Document:

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                                                                   EXHIBIT 10.17

                               [LOGO - PICTURETEL]

                            MASTER ORDERING AGREEMENT

CONTRACT NUMBER
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CUSTOMER NAME AND ADDRESS:

IPN                                                  ("You")
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8777 N. Gainey Center Drive
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#285
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Scottsdale, AZ 85258
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1. ORDERING. You, and your divisions and subsidiaries, may order PictureTel
equipment and software ("Products") under this Agreement. Orders must be in
writing, reference this Agreement by number, and include a statement agreeing to
be bound by its terms. Orders will be governed only by the terms and conditions
of this Agreement and any different or additional terms in any other document
are deemed inapplicable. No order is binding unless or until it is accepted by
PictureTel in writing.

2. PRICES AND PAYMENT. (a) Product prices may be subject to a discount in
accordance with the schedule set forth in Attachment A. (b) Invoices are due and
payable in U.S. dollars 30 days following Product delivery. (c) Product prices
do not include sales, use, value added or other excise tax, however designated
or levied. PictureTel will invoice You for all such taxes on Products purchased
or services provided under this Agreement, and all personal property taxes
assessed on any Product after shipment, together with any interest on them (if
not due to PictureTel's delay). PictureTel will not invoice You for any tax for
which You can provide a valid tax exemption certificate. PictureTel will pay all
taxes based on PictureTel's net income.

3. SHIPMENT AND INSTALLATION. (a) PictureTel will use best efforts to meet
shipment dates specified on an accepted order. You may cancel any order not
shipped within a reasonable time after the scheduled shipment date, but
PictureTel will not be liable for any expenses or damages resulting from its
failure to meet such date. (b) PictureTel will arrange shipment of the Products
and will invoice You for reasonable transportation and insurance charges. Title
to the Products and risk of loss will pass to You on delivery. (c) You will
provide all labor required for internal transport of the Products and a suitable
installation environment in accordance with PictureTel's specifications and
instructions.

4. GMAP. You may place orders for international delivery directly on PictureTel
under the Global Multinational Account Program ("GMAP") as follows: (a) You must
provide the name, address, telephone and fax number of the end-user to be
invoiced and the ship-to location. Your purchase order must include a statement
that the named local end-user will accept and pay the invoice. (b) Product
prices will be as set forth in the then-current applicable International Price
List, less any applicable discount as provided in Attachment A. Quotes will be
in local currency or U.S. Dollars at PictureTel's option. (c) The PictureTel
subsidiary or authorized international distributor located in the country where
the Products will be installed ("Local Provider") will supply Products to and
invoice the local end-user. Invoices will be in local currency or U.S. Dollars
at the Local Provider's option.

5. LEASING. (a) You may assign your right to purchase under this Agreement to a
domestic leasing company, but You will remain liable to PictureTel to perform
all of your duties and obligations. All rights with respect to the Products will
be for your benefit for the term of the lease. The leasing company will obtain
no rights with respect to software, except that PictureTel hereby grants to
leasing company the right to assign the License to a purchaser in the event of
your default; provided, however, that the purchaser agrees in writing to be
bound by the License. (b) PictureTel must receive written notice of your
assignment of a purchase order prior to any shipment of Products. Any notice
received after shipment will be deemed of no effect and PictureTel will look
solely to You to fulfill all payment obligations. The notice of assignment must
include: (i) the name, address, telephone number and contact name; and (ii) an
original document evidencing the assignment of the purchase order which has been
signed by both You and leasing company and is ready for execution by PictureTel.

6. WARRANTY. (a) PictureTel's exclusive warranty is that, for a period of one
year from completion of installation (or delivery if PictureTel does not perform
the installation), Products will be free from defects in materials and
workmanship and will conform to PictureTel's applicable published
specifications. PictureTel will, at its option and expense, repair, modify or
replace any Product, part or component which does not conform with this
warranty. PictureTel does not warrant that the operation of Products will be
uninterrupted or error free. This warranty extends only to You and may not be
assigned to a third party. (b) To obtain warranty service, You must return the
Products to PictureTel's factory after receiving a Return Materials
Authorization Number. Repaired or replaced parts may be recycled or refurbished,
but are equivalent to new and are warranted for the remainder of the original
warranty term, but in no event less than 90 days. (c) During the warranty
period, You will receive software corrections ("Updates"). You may purchase
software containing new functionality or capabilities ("Upgrades") at
PictureTel's then current prices. Updates do not include Upgrades. (d)
PictureTel's liability and your exclusive remedy for breach of warranty, is
limited to repair or replacement as provided above. If, after repeated efforts,
PictureTel is unable to make the Products operate as warranted, PictureTel will
refund the amount You paid for the nonconforming Product after You return it to
PictureTel. (e) PictureTel's express warranty is contingent upon the proper use
of the Products in accordance with PictureTel specifications and instructions.
The warranty does not apply to Products from which the original identification
marks have been removed or altered, or defects or failure due to: (i) disaster,
accident or misuse by You; (ii) failure or defect of electrical power, external
circuitry, air conditioning or humidity control; (iii) use of Products with
items not provided or approved by PictureTel; or (iv) anyone other than
PictureTel or its authorized representative modifying, repairing or servicing
the Product. (f) If, and to the extent that, any license for software delivered
with a Product ("Shrinkwrap License") contains terms different than those in
this Section 6, the terms of such Shrinkwrap License will apply
<PAGE>   2
to that Product. (g) EXCEPT AS EXPRESSLY STATED IN THIS SECTION 6, THERE ARE NO
WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, OF PRODUCTS OR
SERVICES SOLD OR FURNISHED UNDER THIS AGREEMENT OR IN CONNECTION HEREWITH.
PICTURETEL DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. PICTURETEL'S EXPRESS WARRANTIES WILL NOT BE ENLARGED,
DIMINISHED OR AFFECTED BY, AND NO OBLIGATION OR LIABILITY WILL ARISE OUT OF,
PICTURETEL RENDERING TECHNICAL OR OTHER ADVICE OR SERVICE IN CONNECTION WITH THE
PRODUCTS.

7. SOFTWARE LICENSE. (a) GRANT OF LICENSE. This nonexclusive, perpetual license
("License") allows You to: (i) use one copy of the software on the Product with
which it was delivered, but it may not be used on more than one Product at the
same time. If You wish to use the software on multiple Products at the same
time, a copy must be purchased for each machine on which the software is used;
(ii) retain one copy of the software in machine-readable form solely for back-up
or archival purposes. The software is owned by PictureTel or its suppliers and
is protected by United States Copyright Law, international treaty provisions and
all other applicable national laws. You must reproduce the PictureTel copyright
notice, trademark, and other proprietary legends on the copy and may not remove
them from the original; and (iii) transfer the software and all rights under
this License to another party together with a copy of this License, provided You
give PictureTel written notice of the transfer and the other party reads and
agrees in writing to accept the terms and conditions of this License. (b)
RESTRICTIONS. You may not: (i) distribute copies of the software to others or
electronically transfer the software from one machine to another; (ii)
decompile, reverse engineer, disassemble, or otherwise reduce the software to a
human perceivable form unless and to the extent required by applicable law,
notwithstanding the terms and conditions of this License; (iii) rent, lease,
sublicense, loan, modify, adapt, translate, resell for profit, distribute,
network, or create derivative works based upon the software or any part thereof;
or (iv) use the software on any other type of computing or telecommunications
device. (c) U.S. GOVERNMENT RESTRICTED RIGHTS. The software and documentation
are provided with RESTRICTED RIGHTS. Use, duplication, or disclosure by the U.S.
Government is subject to restrictions set forth in subparagraph (c)(1)(ii) of
the Rights in Technical Data and Computer Software clause at DFARS (48 CFR)
252.227-7013 or subparagraphs (c)(1) and (2) of the Commercial Computer Software
- Restricted Rights clause at FAR (48 CFR) 52.227-19, as applicable.
Manufacturer is PictureTel Corporation,100 Minuteman Road, Andover, MA 01810.

8. INFRINGEMENT CLAIMS. (a) If a claim is made or an action brought that a
Product infringes a U.S. patent, or any copyright, trademark or trade secret,
PictureTel will defend You against such claim and will pay resulting costs,
damages and attorney's fees finally awarded, provided that: (i) You promptly
notify PictureTel in writing of the claim; (ii) PictureTel has sole control of
the defense and all related settlement negotiations; and (iii) You cooperate in
such defense. The obligations of PictureTel under this Section 8 are conditioned
on your agreement that if the Product, or the use or operation thereof, becomes
or, in the opinion of PictureTel, is likely to become the subject of such a
claim, PictureTel may at its expense, either procure the right for You to
continue using the Product or, at the option of PictureTel, replace or modify
the same so that it becomes non-infringing (provided such replacement or
modification does not materially adversely affect your use of the Product as
contemplated hereunder). If neither of the foregoing alternatives is available
on terms which are reasonable in PictureTel's judgement, You will return the
Product on written request by PictureTel and PictureTel will credit or refund to
You, at your option, the price paid for such Product less depreciation on a
straight line basis over an assumed five-year service life. (b) PictureTel will
have no liability for any claim based upon the combination, operation or use of
any Product with equipment, software or data not supplied by PictureTel if such
claim would have been avoided by use of other equipment, software or data
whether or not capable of achieving the same results, or based upon alteration
of the Equipment or modification of any Software supplied by PictureTel. (c) THE
FOREGOING STATES THE ENTIRE OBLIGATION OF PICTURETEL WITH RESPECT TO
INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS AND TRADE SECRETS.

9. LIMITATION OF LIABILITY. EXCEPT AS PROVIDED HEREIN OR IN SECTION 8,
PICTURETEL'S MAXIMUM LIABILITY WILL BE LIMITED IN ANY EVENT TO ACTUAL DIRECT
DAMAGES TO THE EXTENT CAUSED SOLELY BY THE ACTS OR OMISSIONS OF PICTURETEL
SUBJECT TO A MAXIMUM LIABILITY OF THE GREATER OF $25,000 OR THE AMOUNT PAID FOR
THE SPECIFIC PRODUCT OR SERVICE WHICH DIRECTLY CAUSED SUCH DAMAGE. IN NO EVENT
WILL PICTURETEL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES, LOST BUSINESS PROFITS, OR LOSS, DAMAGE OR DESTRUCTION OF DATA,
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING
NEGLIGENCE), BREACH OF WARRANTY OR OTHERWISE, EVEN IF PICTURETEL HAS BEEN
ADVISED AS TO THE POSSIBILITY OF SAME. NO LIMITATION AS TO DAMAGES FOR PERSONAL
INJURY IS HEREBY INTENDED. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION
OF INCIDENTAL OR CONSEQUENTIAL DAMAGES AND THE ABOVE EXCLUSION OR LIMITATION MAY
NOT APPLY.

10. FORCE MAJEURE. In no event will either party be liable for its failure to
perform hereunder due to contingencies beyond its reasonable control.

11. GENERAL. (a) You will not assign or transfer any part or all of this
Agreement or any of your rights or obligations hereunder without the prior
written consent of PictureTel. (b) Either party's failure to enforce any
provision of this Agreement will not be deemed a waiver of that provision or of
the right to enforce it in the future. (c) This Agreement will be governed by
the laws of The Commonwealth of Massachusetts, except that the United Nations
Convention of Contracts for International Sales of Goods, 1980 will not apply to
the interpretation of this Agreement with respect to International Sales. (d) If
any provision of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not
in any way be affected or impaired thereby.

THIS AGREEMENT, TOGETHER WITH ANY AMENDMENT, ATTACHMENT OR EXHIBIT EXPRESSLY
MADE A PART HEREOF AND SIGNED BY BOTH PARTIES, IS THE EXCLUSIVE STATEMENT OF THE
AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL COMMUNICATIONS, PROPOSALS OR
PRIOR AGREEMENTS, ORAL OR WRITTEN RELATING TO THIS SUBJECT MATTER.

CUSTOMER:

By:________________________________________________________________

Name: (Type or Print): ____________________________________________

Title:_____________________________________________________________

Date:______________________________________________________________

PICTURETEL CORPORATION

By:________________________________________________________________

Name: (Type or Print): ____________________________________________

Title: ____________________________________________________________

Effective Date: ___________________________________________________
<PAGE>   3
                                  ATTACHMENT A

                          TO MASTER ORDERING AGREEMENT

This is an Attachment to the Master Ordering Agreement ("Agreement") by and
between PictureTel Corporation ("PictureTel") and
____________________________________________ ("Customer"), dated
___________________, 199_____.

The discount set forth below is effective for the 12 month period from _________
to _________ ("Discount Period"). The discount to which Customer is entitled is
based on Customer's commitment to purchase and take delivery of $_______________
worth of Products (excluding maintenance) during the Discount Period. Customer's
commitment is indicated by placing Customer's initials next to the column which
best reflects the value of Customer's purchases at list price. Discounts are
applied against PictureTel's then - current list price. PictureTel will
calculate Customer's actual purchases at net price (list price minus applied
discount) in order to determine whether Customer has achieved Customer's
purchase commitment during the Discount Period. In order to qualify for a
discount, Customer must issue a purchase order for at least 20% of Customer's
intended purchases for delivery within 6 months immediately upon execution of
the Agreement. Purchases made under GMAP through authorized distributors will be
credited toward Customer's commitment when Customer forwards a copy of the paid
invoice to: The GMAP Desk, PictureTel Corporation, 100 Minuteman Drive, Andover,
MA 01810.

<TABLE>
<CAPTION>
  CUSTOMER'S    NET PRODUCT     DISCOUNT     SCHEDULE        SCHEDULE         SCHEDULE         SCHEDULE
   INITIALS      PURCHASES       LEVEL          A                B                C                F
                (IN THOUSANDS)
  ----------    -----------     --------     --------        --------         --------         --------
<S>             <C>             <C>          <C>             <C>              <C>              <C>
                   $0-$150          I           0%               0%               0%                0%
                  $151-$300        II           5%               3%               2%                5%
                  $301-$600        III          10%              6%               5%               10%
                 $601-$2,000       IV           15%             10%               5%               15%
</TABLE>

If Customer's actual purchases fall short of Customer's commitment, PictureTel
reserves the right to invoice Customer for, and Customer agrees to pay, the
difference between the amount Customer paid for the Products and the amount
Customer would have paid had the discount been calculated on Customer's actual
purchases. In addition, Customer will be asked to give PictureTel a forecast of
future purchases and Customer's discount may be lowered for the next discount
period. If Customer exceeds the commitment, Customer's new discount will be
based on Customer's actual purchases. PictureTel will notify Customer in writing
at least 60 days prior to the expiration of the Discount Period.<PAGE>   1
                                                                EXHIBIT 10.18(a)

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                               IPHYSICIAN NET INC.

                           LOAN AND SECURITY AGREEMENT
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        THIS LOAN AND SECURITY AGREEMENT is entered into as of October 4, 1999,
by and between FAR EAST NATIONAL BANK ("Bank") and iPHYSICIAN NET INC.
("Borrower").

                                    RECITALS

        Borrower wishes to obtain credit from Bank and Bank desires to provide
credit to Borrower. This Agreement sets forth the terms on which Bank will
advance credit to Borrower and Borrower will repay the amounts owing to Bank.

                                    AGREEMENT

        The parties agree as follows:

         1. DEFINITIONS AND CONSTRUCTION

                  1.1 Definitions. As used in this Agreement, the following
terms shall have the following definitions:

                  "Accounts" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

                  "Advance" or "Advances" means the equipment advance under the
Term Facility.

                  "Affiliate" means, with respect to any Person, any Person that
owns or controls directly or indirectly such Person, any Person that controls or
is controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, and partners.

                  "Bank Expenses" means all: reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
the preparation, negotiation, administration, and enforcement of the Loan
Documents; reasonable Collateral audit fees; and Bank's reasonable attorneys'
fees and expenses incurred in amending, enforcing or defending the Loan
Documents (including fees and expenses of appeal), incurred before, during and
after an Insolvency Proceeding, whether or not suit is brought.

                  "Borrower's Books" means all of Borrower's books and records
including: ledgers; records concerning Borrower's assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.

                  "Business Day" means any day that is not a Saturday, Sunday,
or other day on which banks in the State of California are authorized or
required to close.

                  "Closing Date" means the date of this Agreement.

                  "Code" means the California Uniform Commercial Code.

                  "Collateral" means the property described on Exhibit A
attached hereto.

                  "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap

                                       1
<PAGE>   3
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "Contingent
Obligation" shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.

                  "Copyrights" means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.

                  "Current Liabilities" means, as of any applicable date, all
amounts that should, in accordance with GAAP, be included as current liabilities
on the consolidated balance sheet of Borrower and its Subsidiaries, as at such
date, plus, to the extent not already included therein, all current Advances
made under this Agreement, including all Indebtedness that is payable upon
demand or within one year from the date of determination thereof unless such
Indebtedness is renewable or extendible at the option of Borrower or any
Subsidiary to a date more than one year from the date of determination, but
excluding unearned revenues.

                  "Daily Balance" means the amount of the Obligations owed at
the end of a given day.

                  "Default Rate" has the meaning set forth in Section 2.3(b).

                  "Equipment" means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

                  "Equity Event" means the date Bank receives written
notification that Borrower has received at least Ten Million Dollars
($10,000,000) from the sale or issuance of its equity securities.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.

                  "Event of Default" has the meaning assigned in Article 8.

                  "GAAP" means generally accepted accounting principles as in
effect from time to time.

                  "Indebtedness" means (a) all indebtedness for borrowed money
or the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.

                  "Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

                  "Intellectual Property Collateral" means all of Borrower's
right, title and interest in and to the following:

                  (a) Copyrights, Trademarks and Patents;

                  (b) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;

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<PAGE>   4
                  (c) Any and all design rights which may be available to
Borrower now or hereafter existing, created, acquired or held;

                  (d) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligation, to sue for and collect such damages for said use or infringement
of the intellectual property rights identified above;

                  (e) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights;

                  (f) All amendments, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and

                  (g) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.

                  "Inventory" means all present and future inventory in which
Borrower has any interest, including merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower's Books relating
to any of the foregoing.

                  "Investment" means any beneficial ownership of (including
stock, partnership interest or other securities) any Person, or any loan,
advance or capital contribution to any Person.

                  "IPO" means the sale of stock of Borrower in the public market
netting an amount to Borrower in excess of $20,000,000.

                  "IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.

                  "Lien" means any mortgage, lien, deed of trust, charge,
pledge, security interest or other encumbrance.

                  "Loan Documents" means, collectively, this Agreement, any note
or notes executed by Borrower, and any other agreement entered into between
Borrower and Bank in connection with this Agreement, all as amended or extended
from time to time.

                  "Material Adverse Effect" means a material adverse effect on
(i) the business operations or condition (financial or otherwise) of Borrower
and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay
the Obligations or otherwise perform its obligations under the Loan Documents.

                  "Negotiable Collateral" means all of Borrower's present and
future letters of credit of which it is a beneficiary, notes, drafts,
instruments, securities, documents of title, and chattel paper, and Borrower's
Books relating to any of the foregoing.

                  "Obligations" means all debt, principal, interest, Bank
Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement
or any other agreement, whether absolute or contingent, due or to become due,
now existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding and including any debt, liability, or
obligation owing from Borrower to others that Bank may have obtained by
assignment or otherwise.

                                       3
<PAGE>   5
                  "Patents" means all patents, patent applications and like
protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.

                  "Periodic Payments" means all installments or similar
recurring payments that Borrower may now or hereafter become obligated to pay to
Bank pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and Bank.

                  "Permitted Indebtedness" means:

                  (a) Indebtedness of Borrower in favor of Bank arising under
this Agreement or any other Loan Document;

                  (b) Indebtedness existing on the Closing Date and disclosed in
the Schedule;

                  (c) Indebtedness secured by a lien described in clause (c) of
the defined term "Permitted Liens," provided such Indebtedness does not exceed
the lesser of the cost or fair market value of the equipment financed with such
Indebtedness;

                  (d) Subordinated Debt; and

                  (e) Indebtedness to trade creditors incurred in the ordinary
course of business.

                  "Permitted Investment" means:

                  (a) Investments existing on the Closing Date disclosed in the
Schedule; and

                  (b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc., and (iii)
certificates of deposit maturing no more than one (1) year from the date of
investment therein issued by Bank.

                  "Permitted Liens" means the following:

                  (a) Any Liens existing on the Closing Date and disclosed in
the Schedule or arising under this Agreement or the other Loan Documents; and

                  (b) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no priority over any of Bank's
security interests;

                  (c) Liens (i) upon or in any equipment acquired or held by
Borrower or any of its Subsidiaries to secure the purchase of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment, or (ii) existing on such equipment at the time of its
acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such equipment.

                  (d) Liens incurred in connection with the extension, renewal
or refinancing of the indebtedness secured by Liens of the type described in
clauses (a)above, provided that any extension, renewal or replacement Lien shall
be limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness being extended, renewed or refinanced does not
increase.

                                       4
<PAGE>   6
                 "Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.

                  "Prime Rate" means the variable rate of interest, per annum,
most recently announced by Bank, as its "prime rate", whether or not such
announced rate is the lowest rate available from Bank.

                  "Quick Assets" means, at any date as of which the amount
thereof shall be determined, the unrestricted cash and cash-equivalents,
accounts receivable and investments with maturities not to exceed 365 days, of
Borrower determined in accordance with GAAP.

                  "Responsible Officer" means each of the President, Chief
Executive Officer, the Chief Financial Officer and the Controller of Borrower.

                  "Schedule" means the schedule of exceptions attached hereto,
if any.

                  "Subordinated Debt" means any debt incurred by Borrower that
is subordinated to the debt owing by Borrower to Bank on terms acceptable to
Bank (and identified as being such by Borrower and Bank).

                  "Subsidiary" means any corporation or partnership in which (i)
any general partnership interest or (ii) more than 50% of the stock of which by
the terms thereof ordinary voting power to elect the Board of Directors,
managers or trustees of the entity shall, at the time as of which any
determination is being made, be owned by Borrower, either directly or through an
Affiliate.

                  "Syndication Date" means the date upon which Bank transfers
its rights and obligations to $5,000,000 of the Term Facility to a lender
acceptable to Borrower and Bank.

                  "Tangible Net Worth" means at any date as of which the amount
thereof shall be determined, the sum of the capital stock and additional paid-in
capital plus retained earnings (or minus accumulated deficit) of Borrower and
its Subsidiaries minus intangible assets, plus Subordinated Debt, on a
consolidated basis determined in accordance with GAAP.

                  "Term Facility" means the facility under which Borrower may
request Bank to issue Advances or Letters of Credit, as specified in Section 2.1
hereof.

                  "Total Liabilities" means at any date as of which the amount
thereof shall be determined, all obligations that should, in accordance with
GAAP be classified as liabilities on the consolidated balance sheet of Borrower,
including in any event all Indebtedness, but excluding unearned revenue.

                  "Trademarks" means any trademark and servicemark rights,
whether registered or not, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of Borrower
connected with and symbolized by such trademarks.

             1.2  Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and all calculations
made hereunder shall be made in accordance with GAAP. When used herein, the
terms "financial statements" shall include the notes and schedules thereto.

        2. LOAN AND TERMS OF PAYMENT

             2.1  Term Facility.

                  2.1.1 Advances. Subject to and upon the terms and conditions
of this Agreement, at any time from the date hereof through the earlier of the
Syndication Date and December 31, 2000, Bank agrees to make advances (each an
"Advance" and, collectively, the "Advances") to Borrower in an aggregate
outstanding amount not to exceed Five Million Dollars ($5,000,000). From the
Syndication Date up to an including

                                       5
<PAGE>   7
December 31, 2000, Bank will make Advances to Borrower in an aggregate
outstanding amount not to exceed Ten Million Dollars ($10,000,000). To evidence
the Advances, Borrower shall deliver to Bank, at the time of each Advance
request, an invoice for the Equipment and software to be purchased and executed
physician contracts. The Advances shall be used only to purchase or refinance
Equipment approved from time to time by Bank that Borrower purchases after the
Closing Date and shall not exceed eighty percent (80%) of the invoice amount of
such Equipment and software, including taxes, shipping, warranty charges,
freight discounts and installation expense. Borrower's obligations to Bank
pursuant to this Section 2.1 shall be evidenced by a promissory note in
substantially the same form as Exhibit D hereto.

                  2.1.2 Interest and Principal. Interest shall accrue from the
date of each Advance at the rate specified in Section 2.2(a), and shall be
payable monthly for each month. All Advances drawn down during each of the three
month periods immediately preceding December 4, 1999, March 4, 2000, June 4,
2000, September 4, 2000 and December 31, 2000, (each a "Drawdown Period",
together "Drawdown Periods") shall be payable in thirty (30) monthly
installments of principal, plus all accrued interest beginning on the _________
day of each month immediately succeeding the applicable Drawdown Period.

                  2.1.3 Maturity. The Term Loan Facility shall terminate on July
4, 2003, at which time all remaining unpaid principal and accrued interest, and
any other amounts due under this Section 2.1 shall be immediately due and
payable.

                  2.1.4 Advance Requests. When Borrower desires to obtain an
Advance, Borrower shall notify Bank (which notice shall be irrevocable) by
facsimile transmission no later than 3:00 p.m. Pacific time one (1) Business Day
before the day on which the Advance is to be made. Such notice shall be in
substantially the form of Exhibit B. The notice shall be signed by a Responsible
Officer or its designee and include a copy of the invoice relating to the to be
financed.

             2.2  Interest Rates, Payments, and Calculations.

                       (a) Interest Rates. Except as set forth in Section
2.3(b), the Advances shall bear interest, on the outstanding daily balance
thereof, at a rate equal to the Prime Rate plus three quarters percent (0.75%);
provided, however, that upon completion of the IPO the rate of interest payable
on the Advances shall be reduced to the Prime Rate.

                       (b) Late Fee; Default Rate. If any payment is not made
within ten (10) days after the date such payment is due, Borrower shall pay Bank
a late fee equal to the lesser of (i) five percent (5%) of the amount of such
unpaid amount or (ii) the maximum amount permitted to be charged under
applicable law. All Obligations shall bear interest, from and after ten (10)
days following the occurrence and during the continuance of an Event of Default,
at a rate equal to five (5) percentage points above the interest rate applicable
immediately prior to the occurrence of the Event of Default.

                       (c) Computation. In the event the Prime Rate is changed
from time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of the day the Prime Rate is changed, by an
amount equal to such change in the Prime Rate. All interest chargeable under the
Loan Documents shall be computed on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed.

             2.3  Crediting Payments. Prior to the occurrence of an Event of
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or Obligation as Borrower specifies. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for
payment. Notwithstanding anything to the contrary contained herein, any wire
transfer or payment received by Bank after 12:00 noon California time shall be
deemed to have been received by Bank as of the opening of business on the
immediately following Business Day. Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date

                                       6
<PAGE>   8
that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

             2.4  Fees. Borrower shall pay to Bank the following:

                       (a) Facility Fee. On the Closing Date, an initial
installment of the Facility Fee equal to Twenty-Five Thousand Dollars ($25,000)
and on the Syndication Date, the remaining installment of the Facility Fee of
Twenty-Five Thousand Dollars ($25,000). Both installments shall be
nonrefundable.

                       (b) Financial Examination and Appraisal Fees. Bank's
customary fees and out-of-pocket expenses for Bank's audits of Borrower's Books,
and for each appraisal of Collateral and financial analysis and examination of
Borrower performed from time to time by Bank or its agents. Bank will audit
Borrower's Books prior to making any Advances hereunder and shall conduct at
least one more audit prior to the Maturity Date. Borrower agrees to pay Bank an
audit fee of $650 per day plus all out-of-pocket expenses incurred in connection
with each audit up to an aggregate amount of $5,000 per contract year; and

                       (c) Bank Expenses. On the Closing Date, all Bank Expenses
incurred through the Closing Date, including reasonable attorneys' fees and
expenses and, after the Closing Date, all Bank Expenses, including reasonable
attorneys' fees and expenses, as and when they become due.

             2.5  Additional Costs. In case any law, regulation, treaty or
official directive or the interpretation or application thereof by any court or
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):

                       (a) subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);

                       (b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, Bank; or

                       (c) imposes upon Bank any other condition with respect to
its performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
the Obligations, Bank shall notify Borrower thereof. Borrower agrees to pay to
Bank the amount of such increase in cost, reduction in income or additional
expense as and when such cost, reduction or expense is incurred or determined,
upon presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

             2.6  Term. This Agreement shall become effective on the Closing
Date and, subject to Section 12.7, shall continue in full force and effect for a
term ending on the Term Maturity Date. Notwithstanding the foregoing, Bank shall
have the right to terminate its obligation to make Credit Extensions under this
Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default. Notwithstanding termination, Bank's Lien on
the Collateral shall remain in effect for so long as any Obligations are
outstanding.

                                       7
<PAGE>   9
       3. CONDITIONS OF LOANS

             3.1 Conditions Precedent to Initial Credit Extension. The
obligation of Bank to make the initial Credit Extension is subject to the
condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:

                       (a) this Agreement;

                       (b) a certificate of the Secretary of Borrower with
respect to incumbency and resolutions authorizing the execution and delivery of
this Agreement;

                       (c) a warrant;

                       (d) an intellectual property security agreement;

                       (e) a promissory note evidencing Borrower's indebtedness
to Bank under the Term Facility in substantially the same form as Exhibit D
hereto.

                       (f) an agreement to provide insurance;

                       (g) an audit of the Collateral, the results of which
shall be satisfactory to Bank;

                       (h) financing statement (Form UCC-1);

                       (i) payment of the fees and Bank Expenses then due
specified in Section 2.5 hereof; and

                       (j) a subordination agreement subordinating rights to
payment and liens of other creditors in the Collateral to the rights to payment
and liens of Bank granted hereunder.

                       (k) evidence that the Equity Event has occurred.

                       (l) an amendment to Borrower's certificate of
incorporation reflecting a change of corporate name to iPhysician Net Inc.

                       (m) a certification of Borrower that the Quick Ratio is
at least 1.5 or greater as of the Closing Date; and

                       (n) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.

             3.2     Conditions Precedent to all Credit Extensions.  The
obligation of Bank to make each Credit Extension, including the initial Credit
Extension, is further subject to the following conditions:

                       (a) timely receipt by Bank of the Payment/Advance Form as
provided in Sections 2.1; and

                       (b) the representations and warranties contained in
Section 5 shall be true and correct in all material respects on and as of the
date of such Payment/Advance Form and on the effective date of each Credit
Extension as though made at and as of each such date, and no Event of Default
shall have occurred and be continuing, or would result from such Credit
Extension (provided, however, that those representations and warranties
expressly referring to another date shall be true, correct and complete in all
material respects as of such date). The making of each Credit Extension shall be
deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this Section
3.2.

                                       8
<PAGE>   10
     4.      CREATION OF SECURITY INTEREST

                  4.1 Grant of Security Interest. Borrower grants and pledges to
Bank a continuing security interest in all presently existing and hereafter
acquired or arising Collateral in order to secure prompt repayment of any and
all Obligations and in order to secure prompt performance by Borrower of each of
its covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in Collateral acquired after the date hereof.

                  4.2 Delivery of Additional Documentation Required. Borrower
shall from time to time execute and deliver to Bank, at the request of Bank, all
Negotiable Collateral, all financing statements and other documents that Bank
may reasonably request, in form satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

                  4.3 Right to Inspect. Bank (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior notice, from
time to time during Borrower's usual business hours, to inspect Borrower's Books
and to make copies thereof and to check, test, and appraise the Collateral in
order to verify Borrower's financial condition or the amount, condition of, or
any other matter relating to, the Collateral.

     5.      REPRESENTATIONS AND WARRANTIES

             Borrower represents and warrants as follows:

                  5.1 Due Organization and Qualification. Borrower and each
Subsidiary is a corporation duly existing and in good standing under the laws of
its state of incorporation and qualified and licensed to do business in, and is
in good standing in, any state in which the conduct of its business or its
ownership of property requires that it be so qualified.

                  5.2 Due Authorization; No Conflict. The execution, delivery,
and performance of the Loan Documents are within Borrower's powers, have been
duly authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles of Incorporation or Bylaws, nor will
they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect.

                  5.3 No Prior Encumbrances. Borrower has good and indefeasible
title to the Collateral, free and clear of Liens, except for Permitted Liens.

                  5.4 Merchantable Inventory. All Inventory is in all material
respects of good and marketable quality, free from all material defects.

                  5.5 Intellectual Property Collateral. Borrower is the sole
owner of, or has rights to, the Intellectual Property Collateral, except for
non-exclusive licenses granted by Borrower to its customers in the ordinary
course of business. Each of the Patents is valid and enforceable, and no part of
the Intellectual Property Collateral has been judged invalid or unenforceable,
in whole or in part, and no claim has been made that any part of the
Intellectual Property Collateral violates the rights of any third party. Except
for and upon the filing with the United States Patent and Trademark Office with
respect to the Patents and Trademarks and the Register of Copyrights with
respect to the Copyrights necessary to perfect the security interests created
hereunder, and except as has been already made or obtained, no authorization,
approval or other action by, and no notice to or filing with, any United States
governmental authority or United States regulatory body is required either (i)
for the grant by Borrower of the security interest granted hereby or for the
execution, delivery or performance of Loan Documents by Borrower in the United
States or (ii) for the perfection in the United States or the exercise by Bank
of its rights and remedies hereunder.

                                       9
<PAGE>   11
                  5.6 Name; Location of Chief Executive Office. Except as
disclosed in the Schedule, Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

                  5.7 Litigation. Except as set forth in the Schedule, there are
no actions or proceedings pending by or against Borrower or any Subsidiary
before any court or administrative agency in which an adverse decision could
have a Material Adverse Effect or a material adverse effect on Borrower's
interest or Bank's security interest in the Collateral. Borrower does not have
knowledge of any such pending or threatened actions or proceedings.

                  5.8 No Material Adverse Change in Financial Statements. All
consolidated financial statements related to Borrower and any Subsidiary that
are delivered by Borrower to Bank fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Bank.

                  5.9 Solvency, Payment of Debts. Borrower is solvent and able
to pay its debts (including trade debts) as they mature.

                  5.10 Regulatory Compliance. Borrower and each Subsidiary have
met the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. No event has occurred resulting from Borrower's
failure to comply with ERISA that is reasonably likely to result in Borrower's
incurring any liability that could have a Material Adverse Effect. Borrower is
not an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940. Borrower is not
engaged principally, or as one of the important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T and U of the Board of Governors of the Federal
Reserve System). Borrower has complied with all the provisions of the Federal
Fair Labor Standards Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a Material
Adverse Effect.

                  5.11 Environmental Condition. None of Borrower's or any
Subsidiary's properties or assets has ever been used by Borrower or any
Subsidiary or, to the best of Borrower's knowledge, by previous owners or
operators, in the disposal of, or to produce, store, handle, treat, release, or
transport, any hazardous waste or hazardous substance other than in accordance
with applicable law; to the best of Borrower's knowledge, none of Borrower's
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment.

                  5.12 Taxes. Borrower and each Subsidiary has filed or caused
to be filed all tax returns required to be filed, and has paid, or has made
adequate provision for the payment of, all taxes reflected therein.

                  5.13 Subsidiaries. Borrower does not own any stock,
partnership interest or other equity securities of any Person, except for
Permitted Investments.

                  5.14 Government Consents. Borrower and each Subsidiary has
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are
necessary for the continued operation of Borrower's business as currently
conducted.

                  5.15 Year 2000. Borrower and its Subsidiaries have reviewed
the areas within their operations and business which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the Year 2000 Problem and have made related appropriate inquiry of material
suppliers and vendors,

                                       10
<PAGE>   12
and based on such review and program, the Year 2000 Problem will not have a
Material Adverse Effect upon its financial condition, operations or business as
now conducted. "Year 2000 Problem" means the possibility that any computer
applications or equipment used by Borrower may be unable to recognize and
properly perform date sensitive functions involving certain dates prior to and
any dates on or after December 31, 1999.

                  5.16 Full Disclosure. No representation, warranty or other
statement made by Borrower in any certificate or written statement furnished to
Bank contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.

     6.      AFFIRMATIVE COVENANTS.

             Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:

                  6.1 Good Standing. Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.

                  6.2 Government Compliance. Borrower shall meet, and shall
cause each Subsidiary to meet, the minimum funding requirements of ERISA with
respect to any employee benefit plans subject to ERISA. Borrower shall comply,
and shall cause each Subsidiary to comply, with all statutes, laws, ordinances
and government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect or a material adverse effect on the
Collateral or the priority of Bank's Lien on the Collateral.

                  6.3 Financial Statements, Reports, Certificates. Borrower
shall deliver to Bank: (a) as soon as available, but in any event within thirty
(30) days after the end of each calendar month, a company prepared consolidated
balance sheet and income statement covering Borrower's consolidated operations
during such period, in a form acceptable to Bank and certified by a Responsible
Officer; provided, however, that after the occurrence of the IPO such statements
shall be delivered within fifteen (15) days after the end of each calendar
quarter; (b) as soon as available, but in any event within ninety (90) days
after the end of Borrower's fiscal year, audited consolidated financial
statements of Borrower prepared in accordance with GAAP, consistently applied,
together with an opinion on such financial statements of an independent
certified public accounting firm reasonably acceptable to Bank; (c) if
applicable, copies of all statements, reports and notices sent or made available
generally by Borrower to its security holders or to any holders of Subordinated
Debt and all reports on Form 10-K and 10-Q filed with the Securities and
Exchange Commission; (d) promptly upon receipt of notice thereof, a report of
any legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000) or more; (e) such budgets, sales projections,
operating plans or other financial information as Bank may reasonably request
from time to time generally prepared by Borrower in the ordinary course of
business; and (f) within twenty-five (25) days of the last day of each fiscal
quarter, a report signed by Borrower, in form reasonably acceptable to Bank,
listing any applications or registrations that Borrower has made or filed in
respect of any Patents, Copyrights or Trademarks and the status of any
outstanding applications or registrations, as well as any material change in
Borrower's intellectual property, including but not limited to any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not
specified in Exhibits A, B, and C of the Intellectual Property Security
Agreement delivered to Bank by each Borrower in connection with this Agreement.

                  Within fifteen (15) days after the last day of each month,
Borrower shall deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in substantially the form of Exhibit C hereto, together with
aged listings of accounts receivable and accounts payable and backlog/bookings
reports.

                  Borrower shall deliver to Bank with the monthly financial
statements a Compliance Certificate signed by a Responsible Officer in
substantially the form of Exhibit D hereto.

                                       11
<PAGE>   13
                  Bank shall have a right from time to time hereafter to audit
Borrower's Accounts and appraise Collateral at Borrower's expense, provided that
such audits will be conducted no more often than every six (6) months unless an
Event of Default has occurred and is continuing.

                  6.4 Inventory; Returns. Borrower shall keep all Inventory in
good and marketable condition, free from all material defects. Returns and
allowances, if any, as between Borrower and its account debtors shall be on the
same basis and in accordance with the usual customary practices of Borrower, as
they exist at the time of the execution and delivery of this Agreement. Borrower
shall promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).

                  6.5 Taxes. Borrower shall make, and shall cause each
Subsidiary to make, due and timely payment or deposit of all material federal,
state, and local taxes, assessments, or contributions required of it by law, and
will execute and deliver to Bank, on demand, appropriate certificates attesting
to the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is reserved against (to the extent required by GAAP)
by Borrower.

                  6.6 Insurance.

                       (a) Borrower, at its expense, shall keep the tangible
Collateral insured against loss or damage by fire, theft, explosion, sprinklers,
and all other hazards and risks, and in such amounts, as ordinarily insured
against by other owners in similar businesses conducted in the locations where
Borrower's business is conducted on the date hereof. Borrower shall also
maintain insurance relating to Borrower's ownership and use of the Collateral in
amounts and of a type that are customary to businesses similar to Borrower's.

                       (b) All such policies of insurance shall be in such form,
with such companies, and in such amounts as reasonably satisfactory to Bank. All
such policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least twenty
(20) days notice to Bank before canceling its policy for any reason. Upon Bank's
request, Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
to be applied on account of the Obligations.

                  6.7 Year 2000 Compliance. Borrower shall perform all acts
reasonably necessary to ensure that (a) Borrower and any business in which
Borrower holds a substantial interest, and (b) all customers, suppliers and
vendors that are material to Borrower's business, become Year 2000 Compliant in
a timely manner. Such acts shall include, without limitation, performing a
comprehensive review and assessment of all Borrower's systems and adopting a
detailed plan, with itemized budget, for the remediation, monitoring and testing
of such systems. As used in this paragraph, "Year 2000 Compliant" shall mean, in
regard to any entity, that all software, hardware, firmware, equipment, goods or
systems utilized by or material to the business operations or financial
condition of such entity, will properly perform date sensitive functions before,
during and after the year 2000. Borrower shall immediately upon request, provide
to Bank such certifications or other evidence of Borrower's compliance with the
terms of this paragraph as Bank may from time to time require.

                  6.8 Principal Depository. Borrower shall maintain its
principal depository and operating accounts with Bank.

                  6.9 Quick Ratio. Borrower shall maintain, as of the last day
of each calendar month, a ratio of Quick Assets to Current Liabilities (less
convertible subordinated debt minus deferred revenues), of at least 1.50 to
1.00. Upon completion of the IPO, compliance shall be on a quarterly basis.

                                       12
<PAGE>   14
                  6.10 Total Liabilities-Tangible Net Worth. Borrower shall
maintain, as of the last day of each calendar month, a ratio of Total
Liabilities to Tangible Net Worth, excluding earned revenue, of not more than
1.25 to 1.00 beginning October 31, 1999; provided, however, if an additional
$2,000,000 is raised at the time of the Equity Event, then the date for
measurement forth above shall be January 31, 2000. Compliance with this covenant
may be additionally extended beyond January 31, 2000 if equity or subordinated
debt over the sum of the $12,000,000 (Equity Event plus Five Million Dollars) is
obtained by Borrower. Each additional $1,000,000 shall result in an extension
for compliance of one month. Upon completion of the IPO, compliance shall be on
a quarterly basis.

                  6.11 Tangible Net Worth. Borrower shall maintain, as of the
last day of each calendar month, a Tangible Net Worth of not less than Thirty
Million Dollars ($30,000,000) beginning October 31, 1999; provided, however, if
an additional $2,000,000 is raised at the time of the Equity Event, then the
date for measurement set forth above shall be January 31, 2000. Compliance with
this covenant may be additionally extended beyond January 31, 2000 if equity or
subordinated debt over the sum of the $12,000,000 (Equity Event plus Five
Million Dollars) is obtained by Borrower. Each additional $1,000,000 shall
result in an extension for compliance of one month. Upon completion of the IPO,
compliance shall be on a quarterly basis.

                  6.12 Debt Service Coverage. Borrower shall maintain a Debt
Service Coverage of not less than 1.25 to 1.0 on a quarterly basis beginning
with January 1, 2000 (measured March 31, 2000). Debt Service Coverage means the
ratio of earnings after tax plus interest and non cash expenses divided by the
current portion of long term debt plus interest. Compliance with this covenant
may be additionally extended beyond January 31, 2000 if equity or subordinated
debt over the sum of the $12,000,000 (Equity Event plus Five Million Dollars) is
obtained by Borrower. Each additional $1,000,000 shall result in an extension
for compliance of one month. Upon completion of the IPO, compliance shall be on
a quarterly basis.

                  6.13 Net Profit After Tax. Borrower shall maintain on a
monthly basis, minimum net profit after tax ("NPAT") not to exceed 120% of
forecast NPAT. Upon completion of the IPO, compliance shall be on a quarterly
basis.

                  6.14 Registration of Intellectual Property Rights.

                       (a) Borrower shall register or cause to be registered on
an expedited basis (to the extent not already registered) with the United States
Patent and Trademark Office or the United States Copyright Office, as
applicable, those intellectual property rights listed on Exhibits A, B and C to
the Intellectual Property Security Agreement delivered to Bank by Borrower in
connection with this Agreement within thirty (30) days of the date of this
Agreement. Borrower shall, on an expedited basis, register or cause to be
registered with the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, and notify Bank of, all registerable
intellectual property rights Borrower has developed as of the date of this
Agreement but heretofore failed to register and give Bank notice thereof.
Borrower shall register or cause to be registered with the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, and
notify Bank of those additional intellectual property rights developed or
acquired by Borrower from time to time in connection with any product prior to
the sale or licensing of such product to any third party and prior to Borrower's
use of such product (including without limitation major revisions or additions
to the intellectual property rights listed on such Exhibits A, B and C) and
shall give Bank notice thereof.

                       (b) Borrower shall execute and deliver such additional
instruments and documents from time to time as Bank shall reasonably request to
perfect Bank's security interest in the Intellectual Property Collateral.

                       (c) Borrower shall (i) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, (ii) use
its best efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Bank in writing of material infringements
detected and (iii) not allow any material Trademarks, Patents or Copyrights to
be abandoned, forfeited or dedicated to the public without the written consent
of Bank, which shall not be unreasonably withheld.

                                       13
<PAGE>   15
                       (d) Bank may audit Borrower's Intellectual Property
Collateral to confirm compliance with this Section 6.13, provided such audit may
not occur more often than once per year, unless an Event of Default has occurred
and is continuing. Bank shall have the right, but not the obligation, to take,
at Borrower's sole expense, any actions that Borrower is required under this
Section 6.13 to take but which Borrower fails to take, after fifteen (15) days'
notice to Borrower. Borrower shall reimburse and indemnify Bank for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of
its rights under this Section 6.13.

                  6.15 Further Assurances. At any time and from time to time
Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Bank to effect the purposes of
this Agreement.

                  6.16 Lockbox. (a) Borrower agrees that immediately upon Bank's
request (whether or not any Event of Default exists), Borrower shall at their
sole expense establish and maintain (and Bank, at Bank's option, may establish
and maintain at Borrower's expense: (a) a United States Post Office lock box
(the "Lock Box") to which Bank shall have exclusive access and control. Borrower
expressly authorizes Bank, from time to time, to remove contents from the Lock
Box, for disposition in accordance with this Agreement. Borrower agrees to
notify all account debtors and other parties obligated to Borrower that all
payments made to Borrower (other than payments by electronic funds transfer)
shall be remitted to the Lock Box, and Borrower shall include a like statement
on all invoices, and (b) a non-interest bearing deposit account with Bank which
shall be titled as designated by Bank ("Cash Collateral Account") to which Bank
shall have exclusive access and control. Borrower agrees to notify all account
debtors and other parties obligated to Borrower that all payments made to
Borrower by electronic funds transfer shall be remitted to the Cash Collateral
Account, and Borrower, at Bank's request, shall include a like statement on all
invoices. Borrower shall execute all documents and authorization as required by
bank to establish and maintain the Lock Box and the Cash Collateral.

                       (b) All items or amounts which are remitted to the Lock
Box, to the Cash Collateral Account or otherwise delivered by or for the benefit
of Borrower to Bank on account of partial or full payment of, or with respect
to, any Collateral shall, at Bank's option, (i) be applied to the payment of the
Obligations in such order or at such time of application as bank may determine
in its sole discretion; or (ii) be deposited to the Cash Collateral Account.
Borrower agrees that Bank shall not be liable for any loss or damage which
Borrower may suffer as a result of Bank's processing or items or its exercise of
any other rights or remedies under this Agreement, including without limitation
indirect, special or consequential damages, loss of revenue of profits, or any
claim, demand or action by any third party arising out of or in connection with
the processing of items or the exercise of any other rights or remedies under
this Agreement. Borrower agrees to indemnify and hold Bank harmless from and
against all such third party claims, demands or action, and all related expenses
or liabilities, including, without limitation, attorneys' fees and costs.

                       (c) Borrower acknowledges and agrees that while the Bank
is not requesting that a Lock Box be established at this time (although it
reserves its right to do so in the future), the bank is requesting that the Cash
Collateral Account be established at this time as security for the payment of
the Obligations and that any and all cash, checks, drafts and other instruments
for the payment of money received by Borrower at any time, in full or partial
payment of any of the Collateral shall forthwith, upon receipt be transmitted
and delivered to Bank (property endorsed, where required so that such items may
be collected by Bank) and deposited into the Cash Collateral Account. All
electronic funds transfers shall be made into the Cash Collateral Account. Any
items received by Borrower shall not be commingled with any other of Borrower"
funds or property, but shall be held separate and apart form Borrower" own funds
or property, and upon express trust for the benefit of the Bank until delivery
thereof is made to Bank. As long as an Event of Default has not occurred,
Borrower may have access to the Cash Collateral Account for the payment of
obligations arising in the ordinary course of business.

                  6.17 Pharmaceutical Contracts. Borrower shall maintain at all
times until June 30, 2000, a minimum of two pharmaceutical contracts. After June
30, 2000 Borrower shall maintain five pharmaceutical contracts, which contracts
shall be for a minimum term of three years (with the exception of Searle, which
contracts can be for one year).

                  6.18 Year 2000 Compliance. Borrower shall perform all acts
reasonably necessary to ensure that (a) Borrower and any business in which
Borrower holds a substantial interest, and (b) all customers, suppliers

                                       14
<PAGE>   16
and vendors that are material to Borrower's business, become Year 2000 Compliant
in a timely manner. Such acts shall include, without limitation, performing a
comprehensive review and assessment of all Borrower's systems and adopting a
detailed plan, with itemized budget, for the remediation, monitoring and testing
of such systems. As used in this paragraph, "Year 2000 Compliant" shall mean, in
regard to any entity, that all software, hardware, firmware, equipment, goods or
systems utilized by or material to the business operations or financial
condition of such entity, will properly perform date sensitive functions before,
during and after the year 2000. Borrower shall, immediately upon request,
provide to Bank such certifications or other evidence of Borrower's compliance
with the terms of this paragraph as Bank may from time to time require.

     7.      NEGATIVE COVENANTS

                  Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Credit
Extensions, Borrower will not do any of the following:

                  7.1 Dispositions. Convey, sell, lease, transfer or otherwise
dispose of (collectively, a "Transfer"), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, other than: (i) Transfers
of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive
licenses and similar arrangements for the use of the property of Borrower or its
Subsidiaries; (iii) Transfers of surplus, worn-out or obsolete Equipment; or
(iv) transfers in an aggregate amount not to exceed $200,000.

                  7.2 Change in Business. Engage in any business, or permit any
of its Subsidiaries to engage in any business, other than the businesses
currently engaged in by Borrower and any business substantially similar or
related thereto (or incidental thereto), or suffer a material change in a
controlling interest in Borrower's shares. Borrower will not, without thirty
(30) days prior written notification to Bank, relocate its chief executive
office.

                  7.3 Mergers or Acquisitions. Merge or consolidate, or permit
any of its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person.

                  7.4 Indebtedness. Create, incur, assume or be or remain liable
with respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

                  7.5 Encumbrances. Create, incur, assume or suffer to exist any
Lien with respect to any of its property, or assign or otherwise convey any
right to receive income, including the sale of any Accounts, or permit any of
its Subsidiaries so to do, except for Permitted Liens.

                  7.6 Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock.

                  7.7 Investments. Directly or indirectly acquire or own, or
make any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.

                  7.8 Transactions with Affiliates. Directly or indirectly enter
into or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a non-affiliated Person.

                  7.9 Subordinated Debt. Make any payment in respect of any
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent.

                  7.10 Inventory. Store the Inventory with a bailee,
warehouseman, or similar party unless Bank has received a pledge of the
warehouse receipt covering such Inventory. Except for Inventory sold in the
ordinary

                                       15
<PAGE>   17
course of business and except for such other locations as Bank may approve in
writing, Borrower shall keep the Inventory only at the location set forth in
Section 10 hereof and such other locations of which Borrower gives Bank prior
written notice and as to which Borrower signs and files a financing statement
where needed to perfect Bank's security interest.

                  7.11 Compliance. Become an "investment company" or be
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Credit Extension
for such purpose. Fail to meet the minimum funding requirements of ERISA, permit
a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur,
fail to comply with the Federal Fair Labor Standards Act or violate any law or
regulation, which violation could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing.

                  7.12 Intellectual Property Agreements. Borrower shall not
permit the inclusion in any material contract to which it becomes a party of any
provisions that could or might in any way prevent the creation of a security
interest in Borrower's rights and interests in any property included within the
definition of the Intellectual Property Collateral acquired under such
contracts.

          8.      EVENTS OF DEFAULT

                  Any one or more of the following events shall constitute an
Event of Default by Borrower under this Agreement:

                  8.1 Payment Default. If Borrower fails to pay, when due, any
of the Obligations;

                  8.2 Covenant Default. If Borrower fails to perform any
obligation under Article 6 or violates any of the covenants contained in Article
7 of this Agreement, or fails or neglects to perform, keep, or observe any other
material term, provision, condition, covenant, or agreement contained in this
Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within twenty (20) days after Borrower receives notice thereof
or any officer of Borrower becomes aware thereof; provided, however, that if the
default cannot by its nature be cured within the twenty (20) day period or
cannot after diligent attempts by Borrower be cured within such twenty (20) day
period, and such default is likely to be cured within a reasonable time, then
Borrower shall have an additional reasonable period (which shall not in any case
exceed sixty (60) days) to attempt to cure such default, and within such
reasonable time period the failure to have cured such default shall not be
deemed an Event of Default (provided that no Credit Extensions will be required
to be made during such cure period);

                  8.3 Material Adverse Change. If there occurs a material
adverse change in Borrower's business or financial condition, or if there is a
material impairment of the prospect of repayment of any portion of the
Obligations or a material impairment of the value or priority of Bank's security
interests in the Collateral;

                  8.4 Attachment. If any material portion of Borrower's assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or person acting in a
similar capacity and such attachment, seizure, writ or distress warrant or levy
has not been removed, discharged or rescinded within twenty (20) days, or if
Borrower is enjoined, restrained, or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs, or if a
judgment or other claim becomes a lien or encumbrance upon any material portion
of Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within twenty (20)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);

                                       16
<PAGE>   18
                  8.5 Insolvency. If Borrower becomes insolvent, or if an
Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding
is commenced against Borrower and is not dismissed or stayed within thirty (30)
days (provided that no Credit Extensions will be made prior to the dismissal of
such Insolvency Proceeding);

                  8.6 Other Agreements. If there is a default in any agreement
to which Borrower is a party with a third party or parties resulting in a right
by such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of Fifty Thousand Dollars
($50,000) or that could have a Material Adverse Effect;

                  8.7 Subordinated Debt. If Borrower makes any payment on
account of Subordinated Debt, except to the extent such payment is allowed under
any subordination agreement entered into with Bank;

                  8.8 Judgments. If a judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least Fifty Thousand
Dollars ($50,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of ten (10) days (provided that no Credit
Extensions will be made prior to the satisfaction or stay of such judgment); or

                  8.9 Misrepresentations. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate delivered to Bank by any Responsible
Officer pursuant to this Agreement or to induce Bank to enter into this
Agreement or any other Loan Document.

          9.      BANK'S RIGHTS AND REMEDIES

                  9.1 Rights and Remedies. Upon the occurrence and during the
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:

                       (a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.5 all Obligations shall become immediately due and payable without any
action by Bank);

                       (b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank;

                       (c) Settle or adjust disputes and claims directly with
account debtors for amounts, upon terms and in whatever order that Bank
reasonably considers advisable;

                       (d) Make such payments and do such acts as Bank considers
necessary or reasonable to protect its security interest in the Collateral.
Borrower agrees to assemble the Collateral if Bank so requires, and to make the
Collateral available to Bank as Bank may designate. Borrower authorizes Bank to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Bank's determination
appears to be prior or superior to its security interest and to pay all expenses
incurred in connection therewith. With respect to any of Borrower's owned
premises, Borrower hereby grants Bank a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
Bank's rights or remedies provided herein, at law, in equity, or otherwise;

                       (e) Set off and apply to the Obligations any and all (i)
balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time
owing to or for the credit or the account of Borrower held by Bank;

                                       17
<PAGE>   19
                       (f) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. Bank is hereby granted a license or other right,
solely pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section 9.1, Borrower's
rights under all licenses and all franchise agreements shall inure to Bank's
benefit;

                       (g) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply any proceeds to the Obligations
in whatever manner or order Bank deems appropriate;

                       (h) Bank may credit bid and purchase at any public sale;
and

                       (i) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.

                  9.2 Power of Attorney. Effective only upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney to: (a) send requests for verification of
Accounts or notify account debtors of Bank's security interest in the Accounts;
(b) endorse Borrower's name on any checks or other forms of payment or security
that may come into Bank's possession; (c) sign Borrower's name on any invoice or
bill of lading relating to any Account, drafts against account debtors,
schedules and assignments of Accounts, verifications of Accounts, and notices to
account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all
claims under and decisions with respect to Borrower's policies of insurance; (f)
settle and adjust disputes and claims respecting the accounts directly with
account debtors, for amounts and upon terms which Bank determines to be
reasonable; (g) to modify, in its sole discretion, any intellectual property
security agreement entered into between Borrower and Bank without first
obtaining Borrower's approval of or signature to such modification by amending
Exhibits A, B, and C, thereof, as appropriate, to include reference to any
right, title or interest in any Copyrights, Patents or Trademarks acquired by
Borrower after the execution hereof or to delete any reference to any right,
title or interest in any Copyrights, Patents or Trademarks in which Borrower no
longer has or claims to have any right, title or interest; (h) to file, in its
sole discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law; and (i) to dispose of the Collateral to the extent
permitted under the California Uniform Commercial Code; provided Bank may
exercise such power of attorney to sign the name of Borrower on any of the
documents described in Section 4.2 regardless of whether an Event of Default has
occurred. The appointment of Bank as Borrower's attorney in fact, and each and
every one of Bank's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid and performed
and Bank's obligation to provide advances hereunder is terminated.

                  9.3 Accounts Collection. At any time during the term of this
Agreement, Bank may notify any Person owing funds to Borrower of Bank's security
interest in such funds and verify the amount of such Account. Borrower shall
collect all amounts owing to Borrower for Bank, receive in trust all payments as
Bank's trustee, and immediately deliver such payments to Bank in their original
form as received from the account debtor, with proper endorsements for deposit.

                  9.4 Bank Expenses. If Borrower fails to pay any amounts or
furnish any required proof of payment due to third persons or entities, as
required under the terms of this Agreement, then Bank may do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such
reserves under the Revolving Facility as Bank deems necessary to protect Bank
from the exposure created by such failure; or (c) obtain and maintain insurance
policies of the type discussed in Section 6.6 of this Agreement, and take any
action with respect to such policies as Bank deems prudent. Any amounts so paid
or deposited by Bank shall constitute Bank Expenses, shall be immediately due
and payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Bank
shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement. Bank shall
have a

                                       18
<PAGE>   20
non-exclusive, royalty-free license to use the Intellectual Property Collateral
to the extent reasonably necessary to permit Bank to exercise its rights and
remedies upon the occurrence of an Event of Default.

                  9.5 Bank's Liability for Collateral. So long as Bank complies
with reasonable banking practices, Bank shall not in any way or manner be liable
or responsible for: (a) the safekeeping of the Collateral; (b) any loss or
damage thereto occurring or arising in any manner or fashion from any cause; (c)
any diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

                  9.6 Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.

                  9.7 Demand; Protest. Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be liable.

          10.     NOTICES

                  Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized
overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Bank, as the case may be, at
its addresses set forth below:

        If to Borrower:             iPhysician Net Inc.
                                    8777 North Gainey Center Drive, Suite 285
                                    Scottsdale, Arizona 85258
                                    Attn: Lyle Scritsmeier

        If to Bank:                 Far East National Bank
                                    2001 Gateway Place, Suite 101E
                                    San Jose, CA  95110
                                    Attn:  Fannie Pon
                                    Tel:  408/487-0343
                                    FAX:  (408) 487-0333

        The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

          11.     CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

                  The Loan Documents shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Borrower and Bank hereby submits to the
exclusive jurisdiction of the state and Federal courts located in the County of
Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER

                                       19
<PAGE>   21
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

          12. GENERAL PROVISIONS

                  12.1 Successors and Assigns. This Agreement shall bind and
inure to the benefit of the respective successors and permitted assigns of each
of the parties; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Bank's prior written consent,
which consent may be granted or withheld in Bank's sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank's obligations, rights and benefits hereunder.

                  12.2 Indemnification. Borrower shall defend, indemnify and
hold harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the Loan Documents;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the Loan Documents, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

                  12.3 Time of Essence. Time is of the essence for the
performance of all obligations set forth in this Agreement.

                  12.4 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

                  12.5 Amendments in Writing, Integration. This Agreement cannot
be amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents, except that any financing statements or other
agreements or instruments filed by Bank with respect to Borrower shall remain in
full force and effect.

                  12.6 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.

                  12.7 Survival. All covenants, representations and warranties
made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.

                                       20
<PAGE>   22
        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                     IPHYSICIAN NET INC.

                                     By:
                                        ----------------------------------------

                                     Title:
                                           -------------------------------------

                                     FAR EAST NATIONAL BANK

                                     By:
                                        ----------------------------------------

                                     Title:
                                           -------------------------------------

                                       21
<PAGE>   23
                                    EXHIBIT A

        The Collateral shall consist of all right, title and interest of
Borrower in and to the following:

        (a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located other than evaluation
equipment in which PictureTel has a security interest, for so long as such
security interest remains in effect;

        (b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's Books relating to any of the foregoing;

        (c) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

        (d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower and Borrower's Books
relating to any of the foregoing;

        (e) All documents, cash, deposit accounts, securities, securities
accounts, security entitlements, financial assets, investment property, letters
of credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;

        (f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential
information, now owned or hereafter acquired; all mask work or similar rights
available for the protection of semiconductor chips, now owned or hereafter
acquired; all claims for damages by way of any past, present and future
infringement of any of the foregoing; and

        (g) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.

                                       22
<PAGE>   24
                                    EXHIBIT B

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

          DEADLINE FOR SAME DAY PROCESSING IS      ., CALIFORNIA TIME
                                              -----

TO:  Far East National Bank                DATE:
                                                 -------------------------------

FAX #:                                     TIME:
                                                 -------------------------------

FROM:         iPhysician Net Inc.
     ---------------------------------------------------------------------------
                             CLIENT NAME (BORROWER)

REQUESTED BY:
             -------------------------------------------------------------------
                            AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE:
                     -----------------------------------------------------------

PHONE NUMBER:
             -------------------------------------------------------------------

FROM ACCOUNT #                            TO ACCOUNT #
               ------------------------                -------------------------

REQUESTED TRANSACTION TYPE                        REQUEST DOLLAR AMOUNT
--------------------------                        ---------------------

                                                  $
                                                   -----------------------------

PRINCIPAL INCREASE (ADVANCE)                      $
                                                   -----------------------------

PRINCIPAL PAYMENT (ONLY)                          $
                                                   -----------------------------

INTEREST PAYMENT (ONLY)                           $
                                                   -----------------------------

PRINCIPAL AND INTEREST (PAYMENT)                  $
                                                   -----------------------------

OTHER INSTRUCTIONS:
                   -------------------------------------------------------------

--------------------------------------------------------------------------------

        All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for and Advance confirmed by this
Payment/Advance Form; provided, however, that those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date.

                                  BANK USE ONLY

TELEPHONE REQUEST:
-----------------

The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.

---------------------------------------------             ----------------------
            Authorized Requester                                  Phone #

---------------------------------------------             ----------------------
             Received By (Bank)                                   Phone #

                  ---------------------------------------------
                           Authorized Signature (Bank)

                                       23
<PAGE>   25
                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:            FAR EAST NATIONAL BANK

FROM:          IPHYSICIAN NET INC.

The undersigned authorized officer of iPhysician Net, Inc. hereby certifies that
in accordance with the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the "Agreement"), (i) Borrower is in complete
compliance for the period ending _______________ with all required covenants
except as noted below and (ii) all representations and warranties of Borrower
stated in the Agreement are true and correct in all material respects as of the
date hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

        PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

<TABLE>
<CAPTION>
       REPORTING COVENANT                         REQUIRED                                        COMPLIES
       ------------------                         --------                                        --------
<S>                                               <C>                                             <C>
       Monthly financial statements               Monthly within 30 days/quarterly within 15      Yes   No
       Annual (CPA Audited)                       FYE within 90 days                              Yes   No
       Audit                                      Initial and annual                              Yes   No
</TABLE>

<TABLE>
<CAPTION>
       FINANCIAL COVENANT                         REQUIRED       ACTUAL                           COMPLIES
       ------------------                         --------       ------                           --------
<S>                                               <C>            <C>                              <C>
       Minimum Quick Ratio                        1.50:1.0       _____:1.00                       Yes   No
       Minimum Tangible Net Worth                 $30,000,000    $__________                      Yes   No
       Liabilities to Tangible Net Worth          1.25:1.00      _____:1.00                       Yes   No
       Debt Service Coverage                      1.25:1.00      _____ 1:0                        Yes   No
</TABLE>

COMMENTS REGARDING EXCEPTIONS:  See Attached.

Sincerely,

-------------------------------------------------
SIGNATURE

-------------------------------------------------
TITLE

-------------------------------------------------
DATE

BANK USE ONLY

Received by:
            -------------------------------------------
                       AUTHORIZED SIGNER

Date:
     ---------------------------------------------------

Verified:
         -----------------------------------------------
                      AUTHORIZED SIGNER

Date:
     ---------------------------------------------------

Compliance Status                           Yes   No

                                       24
<PAGE>   26
                                    EXHIBIT D
                              TERM PROMISSORY NOTE

$10,000,000                                                Palo Alto, California

                                                           Date: October 4, 1999

        IPHYSICIAN NET INC. ("Borrower"), for value received, hereby promises to
pay to the order of FAR EAST NATIONAL BANK ("Bank"), in lawful money of the
United States of America, pursuant to that certain Loan and Security Agreement
dated as of the date hereof, by and between Borrower and Bank (the "Loan
Agreement"), (i) the principal amount of Ten Million Dollars ($10,000,000), or
if lesser, (ii) the principal amount of all Advances outstanding as of the
maturity date hereof.

        This Note is the Note referred to in the Loan Agreement. All terms
defined in the Loan Agreement shall have the same definitions when used herein,
unless otherwise defined herein.

        Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.

        Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.

        The Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.

        Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate. Upon the occurrence of a default hereunder or an Event of
Default under the Loan Agreement, all unpaid principal, accrued interest and
other amounts owing hereunder shall, at the option of Bank, be immediately
collectible by or on behalf of Bank pursuant to the Loan Agreement and
applicable law.

        Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.

        The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement. This Note shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California, excluding conflict of laws principles that would cause the
application of the laws of any other jurisdiction. The provisions of this Note
shall inure to the benefit of and be binding upon any successor to Borrower and
shall extend to any holder hereof.

                                                 IPHYSICIAN NET INC.

                                                 By:
                                                    ----------------------------

                                                 Title:
                                                       -------------------------

                                       25
<PAGE>   27
                     DISBURSEMENT REQUEST AND AUTHORIZATION

Borrower:  iPhysician Net Inc.                     Bank:  Far East National Bank
--------------------------------------------------------------------------------

LOAN TYPE.  This is a variable rate, term loan of a principal amount up to
$10,000,000.

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for business.

SPECIFIC PURPOSE. The specific purpose of this loan is: to finance a purchase of
computer and peripheral equipment for further distribution to physicians and
other care providers and to refinance existing debt with Picture Tel.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:

<TABLE>
<CAPTION>
                                                        Term Loan
                                                        ---------
<S>                                                     <C>
        Amount paid to Borrower directly:               $__________
        Undisbursed Funds                               $__________

        Principal                                       $__________
</TABLE>

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:

<TABLE>
<CAPTION>
        Charges Paid in Cash:
        ---------------------
<S>                                    <C>
        $25,000                        Loan Fee
        $                              Accounts Receivables Audit
        $                              UCC Search Fees
        $                              UCC Filing Fees
        $                              Patent Filing Fees
        $                              Trademark Filing Fees
        $                              Copyright Filing Fees
        $                              Outside Counsel Fees and Expenses (Estimate)

        Total Charges Paid in Cash                                                $__________
</TABLE>

AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered the amount of any loan payment. If the funds in the
account are insufficient to cover any payment, Bank shall not be obligated to
advance funds to cover the payment.

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK. THIS
AUTHORIZATION IS DATED AS OF __________, 1999.

iPhysician Net Inc.

---------------------------------------------
Authorized Officer

---------------------------------------------
<PAGE>   28
                         AGREEMENT TO PROVIDE INSURANCE

Grantor:  iPhysician Net Inc.                      Bank:  Far East National Bank
--------------------------------------------------------------------------------

        INSURANCE REQUIREMENTS. The undersigned ("Grantor") understands that
insurance coverage is required in connection with the extending of a loan or the
providing of other financial accommodations to Grantor by Bank. These
requirements are set forth in the Loan Documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):

        Collateral:        All Inventory, Equipment and Fixtures.
        Type:              All risks, including fire, theft and liability.
        Amount:            Full insurable value.
        Basis:             Replacement value.
        Endorsements:      Loss payable clause to Bank with stipulation that
                           coverage will not be canceled or diminished without a
                           minimum of twenty (20) days' prior written notice to
                           Bank.

        INSURANCE COMPANY. Grantor may obtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Bank. Grantor
understands that credit may not be denied solely because insurance was not
purchased through Bank.

        FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank, on or
before closing, evidence of the required insurance as provided above, with an
effective date of the Closing Date, or earlier. Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Bank may do so at Grantor's expense as provided in the
Amended and Restated Loan and Security Agreement. The cost of such insurance, at
the option of Bank, shall be payable on demand or shall be added to the
indebtedness as provided in the security document. GRANTOR ACKNOWLEDGES THAT IF
BANK SO PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED
PROTECTION AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE
LOAN; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.

        AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Bank to provide to any person (including any insurance agent
or company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

        GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED OCTOBER 4,
1999.

X
  -------------------------------
  Authorized Officer

                                FOR BANK USE ONLY
                             INSURANCE VERIFICATION

DATE:                                             PHONE:
      --------------------------------------            ------------------------
AGENT'S NAME:
             -------------------------------------------------------------------
INSURANCE COMPANY:
                  --------------------------------------------------------------
POLICY NUMBER:
              ------------------------------------------------------------------
EFFECTIVE DATES:
                ----------------------------------------------------------------
COMMENTS:
         -----------------------------------------------------------------------
<PAGE>   29
                         CORPORATE RESOLUTIONS TO BORROW
--------------------------------------------------------------------------------
BORROWER:      iPhysician Net  Inc.
--------------------------------------------------------------------------------

        I, the undersigned Secretary or Assistant Secretary of iPhysician Net
Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of California.

        I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true
and complete copies of the Articles of Incorporation and Bylaws of the
Corporation, each of which is in full force and effect on the date hereof.

        I FURTHER CERTIFY that at a meeting of the Directors of the Corporation,
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.

        BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:

<TABLE>
<CAPTION>
              NAMES                            POSITION                          ACTUAL SIGNATURES
              -----                            --------                          -----------------
<S>                              <C>                                     <C>

------------------------------   -------------------------------------   --------------------------------

------------------------------   -------------------------------------   --------------------------------

------------------------------   -------------------------------------   --------------------------------

------------------------------   -------------------------------------   --------------------------------
</TABLE>

acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

        BORROW MONEY. To borrow from time to time from Far East National Bank
("Bank"), on such terms as may be agreed upon between the officers, employees,
or agents and Bank, such sum or sums of money as in their judgment should be
borrowed, without limitation, including such sums as are specified in that
certain Loan and Security Agreement dated as of October 4, 1999 (the "Loan
Agreement").

        EXECUTE NOTES. To execute and deliver to Bank the promissory note or
notes of the Corporation, on Bank's forms, at such rates of interest and on such
terms as may be agreed upon, evidencing the sums of money so borrowed or any
indebtedness of the Corporation to Bank, and also to execute and deliver to Bank
one or more renewals, extensions, modifications, refinancings, consolidations,
or substitutions for one or more of the notes, or any portion of the notes.

        EXECUTE LOAN AGREEMENT. To execute and deliver to Bank the Loan
Agreement, and also to execute and deliver to Bank one or more renewals,
extensions, modifications, refinancings, consolidations, or substitutions for
the Loan Agreement, or any portion thereof.

        ISSUE WARRANTS.  To issue warrants to purchase the Corporation's capital
stock, for such series and number, and on such terms as an officer of the
Corporation shall deem appropriate

        GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.

        NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to the Corporation or in which the Corporation may have an
interest, and either to receive cash for the same or to cause such proceeds to
be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.

        LETTERS OF CREDIT; FOREIGN EXCHANGE. To execute letter of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.

                                       1
<PAGE>   30
        FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.

        BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to
these resolutions and performed prior to the passage of these resolutions are
hereby ratified and approved, that these Resolutions shall remain in full force
and effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

        I FURTHER CERTIFY that the officers, employees, and agents named above
are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.

        IN WITNESS WHEREOF, I have hereunto set my hand on October 4, 1999 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

                                                   CERTIFIED AND ATTESTED BY:

                                                   X
                                                    ----------------------------

                                       2
<PAGE>   31
                              TERM PROMISSORY NOTE

$10,000,000                                                Palo Alto, California
                                                           Date: October 4, 1999

IPHYSICIAN NET INC. ("Borrower"), for value received, hereby promises to pay to
the order of FAR EAST NATIONAL BANK ("Bank"), in lawful money of the United
States of America, pursuant to that certain Loan and Security Agreement dated as
of the date hereof, by and between Borrower and Bank (the "Loan Agreement"), (i)
the principal amount of Ten Million Dollars ($10,000,000), or if lesser, (ii)
the principal amount of all Advances outstanding as of the maturity date hereof.

        This Note is the Note referred to in the Loan Agreement. All terms
defined in the Loan Agreement shall have the same definitions when used herein,
unless otherwise defined herein.

        Borrower further promises to pay interest on each Advance hereunder in
like funds on the principal amount hereof from time to time outstanding from the
date hereof until paid in full, at a rate or rates per annum and payable on the
dates determined pursuant to the Loan Agreement.

        Payment on this Note shall be applied in the manner set forth in the
Loan Agreement. The Loan Agreement contains provisions for acceleration of the
maturity of Advances hereunder upon the occurrence of certain stated events and
also provides for optional and mandatory prepayments of principal hereof prior
to any stated maturity upon the terms and conditions therein specified.

        The Advances made by Bank to Borrower pursuant to the Loan Agreement
shall be recorded by Bank on the books and records of Bank. The failure of Bank
to record any Advance or any prepayment or payment made on account of the
principal balance hereof shall not limit or otherwise affect the obligation of
Borrower under this Note and under the Loan Agreement to pay the principal,
interest and other amounts due and payable under the Advances.

        Any principal or interest payments on this Note not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest at
the Default Rate. Upon the occurrence of a default hereunder or an Event of
Default under the Loan Agreement, all unpaid principal, accrued interest and
other amounts owing hereunder shall, at the option of Bank, be immediately
collectible by or on behalf of Bank pursuant to the Loan Agreement and
applicable law.

        Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including reasonable attorneys' fees, costs and
expenses. The right to plead any and all statutes of limitations as a defense to
any demand hereunder is hereby waived to the full extent permitted by law.

        The amount of this Note is secured by the Collateral identified and
described as security therefor in the Loan Agreement. This Note shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California, excluding conflict of laws principles that would cause the
application of the laws of any other jurisdiction. The provisions of this Note
shall inure to the benefit of and be binding upon any successor to Borrower and
shall extend to any holder hereof.

                                        IPHYSICIAN NET INC.

                                        By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------

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