  Borrower  ceases  any  material  portion  of  its  business
operations as presently conducted;

            (o) If any  indication  or  evidence  is  received  by  Lender  that
Borrower may have  directly or  indirectly  been engaged in any type of activity
which, in Lender's discretion, might result in the forfeiture of any property of
Borrower to any  Governmental  Authority,  which  default  shall have  continued
unremedied for a period of ten (10) days after written notice from Lender;

            (p)  Borrower or any  Affiliate  of  Borrower,  shall  challenge  or
contest,  in any action,  suit or proceeding,  the validity or enforceability of
this  Agreement,  or  any of the  other  Loan  Documents,  the  legality  or the
enforceability  of any of the  Obligations  or the perfection or priority of any
Lien granted to Lender;

            (q) Borrower shall be criminally indicted or convicted under any law
that could lead to a forfeiture of any Collateral.

            (r) There shall  occur a material  adverse  change in the  financial
condition or business  prospects  of Borrower,  or if Lender in good faith deems
itself  insecure  as a result  of acts or  events  bearing  upon  the  financial
condition of Borrower or the  repayment of the Note,  which  default  shall have
continued  unremedied  for a period of ten (10) days after  written  notice from
Lender.

     SECTION 8.2.  ACCELERATION.  Upon the  occurrence  of any of the  foregoing
Events of Default, the Note shall become and be immediately due and payable upon
declaration to that effect delivered by Lender to Borrower;  provided that, upon
the happening of any event specified in Section 8.1(g) hereof, the Note shall be
immediately due and payable without declaration or other notice to Borrower.

                                       31
<PAGE>

     SECTION 8.3. REMEDIES.

            (a) In addition to all other rights,  options,  and remedies granted
to Lender  under  this  Agreement,  upon the  occurrence  of an Event of Default
Lender may (i) terminate the Loan,  whereupon all outstanding  Obligations shall
be  immediately  due and payable,  (ii) exercise all other rights  granted to it
hereunder  and all rights  under the  Uniform  Commercial  Code in effect in the
applicable  jurisdiction(s)  and  under  any  other  applicable  law,  and (iii)
exercise all rights and remedies  under all Loan  Documents  now or hereafter in
effect,  including the following rights and remedies (which list is given by way
of example and is not intended to be an  exhaustive  list of all such rights and
remedies):

                  (i) The right to take  possession of, send notices  regarding,
and collect directly the Collateral,  with or without judicial  process,  and to
exercise  all  rights  and  remedies  available  to Lender  with  respect to the
Collateral under the Uniform Commercial Code in effect in the jurisdiction(s) in
which such Collateral is located;

                  (ii)  The  right  to  (by  its  own  means  or  with  judicial
assistance)  enter  any  of  Borrower's  premises  and  take  possession  of the
Collateral, or render it unusable, or dispose of the Collateral on such premises
in compliance  with  subsection  (b),  without any liability for rent,  storage,
utilities,  or other sums,  and Borrower shall not resist or interfere with such
action;

                  (iii) The right to require  Borrower at Borrower's  expense to
assemble  all or any part of the  Collateral  and make it available to Lender at
any place designated by Lender;

                  (iv) The right to reduce the Maximum Loan Amount or to use the
Collateral  and/or  funds in the  Concentration  Account  in  amounts  up to the
Maximum Loan Amount for any reason; and

                  (v) The right to relinquish  or abandon any  Collateral or any
security interest therein.

            (b) Borrower  agrees that a notice  received by it at least five (5)
days before the time of any intended  public  sale,  or the time after which any
private sale or other  disposition  of the  Collateral  is to be made,  shall be
deemed to be reasonable notice of such sale or other  disposition.  If permitted
by applicable law, any perishable Collateral which threatens to speedily decline
in value or which is sold on a  recognized  marked  may be sold  immediately  by
Lender  without  prior  notice  to  Borrower.  At any  sale  or  disposition  of
Collateral,  Lender may (to the extent permitted by applicable law) purchase all
or any part of the  Collateral,  free from any right of  redemption by Borrower,
which right is hereby waived and released.  Borrower covenants and agrees not to
interfere  with or impose any  obstacle to  Lender's  exercise of its rights and
remedies with respect to the Collateral.


                                       41
<PAGE>


      SECTION 8.4.  NATURE OF  REMEDIES.  Lender shall have the right to proceed
against all or any portion of the  Collateral  to satisfy  the  liabilities  and
Obligations of Borrower to Lender in any order.  All rights and remedies granted
Lender  hereunder  and under any  agreement  referred  to herein,  or  otherwise
available at law or in equity,  shall be deemed  concurrent and cumulative,  and
not alternative remedies,  and Lender may proceed with any number of remedies at
the same time until the Loans, and all other existing and future liabilities and
obligations  of Borrower to Lender,  are satisfied in full.  The exercise of any
one right or remedy  shall not be deemed a waiver or release of any other  right
or remedy, and Lender,  upon the occurrence of an Event of Default,  may proceed
against Borrower,  and/or the Collateral, at any time, under any agreement, with
any available remedy and in any order.

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION 9.1. EXPENSES AND TAXES.

            (a) Borrower  agrees to pay,  whether or not the Closing  occurs,  a
reasonable  documentation  preparation  fee,  together  with  actual  audit  and
appraisal  fees and all other  out-of-pocket  charges and  expenses  incurred by
Lender in connection with the negotiation,  preparation and execution of each of
the Loan Documents,  any amendments to the Loan Documents following Closing, and
preparation for Closing.  Borrower also agrees to pay all out-of-pocket  charges
and  expenses  incurred by Lender  (including  the fees and expenses of Lender's
counsel) in connection with the  enforcement,  protection or preservation of any
right or claim of Lender and the  collection  of any  amounts due under the Loan
Documents.

            (b)  Borrower  shall pay all taxes  (other  than taxes based upon or
measured by Lender's  income or revenues or any personal  property tax), if any,
in  connection  with the issuance of the Note and the  recording of the security
documents  therefor.  The  obligations  of Borrower  under this clause (b) shall
survive the payment of Borrower's  indebtedness hereunder and the termination of
this Agreement.

      SECTION 9.2. ENTIRE  AGREEMENT;  AMENDMENTS.  This Agreement and the other
Loan Documents  constitute the full and entire understanding and agreement among
the parties with regard to their subject  matter and supersede all prior written
or oral  agreements,  understandings,  representations  and warranties made with
respect thereto. No amendment,  supplement or modification of this Agreement nor
any waiver of any provision  thereof shall be made except in writing executed by
the party against whom enforcement is sought.

     SECTION 9.3. NO WAIVER; CUMULATIVE RIGHTS. No waiver by any party hereto of
any one or more  defaults  by the other party in the  performance  of any of the
provisions  of this  Agreement  shall operate or be construed as a waiver of any
future default or defaults, whether of a like or different nature. No failure or
delay on the part of any party in exercising any right, power or



                                       33
<PAGE>

     remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial  exercise  of any such  right,  power or  remedy  preclude  any other or
further  exercise  thereof or the exercise of any other right,  power or remedy.
The remedies  provided for herein are  cumulative  and are not  exclusive of any
remedies  that may be  available  to any  party  hereto  at law,  in  equity  or
otherwise.

     SECTION  9.4.  NOTICES.  Any  notice  or other  communication  required  or
permitted  hereunder  shall be in writing and  personally  delivered,  mailed by
registered or certified  mail (return  receipt  requested and postage  prepaid),
sent by telecopier  (with a confirming  copy sent by regular  mail),  or sent by
prepaid  overnight  courier service,  and addressed to the relevant party at its
address set forth below,  or at such other address as such party may, by written
notice, designate as its address for purposes of notice hereunder:

            (a)   If to Lender, at:

                  HCFP Funding, Inc.
                  2 Wisconsin Circle, Suite 320
                  Chevy Chase, Maryland 20815
                  Attention:  Ethan D. Leder, President
                  Telephone:  (301) 961-1640
                  Telecopier:  (301) 664-9860

            (b) If to Borrower, at:

                  Medical Asset Management, Inc.
                  25241 Paseo De Alicia, Suite 230
                  Laguna Hills, California 92653
                  Attention: Mr. Clarke Underwood, Chief Financial Officer
                  Telephone:  (714) 829-8333
                  Telecopier:  (714) 829-8330

     If mailed,  notice  shall be deemed to be given  five (5) days after  being
sent, if sent by personal  delivery or telecopier,  notice shall be deemed to be
given when delivered,  and if sent by prepaid courier, notice shall be deemed to
be given on the next Business Day following deposit with the courier.

     SECTION  9.5.  SEVERABILITY.  If any term,  covenant or  condition  of this
Agreement,  or the application of such term,  covenant or condition to any party
or  circumstance  shall be found by a court of competent  jurisdiction to be, to
any extent,  invalid or  unenforceable,  the remainder of this Agreement and the
application  of such term,  covenant,  or condition to parties or  circumstances
other than those as to which it is held invalid or  unenforceable,  shall not be
affected  thereby,  and each  term,  covenant  or  condition  shall be valid and
enforced to the fullest  extent  permitted by law. Upon  determination  that any
such term is invalid, illegal or


                                       34
<PAGE>

unenforceable, the parties hereto shall amend this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner.

     SECTION 9.6.  SUCCESSORS  AND ASSIGNS.  This  Agreement,  the Note, and the
other Loan Documents  shall be binding upon and inure to the benefit of Borrower
and Lender and their  respective  successors  and assigns.  Notwithstanding  the
foregoing,  Borrower  may not assign any of its  rights or  delegate  any of its
obligations  hereunder without the prior written consent of Lender, which may be
withheld  in  its  sole  discretion.  Lender  may  sell,  assign,  transfer,  or
participate any or all of its rights or obligations  hereunder without notice to
or consent of Borrower.

     SECTION 9.7. COUNTERPARTS.  This Agreement may be executed in any number of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute but one instrument.

     SECTION 9.8.  INTERPRETATION.  No provision of this  Agreement or any other
Loan Document shall be  interpreted or construed  against any party because that
party or its legal  representative  drafted  that  provision.  The titles of the
paragraphs of this  Agreement are for  convenience of reference only and are not
to be  considered  in  construing  this  Agreement.  Any  pronoun  used  in this
Agreement shall be deemed to include singular and plural and masculine, feminine
and  neuter  gender  as the case  may be.  The  words  "herein,"  "hereof,"  and
"hereunder"  shall be deemed to refer to this  entire  Agreement,  except as the
context otherwise requires.

     SECTION 9.9. SURVIVAL OF TERMS. All covenants, agreements,  representations
and  warranties  made in this  Agreement,  any other Loan  Document,  and in any
certificates and other  instruments  delivered in connection  therewith shall be
considered  to have been relied  upon by Lender and shall  survive the making by
Lender of the Loans herein contemplated and the execution and delivery to Lender
of the Note, and shall  continue in full force and effect until all  liabilities
and obligations of Borrower to Lender are satisfied in full.

     SECTION 9.10.  RELEASE OF LENDER.  Borrower releases Lender,  its officers,
employees,  and agents, of and from any claims for loss or damage resulting from
acts or conduct of any or all of them,  unless caused by Lender's  recklessness,
gross negligence, or willful misconduct.

     SECTION 9.11.  TIME.  Whenever  Borrower is required to make any payment or
perform any act on a Saturday,  Sunday, or a legal holiday under the laws of the
State of Maryland (or other  jurisdiction where Borrower is required to make the
payment or perform the act), the payment may be made or the act performed on the
next Business Day. Time is of the essence in Borrower's  performance  under this
Agreement and all other Loan Documents.

     SECTION 9.12. COMMISSIONS.  The transaction  contemplated by this Agreement
was brought about by Lender and Borrower  acting as  principals  and without any
brokers,  agents,  or finders  being the  effective  procuring  cause.  Borrower
represents that it has not committed




                                       35
<PAGE>

Lender to the payment of any brokerage fee, commission,  or charge in connection
with  this  transaction.  If any such  claim is made on  Lender  by any  broker,
finder,  or agent or other person,  Borrower will  indemnify,  defend,  and hold
Lender harmless from and against the claim and will defend any action to recover
on that claim, at Borrower's cost and expense,  including Lender's counsel fees.
Borrower  further  agrees that until any such claim or demand is  adjudicated in
Lender's favor, the amount demanded will be deemed a liability of Borrower under
this Agreement, secured by the Collateral.

     SECTION 9.13. THIRD PARTIES. No rights are intended to be created hereunder
or under any other  Loan  Document  for the  benefit of any third  party  donee,
creditor,  or  incidental  beneficiary  of Borrower.  Nothing  contained in this
Agreement  shall be construed as a delegation  to Lender of  Borrower's  duty of
performance, including without limitation Borrower's duties under any account or
contract in which Lender has a security interest.

     SECTION 9.14.  DISCHARGE OF  BORROWER'S  OBLIGATIONS.  Lender,  in its sole
discretion,  shall  have the right at any time,  and from time to time,  without
prior  notice to Borrower if Borrower  fails to do so, to: (i) obtain  insurance
covering  any  of the  Collateral  as  required  hereunder;  (ii)  pay  for  the
performance of any of Borrower's obligations  hereunder;  (iii) discharge taxes,
liens, security interests, or other encumbrances at any time levied or placed on
any of the Collateral in violation of this Agreement  unless Borrower is in good
faith with due diligence by appropriate  proceedings contesting those items; and
(iv) pay for the maintenance and preservation of any of the Collateral. Expenses
and advances shall be added to the Loan, until reimbursed to Lender and shall be
secured by the Collateral. Any such payments and advances by Lender shall not be
construed as a waiver by Lender of an Event of Default.

     SECTION  9.15.  INFORMATION  TO  PARTICIPANTS.  Lender  may  divulge to any
participant it may obtain in the Loan, or any portion thereof,  all information,
and  furnish  to such  participant  copies  of  reports,  financial  statements,
certificates,  and documents  obtained  under any provision of this Agreement or
any other Loan Document.

     SECTION  9.16.  INDEMNITY.  Borrower  hereby  agrees to indemnify  and hold
harmless Lender,  its partners,  officers,  agents and employees  (collectively,
"Indemnitee")  from and against  any  liability,  loss,  cost,  expense,  claim,
damage,  suit,  action  or  proceeding  ever  suffered  or  incurred  by  Lender
(including  reasonable  attorneys'  fees and expenses)  arising from  Borrower's
failure to observe,  perform or  discharge  any of its  covenants,  obligations,
agreements or duties hereunder, or from the breach of any of the representations
or warranties contained in Article IV hereof. In addition, Borrower shall defend
Indemnitee  against  and save it  harmless  from all claims of any  Person  with
respect  to the  Collateral.  Notwithstanding  any  contrary  provision  in this
Agreement,  the obligation of Borrower under this Section 9.16 shall survive the
payment in full of the Obligations and the termination of this Agreement.

     SECTION 9.17.  CHOICE OF LAW; CONSENT TO  JURISDICTION.  THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE




                                       36
<PAGE>

WITH,  THE LAWS OF THE  STATE  OF  MARYLAND,  WITHOUT  REGARD  TO ANY  OTHERWISE
APPLICABLE  PRINCIPLES OF CONFLICTS OF LAWS.  IF ANY ACTION  ARISING OUT OF THIS
AGREEMENT OR THE NOTE IS COMMENCED BY LENDER IN THE STATE COURTS OF THE STATE OF
MARYLAND OR IN THE U.S.  DISTRICT  COURT FOR THE DISTRICT OF MARYLAND,  BORROWER
HEREBY CONSENTS TO THE  JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO
THE LAYING OF VENUE IN THE STATE OF  MARYLAND.  ANY  PROCESS IN ANY SUCH  ACTION
SHALL BE DULY SERVED IF MAILED BY REGISTERED MAIL, POSTAGE PREPAID,  TO BORROWER
AT ITS ADDRESS DESCRIBED IN SECTION 9.4 HEREOF.

     SECTION 9.18.  WAIVER OF TRIAL BY JURY.  BORROWER  HEREBY (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
(B) WAIVES  ANY RIGHT TO TRIAL BY JURY  FULLY TO THE EXTENT  THAT ANY SUCH RIGHT
SHALL  NOW OR  HEREAFTER  EXIST.  THIS  WAIVER  OF  RIGHT  TO  TRIAL  BY JURY IS
SEPARATELY  GIVEN,  KNOWINGLY AND VOLUNTARILY,  BY BORROWER,  AND THIS WAIVER IS
INTENDED TO ENCOMPASS  INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A JURY TRIAL WOULD OTHERWISE  ACCRUE.  LENDER IS HEREBY  AUTHORIZED AND
REQUESTED TO SUBMIT THIS  AGREEMENT TO ANY COURT  HAVING  JURISDICTION  OVER THE
SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE  EVIDENCE OF
BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER HEREBY CERTIFIES
THAT NO  REPRESENTATIVE  OR AGENT OF LENDER  (INCLUDING  LENDER'S  COUNSEL)  HAS
REPRESENTED,  EXPRESSLY OR  OTHERWISE,  TO BORROWER THAT LENDER WILL NOT SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

     SECTION 9.19.  CONFESSION  OF JUDGMENT.  BORROWER  AUTHORIZES  ANY ATTORNEY
ADMITTED  TO  PRACTICE  BEFORE ANY COURT OF RECORD IN THE  UNITED  STATES OR THE
CLERK OF SUCH COURT TO APPEAR ON BEHALF OF  BORROWER IN ANY COURT IN ONE OR MORE
PROCEEDINGS,  OR  BEFORE  ANY  CLERK  THEREOF  OF  PROTHONOTARY  OR OTHER  COURT
OFFICIAL,  AND TO CONFESS  JUDGMENT  AGAINST  BORROWER IN FAVOR OF LENDER IN THE
FULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY
AND ALL CHARGES,  FEES AND COSTS) PLUS  ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT
(15%) OF THE  AMOUNT  DUE,  PLUS  COURT  COSTS,  ALL  WITHOUT  PRIOR  NOTICE  OR
OPPORTUNITY  OF BORROWER FOR PRIOR  HEARING.  BORROWER  AGREES AND CONSENTS THAT
VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE
STATE OF  MARYLAND  OR OF  BALTIMORE  CITY,  MARYLAND,  OR IN THE UNITED  STATES
DISTRICT COURT FOR THE DISTRICT OF MARYLAND.  BORROWER WAIVES THE BENEFIT OF ANY
AND EVERY STATUTE,



                                       37
<PAGE>

ORDINANCE,  OR RULE OF  COURT  WHICH  MAY BE  LAWFULLY  WAIVED  CONFERRING  UPON
BORROWER  ANY  RIGHT  OR  PRIVILEGE  OF  EXEMPTION,  HOMESTEAD  RIGHTS,  STAY OF
EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR
IMMEDIATE  ENFORCEMENT OF A JUDGMENT OR RELATED  PROCEEDINGS ON A JUDGMENT.  THE
AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT  AGAINST BORROWER SHALL NOT
BE EXHAUSTED BY ONE OR MORE  EXERCISES  THEREOF,  OR BY ANY  IMPERFECT  EXERCISE
THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO;
SUCH  AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO
TIME,  IN THE SAME OR  DIFFERENT  JURISDICTIONS,  AS OFTEN AS LENDER  SHALL DEEM
NECESSARY, CONVENIENT, OR PROPER.


                                       38
<PAGE>







     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
as of the date first written above.

                                    LENDER:

ATTEST:                             HCFP FUNDING, INC.
                                    a Delaware corporation


By:                                 By: /s/ Jeffrey P. Hoffman    [SEAL]
   ----------------------------         ---------------------------
    Name:                               Name:  Jeffrey P. Hoffman
    Title:                              Title: Vice President


                                    BORROWER:

ATTEST:                             MEDICAL ASSET MANAGEMENT, INC.
                                    a Delaware corporation


By: /s/ D. Kent Norton              By: /s/ Charlie Underwood      [SEAL]
   ----------------------------         ---------------------------
    Name: D. Kent Norton                Name: Charlie Underwood
    Title: V.P.                         Title: Chief Financial Officer


ATTEST:                             HEALTHCARE PROFESSIONAL
                                    MANAGEMENT, INC.
                                    a Pennsylvania corporation


By: /s/ Arnold M. Neuman, M.D.      By:   /s/ Anthony F. Aulicino  [SEAL]
   ----------------------------         ---------------------------
    Name: Arnold M. Neuman              Name:  Anthony F. Aulicino
    Title:                              Title:  CEO



                                       39
<PAGE>

                                LIST OF EXHIBITS


Exhibit A - Form of Revolving Credit Note

Exhibit B - Form of Lockbox Agreement

Exhibit C - Form of Legal Opinion


                                       40
<PAGE>



                                LIST OF SCHEDULES


Schedule 1.36     -     Permitted Liens

Schedule 4.1      -     Subsidiaries

Schedule 4.5      -     Litigation

Schedule 4.7      -     Tax Identification Numbers

Schedule 4.13     -     Non-Compliance with Law

Schedule 4.14     -     Environmental Matters

Schedule 4.15     -     Places of Business

Schedule 4.16     -     Licenses

Schedule 4.17     -     Stock Ownership

Schedule 4.19     -     Borrowings and Guarantees

Schedule 4.21     -     Trade Names

Schedule 4.22     -     Joint Ventures

Schedule 7.12     -     Transactions with Affiliates

                                       41

<PAGE>

                                SCHEDULE 1.36

                               Permitted Liens

                  C. Jeffery Kessler, M.D., P.C. (Colorado)
                       Gynecology Ltd., P.C. (Colorado)
                     M. H. Melmed, M.D., P.C. (Colorado)

<PAGE>


                                 SCHEDULE 4.1

                                 Subsidiaries

                                     None

<PAGE>


                                 SCHEDULE 4.5

                                  Litigation

CYNTHIA LATSKO KLUTZ ("KLUTZ") V. HEALTH PROFESSIONAL MANAGEMENT CORP.("HPM")
      On or about  August 30,  1995,  Cynthia  Latsko Klutz filed a civil action
against HPM,  Inc. in Allegheny  County,  Pennsylvania,  Court of Common  Pleas.
Klutz alleges breach of contract and negligence arising in connection with HPM's
alleged  obligation to seek out  prospective  buyer for the sale of  plaintiff's
medical practice. Klutz seeks damages in excess of $25,000.


BRADLEY HALL,  M.D.,  P.C. AND BRADLEY HALL,  M.D.  ("BRADLEY") V. MEDICAL ASSET
MANAGEMENT,  INC. ("MAM"); HEALTHCARE PROFESSIONAL MANAGEMENT ("HPM"); AND GREGG
S. SOERGEL
      On or about September 20, 1996,  Bradley Hall,  M.D., filed a civil action
against HPM,  Inc.,  MAM,  Inc.,  and Gregg Soergel  filed in Allegheny  County,
Pennsylvania,  Court of  Common  Pleas.  Bradley  alleges  breach  of  contract,
negligence,  and  misrepresentation  arising  in  connection  with HPM and MAM's
alleged  obligation  to perform  their duty under the contract to detect  and/or
report embezzlement of the plaintiffs' funds. Bradley seeks damages in excess of
$25,000, together with interest, costs and attorney fees.


CENTURY CITY PLAZA RADIOLOGY  MEDICAL GROUP;  NEIL L. HORN,  M.D.; NEIL L. HORN,
M.D., INC.; RALPH BORROWS,  M.D.; BRONA H. BURROWS (COLLECTIVELY "CENTURY CITY")
V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
      On or  about  June  26,  1997,  Century  City  filed  this  demand  for an
arbitration proceeding with the Los Angeles,  California office of the American
Arbitration  Association  based upon an Asset  Purchase  and  Clinic  Management
Agreement  dated  February  1,  1993,  between  Century  City  and  MAM.  In its
arbitration demand against MAM, Century City alleged breach of contract,  breach
of fiduciary duty, request for indemnification,  and constructive fraud. Century
City has  requested  compensatory  damages  in the amount of  $516,545,  loss of
profits in the amount of  $400,000, unspecified  attorneys  fees,  and  punitive
damages.  One August  1,  1997  MAM filed a response  and  counterclaim  against
Century   City   denying   liability   and   asserting   claims   for   material
misrepresentation  and other  causes of  action.  MAM has  requested  damages to
indemnify it for physician  compensation,  operating  expenses,  and  management
fees. In addition, MAM has requested punitive damages, interest,  attorneys fees
and costs.  The  parties  are  currently  engaged in  discovery,  and based upon
matters discovered therein as well as managements knowledge and understanding of
the relevant  facts and  circumstances,  MAM believes that Century City's claims
are without merit and has made no reserves for such.

<PAGE>

MEDICAL ASSET MANAGEMENT,  INC. ("MAM") V. ARBOR FAMILY MEDICINE,  P.C.; MEDICAL
ACQUISITION   CORPORATION;   SUZANNE  NASH-TRUJILLO,   M.D.;  AND  ALEXANDER  G.
CIANFLONE, M.D., (COLLECTIVELY "ARBOR")
      On or about August 15, 1977, MAM filed a demand for  arbitration  with the
Denver,  Colorado office of the American  Arbitration  Association against Arbor
based upon the March 31, 1996, Asset Purchase Agreement and Management  Services
Agreement  between MAM and Arbor, in its demand,  MAM requests the return of its
monies represented by accounts receivable in the approximate amount of $250,000;
that Arbor  repurchase  its furniture,  fixtures,  equipment and supplies in the
approximate  amount of $130,000;  that Arbor return  90,000 shares of MAM common
stock,  that Arbor assume certain  liabilities  which it is obligated to assume,
and that Arbor repurchase real property in the amount of $360,000, plus interest
and costs. On or about September 1, 1997, Arbor filed an answer and counterclaim
alleging   breach  of  contract   and  requesting   approximately   $140,000  in
reimbursement and the return of $80,000 in management fees paid MAM, as well as
interest and costs.  MAM believes that Arbor's  counterclaims  are without merit
and has made no reserves for such.

RENTON FAMILY PRACTICE CENTER ("RENTON") V. MEDICAL ASSET MANAGEMENT, INC.
("MAM")
      On or about August 1, 1997,  Renton filed an unlawful  detainer  action in
King County, Washington Superior Court against MAM seeking approximately $13,000
in rent,  attorneys fees,  interest and costs. MAM,  subsequently,  consolidated
this action with  numerous  counterclaims  against  Renton,  and claims  against
entities owned or controlled by Renton's general partner,  Manfred Laband,  M.D.
The matter has been  consolidated and calendared for trial in December 1998. MAM
believes  it will  prevail  in its  claim  and  has  made  no  reserves  for any
counterclaims of Renton.


MEDICAL ASSET MANAGEMENT, INC. ("MAM") V. ONE CAPITAL CORPORATION; MARCUS V. MAM
      In these related matters, MAM has filed a civil action against One Capital
Corporation  in  Maricopa  County,   Arizona  Superior  Court  and,  by  way  of
counterclaim,  in Colorado for,  among other things,  breach of fiduciary  duty,
breach of oral  agreement,  and misappropriation  of trade secrets.  (Plaintiff,
Marcus,  has filed the action  against MAM in Denver County,  Colorado  Superior
Court,  alleging breach of contract.  MAM believes  Plaintiff's  allegations are
without merit.  MAM's maximum  exposure in the Colorado  action is under $40,000
plus  plaintiff's  attorneys'  fees.)  In or  about  1995,  MAM and One  Capital
Corporation  entered  into  corporate  advisory  agreements  wherein One Capital
Corporation represented that it would perform certain services for MAM in return
for certain fees,  including  stock options of MAM. One Capital  Corporation has
brought various  counterclaims  against MAM in response to MAM's complaint.  MAM
believes One Capital  Corporation's  counterclaims  are without  merit.  MAM has
established  no  contingent  reserve  for  these   counterclaims.   One  Capital
Corporation has asked for specific performance and, in the alternative, damages.
In  the  event  One  Capital  Corporation  prevails  in its  counterclaims,  the
agreement  between MAM and One Capital  Corporation  provides  for the sale of a
maximum of 375,000  shares of MAM common 


<PAGE>

stock to One Capital Corporation at a 40 to 50 percent discount from fair market
value. Counterclaimants have also requested attorneys' fees.


NORMAN COHEN, M.D. ("COHEN") V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
     Cohen and MAM  entered  into a  settlement  agreement,  based upon  certain
claims by Cohen, on July 17, 1997. Thereafter, on October 1, 1997, Cohen entered
a judgment against MAM in the amount of $181,250.  MAM has reserved $182,000 for
the judgment.


WILLIAM SCHEYER ("SCHEYER") V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
     In June 1997, Scheyer filed a claim for 10,000 shares of stock, and $80,575
for unpaid compensation with a King County,  Washington arbitration association.
Scheyer also alleged  unspecified  damages for breach of alleged oral agreement,
together with a claim for interest and attorneys'  fees. MAM plans to vigorously
defend  these  claims.  MAM has  asserted  a  counterclaim  for  payment  of its
management  fee  and  damages  for  breach  of  contract  and  violation  of the
Washington   Securities  Act.  The  claims  are  expected  to  be  submitted  to
arbitration.  MAM believes  Scheyer's  claims are without  merit and has made no
reserves for such.


ROY MUSGROVE ("MUSGROVE") V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
     The Musgrove  action was settled on May 23, 1997,  based on an action filed
in  King  County,  Washington  Superior  Court.  The  material  features  of the
settlement  include  payment by MAM of $112,500 upon  execution of the agreement
and  $75,000  over 24  months,  the  issuance  of 40,461  shares of MAM stock to
various  shareholders  of  Lifestyle  Academy,  and the  assumption  of  certain
obligations of Lifestyle Academy. The parties executed mutual releases.  MAM may
assert a malpractice  cause of action against its former counsel to recover some
of its losses in this case.


PICO COMMERCIAL CENTER PROPERTIES, A CALIFORNIA GENERAL PARTNERSHIP ("PICO")
V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
      In this action filed in Los Angeles  County,  California  Superior  Court,
Pico alleges  breach of contract and damages  arising in  connection  with MAM's
alleged obligation to deliver 112,000 shares of its common stock in exchange for
Pico's  conveyance to MAM of its interest in a certain long term hospital lease.
MAM, by way of defense,  asserts  that Pico did not fulfill  certain  conditions
precedent to MAM's obligations.  Subsequently, the parties agreed upon the basic
terms of a settlement,  under which MAM officers, Johns Regan and/or Kent Norton
individually,  and not MAM,  would  convey to Pico  40,000  shares of MAM common
stock,  restricted  in  accordance  with SEC Rule  144.  MAM  would use its best
efforts to obtain "piggyback registration rights" for said shares and would pay,
by way  of  cash  or  additional  stock,  any  shortfall  between  the  ultimate
liquidated  proceeds of the stock and the amount of $6.25 per share. The parties
are 

<PAGE>

currently engaged in the process of negotiating  details of the settlement.  MAM
has not established a reserve for this matter.


CARL CANTRELL ("CANTRELL") V. MEDICAL ASSET MANAGEMENT, INC. ("MAM")
      In or about July 1997, the California State Worker's  Compensation Appeals
Board  issued an  Amended  Findings  and Award in favor of former  MAM  employee
Cantrell  in  the  approximate  amount  of  $45,000  for  indemnity  awards  and
penalties.


<PAGE>


                                 SCHEDULE 4.7

                          Tax Identification Numbers

                 Medical Asset Management, Inc. (33-03599760)

               Healthcare Professional Management (25-1635922)

<PAGE>


                                SCHEDULE 4.13

                           Non-Compliance with Law

Other  than  filing  with the SEC  which  MAM is  currently  in the  process  of
updating,  MAM  believes  it is  not  in  violation  of any  statute,  rules  or
regulation.

<PAGE>


                                SCHEDULE 4.14

                            Environmental Matters

                                     None

<PAGE>


                                SCHEDULE 4.15

                              Places of Business

<PAGE>


                        MEDICAL ASSET MANAGEMENT, INC.

                                          Steve Ward, Controller
                                          Rocky Mountain Region
CORPORATE OFFICE                          3773 Cherry Creek North Drive, 
----------------                          Suite 735
                                          Denver, CO  80209
3651 Baseline, Suite 222
Gilbert, AZ  85234
Office:        (602) 503-3131
FAX:           (602) 503-3222






                                          CALIFORNIA REGIONAL OFFICE
                                          M&A and CFO

                                          25241 Paseo de Alicia, Suite 230
                                          Laguna Hills, CA  92653
OPERATIONS HEADQUARTERS                   Office:           (714) 829-8333
                                                            (888) MAM-T555
Healthcare Professional Management
Four Station Square, Suite 250
Pittsburgh, PA  15219

<PAGE>

MERGERS & ACQUISITIONS

Jim Causey
Vice President of Mergers & Acquisitions
Pines Office Center
One Pines Court
St. Louis, MO  63141


<PAGE>

ALASKA CLINICS

FAMILY MEDICAL CLINIC OF SOLDOTNA
206 Rockwell Avenue
Soldotna, AK  99669


                                          BRENT DAVIDSON, MD (IM)
FAMILY MEDICAL CLINIC OF SEWARD           60 North 13th Street
P.O. Box 2563                             San Jose, CA  85112
302 Railway Avenue
Seward, AK  99669

                                                     AND

                                          285 South Drive, Suite 3
                                          Mountain View, CA  94040
                                          Manager:          Debi Salazar
ARIZONA CLINICS                           Business:         (415) 968-4977
                                          Back Office:      (415) 968-4968
(415)968-4981                             FAX:              (415) 968-4981
BIRTH & WOMEN'S HEALTH CENTER            
2529 North Wyatt                          SOUTH VALLEY CARDIOVASCULAR GROUP  
Tucson, AZ  85712                         173 North Morrison, Suite D        
                                          San Jose, CA  95126                
                                          



                                          RONALD H. YANAGIHARA, MD (HEM/ONC)
JERRY NEUMAN, MD                          9360 No Name Uno, Suite 130
1500 N. Wilmot, Suite B-240               Gilroy, CA  95020
Tucson, AZ  85712

<PAGE>


PEDIATRIC UROLOGY & MALE INFERTILITY
18370 Burbank Boulevard, Suite 412
Tarzana, CA  91356




                                          THE OB/GYN ASSOCIATES, PC

25 North 14th Street, Suite 540           BUSINESS OFFICE
San Jose, CA  95112                       3773 Cherry Creek North Drive,
                                          Suite 735
                                          Denver, CO  80209



1610 N. El Dorado, Suite 10               AND
Stockton, CA  95204
                                          POTOMAC OFFICE
                                          1550 S. Potomac, Suite 330
                                          Aurora, CO  80012



COLORADO CLINICS

7950 Kipling Street, Suite 200
Arvada, CO  80005                         AND

                                          ALCOTT OFFICE
                                          8300 N. Alcott, Suite 300
                                          Westminister, CO  80030

AND

3655 Lutheran Parkway, Suite 207
Wheat Ridge, CO  80033


<PAGE>


ROCKY MOUNTAIN WOMEN'S HEALTHCARE         FLORIDA CLINICS
701 E. Hampden, Suite 110
Englewood, CO  80110                      LAUREL OAK MEDICAL ASSOCIATES
                                          418 SW 47th Terrace
                                          Cape Coral, FL  33914



7180 E. Orchard Road, Suite 200
Englewood, CO  80111                      IDAHO CLINICS

                                          Fairview Medical Clinic, PA
                                          4809 Fairview Avenue
                                          Boise, ID  83706

9141 Grant Street, Suite 235
Thornton, CO  80229


                                          MISSISSIPPI CLINICS

                                          DESOTO FAMILY PRACTICE
WOODRIDGE WOMEN'S CLINIC, PC  (RETIRED)   7163 Goodman Road
C/O 3773 Cherry Creek North Drive,        Olive Branch, MS  38652
Suite 735         
Denver, CO  80209


GYN, LTD.
320 East Fontanero Street
Colorado Springs, CO  80907

<PAGE>

OHIO CLINICS
                                          PEDIATRIC ALLIANCE
PRIMARY CARE ASSOCIATES, PC
7355 California Avenue, Suite 4           BUTLER PEDIATRICS
Boardman, OH  44512                       100 Evans Road, Suite A
                                          Butler, PA  16001



PENNSYLVANIA CLINICS
                                          MANOR OAK
MOUNTAIN SPRINGS MEDICAL ASSOCIATES       1910 Cochran Rd.
20 Nickman's Plaza                        Pittsburgh, PA  15220
Lemont Furnace, PA  15456



                                          MT. LEBANON PEDIATRICS
                                          603 Washington Road
COMMUNITY CARE PLUS                       Mt. Lebanon, PA  15228
2010 Kinvara Drive
Pittsburgh, PA  15237


                                          NORTH HILLS PEDIATRICS
                                          9104 Babcock Blvd., Suite 2111
                                          Pittsburgh, PA  15237

AND

601 Monroe Ave.
Pittsburgh, PA  15202

<PAGE>


NORTHLAND PEDIATRICS                      CONTEMPORARY WOMEN'S HEALTH CARE
4721 McKnight Rd., Suite 209 N            435 Williams  Avenue South  
Pittsburgh,  PA 15237                     Renton, WA 98040



PEDIATRICS SOUTH
240 Mt. Lebanon Blvd.
Pittsburgh, PA  15234



                                          AURORA FOOT & ANKLE
SOUTHWESTERN PEDIATRICS                   7315 212th Street SW, Suite 103
51 Professional Plaza                     Edmonds, WA  98026
850 Clariton Plaza
Pittsburgh, PA  15236



ST. CLAIR PEDIATRICS                      WOODENVILLE DERMATOLOGY CLINIC
1580 McLaughlin Run Rd.                   1700 140th Avenue, Suite 206
Pittsburgh, PA  15241                     Woodenville, WA  98072



WASHINGTON CLINICS

Northwest Foot & Ankle
9730 3rd Avenue, NE Suite 208 
Seattle, WA 98115


<PAGE>


                                SCHEDULE 4.16

                                   Licenses

                         Medical Asset Management, Inc.
     Business permits and qualified to do business in the following states:
 Alaska, Arizona, California, Colorado, Mississippi, Tennessee, and Washington

             Healthcare Professional Management Business permits and
                qualified to do business in the following state:
                                  Pennsylvania

<PAGE>


                                  SCHEDULE 4.17

                                 Stock Ownership

<PAGE>


<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  8
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:05 


REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
--------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                  <C>                 <C>  
STANLEY & TOBY HERZOFF            MA 1042        ###-##-####          C                     2,000
4240 FULTON AVE APT 307                                                                   -------
STUDIO CITY CA 91604                                                  TOTAL                 2,000
                                                                     
EDWARD P HESTIN                   MA 1035                             R                   108,333
108 SOUTHRIDGE DR                                                                         -------
MONROEVILLE PA 15146                                                  TOTAL               108,333
                                                                     
DAVID A & LINDA M HILL JT TEN     MA0937                              R                     2,000
                                                                                          -------
                                                                      TOTAL                 2,000
                                                                     
LINDA HINERMAN                    0753                                C                     1,429
1250 EMERY ST                                                                             -------
SALT LAKE CITY UT  84104                                              TOTAL                 1,429
                                                                     
MICHAEL J & PATRICIA A            MA1004         ###-##-####          C                       100
HOCHGESANG JTTEN                                                                          -------
1339 MILLER LN                                                        TOTAL                   100
JASPER IN  47546                                                      
                                                                     
CAROL RAE HOPF                    MA1076         ###-##-####          C                       200
3229 N 500 W                                                                              -------
JASPER IN 47546                                                       TOTAL                   200
                                                                     
RALPH S HOPF                      MA1077         ###-##-####          C                       300
3229 N 500 W                                                                              -------
JASPER IN  47546                                                      TOTAL                   300
                                                                     
JOHN P HOSINSKI                   MA1030         ###-##-####          C                       100
1015 NEVILLE                                                                              -------
JONEDBORO AR  72401                                                   TOTAL                   100
                                                                     
HARRY J JAFFE                     MA1040         ###-##-####          C                       200
1827 ALLENBY GREEN                                                                        -------
GERMANTOWN TN  38139                                                  TOTAL                   200
                                                                     
JDN PARTNERS LP                   MA1048                              R                    50,000
                                                                                          -------
                                                                      TOTAL                50,000
                                                                     
PATRICIA D JENSEN                 0754                                C                     1,429
3954 HIGHLAND DR                                                                          -------
SALT LAKE CITY UT  84124                                              TOTAL                 1,429
                                                                     
ROY & GENEVIEVE P JEPSEN JTTEN    MA0955         ###-##-####          C                     3,000
277 PASEO CHUREA                                                                          -------
GREEN VALLEY AZ 85614                                                 TOTAL                 3,000
                                                                     
</TABLE>
                                                                     
<PAGE>                                                       

<TABLE>
<CAPTION>


MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  11
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:52

                                                                                         
REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                  <C>               <C>            
DAVID F LIDDELL                   MA0961                              R                  25,000                       
DAVID F LIDDELL, MA, RPT,                                                                --------
INC, PS                                                               TOTAL              25,000
                                                                                      
JUDY LOTAS                        MA1085                              R                  14,286
                                                                                        ---------
                                                                      TOTAL              14,286
                                                                                      
IRENE S LUND                      0761                                C                   1,429
529 A FIRST AVE                                                                         ---------
SALT LAKE CITY UT  84103                                              TOTAL               1,429
                                                                                      
DENNIS S & LAURIE J MANN JTTEN    MA0965                              R                  11,300
                                                                                        ---------
                                                                      TOTAL              11,300
                                                                                      
ERNEST & JAINE MCVOY              MA0951         26-2455173           C                     200
106 OLD WATERMILL RD                                                                    ---------
RAINBOW CITY AL  35906                                                TOTAL                 200
                                                                                      
KEVIN C MEHRINGER                 MA0977                              C                   2,000
453 E STATE RD 164                                                                      ---------
JASPER IN  47546                                                      TOTAL               2,000
                                                                                      
SALLY MINARD                      MA1084                              R                  14,286
                                                                                        ---------
                                                                      TOTAL              14,286
                                                                                      
WILLIAM MORETH                    MA0954         ###-##-####          C                     200
1747 S CARRIAGE LN                                                                      ---------
NEW BERLIN WI  53151                                                  TOTAL                 200
                                                                                      
STEVEN MORTON                     0764                                C                   1,429
3866 S 825 WEST                                                                         ---------
BOUNTIFUL UT  84010                                                   TOTAL               1,429
                                                                                      
MARVIN NEIUWENDORP                0810           ###-##-####          C                     100
230 N 7TH AVE                                                                           ---------
SHELDON IA  51201                                                     TOTAL                 100
                                                                                      
STANLEY G NEWELL DPM              MA0966                              R                  64,200
                                                                                        ---------
                                                                      TOTAL              64,200
                                                                                      
OB-GYN ASSOCIATES PC              MA1015         84-0591950           R                 146,000
11175 E MISSISSIPPI AVE STE 100                                                         ---------
AURORA CO  80012                                                      TOTAL             146,000
                                                                                      
</TABLE>
                                                  
<PAGE>    

<TABLE>
<CAPTION>
                                                                         
                                                               
MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  12   
                                  AS OF 06/30/96                 FORM: 10A    
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:53

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>                <C>  
                                                                                       
ODESSA MANAGEMENT                 0767                                C                 215,026
2ND FLOOR CITY BANK BUILD                                                               ---------
FREEPORT BAHAMAS                                                      TOTAL             215,026
                                                                                       
PACIFIC INTER SECURITIES INC      0769                                C                  38,606
1500-700 W GEORGIA ST                                                                   ---------
PO BOX 10015                                                          TOTAL              38,606
VANCOUVER BC V7Y1J1                                                                    
                                                                                       
GEORGIA PACIFIC SEC.              0814                                C                   2,858
STE 1600 TWO BENTALL CENTRE                                                            ---------
555 BURRARD ST                                                        TOTAL               2,858
VANCOUVER BC  V7XIS6                                                                   
                                                                                       
MR & MRS WILBUR PERRY             MA0941                              R                   2,000
                                                                                        ---------
                                                                      TOTAL               2,000
                                                                                       
WILBUR A & PATRICIA C PERRY JTTEN MA0970                              R                   2,000
                                                                                        ---------
                                                                      TOTAL               2,000
                                                                                       
DANIEL S PERKINS TRUSTEE          MA1062                              R                   5,000
UA DTD 5-12-88 FBO DANIEL S                                                             ---------
PERKINS                                                                                
                                                                      TOTAL               5,000
                                                                                       
RICHARD W PERKINS TRUSTEE         MA1070                              R                  15,000
UA DTD 6-14-78 FBO RICHARD W                                                            ---------
PERKINS                                                                                
                                                                      TOTAL              15,000
                                                                                       
STEVE PERRY                       0803                                R                   5,000
                                                                                        ---------
                                                                      TOTAL               5,000
                                                                                       
PHILADELPHIA DEP                  0771                                C                 396,754
1900 MARKET ST                                                                          ---------
PHILADELPHIA PA  19103                                                TOTAL             396,754
                                                                                       
SHARON PODOBNIK & SUSAN D         MA1088         ###-##-####          C                     155
PODOBNIK JTTEN                                                                         
616 MILLER LN                                                                           ---------
PITTSBURGH PA  15239                                                  TOTAL                 155
                                                                                       
DANIEL & SUSAN D PODOBNIK JTTEN   MA1089         ###-##-####          C                     130
616 MILLER LN                                                                           ---------
PITTSBURGH PA  15239                                                  TOTAL                 130
                                                                                       
OZZIE POLIT                       0792                                R                   2,000
                                                                                        ---------
                                                                                          2,000
                                                                                       
</TABLE>
                                                                             
<PAGE>                                                             
                                                           

<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  13
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:54

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                  <C>               <C>  
PONTE VEDRE PARTNERS LTD          MA1058                              R                 150,000
                                                                                        ---------
                                                                      TOTAL             150,000
                                                                                      
CLYDE E PRECHTER                  MA0956         39-3052671           C                     200
11137 WILLOW VALLEY RD                                                                  ---------
NEVADA CA  95959                                                      TOTAL                 200
                                                                                      
PRISM PARTNERS I                  MA1045                              R                  50,000
                                                                                        ---------
                                                                      TOTAL              50,000
                                                                                      
PYRAMID PARTNERS LP               MA1069                              R                  75,000
                                                                                        ---------
                                                                      TOTAL              75,000
                                                                                      
WILLIAM F RAWLS                   MA0912         ###-##-####          C                     150
BOX 593                                                                                 ---------
INDIANOLA MS  38751                                                   TOTAL                 150
                                                                                      
JOHN W REGAN & SANDRA K REGAN     MA1028                              R                5,146,094
JTTEN                                                                                 
                                                                                        ---------
                                                                      TOTAL            5,146,094
                                                                                      
WILLARD D & NORENE V REGESTER     MA0968                              R                   15,800
COM PROP                                                                              
                                                                                        ---------
                                                                                          15,800
                                                                                      
REGENT CAPITAL PARTNERS           MA1053                              R                  200,000
                                                                                        ---------
                                                                      TOTAL              200,000
                                                                                      
MARIO S RODRIGUEZ                 0773                                C                    2,002
1445 W ARAPAHOE AVE                                                                     ---------
SALT LAKE CITY UT 84104                                               TOTAL                2,002
                                                                                      
RONALD ROSENQUIST                 0774                                C                   11,559
                                                                                        ---------
                                                                      TOTAL               11,559
                                                                                      
THEODORE D ROTH                   MA1067                              R                    6,250
                                                                                        ---------
                                                                      TOTAL                6,250
                                                                                      
DUANE J ROTH                      MA1068                              R                    6,250
                                                                                        ---------
                                                                      TOTAL                6,250
                                                                                      
</TABLE>                          
                                                               
<PAGE>                                                    
                                                       
                       
                                           
<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  14
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:55

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>                <C>  
WILLIAM M & KATHLEEN M ROWEKAMP   MA0900         ###-##-####          C                   4,000
JTTEN                                                                                 
BOX 828                                                                                 ---------
JASPER IN 47546                                                       TOTAL               4,000
                                                                                      
MARILYN C RUSHTON                 0775                                C                   2,858
1582 E 12700 S                                                                          ---------
DRAPER UT 84020                                                       TOTAL               2,858
                                                                                      
STEPHAN C & CHRISTA M SCHULER     MA0959         ###-##-####          C                     200
858 BLESSINGER LN                                                                       ---------
JASPER IN 47546                                                       TOTAL                 200
                                                                                      
WILLIAM J & ZELDZ M SCHEYER       MA0967                              R                   5,000
CO TRUST UTA 5/24/93                                                                    ---------
                                                                      TOTAL               5,000
                                                                                      
JOSEPH W & JEAN M SCHERER JTTEN   MA1014                              C                   1,000
160 LEISIE RD                                                                           ---------
RENFREW PA  16053                                                     TOTAL               1,000
                                                                                      
KENNETH W SCHMITT TR WILLIAM F    MA0968                              C                   1,000
SCHMITT                                                                               
3584 BITTERSWEET DR                                                                     ---------
JASPER IN 47546                                                       TOTAL               1,000
                                                                                      
JAMES SEAY                        0777                                R                   2,312
                                                                                        ---------
                                                                      TOTAL               2,312
                                                                                      
THERON & HELEN SEEMANN JTTEN      MA0930         ###-##-####          C                     700
3106 HOWARD DR                                                                          ---------
JASPER IN 47546                                                       TOTAL                 700
                                                                                      
BRADLEY T & DEBRA K SEGER         MA0933         ###-##-####          C                  16,500
1986 EMILY ST                                                                           ---------
JASPER IN 47546                                                       TOTAL              16,500
                                                                                      
ALBERT & ROSE SHAW                MA1001                              C                   3,000
26 GORMLEY AVE                                                                          ---------
MERRICK NY  11566                                                     TOTAL               3,000
                                                                                      
JAVAID SHEIKH                     MA0940                              R                   8,000
                                                                                        ---------
                                                                      TOTAL               8,000
                                                                                      
SHELL PENSIONS TRUST LTD          MA1054                              R                 150,000
                                                                                        ---------
                                                                      TOTAL             150,000
                                                                                      
</TABLE>
                                                                    
<PAGE>                                                        
                                                   
                                                                      
                                                
<TABLE>                                                                       
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  15
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:56

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                  <C>               <C>  
JAMES H SKILMAN CUST ANDREW J     MA0949         ###-##-####          C                     475
SKILMAN                                                                               
1795 W 5TH AVE                                                                           --------
JASPER IN 47546                                                       TOTAL                 475
                                                                                      
JAMES H & CAROL J SKILLMAN JTTEN  0817           ###-##-####          C                     100
1795 W FIFTH ST                                                                         ---------
JASPER IN 47546                                                       TOTAL                 100
                                                                                      
DENIS E & CAROLYN H SKOG JT TEN   MA0922         ###-##-####          R                     558
1609 2ND ST                                                                             ---------
MARYSVILLE WA  98270                                                  TOTAL                 558
                                                                                      
BLUE SKY DEVELOPMENT CO           MA0911                              C                   1,000
10 MORRIS LN                                                                            ---------
TEXARKANA TX  75503                                                   TOTAL               1,000
                                                                                      
GREGG S SOERGEL                   MA1034                              R                 108,333
140 PROSPECT ST                                                                         ---------
PITTSBURGH PA  15211                                                  TOTAL             108,333
                                                                                      
SAMUEL & JULIA SPIGELMAN          MA0980                              R                  48,800
5800 RAINBOW HILL RD                                                                    ---------
LOS ANGELES CA                                                        TOTAL              48,800
                                                                                      
SAMUEL SPIGELMAN MD               MA1083                              R                  14,304
                                                                                        ---------
                                                                      TOTAL              14,304
                                                                                      
SPRING POINT PARTNERS LP          MA1046                              R                  50,000
                                                                                        ---------
                                                                      TOTAL              50,000
                                                                                      
JOSEPH F STEURER                  MA0957         ###-##-####          C                     500
404 REYLING DR                                                                          ---------
JASPER IN 47546                                                       TOTAL                 500
                                                                                      
ARNOLD M STEINMAN                 MA0964         ###-##-####          C                   3,000
BOX 8006                                                                                ---------
PITTSBURGH PA  15216                                                   TOTAL               3,000
                                                                                      
FRANCIS R & ROYAL STERLING JT TEN MA0907                              C                   1,400
43 PLANTATION DR #A-104                                                                 ---------
VERO BEACH FL  32966                                                  TOTAL               1,400
                                                                                      
STORIE PARTNERS LP                MA1059                              R                 250,000
                                                                                        ---------
                                                                      TOTAL             250,000
                                                                                      
</TABLE>
                                                                             
<PAGE>                          
                                               
<TABLE>                      
<CAPTION>                                                                             
                                                                              
MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  16
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:58

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>                  <C>               <C>  
LOREN B & SHARON B STONE JTTEN    MA1081                              R                  10,625
                                                                                        ---------
                                                                      TOTAL              10,625

LORELEI H TAMAYO                  MA0924         ###-##-####          R                     558
12627 SE 307TH ST                                                                       ---------
AUBURN WA  98092                                                      TOTAL                 558
                                                                                     
RAYMOND L & MARGARET F TANNER     MA1027         ###-##-####          C                     300
JTTEN                                                                                
450 N AVON RD                                                                           ---------
MEMPHIS TN  38117                                                     TOTAL                 300
                                                                                     
GERALD & ELLEN TARLOW             MA1023                              R                   7,500
                                                                                        ---------
                                                                      TOTAL               7,500
                                                                                     
JAY TEITELBAUM                    MA1056                              R                   5,600
                                                                                        ---------
                                                                      TOTAL               5,600
                                                                                     
BROOKS TERRY                      MA0993                              R                   1,000
                                                                                        ---------
                                                                      TOTAL               1,000
                                                                                     
RODGER S TERRY                    0779                                R                   2,312
                                                                                        ---------
                                                                      TOTAL               2,312
                                                                                     
MCKINLEY W THIGPEN                MA0985                              R                   4,000
                                                                                        ---------
                                                                      TOTAL               4,000
                                                                                     
PHILIP L THOMAS TR PL THOMAS      MA0982                              C                 150,000
INC PROFIT SHARING TR                                                                   ---------
                                                                      TOTAL             150,000
                                                                                     
THE TRAVELERS INDEMNITY COMPANY   MA1057                              R                 650,000
                                                                                        ---------
                                                                      TOTAL             650,000
                                                                                     
SUZANNE NASH - TRUJILLO, MD       MA1091                              R                  22,500
                                                                                        ---------
                                                                      TOTAL              22,500
                                                                                     
RAE S TSUKAMOTO                   MA0923         ###-##-####          R                     558
12627 SE 307TH ST                                                                       ---------
AUBURN WA  98092                                                      TOTAL                 558

</TABLE>
                                  
<PAGE>         
                                       
              
<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  17
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:59

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                              <C>           <C>                   <C>                 <C>     
TURNER-VISION INC                 MA1052                              R                   15,625
                                                                                         --------
                                                                      TOTAL               15,625
                                                                                        
CLARKE UNDERWOOD                  0800                                R                  224,035
                                                                                         --------
                                                                      TOTAL              224,035
                                                                                        
MICHAEL C VALERIO                 MA1011         ###-##-####          C                      700
6730 GLENN FAIRY                                                                         --------
SAN ANTONIO TX  78239                                                 TOTAL                  700
                                                                                        
BETTY VANDERSCHUUR                0783                                C                    1,429
4124 W 4835 S                                                                            --------
SALT LAKE CITY UT  84118                                              TOTAL                1,429
                                                                                        
PAUL VOYTIK                       MA0972         11-1111118           C                    1,000
3760 MT HICKORY BLVD                                                                     --------
HERMITAGE PA 16148                                                    TOTAL                1,000
                                                                                        
ROBERT E & ANNE E WADDELL         0815           ###-##-####          C                      100
BOX 631                                                                                  --------
JASPER IN 47546                                                       TOTAL                  100
                                                                                        
PHILIP WADE                       0801                                R                   11,659
                                                                                         --------
                                                                      TOTAL               11,659
                                                                                        
CORINNE K WALTER                  0784                                C                    1,429
3130 S 4TH EAST                                                                          --------
SALT LAKE CITY UT  84115                                              TOTAL                1,429
                                                                                        
DAVID WANK                        0796                                R                    2,000
                                                                                         --------
                                                                      TOTAL                2,000
                                                                                        
DARREN WARDLE                     MA1016         ###-##-####          R                   15,125
7315 212TH ST SW#103                                                                     --------
EDMAIDS WA  98026                                                     TOTAL               15,125
                                                                                        
STEVEN J WARD CUST TIMOTHY S WARD  MA1005        ###-##-####          C                    1,050
14614 W 62ND PL                                                                          --------
ARVADA CO  80004                                                      TOTAL                1,050
                                                                                        
                                                                               
</TABLE>                                                              
                                                                      
<PAGE>                                                                
                                                                      
                                                                      
<TABLE>                                                               
<CAPTION>                                                             
                                                                      
MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  18
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:48:10

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                  <C>                 <C>  
STEVEN WARD CUST SHELBY R WARD    MA1006         ###-##-####           C                    1,050
14614 W 62ND PL                                                                           -------
ARVADA CO 80004                                                        TOTAL                1,050
                                                                                         
JOHN L WEAVER                     MA1074         ###-##-####           C                       25
3358 STEIN RD                                                                             -------
SHELBY OH  44875                                                       TOTAL                   25
                                                                                         
JAMES H & PATRICIA A WEISHEIT     MA0989                               C                    4,000
JTTEN                                                                                    
1804 N 350 W                                                                              -------
JASPER IN 47546                                                        TOTAL                4,000
                                                                                         
DAVID R WEIR                      MA1071                               R                    6,250
                                                                                          -------
                                                                       TOTAL                6,250
                                                                                         
DAVE M WESTRUM                    MA1072                               R                    6,250
                                                                                          -------
                                                                       TOTAL                6,250
                                                                                         
MICHAEL WILKINSON                 MA1002                               C                    1,000
PO BOX 282                                                                                -------
CENTRAL CITY CO 80427                                                  TOTAL                1,000
                                                                                         
RICHARD S WINER & LYNN M WINER    MA0925                               R                    2,000
TRUSTEES LIVING TRUST DATED                                                               -------
2/8/95                                                                                   
26834 W HOTSPRINGS PLACE                                               TOTAL                2,000
CALABASAS HILLS CA 91301                                                                 
                                                                                         
ANTHONY WINER                     MA0944                               R                    2,000
                                                                                          -------
                                                                       TOTAL                2,000
                                                                                         
RAINER WUNDERLICH                 MA1051                               R                    3,500
                                                                                          -------
                                                                       TOTAL                3,500
                                                                                         
ROBERT E & MARGARET ZAIC          0798                                 R                    2,000
                                                                                          -------
                                                                       TOTAL                2,000
                                                                                         
                                                                                         
</TABLE>                                                                        

<PAGE>


<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  19
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:48:10

REPORT SELECTION CRITERIA
--------------------------
<S>            <C>    
CLASS        :  Both
SERIES       :  All
MIN. SHARES  :  1

STATE        :  All
ENTITY       :  All


COMMON SERIES C                        SHARES          SHAREHOLDERS
---------------                   ---------------------------------------
<S>                                    <C>                <C>
This Criteria                          3,132,670          113
All Other                                      0            0
                                  ---------------------------------------
                                       3,132,670          113


COMMON SERIES R                        SHARES           SHAREHOLDERS
---------------                   ---------------------------------------
This Criteria                          9,941,932          101
All Other                                      0            0
                                  ---------------------------------------
TOTALS                                 9,941,932          101

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  1
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:39:58

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-----------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>                <C>    
MICHELLE L ANDERS                 MA0997                               C                   100
1105 KINGS LN                                                                           ------
MOON TWP PA  15108                                                     TOTAL               100
                                                                                       
MARION ANDERSON                   0789                                 R                 2,000
440 HARMONY DR                                                                          ------
SEDONA AZ  86336                                                       TOTAL             2,000
                                                                                       
DAVID J ANDERSON                  0727                                 C                 2,858
343 UNIVERSITY VILLAGE                                                                  ------
SALT LAKE CITY UT  84108                                               TOTAL             2,858

PATRICIA J APGOOD                 0728                                 C                 2,858 
544 SOUTH SUNSET DR.                                                                    ------ 
KAYVILLE UT 84037                                                      TOTAL             2,858 

ROY ASCANI                        0729                                 C                 2,858 
324 11TH AVENUE                                                                         ------ 
SALT LAKE CIY UT  84103                                                TOTAL             2,858 
                                                                                       
ASSOCIATED CAPITAL LP             MA1047                               R               237,500
                                                                                        ------
                                                                                       237,500
                                                                                       
ANTHONY F AULICINO                MA1033                               R               108,333
                                                                                       -------
                                                                                       108,333
                                                                                       
MR & MRS PHILIP BACHELIS          MA0945                               R                 2,000
                                                                                       -------
                                                                                         2,000
                                                                                       
JAMIE L BACHELIS                  0790                                 R                 2,000
                                                                                       -------
                                                                       TOTAL             2,000
                                                                                       
PAUL BAKER                        MA0979                               R                 2,100
                                                                                       -------
                                                                       TOTAL             2,100
                                                                                       
MICHELLE BARELA                   0730                                 C                 1,429
303 N 12TH WEST                                                                        -------
SALT LAKE CITY UT  84116                                               TOTAL             1,429
                                                                                       
BBR CAPITAL LIMITED               MA0973                               C               175,000
                                                                                       -------
                                                                       TOTAL           175,000
</TABLE>         
                                                                                
                                                                    
<PAGE>                                                              
                                                                    
<TABLE>                                                    
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  3
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:00

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES           SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>               <C>  
CALVERT IRREVOCABLE TRUST         MA0991                             R                 50,000
                                                                                    ---------
                                                                     TOTAL             50,000
                                                                                    
J CALVERT BROTHERS                MA0992                             R                  1,000
                                                                                    ---------
                                                                     TOTAL              1,000
                                                                                    
PATTY A CALVERT                   MA1029                             R                 55,483
1021 MOSBY RD                                                                       ---------
MEMPHIS TN  38116                                                    TOTAL             55,483
                                                                                    
MARY CALLICCHIO                   0734                               C                    500
25 S GLENVIEW DR                                                                    ---------
LOMARD IL  60148                                                     TOTAL                500
                                                                                    
DENNIS P CALVERT                  0736                               R              1,131,096
24772 MENDOCINO CT                                                                  ---------
LAGUNA HILLS CA  92653                                               TOTAL          1,131,096
                                                                                    
GENE CALVERT                      0805                               R                  2,000
                                                                                    ---------
                                                                     TOTAL              2,000
                                                                                    
PATRICIA CALVERT                  0737                               R                  2,312
                                                                                    ---------
                                                                     TOTAL              2,312
                                                                                    
ALEX E & JUDY CASTRACANE JTTEN    MA1009         ###-##-####         C                    500
139 PHILOMENA DR                                                                    ---------
CORAOPOLIS PA  15108                                                 TOTAL                500
                                                                                    
CEDE & CO                         0780                               C              1,996,034
PO BOX 222                                                                        -----------
NY                                                                   TOTAL          1,996,034
NY NY  10274                                                                        
                                                                                    
PEGGY CHASE                       0740                               C                  2,858
935 W 1600 NORTH                                                                  -----------
WEST BOUNTIFUL UT  84087                                             TOTAL              2,858
                                                                             
SHARON CHILES                     0741                               C                  2,858
14594 S ROSE CANYON RD                                                            -----------
RIVERTON UT  84065                                                  TOTAL               2,858

STEPHEN H CHILES                  0742                               C                  2,858
14594 S ROSE CANYON RD                                                            -----------
RIVERTON UT  84065                                                  TOTAL               2,858

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  4
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:01

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
-------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>               <C>  
SHERRY CHRISTENSEN                0743                               C                 2,858
5654 S 625 E                                                                         -------
MURRAY UT  84107                                                     TOTAL             2,858
                                                                                   
ALEXANDER G CIANFLONE, MD         MA1090                             R                22,500
                                                                                     -------
                                                                     TOTAL            22,500
                                                                                   
TIMOTHY J CLEARY TRUST UTA        MA1038                             R                 4,000
12/25/94                                                                           
                                                                                     -------
                                                                     TOTAL             4,000
                                                                                   
WILLIAM B CLUFF                   0744                               C                 1,429
3839 HIGHLAND COVE #211                                                              -------
SALT LAKE CITY UT  84106                                             TOTAL             1,429
                                                                                   
CHARLES M COHN TTEE CHARLES COHN  MA1017         36-2669784          C                   500
& ASS                                                                              
PROFIR SHARING TRUST                                                                 -------
3230 TEMPLE LN                                                       TOTAL               500
WILMETTE IL  60091                                                                 
                                                                                   
HOLLY L COOMANS                   0745                               C                 1,429
6043 TROWBRIDGE WAY                                                                  -------
SALT LAKE CITY UT  84118                                             TOTAL             1,429
                                                                                   
ERNEST & MARYANNE CUMBERLEDGE     MA1003                             C                   200
JTTEN                                                                              
437 BLUE BUFF RD                                                                     -------
KING OF PRUSSIA PA  19406                                            TOTAL               200
                                                                                   
MARY EILEEN & LEO G DANZER JTTEN  MA1018         ###-##-####         C                    10
5469 E JACKSON                                                                       -------
DUBOIS IN  47527                                                     TOTAL                10
                                                                                   
LAVERN DAVIDHIZAR                 MA0946                             R                41,000
206 ROCKWELL AVE                                                                     -------
SOLDOTNA AK  99669                                                   TOTAL            41,000
                                                                                   
BRENT W DAVIDSON MD PC            MA0969                             R                 3,000
                                                                                     -------
                                                                     TOTAL             3,000
                                                                                   
DAVID CAPITAL LP                  MA0983                             R                65,000
                                                                                     -------
                                                                     TOTAL            65,000
                                                                                   
PHILIP J DEER JR                  0791                                R                4,000
                                                                                     -------
                                                                     TOTAL             4,000


</TABLE>

<PAGE>


<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  5
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:02

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>                <C>  
QUINTON DOBBINS                   MA0958         ###-##-####         C                  1,000
5685 US 40                                                                            -------
GREENFIELD IN  46140                                                 TOTAL              1,000
                                                                                    
DENNIE R DXLEY II                 MA0996                             C                    200
GENERAL DELIVERY                                                                      -------
MILLTOWN IN  47145                                                   TOTAL                200
                                                                                    
ELLIS LIMITED PARTNERSHIP         MA1066                             R                 15,000
                                                                                      -------
                                                                     TOTAL             15,000
                                                                                    
H STEPHEN & BARBARA EPSTEIN       MA0981                             R                 29,000
                                                                                      -------
                                                                     TOTAL             29,000
                                                                                    
JOHN M ERNST JR                   0746                               R                    800
PO BOX 223                                                                            -------
FERDINAND IN  47532                                                  TOTAL                800
                                                                                    
JOSEPH D & PATRICA W FERRRONE     MA1086                             R                 10,015
JTTEN                                                                               
                                                                                      -------
                                                                     TOTAL             10,015
                                                                                    
RONALD FLEISHMAN                  0825                               R                  2,000
                                                                                      -------
                                                                     TOTAL              2,000
                                                                                    
JERE T & JACQUELINE R FRONZA JT   MA0927         ###-##-####         C                    200
TEN                                                                                   -------
1500 MOUNT HOPE AVE                                                  TOTAL                200                 
POTTSVILLE PA  17901                                                 
                                                                                    
DAVID A & JULIE M FUHS JTTEN      MA0978                             C                  8,000
804 TURNBRIDGE CIR                                                                    -------
NAPERVILLE IL  60540                                                 TOTAL              8,000
                                                                                    
STEVEN & JULIE FULD UTA FEB 21    0794                               R                  2,000
1994                                                                                  -------
                                                                     TOTAL              2,000

COSTANTINO & DONNA GALLO          MA1026                             R                100,000
TRUSTEES
UTA DATED 3/4/96                                                                      -------
                                                                     TOTAL            100,000

ROBIN K GALLAGHER                 0747                               C                  1,429
925 E CARNATION DR                                                                    -------
SANDY UT 84070                                                       TOTAL              1,429

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  6
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:03

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
------------------------------------------------------------------------------------------------
<S>                                <C>         <C>                 <C>                 <C>  

LESLIE J GARFIELD                 MA1044       ###-##-####           C                 2,000
654 MADISON AVE STE 1507                                                             -------
NY NY 10021                                                          TOTAL             2,000
                                                                                    
ELENOR GARDNER                    MA1087                             R                20,000
                                                                                     -------
                                                                     TOTAL            20,000
                                                                                    
HENRY GELLIS                      MA1094                             R                10,000
                                                                                     -------
                                                                     TOTAL            10,000
                                                                                    
DENA GENDUSA                      MA1063                             R                 6,250
                                                                                     -------
                                                                     TOTAL             6,250
                                                                                    
PAUL E GETTINGS JR & TS GETTINGS  MA1039                             R                 2,000
JTTEN                                                                               
                                                                                     -------
                                                                     TOTAL             2,000
                                                                                    
EDWARD L &HELEN M GIESLER JTTEN   MA1043         ###-##-####         C                   150
PO BOX 94                                                                            -------
IRELAND IN 47545                                                     TOTAL               150
                                                                                    
POLLY GILBERT                     0806                               C                 4,624
                                                                                     -------
                                                                     TOTAL             4,624
                                                                                    
JULIA ANNE GILLIN                 0795                               R                 2,000
                                                                                     -------
                                                                     TOTAL             2,000
                                                                                    
GLOBAL SECURITIES CORP            0748                               C                 8,000
PO BOX 11190 ROYAL TOWER                                                             -------
2900 - 1055 WEST GEORGIA ST                                          TOTAL             8,000
VAN COUVER BC V6E 3R5                                                               
                                                                                    
MURIEL & BARNEY GOLDSTEIN JTTEN   MA1036         ###-##-####         C                   200
                                                                                     -------
5215 BALBOA BLVD                                                     TOTAL               200               
APT 304                                                              
ENCINO CA  91316                                                                    
                                                                                    
BARNEY & JUDITH GOLDSTEIN JTTEN   MA1073         ###-##-####         C                 1,000
2290 PACIFIC AVE                                                                     -------
LONG BEACH CA  90806                                                 TOTAL             1,000
                                                                                    
LEE T GRIFO                       MA1082         ###-##-####         C                   200
625 PAXINOSA AVE                                                                     -------
EASTON PA  18042                                                     TOTAL               200

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  7
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:04

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES              SHARES
------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>                 <C>                 <C>  

ROSEMARY B HAGER                  MA1032                             R                   108,333        
                                                                                         -------
                                                                     TOTAL               108,333
                                                                                         
WILLIAM J HALKO                   MA0932         ###-##-####         C                       200
604 WALNUT ST                                                                            -------
ASHLAND PA  17921                                                    TOTAL                   200
                                                                                         
SAMUEL E & BETTY S HALL           0749                               C                     1,000
RFD 1 BOX 247                                                                            -------
JEFFERSON PA  15344                                                  TOTAL                 1,000
                                                                                         
LORRAINE HALL                     0750                               C                     1,429
2636 DUBLIN DR                                                                           -------
SALT LAKE CITY UT  84119                                             TOTAL                 1,429
                                                                                         
ROGER HAMILTON                    MA1092                             R                     5,779
                                                                                         -------
                                                                     TOTAL                 5,779
                                                                                         
STEVE HARRISON                    0804                               R                    16,000
                                                                                         -------
                                                                     TOTAL                16,000
                                                                                         
SHARON L HARRIS                   0812                               C                     1,500
525 E 86TH ST                                                                            -------
NY NY 10028                                                          TOTAL                 1,500
                                                                                         
PAUL L HASSFURTHER                MA1024         ###-##-####         C                       300
BOX 421                                                                                  -------
JASPER IN 47546                                                      TOTAL                   300
                                                                                         
THE HEART LAB OF SANTA CLARA      MA1013                             R                    23,559
VALLEY INC                                                                               -------
PROFIT SHARING PLAN FBO                                                                  
COSTANINO TINO                                                       TOTAL                23,559             
                                                                     
                                                                                         
RICHARD N HEFFNER                 MA0935         ###-##-####         C                       100
227 DAUPHIN ST                                                                           -------
ENOLA PA  17025                                                      TOTAL                   100
                                                                                         
TRACY HENSON                      0751                               C                     1,429
3628 DESERT FOX CIR                                                                       -------
KEARNS UT  84118                                                     TOTAL                 1,429
                                                                                         
JAMES HERZOFF                     MA0943                             R                     7,400
CROWEL WEEDON & CO                                                                       -------
                                                                     TOTAL                 7,400
                                                                                         
</TABLE>                                          
                                                                               
<PAGE>


<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  9
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:40:07

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID           SERIES            SHARES
------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                    <C>               <C>  

BANK OF NEWPORT AS CUST           MA0936                                R                  4,000
FBO: JEFFERY JOHNSON                                                                     -------
                                                                        TOTAL              4,000
                                                                                        
ORANGE NAT BK CUST FBO:           MA0971                                R                  2,000
JEFF JOHNSON IRA BPS:55931888a11                                                         -------
                                                                        TOTAL              2,000
                                                                                        
JOSHUA CAPITAL PARTNERS LP        MA1060                                R                  2,525
                                                                                         -------
                                                                        TOTAL              2,525
                                                                                        
HERMAN KAPLAN & SHIRLEY KAPLAN    MA1050                                R                  1,750
                                                                                         -------
                                                                        TOTAL              1,750
                                                                                        
DAVID KIZOR                       0757                                  R                  2,312
                                                                                         -------
                                                                        TOTAL              2,312
                                                                                        
PAUL & DELORES KLAUS              0758                                  C                    500
2055 SAWGRASS DR                                                                         -------
APOPKA FL  32712                                                        TOTAL                500
                                                                                        
ALFRED H KLEISER                  MA1078         314932-3925            C                    400
1323 GREEN ST                                                                            -------
JASPER IN 47546                                                         TOTAL                400
                                                                                        
NORBERT KLUESNER                  MA0987                                C                    300
BOX 193                                                                                  -------
DUBOIS IN 47527                                                         TOTAL                300
                                                                                        
GLENN j & KAREN K KNIES JTTEN     MA1079         ###-##-####            C                    500
4261 S170 E                                                                              -------
HUNTINGBURG IN 47542                                                    TOTAL                500
                                                                                        
TIMOTHY R & YVONNE A KNIES JTTEN  MA0903                                C                  1,000
1644 E WALNUT DR                                                                         -------
HUNTINGBURG IN 47542                                                    TOTAL              1,000
                                                                                        
HOPE & CHAD KOBER                 MA0999                                C                    190
206 DELEWARE AVE                                                                         -------
N VERSAILLES PA  15137                                                  TOTAL                190
                                                                                        
FRANK M KOERBER                   MA1055                                R                 10,000
                                                                                         -------
                                                                        TOTAL             10,000
                                                                                        
</TABLE>                                         
              
<PAGE>                                        
                

<TABLE>
<CAPTION>

MEDICAL ASSET MANAGEMENT INC      SHAREHOLDER LIST               PAGE  10
                                  AS OF 06/30/96                 FORM: 10A
                                                                 DATE: 07/10/97
                                                                 TIME: 12:44:51

REGISTRATION                      ACCOUNT NO.    TAXPAYER ID         SERIES          SHARES
--------------------------------------------------------------------------------------------
<S>                                  <C>         <C>                 <C>             <C>  
JEROME KOSSOFF AND 
MAXINE KOSSOFF                    MA1061                            R                 6,250
                                                                                    -------
                                                                    TOTAL             6,250
                                                                                  
AMY KOSSOFF                       MA1064                            R                 6,250
                                                                                    -------
                                                                    TOTAL             6,250
                                                                                  
DAVID KOSSOFF                     MA1065                            R                 6,250
                                                                                    -------
                                                                    TOTAL             6,250
                                                                                  
MARK F KRESS                      MA1008         ###-##-####        C                   200
1321 BRIARCLIFF                                                                     -------
JASPER IN 47546                                                     TOTAL               200
                                                                                  
MARK F KRESS CUST                 MA1020         ###-##-####        C                 1,130
KEASHA M KRESS                                                                      -------
1321 BRIARCLIFF                                                     TOTAL             1,130
JASPER IN 47546                                                                   
                                                                                  
RICHARD F KUNKEL                  0821           ###-##-####        C                 4,000
725 UNIVERSITY DR                                                                   -------
JASPER IN 47546                                                     TOTAL             4,000
                                                                                  
GREGORY W KUPER & DEBORAH A       MA0906         ###-##-####        C                   600
HUPER JTTEN                                                                       
1393 EMILY                                                                          -------
JASPER IN 47546                                                     TOTAL               600
                                                                                  
SCOTT D LEAVITT                   0760                              C                 1,429
1582 E 12700 S                                                                      -------
DRAPER UT  84020                                                    TOTAL             1,429
                                                                                  
RODGER LEE & JOAN H LEE           MA1049                            R                 3,500
                                                                                    -------
                                                                    TOTAL             3,500
                                                                                  
KENNETH W & CAROL J LEINENBACH    MA1075         ###-##-####        C                   200
JTTEN                                                                             
BOX 121                                                                             -------
IRELAND IN  47545                                                   TOTAL               200
                                                                                  
RAY & SALLEY LEIVA                0813           ###-##-####        C                   500
1206 FULLERTON AVE                                                                  -------
CORONA CA  91719                                                    TOTAL               500
                                                                                  
</TABLE>                
               
<PAGE>                                                                      


                                SCHEDULE 4.19

                           Borrowings & Guarantees


<PAGE>


                Medical Asset Management, Inc. and Subsidiary


            Notes to Consolidated Financial Statements (continued)


4.     ACQUISITIONS (CONTINUED)

The  unaudited  pro  forma  information  presented  below  is  for  illustrative
information  only and is not necessarily  indicative of results which would have
been achieved or results which may be achieved in the future:

                                                       1996        1995
                                                  (Unaudited)    (Uaudited)
                                                  -----------    ---------
Revenue                                            $12,608,758  $14,833,235
Net loss                                            (5,516,496)  (1,030,025)
Net loss per share                                  (.42)        (.10)

5.     PROFIT SHARING PLAN

During 1996,  the Company  implemented a 401(k) profit  sharing plan (the Plan).
Substantially  all employees are eligible to  participate  in the Plan once they
have reached the age of 21 and  completed  one year of service with the Company,
as defined.  Participants  may contribute a percentage of their  compensation to
the  Plan,  but not in  excess  of the  maximum  allowed  by law.  The Plan also
provides for matching and other  additional  contributions by the Company at its
discretion. No discretionary contributions were made by the Company in 1996.

6.     DEBT

RELATED PARTY DEBT

Related party debt in the amount of $9,830 and $213,361 at December 31, 1996 and
1995, respectively, consists of demand notes payable including interest at 8% to
certain officers of the Company.

LINE OF CREDIT AND NOTES PAYABLE

At December 31, 1996,  the Company has $2.5  million  available  under a line of
credit with a bank.  The amount  outstanding  under the line was  $1,264,351  at
December 31, 1996 at 4.9%. Upon maturity on May 30, 1997, this note was extended
to May 29,  1998 at 6.72%.  Amounts  are  available  under this line only to the
extent the Company has  certificates  of deposit to secure the balance (see Note
2). At December 31, 1996,  $1,235,649 remained available for use under the line.
On September 3, 1997, all amounts outstanding under the line were repaid.




                                       18
<PAGE>



                Medical Asset Management, Inc. and Subsidiary

            Notes to Consolidated Financial Statements (continued)

6.    DEBT (CONTINUED)

LINE OF CREDIT AND NOTES PAYABLE (CONTINUED)

At December 31, 1996, the Company had four notes payable  totaling  $301,498 due
upon demand  including  interest at 10%. On July 21, 1997,  the total amount due
under these notes on that date of $317,636 was forgiven.  This  forgiveness will
be  recognized  in the  Company's  financial  statements  in the  quarter  ended
September  30, 1997.  The Company  also has $141,020 of demand notes  payable at
interest rates ranging from 8% to 10% due in 1997.

At December 31, 1995, the Company had $936,766 of demand notes at interest rates
ranging  from 8% to 10%.  In August  1996,  $263,193  of the 1995  balance  plus
$12,260 of additional  interest accrued in 1996 was converted into 47,565 shares
of common  stock.  Additionally,  $515,875 of the 1995  balance was  forgiven in
conjunction with the termination of certain  management  agreements in 1996 (see
Note 3).

LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>

                                                              DECEMBER 31

                                                          1996            1995
                                                      --------------------------
<S>                                                    <C>            <C>     
Notes payable to various  individuals in               $1,511,190     $391,606
conjunction  with  asset   acquisitions,
interest  at 10%,  maturing  on  various
dates in 1996 and 1997,  with all unpaid
principal  and accrued  interest  due at
maturity date.

Mortgage     payable    to    a    bank,              300,513                -
collateralized by a building, with a net
book value of  $510,000  interest at 10%
with monthly payments of $3,270 to 2011

Unsecured  note  payable  to  a  finance              500,000                -
company  with  interest  at  7.9%,   and
monthly payments of $15,550 to 1999

Note  payable  to  a  computer  software              737,500                -
vendor, interest at 10%, $600,000 due in
1998, remainder in 1999,  collateralized
by  software  licenses  with a net  book
value of $1,237,604

Capital   lease   obligations,   varying              534,734          175,241

interest rates not exceeding 26.5%, with
various  due  dates   through  2001  and
collateraliized by equipment

Other                                                 110,350           37,898
                                                      -------           ------
                                                 
                                                     3,694,287         604,745

                                                     1,393,399          21,898
Less current portion                                 ---------          ------
                                                    $2,300,888        $582,847
                                                    ==========        ========


</TABLE>


                                       19
<PAGE>

6.      DEBT (CONTINUED)

LONG-TERM DEBT (CONTINUED)

Maturities  of long-term  debt,  including  capital  lease  obligations,  as of
December 31, 1996 are as follows:

<TABLE>
<CAPTION>

<S>                <C>       
1997               $1,393,399
1998                1,526,000 
1999                  426,500
2000                   96,000
2001                   41,000
Thereafter            211,388
                      -------
                    $3,694,287
                   ==========
</TABLE>

CONVERTIBLE SUBORDINATED DEBT

During 1995,  the Company  issued  $762,000 in Series B  Convertible  Redeemable
Secured Subordinated Debentures  (convertible  debentures) which are convertible
into common stock at $5 per share.  Principal  and accrued  interest at December
31, 1995 was $808,095.  During 1996, the holders of $718,000 of the  convertible
debentures  converted the  convertible  debentures into 143,600 shares of common
stock. The remaining $44,000 of convertible debentures were redeemed in cash.

In 1995,  in  conjunction  with an  acquisition,  the  Company  entered  into an
agreement  to issue to a  physician  8%  convertible  debentures  not to  exceed
$450,000,  which will  mature and be due for payment to the  physician  in 1999.
These  debentures are  convertible  into common stock upon maturity at a rate of
80% of the then  current  market price at the time of maturity but not less than
$5 per share. At December 31, 1996 and 1995, $125,438 and $54,810,  respectively
of debentures (including interest) were outstanding.

7.    EQUITY

PREFERRED STOCK

In 1994, the Company issued  3,000,000  shares of Class A preferred  stock which
 are convertible into shares of common stock. In July 1996, 750,000 shares of
   common  stock were  issued to the  original  holder of the Class A  preferred
stock pursuant to the agreed conversion terms, leaving a balance of 2,250,000
shares of Class A preferred stock. In order to conform the Company's 

<PAGE>


                                SCHEDULE 4.21

                                 Trade Names

                                     None

<PAGE>


                                SCHEDULE 4.22

                                Joint Ventures

                                     None



<PAGE>


                                SCHEDULE 7.12

                         Transactions with Affiliates

                                     None