Exhibit 10.42

                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as
of the date below  stated,  by,  between and amongst  MANAGED  RESPIRATORY  CARE
SERVICES,  INC.  ("MRCS"),  an Arizona  corporation  ("Seller")  with  principal
offices  at  Phoenix,  Arizona;  JEAN  MATHEWS  ("Mathews"),   and  JOE  SALAZAR
("Salazar"),  each  and all of whom  are the sole  stockholders,  directors  and
officers of Seller  (individually  referred to by their last names, as indicated
above,   and   collectively   referred  to  as   "Stockholders");   and  SCRS  &
COMMUNICOLOGY, INC. OF OHIO, an Ohio corporation ("Buyer", or sometimes referred
to as "SCRS-Ohio"), with principal offices at Laguna Hills, California.

Whereas,  Seller  is in the  business  of  providing  or  furnishing  marketing,
contract  management  and  practice  management  services  for and on  behalf of
respiratory  care  therapists or the employers of such therapists (the "Seller's
Business"); and

Whereas,  the parties  hereto  desire that Seller shall sell to Buyer,  and that
Buyer shall  purchase  from Seller,  all of the assets  directly  related to the
operation of the Seller's  Business  (sometimes  hereinafter  referred to as the
"Purchased  Assets"),  as more  fully  identified  in this  Agreement  or in the
exhibits  or other  schedules  appended  hereto,  upon the terms and  conditions
hereinafter set forth; and

Whereas,  the  Seller and Buyer have  entered  into a certain  Letter of Intent,
dated and made as of June 13, 1996,  together with any amendments or supplements
thereto, generally describing the proposed acquisition by Buyer of the Purchased
Assets and Seller's  Business,  which Letter of Intent is to be and shall hereby
be superseded by and upon timely execution of this Agreement; and

Whereas,  Mathews owns  fifty-one  percent  (51%) of the issued and  outstanding
shares of stock of Seller,  is a director  and officer of Seller,  is one of the
persons  responsible for  origination and development of the Seller's  Business,
and is a full-time  employee of Seller  directing  and planning  the  day-to-day
activities of Seller's Business; and

Whereas,  Salazar owns  forty-nine  percent (49%) of the issued and  outstanding
shares of stock of Seller,  is a director  and officer of Seller,  is one of the
persons responsible for origination and development of the Seller's Business and
is a  full-time  employee  of  Seller  directing  and  planning  the  day-to-day
activities of Seller's Business;

 Whereas,  Stockholders  (collectively or as individually named, as appropriate)
participate in, and have executed,  this Agreement  primarily for the purpose of
assuming and being  personally and primarily  bound,  jointly and severally,  by
each, every and all of Seller's  agreements,  indemnities,  representations  and
warranties contained herein, the same as though  Stockholders,  and each of them
as specifically or collectively named, were a seller hereunder,  and having made
such  agreements,   indemnities,   representations   and  warranties  to  Buyer,
personally and directly with Seller to Buyer as obligations of a principal,  and
not as a surety (each Stockholder hereby  conclusively  acknowledging his or her
direct, personal benefit hereunder); the parties, however, now herewith agreeing
that this  obligation  of  Stockholders  is not  intended to nor shall it create
either  directly or indirectly  any new liability or obligation on the behalf of
Stockholders as concerns or relates to any person or other entity not a party to
this  Agreement;  in  addition,   Stockholders  hereby  join  in  and  otherwise
participate  in this  Agreement,  and execute it  individually  as it relates to
other contractual  agreements they herewith make, referenced herein, which shall
become effective upon execution and consummation of this Agreement;

Now,  Therefore,  in  consideration  of the  premises and mutual  covenants  and
agreements  herein  contained,  and for other  good and  valuable  consideration
(including  the  purchase  price  specified  in  Article  Three,   below),   the
sufficiency of which is hereby acknowledged,  Seller, Stockholders (collectively
or  individually,  to the extent as provided herein) and Buyer do mutually agree
as follows:

ARTICLE ONE.   SALE AND PURCHASE OF ASSETS

         Section 1.1. Assets Sold and Purchased. Subject to and on the terms and
conditions set forth herein,  at the Closing (as defined in Section 4.1.,  which
shall occur on the "Closing  Date"),  Seller shall sell,  deliver,  transfer and
assign to Buyer free and clear of all liens, claims,  charges,  restrictions and
encumbrances  of every  kind,  nature and  description  (except  only any as are
expressly  identified  as such,  set forth in Exhibit 2.1,  and which Buyer,  in
connection therewith, shall have agreed to accept), and Buyer shall purchase for
the consideration herein provided, all of the assets, properties and business of
Seller of every kind, nature and description, wherever located, whether tangible
or intangible,  and whether or not fully  depreciated or amortized,  as the same
shall  exist as of the  Closing  Date  (and  excepting  only  such  specifically
identified  assets as are to be  retained  by Seller  pursuant  to Section  1.2.
hereof). Such assets to be purchased by Buyer, hereinafter sometimes referred to
as the "Purchased  Assets",  are those  specifically  set forth in Exhibit 1.1.,
attached hereto, and which is intended and shall include all of those assets now
and  presently  required  for and used in the  operation  of Seller's  Business,
including  existing or pending  licenses,  contracts  and incomes from and after
Closing  Date,  and  expressly  including  the  following:  (a)  All  furniture,
fixtures,  equipment,  and inventory owned by Seller;  (b) All right,  title and
interest in and to the name "Managed  Respiratory  Care Services,  Inc." and any
registered  copyright  or service  mark related  thereto;  (c) All  intellectual
property rights of Seller, and trade secrets including the Seller's client list;
(d) All right,  title and  interest  of Seller in, to and under each  assignable
license, contract, agreement, commercial document, memorandum, letter of intent,
order or commitment, whether written or oral, in the name of or intended for the
benefit of Seller and related to Seller's Business;  (e) All accounts,  licenses
and prospective  customer  lists,  files,  correspondence  and databases and any
other  information   relating  to  the  Purchased   Assets,   including  without
limitation,  any prospects  list (except for any of the  foregoing  which Seller
requires to operate its  business  after the Closing or is required to retain in
order to comply with any applicable  law, as to which only copies thereof are to
be conveyed hereunder (collectively, the "Purchased Asset Information"); and (f)
All membership or other similar  interests in "Phoenix  Solutions,  LLC", or any
contracts regarding such entity.

         Section 1.2. Assets Retained by Seller. Seller shall not sell, deliver,
transfer,  assign or convey, and Buyer shall not purchase,  the assets of Seller
(if any) as are set forth in Exhibit  1.2 hereto.  Such  assets are  hereinafter
referred to as the "Retained Assets".

         Section 1.3. Instruments of Transfer. At Closing,  Seller shall deliver
to Buyer  bills of sale,  endorsements,  assignments,  and such  other  good and
sufficient  documents and instruments of transfer as shall be effective,  in the
opinion of Seller's  counsel (see Section  4.2(f)(ix)  of this  Agreement),  and
acceptable  to  Buyer's  counsel,   to  vest  in  Buyer  good,   marketable  and
indefeasible title to the Purchased Assets as contemplated hereby.

         Section 1.4. Further Assurances by Seller and Stockholders.  Seller and
Stockholders  further  agree  that,  at any  time and  from  time to time  after
Closing,  they will, upon the request of Buyer and at Seller's and Stockholder's
sole expense,  do,  execute,  acknowledge,  and deliver,  or will use their best
efforts  to cause to be done,  executed,  acknowledged  or  delivered,  all such
further  acts,  assignments,  transfers,  conveyances,  or  assurances as may be
reasonably  required in order to further transfer,  assign,  convey,  assure and
confirm  to  Buyer,  or to aid and  assist  in the  collection  or  reducing  to
possession by Buyer,  of any of the  Purchased  Assets or to vest in Buyer good,
marketable and indefeasible title to such Purchased Assets.

         Section 1.5.  Assignment of Contracts,  Rights, Etc. Anything contained
in this  Agreement to the contrary  notwithstanding,  this  Agreement  shall not
constitute  an agreement to assign any  contract,  license,  lease,  commitment,
sales order, purchase order, or any claim or right of benefit arising thereunder
or resulting therefrom, if an attempted assignment thereof,  without the consent
of a third party  thereto  (which third party is not a party to this  Agreement)
would  constitute  a breach  thereof  or in any way  affect  the rights of Buyer
thereunder.  In such event, Seller and Stockholders shall use their best efforts
to obtain the consent of the third party to the  assignment  thereof to Buyer in
all cases in which such consent is required for assignment or transfer.  If such
consent is not obtained,  Seller and Stockholders  agree to cooperate with Buyer
in any  reasonable  arrangements  designed  to  provide  and assure to Buyer the
benefits thereunder,  including  enforcement for the benefit of Buyer of any and
all rights of Seller  against  the third party  arising out of the  cancellation
undertaken or attempted by such third party or otherwise.

         Section 1.6. Access by Seller and  Stockholders.  For a period of three
years  after  Closing  or such  longer  period of time as may be  necessary  for
Seller's  or   Stockholders'   compliance   with   requirements  of  any  taxing
authorities,   Buyer  shall,  during  normal  business  hours,  provide  Seller,
Stockholders and their authorized agents or representatives, with such access to
the  books  and  records  of the  Seller's  Business,  as  are  to be  conveyed,
transferred  and assigned to Buyer in connection with the Purchased  Assets,  as
the Seller and Stockholders may reasonably require. Such access shall be limited
to the books and records of the  Seller's  Business  prior to the Closing  Date.
Seller  and  Stockholders  shall be  entitled,  at their  own  expense,  to make
extracts of copies of such books and records. Notwithstanding anything contained
herein  to  the  contrary,   Buyer  shall  not  be  obligated  to  give  Seller,
Stockholders  or any such  agents or  representatives,  access  to any  material
relating to any period  subsequent  to the Closing Date or developed by Buyer at
its expense or for its benefit,  including,  without limitation, tax returns for
any subsequent periods of time, provided,  Buyer shall give reasonable access to
Seller,  as Seller may  reasonably  determine to be directly  relevant,  of such
books and records  developed and  maintained by Buyer after Closing Date, and as
necessary  to verify the amount of any  Earn-Out  Payments  to which  Seller may
become entitled,  after Closing Date, under Section 3.4 (or related section,  if
applicable) of this Agreement.

ARTICLE TWO.   ASSUMPTION OF LIABILITIES

         Section  2.1.   Liabilities   Assumed.   Buyer  shall  not  assume  any
liabilities  (or  obligations)  whatsoever  of either  Seller  or  Stockholders,
whether in connection  with Seller's  Business or the Purchased  Assets,  except
those specifically  listed,  identified and enumerated in Exhibit 2.1., attached
hereto (the "Assumed Liabilities").

         Section  2.2.  Liabilities  Retained.   Seller  agrees  to  retain  all
liabilities and obligations of Seller,  pertaining to the Seller's  Business and
the Purchased Assets, except as specifically assumed by Buyer and as fully shown
in  Exhibit  2.1.  (if any).  Except  as so shown,  Seller  shall  remain  fully
obligated,   and  shall  discharge  all  liabilities  and  obligations   thereof
(hereinafter  collectively referred to as the "Liabilities)",  including but not
limited to the following: (a) All long-term liabilities of Seller, including the
current portion  thereof;  (b) All liabilities for federal,  state,  provincial,
local and foreign taxes relating to Seller's Business,  whether arising prior to
the Closing Date or thereafter, and related to the Seller's prior use, ownership
or possession, or Seller's transfer, conveyance and assignment, of the Purchased
Assets contemplated by this Agreement,  including without limitation,  property,
franchise,   gross  receipts,   sales,  and  income  taxes  of  every  kind  and
description;  (c)  All  liabilities  of  Seller  to  its  accounts,  clients  or
customers,  arising out of or connected  with matters on or prior to the Closing
Date;  (d) All  liabilities  (including  short  term) of  Seller  of any  nature
whatsoever,  based on events  occurring  before  the  Closing  Date or  services
performed by Seller  before the Closing Date,  notwithstanding  that the date on
which the claim is first made known is after the Closing Date, including without
limitation  those  liabilities  pertaining to any  employment  relationship,  or
regulations  or laws relating to health and safety of employees;  regulations or
laws relating to hazardous  materials and pollution of the environment;  (e) All
liabilities  of Seller with respect to any  pending,  threatened  or  unasserted
litigation, claims, demands, investigations or proceedings relating to events on
or before the Closing Date, or arising thereafter; (f) All liabilities of Seller
with  respect  to or  arising  out  of the  transactions  contemplated  by  this
Agreement;  (g) Any  liability,  the  existence  of  which  is a  breach  of any
representation,  warranty, or covenant of either Seller or Stockholders (whether
collectively,  or individually by name) under or within this Agreement;  and (h)
All liabilities of Seller with respect to all employee pay, salary,  benefit and
bonus plans based on events  occurring or arising  prior to the Closing Date, or
arising thereafter.

ARTICLE THREE.    CONSIDERATION FOR PURCHASED ASSETS

     Section 3.1. Total Purchase Price to be Determined.  Buyer,  at Closing and
from time to time thereafter as provided in this Agreement, shall pay Seller for
the  Purchased  Assets a total money  purchase  price  consisting  of a "Minimum
Purchase Price" (see Section 3.2), and "Earn-Out  Payments",  in an amount to be
determined  after Closing in accord with this Article  Three.  In no event shall
the total of Minimum  Purchase Price and Earn-Out  Payments,  regardless of when
determined or payable, exceed the sum of $800,000.00.

     Section 3.2. Closing;  "Minimum Purchase Price" due at Closing.  On Closing
Date,  and if the  transaction is then ready to be consummated to the reasonable
satisfaction  of each party,  and in a manner  consistent with the terms of this
Agreement,  and if Seller and Stockholders shall have performed prior to Closing
all matters as required of them under this Agreement,  and all conditions  shall
have been  satisfied  or  otherwise  waived by the party  having the power to so
waive,  Buyer shall  thereupon pay Seller the sum of  $300,000.00,  by cashier's
check or money order  payable to Seller's  order,  or wire  transfer to Seller's
designated account. This sum shall be the "minimum purchase price" to be paid by
Buyer.

     Section  3.3.  "Earn-Out   Payments";   Definitions  and  Principles.   The
additional  amount of the  purchase  price  (over and above that  payable  under
Section  3.2),  if any,  shall be known as the  "Earn-Out  Payments",  as may be
determined to be earned by Seller, and due and owing by Buyer, from time to time
following Closing Date and during the "Earn-Out  Period"(which  begins the first
day following the Closing Date and ends December 31, 1998),  all pursuant to the
provisions  of this  Section  3.3 and the  formula  in  following  Section  3.4.
Earn-Out Payments shall be based on "After-Tax Profitability" ("ATP"), which for
purposes of this  Section 3.3 (and  related  sections)  shall be  determined  in
accord with the following: Gross Revenues (as defined for each of the accounting
periods  contained  within the  Earn-out  Period) of that  defined or  described
portion of Buyer's RT Division (as more fully  qualified  herein),  less Cost of
Sales,  Overhead,  General  &  Administrative  Costs,  Amortization,   Interest,
Depreciation,  and Other Expenses, (in accord with generally accepted accounting
principles,  consistently  applied) and less Taxes,  for each of the  respective
accounting  periods  ("Years")  during  the  Earn-Out  Period.  The  result,  so
determined,  subject to the definitions and determinations hereinafter provided,
shall be After-Tax Profitability ("ATP"), upon which determination the amount of
any Earn-Out Payment shall ultimately be further determined.  As a general rule,
for purposes of determining  Earn-Out Payments under this (and related) sections
of this  Agreement,  the parties  intend that Buyer's RT Division  shall include
operations  under and sales generated by those Purchased Assets as comprised the
Seller's Business immediately prior to Closing Date, together with that such new
and additional business as Buyer's RT Division, as initially constituted,  shall
develop  with either  existing  accounts  or  third-parties  unrelated  to Buyer
following Closing Date.  Determination of Gross Revenues of Buyer's RT Division,
for this purpose,  shall not include any sales derived from the assets  included
within such  division,  if any,  hereafter  purchased from a third party seller.
Further,  unless  included  within Gross  Revenue for a particular  Year (by and
under the definitions following), Gross Revenue of the Buyer's RT Division shall
not include sales  directly or indirectly  related to Regency  Health  Services,
Inc. (Buyer's parent corporation),  or any subsidiaries thereof, or divisions of
subsidiaries.  The following  definitions  (or  principles)  shall be applied to
determine ATP, which, following adjustments and subject to those provisions more
fully stated in Section 3.4, shall yield the Earn-Out  Payments to be determined
during the Earn-Out  Period:  o Gross Revenue (Year One):  the gross revenues of
Buyer's RT Division, excluding sixty per cent (60%) of sales directly or related
to Buyer's parent corporation,  Regency Health Services,  Inc., and subsidiaries
or divisions owned by said parent corporation.  o Gross Revenues (Year Two): the
gross revenues of Buyer's RT Division,  excluding  sixty per cent (60%) of those
sales  directly  or  related  to  Buyer's  parent  corporation,  Regency  Health
Services,  Inc. and  subsidiaries or divisions owned by said parent  corporation
arising  during  that  period  of time of Year Two as is within 12 months of the
Closing Date (and excluding all such sales  thereafter).  o Gross Revenues (Year
Three):  the gross  revenues  of  Buyer's RT  Division,  excluding  those  sales
directly or related to Buyer's parent corporation, Regency Health Services, Inc.
and subsidiaries or divisions owned by said parent corporation. o Cost of Sales:
all expenses directly  attributable to generation and support of gross revenues.
o Overhead:  all expenses  indirectly  attributable to generation and support of
gross revenues. o General & Administrative Expenses: those expenses necessary to
support the RT Division, and which cannot be directly or indirectly allocated to
any portion of the gross revenue. o Depreciation,  Interest, and Other Expenses:
determinations  to  be  made  consistent  with  generally  accepted   accounting
principles.  o Taxes: all federal,  state,  local and other  governmental  taxes
based on income  and  profit,  determined  to be  applicable  to the  Buyer's RT
Division,  during the Earn-out Period, without regard to any surtax exemption. o
Inter-company allocations of expenses: inter-company (or divisional) allocations
shall be limited to those  expenses  which,  because of cost  and/or  efficiency
advantages,  can be  directly  associated  with  the  operation  of  Buyer's  RT
Division. Buyer will provide detailed explanation in support of the allocation.

         For purposes of applying and determining  the Earn-Out  Payments as may
be due Seller from time to time,  Buyer shall track and record ATP (as that term
is  specially  defined in and for the  purposes of this  Section 3.3 and related
sections  hereof) of Buyer's RT Division (as limited in this Section 3.3) during
three (3) consecutive  accounting periods or calendar years,  namely, 1996 (from
and after  Closing Date only,  expressly  excluding  any period of calendar year
1996 prior to the  Closing  Date),  1997 and 1998 (such  periods or years  being
collectively  referred  to as  the  "Earn-Out  Period",  each  such  year  being
individually  referred to, in succession,  as "Year One",  "Year Two", and "Year
Three").  If ATP for the Year in  question,  is equal to or  greater  than  "ATP
Target" as shown in Column 2 of table,  Section 3.4, below, the Earn-Out Payment
shall be deemed fully earned,  due and payable.  If ATP for the Year in question
is less than "ATP Target" as shown in Column 2, table, Section 3.4, the Earn-Out
Payment  shall be reduced by a ratio of $3 for each $1 said ATP is less than the
ATP Target,  to be applied until the Earn-Out Payment for the Year reaches zero.
Earn-Out Payments are not dependent upon Stockholders'  continued  employment by
Buyer, nor upon the maintenance of such employment for any particular or minimum
period of time.

     Section 3.4. Table of ATP Targets,  Earn-Out  Payments.  When ATP equals or
exceeds ATP Target,  Earn-Out  Payments  ("EOP") shall be deemed fully earned by
Seller, and become fully payable by Buyer in accord with the following table:
       Column 1                     Column 2         Column 3
         Year                       ATP Target                EOP
          One (1996)                $63,000.00                $25,000.00
         Two (1997)                 $186,000.00               $175,000.00
         Three (1998)               $293,000.00               $300,000.00

     In no event shall the cumulative  total of the Earn-Out  Payments,  for the
entire Earn-Out Period, exceed the sum of $500,000.00.  If ATP does not equal or
exceed ATP Target,  in one or more Years,  apply EOP reduction formula stated in
Section 3.3.

     Section 3.5. Delivery of Buyer's RT Division Financial  Statements.  Within
forty-five  days  after the end of each of the  Years  comprising  the  Earn-Out
Period,  Buyer shall have prepared and  delivered to Seller  internally-prepared
and maintained  balance sheet and income statements for such year for Buyer's RT
Division (the  "Financial  Statements"),  prepared in accordance  with generally
accepted  accounting  principles  (GAAP),  consistently  applied,  along  with a
statement in reasonable detail computing and showing Gross Revenue (as variously
defined in  Section  3.3,  for the Year in  question),  along  with a  "Earn-Out
Report",  containing an  identification  of all other applied elements and items
leading to a determination  of ATP, with all necessary back up calculations  and
determinations.

     Section 3.6.  Calculation of Earn-Out Payments;  Dispute by Seller. (A) The
contents of the Financial  Statements and Earn-Out  Report,  as determining  the
Earn-Out  Payment  payable for that Year, in accord with Section 3.3 and Section
3.4,  shall be binding  upon the parties  unless  Seller  gives  written  notice
("Earn-Out  Report  Dispute  Notice")  that  Seller  disputes  the  calculations
therein,  serving such Earn-Out  Report  Dispute  Notice within twenty (20) days
after the Financial  Statements  and Earn-Out  Report have been  transmitted  to
Seller.  (B) If Seller  delivers an Earn-Out Report Dispute Notice in accordance
with  Subsection  3.6(A),  such notice shall set forth in reasonable  detail the
exclusions,  calculations  or  determinations  being disputed in good faith.  If
Buyer and Seller have not  resolved the dispute  within  fifteen (15) days after
Seller serves the Earn-Out  Report  Dispute  Notice,  the parties shall promptly
submit  the  dispute  to a  nationally  recognized,  mutually-agreed,  "Big Six"
accounting  firm or its  successor  (other than any such  auditors used by Buyer
within the previous three (3) years) with instructions to finally determine,  by
compilation  or review,  within  thirty (30) days,  Gross  Revenue (as variously
defined  in  Section  3.3,  for the Year in  question),  along  with such  other
necessary  and  appropriate  determinations  leading  to ATP  (as  that  term is
specially defined in and for the purpose of Section 3.3, and related  sections),
of the Buyer's RT Division (as  qualified in Section 3.3) and whether ATP,  when
compared to ATP Target,  is sufficient to entitle Seller to an Earn-Out  Payment
(whether  in full,  per the table in Section  3.4,  or reduced by the formula in
Section 3.3). All expenses relating to such determination,  including attorneys'
fees,  shall be borne equally by the parties.  The  accounting  firm so selected
shall by  compilation  or  review  set forth the  exclusions,  calculations  and
determinations,  thereby establishing the Auditor's Earn-Out Report for the Year
in question,  and such Auditor's  Earn-Out Report shall thereupon become binding
upon and non-appealable by the parties.

     Section  3.7.  Payments.  (A).  The  Earn-Out  Payments,  if,  when and to 
the  extent  deemed  earned,  shall  be paid to  Seller according to 
the following schedule:

         Year:             EOP Due Date:
         1996              March 15, 1997
         1997              March 15, 1998
         1998              March 15, 1999

(B). Except as provided in Subsection  3.6(A),  any amount of Earn-Out  Payments
deemed  earned,  and due and owing from  Buyer,  but not paid in full within ten
(10)  days  following  the  due  date  specified  in  Subsection  3.7(A),  shall
thereafter bear interest until paid, at ten percent (10%) per annum. (C). If the
Auditor's  Earn-Out  Report  determines  that any additional  amount of Earn-Out
Payments are earned,  and due and owing by Buyer,  the Earn-Out Payment shall be
paid to Seller  within ten (10) days of the  determination,  and if not so paid,
the amount of any unpaid  Earn-Out  Payments  shall bear interest as provided in
Subsection 3.7(B).

     Section 3.8.  Continuation  of Operations.  Buyer  represents and agrees as
follows:  (a) that all Purchased  Assets,  including all contracts,  agreements,
commitments  and any renewals,  modifications  or  amendments  to same,  will be
retained in Buyer's RT Division  during the  Earn-Out  Period  (Buyer,  however,
shall not be in breach for any loss, diminishment,  cancellation, termination or
curtailment of any such  Purchased  Assets by the actions or activities of third
parties,  including the cancellation or termination of any contract or agreement
by the other party thereto,  nor shall Buyer be prevented,  in good faith,  from
cancelling,   terminating  or  curtailing  one  or  more  operations  under  any
particular  contract,  agreement,  commitment  or any renewals by reason of such
operations  generating  inadequate sales,  margins or profits,  in Buyer's sound
business discretion);  (b) that, unless otherwise provided for in (a) above, the
operations of Seller's Business,  as existed  immediately prior to Closing Date,
will be  continued  and  developed in Buyer's RT Division  (with the  direction,
efforts,  full  cooperation  and assistance of Mathews and Salazar,  during such
time as they each may be employed by Buyer's RT Division following Closing Date,
pursuant to other portions of this Agreement)  during the Earn-Out  Period;  (c)
that  Buyer's RT  Division  will not merge  with,  and that the assets of the RT
Division will not be sold to, or otherwise  consolidate  with any other division
or entity,  affiliated  with Buyer or  otherwise,  during  the  Earn-Out  Period
(without  Seller's  written  consent,  which consent  shall not be  unreasonably
refused if and in the event Buyer's proposed transfer, by sale or otherwise,  of
all or any  Purchased  Assets or the RT Division is to an entity,  division or a
third  party  which  transferee  shall  have  expressly  agreed  to  assume  the
continuing responsibilities of Buyer under this Agreement, including the ongoing
obligation  of Buyer to determine and pay to Seller the Earn-Out  Payments,  and
shall have further  agreed to continue the operations of the Buyer's RT Division
consistently and in substantially the same manner as Buyer shall have undertaken
same  following  Closing Date);  and (d) that until end of the Earn-Out  Period,
neither  Buyer's  parent  corporation  or other  subsidiaries  thereof  will not
establish or own a business directly competing with Buyer's RT Division,  or any
business that would compete with the Seller's Business as it existed immediately
prior  to the  Closing  Date  (for  purposes  of this  Section  3.8,  "Competing
Business"  shall mean any business that engages in, and "Compete" shall mean the
practice of, providing or furnishing marketing,  contract management or practice
management  services  for  and on  behalf  of  respiratory  care  therapists  or
employers of such therapists  within the state of Arizona,  provided Buyer shall
not be precluded from acquiring the assets of any such Competing Business, to be
operated as part of the RT Division);  and (e) that Buyer will maintain adequate
books and records  during the Earn-Out  Period and for two years  thereafter  in
order to allow Seller to review the books and records during reasonable business
hours.

     Section 3.9. Buyer's Default and Seller's Remedy. (A) Each of the following
shall  constitute  an  Event  of  Default  with  respect  to  Buyer's  continued
performance under this Article Three,  when occurring or transpiring  during the
Earn-Out  Period:  (1) failure by Buyer to issue payment of any Earn-Out Payment
(when such is deemed earned, due and owing under the Earn-Out Report) by the due
date specified in Section 3.7, or within ten (10) days  thereafter;  (2) failure
by Buyer to provide  Financial  Statements or the Earn-Out Report to Seller in a
timely  manner  as  required  by  Section  3.5;  (3)  the  transfer,  by sale or
otherwise,  of any of the Purchased Assets to any other entity or division other
than Buyer's RT Division,  without Seller's written consent, which consent shall
not be unreasonably  refused if and in the event Buyer's  proposed  transfer (by
sale or otherwise) of all or any Purchased Assets is to an entity, division or a
third  party  which  transferee  shall  have  expressly  agreed  to  assume  the
continuing  responsibilities  of  Buyer  under  this  Agreement,  including  the
determination and payment to Seller of any remaining Earn-Out Payments, when and
as due, and shall have further  agreed to continue the operations of the Buyer's
RT Division  consistently  and in  substantially  the same manner as Buyer shall
have undertaken same following  Closing Date; (4) Buyer's  discontinuance of the
RT Division prior to the expiration of the Earn-Out  Period (unless by transfer,
by sale or otherwise,  to which Seller shall have consented);  (5) engagement by
Buyer, or its parent  corporation,  in any Competing  Business,  or any business
that would Compete with the business of Seller's Business as it existed prior to
the  Closing  Date,  and within  any point in  Arizona;  or (6) any  bankruptcy,
reorganization,  debt  arrangement or other  proceeding  under any bankruptcy or
insolvency law, or any dissolution or liquidation  proceeding,  instituted by or
against Buyer or a subsidiary of Buyer, if not dismissed within 90 days.

(B) In the event one or more Events of Default have occurred,  Buyer shall be in
breach of this  Agreement  and Seller is then  entitled to pursue all  available
remedies, including damages or specific performance, to which Seller may then be
entitled under applicable law.








ARTICLE FOUR.   THE CLOSING

     Section 4.1. Date, Time and Place.  Closing of the purchase and sale of all
Purchased Assets, as contemplated herein, shall take place on August 9, 1996, at
the hour of 11:00 A.M.,  local time,  at the  Buyer's  offices at Laguna  Hills,
California,  or such  earlier  date and hour as the parties may  mutually  agree
upon,  or such later date and hour,  or at such other place,  as the parties may
mutually agree in writing. If Closing does not take place because of the actions
or  inactions  of Seller,  or if there is any  material,  adverse  change to the
Purchased Assets, or the Seller's Business generated thereby, as a result of any
condition,  occurrence or event  predating the Closing,  then and in such event,
Buyer may, at Buyer's sole  option,  declare this  Agreement  null and void,  no
longer  in effect  and  neither  party  shall  have any  further  obligation  or
liability  hereunder.  If  Closing  does not take  place  solely  because of the
actions or  inactions  of Buyer,  then and in such event Seller may, at Seller's
sole option, declare this Agreement null and void, no longer in effect.

     Section 4.2. Conditions Precedent to Buyer's Obligations. The obligation of
Buyer to perform in  accordance  with this  Agreement is  contingent  upon,  and
subject  to,  satisfaction  or waiver by Buyer of the  following  conditions  by
Seller and/or Stockholders (collectively or individually, as the case may be) at
or prior to Closing,  or  compliance  with the  following  conditions to Buyer's
reasonable  satisfaction:  (a)  Performance  by Seller and  Stockholders  of all
agreements  and  covenants to be  performed by them at or prior to Closing;  (b)
Continued  accuracy  of  the   representations  and  warranties  of  Seller  and
Stockholders,  as herein  contained;  (c) Absence of any  pending or  threatened
legal action against Seller or Stockholders which, if successful, would prohibit
or hinder  consummation,  or require substantial  rescission of the transactions
contemplated by this Agreement; (d) Absence of a material, adverse change in the
financial  condition,  results of  operations,  assets  (including the Purchased
Assets)  or  business  of Seller;  (e)  Continuation  in full force and  effect,
without  modification,  of Seller's  presently  existing  and  material  leases,
contracts,  licenses,  permits  and other  similar  contracts  and  rights;  (f)
Delivery  of the  following  documents  to  Buyer  or  confirmation  to Buyer of
compliance with the following  requirements  at or before Closing,  all of which
shall be in form and of such substance  acceptable to Buyer and its counsel: (i)
Instruments of transfer required by Section 1.3 hereof; (ii) Releases (or copies
thereof) of all liens,  claims,  charges,  encumbrances,  security interests and
restrictions,  if any, on the Purchased  Assets  necessary to provide Buyer with
good,  marketable and indefeasible title to each and all of the Purchased Assets
at Closing  (excepting  only any such  matters  which Buyer has agreed to accept
thereon and at such time,  and as are  specifically  listed and shown as such in
Exhibit  2.1);  (iii)  Consents  and  approvals  of all third  parties,  if any,
necessary  for Seller  and  Stockholders  to  execute,  deliver or perform  this
Agreement;  (iv)  Consents and approvals of all third  parties  having  business
relationships  with  seller,  if consent to  transactions  of the nature  herein
contemplated is or may be required in order to prevent a material adverse change
in such business relationship,  such as cancellation of services or any software
license by a  customer;  (v)  Certified  copies of  corporate  actions  taken by
Seller's  Board  of  Directors,  and  Seller's  Stockholders,   authorizing  the
execution,  delivery  and  performance  of this  agreement,  and the  filing  of
amendments  to Seller's  Articles of  Incorporation,  changing  Seller's name to
eliminate  any and all  reference,  in any form,  to "MANAGED  RESPIRATORY  CARE
SERVICES,  INC."; (vi) Articles of Amendment to the Articles of Incorporation of
Seller,  in form suitable for filing  forthwith,  changing its name to eliminate
the  words  "MANAGED  RESPIRATORY  CARE  SERVICES"  (to be  thereafter  filed at
Seller's expense,  with the Arizona  Corporation  Commission,  and proof thereof
being  furnished to Buyer's  counsel not more than 15 days  following  Closing);
(vii)  Certificate  of Good  Standing  and Status  for Seller  from the State of
Arizona,  dated no earlier than ten (10) days prior to the Closing Date;  (viii)
Certificate  signed by one or more  duly  authorized  officers  of  Seller,  and
Stockholders, dated the Closing Date, to the effect that the representations and
warranties of Seller and  Stockholders  contained herein are true and correct as
of the Closing Date, just as if such  representations  had been made thereat and
on such date; (ix) Opinion of counsel for Seller and Stockholders,  addressed to
Buyer and dated the Closing  Date,  to the effect that the  representations  and
warranties  contained in Sections 5.1.1;  5.2.1;  5.2.2.;  5.2.3. clause (i) and
(iv); and Subsection  5.4.2.  (the third sentence) are true and correct subject,
where appropriate,  to the standard bankruptcy and equitable remedies exceptions
and subject to such changes as are reasonably acceptable to Buyer's counsel; (x)
UCC  searches  showing  no liens,  security  interests,  or claims  against  the
Purchased Assets or Seller's Business being hereby acquired,  brought current to
the Closing Date by supplemental affidavits of Seller and Stockholders; and (xi)
Satisfaction  of all bank  indebtedness  required to consummate the  transaction
with delivery of pay-off letters or documents from the involved bank(s) or other
lenders to be addressed to Seller.

     Section  4.3.   Conditions   Precedent   to  Seller's   and   Stockholder's
Obligations.   The  obligation  of  Seller  and  Stockholders  (collectively  or
individually,  as  applicable)  to perform in accordance  with this Agreement is
contingent  upon, and subject to,  satisfaction  of the following  conditions by
Buyer at or before  Closing:  (a)  Performance  by Buyer of all  agreements  and
covenants to be performed by it at or prior to Closing;  (b) Continued  accuracy
of the representations and warranties of Buyer, as herein contained; (c) Absence
of any pending or threatened  legal action  against Buyer which,  if successful,
would prohibit or hinder consummation,  or require substantial rescission of the
transactions  contemplated  by this  Agreement;  (d)  Delivery  or tender of the
following documents to Seller, at Closing,  all of which shall be in form and of
such  substance  acceptable  to Seller and its counsel:  (i) That portion of the
purchase  price as required by Section 3.2.  hereof;  (ii)  Instruments by which
Buyer  assumes the  Assumed  Liabilities  (if any);  (iii)  Certified  copies of
corporate  actions  taken by Buyer,  and Buyer's  shareholder,  authorizing  the
transactions  contemplated  hereby;  (iv) Certificate of good standing for Buyer
dated no earlier than 10 days prior to the Closing Date; (v) Certificate  signed
by  Buyer's  President,   dated  the  Closing  Date,  to  the  effect  that  the
representations and warranties of Buyer contained herein are true and correct as
of the Closing Date,  just as if such  representations  and  warranties had been
made  thereat;  and (vi)  Opinion of counsel for Buyer,  addressed to Seller and
Stockholders, dated the Closing Date, to the effect that the representations and
warranties  contained in Section 6.1. are true and correct, and that to the best
of said counsel's  knowledge,  the representations  and warranties  contained in
Subsections 6.2.2. and 6.2.3. are true and correct,  subject, where appropriate,
to the standard bankruptcy and equitable remedies exceptions and subject to such
changes as are reasonably acceptable to Seller's counsel.

     Section  4.4.   Non-fulfillment  of  Buyer's  Conditions.   The  conditions
contained in Section 4.2. hereof have been inserted for the exclusive benefit of
Buyer.  In case any  material  conditions  shall not be  fulfilled  at or before
Closing, Buyer may rescind this Agreement by notice to Seller and in such event,
Buyer shall be released from all further obligation  hereunder and, unless Buyer
can show that the condition or conditions for the non-performance of which Buyer
has rescinded  this  Agreement  were  reasonably  capable of being  performed or
caused to be  performed by Seller  and/or  Stockholders  without  undue delay or
postponement of the Closing, then Seller and Stockholders shall also be released
from all obligations hereunder; provided, that any of the said conditions may be
waived  in whole or in part by  Buyer  without  prejudice  to  Buyer's  right of
rescission  in the  event  of the  non-fulfillment  of any  other  condition  or
conditions.

     Section 4.5. Non-fulfillment of Seller's and Stockholder's Conditions.  The
conditions contained in Section 4.3. hereof have been inserted for the exclusive
benefit of Seller and Stockholders. In case any material conditions shall not be
fulfilled at or before  Closing,  Seller may rescind this Agreement by notice to
Buyer and in such event,  Seller and  Stockholders  shall be  released  from all
further  obligation  hereunder and, unless Seller and Stockholders can show that
the  condition  or  conditions  for the  non-performance  of  which  Seller  and
Stockholders  have rescinded this  Agreement  were  reasonably  capable of being
performed or caused to be performed by Buyer without undue delay or postponement
of the  Closing,  then  Buyer  shall  also  be  released  from  all  obligations
hereunder;  provided,  that any of the said conditions may be waived in whole or
in part by Seller and Stockholders without prejudice to their right of recission
in the event of the non-fulfillment of any other condition or conditions.

ARTICLE FIVE.   REPRESENTATIONS, WARRANTIES OF SELLER, STOCKHOLDERS

         Seller and Stockholders,  jointly and severally,  represent and warrant
to Buyer that the following statements are true and correct to the best of their
knowledge,  respectively, as of the date hereof and that said statements will be
true and correct to the best of their knowledge, respectively, as of the Closing
Date  (unless  specific  reference  is made to only one of such dates or to some
other date):

     Section 5.1.  Corporate Status of Seller:

5.1.1.   Organization,  Good Standing and Power of Seller.  Seller (i) is a 
corporation  duly organized,  validly  existing and in good standing under the 
laws of  Arizona  and (ii) has full  corporate  power  and  authority  to own,  
lease and  operate  its  properties (including the Purchased  Assets) and to 
carry on Seller's  Business,  as such business is presently being  conducted, 
and to execute, deliver and perform this Agreement in all and every material 
respect. 
5.1.2.  Ownership of Seller.  All of the issued and  outstanding  shares of the 
capital stock of Seller are owned by the  Stockholders, all parties  hereto,  
and that no persons not parties hereto have any right,  warrant,  or option to 
acquire (or to exercise the voting powers or rights represented by) any such 
shares.
5.1.3.  Subsidiaries.  Seller has no subsidiaries or affiliate companies.
5.1.4.   Foreign Qualification.  Seller is not qualified to transact business 
in any foreign jurisdiction.

Section 5.2.   Status of Agreements:

5.2.1.  Authorization  and  Enforceability.  All requisite  corporate  action to
approve,  execute,  deliver and perform  this  Agreement,  and each of the other
agreements,  instruments  and other  documents  to be  delivered  in  connection
herewith,  has been taken by the Seller's  Directors and all Stockholders.  This
Agreement  has been duly and validly  executed  and  delivered by Seller and all
Stockholders  and  constitutes  the  valid  and  binding   obligation   thereof,
enforceable in accordance with its terms. All such other agreements, instruments
and other documents to be executed and delivered by Seller or Stockholders will,
when executed and delivered,  constitute the valid and binding obligation of the
Seller  or  Stockholders,  enforceable  in  accordance  with its  terms.  5.2.2.
Consents.  Except as set forth on and fully  identified in  Disclosure  Schedule
5.2.2., and as required or indicated by the provisions hereof, no authorization,
approval, consent or order of, or registration,  declaration or filing with, any
court,  governmental  body or agency or other public or private body,  entity or
person is required in connection with the execution, delivery, or performance of
this Agreement or any other agreement, instrument or document to be delivered by
or on behalf of Seller or Stockholders in connection herewith. 5.2.3. Absence of
Conflicts  or  Disruptions.  Except  as set  forth on and  fully  identified  in
Disclosure  Schedule 5.2.3.,  neither the execution,  delivery or performance of
this Agreement,  or any other  agreement,  instrument or document to be executed
and delivered by Seller or  Stockholders  in connection  herewith,  does or will
violate  or  conflict  with,  result  in a breach  of or give rise to a right of
acceleration  or termination  under (i) Seller's  Articles of  Incorporation  or
Bylaws;  (ii) any lien,  mortgage,  security  agreement or other encumbrances or
restriction   affecting  Seller's  Business  or  Purchased  Assets;   (iii)  any
commitment, contract, agreement, plan, arrangement,  understanding,  instrument,
lease,  or license to which  Seller is a party or to which it is bound;  or (iv)
any order, arbitration,  award, judgment, decree or similar restriction to which
Seller  is  subject  or by which  it is  bound.  Such  execution,  delivery  and
performance  will also not  result  in the  imposition  of any  lien,  mortgage,
pledge, encumbrance, easement, claim, or other restriction or charge on Seller's
Business,  or the Purchased Assets, or impair any material business relationship
which Seller has with any current customer, licensee, or other person, except as
set forth in this Disclosure Schedule 5.2.3.

Section 5.3.   Status of Business:

5.3.1.  Financial Statements  Disclosure Schedule 5.3.1. consists of the 
following financial statements:

     Internally prepared balance sheet of Seller as of June 30, 1996, together 
with the related statement of income;

         All of such financial  statements and information are true, correct and
complete and have been prepared in accordance with generally accepted accounting
principles  applied on a basis consistent with prior periods.  The balance sheet
referenced above, (the "Balance Sheet") presents fairly the financial  condition
of Seller,  as at the date stated,  and the statement of income  presents fairly
the results of  operations  for the period  covered  thereby,  given the limited
purpose for which those financial  statements were prepared.  5.3.2.  Absence of
Undisclosed  Liabilities.  Seller does not have any knowledge of any liabilities
other than (i)  liabilities  adequately  reflected  or  reserved  against in the
Balance  Sheet and which,  in  accordance  with  generally  accepted  accounting
principles,  should  have  been  reflected  therein,  (ii)  current  liabilities
incurred  in the  ordinary  course of  business  since the date of such  Balance
Sheet,  all of which are  reflected in the  journals and ledgers of Seller,  and
(iii) the liabilities set forth in Disclosure Schedule 5.3.2. 5.3.3.  Absence of
Certain Changes. Since the date of the Balance Sheet, Seller's Business has been
operated  only in the ordinary  course,  and,  except as set forth in Disclosure
Schedule  5.3.3.,  or  otherwise  reflected  in the  Balance  Sheet  or in other
provisions of this Agreement,  there has not been with respect to Seller, and as
shall apply only to the Purchased Assets, being sold to Buyer hereunder: (a) Any
change in its condition, financial or otherwise, assets, liabilities,  business,
earnings or prospects,  except changes in the ordinary  course of business or of
which Buyer has knowledge,  none of which  individually  or in the aggregate has
been  materially  adverse;  (b) Any damage,  destruction or loss (whether or not
covered by insurance) materially and adversely affecting its properties, assets,
business or prospects;  (c) Any  executory  sales  commitments  in excess of its
ability to produce or conduct  operations at a profit;  (d) Any general increase
in the level or rate of sales or  compensation  of employees;  (e) Any liability
incurred or assumed, or any contract, agreement,  arrangement,  license or other
commitment  entered into or assumed by it or on its behalf,  whether  written or
oral,  involving more than  $5,000.00 in each  instance,  except in the ordinary
course of  business;  (f) Any loan or  advance  made to any  officer,  director,
consultant,  agent,  employee  or  shareholder,  or other loan or  advance  made
otherwise  than in the  ordinary  course  of  business;  (g) Any  change  in its
accounting  methods or practices or any change in  depreciation  or amortization
policies or rates theretofore  adopted by it; (h) Any purchase or sale of assets
in anticipation of this Agreement, or any purchase,  lease, sale, abandonment or
other  disposition of assets  otherwise than in the ordinary course of business;
(i) Any acquisition of all or any substantial  part of the stock or the business
or operating assets of any other person, firm, association, corporation, limited
liability company,  or business  organization except as disclosed to Buyer; (j).
Any  actual or  threatened  material  adverse  change in its  revenue  earnings,
business, operations,  condition,  prospects or business relationships;  (k) Any
mortgage,  pledge, lien, charge, security interest or other encumbrance against,
any of its assets; (l) Any waiver of release of any rights, except for rights of
insubstantial  value;  or (m) Any transfer or grant of any material rights under
any leases, licenses, agreements, copyrights, trade names, or service marks.

5.3.4.  Taxes. The books of account of Seller accurately reflect all known items
of income and expense  (including  accruals) and all assets and  liabilities  of
Seller in  accordance  with  normal  accrual  accounting  practices,  subject to
customary month-end,  quarterly,  or year-end  adjustments,  and customary audit
adjustments.  Except as listed in  Disclosure  Schedule  5.3.4.,  Seller has (i)
filed all federal and local income tax,  excise tax,  sales tax, use tax,  gross
receipts  tax,  franchise  tax,  employment  and payroll  related tax,  real and
personal  property  tax, and all other tax returns  which it is required to file
with respect to Seller and which have become due, (ii) paid or accrued all taxes
owed by Seller as well as all deficiencies or other  assessments of tax interest
or penalties,  and (iii) provided for all taxes not yet payable by Seller. There
are no claims  pending  against  Seller for  deficient  or past due taxes of any
nature, and Seller has no knowledge of any unassessed tax deficiency proposed or
threatened  against Seller.  No audits of any tax return of Seller are currently
in progress,  and there are not in force any  extensions of time with respect to
the  dates on which  any tax  return  was or is due to be filed by Seller or any
waivers or agreements for the extension of time for the assessment or payment of
any tax. 5.3.5. Compliance with Laws. Except as set forth in Disclosure Schedule
5.3.5.,  Seller (i) is not in  violation  of any  outstanding  judgment,  order,
injunction,  award  or  decree  specifically  relating  to  it;  (ii)  is not in
violation of, in any material respect, any federal, state, provincial,  local or
foreign law,  ordinance or  regulation  applicable  to Seller's  Business or the
Purchased  Assets,   including  without   limitation   environmental   laws  and
occupational health and safety laws. 5.3.6.  Litigation.  Except as set forth in
Disclosure  Schedule 5.3.6., no claim,  litigation,  action,  investigation,  or
proceeding  is  pending,  or,  to  the  knowledge  of  Seller  or  Stockholders,
threatened,  and no  order,  injunction  or decree is  outstanding,  against  or
relating to Seller,  Seller's  Business  or the  Purchased  Assets,  and neither
Seller  nor  Stockholders  know or has a  reasonable  basis for  knowing  of any
information   which  may  result  in  any  such   claim,   litigation,   action,
investigation  or  proceeding.   5.3.7.  Materials  and  Supplies.   Seller  and
Stockholders  are not aware of any actual or potential  shortage of materials or
supplies from any source which might  materially and adversely  affect  Seller's
Business. 5.3.8. Lists of Properties, Contracts, Etc. Disclosure Schedule 5.3.8.
contains a complete and accurate  list and  description  of the  following  with
respect to Seller's Business:  (a) All real property leased from others; (b) All
equipment, furniture, fixtures, vehicles, leasehold improvements, other personal
property  used in the conduct of  Seller's  Business  with an  original  cost in
excess of  $1,000.00,  or which are  leased  for  others at an annual  rental in
excess   of   $500.00;   (c)  All   licenses,   franchises,   permits,   orders,
authorizations, concessions, copyrights, trademarks, service marks, trade names,
patents or other  intellectual  property  items used in the  conduct of Seller's
Business;  (d) All  agreements  for the purchase,  sale or other  disposition of
goods, materials,  equipment, supplies, capital assets, or services which cannot
be  terminated  at any  time  on less  than  thirty  (30)  days  notice  without
liability,  which by their  terms will not be fully  performed  on or before the
Closing Date or which involve terms or quantities  exceeding normal  commitments
in the ordinary course of business; (e) All instruments or agreements evidencing
liens,  financing  arrangements or secured transactions for Seller's Business or
any Purchased Asset; (f) All management,  employment or agency  agreements;  (g)
All agreements with directors, officers, or any Stockholders, or with the spouse
or other  relative  of any such  persons;  (h) All  agreements  and  instruments
pursuant to which  credit has or may be obtained or  indebtedness  for  borrowed
money has or may be incurred; (i) All guarantees of payment or performance by or
on behalf of a third-party; (m) All other contracts, agreements,  commitments or
understandings  entered into other than in the  ordinary  course of business and
consistent  with past  practices;  (n) The names and  addresses  of all  current
officers and directors,  and current compensation rates or arrangements for each
such person; and (o) The names and addresses of all persons, if any, now holding
proxies,  powers of  attorney,  or other like  instruments  and powers to act on
behalf of Seller, and a summary of the terms thereof.

         True and complete  copies of all written  documentation  pertaining  to
each of the foregoing,  as disclosed on Disclosure  Schedule  5.3.8.,  have been
previously delivered to or made available for inspection by Buyer.
 5.3.9.  Compliance  with  Contracts  and  Commitments.   With  respect  to  the
agreements, leases, licenses, commitments, instruments and undertakings, oral or
written,  to which  Seller is a party or by which it is bound,  (i)  Seller  has
performed  all of the  obligations  to be performed by it; (ii) Seller is not in
any material  respect in default  under or in  violation  of any thereof;  (iii)
there is no basis for a valid claim of such a violation or default;  and (iv) no
event has occurred which, with notice or lapse of time or both, would constitute
such a  default.  Neither  Seller  nor  Stockholders  are aware of any  material
default  under or any material  violation  of any of the  foregoing by any other
party thereto.

Section 5.4.   Status and Quality of Assets:

5.4.1.  Completeness.  Except for the Retained Assets, included in the Purchased
Assets are all those  assets which are  necessary  in order to operate  Seller's
Business in the ordinary course as presently conducted.  5.4.2.  Seller's Title.
Except  as set  forth in  Disclosure  Schedule  5.4.2.,  Seller  owns all of the
Purchased  Assets with good,  absolute and marketable  title  thereto,  free and
clear of all liens, security interests, claims, charges,  encumbrances and other
restrictions  or  limitations  affecting  the  ability to use or  transfer  such
assets. All of the agreements,  leases, licenses,  instruments,  commitments and
undertakings  to which Seller is a party or by which it is bound with respect to
which Buyer is acquiring the rights of Seller  pursuant  hereto,  are valid,  in
full force and effect and  enforceable in accordance with their terms by Seller,
as the case may be. Subject to the terms of this  Agreement,  the instruments of
transfer  required  hereby to be executed and delivered by Seller to Buyer will,
when so executed and delivered,  effectively vest in Buyer good,  marketable and
indefeasible  title to the  Purchased  Assets  and the full  rights of Seller to
enforce the aforesaid agreements, leases, licenses, instruments, commitments and
undertakings  to which it is a party or by which it is bound in accordance  with
their terms.  5.4.3.  Trademarks and  Copyrights.  Exhibit 1.1.  includes,  as a
Purchased  Asset,  all  trademarks,  service  marks,  and  copyrights  and their
registrations  or  applications,  owned by Seller and used in  association  with
Seller's Business and the Purchased Assets. 5.4.4. Patents. There are no patents
or patent rights  associated with the Purchased  Assets. To the best of Seller's
knowledge,  there are no claims that the use of the Purchased Assets violates or
infringes on the patent or patent  right of any person.  5.4.5.  Trade  Secrets.
Exhibit 1.1. includes a description of Seller' trade secrets associated with the
Purchased Assets.  Seller is the sole owner of each of these trade secrets, free
and clear of any  encumbrances,  restrictions  or legal or  equitable  claims of
others.  Seller  has taken all  reasonable  security  measures  to  protect  the
secrecy,  confidentiality,  and  value of these  trade  secrets;  and any of its
employees  and other  persons  who,  either  alone or in  concert  with  others,
developed, invented, discovered,  derived, programmed or designed these secrets,
or who have  knowledge of or access to information  relating to them,  have been
put on notice and, if  appropriate,  have  entered  into  agreements  that these
secrets  are  proprietary  to  Seller  and are not to be  divulged  or  misused.
Further,  to the best  knowledge  of  Seller,  all of these  trade  secrets  are
presently  valid and  protectible  and are not part of the public  knowledge  or
literature;  nor,  to  Seller's  knowledge  have they  been  used,  divulged  or
appropriated for the benefit of any past or present  employees or other persons,
or to the detriment of Seller.

Section 5.5.  Miscellaneous:
5.5.1. Conflicts of Interest. Except as set forth in Disclosure Schedule 5.5.1.,
no officer,  director or shareholder of Seller or any relative  thereof,  or any
entity controlled by any of said persons (i) owns,  directly or indirectly,  any
interest  in, or is an  employee  or  representative  of or  consultant  to, any
corporation,  firm,  limited liability company,  association,  or other business
entity which is, or is engaged in business  as, a  competitor,  lessor,  lessee,
customer,  licensee,  licensor, or supplier of Seller; or (ii) owns, directly or
indirectly,  in whole or any part,  any tangible or  intangible  property  which
Seller is using or the use of which is  necessary  for the  conduct of  Seller's
Business,  or (iii) has any claim or cause of action whatsoever  against Seller.
5.5.2.  Brokers,  Agents.  Except as set forth in Disclosure Schedule 5.5.2., no
broker,  finder or other  person  or  entity  acting  in  similar  capacity  has
participated  on  behalf  of  Seller  or  Stockholders  in  bringing  about  the
transaction herein  contemplated,  rendered any services with respect thereto or
been in any  way  involved  therewith.  5.5.3.  Accuracy  and  Completeness.  No
representation or warranty made by Seller or Stockholders in this Agreement, and
no statement contained in any exhibit, certificate, disclosure schedule or other
document   delivered  to  Buyer  pursuant  hereto  or  in  connection  with  the
transaction  contemplated hereby contains, or will contain, any untrue statement
of a material  fact, or omits,  or will omit, to state a material fact necessary
to make the statements contained therein, in light of the circumstances in which
they  are  made,  not  misleading.   5.5.4  Survival.  Seller  and  Stockholders
acknowledge  and agree that the  representations  and  warranties  of Seller and
Stockholders  contained in Article Five of this  Agreement  shall  survive for a
period of one (1) year  after the  Closing  Date,  except  for those in  Section
5.3.4,  which shall  survive for the  longest  period with  respect to which any
taxing authority can assess additional taxes (including any extensions thereof).
Otherwise,  any  representations  and warranties of Seller and Stockholders made
within  this  Agreement  shall  survive  for a period of three  (3) years  after
Closing Date. No  investigation or lack thereof by Buyer or any agents on behalf
of Buyer shall be deemed to constitute  or imply a waiver of any  representation
or warranty of Seller or Stockholders.


ARTICLE SIX.   REPRESENTATIONS, WARRANTIES OF BUYER

         Buyer  represents  and  warrants  to Seller and  Stockholders  that the
following statements are true and correct to the best of its knowledge as of the
date hereof and that said statements will be true and correct to the best of its
knowledge as of the Closing Date (unless specific  reference is made to only one
of such dates or to some other date):

Section 6.1.  Corporate Status of Buyer:
6.1.1.   Organization,  Good  Standing and Power of Buyer.  Buyer (i) is a 
corporation  duly  organized,  validly  existing and in good standing  under the
laws of Ohio and (ii) has full  corporate  power and  authority to own,  lease 
and operate its  properties,  as and where such properties are now owned or 
leased and as such business is presently being  conducted,  and to execute,  
deliver and perform this Agreement in all and every respect.
6.1.2.  Ownership  of Buyer.  All of the issued  and  outstanding  shares of 
the capital  stock of Buyer are owned by  Regency  Health Services, Inc. of 
Tustin, California.
Section 6.2.   Status of Agreements:
6.2.1.  Authorization  and  Enforceability.  All requisite  corporate  action to
approve,  execute,  deliver and perform  this  Agreement,  and each of the other
agreements,  instruments  and other  documents  to be  delivered  in  connection
herewith,  has been taken by the Buyer's  Directors and (if required) by Buyer's
shareholders. This Agreement has been duly and validly executed and delivered by
Buyer and constitutes the valid and binding obligation  thereof,  enforceable in
accordance  with its terms.  All such other  agreements,  instruments  and other
documents  to be executed  and  delivered  by or on behalf of Buyer  will,  when
executed and delivered, constitute the valid and binding obligation of the party
executing same,  enforceable in accordance with its terms. 6.2.2.  Consents.  No
authorization,  approval,  consent or order of, or registration,  declaration or
filing with, any court,  governmental  body or agency or other public or private
body,  entity or person is required in connection with the execution,  delivery,
or performance of this Agreement or any other agreement,  instrument or document
to be delivered by or on behalf of Buyer. 6.2.3.  Absence of Conflicts.  Neither
the  execution,  delivery  or  performance  of  this  Agreement,  or  any  other
agreement,  instrument  or document to be  delivered by or on behalf of Buyer in
connection herewith,  does or will (i) conflict with or violate or result in any
breach of any judgment, decree, order, statute, rule or regulation applicable to
Buyer;  (ii)  conflict  with,  violate or result in breach of any  agreement  or
instrument to which Buyer is a party or by which it is bound;  or (iii) conflict
with or violate any  provision  of the  Articles of  Incorporation  or Bylaws of
Buyer.

Section 6.3.  Miscellaneous:
6.3.1.  Brokers,  Agents. No broker,  finder or other person or entity acting in
similar  capacity  has  participated  on behalf of Buyer in  bringing  about the
transaction herein  contemplated,  rendered any services with respect thereto or
been in any  way  involved  therewith.  6.3.2.  Accuracy  and  Completeness.  No
representation  or warranty  made by Buyer in this  Agreement,  and no statement
contained in any exhibit,  certificate,  disclosure  schedule or other  document
delivered to Seller and/or  Stockholders  pursuant  hereto or in connection with
the  transaction  contemplated  hereby  contains,  or will  contain,  any untrue
statement of a material  fact, or omits,  or will omit, to state a material fact
necessary  to  make  the  statements   contained   therein,   in  light  of  the
circumstances  in which they are made, not  misleading.  6.3.3  Survival.  Buyer
acknowledges  and  agrees  that  the  representations  and  warranties  of Buyer
contained in Article Six of this Agreement shall survive for a period of one (1)
year after the Closing Date,  otherwise,  such representations and warranties as
are made by Buyer in this  Agreement  shall  survive  for a period  of three (3)
years after  Closing  Date.  No  investigation  or lack thereof by Seller or any
agents on behalf of Seller  shall be deemed to  constitute  or imply a waiver of
any representation or warranty of Buyer.


ARTICLE SEVEN.   INTERIM OPERATIONS

     Section 7.1. Conduct of Business.  Seller and Stockholders  agree that from
the date of this Agreement to and until Closing, except to the extent that Buyer
may  otherwise  consent in writing,  Seller has and will  operate  its  business
substantially  as  presently  operated  and  only in the  ordinary  course  and,
consistent  with such  operations,  will use its best efforts to preserve intact
the present  business  organization  and the  relationships  with persons having
business dealings with it.

     Section 7.2. Access to Information;  Confidentiality.  From the date hereof
until  Closing,  Seller shall make available to the  accountants,  attorneys and
other  representatives  of Buyer for  examination  during normal business hours,
upon reasonable request, all books, records and documents of Seller,  whether or
not related to Seller's  Business,  of every nature,  kind and character.  Buyer
acknowledges  that certain  information  about Seller's  Business is non-public,
confidential information.  Buyer agrees that if the transactions contemplated by
this Agreement are not consummated for any reason, Buyer will not disclose,  use
or permit the use of any non-public,  confidential  information  that Seller has
provided or will provide from time to time pursuant to its investigation.  Buyer
agrees  that  until  the  Closing  Date,  it and its  representatives  shall not
disclose, use or permit the use of, any non-public confidential information that
Seller has provided or will  provide  from time to time,  except for purposes of
evaluating  Seller's Business and in moving towards  completing the transactions
contemplated hereby.

     Section 7.3. Notice to Buyer.  Seller and  Stockholders  covenant and agree
that they have not and will not prior to Closing  engage in any  transaction  or
commence any judicial or other  proceeding under Title 11 of United States Code,
or any other law for the relief or restructuring of any of Seller's indebtedness
or affairs or for the reorganization of Seller's affairs,  or for an arrangement
or composition with seller's creditors,  or any of them, without first notifying
Buyer and allowing the opportunity,  but never the obligation, to provide Seller
such assistance,  financial or otherwise, as may be appropriate, in the sole and
absolute  discretion of Buyer, to avoid any such  proceeding or transaction;  it
being understood and agreed that the aforementioned  notice to Buyer shall be in
writing  and  delivered  to Buyer not less than ten (10) days prior to  Seller's
entering into any such proceeding or contemplated transaction.

ARTICLE EIGHT.   INDEMNIFICATION

     Section 8.1. Indemnification by Seller and Stockholders. From and after the
Closing  Date,  for  a  period  of  three  (3)  years  thereafter,   Seller  and
Stockholders shall indemnify, defend and hold harmless Buyer, its successors and
assigns, from and against any and all claims, demands, liabilities, obligations,
actions, suits,  proceedings,  losses,  damages,  costs, expenses,  assessments,
judgments,  recoveries  and  deficiencies,  including  interest,  penalties  and
reasonable  attorneys;   fees  (including  without  limitation  attorneys'  fees
incurred  in  investigating  or in  attempting  to avoid the same or oppose  the
imposition thereof), of every kind and description, contingent or otherwise (the
foregoing  hereinafter  collectively  referred to as "Damages") against Buyer or
the  Purchased  Assets,  occasioned  by,  arising out of or  resulting  from any
misrepresentation  (and  during  the  period of time for which a  representation
shall  survive  Closing  Date),  breach of warranty or covenant  (and during the
period of time for which a warranty or covenant shall survive, or be enforceable
following,  the Closing Date), or default or  nonfulfillment of any agreement on
the  part  of  Seller  under  this  Agreement,  or any  certificate,  agreement,
appendix,  schedule or other instrument furnished to or to be furnished to Buyer
pursuant to this  Agreement.  Buyer,  with reasonable  promptness,  shall notify
Seller and  Stockholders of any claim against Buyer for Damages,  and Seller and
Stockholders  shall have, at their  election,  the right to compromise or defend
any such matter through  counsel of their own choosing,  any such  compromise or
defense to be at the expense of Seller and  Stockholders.  Buyer agrees,  at the
expense of Seller and  Stockholders,  to  cooperate  in the  defense of any such
claim for  Damages.  Seller  and  Stockholders  shall  take  whatever  action is
necessary  in  the  course  of  defending  any  claim  to  which  the  foregoing
indemnification  applies to avoid the imposition of any lien on Buyer's  assets.
If Seller and  Stockholders  fail to take such action after  reasonable  notice,
Buyer may, in the  settlement of any claim for such Damages,  exercise the right
of set-off against all or any sum of money then due, or to become due, to Seller
(or its  successors  and assigns,  if any) as Earn-Out  Fees under  Section 3.3,
together  with any other remedy or right which Buyer may then  exercise  against
Seller or  Stockholders  (in  their  individual  capacity,  as  parties  to this
Agreement) under this Section 8.1.

     Section 8.2.  Indemnification  by Buyer. From and after Closing Date, for a
period  of three  years  thereafter,  Buyer  shall  indemnify,  defend  and hold
harmless  Seller,  its  successors  and  assigns,  from and  against any and all
claims, demands, liabilities,  obligations, actions, suits, proceedings, losses,
damages, costs, expenses,  assessments,  judgments, recoveries and deficiencies,
including interest,  penalties and reasonable attorneys; fees (including without
limitation  attorneys' fees incurred in  investigating or in attempting to avoid
the same or oppose  the  imposition  thereof),  of every  kind and  description,
contingent or otherwise (the foregoing  hereinafter  collectively referred to as
"Damages")  against Seller,  occasioned by, arising out of or resulting from any
misrepresentation  (and  during  the  period of time for which a  representation
shall  survive  Closing  Date),  breach of warranty or covenant  (and during the
period of time for which a warranty or covenant shall survive, or be enforceable
following,  Closing Date), or default or  nonfulfillment of any agreement on the
part of Buyer  under this  Agreement,  whether in  connection  with the  Assumed
Liabilities or otherwise. Seller, with reasonable promptness, shall notify Buyer
of any claim against Seller for Damages,  and Buyer shall have, at its election,
the right to  compromise  or defend any such matter  through  counsel of its own
choosing,  any such compromise or defense to be at the expense of Buyer.  Seller
agrees,  at the expense of Buyer,  to cooperate in the defense of any such claim
for  Damages.  Buyer shall take  whatever  action is  necessary in the course of
defending any claim to which the foregoing  indemnification applies to avoid the
imposition of any lien on Seller's Retained Assets (or other assets).

ARTICLE NINE. MISCELLANEOUS AGREEMENTS AND PROVISIONS.


    Section  9.1.  Mathews  and  Salazar  Employment  Agreements.  Mathews  and
Salazar,  and  each of  them,  agree  to enter  into at  Closing  an  Employment
Agreement with Buyer substantially in the form attached hereto as Exhibit 9.1.

     Section 9.2. Seller's Non-Compete and Termination Agreement.  Seller agrees
and represents to Buyer, with full  understanding  that Buyer is relying on this
representation, that Seller is terminating "Seller's Business", and for a period
of one year  after  the last to  occur of the (i)  completition  of the Earn Out
Period (see Article Three), or (ii) the termination of Stockholders'  employment
with Buyer (see Section  9.1,  above),  Seller,  as to any point or place in any
county in Arizona where Seller,  prior to Closing Date,  has conducted  business
under any completed  contract,  or negotiated  any pending or proposed  contract
pertaining to Seller's  Business,  will not reenter that business,  or any other
similar business dealing with, related or pertaining to, directly or indirectly,
respiratory  therapy practice  management or marketing on behalf of hospitals or
health  care  providers  or other  identical,  comparable  or  similar  entities
otherwise employing or obtaining the benefit of respiratory therapists, in which
business Seller is now engaged,  and that Seller is herewith divesting itself of
its present  corporate name and all of its service names.  Seller is taking such
action and making such  representation  in exchange for the  consideration it is
receiving from Buyer under the terms of this  Agreement.  Seller agrees that the
agreements  and  representations  made under this Section 9.2 are reasonable and
necessary  for the  protection of Buyer in connection  with  acquisition  of the
Purchased Assets,  and expressly  acknowledges that such is an essential part of
the benefit of the bargain for Buyer.  Any breach of this  Section 9.2 by Seller
will cause irreparable  injury to Buyer for which damages would be an inadequate
remedy and that (in addition to and without limitation of any other rights Buyer
may have and exert against  Seller) Buyer shall have the right to issuance of an
injunction  by a court of  competent  jurisdiction,  enjoining  such breach upon
notice and without bond.  Notwithstanding any other provision of this Agreement,
Seller may directly or  indirectly do all or any of the  following:  (a) enforce
any and all rights and  remedies  afforded  Seller  under  this  Agreement;  (b)
manage,  collect,  enforce and act as a lessor and  otherwise  realize  upon all
assets of Seller as are not sold to Buyer under this  Agreement.  Further,  this
provision  shall not be construed as  prohibiting  Seller from  entering into or
otherwise  keeping or maintaining  any other business not listed in this Section
9.2.,  and not  presently or formerly a part of "Seller's  Business"  within the
meaning of this Agreement.

     Section 9.3.  Publicity.  All public  announcements  relating to this 
Agreement or the  transactions  contemplated  hereby will be made only as 
determined by Buyer.

     Section 9.4.  Expenses,  etc.  Buyer shall bear and pay all of the expenses
incident to the  transactions  contemplated by this Agreement which are incurred
by  Buyer.  Seller  and  Stockholders  shall  bear  and pay all of the  expenses
incident to the  transactions  contemplated by this Agreement which are incurred
by them.

     Section 9.5. Notices. All notices and other  communications  required by or
in  connection  with this  Agreement  shall be in writing and be deemed given if
delivered by hand, or mailed by certified  U.S.  mail, or transmitted by Federal
Express United Parcel Service or similar nationwide  overnight-priority  courier
service,  to the intended,  appropriate  recipient at the following  address (or
such other address as the party shall specify by notice pursuant hereto):

If to Buyer, to:                 Mr. Jamison J. Ashby, Chief Operating Officer
                                 SCRS & COMMUNICOLOGY, INC. OF OHIO
                                 95 Argonaut, Suite 100
                                 Laguna Hills, California 92656



                  with a copy to:
                                    David A. Grant, Esq., SVP & General Counsel
                                    REGENCY HEALTH SERVICES, INC.
                                    2742 Dow Avenue
                                    Tustin, California 92680-7245

If to Seller, to:                   Ms. Jean Mathews, Director
                                    Mr. Joe Salazar, Director
                                    3801 North 24th Street
                                    Phoenix, Arizona 85016

                  with a copy to:
                                    Kyle B. Hettinger, Esq.
                                    BROWN & BAIN, P.A.
                                    2901 North Central Avenue
                                    Phoenix, Arizona 85012-2788

If to Stockholders, to:             Ms. Jean Mathews
                                    3801 North 24th Street
                                    Phoenix, Arizona 85016
                                    Mr. Joe Salazar
                                    3801 North 24th Street
                                    Phoenix, Arizona 85016

                  with a copy to:
                                    Kyle B. Hettinger, Esq.
                                    BROWN & BAIN, P.A.
                                    2901 North Central Avenue
                                    Phoenix, Arizona 85012-2788



     Section 9.6.  Binding Effect.  Except as may be otherwise  provided herein,
this Agreement and all provisions  hereof shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, personal representatives,
successors, designatees, and assigns.

     Section 9.7. Disclosure  Schedules and Exhibits.  All disclosure  schedules
and exhibits  referred to in this Agreement  constitute an integral part of this
Agreement as if fully rewritten herein.

     Section  9.8.  Counterparts.  This  Agreement  may be  executed  in  
multiple  counterparts,  each of  which  shall be  deemed  an original, but all
of which together shall constitute one and the same document.

     Section 9.9.  Governing  Law.  This  Agreement  and all disputes  arising  
hereunder  shall be  construed in  accordance  with and governed by the laws 
of the State of California.

     Section 9.10.  Severability.  If any provision of this  Agreement  shall be
held  unenforceable,  invalid  or void to any extent  and for any  reason,  such
provision shall remain in force and effect to the maximum extent  allowable,  if
any, and the  enforceability  or validity of the  remaining  provisions  of this
Agreement shall not be affected thereby.

     Section 9.11. Waivers. No waiver of any of the provisions of this Agreement
shall be valid and  enforceable  unless  such waiver is in writing and signed by
the party to be charged therewith, and, unless otherwise stated therein, no such
waiver shall constitute a waiver of any other provision  hereof, or a continuing
waiver.

     Section 9.12. Termination. This Agreement may be terminated by (i) Buyer if
the  conditions  set  forth in  Section  4.2  hereof  shall not have been met by
Closing Date,  and by Seller and  Stockholders  if the  conditions  set forth in
Section  4.3.  shall not have been met by  Closing  Date,  and (ii) Buyer if any
change  shall  have  occurred  or  be  threatened  in  the  business,  financial
conditions, operations, results of operations, or prospects of Seller's Business
which is or will be  materially  adverse,  or if Buyer shall become aware of any
presently existing facts which has or will have a material adverse effect on the
business, financial condition,  operations,  results of operations, or prospects
of  Seller.  Upon  such  termination,  neither  party  shall  have  any  further
obligations under this Agreement.

     Section  9.13.   Entire  Agreement.   This  Agreement   together  with  the
agreements,   instruments,  and  other  documents  to  be  delivered  hereunder,
constitute the entire  understanding  and agreements  between the parties hereto
and concerning the subject matter hereof.  All negotiations  between the parties
hereto  are  merged  into this  Agreement,  and  there  are no  representations,
warranties,  covenants,  understandings,  or agreements,  oral or otherwise,  in
relation thereto between the parties other than those incorporated herein and to
be delivered  hereunder.  Except as  otherwise  expressly  contemplated  by this
Agreement,  nothing  expressed or implied in this Agreement is intended or shall
be construed so as to grant or confer on any person, firm or corporation,  other
than the parties  hereto,  any rights or privileges  hereunder.  No  supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by the parties wishing to be bound thereby.

     Section 9.14. Right of Setoff.  If Buyer be required to pay at any time any
obligation of Seller or all or any Stockholders arising out of or related to the
transaction  covered by this Agreement and the  agreements  provided for herein,
which amount was not the  obligation of Buyer,  or should Buyer  experience  any
loss or expense by reason of Seller's or  Stockholders'  breach (whether all and
collectively  or less than all of such  Stockholders)  of any  provision of this
Agreement and the agreements provided for herein,  Buyer shall have the right of
setoff against any money due Seller and/or Stockholders (whether collectively or
individually) under the terms of any agreement or transaction between or amongst
the  parties,  which  right  shall be in  addition  to the  right of  setoff  as
identified in Section 8.1., above.

     Section  9.15.  Default  and  Remedies.  In the  event  any  party  to this
Agreement fails to perform any material act, duty or obligation which said party
is bound to  perform  and is then due or owed to any other  party  hereto at any
time after Closing Date and said party is thereupon in breach of this  Agreement
(including  Section 3.9  hereof),  then and in such event the party so aggrieved
may send written  notice to the party in breach,  specifying  the material  act,
duty or obligation due or owing, whereupon the party receiving such notice shall
have  fifteen  (15) days to cure such breach by  performance  to the  reasonable
satisfaction of the party so aggrieved (if a longer or shorter period of time is
expressly  provided in any section,  as to a specific act,  duty or  obligation,
such other period of time shall control).  In the absence of a timely cure after
such notice,  the party so aggrieved  (without  further  notice)  shall have the
right to declare a default in the performance of this Agreement,  and thereafter
may seek any  relief or  remedy  as may then be  available  to such  party,  not
otherwise  inconsistent  with this Agreement,  including  damages arising out of
such breach, or, if applicable, specific performance,  compelling performance of
the act,  duty or  obligation.  Upon  default,  any party  seeking  relief,  and
substantially  prevailing  therein,  shall have the right to seek and recover of
the party in  default,  all costs of suit and  reasonable  attorneys'  fees,  in
addition to any other relief as may be available.

         In Witness Whereof, the parties, personally and individually, or by and
through  their duly  authorized  officers or agents,  do hereby  enter into this
Asset Purchase  Agreement,  intending to be bound by the provisions  hereof, the
dates recorded  below,  due authority being  warranted,  and  understanding  and
agreeing that this instrument may be executed in two or more counterparts,  each
party having  executed each  counterpart in original or facsimile form, each and
all such counterparts being one and the same instrument:



Buyer:

SCRS & COMMUNICOLOGY, INC. OF OHIO


By:                                         Date:
         Jamison J. Ashby, COO







Seller:

MANAGED RESPIRATORY CARE SERVICES, INC.


By:                                         Date:
         Jean Mathews, President





Stockholders:


                                            Date:
Jean Mathews


                                            Date:
Joe Salazar