<PAGE>
 
                                 EXHIBIT 10 (j)
            NOTE PAYABLE TO AT&T SMALL BUSINESS LENDING CORPORATION
                         AND RELATED OPEN-END MORTGAGE
                                        
                                                      OMB APPROVAL NO. 3245-0201

                                                                 SBA LOAN NUMBER
                                                                PLP 950-789-3008
                                                                                
                       U.S. Small Business Administration
                                      NOTE

                                                      Philadelphia, Pennsylvania
                                                      --------------------------
                                                                (City and State)

                                                       (Date)    Oct. 28  , 1996
                                                              ------------      

$1.587.500,00
-------------

For value received, the undersigned promises to paid to the order of AT&T
                                                                     ----
SMALL BUSINESS LENDING CORPORATION
----------------------------------

                                    (Payee)

at its Office in the city of Parsippany, State of New Jersey or at holders
                             ----------           ----------           
option, at such other place as may  be designated from time to time
by the holder One Million Five Hundred Eighty-Seven Thousand Five Hundred
              -----------------------------------------------------------
dollars, with interest on unpaid principal computed from the date of each
advance to the undersigned at the initial rate of 10.25% percent per annum,
                                                  -------                  
payment to be made in installments as follows:



NOTE PAYABLE:  One installment of interest only will be payable on the first day
of month following the date of this Note. Then, equal monthly installments of
principal and interest in the amount of $17,303.00 will be due on the first day
of the second month following the date of this Note and on the first day of each
and every month thereafter, unless the amount of any installment changes
pursuant hereto.  The balance of principal, accrued interest and all other
amounts due hereunder shall be payable on or before fifteen (15) years from the
date of this Note. THE INITIAL INTEREST RATE SHALL BE TEN AND ONE QUARTER
PERCENT (10.25%) PER ANNUM.  Each payment shall be applied first to the interest
accrued to the date of receipt of said payments, and the balance, if any, to
principal, and then to any other amounts due hereunder, Including late charges.
The interest rate shall not exceed the maximum rate allowable under applicable
law.

LATE CHARGES: Borrower agrees to pay a late charge equal to five percent (5.0%)
of the payment amount due if such payment is no received within ten (10) days of
the due date. Funds received from the borrower will first be applied to
interest, to the date of receipt, then to principal, and then to the late fee.

THIS IS A VARIABLE RATE LOAN. Commencing on the first Adjustment Date (as
defined below) and continuing on each Adjustment Date thereafter, the interest
rate will fluctuate in accordance with  the "Prime Rate" as published the
InMoney Rates section of the Wall Street Journal on such date (or if the Wall
Street Journal is not published on such date, as published in the Wall Street
Journal on the first business day after such date, or if no such rate is
published in the Wall Street Journal then the prime rate as published in a
national daily financial newspaper as selected by the holder of this Note (the
"Holder"). The interest rate (spread) to be added to the Prime Rate at the
beginning of each applicable adjustment period will be two percent (2%). Each
adjustment period will be quarterly, beginning on the first business day of the
calendar quarter following the date of this Note.  Adjustment periods and
calendar quarters shall commence on each January 1, April 1, July 1 and October
1 (each an "Adjustment Date").

If this Note contains a fluctuating interest rate, the notice provision is not a
pre condition for fluctuation (which shall take place regardless of notice).
Payment of any installment of principal or interest owing on this Note may be
made prior to the maturity date thereof without penalty. Borrower shall provide
lender with written notice of intent to prepay part or all of this loan at least
three (3) weeks prior to the anticipated prepayment date. A prepayment is any
payment made ahead of schedule that exceeds twenty (20) percent of the then
outstanding principal balance. If borrower makes a prepayment and fails to give
at least three weeks advance notice of intent to prepay, then, notwithstanding
any other provision to the contrary in this note or other document, borrower
shall be required to pay lender three weeks interest on the unpaid principal as
of the date preceding such prepayment

                                       47
<PAGE>
 
The interest rate on this Note shall increase or decrease on each Adjustment
Date by adding the spread to the Prime Rate in effect as of such Adjustment
Date.

Upon any changes in the interest rate, the above monthly principal and interest
payment shall be adjusted to amortize the remaining principal balance in equal
monthly payments of principal and interest over the remaining term of the loan.

Holder shall give written notice to the undersigned of each increase or decrease
in the interest rate within thirty (30 ) days after the effective date of each
rate adjustment; however, the fluctuation of the interest rate is not contingent
on whether the notice is given and any failure of the Holder to give such notice
shall not relieve the Borrower from any obligation to make any payment due under
this Note.

If the undersigned shall be in default of payment due on the indebtedness herein
and the Small Business Administration (SBA) purchases its guaranteed portion of
said indebtedness, the rate of interest on both the guaranteed and unguaranteed
portions herein shall become fixed at the rate in effect as of the date of
default.  If the Undersigned shall not be in default in payment when SBA
purchases its guaranteed portion, the rate of interest on both the guaranteed
and unguaranteed portions shall be fixed at the rate in effect as of the date of
purchase by SBA.

Borrower shall provide Holder with written notice of intent to prepay part or
all of this loan at least 21 calendar days prior to the prepayment date. A
prepayment is any payment made ahead of schedule that exceeds twenty (20%)
percent of the then outstanding principal balance before such prepayment.  If
Borrower makes a prepayment and fails to give at least 21 days advance notice of
intent to prepay, then, notwithstanding any other provisions to the contrary in
this Note or other document, Borrower shall pay Holder 21 days interest on the
unpaid principal as of the date preceding such prepayment.

                                       48
<PAGE>
 
The term "Indebtedness" as used herein shall mean the indebtedness evidenced by
this Note, including principal, interest, and expenses, whether contingent, now
due or hereafter to become due and whether heretofore or contemporaneously
herewith or hereafter contracted. The term "Collateral" as used in this Note
shall mean any funds, guaranties, or other property or rights therein of any
nature whatsoever or the proceeds thereof which may have been, are, or hereafter
may be, hypothecated, directly or indirectly by the undersigned or others, in
connection with, or as security for, the indebtedness or any part thereof. The
Collateral, and each part thereof, shall secure the Indebtedness and each part
thereof. The covenants and conditions set forth or referred to in any and all
instruments of hypothecation constituting the Collateral are hereby incorporated
in this Note as covenants and conditions of the undersigned with the same force
and effect as though such covenants and conditions were fully set forth herein.

The Indebtedness shall immediately become due and payable, without notice or
demand, upon the appointment of a receiver or liquidator, whether voluntary or
involuntary, for the undersigned or for any of its property, or upon the filing
of a petition by or against the undersigned under the provisions of any State
insolvency law or under the provisions of the Bankruptcy Reform Act of 1978, as
amended, or upon the mailing by the undersigned of an assignment for the
benefits of its creditors. Holder is authorized to declare all or any part of
the Indebtedness immediately due and payable upon the happening of any of the
following events:  (1) Failure to pay any part of the indebtedness when due; (2)
nonperformance by the undersigned of any agreement with, or any condition
imposed by, Holder or Small Business Administration (hereinafter called "SBA"),
with respect to the Indebtedness; (3) Holder's discovery of the undersigned's
failure In any application of the undersigned to Holder or SBA to disclose any
fact deemed by Holder to be material or of the making therein or in any of the
said agreements, or in any affidavit or other documents submitted in connection
with said application or the indebtedness, of any misrepresentation by, on
behalf of, or for the benefit of the undersigned; (4) the reorganization (other
than a reorganization pursuant to any of the provisions of the Bankruptcy Reform
Act of 1978, as amended) or merger or consolidation of the undersigned (or the
making of any agreement therefor) without the prior written consent of Holder;
(5) the undersigned's failure duly to account, to Holder's satisfaction, at such
time or times as Holder may require, for any of the Collateral, or proceeds
thereof, coming into the control of the undersigned; or (6) the institution of
any suit affecting the undersigned deemed by Holder to affect adversely its
interest hereunder in the Collateral or otherwise.  Holder's failure  to
exercise its rights under this paragraph shall not constitute a waiver thereof.

Upon the nonpayment of the Indebtedness, or any part thereof, when due, whether
by acceleration or otherwise, Holder is empowered to sell, assign, and deliver
the whole or any part of the Collateral at public or private sale, without
demand, advertisement or notice of the time or place of sale or of any
adjournment thereof, which are hereby expressly waived. After deducting all
expenses incidental to or arising from such sale or sales, Holder may apply the
residue of the proceeds thereof to the payment of the indebtedness, as it shall
deem proper, returning the excess, if any, to the undersigned.  The undersigned
hereby waives all rights of redemption or appraisement whether before or after
sale.

Holder is further empowered to collect or cause to be collected or otherwise to
be converted into money all or any part of the Collateral, by suit or otherwise,
and to surrender, compromise , release, renew, extend, exchange, or substitute
any item of the Collateral in transactions with the undersigned or any third
party irrespective of any assignment thereof by the undersigned, and without
prior notice to or consent of the undersigned or any assignee.  Whenever any
item of the Collateral shall not be paid when due, or otherwise shall be in
default, whether or not the indebtedness, or any part thereof, has become due,
Holder shall have the same rights and powers with respect to such items of the
Collateral as are granted In this paragraph in case of nonpayment of the
Indebtedness, or any part thereof, when due.  None of the rights, remedies,
privileges, or powers of Holder expressly provided for herein shall be
exclusive, but each of them shall be cumulative with and in addition to every
other right, remedy, privilege, and power now or hereafter existing in favor of
Holder, whether at law or equity, by statute or otherwise.

The undersigned agrees to take all necessary steps to administer, supervise,
preserve, and protect the Collateral; and regardless of any action taken by
Holder, there shall be no duty upon Holder in this respect. The undersigned
shall pay all expenses of any nature, whether incurred in or out of court, and
whether incurred before or after this Note shall become due at its maturity date
or otherwise, including but not limited to reasonable attorney's fees and costs,
which Holder may deem necessary or proper in connection with the satisfaction of
the Indebtedness or the administration, supervision, preservation, protection of
(including but not limited to, the maintenance of adequate insurance) or the
realization upon the Collateral. Holder is authorized to pay at any time and
from time to time any or all of such expenses, add the amount of such payment to
the amount of the Indebtedness, and charge interest thereon at the rate
specified herein with respect to the principal amount of this Note.

The security rights of Holder and its assigns hereunder shall not be impaired by
Holder's sale, hypothecation or rehypothecation of any note of the undersigned
or any item of the Collateral, or by any indulgence, including but not limited
to (a) any renewal, extension, or modification which Holder may grant with
respect to the Indebtedness or any part thereof, or (b) any surrender,
compromise, release renewal, extension, exchange, or substitution which Holder
may grant in respect of the Collateral, or (c) any indulgence granted in respect
of any endorser, guarantor, or surety. The purchaser, assignee, transferee, or
pledgee of this Note, the Collateral, and guaranty, and any other document (or
any of them), sold, assigned, transferred, pledged, or repledged, shall
forthwith become vested with and entitled to exercise all the powers and rights
given by this Note and all applications of the undersigned to Holder or SBA, as
if said purchaser, assignee, transferee, or pledgee were originally named as
Payee in this Note and in said application or applications.

                                       49
<PAGE>
 
This promissory note is given to secure a loan which SBA is making or in which
it is participating and, pursuant to Part 101 of the Rules and Regulations of
SBA (13 C.F.R 101.1 (d)), this instrument is to be construed and (when SBA is
the Holder or a party in Interest) enforced in accordance with applicable
Federal law.

CONFESSION OF JUDGMENT CLAUSE - THE UNDERSIGNED HEREBY AUTHORIZES AND EMPOWERS
-----------------------------                                                 
ANY ATTORNEY OR CLERK OF ANY COURT OF RECORD IN THE UNITED STATES OR ELSEWHERE
TO APPEAR FOR AND, WITH OR WITHOUT DECLARATION FILED, CONFESS JUDGMENT AGAINST
THE UNDERSIGNED IN FAVOR OF THE HOLDER, ASSIGNEE OR SUCCESSOR OF HOLDER OF THE
NOTE, AT ANY TIME, FOR THE FULL OR TOTAL AMOUNT OF THIS NOTE, TOGETHER WITH ALL
INDEBTEDNESS PROVIDED FOR THEREIN, WITH COSTS OF SUIT AND ATTORNEY'S COMMISSION
OF TEN (10) PERCENT FOR COLLECTION; AND THE UNDERSIGNED EXPRESSLY RELEASES ALL
ERRORS, WAIVES ALL STAY OF EXECUTION, RIGHTS OF INQUISITION AND EXTENSION UPON
ANY LEVY UPON REAL ESTATE AND ALL EXEMPTION OF PROPERTY FROM LEVY AND SALE UPON
ANY EXECUTION HEREON; AND THE UNDERSIGNED EXPRESSLY AGREES TO CONDEMNATION AND
EXPRESSLY RELINQUISHES ALL RIGHTS TO BENEFITS OR EXEMPTIONS UNDER ANY AND ALL
EXEMPTION LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BE ENACTED.


                                       INNOVATIVE MEDICAL SYSTEMS CORP.

                                       By:
----------------------                    -----------------------------
Attest                                 Joseph B. Catarious, Jr., CEO





Note. Corporate applicants must execute Note, in corporate name, by duly
authorized officer, and seal must be affixed and duly attested; partnership
applicants must execute Note in firm name, together with signature of a general
partner.

                                       50
<PAGE>
 
                                    OPEN-END
                                    MORTGAGE
                                (Participation)

                                                                PLP 950-789-3008


This mortgage made and entered into this 28th day of October, 1996,
by and between INNOVATIVE MEDICAL SYSTEMS CORP.
(hereinafter referred to as mortgagor) and AT&T SMALL BUSINESS LENDING
CORPORATION (hereinafter referred to as mortgagee), who maintains an office and
place of business at 2 Gatehall Drive, Parsippany, New Jersey 07054.

WITNESSETH, that for the consideration hereinafter stated, receipt of which is
hereby acknowledged, the mortgagor does hereby mortgage, sell grant, assign, and
convey unto the mortgagee, his successors and assigns, all of the following
described property situated and being in the County of Bucks.
State of Pennsylvania.

Commonly known as 55 Steam Whistle Drive, Ivyland, Pennsylvania and more
particularly described in the attached Exhibit A.



Together with and including all buildings, all fixtures including but not
limited to all plumbing, heating, lighting, ventilation, refrigerating,
incinerating, air conditioning apparatus, and elevators (the mortgagor hereby
declaring that it is intended that the items herein enumerated shall be deemed
to have been permanently installed as part of the realty), and all improvements
now or hereafter existing thereon; the hereditaments and appurtenances and all
other rights thereunto belonging, or in anywise appertaining, and the reversion
and reversions, remainder and remainders, all rights or redemption, and the
rents, issues, and profits of the above described property (provided, however,
that the mortgagor shall be entitled to the possession of said property and to
collect and retain the rents, issues, and profits until default hereunder).  To
have and to hold the same unto the mortgagee and the successors in interest of
the mortgage forever in fee simple or such other estate, if any, as is stated
herein.

The mortgagor covenants that he is lawfully seized and possessed of and has the
right to sell and convey said property; that the same is free from all
encumbrances except as hereinabove recited; and that he hereby binds himself and
his successors in interest to warrant and defend the title aforesaid thereto and
every part thereof against the claims of all persons whomsoever.

This instrument is given to secure the payment of a guaranty of a promissory
note dated of even date in the principal sum of $1,587,500 signed by Joseph B.
Catarious, Jr.
in behalf of Innovative Medical Systems Corp.



THIS MORTGAGE SECURES FUTURE ADVANCES.

                                       51
<PAGE>
 
Said promissory note was given to secure a loan in which the Small Business
administration, an agency of the United States of America, has participated.  In
compliance with section 101.1(d) of the Rules and Regulations of the Small
Business Administration [13 C.F.R. 101.1(d)], this instrument is to be construed
and enforced in accordance with applicable Federal law.

1. The mortgagor covenants and agrees as follows:

     a. He will promptly pay the indebtedness evidenced by said promissory note
at the times and in the manner therein provided.

     b. He will pay all taxes, assessments, water rates, and other governmental
or municipal charges, fines, or imposition, for which provision has not been
made hereinbefore, and will promptly deliver the official receipts therefor to
the said mortgagee.

     c. He will pay such expenses and fees as may be incurred in the protection
and maintenance of said property, including the fees of any attorney employed by
the mortgagee for the collection of any or all of the indebtedness hereby
secured, or foreclosure by mortgagee's sale, or court proceedings, or in any
other litigation or proceeding affecting said property.  Attorney's fees
reasonable incurred in any other way shall be paid by the mortgagor.

     d. For better security of the indebtedness hereby secured, upon the request
of the mortgagee, its successors or assigns, he shall execute and deliver a
supplemental mortgage or mortgages covering any additions, improvements, or
betterments made to the property hereinabove described and all property acquired
by it after the date hereof (all in form satisfactory to mortgagee).
Furthermore, should mortgagor fail to cure any default in the payment of a prior
or inferior encumbrance on the property described by this instrument, mortgagor
hereby agrees to permit mortgagee to cure such default, but mortgagee is not
obligated to do so; and such advances shall become part of the indebtedness
secured by this instrument, subject to the same terms and conditions.

     e. The rights created by this conveyance shall remain in full force and
effect during any postponement or extension of the time of the payment of the
indebtedness evidenced by said promissory note or any part thereof secured
hereby.

     f. He will continuously maintain hazard insurance, of such type or types
and in such amounts as the mortgagee may from time to time require on the
improvements now or hereafter on said property, and will pay promptly when due
any premiums thereof.  All insurance shall be carried in companies acceptable to
mortgagee and the policies and renewals thereof shall be held by mortgagee and
have attached thereto loss payable clauses in favor of and in form acceptable to
the mortgagee.  In event of loss, mortgagor will give immediate notice in
writing to mortgagee, and mortgagee may make proof of loss if not made promptly
by mortgagor, and each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to mortgagee instead of to
mortgagor and mortgagee jointly, and the insurance proceeds, or any part
thereof, may be applied by mortgagee at its option either to the reduction of
the indebtedness hereby secured or to the restoration or repair of the property
damaged or destroyed.  In event of foreclosure of this mortgage, or other
transfer of title to said property in extinguishment of the indebtedness secured
hereby, all right, title, and interest of the mortgagor in and to any insurance
policies then in force shall pass to the purchaser or mortgagee or, at the
option of the mortgagee, may be surrendered for a refund.

     g. He will keep all buildings and other improvements on said property in
good repair and condition; will permit, commit, or suffer no waste, impairment,
deterioration of said property or any part thereof; in the event of failure of
the mortgagor to keep the buildings on said premises and those erected on said
premises, or improvements thereon, in good repair, the mortgagee may make such
repairs as in its discretion it may deem necessary for the proper preservation
thereof; and the full amount of each and every such payment shall be immediately
due and payable; and shall be secured by the lien of this mortgage.

     h. He will not voluntarily create or permit to be created against the
property subject to this mortgage any lien or liens inferior or superior to the
lien of this mortgage without the written consent of the mortgagee; and further,
that he will keep and maintain the same free from the claim of all persons
supplying labor or materials for construction of any and all buildings or
improvements now being erected or to be erected on said premises.

     i. He will not rent or assign any part of the rent of said mortgaged
property or demolish, or remove, or substantially alter any building without the
written consent of the mortgagee.

     j. All awards of damages in connection with any condemnation for public use
of or injury to any of the property subject to this mortgage are hereby assigned
and shall be paid to mortgagee, who may apply the same to payment of the
installments last due under said note, and mortgagee is hereby authorized, in
the name of the mortgagor, to execute and deliver valid acquittances thereof and
to appeal from any such award.

     k. The mortgagee shall have the right to inspect the mortgaged premises at
any reasonable time.

2. Default in any of the covenants or conditions of this instrument or of the
note or loan agreement secured hereby shall terminate the mortgagor's right to
possession, use, and enjoyment of the property, at the option of the mortgagee
or his assigns (it being agreed that the mortgagor shall have such right until
default).  Upon any such default, the mortgagee shall become the owner of all of
the rents and

                                       52
<PAGE>
 
profits accruing after default as security for the indebtedness secured hereby,
with the right to enter upon said property for the purpose of collection such
rents and profits. This instrument shall operate as an assignment of any rentals
on said property to that extent.

3. The mortgagor covenants and agrees that if he shall fail to pay said
indebtedness or any part thereof when due, or shall fail to perform any covenant
or agreement of this instrument or the promissory note secured hereby, the
entire indebtedness hereby secured shall immediately become due, payable, and
collectible without notice, at the option of the mortgagee or assigns,
regardless of maturity, and the mortgagee or his assigns may before or after
entry sell said property without appraisement (the mortgagor having waived and
assigned to the mortgagee all rights of appraisement):

     (i) at judical sale pursuant to the provisions of 28 U.S.C. 2001 (a); or

     (ii) at the option of the mortgagee, either by auction or by solicitation
of sealed bids, for the highest and best bid complying with the terms of sale
and manner of payment specified in the published notice of sale, first giving
four weeks' notice of the time, terms, and place of such sale, by advertisement
not less than once during each of said four weeks in a newspaper published or
distributed in the county in which said property is situated, all other notice
being hereby waived by the mortgagor (and said mortgagee, or any person on
behalf of said mortgagee, may bid with the unpaid indebtedness evidenced by said
note).  Said sale shall be held at or on the property to be sold or at the
Federal, county, or city courthouse for the county in which the property is
located.  The mortgagee is hereby authorized to execute for and on behalf of the
mortgagor and to deliver to the purchaser at such sale a sufficient conveyance
of said property, which conveyance shall contain recitals as to the happening of
the default upon which the execution of the power of sale herein granted
depends; and the said mortgagor hereby constitutes and appoints the mortgagee or
any agent or attorney of the mortgagee, the agent and attorney in fact of said
mortgagor to make such recitals and to execute said conveyance and hereby
covenants and agrees that the recitals so made shall be effectual to bar all
equity or right of redemption, homestead, dower, and all other exemptions of the
mortgagor, all of which are hereby expressly waived and conveyed to the
mortgagee; or

     (iii) take any other appropriate action pursuant to state or Federal
statute either in state or Federal court or otherwise for the disposition of the
property.

In the event of a sale as hereinbefore provided, the mortgagor or any persons in
possession under the mortgagor shall then become and be tenants holding over and
shall forthwith deliver possession to the purchaser at such sale or be summarily
dispossessed, in accordance with the provisions of law applicable to tenants
holding over.  The power and agency hereby granted are coupled with an interest
and are irrevocable by death or otherwise, and are granted as cumulative to the
remedies for collection of said indebtedness provided by law.

4. The proceeds of any sale of said property in accordance with the preceding
paragraphs shall be applied first to pay the costs and expenses of said sale,
the expenses incurred by the mortgagee for the purpose of protecting or
maintaining said property, and reasonable attorney's fees; secondly, to pay the
indebtedness secured hereby; and thirdly, to pay any surplus or excess to the
person or persons legally entitled thereto.

5. In the event said property is sold at a judicial foreclosure sale or pursuant
to the power of sale hereinabove granted, and the proceeds are not sufficient to
pay the total indebtedness secured by this instrument and evidenced by said
promissory note, the mortgagee will be entitled to a deficiency judgment for the
amount of the deficiency without regard to appraisement.

6. In the event the mortgagor fails to pay and Federal, state or local tax
assessment, income tax or other tax lien, charge, fee, or other expense charged
against the property the mortgagee is hereby authorized at his option to pay the
same.  Any sums so paid by the mortgagee shall be added to and become a part of
the principal amount of the indebtedness evidence by said note, subject to the
same terms and conditions.  If the mortgagor shall pay and discharge the
indebtedness evidenced by said promissory note, and shall pay such sums and
shall discharge all taxes and liens and the costs, fees, and expenses of making,
enforcing, and executing this mortgage, then this mortgage shall be canceled and
surrendered.

7. The covenants herein contained shall bind and the benefits and advantages
shall inure to the respective successors and assigns of the parties hereto.
Whenever used, the singular number shall include the plural, the plural the
singular, and the use of any gender shall include all genders.

8. No waiver of any covenant herein or of the obligation secured hereby shall at
any time thereafter be held to be a waiver of the terms hereof or of the note
secured hereby.

9. A judicial decree, order, or judgment holding any provision or portion of
this instrument invalid or unenforceable shall not in any way impair or preclude
the enforcement of the remaining provisions or portions of this instrument.

10. Any written notice to be issued to the mortgagor pursuant to the provisions
of this instrument shall be addressed to the mortgagor at the mortgaged premises
and any written notice to be issued to the mortgagee shall be addressed to the
mortgagee at 2 Gatehall Drive, Parsippany, New Jersey 07054.

                                       53
<PAGE>
 
IN WITNESS WHEREOF, the mortgagor has executed this instrument and the mortgagee
has accepted delivery of this instrument as of the day and year aforesaid.


                                       INNOVATIVE MEDICAL SYSTEM CORP

                                       By:
                                          ----------------------------------
                                       Attest:
                                              ------------------------------

Executed and delivered in the presence of the following witnesses:

--------------------------------
 
--------------------------------
 
     (Add Appropriate Acknowledgment)

COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA


On this      day of     , in the year 1996, before me, the undersigned, a Notary
       ------      -----
Public in and for said County and Sate, personally appeared Joseph B. Catarious,
Jr., personally known to me (or proved to be on the basis of satisfactory
evidence) to be the persons who executed the within instrument as the CEO of
Innovative Medical Systems Corp. as the free act and deed of such corporation
for the purposes contained therein.


     ---------------------------------------------- 
     Notary Public in and for said County and State

     My Commission Expires:
                           ------------------------
================================================================================
     MORTGAGE
===============================================================================
INNOVATIVE MEDICAL SYSTEMS CORP
     TO
AT&T SMALL BUSINESS LENDING CORPORATION
================================================================================
RECORDING DATA
              
              The ADDRESS OF Mortgagee IS 2 Gatehall Drive, Parsippany, NJ 07054


              ------------------------------------------------------------------
================================================================================
RETURN TO:

Name:  Carolyn Stedronsky
Address:  2 Gatehall Drive
Parsippany, New Jersey 07054

                                       54